Lying is a crime. Refusing to communicate is an hindrance. Fortunately, the incentives for being transparent will far out-weight any benefit privacy could provide.
Privacy is why racism and LGBH issues exist in the first place. Tolerance sets in very quickly when constantly exposed to reality.
Likewise, privacy sustains the need to hide skeleton in the closet and conceal past mistakes. When everyone is exposed, it just becomes commonplace and they're not that remarkable anymore. If anything, it will be easier to understand why and how mistakes happen, and we'll be able to reduce their occurrence significantly. Today, the worst problems/mistakes are those people are working the hardest to conceal. Don't you see how that's a problem?
Privacy doesn't cure the underlying fear of being exposed. It gives you a sensation of safety in a society that's inherently broken. No wonder shameless people are so successful. Privacy, again, is the cause of that imbalance. Get rid of privacy, and people will start accepting the imperfect person they are.
I'm not advocating a complete switch today. I need people to understand that privacy is not a sustainable long-term solution, and that we need to make important changes to society that will facilitate the eventual switch to total transparency. It's not like you have a choice, transparency will be imposed on you whether you want it or not. The sooner you take steps to facilitate and embrace the switch, the easier and smoother the process will be.
A good analogy for that is fossil fuel. I don't suggest that everyone switch to electric cars today, but we have to take steps to prepare for an eventual switch. Like privacy, we can only use so much fossil fuel before it's gone.
> People will stop lying
I don't[3]. I already have a hard enough time remembering everything, and lies would only add to the crap I have to remember. Please don't assume everybody lies OR that "not lying" is anything close to the same set as "no privacy". Just because I tell the truth doesn't mean I don't maintain privacy for a variety of reasons.
The zero-privacy society you are advocating for has real world consequences to thing like racism, LGBT issues, and the like. Assuming that people wouldn't behave in these antisocial ways is delusional at best, because it presupposes that people act anywhere close to rationally. Wore, you have to remember that modern technology means that anything recorded sticks around ~forever. You are advocating for a society where people dig up ancient skeletons in someone's close just because they can. This is not hypothetical - an obvious example are the people in ?chan culture where bored teenagers SWAT[4] people "for the lulz"[5] It is laughable to think that that this kind of behavior will magically go away with more cameras.
In a society where every mistake you have ever made is recorded and available for critique is a society with extreme risk-avoidance (ass-covering) policies. The closet thing to this totally-open society we have today are the extreme forms of Calvinism (xian strict predestination) and the perverse incentive it creates to cover up and ignore problems.
Above all that, though, is the effect a lack of privacy has on experimentation and innovation: when people know they are being watched, they tend to not take risks or do things that make them stand out too much. This isn't just a Human behavior, either, as most mammals have similar reactions. You seem to see this effect as a good thing, while ignoring that private experimentation is a key part of how children grow and learn. Even into adulthood a lack of privacy raise stress and other mental health problems.
In a few hundred years, if society has learned to handle race, sexuality, poverty, mental health, and many of the other problems that cause the animosity, hatred, and violence we see today, we might be able to consider a are more open society. Until that time, an "open" society has real consequences for a lot of people. If you want to make such a future happen faster, I suggest you spend your efforts on actually trying to fix some of these problems, instead of assuming that everybody lives in a similar situation to your so you can pretend that hatred, racism, sexism, are just "brainwashing" that will magically go away if we could just get a camera into every bedroom.
[1] https://en.wikipedia.org/wiki/Guilt_society
[2] https://en.wikipedia.org/wiki/Shame_society
[3] I will add that while I have never had to test the extreme limits of "not lying", I have walked away from a job over a "lie or street" situation ( http://c2.com/cgi/wiki?LieOrStreet ).
[4] https://www.youtube.com/watch?v=TiW-BVPCbZk
[5] http://knowyourmeme.com/memes/i-did-it-for-the-lulz