I think not violating people's privacy with technological data collection is a technological issue, not a political one. Because you can have a society without capitalism or the state, you can have incredibly strong social norms governing privacy and the use of people's data, but as long as that society is collecting and storing information about individual people, that information can still be leaked, stolen, or misused by whoever controls it.

(I mean, imagine somebody in smart city IT has some sort of personal issue or conflict with another citizen and decides to abuse their access to data collection to gather information about that citizen. Even in an anarchist utopia we'd still have stalkers, domestic violence, controlling partners, child custody disputes, and all the ways people in relationships hurt each other that come with humans being human.)

The only way to guarantee data collection doesn't violate people's privacy is to not collect data capable of violating people's privacy - that is, don't deploy systems that can collect that data at all.

And that restricts the type of data that can be collected so much that, I think, it rules out most of the benefits of a "smart city".