Battles for the Internets

The internet has given us many things. It has given us a new space for research, a new space for communication, a new space for procrastination and increasingly it has also provided us with a new space to wage war. Here are some updates from the Front.

Battle I: Anonymous vs. the CCP

So, internet freedom and ‘lulz’ hacktivists Anonymous have decided to finally take on the Chinese censorship behemoth. They have defaced several websites of governments and businesses. Furthermore they have used the sites to prominently advertise the many ways in which one can (to an extent) slip past the great firewall of China. Two things are noticeable about this:

Firstly, this was a confrontation which had to happen at some point. When it comes to internet censorship, no one is more adept at it than China. Anonymous at one point simply had to prove that it could take on the Cyber-Dragon. The choice of timing (right after the Bo Xilai disaster) was excellent and will probably provide the party with a few more headaches.

Secondly, the Dragon will undoubtedly win this battle. The thing is that, the way I understand it, the Chinese censorship system is not necessarily meant to be completely unbeatable. The CCP knows very well that complete Orwellian thought control is not within the realms of the currently achievable. Rather the point of the Censorship regime is to maintain a stranglehold over the main communication channels such as the Chinese twitter Weibo, in order not to prevent people from dissenting but to prevent them from spreading their dissent. In that sense telling people that censorship exists (which most people probably know anyways) and informing them of how to work around it (which a lot know as well) is not an effective way of beating the system, because people still cannot use social media to mobilize. So, while a nuisance, the CCP will survive this unscathed (and may even use the opportunity to close some holes in the Great firewall).

Battle II: The Pentagon (allegedly) vs. the Free Press

Two journalists from USA Today dared to write a story which strongly criticizes the inefficiency of the Pentagon’s “information operations” in Afghanistan (essentially attempts to “win the hearts and minds”). And the Empire decided to strike back by mounting an information campaign against the journalists, complete with fake websites, twitter accounts and Wikipedia entries. Of course this was so glaringly obvious that it underscored the inefficiency of these kinds of activities, rather than obscuring it. Indeed, the whole thing was so poorly executed that some are wondering whether it really was the Pentagon in the first place, instead suspecting a disgruntled military subcontractor. Either way, the free press survived this attack pretty much unscathed, which is good news for once.

Battle III: The Big Wild Western Civil War

With SOPA and PIPA defeated, the internet community is now roaring about ACTA and CISPA, which seem to be new attempts to do similar things. Much has already been said about this battle and I have little to add to the debate. The only thing which continuously amazes me is the internet community’s undying faith into the idea that it could actually maintain a free internet and the associated surprise when someone tries to take this freedom away. Don’t get me wrong, I have pretty pronounced libertarian strains and love the free internet like anyone. But what did you expect? Did you really think the law, which has encroached every other area, will leave the internet untouched forever? Did you really think you can download millions of gigabytes of music, films, games and classified government documents from sites with names like Piratebay or Wikileaks, without eliciting any kind of response? Of course governments are trying to regulate the internet. They would be stupid if they wouldn’t.

We all love Western movies. We all love the freedom associated with the Wild West. But it is an illusion to think that it can be maintained. At one point the Cavalry and the Rangers move in and ‘restore order’. They have now arrived. It will of course take some time until ‘order’ is established. But, unless the governments of the world run out of stupid acronyms, it is an inevitable outcome.

– AK

Innocence Proves Nothing – An unconventional take on an unconventional solution to an unconventional problem

Recently in France there has been a debate regarding a new law. Said law would make repeated visits of sites with content that advocates terrorism punishable. Similar laws regarding sites containing child pornography already exist in several countries. Now, there is many ways to assess whether such a law would be a good law or not. One could consider its practical implications. One could evaluate it in relation to existing judicial principles and procedures. Or one could focus on its philosophical underpinnings. I will attempt to do the latter, using an unconventional approach.

