To bring the pressure of war to bear upon the whole population, and not merely upon the armies in the field, is the very spirit of modern warfare. —Alfred Thayer Mahan, November 1910
During the last quarter of the nineteenth century, for statesmen with an interest in national security, understanding the strategic implications of globalization—the phenomenon by which national economies became entwined with and progressively subsumed within the international economy—was one of the thorniest and most mentally challenging problems they faced. Today, as national economies become increasingly dependent on and intertwined with cyberspace, the topic of cybersecurity moves steadily up the defense agenda. Now critical to the global economy on which societies depend, cyber systems are a major factor in national defense and international stability.
Like globalization, cyber warfare is a multifaceted yet amorphous subject: barbed, hard to define, and difficult to conceptualize. The paucity of tangible examples of cyber warfare does not help matters, because it is difficult to theorize about a subject when one does not understand the parameters of the possible. Until very recently there was but one reasonably well-known instance of cyber warfare, Stuxnet. For a period, indeed, its name became almost synonymous with the term “cyber warfare.” Yet to frame an understanding of a subject on a single manifestation would clearly be unwise. In conceptual terms, moreover, Stuxnet was the cyber equivalent of a precision tactical weapon, whereas it is possible to think of other forms of cyber warfare. For instance, it is generally acknowledged that cyber weapons have been developed for use in conjunction with combat forces. Similarly, the possibility of attacking an enemy’s critical economic infrastructure to degrade their military or civilian capabilities has now become widely known.
Yet even these uses do not exhaust the possibilities. The employment of cyber warfare to assist combat forces is operational, while targeting critical economic infrastructure is a precision attack on physical assets. But could not a state use cyber means as a weapon of mass destruction or disruption, targeting an enemy’s confidence as well as its infrastructure, with the aim of causing enemy civilians to put political pressure on their government?
To consider such scenarios it is helpful to seek an analogy. As it happens, recent history affords several possible examples of strategies to which this type of cyber warfare—we might call it strategic cyber warfare—might profitably be compared. These attacks are often described as forms of economic warfare. The most commonly employed historical example is the Allies’ strategic bombing campaign in World War II; less common are the German U-boat campaigns of the First and Second World Wars and the US submarine campaign against Japan during 1942–45. A better historical analogy for thinking about cyber warfare is Britain’s economic warfare plan implemented at the outbreak of the First World War.1 For several reasons this analogy is especially attractive.
First, the international economy of today bears a closer resemblance to that of the three or four decades preceding the First World War era than to the more recent era encompassing the two world wars. The world economy was relatively more globalized (less autarkic) during the fifty-year period prior to the outbreak of the First World War than it was during the fifty years afterward. During the first era of globalization, as in the second (i.e., today), the stability of the national economies and the international economy rested on the free movement around the globe of goods, money, knowledge, and information. The flow of physical goods over the seas also hinged on a parallel yet separate flow of real-time information via undersea cables. Accurate and instantaneous information relaying details of supply, demand, and prices was essential to all businesses and especially to the financial services industry that facilitated the movement of commerce with ever-increasing velocity. The flow of information, paralleling the international flow of goods and services, became integral to economic systems.
Second, then as now, defense policymakers seeking to forecast the nature of future wars found themselves in a very new, almost alien, strategic environment—and with good reason. The advent of new military technologies changed the ways in which wars could be fought, but more fundamentally the transformation of the world economic system introduced changes in the nature of war itself. In particular, the development of the cable network impacted the structure of the world economy in ways that presented multiple strategic challenges and opportunities. Not only could militaries use the cable network to achieve unprecedented speeds of communication but, more important, businessmen and consumers around the world also came to depend on the smooth functioning of the cable network. Interrupting the network could therefore impact civilians—not just their governments or armed forces—more directly and more rapidly than had previously been possible. This interruption need not even be achieved by the armed forces. The very parameters of warfare were changing.
