This may seem like an unusual blog post for me, but try to think of it as an applied book review. The book is Cyber War Will Not Take Place by Thomas Rid. I had been reluctant to read the summary that was forwarded to me because I thought the title was provocative in the sense that it would not be something I could follow. Instead it make a compelling argument that the use of the word War has become too generalized.
The premise of the book comes from Carl Von Clausewitz’s theory on warfare. There are three aspects that defines an action as an act of war:
- War is always a violent act.
- One side coerced the other side to accept its will through force or the threat of force.
- War is always political in the sense that an intent is transmitted to the adversary.
If the definition of warfare is limited to this list, then cyber warfare is a misnomer. Rid then brings forward other tactics that would be better descriptors of the current extent of cyber activities. These tactics include sabotage, espionage, and subversion. Before I read the summary of the book, I would have used the Stuxnet malware as an example of cyber warfare. Instead I am now of the opinion it was more of an act of sabotage — not designed to inflict casualties, limited to a specific system, and not intended for the perpetrator to be discovered.
These concepts bring me back to my training as an economist and what is taking place in Japan. Between the government and the central bank, the Japanese are attempting to significantly devalue their currency. This has been called the first salvo in a currency war. If we follow the premise of the book, it is more accurate to say the Japanese authorities are attempting to sabotage their own currency. While that is an odd goal on the surface, it is the simplest method for the Japanese to cause internal inflation, something the economy needs. But as beginning students in economics know, there cannot be an action without a reaction. When the Japanese yen becomes de-valued relative to the dollar, the price of American imports to Japan rises. Conversely, the price of Japanese exports to America falls. Thus, the effect of Japan trying to create inflation through the devaluation of their currency causes the United States to effectively import deflation. This is something our Federal Reserve desperately wants to avoid. The only real policy that can be implemented to counter the Japanese is to devalue our currency as well, another act of sabotage.
While the Japanese have been careful to only talk of their internal objectives, there cannot be any conclusion except to analyze their actions to determine the impact of their policy on their trading partners. With the Japanese committing sabotage against their own currency, the United States may be compelled to respond in kind (this again is starting to sound like war). The secondary reaction of the Japanese government and central bank is unknown. If they are desperate to cause internal inflation, there are other methods they can enact to achieve that result.
While there has not been an articulation of the intent of the Japanese government with regard to their trading partners, the consequences of their actions seem very well understood. At what point do we question the longevity of von Clausewitz’s definition of war since it can cause damage to a country beyond the direct violence applied to that country’s citizens?