There is a fifth option, which is to construct through the democratic process a new set of civil rights and policies designed to confront and limit these new powers.
For example: we can seek to make it illegal for certain information to be tracked; we can require that any information collected be disclosed to the individual at risk of being tracked; we can expand fourth-amendment protections explicitly, forcing a warrant to be issued to collect any of the information made available through these systems, even if the data is stored on a corporate server (doing away with national security letters and administrative subpoenas, and prohibiting disclosure without a warrant); and we can impose criminal penalties on government and corporate officials that violate these rights.
And more: we can make exposure of all but the most sensitive government "secrets" mandatory by law, rather than relying on legally questionable whistle-blowing for disclosures; we can ensure that encryption technologies (and other self-protection techniques) always remain legal, and remove any requirement that backdoors be added to new communication technology; we can work to decentralize corporate power in telecom by aggressively enforcing anti-trust laws; we can improve transparency and oversight of telecom services by explicitly encouraging that high-speed data service be provided as a local public utility.
And we can reduce the incentive that exists at every level of law enforcement to undermine privacy and civil liberties (and in turn further centralize power) by making fewer things illegal--most importantly, drugs.
While I'd love for those things to come to pass, it's alarming that you elide methods and obstacles entirely. The democratic process has been purchased by the entities you're proposing to regulate, and the entities that you propose enforce these new rules, are beneficiaries of the current arrangement and would be greatly inconvenienced by the changes you propose. The beneficiaries of the current arrangement will resist changes to that arrangement with utmost vigor, so it doesn't speak well of your proposal that it supposes that they will cooperate with changes that are against their interests by handwaved methods and tactics.
I think the first step towards change is to envision the world that you want, and find people that agree with that vision. And if you can't agree on everything, find that subset of policies and objectives that people can passionately agree on, and forget everything else. Then, get organized.
Start by going door to door; find people who care enough about the issue to help out; have in-person meetings and events and build connections; give people the tools--online and offline--to recruit participants and stage their own meetings; orient people towards a focused set of objectives, and ask them for money to help you broadcast those ideas with counter-propoganda; ask people to contribute time and money to candidates that support those objectives; always keep everything above board, to avoid being attacked; rinse and repeat. If enough people care, you can win; if not, then maybe "money in politics" wasn't the real hurdle to reform--maybe it's just that the voters didn't want the reform you were preaching.
Democracy today seems broken, like it doesn't work any more, but it's always been "broken," it's never "worked". The progressive movement and the labor movement of a century ago both fought an uphill battle against big money in politics. It took decades before they experienced lasting success. When voters want changes in government that cost profitable businesses money, a lot of those businesses will spend at least as much money as they stand to loose to prevent that change from happening. It was as true one hundred years ago as it is today.
The fact is, though, that absent massive violence or election fraud (which itself is only possible when the polls are tight) with all the money in the world you still need people--individual people--to vote your way. Money in US politics has influence only insofar as it can be used to convince the masses of voters to vote a certain way. The thing is that money and propaganda have limits, especially if a message of reform resonates. That's what social movements are all about--coalescing around a message of reform that makes propaganda sound unconvincing.
Some people don't mind being tracked, and some people prefer it (because it can increase the quality and relevance of services offered to them). I can't think of a reason we should outright deny such services from existing. Additionally, such regulations would probably end up applying only to corporations (who are usually not malicious, and only want my money) but not applying to governments, who can cite "national security" concerns to justify tracking people anyway.
As for mandating government transparency and protecting encryption, I think those could have a lot of potential to help without unfairly limiting any person or group. And I agree, we should make fewer things illegal, which is another reason it might not be smart to make collecting consumer data illegal.
I think this is the correct course of action. No matter what amount of privacy we have, and I think we are entitled to a lot of it, nothing stops someone who has more power from exploiting someone who has less. All the encryption in the world doesn't stop someone from breaking down a door and breaking the code with a rubber hose, so to speak. What does stop people from doing this is a very strong social stigma against this kind of behavior. Or at least it was a very strong social stigma, it seems to be breaking down if you are of a certain color or religion now.
Only by maintaining the social stigma can we really protect ourselves.
This is, at its core, a social issue, not a technological one.
For example: we can seek to make it illegal for certain information to be tracked; we can require that any information collected be disclosed to the individual at risk of being tracked; we can expand fourth-amendment protections explicitly, forcing a warrant to be issued to collect any of the information made available through these systems, even if the data is stored on a corporate server (doing away with national security letters and administrative subpoenas, and prohibiting disclosure without a warrant); and we can impose criminal penalties on government and corporate officials that violate these rights.
And more: we can make exposure of all but the most sensitive government "secrets" mandatory by law, rather than relying on legally questionable whistle-blowing for disclosures; we can ensure that encryption technologies (and other self-protection techniques) always remain legal, and remove any requirement that backdoors be added to new communication technology; we can work to decentralize corporate power in telecom by aggressively enforcing anti-trust laws; we can improve transparency and oversight of telecom services by explicitly encouraging that high-speed data service be provided as a local public utility.
And we can reduce the incentive that exists at every level of law enforcement to undermine privacy and civil liberties (and in turn further centralize power) by making fewer things illegal--most importantly, drugs.