Any person who at least has had some contact with geek culture in his life will know what Warhammer 40k is. For those that don’t: it is a dystopian sci-fi fantasy universe in which the human Empire battles the forces of Chaos (among other foes) in a seemingly never-ending war. One unit that the Empire especially relies on in this war is the inquisition. The motto of said inquisition is “innocence proves nothing” (which explains the title). I always found that this motto was, in literary terms, extremely well chosen. The idea that “innocence proves nothing” after all flies in the face of pretty much our entire modern understanding of ethics. For us, innocence proves everything. If someone is innocent, he cannot be justly punished. This simple principle, however, does not and cannot hold in the world of Warhammer. The problem is that chaos, the evil force, can corrupt almost anything and only the strongest can resist it. So for the inquisition innocence is not a valid criterion. Bent on stopping chaos’s spread, they must judge whether someone is corruptible or not. If he is corruptible he must be eradicated, whether or not he has done something wrong. Innocence may imply resistance to corruption, but it may also imply that the person in question up until now had no chance to be corrupted. So: “innocence proves nothing”. They thus seek not to achieve justice. They want more. They want purity.

Now, any sane resident of our world would immediately reject such idea. It is anti-democratic. It is totalitarian. It is right-out insane. But… in a sense this is what is happening. The mere fact of looking at a website, even if it contains materials that advocates terrorism, is not a guilty act. One could go on these websites without ever intending to commit a terrorist act. One might, for example, be a sociologist researching the origins of terrorism. In this case one would unquestionably be innocent. There is no act and there is no intent so there can be no crime. But, if the law detailed above is enacted, one could still be persecuted. One could say that… innocence proves nothing. Such would be a strong case to oppose this law. We neither need nor want an inquisition to replace our legal system. In a democracy innocence should guarantee the right to be free and the law should protect this freedom. The only people whose freedom can be constrained are those who are guilty of conspiring against societies laws. And every single person must be regarded as innocent until they are proven guilty.  To sum it up: we cannot accept the moral foundations of the Warhammer world because we simply don’t live in the Warhammer world.

Or do we? The thing is that terrorism seems to us as a crime that is distinctly different from others. It is not something comprehensible to a sane and reasonable individual. It is not like the murder done out of affection, or the theft done out of greed, which, even if wrong, still appear understandable. It is a fundamentally irrational act, a systematic destruction of life for the sole purpose of instilling fear and thus fulfilling an absurd ideology. One could imagine that an otherwise good person could commit a murder in drunken rage. But, to me at least, it seems impossible that a good person would ever commit the indiscriminate killings that exemplify terrorism. Terrorists cannot be reasoned with. Terrorists do not understand the immorality of their actions. Far worse, terrorists deem their actions to be ethical, legitimate, and sometimes even sacred. They are in a sense like Warhammer’s chaos: a force truly evil. Terrorism is a concept that seems so foreign to our values that it simply should not exist. It should be eradicated and banished from our world. Seen through this lens the law would make sense. No one should even read ideas so decidedly evil. One might come to them innocent, but they can corrupt, and every single corrupted puts society as a whole at risk.  To prevent the possibility of corruption, everyone who puts himself into a position where he could be corrupted must be punished. The threat must be removed and purity must be achieved.

Now here one could immediately raise a valid objection. Benjamin Franklin once wrote that “they who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety”. And even in the Warhammer world this to an extent is true. The Empire is a brutal dictatorship and its methods are often hard to distinguish from those of the chaos. But if we need to erode democracy and our values in order to fight terrorism, don’t the terrorists somehow win? Unquestionably the answer is yes. And the law arguably does exactly that. It limits the freedom of information and it gives huge power to those with the authority to specify what terrorism, a fuzzy tem, exactly is. What if a future government decides to declare the Front National website terrorist? Or the website of the Front de Gauche? The opportunities for abuse are virtually endless. And how does one prevent seeing it? What if someone posts terrorist material on Facebook? Will all his friends have to go to jail? It all becomes very akin to the Orwellian concept of “thought crime”. This is not something desirable.

So, is the case closed? Not quite. The problem with the quotation written above is that, as good and powerful as it is, it represents somewhat of a false dichotomy. Without a minimum level of security to guarantee it, no essential liberty can exist. In both of the world wars, Britain, a mature democracy, decided to strongly limit the freedom of the press. This represented the curtailing of an essential liberty. But it did not result in a slide towards totalitarianism. Quite on the contrary, totalitarianism was decisively defeated in those wars. Now, arguably, we are in a war on terror. In the face of terror, essential liberty cannot exist. Freedom cannot be sustained if confronted with a minority that categorically denies the most fundamental of all human rights: the right to live. The state exists precisely to defend society from such ideologies and actions. The Empire arguably is bad. But Chaos is far worse. The risks are simply too high. What if such a website corrupts a biologist who then develops a biological weapon which turns into a pandemic? What if it corrupts an engineer at a nuclear plant? The law is thus part of a war effort. A war we cannot afford to lose.

