Post-Snowden: the economics of surveillance

After 9/11, we worked on the economics of security, in an attempt to bring back some rationality. Next followed the economics of privacy, which Alessandro Acquisti and others developed to explain why people interact with social media the way they do. A year after the Snowden revelations, it’s time to talk about the economics of surveillance.

In a new paper I discuss how information economics applies to the NSA and its allies, just as it applies to Google and Microsoft. The Snowden papers reveal that the modern world of signals intelligence exhibits strong network effects which cause surveillance platforms to behave much like operating systems or social networks. So while India used to be happy to buy warplanes from Russia (and they still do), they now share intelligence with the NSA as it has the bigger network. Networks also tend to merge, so we see the convergence of intelligence with law enforcement everywhere, from PRISM to the UK Communications Data Bill.

There is an interesting cultural split in that while the IT industry understands network effects extremely well, the international relations community pays almost no attention to it. So it’s not just a matter of the left coast thinking Snowden a whistleblower and the right coast thinking him a traitor; there is a real gap in the underlying conceptual analysis.

That is a shame. The global surveillance network that’s currently being built by the NSA, GCHQ and its collaborator agencies in dozens of countries may become a new international institution, like the World Bank or the United Nations, but more influential and rather harder to govern. And just as Britain’s imperial network of telegraph and telephone cables survived the demise of empire, so the global surveillance network may survive America’s pre-eminence. Mr Obama might care to stop and wonder whether the amount of privacy he extends to a farmer in the Punjab today might be correlated with with amount of privacy the ruler of China will extend to his grandchildren in fifty years’ time. What goes around, comes around.

3 thoughts on “Post-Snowden: the economics of surveillance

  1. Ross,

    One advantage the NSA has is the “All roads lead to Rome” issue of the Internet network architecture and of other communications networks. Along with the 5-Eyes having most satalite footprints covered and Australia in particular sitting astride of most sub-sea cables in Asia.

    It is interesting to note from the recent UN’s ITU World Telecomms Development Confrance in Dubai no real consensus about Internet governance was reached, thus for no atleast the US, UK and others retain their privaledged position.

    As long as the NSA retain control of “the bat and ball” they can “move the goal posts” where ever they wish irrespective of how any one else collectivly or otherwise may wish to change the rules of the game.

    Thus it is in Europes interest to redifine the physical and overlaying logical and cryptographic arangments of the Internet and other telecommunications networks to ease the 5-Eyes strangle hold on them.

    The problem is that with few exceptions most governmental persons elected or otherwise are easily drawn into the idiotic “if you know what I know but can not tell you” club the intel organisations spin. Like moths to a flame they allow themselves to get in effect emasculated in the process, and thus neutered they appear incapable of taking action to limit the intel agencies excessess or bring into place strong privacy legislation.

    And it is this political weakness that has since WWII led to our loss of freedoms, which hard won at the time are now almost compleatly squandered and will be a long and hard battle to regain.

    Thus whilst we can take back the technical bat and ball will our governments alow us to?

    Looking back at Harold Willson who absolutly hated and detested the security services he achived little to restrict their activities. So can we find elected representatives who will stand upto the intel services sufficiently to limit at a minimum their excesses?

    And if not where do we go from here?…

    1. I like the choice of words – freedoms vs. rights. I am tired of hearing about every ones “rights” being violated. Howard K Phillips approaches that subject in his book The Death of Common Sense. I do not, for one minute, believe any laws enacted to protect our freedoms re the internet will be effective. We live in a time when we listen to lies, knowing they are lies, and we nod our heads in agreement. President Obama used the word transparency in his campaign and we repeated the word in support of him. Most of us knew he was entering the lions den and he would be fortunate if he could manage not to be eaten. and he has done very well in that regard. Thus, our freedoms are violated, and will continue to be violated – I have a lingering suspicion that the old lions know little about the internet and they are counting their days until they can retire and become lobbyists.

  2. I gave a talk on this paper as the annual privacy lecture at Berkeley Law School. The video should be available in due course and I’ll link it here when it appears; meanwhile here is a review in Law Technology News.

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