An event that shook the U.S. stock market in early September may be very relevant to how we understand the evolving technique of network-centric warfare, the basis of which is the common operating or tactical picture shared by all participants. Those in the military who first advanced this idea often referred back to current commercial practices. Conversely, those writing about the stock market often characterize what they do as a kind of warfare. If you look for books on strategy, at least half of them are really about business practices. The September event brought the two views of strategy into focus.
For many in the stock market, the data published electronically by Bloomberg LLC constitutes their tactical picture. Bloomberg has prospered by providing, in one place, the information most relevant to any stock trader. That company was doing what various military nets are supposed to do. In each case, the individual operator—or local commander—depends utterly on information from remote and unknown providers.
For years, for example, the Securities and Exchange Commission has pursued financial publishers who mislead the public, on the theory that systematic errors in what amounts to their tactical pictures can have far-reaching consequences. This type of surveillance is closely related to the attempt to ban insider trading, in which a kind of deception is practiced by using key information denied to most traders (whether that works in practice is of course open to question).
One day in September, a stock trader linked to an electronic clipping describing how, in 2002, United Airlines was considering filing for bankruptcy. He was a "third party" data supplier to Bloomberg, in effect a stringer on the company's news service. His item made it into the company's news stream—or into the tactical picture the company's users received. These users perceived it as a piece of vital breaking news. Naturally, they sold United stocks. By the end of the trading day, the stocks had lost most of their value. The incident was described as an unfortunate error due to electronic sloppiness. It might just as easily have been a maneuver designed to cut the cost of the stock and thus benefit buyers planning to buy cheap. It is not clear to what extent the SEC considered investigation worthwhile.
A Fuzzy Picture
In our terms, the tactical picture used by all of those traders was badly corrupted. Just as in combat, each trader feels enormous pressure to act immediately on breaking information. The United fiasco dramatized a key question: how can we be sure of the integrity of our information
The usual answer is that a senior commander has the means to drill down into the tactical picture to discover the sources of information, and thus to evaluate them.But the United case provides a more unpleasant answer: in the heat of combat, financial or actual, there is a lot less time for analysis than one might imagine. Either the netted tactical picture is trustworthy, or it is rejected out of hand. Those traders who lost as United stock values collapsed believed the story because they were nervous about the state of the market and of the economy; they had good reason to be nervous. They almost certainly had the ability to ask questions (the answers to which would have been helpful), but they knew that a fast-moving stock crisis gave them very little time. As for combatant commanders, the greatest advantage they get out of the netted picture is that it makes them much more agile—they can move a lot faster. How much time will there ever be to go into details
Slowness in making decisions can often be fatal.The United problem suggests that network-centric warfare has a much larger psychological component than has been imagined. Much depends on how trustworthy that tactical picture really is. If the picture fails spectacularly, will it ever be trusted as much again
It will be interesting to see whether the impact of the United fiasco is to push traders away from the Bloomberg picture and toward alternative news sources (i.e., alternative pictures) created by competitors, such as Reuters.The military equivalent would be a pair of consequences. One would be for commanders to reject much of the over-the-horizon information they are offered in favor of that generated by those they know within their own organizations. Another might be for a general retreat toward a more platform-centric style of warfare. Either would have further profound consequences. Network-centric warfare offers us an agility that may in itself confound slower-moving enemies that have not adopted it. It is key to any sort of precision warfare, and when we fight far from home we may not have enough weapons to do anything but a precision attack.
Seeing is Believing
This is what information assurance or information integrity means: can a commander presented with a tactical picture on a computer believe it
The computer picture is not reality, but it tends to be very convincing. It takes considerable strength of character to question it unless the commander suddenly suspects that it is entirely misleading. In that case he simply ignores it. Using a common tactical picture for life or death decisions means accepting the competence of numerous analysts and others the commander—the one responsible for action—has never met and consequently has never evaluated. It would be ludicrous to maintain that the military personnel system has automatically assigned only the most competent such people. As in all other areas of life, some of them are likely to be a lot better than others. Not knowing which is which, how far can a commander trust the picture he usesIt might be added that basing combat on a shared picture makes it much more difficult to assign responsibility for particular actions. Remember that B-2 attack on the Chinese embassy in Belgrade nearly a decade ago
The Chinese were furious: surely the B-2 pilot could see their flag and the glass facade of the embassy. In fact the pilot saw nothing, because he merely delivered a GPS-guided bomb to a set of coordinates he had been given. The coordinates in turn were part of a tactical picture. It proved remarkably difficult to determine who had produced the wrong coordinates in the first place, because the bombing data were created by so many analysts in so many places. This is not a conspiracy theory. It is a description of a different kind of warfare with which we have to come to terms.Information integrity is usually taken to mean protecting our stream of information from enemies. A chilling (because casual) report in September dramatized the problem. A senior Air Force officer explained that of course his command's computers were connected both to the Secure Internet Protocol Routing Network (SIPRNET) and to the commercial Internet. His logic was that he often had to communicate with non-governmental organizations, which are so important in places like Iraq or Kosovo. However, it emerged in an interview that his junior officers prized Internet access because they liked news stories and live feeds from basketball games.
This sort of interconnection is tolerated because the SIPRNET is protected by software in the form of firewalls. Unfortunately, many of our potential adversaries number talented computer hackers and criminals in their populations. We already know as much, because there are periodic reports of astoundingly successful computer crimes perpetrated from places like Russia (by individuals, not by the government). It is impossible to say how effective firewalls are, but an analogy would be estimates of how safe codes historically have been from being broken.
It is possible that no victim of code-breaking has ever willingly admitted, or even accepted, the potential problem. Most accounts of World War II code warfare now describe the Allies' acceptance of losses to avoid disclosing their success against the German Enigma machine. However, at the end of the war the Germans admitted that, on at least four occasions, they had good reason to question the integrity of their system. Each time, their code-makers refused to believe there was a problem.
On our own side, the British convoy code was extremely insecure, leading to massive losses. The British suspected as much by 1941, but the task of replacing the code was so Herculean that it was not carried out. A changed code was rushed through only after U.S. code-breakers reading German communications noticed that the Germans had reassigned a patrol line of U-boats rather suddenly after a convoy had been ordered to change course. They concluded that the Germans were reading the British codes and it seems that the U.S. Navy brought pressure to bear on the British.
In case this seems a reason for Americans to gloat, remember that the U.S. Navy never associated Soviet successes from 1969 onward with the loss of code machines on the USS Pueblo (AGER-2) and the possible loss of code keys (previously discounted because the Soviets lacked the code machines). The reality of compromise was understood only after Navy spy John Walker was caught, and even that achievement was due mainly to Walker's ex-wife tipping off the FBI to his activities.