Google is one of the worlds most powerful corporations - particularly in cyberspace - both in the US and in China. When a state attacks a company, it is espionage by definition. From the perspective of China, their actions represent politically motivated Cyber law enforcement activity by a nation state against an international corporation, not unlike when the US Treasury raids financial records of international companies involved in what US law deems to be criminal activities.
However there is always an alternative viewpoint in cyberspace. In this case Google is calling it cyber warfare, and in the 21st century we have some prerequisite when we say the US is at war with Al Qaeda, which isn't an international corporation but is a non-state actor. One question that raises is whether a corporation can be a non-state actor, and in a medium like cyberspace can a state "war" a corporation? Ponder that last, because what happens if Google pulls out of China, then decides one day (hypothetical scenario) to launch a cyber attack against The Great Wall, or even Baidu? Can a corporation 'war' a state? Does the term even matter when explaining the context of the conflict? As both our laws and international law are still relatively undefined regarding cyber warfare, the terms may matter a great deal even if they shouldn't.
He also brings up the possibility of social movements being created entirely on the Internet, and shows some possible opening moves in that direction. I would like to add that George Soros's foundation helped to organize and instruct the fledgling democracy movement in Georgia prior to the revolution there. Cyberspace is definitely redefining many of the traditional parts of IR. If I teach foreign policy again, I will have to include this as part of my "internet and FP" lecture.
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