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Tech and War

 

Tech and War

Courtesy of Ben Thompson, Stratechery

While it has been only 11 days since Russia invaded Ukraine, it is already clear that the long-term impact on the tech industry is going to be substantial. The goal of this Article is to explore what those implications might be.

Let me start with some caveats:

  • First, while I presume it goes without saying, I condemn Russia’s invasion of Ukraine in the strongest possible terms.
  • Second, the situation is obviously extremely fluid. My goal is to write about impacts that seem likely to endure, but some issues, particularly those involving China, could shift considerably.
  • Third, the long-term is inherently difficult to predict. Nearly every major event that has has happened over the last several years, from Donald Trump’s election, to COVID, to this invasion, was not only not anticipated by most people, but was in fact dismissed even after there were signs in place that they might occur. So take all of this with the appropriate grain of salt.

The most important thing to make clear about this Article, though, is that much of it is focused on capabilities, not intentions. In much of our daily life we rely on the good intentions of others, even if they have dangerous capabilities. One mundane example is traffic on a two-way street: oncoming cars have the capability of swerving into my lane and hitting me head-on; I trust that they do not intend to do so. There are a whole host of similar examples, for good reason: societies that trust each other’s intentions function much more smoothly and efficiently; no one wants every single street to be built with concrete dividers between traffic.

In an ideal world international relations would work the same way, and there is an argument that much of the prosperity of the last few decades has been driven by the sort of increased trust and interconnectedness that comes from assuming the good intentions of other countries — or at a minimum enlightened self-interest — leading to increased economic efficiency for everyone engaged in global trade. In this arena, though, the question of capabilities is never far from the surface: what can one country do to another, should the intentions of the first country change, and what must the second country do to ameliorate that risk? And here there is very much a tech angle.

Public Versus Private Sanctions

In response to the invasion Western governments unleashed an unprecedented set of sanctions on Russia; these sanctions were primarily financial in nature, and included:

  • Disconnecting sanctioned Russian banks from the SWIFT international payment system
  • Cutting off the Russian Central Bank from foreign currency reserves held in the West
  • Identifying and freezing the assets of sanctioned Russian individuals

The sanctions, which were announced last weekend, led to the crashing of the ruble and the ongoing closure of the Russian stock market, and are expected to wreak havoc on the Russian economy; now the U.S. and E.U. are discussing banning imports of Russian oil.

This Article is not about those public sanctions, by which I mean sanctions coming from governments (Noah Smith has a useful overview of their impact here); what is interesting to me is the extent to which these public sanctions have been accompanied by private sanctions by companies, including:

This is an incomplete list! The key thing to note, though, is few if any of these actions were required by law; they were decisions made by individual companies.

This, though, is where the intentions versus capabilities distinction arises, in two different respects:

  • First, the public/private distinction that I just noted may not be so apparent to people outside of the U.S. or the West generally; one could certainly understand how other countries might interpret this collection of public and private sanctions as being different parts of a single whole. To that end, this collection of actions demonstrates the capability of effectively wiping an economy off of the map.
  • Second, to the extent that the public/private distinction is understood, it highlights the capability of private companies to impose sanctions, and their willingness to do so in pursuit of political goals — even if those political goals are to stop an unjust invasion and save lives.

I suspect that both of these interpretations matter and will have long-reaching effects, in part because they are not a new trend, but a continuation of an ongoing one.

Continue reading Tech and War here >

Image by ELG21 from Pixabay


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