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The Kitchen Sync

October 9, 2020

Deep Dive: The new superpowers

What’s new: I (Klon) have an essay in National Affairs, The New Superpowers: How and Why the Tech Industry is Shaping the International System.

Why this matters: The essay explains the rise of the tech industry as a geopolitical player, how states are responding to this rise, and how conservatives and others on the political right can think well about this development and its implications.

Context: This article is part of a new series of essays by conservative and libertarian experts on how internet-platform companies affect modern life. The essays are framed in terms of the different kinds of “power” tech companies wield—or are accused of wielding—in American life. They are as follows:

  • Geopolitical Power

  • Market Power

  • Political Power

  • Cultural Power

  • Informational Power

Go deeper: I begin the article by illustrating how three trends hold special prominence driving tech’s geopolitical ascendence:

  • First, A growing number of technology companies have global interests and influence.

  • Put simply: the world’s largest technology companies are amassing a level of wealth, influence, international presence, and transnational interests that was previously only enjoyed by states.

  • Second, the expanding presence and role of digital and social media. 

    • Modern communications and social media provide an unparalleled tool for legitimate political discussion and action, but these tools also extend to bad actors.

  • Third, technology companies are a, if not the, center of gravity in the development of critical national security capabilities and methodologies.

  • These companies have unparallelled capacity to observe, to understand, to predict, and to shape human behavior and events.

There are three broad reactions governments have to this shifting global environment.

  • The US: “Engage and Invest”

    • The American response is typified by direct engagement and partnership with the private sector and by ongoing government research and investment.

  • China: “Fuse and Use”

    • China has never made a clear distinction between its public and private sectors.

  • It is within a system of “political capitalism,” where Chinese (and foreign) technology researchers and companies operate, an environment where the state is unbound by law and totally free to direct, subsidize, and coerce private sector support for official government priorities and policies.

  • Europe: “Strangle and Surrender”

    • In Europe, where the technology industrial base is comparatively weak, governments appear to be content with strangling technological innovation with regulations while simultaneously surrendering their national and cyber security to foreign actors – though, there are some reasons for hope.

Finally, the essay closes with four thoughts for those on the political right dealing with these issues.

  • First, always remember that technology companies and their capabilities are a key center of gravity in a global contest between liberal democratic society and technologically-enabled authoritarianism.

  • Second, the U.S. government must expand its organic capabilities for technological research and design while also dramatically improving its ability to discover and to integrate privately derived innovations before our strategic competitors. 

  • Third, the distorting economic impacts of China’s coercive economics must be accounted for and we cannot allow the natural “efficiencies” of markets to produce unacceptable national security outcomes.

  • Finally, fourth, conservatives must carefully balance their national security concerns regarding technology with their social and political concerns surrounding the growing role these companies have within our society.

In closing: There’s a ton more in the essay and I hope you’ll read it and that it’s helpful to you. 

FT’s Cold War

What’s new: The Financial Times has a new series of articles exploring “how the technology world is splitting into two blocs, military tensions are rising and countries are being asked to choose sides.”

Why this matters: The business world is waking up to the trends discussed in the essay above and is beginning to reorient accordingly. 

Key points: Currently, the series includes the following articles (with more to come):

What we’re thinking: Unfortunately, much of this content is behind FT’s paywall. If you have access, however, we highly reccomend it because it demonstrates that it’s not just governments who are reevaluating their posture on China. It also makes clear that the current contest between Washington and Beijing will not simply go away if someone new moves into the White House. A separation is happening — it’s simply a matter of how fast, how deep, and how dissruptive this separation will be.

House issues report on “big tech” & antitrust

What’s new: Democrats on the House Judiciary Committee’s antitrust subcommittee have issued a report saying “big tech” is, in fact, too big.

Why this matters: The “break up ‘big tech'” drumbeat is getting louder and feeds a broader chorus calling for regulatory action in the industry.

Key points:

  • The report does not have a single republican supporter. 

  • As other reports have done, this report treats Alphabet, Amazon, Apple, Facebook and others as monolithic “tech companies” rather than accounting for the fact that they are, in fact, quite different in the products and services they provide. 

  • The report, at times, confusingly cites examples of robust competition as evidence of monopolistic behavior. 

  • That is not to say, however, that the report doesn’t occasionally raise important questions and issues — questions and issues that should be further examined in a non-partisan and sophisticated manner.

  • For example, there are legitimate questions about how the consumer welfare standard can be more effectively applied in the context of free digital services. 

What we’re thinking: While somewhat influential, the report is unlikely to be decisive. More likely, it’ll be cited as justification for future legislative proposals that would have been drafted anyway. Moreover, we’re skeptical of anything that lumps these companies together and renders a “universal” judgement or that mixes this issue with concerns about intermediary liability (i.e., Section 230) — it smacks of political ax-grinding rather than being a serious examination of the businesses or of the law. We think the impending DOJ suits against Google and (maybe) Facebook will be far more serious and will require far more attention.

Fancy Bear wants your face

What’s new: Russia’s “Fancy Bear” hackers likely stole facial recognition data from a US federal agency.

Why this matters: As facial recognition technologies proliferate, so do the cybersecurity concerns they provoke.

Key points:

  • Last week, DHS’s Cybersecurity and Infrastructure Security Agency (CISA) published an advisory explaining that cyber attackers penetrated a US federal agency and stole troves of data, including facial images.

  • Now, according to Wired magazine, the attackers have been identified by security researchers to be “Fancy Bear” (AKA APT28), a team of hackers within Russia’s GRU.

  • The group is responsible for operations targeting the 2016 US presidential election, political parties, consultancies, and campaigns this year.

  • According to Vice News, the stolen data included people’s faces, license plates, and care information and was released on the dark web.

Do we have INTEL all wrong?

What’s new: Zachery Tyson Brown, over at War on the Rocks, ask the question, “What if Sherman Kent was wrong?

Why this matters: Sherman Kent is the grandfather of modern intelligence analysis and even asking this question would be considered heresy by many prominent intelligence officials (which is why we like this article so much).

What we’re thinking: Look, the Sync is already really long this week so we’re going to cut to the chase: if you’ve ever worked in the intelligence community or if you’ve ever been a senior “intelligence consumer,” you owe it to yourself to read this article. We don’t agree with everything Brown says; but, the challenges he raises are real and his call for a more tailored intelligence analysis reflects the tone and tenor of many modern policymakers — namely, “Give me something I can use!”

Klon Kitchen is a managing director at Beacon Global Strategies and a nonresident senior fellow at the American Enterprise Institute.