Cybersecurity: Free Markets versus Centralized Control

Wednesday, August 25, 2010

Anthony M. Freed

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Free markets have successfully been employed to coax totalitarian regimes towards the path of freedom because the opportunities free markets provide create hegemony across a broad tactical foundation that reaches far beyond simple dependence on military strength and costly conflicts.

The strategy worked to end the Cold War when the USSR relented to free market forces. Sure, it was the unprecedented spending on defense by the United States that eventually brought down the Soviets, but the underlying reason for their demise was an inability to both feed their military machine and prop up their government-subsidized economy simultaneously.

The tactic seemed to be working on China as well, as China has made significant reforms over the last two decades that have shifted the once closed-society towards a western style free market system.

That shift may well prove to have only reinforced the centralized power structure in China to the extent that they now have the economic engine to support totalitarian expansionism to a degree the Soviets had only aspired to even at the peak of their power.

A recent article published by PC Pro highlights growing concern over China's initiative to gain a tactical advantage on the cyber front. From the article:

China's cyber warfare capability is an increasing threat to local and global adversaries, according to a nervous-sounding report by the US Department of Defense. In a report to Congress, Military and security developments involving the People's Republic of China, the department warned that China was developing the capability to mount serious battlefield and long-range attacks on information systems. China's investments in advanced electronic warfare systems, counter-space weapons, and computer network operation reflect the emphasis and priority China's leaders place on building capability for information advantage, the report said.

Aside from the issues being addressed in the ensuing debate over the relevance of the concept of cyberwarfare, there are deeper concerns to address regarding the granular effect China's modus operandi is having on the very structure of western societies.

Will the free market conquer the eminent threat to information systems security, or will the free market be overwhelmed by government intercession, ultimately diminishing once free societies to the level of quasi-totalitarianism?

Examples abound - from the dozens of cyber legislative efforts that include a proposal to register Internet users with the government, to the sharp increase in the number of sovereigns demanding access to Blackberry servers in the name of security (coming soon to the US?) - the trend is indicative of a movement towards centralized control of information systems.

Now  private industry defense contractors may soon find their systems under surveillance by the largest of the domestic intelligence monitoring apparati - the National Security Agency.

As recently reported in The Atlantic:

To better secure unclassified information stored in the computer networks of government contractors, the Defense Department is asking whether the National Security Agency should begin to monitor select corporate dot.com domains, several officials and consultants briefed on the matter said. Under the proposal, which is being informally circulated throughout the department and the Department of Homeland Security, the NSA could set up equipment to look for patterns of suspicious traffic at the internet service providers that the companies' networks run through. The agency would immediately notify the Pentagon and the companies if pernicious behavior were detected.

On the face of this, I completely agree that in the case of defense related issues, the more security the better. Looking at the big picture though, my concerns derive from the idealistic notion that free market tenets ultimately provide the ballast ensuring the principles of a free society remain sacrosanct.

On a more pragmatic basis, it is difficult to imagine that legislative processes, increased regulatory compliance mandates, and unfettered government access to non-government information systems will do anything but further impede entrepreneurial efforts to mitigate cyber threats.

The federal government is monolithic and extremely inefficient when contrasted with private enterprise on any level, and the move towards centralized control of information systems and security is a move towards totalitarian-style control of individual and corporate liberties.

Ironically, some of the provisions the government employs to monitor information exchange in the name of national security perpetuate the very vulnerabilities being exploited by both freelance and state-supported hackers.

The very best the government can do is to mandate security outcomes, provide the economic and social incentives required for innovation in the private sector, abolish bureaucratic red tape, and then get the hell out of the way so the free market can do its job.

Else, Western societies could soon begin to resemble the extremist regimes we have for so long paid such a heavy toll to defeat - and worse, we will have walked willingly down that proverbial path we paved for ourselves with good intentions.

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