Principle of Balancing Transparency with Capability

The idea of privacy has always been in contradiction to transparency, but there exists a theorem stating that you can't have both maximized: transparency is inversely proportional to privacy. So, we tend to extremes. For example, the idea of rights to privacy is highly regarded in the Western society, so much so that this right is extended and granted to private enterprises and governments (through rights to data sovereignty).

When a single individual misbehaves, the damage that one can make is relatively limited, yet when a large organization (with rights to privacy or "data sovereignty") misbehaves, the consequences may be far-reaching.

The larger and more powerful an organization is, logically, the more damage it may do if it misbehaves (higher risk to other players). From here comes an idea of the principle of "balance of transparency with capabilities", stating that:

$$Transparency \propto Capability$$

The greater the capabilities of a person, organization or government, the higher level of transparency it should require, to ensure that it does not misbehave.

Contrarily, the free individuals that are not part of large organizations, or part of small organizations, ought to have relatively more privacy, due to the lower capabilities.

Of course, there may exist individuals and small groups with enormous capabilities, therefore, the proportionality of transparency, according to this principle, should correlate with the level of capability rather than the size of organization per se.

However, clearly, the level of trust reduces requirements for transparency, so, we could write:

$$Transparency \ requirement \propto \frac{Capability}{Trust}$$

$$Privacy \ allowance \propto \frac{Trust}{Capability}$$

I think this principle must have been formalized long ago, somewhere, because it seems so obvious, yet, I can't find it online, so, sharing it here.

Of course, there are cases, when we grant high level of autonomy and organizational "data sovereignty" to organizations due to other factors, like trust gained due to low volatility of deviation of its decisions from a set target (like, stable legal or ethical principles system), and so on. However, that falls into the calculation of "Trust".