Wednesday, March 4, 2015

The Cost of Cyber-Security in the War on Terrorism

Governments and private industry have dramatically increased their expenditures on physical and cyber-security almost to the point of panic.

With respect to cyber-security, each breach of a major firm or government institution – those that are publicly acknowledged – adds political pressure to increase resources to safeguard America’s information.

The reason for the panic is that this particular risk cannot be quantified in order to justify the expenditures. Thus the only option is to throw more money at the problem hoping that it eliminates the threat.  Because this is a national security issue, the additional funding amount will not be publicly revealed nor will government officials authorized to fund such projects be held accountable.  It’s one big technical, economic and political black box.

This begs the question how many and even whether these cyber-breaches are simply probes or deep intrusions.  How do you define a breach?  Was it a cut that required a dab of mercurochrome and a band-aid or an emergency trip to the ICU? There is no independent firm that can confirm the level of such breaches.

One may also ask whether the level of this new class of industrial espionage and warfare is grossly over-stated similar to what the U.S. government consistently informed the American public of the Soviet Union’s so-called powerful armed forces which turned out to be nothing more than a paper tiger to justify spending billions of taxpayer money on unneeded military equipment.

With probably billions being spent on cyber-defense, this means significantly less for critical expenditures such as education and infrastructure maintenance.

For private industry, whether they confront the security issues directly or subcontract their security matters, they have significantly less for capital investment and employing new workers.  For this reason private economic growth stagnates or is tepid at best.  Additionally private industry must deal with the intangible ‘soft costs’ with respect to public relations damage control due to loss of prestige and goodwill for their clients.

As for hard-asset security, much has been discussed on the militarization of law enforcement and added security surveillance measures. The financially good news about these security measures is that at least their costs can be quantified even if camouflage uniforms in urban environments don’t make any sense.

The recent terrorist attacks in Paris, horrific as they were, send security costs spiraling in a self-defeating cycle in which governments and industries believe spending more money will reduce attacks. Certainly an impressive show of force by law enforcement is required to calm the public. But to defeat terrorism you have to eliminate its causes in which the full participation of currently available talented human resources in addition to law enforcement from many disciples like sociologists, anthropologists, psychologists, linguists, etc. can be utilized.

Copyright Indo-Brazilian Associates LLC 2015.  All rights reserved.

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