THE SHIELD OF ACHILLES (129 page)

The role of the news media has changed, constitutionally speaking, in the last three periods of the state.
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In the era of the state-nation the constitutional role of the press was foremost to transmit the political leadership's views. This often amounted to functioning as an organ to shape public opinion. Napoleon's bulletins provide a good example.
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So do the
Federalist Papers
, first published as essentially op-ed pieces, and the journalism that powered the French Revolution. In the nation-state period, to this role was added the function of informing leaders about the public reaction as the public spoke back to government through the media. William Randolph Hearst's famous remark (“You provide the pictures, I'll provide the war”) showed a shrewd appreciation of this. The pivotal role played by the
New York Times
in opposing the War in Viet Nam that it had so heartily supported and the
Washington Post
's crucial exposure of Watergate
felonies both showed the press not only leading the public but also constantly reporting trends in public opinion on the same issues. Editorial opinion and its counterparts in the electronic media eventually stood for public opinion. When the CBS anchorman Walter Cronkite turned against the Viet Nam War, President Johnson is reported to have concluded that his war policies no longer had the confidence of the public.
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In the market-state, the media have begun to act in direct competition with the government of the day. The media are well situated to succeed in this competition because they are trained to work in the marketplace, are more nimble than bureaucrats hampered by procedural rules, are quick to spot public trends, can call on huge capitalizations, can rely on sophisticated managers and technocrats, and are the most capable users—far outpacing politicians—of the contemporary techniques of advertising and public relations. Finally the media, protected in many countries by statutes and constitutional amendments, are free of many of the legal and political restraints that bind government officials.

The changing role of the media as it enters the era of the market-state is felt in many quarters. David Anderson, a law professor and former journal-iist, has observed that the constitutional protections surrounding libel defendants have been transformed from protection for the lonely, vilified civil libertarian to an insurance policy for media multinationals.
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To take another example, one aspect of President Clinton's difficulties in persuading the public that the campaign of vilification directed against him came from a “right-wing conspiracy” is that some of its most avid adherents were liberal journalists. They were not conspirators—at least not of the right-wing variety—so much as soldiers in an historic struggle to wrest power from the presidency, and to gain even greater control over the electoral process than the media now enjoys.

Indeed the competitive, critical function of the media in the market-state is similar to that of the political parties of the Left in the nation-state: the Left was always a
critical
organ in government, reproving, harassing, questioning the status quo; it sought a governing role even though whenever Left parties held office, they quickly moved to the center, co-opting (or being co-opted by) the Right. Now with the discrediting of the Left in the market-state, this competitive critical function has been taken up by the media.
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The media are completely untrained in this task—ethically or politically. Much the same can be said for the leadership of the great multinational corporations (of whom the media empires form a subset). Nor can these institutions expect much guidance from the political class that has so enslaved itself to the market via its reliance on campaign contributions.

Relations between the media and the other organs of government are further exacerbated by the fact that in the market-state the public's attitude toward what can be accomplished by government changes (and thus also changes with respect to the scope of personal responsibility). Now it is up to the individual to avoid problems, not up to the state to fix them. If there are unsafe areas of town, the citizen is best advised not to go there, rather than expect the police to ensure a safe environment. If a person becomes a politician or seeks fame, he will get little sympathy if he is badly treated thereafter: he sought the role, and therefore he bought into a bargain that includes loss of privacy, jeopardy to reputation, loss of earnings. The market is inherently unpredictable, so persons become more fatalistic; the nation-state, based on the operations of law rather than the market, gave a sense, perhaps illusory, that expectations would be fulfilled through policy.

In the transition, the nation-state will appear to be doing even worse than it is. Popular appreciation will plummet because the public has been persuaded that the government cannot accomplish anything positive of note. This is partly due to the switch in roles by the media, which retain the credibility of reportage but now also have the mission of opposition. Business activities—and the activities of business leaders—are replacing politics as the central source of news about the welfare of the people.

Absent the threat of war, it is very difficult to believe that the publics will be eager to follow the urgings of their political leaderships to make the sacrifices that states often require. This development will strain the political structures of the great powers to their utmost, making them vulnerable to delegitimation in a crisis. Political leaders may find they are able to inspire a sense of mission only through the shrewd manipulation of the media, a short-lived tactic that ultimately must invite contempt. At the same time, some sectors of the public will become more credulous, more willing to believe preposterous stories about government cover-ups.

