It almost goes without saying that the spying and security state has metastasised over the past twenty years or so, and is only likely to get worse as states look to exploit digital technology to further their regimentation and control of society.
However, a further interesting question is whether such spying and surveillance are a “necessary” part of the deliverance of safety and security. Would, for example, private security agencies have the need to spy on people’s private communications in order to keep their clients safe, and, if so, could this be achieved on an entirely voluntary basis in a free society?
Security, like any other good, is an end that consumes scarce resources, and so its provision must be valued more highly than other ends to which those resources could be devoted. Because a state is as an institution that enforces a territorial monopoly of the provision of law, order and defence funded by compulsory levies (taxes), it is able to provide a “blanket” security service without ever having to worry about whether its “customers” will leave it to patronise a competing provider. As a result, the state is cut off from any communication, through the profit and loss system, of whether it has correctly allocated resources efficiently to provide for security needs; as such the state can refer only to other criteria in order to judge the urgency of a particular security threat, and the measures that should be taken to tackle it.
This would not be the case on the free market. Private, competing, security agencies would not be able to apportion more resources towards the production of security than its customers were willing to pay for. In times, therefore, of relatively light or transient threats (such as one-off acts of crime by heterogeneous individuals) then the gathering of anything other than targeted (as opposed to mass) intelligence would simply be a waste. In fact, this state of affairs is likely to be the norm in a free society. Most “organised” crime consists of the underground provision of peaceful and voluntary services that the state has outlawed, while “terrorist” threats tend to be political backlashes against the state’s own actions.
The closest you might get to any kind of comprehensive criminal threat in a free society is various forms of human trafficking, such as paedophile rings and kidnap for forced labour. It is therefore very unlikely that there would be the need for systematic intelligence gathering in a world free of the state.