From a new paper on government surveillance and data mining by George Washington University Law School Professor Daniel J. Solove, 'I've Got Nothing to Hide' and Other Misunderstandings of Privacy (25 page pdf):
Far too often, discussions of the NSA surveillance and data mining define the problem solely in terms of surveillance. To return to my discussion of metaphor, the problems are not just Orwellian but Kafkaesque. The NSA programs are problematic even if no information people want to hide is uncovered. In The Trial, the problem is not inhibited behavior, but rather a suffocating powerlessness and vulnerability created by the court system's use of personal data and its exclusion of the protagonist from having any knowledge or participation in the process. The harms consist of those created by bureaucracies – indifference, errors, abuses, frustration, and lack of transparency and accountability.
One such harm, for example, which I call "aggregation," emerges from the combination of small bits of seemingly innocuous data. When combined, the information become much more telling about a person. For the person who truly has nothing to hide, aggregation is not much of a problem. But in the stronger less absolutist form of the "nothing to hide" argument, people are arguing that certain pieces of information are not something they would hide.
Aggregation, however, means that by combining pieces of information we might not care to conceal, the government can glean information about us that we might really want to conceal. Part of the allure of data mining for the government is its ability to reveal a lot about our personalities and activities by sophisticated means of analyzing data. Therefore, without greater transparency in data mining, it is hard to claim that programs like the NSA data mining program will not reveal information people might want to hide, as we do not know precisely what is revealed.
Moreover, data mining aims to be predictive of behavior. In other words, it purports to prognosticate about our future actions. People who match certain profiles are deemed likely to engage in a similar pattern of behavior. It is quite difficult to refute actions that one has not yet done. Having nothing to hide will not always dispel predictions of future activity.
Another problem in the taxonomy, which is implicated by the NSA program, is the problem I refer to as "exclusion." Exclusion is the problem caused when people are prevented from having knowledge about how their information is being used, as well as barred from being able to access and correct errors in that data. The NSA program involves a massive database of information that individuals cannot access. Indeed, it was kept secret for years. This kind of information processing, which forbids people's knowledge or involvement, resembles in some ways a kind of due process problem. It is a structural problem involving the way people are treated by government institutions. Moreover, it creates a power imbalance between individuals and the government. To what extent should the Executive Branch, and an agency such as the NSA, which is relatively insulated from the political process and public accountability, have a significant power over citizens? This issue is not about whether the information gathered is something people want to hide, but rather about the power and the structure of government. ...
A related problem involves "secondary use." Secondary use is the use of data obtained for one purpose for a different unrelated purpose without the person's consent. The Administration has said little about how long the data will be stored, how it will be used, and what it could be used for in the future. The potential future uses of any piece of personal information are vast, and without limits or accountability on how that information is used, it is hard for people to assess the dangers of the data being in the government's control.
Therefore, the problem with the "nothing to hide" argument is that it focuses on just one or two particular kinds of privacy problems – the disclosure of personal information or surveillance – and not others. It assumes a particular view about what privacy entails, and it sets the terms for debate in a manner that is often unproductive.
It is important to distinguish here between two ways of justifying a program such as the NSA surveillance and data mining program. First is to not recognize a problem. This is how the "nothing to hide" argument works. It denies even the existence of a problem. The second manner of justifying such a program is to acknowledge the problems but contend that the benefits of the NSA program outweigh the privacy harms. The first justification influences the second, for the low value given to privacy is based upon a narrow view of the problem.