Identity in Economics, and in Context

Unique identification today is as much about money as was the wide adoption of last names centuries ago. Governments around the world adopted identity schemes to enable census and taxation. Today businesses are creating and using new identity systems in order to enable commerce. Identity allows for the creation and pricing of risky contracts. Victims of identity theft often wonder, “how can person I never knew in a state I have never visited create a debt with a bank with whom I have never done business, and which now I am expected to pay?” The creativity of such identity thieves knows no bounds. They can use identity to steal money, goods, or services. They can also use an identity to commit other forms of fraud against unrelated individuals, firms, or governments. Sometimes the schemes are simple—like using a stolen credit card to buy a laptop or an insurance number to steal healthcare. Other schemes are far more complex, involving an ecosystem of intermediaries. The factors that created this situation and the resulting challenges that must be addressed to extricate us are the focus of this book.