Knowledge is power and power corrupts...

Tuesday, Jul 16 2013 by
6
Knowledge is power and power corrupts

The City Grump tackles Edward Snowden and how national security agencies are using our data – both personal and business.

Knowledge is power and power corrupts. It’s time we understood the full implications of Edward Snowden’s revelations for finance and commerce as well as for the man on The Clapham omnibus. I find it really extraordinary that after the initial interest in Snowden’s unmasking of the near limitless data mining that goes on by government sponsored surveillance, most of the press and the public – both here and in the US – has relapsed into the lackadaisical response:

“Well what do you expect in this age of terrorism and social media?”  

Even Germany, France, etc, who can still remember the horrors of state surveillance under fascist regimes seem, after widespread indignation, to have retreated back to their comfy offices and restaurants. The implication of such attitudes is that Snowden is nothing more than a common traitor to his country.

Every now and again someone tries to re awaken the public’s brains such as Stephen Walt, Harvard professor of international affairs, writing in this week’s Financial Times, suggesting provocatively that Snowden deserves an immediate presidential pardon. 

He remarks that:

“History will probably be kinder to Mr Snowden than to his pursuers, and his name may one day be linked to other brave men and women – Daniel Ellsberg, Martin Luther King, Mark Felt, Karen Silkwood and so on-whose acts of principle defiance are now widely admired”.

Walt observes that:

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“under the veneer of 'national security', government officials can use these vast troves of data to go after anyone, questioning what they were doing, including whistleblowers, investigative journalists or ordinary citizens posting comments on news websites. Once a secret surveillance system exists, it is only a matter of time before someone abuses it for selfish ends”. 

And here’s the rub. Edward Snowden was a young contractor who decided to go public on abuses as he saw it, yet there are hundreds of other unseen men and woman working away at GCHQ, and its US equivalent, with access to a treasure trove of private information. 

At their fingertips is a wealth of information on upcoming stock market deals, company takeovers, company IP, drug formulae, nascent political decisions, meeting schedules, etc, etc. The possibilities for those on the surveillance inside track to make money from using such information are infinite. 

For example, I will bet a pound to a pinch of salt that the source of a number of insider driven stock price movements can be traced back to someone glued to a computer screen at GCHQ/NSA. It is naïve beyond belief to think that no one in there is using this “legitimised” information for their own personal financial gain. Yet I have not seen any discussion of this unintended consequence of the so-called fight against terrorism.

So next time you are taken aback that someone seems to have cottoned on to that conversation you were having about taking over your principal competitor or launching a game changing product, you might like to tell those charged with enforcing the law, be it the FCA or the police, where they should direct some of their enquiries.

As Country Life, my next favourite publication after Real Business, puts it, “Universal surveillance can’t be justified in a free society. If we continue to allow it, the terrorists will have won and our enlightened, liberal society will be no more.”

Corruption will rule the roost.


Filed Under: Regulation, Insider Trading,

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The City Grump

The City Grump is aimed at investors in small companies, the people who run those companies and the politicians and regulators involved therein. His mission is to give a radical yet common sense view of all things financial that affect his audience's lives. His goal is impossible, namely to get our Establishment to understand and… ...read more or visit website »


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About The City Grump

The City Grump has spent 30 years in an eclectic mixture of fund management, stockbroking and exchanges. He has also co founded and sold two small businesses and still enjoys messing about on the fringes of the City Establishment. more »


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