Stephen Baker. The Numerati

[September 24th, 2008] Every day, you leave behind a stream of consumer data like a trail of bread crumbs: juicy tidbits like your credit card purchases, your Facebook pictures, your text messages and a thousand other informational fragments. And just as in the German fairy tale, there is a host of hungry crows behind you, just waiting until your back is turned to swoop down and devour these instructive morsels. The crows are companies like Google and IBM, and little by little, their computers are gobbling up bits of your behavioral DNA and reassembling them into a mathematical model of you. That way, they can predict what you’ll buy, whom you’ll vote for, what you’re sick with, and even whom you should date. It’s frightening, it’s incredibly lucrative, and it’s all covered in The Numerati (Houghton Mifflin, 256 pages, $26). BusinessWeek reporter Stephen Baker takes an in-depth look at the work of the math whizzes who are turning humans into equations.

The good news? Nobody cares enough about you in particular—unless you happen to be a suspected terrorist or a presidential hopeful—to put a face with your texting habits or your penchant for electronic porn. That’s because, at present, Google’s computers aren’t big enough and their algorithms aren’t sophisticated enough to deal with individual people in all their complexity. As of right now, computers are lucky if they can tell the difference between a loyal Clorox consumer and a bargain-hunting barnacle.

But it won’t be that way for long. One of the Numerati’s overarching goals is the eventual unification of disparate realms of consumer data—financial ratings, criminal records, buying habits, medical monitoring, social networking, electronic scheduling, even personality profiling (thanks, Match.com!). That way, in the future, when you mark on a health insurance application that you are a non-smoker, Humana can gently correct you, citing thousands of guilty nicotine sensors in your bloodstream. That way, when you apply to adopt a child, the adoption agency will be able to call up all your ex-lovers from eHarmony to find out how you manage your aggression. That way, based on your patterns of movement, your demographics and the content of your emails, the FBI will be able to predict with 92 percent accuracy that you are a pedophile and put you under surveillance before you’ve committed any crime.

In the face of such digital encroachments, Baker remains remarkably level-headed, with an attitude comprising equal parts awe, fear and fatalism. After all, one could make the case that Americans are compensated for unwanted privacy violations by better health monitoring, safer borders and micro-targeted marketing. And one thing’s for sure—there’s no going back. Market forces favor the firm with the most data and the best algorithms; so—for the time being at least—it’s a race among Google, IBM, Yahoo, Accenture and a host of other futuristically named companies to see who can get furthest and deepest into our wallets, our Rolodexes, our planners and our very minds.