At present when we consider environmental threats to the collectivity of mankind, we have tended to concentrate our concerns on cumulative threats like global warming and the destruction of the ozone layer. When we think about environmental events that threaten a single state, we focus on oil spills, desertification, and deforestation. We have neglected events relating to the environment that bring about conflict among the members of the society of states. Crises like those provoked by the meltdown of a nuclear reactor, the incubation of an infectious disease, the migration of
industrial pollutants or water-table contaminants, genetic interventions with unanticipated consequences all will put stress on an international system that is steadily divesting itself of legitimate universal legal institutions, even as it is creating new global economic ones. During much of the period in which the particulate ash and smoke from the fires in northern Mexico blanketed Texas in 1998, Mexico refused U.S. assistance in putting the fires out. When a Russian submarine with a nuclear reactor aboard was crippled in 2000, Russia similarly refused assistance until it was too late to rescue its crew. The president of South Africa once took the view that AIDS was not related to HIV and could have, had he persisted, greatly worsened a transnational epidemic. These incidents may be harbingers of the sorts of environmental problems that can easily lead to conflict.

Nation-states tend to treat epidemiological matters in nonsecurity terms. Air travelers, for example, are routinely screened for carrying weapons across national borders; they are seldom required to demonstrate that they are free of lethal communicable infections. By viewing such matters as international security issues, the market-state sets the stage for strategic conflict over their resolution.

Nation-states continue to think in terms of maintaining control of conventional agricultural and industrial raw materials (like food and oil) by encompassing them within their territories, neglecting to put in place rules of behavior that will govern the distribution of goods like water and technology when these are at least as likely to be the source of interstate conflict in the future. Hitherto restrictions on technology transfers—like those governing the export of high-speed computers that can be used in missile telemetry—arose from state conflicts like the Cold War. In the future such restrictions may themselves be the cause of conflict.

Nation-states tend to treat crime and corruption in terms of the laws of a single state, using suppression to its fullest effect. This overlooks the destructive economic and political effects in other societies of the markets in illegal enterprises created by such national suppression. The inadvertent consequences of the United States's attempted suppression of cocaine consumption has perhaps done more harm to the polities of many Third World governments than meddling and intervention ever did.

The next example of the historic juxtaposition of these two archetypal forms of the State is potentially the most disturbing. This is the set of issues that is becoming known as the problem of “critical infrastructure.” A society's critical infrastructure is composed of those elements— telecommunications, energy, banking and finance, transportation, government services—that undergird modern life such that their extended interdiction would have consequences for the sustainability of that way of life. Historically, these elements were confined to national territories. Moreover, these individual elements of the infrastructure were physically and conceptually separate systems that had little interdependence. Generation of electricity by the local power company did not depend, in any immediate way, on the operations of the local phone company or the local bank; the German phone company did not depend on the British phone system, nor did the Japanese banking system depend on the day-to-day operations of the Italian banking system. Beginning in the mid-eighties, however, the interplay among a number of factors created a new largely intangible infrastructure, the international superinfrastructure, that is critically essential to, yet also critically dependent upon, each of the traditionally recognized infrastructures. The factors bringing about the emergence of this superinfrastructure include the many developments in information and communications technology, but also, crucially, a change in attitude among the most highly developed members of the society of states about the role of government and the market. This change in values within many states—which is encapsulated by the claim that we are moving from the era of the nation-state to that of the market-state—has had two effects that are relevant to this problem. First, it has vastly enhanced the vulnerability of the critical infrastructure of states because the reshaping of the various sectors mentioned above (banking, energy, and so on) has taken the path of greater efficiency rather than greater national security. Deregulation and greater competition have meant that there are now more competing operators with access to critical systems, and that operators are no longer monopolists with annual profits guaranteed by the State with which they can be relied upon to cooperate in matters of national interest. The new players have a different attitude toward their responsibilities to the society in which they operate.

Second, each government's role in protecting its state'S infrastructure has become bewilderingly complex, even paralyzing. Two facts are sufficient to make it so: most of the critical infrastructure for the most developed state is in the hands of the private sector, which thus controls the information on which any attempts to ensure security depend; and the origin
of attacks on these infrastructures can be made impossible to trace, so that traditional strategies of deterrence and retaliation become irrelevant. It may or it may not be in the interests of Lloyds Bank to disclose to government authorities that a successful intrusion into its accounts had been made by a cyberattack that has cracked its security codes via the Internet, but even if a national government learned of such an attack, which ministry has jurisdiction? Should the intrusion be treated as a domestic crime? As a foreign attack? And if a foreign attack, is it by a state or a criminal conspiracy or some subnational group? Or is the entire affair the work of a disgruntled employee or simply a glitch in the software? Who has the authority to answer these questions, bearing in mind that the costs to the society of an unreported attack will almost always be greater than the costs borne by the private enterprise that suffers the initial loss, but that the private enterprise can be global while the exclusive jurisdiction of the State is, by definition, territorially limited.