As you might have noticed by now, I’m torn. There is compelling arguments on either side of the debate. Terrorism is a threat which is hard to compare to any other crime. It is a threat which must be adequately addressed. But we must also be careful to not exaggerate. Personally, I still believe that we have better options than this law. Instead of trying to banish ideas, however evil they are, we must find ways to convince people who might visit these sites of the superiority of our values. We must be able to prevent the spread of fanatic ideologies not by law but rather by reaching a consensus that they are wrong and unacceptable. In essence: instead of eradicating the forces of corruption we must increase our resistance to said corruption. It needs education, not inquisition. If we do not fight for our values, we lose them. If we do not believe them to be superior, we are lost. But I might be wrong. And the price of being wrong could be huge. Because it might just be that… innocence proves nothing.

– AK

Instagram: New Age Fun With A Vintage Feel

Some say a picture’s worth a thousand words. Apparently, Mark Zuckerberg now thinks it’s worth a billion dollars too.

That’s right kids. They’ve done it this time. Facebook has gone and bought the popular photo-sharing Instagram app for the whopping price of a thousand million dollars. This represents the biggest purchase the company has ever made, having previously limited themselves to hundred million dollar acquisitions.

This is neither surprising nor unexpected considering the success the company has encountered since the app was launched in October 2010.  Indeed, Instagram currently amasses a solid 30 million users. It is one of the most downloaded apps for iPhone and has just recently made its way into the Android market. The purchase was a logical step for Facebook, with its ever-expanding photo sharing features and its appetite for innovative programs. Basically, Instagram was becoming a little too successful and Zuckerberg was getting a run for his money. And you know what they say, after all: If you can’t beat them, buy them.

All of this brings me to ask myself: Why? What is it about Instagram that makes it so gosh-darn appealing to audiences of all shapes and sizes? I mean, has anyone actually stopped to think about the essence of it? Has anyone, for just a second, taken the time to dwell on what the point of this application really is? Seriously. Give it just a moment’s reflection.

Here is a program that allows you to take pictures. So far so good.
As it is a feature on your mobile phone, you can use it any time, anywhere. Practical, I like it.
It lets you upload and share the images instantly. Still working for me.
The only thing you have to do is pass your photo through a little filter that makes it look like it was taken on a 60’s analog camera. … And now you lost me.

Maybe it’s just me. Maybe I’m a tad narrow-minded and can’t fully grasp the ingenuity of this wonderful app but I don’t get it. Like many trends and habits today, the purpose of Instagram remains a mystery to me.
What are you trying to do, kid? Do you seriously believe that the picture you took of the stop sign on your way back to your middle-class, suburban neighborhood is going to look any more hip if you pass it through a yellowing filter? Do you honestly believe that when I glance at your photos, I think: “Would you look at that? That Lomo-fi effect really brings the image together! I love the way it reminds of the acid trip I was on at Woodstock.” Really? Do you really have such little faith in your photographing skills that you feel the necessity to alter them in order to make them look interesting? Or is it just that pang of nostalgia you feel when you realize you haven’t gotten a roll of film developed in well over five years?

Now, all of this may come off a bit harsh, borderline hateful towards an app that doesn’t do much more than give a cutesy, old-fashioned vibe to contemporary photos. But, don’t you see? This is the very root of the problem. We live in a generation that is constantly thinking up ways to have “new-age fun with a vintage feel.” Why? What’s wrong with taking a picture and posting it as it is? Why do you have to give the impression that it was taken a couple decades back when the sun shone brighter, the girls were prettier and the threat of global warming did not loom over our heads? Why must we always be dissatisfied with the era we are living in? Why can’t you look at a photograph and be content with the fact that it was taken in the 21^st century?

It’s true that throughout history, people have always felt they were better off in the past.  I can safely state that I’d be at least a hundred dollars richer if I had gotten a penny for every time I refrained from slapping someone across the face because they missed “the good old days when music still meant something.” It’s natural, everything seems sweeter in retrospect. But kids, you’re smart. You can look past these preconceived, romanticized notions about the good old days. Just think about it. What’s the point of all these innovations in the field of photography if at the end of the day all we do is purposely make our images blurry so they can look like the were taken fifty years ago and have since then been kept in a damp basement?

