If I were a geeky Google employee I might be excited about the current troubles between Google and China: a free ticket to experiment with all kind of computer hacking that would be off-limits otherwise. If I were a human rights activist I would probably applaud Googles brave step. But if I were a Secretary of State I would be worried.
Background
On Januari 12, Google management announced a new approach to China, stating that cyber attacks had been made from China and announcing that Google would stop cooperation with Chinese censorship. As to this moment of writing no formal reaction of the Chinese government is known.
Although, at this moment, Google has not yet actually retreated from China and did not yet release censorship either, it is widely anticipated Google will end its formal presence in China. They might continue a chinese version of their search engine operated from overseas, something like cn.google.com instead of google.cn.
Why it matters
Our modern global economy is extremely interconnected. Thanks to international trade we can benefit from materials and skills, available from overseas, and thus enjoy better products and services. In fact our current level of wealth is based upon international trade.
Both China and Google are powerful players in global economy and both are symbols for the potential of further development. China, the most populous country in the world, is only at the beginning of industrial development. Google is disclosing the vast reservoir of potential in the internet. China symbolizes that the benefits of modern urban industrial life is not a privilege of a few western countries, that other countries have the potential of catching up or even outperforming the western establishment. Google symbolizes that modern urban industrial society has not reached its final destination yet. When these symbols prove incompatible, we better prepare for a bumpy road ahead.
Trust is gone
For trade to thrive, trust is an essential component. A trade deal is only worthwhile if you can trust you will receive due payment and won’t be robbed of your assets. As confidence declines trade partners will feel forced to put more resources on risk reduction which reduces the profit of the deal. It is no coincidence that governments of thriving merchant nations have done major investment in achieving trust with protection of property, fair legislation, independent courts and so on.
When China has a human rights issue, this is also a matter of trust. It shows the national government has not full confidence in all of its subjects. It fears that Falun Gong, or the Dalai Lama, might try to institute a theocracy Iranian style. It fears the Uyghur or Tibetan people might seek independence. It fears students or liberals might overthrow the government while neglecting the interests of the current establishment. And the subjects on their turn mistrust the government because their needs might not be fully appreciated or their local habits might be suppressed.
Merchants are opportunistic by nature (they should be). The Chinese venture has been based upon the fact that it seemed to be working. The Chinese government, very much wanting to participate in modern trade, has done enough to safeguard the interests of western enterprises to make them open Chinese branches. Achieving trust in international trade and achieving trust in internal political affairs seemed to be two entirely different things.
What the Google case has done is:
- proving that these two are, in fact, interconnected
- proving that the trustworthiness of the Chinese government might be lass than expected as they seem to be not fully respecting intellectual property rights
In our 21st Century economy terrabytes of information cross national borders on a daily basis. Much of this information is encrypted as it is part of international VPN business networks. When trust isn’t there each bit of this information might be mistrusted. The Chinese government, for the better or the worse, has proven to be mistrusting. Any bit of information might be contraband helping a religious, regional or liberal uproar. On top of that they want power, are envious on western technology and ambitious to obtain this level of technology for themselves. So they want control over the streams of information.
The foreign enterprises on their turn know their IP is at stake, they might be confronted with competition of producers who copy their products without paying anything for development costs. They will continue to protect the integrity and secrecy of their data.
An arms race is inevitable as for both parties their survival depends on it. For the Chinese government, increasingly, allowing foreign enterprises is like allowing Trojan Horses. They will gradually introduce stricter regulation to make sure there isn’t a bit of Falun Gong slipping into the country. But for the enterprises complying with these regulations is like surrendering their IP. Eventually trade with China might slowly dry up.
Historical parallel: Book printing
In the West we have a rich and anecdotal history of how a free flow of information helped to overthrow a repressing government. It all started with the invention of the Book Press which forced the Vatican to give up its monopoly on reading and interpreting the Holy Bible. In the 17th Century books printed in The Netherlands were illegally smuggled into countries like France and Italy and allowed to spread new ideas about freedom and the role of national government. Over time (many decades!) these new ideas lead to revolt and government change.
