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Musings Report #34 8-20-16 "Empires built on secrets cannot stand"
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"Empires built on secrets cannot stand"
I recently received a thought-provoking email from longtime correspondent Lew G. on computer and Internet security.
Recent leaks and hacks--from the NSA, the National Democratic Committee, George Soros, the Panama Papers--reflect the reality that even "secure" systems can either be hacked or made public by whistleblowers.
Here is Lew's comment:
"About a year ago, I worked through the reality of computer security in a post, and predicted that the NSA would eventually stop collecting anything. It wasn't possible to prevent computers being hacked, but it was possible to protect info in transit and info in storage. So, we could expect many more Snowdens, nobody would be able to keep secrets. If you can't protect it, and you can't, don't collect it. Secrets have become a liability, when they used to be an asset.
Empires built on secrets cannot stand?"
This is a fascinating question, which I turned into a declarative statement for the title of this Musings.
In the old order, secrets were the foundation of statecraft, military effectiveness and intellectual property. Industrial and state spying paid huge dividends to those who acquired the secrets of rivals.
Secrets now appear to be liabilities rather than assets.
Some of this vulnerability is the result of the basic architecture of the Internet, which was designed to connect a few dozen universities and research centers in the late 1960s. The protocols were not designed to connect billions of devices securely.
The other vulnerability is human nature: the greater the power of the secret, the greater the power wielded by whistleblowers and the greater the attraction to hackers.
Ironically, perhaps, security now flows not from maintaining secrets but from not needing any secrets to protect. Trust--in relationships and enterprises--comes from transparency and an absence of secrets, and betrayal arises from hidden secrets being revealed.
People who don't have to mask their true character and intentions don't need to keep secrets. Enterprises and networks that adapt so fast nobody else can keep up with them don't need secrets, either.
Empires built on secrets cannot stand because the unveiling of the secrets destroys credibility, trust and whatever value was dependent on the secrets being maintained. A transparent Empire whose strength flows from transparency and fast adaptation cannot be brought down by the act of making secrets public, just as an individual without secrets cannot be brought down by the release of secrets: there's nothing to reveal, and no power waiting to be unleashed.
This power flows from transparency, trust and fast adaptation/learning, not from secrets. I suspect this is scale-invariant, as true of individuals as it is of families, enterprises, communities, cities, nations and empires.
Summary of the Blog This Past Week
What the Fed Hasn't Fixed (and Actually Made Worse) 8/19/16
It's Time to Abolish the DEA and America's "War on Drugs" Gulag 8/18/16
The Odds of a Global Food Crisis Are Rising 8/17/16
The Deep State's Catch-22 8/16/16
Here's Why Wages Have Stagnated--and Will Continue to Stagnate 8/15/16
Best Thing That Happened To Me This Week
Found this quote by William Hutchison Murray:
"Until one is committed there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too.
All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favour all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamt would have come his way."
Market Musings: Looking at the S&P 500 since 2007
It's interesting to take the long view of the S&P 500 (SPX). Looking at a 10-year chart, the decline from almost 1,600 to 667 from 2007 to 2009 doesn't look that big a deal, given the incredible 6-year uptrend since March 2009.
The boost phase of the rally lasted over 2 years, from 3/09 to 6/11, when the Greek debt crisis caused a temporary swoon in global markets.
Once central banks rescued markets (again), the rally resumed, but beneath the trend line.
This rally ran out of steam in early 2015. The marginal new highs in May 2015 and July 2016 are not even visible on this chart.
What is visible is a giant megaphone pattern that targets the old all-time high from 2007 around 1,600.
Even the casual observer is struck by the market's wild yo-yo'ing since early 2015--rather than trace out a definable uptrend, it's been a chop-fest of dizzying declines and furious rallies.
This is not characteristic of a powerful Bull market. Rather, it is evidence of a Bull market faltering, eroding and being saved by increasingly outsized central bank interventions.
$180 billion a month of addiitonal stimulus is now required from the major central banks to keep the market afloat. Yet the returns continue to diminish.
There's something fishy about this current rally in 2016; the declines are huge but the new highs are modest. This is a tired Bull, and a spear tossed from somewhere in the crowd could bring it down all too easily.
From Left Field
The Myth of Self Reliance (Toby Hemenway)
Casual Sex: Everyone Is Doing It -- not quite, but a grabber headline...
The richest people in the world are frightened -- debt-serfs are nearing revolt...
The World’s Energy Engine Is Slowing (via Joel M.)
Venezuela was once the richest country in Latin America. Now it’s falling apart
The Street Syndicate: Re-organizing Informal Work
As informality becomes a major feature of the global economy, street syndicalism may be the key to putting human dignity over property rights.
Solar physicist sees global cooling ahead (via John D'A.)
Could Even Central Banks Be Using Bitcoin? -- makes sense...
Relax — robots are not coming for your job -- wishful thinking....
The Plight Of The White Working Class Isn’t Economic, It’s Cultural
What I Said When My White Friend Asked for My Black Opinion on White Privilege -- be sure to read about the stuffed animal in the rear window to telegraph a low-risk profile...
THE HUMAN COST OF CHINA’S SLOWDOWN
On a visit to a Chinese shipyard, our correspondent met a man prepared to resort to extreme measures just to get paid -- of course this doesn't matter--everything in China is awesome and will only get more awesome...
"Whatever you can do or dream you can, begin it--boldness has genius, power and magic in it." Goethe, 1835 translation by John Anster
Thanks for reading--
charles |
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