Technology and Sovereignty

Wriston, Walter B.




The growing inability of sovereign governments to regulate their affairs in the information age will have profound foreign policy implications.

Recently a private company forced a superpower to change its policy. This occurred when the government's monopoly on photographs from space was broken by the launching in February 1986 of the privately owned French satellite SPOT. When the pictures of the Chernobyl nuclear disaster taken by SPOT appeared on the front pages of the world's newspapers, the Soviet Union was forced to change its story and admit that the event was much more serious than it had previously claimed. In this instance, the technology was not new, but the power to use the information shifted from the government to the private sector. However, the event posed a continuing dilemma: what SPOT revealed about Chernobyl, it can also reveal about American military sites. There is no American censorship of SPOT pictures, as there has been on a de facto basis of America's Landsat photos.

While the resolution of SPOT'S picture is only ten meters, it will undoubtedly be improved. It is not beyond the realm of possibility that the next logical development might be for an international news agency to purchase its own high-resolution satellite. As a cost comparison, the purchase of a satellite would be a good deal less expensive for a television network than covering the Olympics. If this occurs, the guardians of national security will clash in space with the defenders of the First Amendment.

The policy dilemma posed by SPOT was further sharpened by the offer of the Soviet Union to sell high quality imagery, which has a five-meter resolution, to anyone beyond their borders who could meet the price. National rules, including those of the Department of Defense and President Carter's secret directive in 1978 limiting the power of civilian satellites, are eroding to the point of ineffectuality. One can wonder about the course of events if SPOT had produced a picture of Pearl Harbor on December 8, 1941, when the world was being told our fleet was intact. What is certain is that it will become progressively harder for nations to assert what is not true if the "spy in the sky" is not controlled by the government.

Another traditional aspect of sovereignty has been the ability of nation-states to issue currency and mandate its value. In the past, what kings said their currency was worth was not always congruent with the facts. In the seventeenth century the Amsterdam bankers made themselves unpopular by weighing coins and announcing their true metallic values. However, those bankers spoke to a very small audience and their voices were not heard far beyond the city limits. Technology now carries the market's judgments on the value of currencies to all parts of the planet within minutes.

Today we are witnessing a galloping new system of international finance. Our new international financial regime differs radically from its precursors in that it was not built by politicians, economists, central bankers or finance ministers, nor did high-level international conferences produce a master plan. It was built by technology. It is doubtful if the men and women who interconnected the planet with telecommunications and computers realized that they were assembling a global financial marketplace that would replace the Bretton Woods agreements and, over time, alter political structures. Although only a few politicians recognized the possibilities of instant global communications, the money traders of the world immediately drove their trades over the new global electronic infrastructure, creating a new international monetary system governed by the Information Standard.

Today, information about all countries' diplomatic, fiscal and monetary policies is instantly transmitted to more than two hundred thousand screens in hundreds of trading rooms in dozens of countries. As the screens light up with the latest statement of the president or the chairman of the Federal Reserve, traders judge the effect of the new policies on the relative values of the country's currency and buy or sell accordingly.

Although innumerable speeches are made giving lip service to the idea of a global marketplace, many people still fail to understand the reality. The entire globe is linked electronically, with no place to hide. Finance ministers who believe in sound monetary and fiscal policies are starting to perceive that the new technology is on their side. And politicians who wish to evade responsibility for the results of their imprudent actions on fiscal and monetary matters correctly perceive that the new Information Standard will punish them. The consequences are, in fact, more draconian than the gold exchange standard and a great deal faster in coming.

  • This document was created from the article, "Technology and Sovereignty" by Walter B. Wriston for the Winter 1988/1989 edition of "Foreign Affairs." The original article is located in MS134.003.027.00008.
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