Over time the principle of spreading of information has remained a constant in overcoming repression and establishing freedom. While technology advanced, so did the instruments. Book presses evolved into stencil machines, faxes, copiers, computers and now the internet. With improved technology government countermeasures have become more advanced as well but ultimately the dance remains the same. It is a social game that’s about credibility and flexibility. The big problem of a hierarchical central government is that they can never match the flexibility of a social network. The illegal information threatens to slowly undermine its credibility. Oppressive measures can raise the fear and slow down this process but they further decrease credibility as well. Ultimately nobody takes the government seriously anymore and then they’re gone.
In the West we acclaim this process. We feel it is a part of our history and our identity and we tell the stories with heroism. Enabling such a process in another country is not seen as hostile interference in foreign affairs, it is seen as helping a suffering minority. Of course the governments involved have a different view, the Iranian and Birmese governments sure think they are under attack from Western destabilizing forces. But, while real military operations are always controversial, western public opinion is very favorable to helping the spread of information. It is OK that Facebook and Twitter are helping Iranian dissidents. Soon Google might do the same in China. The Chinese government is quite right to be afraid.
Historical parallel: Industrial revolution
But let’s face another parallel, this is not the first time technology is spreading faster than organization. In the 18th Century, the industrial revolution happened in England in a very liberal environment. Probably it is due to this liberal attitude the industrial revolution was possible in the first place: it was worthwhile to experiment with new machines because when the idea worked out you were allowed to keep the revenue. But when the industrial revolution enrolled other countries started copying the inventions without necessarily having such a liberal climate by themselves.
Notably Prussia has been one of the early adopters. In the 18th Century Prussia was yet another small kingdom in Central Europe. But during the 19th Century Prussia used new technology to increase their power and quite successfully so, in 1871 they were able to overthrow Austrian leadership in the German Confederation and establish the (Prussian lead) German Empire.
Like China today, Prussia had a somewhat twisted combination of modernity and traditional authoritarian leadership. Especially in the early stages freedom of trade and enterprise were encouraged, freedom of speech not so much. Until 1866 Prussian railways were private enterprises. But towards the end of the 19th Century the German industry became more and more subordinate to the one national interest.
On the British islands during the industrial revolution competition has always been between enterprises, the presence of a (relatively liberal) supervising state has always been undisputed. Fortune of being an island, disputes about the territory of England were not important. So even with international expansion there has been a nuance that trade interests were more important than territorial interests.
But Continental Europe was a whole different beast. Frontiers were disputed all the time, territorial interests were far more important. The nuance pointed the other way, even when trade interests were important and competition between enterprises did exist, it was ultimately the national interest and competition between states that counted.
A century ago Germany had managed to build up a powerful state-of-the-art military machinery, forcing its neighbors to follow suit. Contemporaries had no idea of how powerful this machinery really was and were rather ignorant with the mechanisms that could ignite it, which happened in 1914 resulting in millions of deaths in World War I. But the worst had yet to come. Due to the hostilities international trade came to a complete standstill. All the benefits of international trade suddenly were gone leaving the world in a deep economic recession during the 1930’s which lead to another, even more devastating war.
Yes, ultimately Germany has become a modern democratic state with all civil freedom and without dangerous territorial ambitions, but at what a cost! I’m not saying (and certainly not hoping) this is the prospect for China. All I’m saying is that it is rather naive to expect all will go well by itself. There is certainly reason to be optimistic about technology advances and optimistic about the world more free and prosperous, but these changes come with turbulence that come with risk as well.
Prospect
So there is the fun part: the experimentation with computer hacking. I’m not so pessimistic about that one on itself. No doubt Cyber War will continue. But big corporations are far from defenseless, they are bound to learn a lot and make improvement in how to arrange their internet connections.
There is the heroic part of helping the poor victims of suppressing regimes. People in the West will try to hack Chinese digital Walls and even if they don’t Chinese government will be very suspicious about that. That’s simply the way it’s gonna be.
And there is the worrying part, that of the complex task of balancing international relations. It will require a lot of attention from skilled people to do it right. And that is where my real fear lies, that at the moment when it is really critical the President of the United States will not be able to give it his full attention because he was distracted by some silly teenager playing with his underwear on an Amsterdam – Detroit flight.