ANewDomain.Net Essay: NSA versus Tech Economy, Cost-Benefit Analysis

Silicon Valley worries that NSA spying is hurting American tech companies’ ability to compete internationally. Who wants to store their data here when they know it’s going to be spied upon? But the post-9/11 police state indirectly employs millions of Americans. What’s more valuable to the U.S. economy — the security surveillance sector, or IT? The answer may or may not surprise you…but it will bum you out:

But then I began thinking about the vast scale of the post-9/11 police state. Tens of thousands of employees. Hundreds of thousands of private contractors. Many of them, like former CIA contractor Snowden, paid six-figure salaries. That huge data farm in Utah. That’s a lot of economic activity. For the moment, let’s set aside the moral and political ramifications of law-breaking citizens (the NSA’s charter prohibits both intentional and accidental data collection in the United States) who spy on law-abiding citizens. As a simple matter of short-term cost-benefit analysis, what’s better for the American economy: privacy or police state?

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  • First, Mr Rall does an excellent economic analysis. Then, at the bottom, he says it was all tongue in cheek. (I have been accused of writing tongue in cheek when I say I know the world was created in 4004 BC, because I trust the Good Book and not the extensive fossil record and carbon 14 dating, which were sent by Satan to lead people astray. But when I give quantitative evidence, I try to make sure it’s accurate.)

    “these illegal violations of privacy”
    Bush, jr declared a War on Terror. Not a police action to find the guilty, produce evidence of their guilt, and protect the innocent, and everyone is innocent until proven guilty. War is much more profitable. So the NSA actions, approved by the Secret court, are NOT illegal under the Rules of War. Bush, jr suspended the Constitution, and the Congress and the Supreme Court did not object.

    “Your data isn’t safe in the United States”
    True. But the IT industry is so inbred, any European cloud will have US bits, and the NSA will do its best to exploit them, and will inevitably succeed. And those European countries don’t have a Snowden. Well, the UK does (and it’s the same one reporting on GCHQ activities), and the UK GCHQ is spying on everyone in the UK and Europe. Division of labour, you know.

    “Now Consider the Profits of NSA Spying”
    Your analysis does NOT include the multiplier. When the NSA spends $50 billion or so, the people who receive it (all with clearances, and so all Americans) spend most of it in the US, and when they spend that $50 billion, that’s another $50 billion added to the economy. (One must take into account the marginal propensity to spend, and that infinite sum amounts to at least $500 billion added to the economy.)

    So, all-in-all, Mr Rall has proven that the US desperately needs the NSA to implement everything Orwell predicted on simple economic grounds. And more! The alternative would be higher unemployment. And complete loss of privacy is worth it if it reduces the unacceptably high unemployment rate.

  • alex_the_tired
    November 25, 2013 4:23 PM


    I’ll think about this some more on the ride home. But the point I want to bring up right now is this:

    The Internet model’s biggest danger? Edward Snowden. One person was able to get ALL this information. An article floating around mentions that Snowden has a “doomsday cache” of information.

    It’s like trying to grab all the hand grenade shrapnel before it hits anyone.

    Civilization is a complex, subtle mechanism. Like a wind-up alarm clock. It takes very, very little deliberate sabotage to wreck it. Imagine how much damage someone could do with free, unseen access to a whole mess of billion-dollar company databases.

    The economic destruction would be absolute. And what do we have preventing it? Why, the assurances of a bunch of experts. And as long as not one single one of those experts gets pissed off and decides to start figuring out ways to crash the whole shebang, we’ll be fine.

    As long as.

    • Where the hell is the “LIKE” button???? Oh, I forgot I’m not on Facebook…. 🙂

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