I’m not saying that the world today is perfect. All I’m asking is that you think this through for a second and don’t play into clichés so easily. Enjoy the times you are living. Rejoice in all the technological growth you have the privilege of experiencing. Don’t ruin a perfectly good picture just because you think the effect makes it look like it was taken at an underground jazz club in Chicago. Mark Zuckerberg may be convinced that this is a billion dollar idea but you can’t fool me. In my eyes, Instagram is and will always remain the epitome of artistic pretense. It is a way to emphasize your desperate need to be alternative in the exact same way as everyone else. If you’re really interested in taking analog photos, then please go ahead and do that. Be my guest! Just don’t come to me with a picture that was taken on a five-megapixel camera and pretend it’s a transcendental masterpiece. But hey, at the end of the day, I’m not the young CEO of a company that was founded on a stolen idea. So what do I know, right?

– This article was written by and presents the opinion of EB, one of our guest contributors

Neither Intelligent nor competitive – French Politics Edition II

All kinds of social democrats all over the world love to invoke Sweden when it comes to proving that welfare states are sustainable. And I concede, by pretty much all measures Sweden is a great country. But just a thought experiment: what would you say if actually Sweden proves to be more capitalist than your country?

Let’s look at the data shall we:

Sweden:

GDP per capita ($, PPP)	39013
Gov’t spending as % of GDP	55.2
Tax burden as % of GDP	46.4
Gov’t deficit as % of GDP (2010)	0.2 surplus
Public debt as % of GDP	39.8
Minimum wage	No legislated minimum wage
Heritage “business freedom” index	94.6
Heritage “labour freedom” index	54.6
World bank “ease of doing business” rank	14

France:

GDP per capita ($ PPP)	33835
Gov’t spending as % of GDP	55
Tax burden as % of GDP	41.9
Gov’t deficit as % of GDP (2010)	7.1
Public debt as % of GDP	81.7
Minimum wage	8.86 (2010)
Heritage “business freedom” index	83.7
Heritage “labour freedom” index	51.6
World bank “ease of doing business” rank	29

Interesting… Sweden, the bastion of social democracy, has a better business climate than France (and much, much better debt amanagement with only slightly bigger government). Surely French politicians will thus aim to improve the business climate in France while cutting debt and making the state more efficient. If not trying to emulate capitalism, they would at least try to emulate the much praised Swedish model. Right?

Right?

Let’s see…

–          Sarkozy: Tax the rich (at least the so-called fiscal exiles), go protectionist, more financial regulation, (maybe throw out some immigrants for good measure)

–          Hollande: Tax the rich, expand the state, more financial regulation

–          Le Pen: Tax the rich, go protectionist, leave the euro, throw out immigrants

–          Mélenchon: Tax the rich to space, nationalize banks, increase minimum wage by 20% and yeah… Do a Hugo Chavez style Citizen’s revolution

Now, it doesn’t surprise me that politicians don’t understand what Libertarianism is about. But that they don’t even seem to comprehend social democracy any more… That is just a fail.

– AK

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Pictures on the walls – the right way?

Sometimes I wonder.

I start to wonder how we came this far and where is this road taking us. Back in the early days of mankind, there were paintings on the walls, illuminated by the fires that warmed up the chilly caves of the first men and women. For what purpose were they drawn, we can only wonder. Maybe religious incentives, maybe to ask the gods to help those out there searching for a prey, spears in their hands, fear in their hearts, but their minds set on the one and only goal of their quest, survival. Maybe these images were only pieces of arts, expressing the most dominant event of the tribe, the hunt. Maybe these images were there to teach something, to show the young what is expected from them, what needs to be done when their arms grow strong enough to hold a spear firmly and thrust it into the chest of the approaching beast.
For the beast is surely to come.

But times changed, and the pictures changed.

