MINDING EVERYONE ELSE'S BUSINESS

AMONG the mistakes the Republicans made in their push for impeachment,
surely, was misjudging the American public's passion for privacy. Embedded
in our national consciousness, along with "Don't Tread on Me!" is the
phrase "It's none of your damn business!"

This intense, sometimes irrational commitment to privacy spans the
political spectrum, from NRA conservatives to pro-choice liberals. And it
may be the best explanation for the breadth of public support for President
Clinton during these past months, in the face of overwhelming evidence of
his misdeeds. Ordinary folks didn't like his conduct, but they also seem to
have felt: Get off his back!

American business may be making a similar error in misunderstanding the
depth and power of America's demand for privacy.

The latest example of a big, smart company to make this mistake is computer
chip maker Intel. The company was forced last month to revise a planned
Pentium III chip when consumers protested a feature that would give each
chip a precise signature, allowing online retailers, law enforcement or
anyone else with the technology to identify who sent a particular e-mail
message or visited a particular Web site.

Maintaining privacy in the electronic age is like trying to hold back the
tide. One of the most powerful applications of digital technology is its
ability to store, retrieve and transmit vast amounts of information. The
tools are so pervasive now -- from scanners in supermarkets to satellite
navigation systems that can track every move of your car -- that we take
them almost for granted.

And for business, these wondrous tools help answer what has been the
essential question of commerce since the first cave man opened the first
lemonade stand: Namely, what do people want to buy?

Rather than having to guess at the answer, it's now possible to know with
some certainty -- not simply by studying broad trends of demographic
groups, but by recording and analyzing the actual purchases of each
consumer. Amazon.com, for example, knows precisely what books I bought last
year, and with its computer models it can predict what I might like to read
next -- and make suggestions.

The potential for this sort of "data mining," as it's known, is nearly
endless. Safeway can learn what I eat, United Airlines where I travel. For
business, these are heaven-sent marketing tools.

The problem is, most Americans are horrified at the notion that
corporations are gathering such intimate data about their lives.

The leading journalistic chronicler of privacy in the electronic age is my
colleague Robert O'Harrow Jr. His stories in The Washington Post on this
subject have created an amazing storm of public reaction.

A year ago, O'Harrow disclosed that two big Washington-area retailers --
Giant Food Inc. and CVS Corp. -- were sending pharmacy data to a company
called Elensys Inc., which used that information to send letters to
customers touting new products or reminding them to refill prescriptions.
This was obviously good marketing, and the retailers thought it would also
be good for their customers' health. But after a torrent of complaints from
angry consumers, Giant and CVS halted the practice.

The federal government is making similar blunders. Zealous regulators at
the Federal Deposit Insurance Corp., for example, wanted to enlist banks in
their war on money laundering -- by forcing them to snoop on their
customers. But after more than 23,000 people complained about this
so-called "Know Your Customer" rule, the FDIC is reconsidering the plan.
And let's not even get into the National Security Agency's never-ending
efforts to crack codes.

I have never entirely understood the privacy mania. Why shouldn't the NSA
be able to crack our electronic messages if it will help them catch the bad
guys? Similarly, I'm not all that upset if Amazon.com wants to mine my data
and recommend a book or two.

But it's evident that most Americans take a different view. They don't like
people meddling with their private lives, period. That's part of what it
means to be an American. Indeed, you can make an argument that the enduring
American ideology is this raw, frontier-rooted libertarianism.

Technology will keep pushing business to make clever use of data. But I
suspect that the most profitable businesses will be the ones that
understand America's love affair with privacy, and do their best to level
with their customers.

David Ignatius writes for The Washington Post.