Most of the discussion about NSA surveillance practices has rightfully centered around the juxtaposition of security, privacy and other civil liberties. In the heat, and only rarely light, of that dispute over competing values, other interests may be overlooked. Among those other interests are the American brand in the world and the economic impact on private American companies that comes with a tarnished national image.
It hasn’t been long enough to collect accurate statistical data on losses to private American companies. It may never be possible to accurately assess all the losses because choices between contractors, American or foreign, may not be entirely clear as between fear of NSA intrusion and other factors. What we have so far are estimates. Those estimates range from $25 billion to $180 billion over three years.
There are three factors at work that damage U. S. business interests. The first of these is simple anger. That appears to be a major factor in Brazil’s decision not to go forward with the purchase of $4.5 billion worth of U. S. fighter jets from Boeing. They will instead contract with a European firm.
A second factor is the perception that U. S. companies, especially tech companies, are cooperating with the NSA in violations of privacy. This is not helped by the use of such means as National Security Letters that prevent American companies from disclosing what information they are providing to surveillance agencies. Internationally, it is not unusual for individuals to be of the opinion that private companies are complicit with the NSA, though that is not always factually accurate.
Third there is a perception that the NSA, being American based, will more easily be able to hack American based technology than foreign based technology and that American encryption will be less reliable than foreign based encryption. This, combined with the perception of U. S. companies’ cooperation with the NSA, makes for a hostile economic environment in foreign markets. As Jason Healey of the Atlantic Counsel puts it,
“It wouldn’t surprise me, it would be very rational, for foreign companies or individuals to just decide to try and avoid American cyberspace where they can.”
Tomorrow, the President will make a major address on NSA practices and the recommendations of his review group. Already surveillance agencies are pushing back against some of those recommendations in an effort to, in my opinion, hold onto as much of their power as possible. Many of these recommendations will require congressional action which may have been difficult in the current political environment even without agency resistance. With agency resistance, congressional action may simply not be feasible.
It may be years before we learn the full impact of the NSA’s activities on America’s economic fortunes. Questions that will need to be asked go beyond orders for today’s technology and beg the much more important question of whether the United States will remain the go-to country for future technology development.
Sources include: Politico , CATO Institute , NPR and Silicon Valley Watcher .
Contributor, aka tidbits. Retired attorney in complex litigation, death penalty defense and constitutional law. Former Nat’l Board Chair: Alzheimer’s Association. Served on multiple political campaigns, including two for U.S. Senator Mark O. Hatfield (R-OR). Contributing author to three legal books and multiple legal publications.