What do we see now, what’s out there on the walls to teach our young, to prepare them for life? Just turn on your TV, and see. We find Jersey Shore, where getting drunk and behaving ridiculously in front of the cameras seems to give the highest entertainment and respect, we find Sex and the City, which gives our girls the idea that being single and having a different partner every night even at the age of 40 is perfectly fine, or on the other side, we find a show called Fifteen and Pregnant, and… I should probably stop here, since I am not the most reliable source concerning TV shows, since I stopped watching them a long time ago. But it’s not just that. All the ads, all the billboards show the pictures of perfect bodies with one clear message, trying to create a link in our brains: buy this and sex. And there is nothing wrong with any of those. What’s wrong is that we see young girls uploading almost naked pictures of themselves on social networking sites. All it takes is a mirror, a phone, and a few hundred comments. Like this and sex.

But before anyone would try to cut the tonsure into my hair, and to proclaim me as a 21^st century monk, I would like to make it clear, I am not saying that everything out there is bad or should be taken as a serious threat to our upcoming generations. I just wonder, if this is the right way, or not.

When I see that the population of almost every country in Europe is falling, I wonder, even though we become smarter, more informed and more interacted than ever before, but still, we are losing our faith in the most valuable connection that’s out there, marriage and family. When it is almost rare to see someone raising more than 2 children, and when we should be happy, if there are at least two children, I wonder. When divorce and re-marrying seems to be a casual event, only being concerned with financial issues, leaving the children out there to be strong and understanding, I wonder. Is this the right way, or not.

But who is responsible? Is it the caveman who paints the pictures? Is the caveman who keeps watching them? Or is it the caveman who grew up in a culture where he had no chance of questioning the message on the wall? None of them. The responsibility rests in the hands of those who wonder, wonder, and do nothing.

– The Pale

Neither competitive nor intelligent – French Politics edition

A quick follow up on my last post about “competitive intelligence”.

From Foreign Policy magazine:

Mélenchon, who tends to replace terms like “fiscal exiles” with “tax traitors,” recently proposed a 100 percent tax on annual income of more than $475,000. Posters for his Leftist Front coalition of microparties ask (in block capital letters): “TIRED OF PAYING FOR THE RICH? US, TOO!”

Amazing. And I thought Le Pen was the peak of all crazy…

But, just to clear things up. Mr. Melenchon, you’re a politician. You are paying for nothing. So, dont pretend.

– AK

“Competitive Intelligence” for Europe

First of all: welcome to the Dual Blogarchy.

Before I will get to my actual first post, I will briefly say a few things about this blog. For one, even though the design may give this impression, we are not monarchists. This blog will not (necessarily) attempt to push any political agenda. We simply chose this design because it is an awesome way of representing our respective cultures.

In this blog I will mainly write about two issues: economics and (inter)national security. Now, why did I choose to focus on these two topics especially? Well, for economics, the choice is obvious. I love the subject and it is relevant. As a matter of fact I can hardly think of anything more relevant. Economic policies, after all, are what determine the” wealth of nations”. The right economic policies can turn a barren, deserted place into an industrial hub while the wrong policies can transform a rich and pleasant land into an impoverished failed state. But national security is also important. The more you got, the harder it is to keep it. Despite the fact that many societies have attained huge wealth for their nations, they still aren’t safe. Quite on the contrary, the spectres of terrorism and war are constantly lurking in the darkness, awaiting the right moment to strike at our heart. The result is a paradox. On one hand our generation is richer and safer than any other generation before it. On the other hand, however, our generation also is permanently surrounded by threats, all of which, were they ever to materialize, could easily destroy all the progress mankind has made. From financial crises, over global warming, to genetically enhanced bioterrorism, we are surrounded by dangers which allow for no mistakes. It is in this context that (inter)national security should concern everyone.

Also, as you can see, it can get pretty long… But bear with me, it will be worth your time.

But now get to my actual first post. The topic today will be what is called “competitive intelligence”. This is an interesting place to begin because it is one of those things which exist on the overlap of economics and national security. “Competitive intelligence” is basically a legal form of industrial espionage, in which market participants, often supported by their respective governments, try to gain an informational advantage over each other. This takes various forms. Companies may attempt to gain information about plans of their competitors, they might attempt to defend their intellectual property in the context of an international market (or steal others intellectual property) or they may lobby decision makers to enact specific policies. In many cases the respective nation states housing these companies will aid them in their endeavours using diplomatic or intelligence assets. US companies, for example, have apparently in several instances gained from information garnered through the Echelon surveillance system, which monitors global communication networks.

