Financial History Issue 122 (Summer 2017) | Page 33

cabinets. In the early 1950s, Life magazine marveled at the scale and efficiency of the modern credit bureau, ranking its intelligence-gathering capacity alongside that of the Federal Bureau of Investiga- tion (FBI) and the Soviet KGB. Postwar credit bureaus would add new elevator filing systems, document conveyers and photoduplicating devices to their array of information-handling technologies. All of this was soon overshadowed by another machine: the computer. During the 1970s and 1980s the credit report- ing industry was completely reshaped by mergers, as a handful of computerized bureaus bought out hundreds of small local bureaus. While computerization accelerated credit surveillance and con- solidated the reporting industry’s national reach, it also opened the door to new technologies of consumer discipline, most importantly statistical scoring. During the closing decades of the 20th century, the leading national bureaus became deeply involved in the development of risk scor- ing and database marketing programs that did more than simply calculate credit risk. They drew upon massive datasets to predict the behaviors, interests and com- mercial value of Americans. Looking back at the history of American credit surveillance, it is easy to understand why systems of organized credit report- ing were created in the first place. As the nation’s population became more numer- ous and mobile, one was more likely to transact with strangers. And as imper- sonal market relationships — relationships based on contracts, prices and monetary exchange — displaced traditional bonds of obligation, human interactions became more abstract. “In the complex march of mod- ern affairs, business has become more mechanical,” the author of a credit text- book remarked in 1895. “We have lost the personal equation of our customers, or get it only at second-hand. The name of the debtor or creditor on our books is only a symbol which might as well be repre- sented by a number.” New “mechanical” ways of know- ing one’s fellow citizens  —  via credit reports, credit records and, later, credit scores — were disturbing because they sug- gested that economic relationships were losing their human scale and personal touch. Americans were not just estranged from their neighbors and community in Comic book published by the Federal Reserve Bank of New York Public Information Department in 1980 entitled The Story of Consumer Credit. everyday life. They were becoming faceless accounts and dollar signs in the ledgers of corporate employers, creditors, insurance companies, retailers and other business concerns. This, ultimately, was the darker subtheme beneath the comedy of Rock- efeller’s department store interrogation. When it came to judging creditworthi- ness, a quality rooted in trust and integ- rity, no one was beyond the objectifying gaze of capitalism. It was doubly ironic, and poetic justice perhaps, that the iconic industrialist was temporarily an anony- mous cog in the capitalist machine he had helped to build. Until the late 1960s, the American pub- lic was untroubled by credit reporting. Contrary to sensational press coverage of the time, credit surveillance was no dark conspiracy unmasked by Congress in 1968. Americans had always known that their lives were held under a microscope when they applied for credit. They just did not care. Consumer groups had long fought for safer products, better labeling and ethi- cal advertising, but the one thing they did not demand was privacy. Such silence on the issue is difficult to fathom from the vantage of our own privacy-conscious age. In the absence of evidence, we can only speculate as to why. Perhaps the lingering stigma of borrowing and the uncertain legitimacy of “the consumer,” a new con- cept in the early 20th century, was enough to keep dissent at bay. More realistically, consumers probably acquiesced then for the reason they do today: they wanted the borrowed goods or money more than they cared about their privacy. Even the famously reserved Rockefeller accepted this tradeoff as the price of convenience. The modern freedom to buy now and pay later would be a dubious one, to say the least. Surcharges and interest pay- ments were not the only hidden costs. In return for the trust of retail creditors and institutional lenders, Americans sur- rendered the intimate details of their lives. This exchange, personal information for access and convenience, may have seemed a fair trade to credit-hungry Americans during the early 20th century, but it set a precedent with profound implications for the future of commercial data gathering and privacy. When asking for a merchant’s trust, credit customers relinquished their right to withhold information about their personal and financial circumstances. Mass credit not only trapped Americans in the bondage of debt; it also ensnared them in bonds of institutional surveil- lance. Applying for credit was the original sin of modern consumer surveillance. A century after Rockefeller exchanged his privacy for credit in a Cleveland department store, consumer surveillance had crept into nearly every facet of every- day life. It is embedded in the technolo- gies we depend upon for communication, work, commerce and entertainment. No digital presence goes untracked; no digital profile goes unmined. This is by design. In our data-driven economy, personal information is the coin of the realm. It is the commodity we use to pay for “free” content, memberships and ser- vices. This quid pro quo — information for access — has fueled innovation and built new industries, but it has also eroded the boundaries of privacy and, more signifi- cantly, opened the doors to new forms of social classification and economic objecti- fication. The history of credit surveillance is the history of this Faustian bargain and the starting point for understanding the monetizing logic of digital capitalism in our own time.  Josh Lauer is an associate professor of media studies at the University of New Hampshire and the author of Credit- worthy: A History of Consumer Surveil- lance and Financial Identity in America (Columbia University Press, 2017), from which this article has been adapted. www.MoAF.org  |  Summer 2017  |  FINANCIAL HISTORY  31