Third, before 1914 the British government had devised an economic warfare strategy that included the targeted disruption of the aforementioned, complex global communications network. In fact, the economic warfare strategy as implemented in August 1914 aimed at more than disrupting specific industries or elements of national critical infrastructure. Here, the term “economic warfare” is not referencing bombing ball-bearing plants or oil refineries (done with precision or otherwise), as in the Second World War, nor even the interdiction of global supply chains, as in the German and US submarine campaigns. These forms of economic attack were all comparatively limited in scope, intended to create bottlenecks and choke points in critical-path supply chains in the hope of producing knock-on systemic consequences. In 1914 the British aim was far higher: to “derange” the enemy’s entire national economy, thereby delivering an incapacitating knock-down blow that would obviate the need for less intense but more prolonged types of war. Put another way, economic warfare transcended specific systems; it was not intended to be systems specific but society specific. Indeed, Britain’s plan for economic warfare may well have been the first attempt in history to seek victory by deliberately targeting the enemy’s society (through the economy) rather than the state. To be more precise, the target was the systems supporting the society’s lifestyle rather than the society itself. This was a novel approach to waging war.
To be clear, economic warfare, as envisioned in 1914 and as defined here, was not analogous to the Allies’ strategic bombing campaign from 1942. The differences are fundamental. Whereas strategic bombing targeted the ability of the state to make war and could work only through attrition, economic warfare targeted the enemy’s society by deranging its national economy with the object of rapidly undermining the legitimacy of and domestic support for the enemy state. Similarly, whereas in strategic bombing civilian casualties were typically viewed as collateral damage, in economic warfare civilians were the target. These differences are summarized in table 8.1.
In positing this analogy, I do not mean to suggest that there exist direct parallels down to every last detail between the British strategic thinking before 1914 and the cyber problems of today. Nor do I mean to suggest that the nature of the technological problems and possibilities are similar, for in fact they are quite different. Rather, I seek to offer a different way of thinking about the possibilities of cyber warfare from what seem to me to be the most common approaches. The points that I wish to emphasize and the questions that I raise, therefore, pertain to the economic, political, and legal implications of waging warfare within a globalized trading system and to the difficulties and dangers of trying to weaponize any of the underpinning infrastructure. The analysis should serve also as a reminder of how serious the stakes can be when warfare—cyber or otherwise—disrupts the global trading system and thereby causes significant economic collateral damage. As the British discovered in 1914, employing an economic warfare strategy is easier said than done.
There are four basic parts to the story.
Historians have long marveled at the tremendous expansion in world trade during the long nineteenth century and concomitant dramatic rise in the ratio of foreign trade to global economic output. Between 1800 and 1913, world output per head doubled; over the same period the volume of world trade per capita multiplied by a factor of eleven.2 By far the greatest upward leap occurred during the last third of the nineteenth century. Led by Great Britain, between 1870 and 1896 the volume of world trade doubled, and by 1914, in the space of just seventeen years, it had doubled again. All nations, especially the industrialized European powers, saw a steady rise in the ratio of foreign trade to economic output.
The late-nineteenth-century growth in international trade has been attributed mainly to the remarkable fall in the cost of long-distance transportation, with nods to the parallel communications revolution and developments in financial services.3 A series of innovations in steam technology led to a steady drop in the cost of carriage by land (railways) and by sea (steamships). These changes made it economically practicable to transport bulk commodities, or staples with a low value-to-weight ratio, over great distances. Between 1868 and 1902, for instance, the cost of transporting wheat across the Atlantic fell by more than three-quarters.4 Delivery was not only cheaper, moreover, but also quicker and more reliable.
The four or five decades before the outbreak of the First World War are now regarded as the first “golden age” of globalization. Although in many respects the facts are not new—historians were long aware that the volume of world trade had majorly increased during this period—the conceptual shift in interpreting those facts is. This shift is significant. In the words of the Cambridge historian Martin Daunton, “The context for thinking and writing about British economic growth has changed: the late nineteenth century can now be interpreted less as a period of decline and more as an era of globalization.” Similarly, the tremendous increase in the volume of world trade is now more viewed as “the consequences of the new steam technology of the industrial revolution.”5 Here Daunton uses the concept of globalization to rethink the story of British power at the turn of the century and to relate the increase of global trade to industrialization.