So, three questions to answer:

–          Why is competitive intelligence important?

–          What are the main threats to European “intelligent competitiveness”?

–          What can Europe do to become more “intelligent” and “competitive”?

Firstly, why is competitive intelligence important? The answer to this may seem obvious, or it may seem not, depending on where one is coming from. In very basic microeconomics, people often erroneously ignore the importance of information, since simple models  operate under the assumption of perfect information, i.e. that every market participant knows everything he needs to know to make a rational decision. In reality such perfect information is almost never available and the market for information as a result takes a very pivotal role in the global economic system. Especially in our world of high powered- high speed finance, the right information transfer at the right moment can be absolutely crucial. The problem with information markets is that they, due to their special nature, can hardly be expected to function efficiently. They suffer from a somewhat paradoxical two-fold problem. On one hand information markets are too bounded. While technology has helped a lot in these areas, we still face many bottlenecks which prevent people from participating in mutually beneficial information transfers. Some of these bottlenecks certainly being societal, which is no surprise given that the market for information is highly embedded into the general social structure. On the other hand many information markets are too open. Like many other “virtual goods” (goods which can be recreated at almost zero marginal cost), some types of information are neither excludable nor rivalrous. With a few key strokes an important company email can be forwarded to millions of people. The result is that to prevent certain informational transfers, we often depend on government intervention. In order to deal with these issues government has proceeded to criminalize some forms of informational transfer (insider trading, for example) while trying to protect other types of information from getting into the wrong hands (one way being patents). “Competitive intelligence” in essence is an attempt to get the most out of information markets. Governments will try to aid their companies by helping them to gain information on their competitors or market developments, by defending their intellectual property and by promoting their brand overseas.

Going to Europe, what are the biggest threats to our “intelligent competitiveness”?

Intellectual property violations: Europe increasingly is relying on a high-tech economy. European companies can no longer compete based on quantity and prices in low-tech sectors, which is why the production of such goods has moved to other parts of the world with lower production costs. Instead Europe’s comparative advantage increasingly lies in the production of high quality goods and services. This is good because it garners high surplus values but it requires a technological advantage (and a corresponding stock of physical and human capital) in order to be sustainable. This technological advantage is increasingly coming under attack, not only through legitimate means (higher investment into research in other countries) but also through intellectual property violations. The most relevant example of this is still China, although apparently some progress has been made. But the continuing disrespect for European brand names and the limited defence of European companies’ rights in the local courts seems to be an on-going problem. If Europe loses its technological advantage, many sectors of its economy will suffer greatly as a result.

Cyber-security: The technological advantage can also be lost through direct theft. In our modern world, where sensitive information is increasingly stored in digital form, it has become relatively easy to steal data, if one knows how to do it. Hacker attacks on companies in Europe, America and Japan, have recently multiplied. Such attacks are not only protest actions carried out by Anonymous and similar groups but also seemingly are part of an organized theft of intellectual property. Although there is no discrete evidence for this, Ghostnet, which had infected embassies and companies worldwide, was most probably organized or at least supported by the government of the People’s Republic of China (the fact that the Tibetan government in exile was one of the targets underscores this). If our digital infrastructure is not hardened to resist such attacks, European companies will suffer.

So, what can be done? This is where it really gets interesting, because competitive intelligence gives some slightly different answers from the usual economic orthodoxy. The usual answer to a loss of competitiveness is either “more free trade” or “more protectionism”. Don’t get me wrong, both are valid approaches. But both are, well… not quite intelligent enough. Free trade only makes sense if people play by the rules. If everyone respects intellectual property rights and refrains from nefariously gaining information through the help of government assets, then free trade probably provides a socially efficient outcome. Protectionism is already somewhat more applicable. It aims to protect domestic industries either through import reduction (tariffs or quotas) or through subsidies. Both these measures can help but they can easily also do harm. Subsidies can easily promote the wrong industries (those which have more political than economic importance) and therefore just present a loss of society’s resources. Tariffs or quotas are equally hard to target at the right goods and usually their presence gives disincentives to local companies, which dissuade them from innovating since they are shielded from competition. Since innovation lies at the heart of a high-tech economy such blanket measures (what I would call the industrialisation orthodoxy) are not desirable.