The core elements of the international superinfrastructure are the telecommunications networks—which include the landline networks of long-distance telephone carriers, cellular networks, and satellite services—and the collection of information technologies that in the year 2000 was composed of 400 million computers worldwide—about 50 percent of which were in the United States, Germany having 7 percent, China 1 percent—and the Internet, a global network interconnected by means of routers that use a common set of protocols to provide communication among users then numbering about 32 million devices, and expected by 2002 to encompass about 300 million worldwide. Taken together, these three networks (telecommunications, computer, and Internet) supported over 200 million hours of connectivity every business day in 2000. The telecommunications networks are crucial for virtually all aspects of the infrastructures of most states, including their defense operations. In 2001 more than 95 percent of all internal communications by the U.S. Department of Defense went by means of the public switched network. Moreover, the pace of this increasing dependence was quickening.

So long as the nation-state dominated public affairs, it was inconceivable that states would willingly lose control of their national telecommunication industries. If it had been proposed in 1945 that the U.S. Bell System should be dismantled, objections on grounds of national security and law enforcement would almost certainly have trumped efficiency concerns. Today, the desire to bring better service at a lower cost to consumers has made the security and law arguments sound antiquated. In fact the distinctions between local and long distance and between wireline and wireless service providers are beginning to disappear. All aspects of the public switched telephone network have now been opened to competition. In the traditionally monopolistic local markets, local exchange carriers have
been required to allow alternative access providers to interconnect to them. The U.S. Telecommunications Act of 1996 cleared the way for cable television operators to offer telephone and other services over their cable systems. As the structure of the industry changes, fewer services will be delivered wholly by a single provider; more often services will involve interconnection and interworking among several providers, which will inevitably mean greater reliance on what I have called the superinfrastructure. As in banking, the industry will consolidate. The Pacific Telesis – SBC and NYNEX – Bell Atlantic mergers in 2000 reflected this trend. Indeed future mergers will be international in scope, such as was presaged by British Telecom's attempted takeover of the MCI network. Thus we will see a more diverse and decentralized system that is, at the same time, far more dependent on a smaller number of electronic gateways.

Banking and finance, after having remained essentially unchanged since the Second World War, are being revolutionized through access to the superinfrastructure, interacting with a political environment that has radically changed regulatory policy. Until the 1980s, the financial services infrastructure of most countries was primarily the product of states that prohibited these institutions from entering specific lines of business, limited the ownership of various types of firms, and prevented banks from operating on an international or even national level. In some states, such as Japan and Germany, many of these constraints were still largely in force at the century's end. Once deregulation occurs, however, financial institutions need advanced telecommunications to remain competitive in the new environment. In the twenty-first century, the infrastructure of national banking and financial services will become heavily dependent on computer-controlled systems and the telecommunications systems that link them together to move instruments of value through the economy. Payment systems, perhaps the most crucial sector in banking and financial operations, rely on a small number of networked information systems to track, finalize, and account for transactions. Practically all communications in the industry use leased terrestrial circuits; and it is anticipated that the trading markets, electronic funds transfer, and other financial functions will migrate to shared networks like the Internet that are more cost-effective. The use of electronic cash is quickly increasing, with a significant impact on the volume and value of transactions flowing through electronic funds. Visa and Mastercard are international systems of banking and debit that would be impossible without this electronic linkage. In the five years from 1990 to 1995 the use of cash in all transactions decreased 5 percent, and this trend is accelerating. The number of banks is expected to continue to decline. Many financial institutions are outsourcing activities, allowing them to focus on core business functions and reduce overhead. The result of this, however, is to concentrate back-office financial functions in a handful of third-party providers connected by the superinfrastructure, so that disruption of one major outsource would affect multiple companies.

