In Bentham's Panopticon, a design for a prison, the guard in the tower can see right through the surrounding ring of cells. The inmates in their cells can't see into the guard tower, so they don't know when they're being watched. They begin to police themselves, just in case. They internalise the judging observer, and don't break any rules.
A recent paper suggests that online commenters aware of NSA surveillance, and convinced of its import for national security, will censor themselves from expressing views they believe go against the norm. The perception of being observed increases conformity, and discourages dissenting opinions. The need for hectoring collectivism is never even reached.
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