Panopticon

What a cool word. What is it? A very interesting type of prison where a very few number of guards can see all inmates, each inmate has a window to the outside world, and no inmate can see another inmate. Check it out on Wikipedia.

I heard the concept in the context of a talk given at Yahoo! by Jamais Cascio (cascio@openthefuture.com), where he talked about the Participatory Panopticon. The idea is that once everyone has a mobile phone capable of recording photos or videos at any time, without the target's knowledge, we basically are in a situation where you live your life as you do, but at any moment you might be recorded (seen by the guards).

Question: If everything is always recorded, does it destory social fabric, or does it require forgiveness, since nothing is forgotten?