Instead I would propose some other measures:

Closer cooperation of the private sector with a modernized intelligence service: I will start with this proposition since it’s probably the most controversial. The thing is that in Europe already the word intelligence agency already activates a panic reflex in many people. Intelligence gathering is still connected mainly to cold war fantasies of a spy-war or even worse to a Nazi style secret police. The only role we give our intelligence services is too maybe hunt a few terrorists, but that’s it. And in this we want to keep them not only as accountable as possible but also to isolate them as best as possible from the rest of the nation, including the private sector. The problem with that approach, however, is that it is simply outdated. Regarding the US there is evidence, including the already mentioned case where the company Raytheon profited from information gathered by Echelon, that the intelligence services are cooperating closely with key industries. And regarding China I believe there can be no doubt that the government is using all its assets to protect its economic interests. Europe will have to adapt in order to keep its technological edge. It will have to increase cooperation between intelligence (performed by civil, military and diplomatic agencies) and the private sector. It will further have to do this in a coordinated and united fashion. If Europe can pool its (unfortunately somewhat limited) intelligence resources in form of a European wide agency, it will be in a much better position internationally. This leads me to my second point.

A European-wide strategy to ensure cyber security and the protection of intellectual property: As already noted, European companies desperately need to protect their intellectual assets. Now, of course, we would all love to find a legal solution to this problem (or not, see SOPA) which would ensure that everyone respects private property rights and plays by the rules. However, for a myriad of reasons, this won’t happen. Therefore we need a more pro-active defence. This again will require intelligence cooperation, but the scale in this issue is much broader. Europe must come together in order to modernize the public and private sectors’ digital infrastructure, hardening it against any future attacks. Subsidies must be provided in a targeted fashion so that companies can more adequately protect themselves. Critical infrastructure (the electricity grid!) and key industries must be especially resilient. The European militaries must broaden their cyber-war capabilities in order to ensure that the source of attacks can be identified and that any such attacks can be met with retaliatory strikes. Furthermore Europe must stand united and use its assets aggressively to deter cyber-attacks or intellectual property violations in other countries.

A modern and targeted(!) education and research policy: In order to keep its technological edge, Europe must not only protect but also continuously expand it. This can only be done through a strong support for Human capital development (in other words education). However such measures must be targeted. I am sorry to say but there are certain fields which quite simply deserve way more support than other fields. Most emphasis must be placed on the so called STEM subjects (science, technology, engineering and mathematics). This must be united with policies which strongly encourage math, science and computer (!) education on the primary and secondary level. A society which is mathematically and technologically illiterate will not be able to compete in the modern world. Government must then further ensure that the graduates of these fields will find employment by providing large research grants to both the public and the private sector. All of this should, once again, happen in a coordinated fashion on the European level. Now, while this is probably one of my less controversial points, it will also be very expensive. And here we will have to make decisions.  Do we want to hold on to our increasingly obsolete Bismarckian warfare-welfare state or can we move to becoming a modern innovation nation, as economist Alex Tabarrok refers to it? This is a difficult problematic, even in the US, which traditionally had less attachment to its welfare policies. The federal government spends a staggering 450 billion dollars on Medicare but only 32 billion dollars on the National institutes of health which fund health research. This seems nonsensical. More research means both better and possibly also cheaper treatments. Ways to, for example, diagnose cancer earlier or to treat it more efficiently would cut a huge chunk from the Medicare costs. But the gains from research are not immediately felt by voters and scientists lack the kind of lobbies available to other advocacy groups, so change in this direction will be hard to achieve. And things are looking even worse in Europe than in the US. In 2000 the EU planned to get every country to invest at least 3% of its GDP in research and development, as part of its Lisbon strategy. Only Finland and Sweden (4%) reached this goal. In the EU on average only 1.9% of GDP are spent on R+D. In Japan, to provide a comparison, it is 3.4%. This is ridiculous. But even worse, looking at for example the debates between the different candidates for the French presidency, no one really cares.

Two very informative videos (both in German though):

http://www.youtube.com/watch?v=J1ag0PHN4_8&feature=related

http://www.youtube.com/watch?v=5bNViw1bj-A&feature=relmfu

(Especially the discussion of Pokémon as a brand is epic)

And for an excellent article on innovation:

http://www.theatlantic.com/business/archive/2012/01/the-innovation-nation-vs-the-warfare-welfare-state/251984/

– AK

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