As I believe I did not adequately convey my thoughts on privacy I'll make another attempt.
As a function of time, individual privacy has both risen (as with the dissolution of tribe structures) and fallen (as with the advent of computer information tracking). Lack of privacy may cause harm (both financial and social) when there exists 1. an imbalance of privacy (one party has more information about another than vice versa), and 2. the superior party stands to benefit from harmful misuse of the other's information. However, the reverse is also true: that too much privacy may cause harm (as is the case when an unsuspecting investor is swindled by Bernie Madoff's Ponzi scheme).
The financial impact of privacy imbalance can be mitigated by taking steps to ensure proper measures of security are in place (such as passwords, antivirus software, etc.) and by investing in specialized insurance (such as privacy breach insurance). For most people, the potential for unrecoverable financial loss is minimal when these simple steps are taken. I would venture to guess that historically one's financial security tends to increase when his personal privacy decreases.
As for the social implications of privacy imbalance, most negatives are due to a combination of incomplete information and lack of societal understanding. Using mutual male masturbation as an example:
Suppose that within a given population approximately 60% of the male population has at some point engaged in mutual manual sexual stimulation with a member of the same sex; however, within this population there is no public knowledge regarding this habit. Now suppose that gay Billy outs hetero Frankie as a participant in said activity. Having no knowledge of the prevalence of said activity, a majority of the population labels Frankie as homosexual and he suffers emotionally as a result.Some of the emotional turmoil is simply a result of public scrutiny and not a function of lack of information, but much of the potential heartache would disappear with more complete public information about the habits of the population. I would venture to guess that public knowledge of a teenager's self masturbation habits would be seen much differently today than 50 or 60 or 70 years ago.
Change in societal knowledge is gradual, however, and even with perfect access to information there is a habit of the individual for selective acquisition and lack of critical thought. Furthermore, societal mores and dogma are often times deep rooted in an individual's psychology, and added information does little to change perception in that short run. Public policy should therefore be focused in the short term on measures to protect sensitive issues of privacy and in the long term on increasing public awareness and openness.
Ironically, the government's efficacy in dealing with malicious uses of private information rests on having adequate access to information about potential perpetrators. Akin to giving police guns and authority to deal with violent criminals, the government must be given sufficient access to information about its individual citizenry to adequately deal with issues of privacy and security. However, if the government itself is not transparent enough to face public scrutiny, the threat of misuse of private information by government officials might be too high to warrant access (as it might be safer to stick with the spammers, advertisers, hackers, and thieves).
*On a more personal note, I do indeed take steps to mitigate potential damage from breach of personal privacy through discretion, security, and proactive information control. Also, as someone who attempts to present a positive image of myself, I welcome another way to become superior in the eyes of potential employers: I don't post drunken pictures and the like on facebook for this very reason. In a way, I see this as a shifting of 'survival of the fittest' to a more intelligence based metric (although with a tested IQ of 97 I'm not sure if I'd really benefit). However, I am in favor of businesses utilizing my personal consumer/browsing/etc. habits to better tailor advertisements and to potentially shift economic resources to more favorable sectors.
This is by no means a complete representation of my thoughts on privacy, but merely an attempt to provide a bit more information. I tend to do better in response to the ideas of others, as those ideas serve as anchors to my ever so wayward mind. Thoughts? Objections? Mockery?