Similarly, for nearly sixty years the electric power industry reflected a well-defined pattern of mutually exclusive regulated monopolies, each serving customers in its discrete area. Utilities in the United States and Britain now must unbundle generation, transmission, and other services, enabling rivals to lease lines to send power to their customers. Companies must post data on transmission availability and rates on the Internet. Moreover, in the past, steam-driven generators were the norm, whether relying on coal or nuclear fuel. Now aero-derivative gas turbines make power more cheaply, use less fuel, and are cleaner. With the new technology, power companies can achieve comparable output with plants one-tenth the size. This means that new, smaller companies can enter the market, increasing competition and penalizing older utilities with high sunk costs in outmoded plant and equipment. Today, telecommunications networks hook up to the giant Interconnects that are the islands of the electrical power infrastructure for the developed world. Electrical power generation, transmission, and distribution are largely controlled by a multitude of automated systems that monitor, report on, and in part control the flow of energy throughout these systems. Yet as more players enter the field, the SCADA—supervisory control and data acquisition—systems that manage the flow of energy are becoming more numerous. These standardized, automated systems are linked to control centers that are linked in turn to management systems responding to the increasingly competitive business environment. Thus we have the paradox of more access to competition, meaning more competitors, and yet more centralization and dependence upon the superinfrastructure.

The pipelines that carry oil and gas, like the energy transmission lines, also are controlled by SCADA systems that rely on standardized, automated mechanisms as a way of meeting the pressures of intensified competition. These systems controlled in 2000 much of the 22,000 miles of oil pipelines and 1.2 million miles of gas pipelines, regulating the flow of oil and gas through an array of pumps, vents, valves, and storage facilities throughout the pipeline system. Here as elsewhere, the efforts toward standardization and establishment of common protocols are driven by the high cost of maintaining multiple kinds of protocols, computer hardware, and software. Many infrastructure entities look to the day when virtually all of their operations will run on networks of large computers using standard communications software throughout.

The difficulty posed by these infrastructure developments is that a cyberattack on that structure can now be launched from anywhere on the
globe and can have an impact that is compounded by the interconnectivity among essential elements of the infrastructure. The rapid dependence on information that is sweeping the infrastructure is accompanied by a mutual dependency among, and a dramatic lessening of the number of, critical nodes as well as a general standardization. These developments are largely responsible for the increase in wealth that has been brought about by the new deployment of information; unavoidably they have created a situation of very high risk should that information be tampered with or interdicted. The use of information technology has grown from an option to enhance efficiency to a necessity that many parts of the infrastructure require to function.

The critical superinfrastructure provides the link between the processes of quite different organizations and thus, if compromised, has the ability to create a cascading effect, multiplying destruction exponentially. Thus, for example, a national outage of the U.S. public switched network (PSN) would not only bring almost all local service and all long-distance telephone service in North America to a halt; it would also disrupt Internet communications and cut off essential services such as air traffic control, banking and financial transactions, and even the emergency response to deal with the crisis caused by this outage.

Who would mount such an attack? Unlike conventional warfare, this type of operation would offer little strategic warning and few indications of an imminent assault. Physical attacks would be carried out by small, highly mobile units, while individuals equipped with laptop computers could launch attacks from any point on the global network. This form of warfare would be inexpensive, putting it within reach of most groups and most states. As in the world economy, the greatest asset in this conflict would be information: in this case, the information necessary to turn information technology against itself.

Where would such an attack on the critical superinfrastructure come from? It might be the result of a natural disaster, like an earthquake or flood, or of a simple accident at a critical node owing to design flaws, installation errors, or inadequate operation. Or it might be caused by an intentional act of terrorism, like the attacks on the World Trade Center that targeted both the American air traffic network and its financial services industry. The most insidious and conceivably the most damaging threat to cyber systems, however, is a cyber threat. Such threats are new, the product of the information age that gave rise to the superinfrastructure in the first place.

Cyber threats might arise from malicious insiders, from terrorists or military opponents, or organized crime, from hackers or competing industrial firms, or from the national intelligence or defense agencies of other
countries.
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National intelligence agencies may wish to siphon off data or even to insert disinformation. In a 1990s incident, organized crime electronically robbed Citibank of $10 million through its branch office in St. Petersburg, Russia; it would be idle to suppose that criminal conspiracies will not explore the possibilities of falsifying criminal records, accounts, and other data stored electronically. Hackers are often students who penetrate government and private systems for the sheer thrill of beating the system. In an era of deep suspicion of the motives of governments and large corporations, the number of such persons will surely increase as the number of persons with computer expertise and experience increases.
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Insiders pose the most dangerous threat because they have detailed knowledge of the systems they attack and ready access to the target's own resources.