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Institute for National




Chapter 8

Economic Information Warfare

The marriage of information warfare and economic warfare can take two forms: information blockade and information imperialism.

Information Blockade

The effectiveness of an information blockade presumes an era in which the well-being of societies will be as affected by information flows as they are today by flows of material supplies. Nations would strangle others' access to external data (and, to some extent, their ability to earn currency by exporting data services). Cutting off access would cripple the economies of those nations, bringing them to their knees.

For the next few decades at least, the United States is more likely to perpetrate rather than find itself the victim of information blockades. It is more likely to be united with the rest of the world than our rogue opponents would be; not only is it, by far, the best connected and thus would be the hardest to cut off from information flows (not to mention the most self-sufficient economically), it is also a natural exporter of information.

An analysis of information blockades raises the same questions raised by other forms of information warfare: is it real? is it war? Could the United States truly blockade information, and, if so, would that make much difference to the behavior of other nations?

Is it Real?

Information blockades can be understood as a variant on economic blockades. Cutting off trade in goods can affect the well-being of a country by disrupting production flows and, in the long run, eliminating the benefits of foreign trade. An information blockade works similarly by forcing the target country to work in the dark and, in the long run, by removing the benefits of information exchange. It also limits the ability of the blockaded country to engage in psychological warfare.

To blockade a nation's information flow without blockading its physical flows is to block only one avenue of commerce, the one that flows electronically. If physical flows remain intact, printed (e.g., technical manuals) material could be acquired and even large databases transferred by CD-ROM. The information blockade would interrupt real-time interactions and restrict access to very large information flows (e.g., raw satellite imagery). It would be both easier and harder than blocking the country's supply of goods. With less opportunity for physical confrontation (in contrast to, say, boarding suspect ships at sea), the odds of violence is less. For the most part, information conduits are countable (by contrast, opportunistic smugglers can penetrate the entire length of a border).

How well can electronic data flows be cut off? Physical linkages, such as copper or wire, can be cut off at the border, in the waters, or at the nearest switch. In World War I, England severed Germany's cable links to the United States. Terrestrial radioelectronic connections can be silenced either by silencing the nearest transmitter (e.g., microwave towers) or by selective jamming. Space-based communications pose a bigger problem. Even if all sources uploading to geosynchronous satellites ceased transmissions (most are institutions, such as phone companies or media services), some services such as direct broadcast satellite would be nearly impossible to block. Free channels would just radiate. The benefits and lack of penalty associated with cracking by-subscription channels (which may carry tomorrow's digital business traffic) would probably motivate enough people to try, as video piracy in the United States shows.

Eliminating person-to-person linkages (e.g., Iridium, Inmarsat) could be confounded by the efforts of those on the outside whose communications were cut off. Third parties could establish accounts on global networks to pay for users inside the country. It is almost impossible for satellites to know where signals are going and even harder to determine where they come from. Encryption would hide who was talking to whom.

Is it War?

Under what circumstances would a nation be vulnerable to information-economic warfare? Those who would block information could do so only by controlling a sufficiently large percentage of information resources and by being themselves relatively invulnerable to reverse pressure. In this respect, the United States alone would have a comparative advantage.

Comparisons to economic warfare are apt. The effectiveness of economic warfare depends on the target country's need for trade (or on the scale of disruption an unexpected cutoff of trade would imply). Countries that need food (e.g., the United Kingdom) or raw materials (e.g., Japan) or that live by selling specific resources (e.g., Iraq) are vulnerable to economic warfare. Those that for ideological or geographical reasons can forgo trade (e.g., the former Soviet Union) are harder to affect. A reigning article of faith holds that economic growth requires active participation in the global economy. Any nation only beginning to integrate its economy with the rest of the world's would see a blockade more as opportunities missed than as output lost; either would mean taking a risk.

For an information blockade to have power similar to that of an economic blockade, the target nation would need to be dependent on external information flows, although information exchange is only one component of trade. Note 56 A nation that had lost access to electronic information exchange could be hindered yet not prevented from conducting trade. Iraq, for instance, could still sell oil. Without real-time access to commodity exchanges or the ability to tap databases on usage patterns, a targeted nation might have somewhat more difficulty writing the most advantageous contract for itself -- but that constitutes a far lower loss.

Conversely, dependence could arise more from importing information, rather than from exporting it. The growth of computers, communications, and simulation suggests the growing attractiveness of offering services, especially expert services, over the net. Both carbon-based and silicon-based consultants could advise farmers on crop conditions, diagnose failures in complex machinery or factory systems, navigate the shoals of global commerce and finance, prepare surgical procedures, even supply the educational system. Such bandwidth-dependent applications are especially vulnerable to blockade.

As with many forms of conflict, threats may be more effective than acts. Nations seeking greater information intercourse (e.g., to attract industries) would be more sensitive to the risks of untoward actions to their participation in the info-sphere; but nations that decide the risk is worth taking might be less likely to come to terms once information warfare has commenced. After all, societies were known to function before television.

How dependent on information flows could nations become? Some, the Philippines and several in Caribbean, are acquiring low-tech information export sectors (e.g., credit card operations). Would ambitious countries see their prosperity linked to status as a competitive base from which to sell goods and services and still risk provoking an information blockade that could sour potential investors?

If the threat of information war is present, few countries might allow themselves to become so vulnerable. Yet, under peaceful conditions, the prospect of a blockade may seem remote. Dependence on global information links will increase, and even leaders with hostile intent may not perceive that such dependence leaves them vulnerable to retribution if and when the leadership carries out hostile acts.

Information Imperialism

To believe in information imperialism means believing in modern day economic imperialism. Thus, trade is war. Nations struggle with one another to dominate strategic economic industries.

How does information play in this contest? Although it is difficult in a paragraph to do justice to a complex chain of causality, Note 57 the logic is as follows. Nations specialize in certain industries; some industries are better than others. The good industries command high wages and, usually, feature high growth rates. They tend to be knowledge- intensive; they require and reinforce skills against which other nations, particularly those with low-wage workforces, cannot easily compete. Acquiring and maintaining a position in these industries is a reinforcing process. Consider Silicon Valley. The advantages of working there include easier access to customers, suppliers, and to workers sophisticated in electronics. The constant exchange of information, in particular, early access to interesting technical questions and information resources, provides on an edge in coming up with interesting solutions that, in turn, increases the likelihood that the area may enjoy a like advantage in the next round of problems. National policies may reinforce virtuous cycles. Japanese automobile manufacturers, even U.S. transplants (e.g., Toyota in Georgetown, Kentucky) have been accused of giving interesting work to their friends and boring work to others; Japanese vendors are said to offer their wares to domestic buyers one or two years before the wares go overseas. U.S. firms have a hard time tapping into these networks of opportunity, either as suppliers or buyers. Targeted acquisition policies by governments (e.g., lucrative, research-intensive defense contracts) can have similar effects promoting a particular sector.

Is this war? Analogies to kulturkampf may be useful here. The United States does not export movies or pop fashions with an eye to subverting other cultures; it is something it does at a comparative advantage and wishes to extend through markets in goods and services. The Japanese could argue that, similarly, they do not wish to place the rest of the world into an inferior and dependent technological position. They simply want to make enough money to pay for their imports, and they believe they have a comparative advantage in certain high-technology manufacturing. Whether characterizing trade as a country-versus-country competition is meaningful in an age of multinational corporations remains an open question. Most large manufacturing corporations Note 58 in the United States and Europe are rapidly losing national coloration -- and, in any case, they source components globally. Japanese and other Asian corporations remain noticeably national, but they are moving in the same direction.

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