August 22, 2012

"All's well that went well", London Mayor Boris Johnson might have thought ten days ago, after all the concerns and anxieties that led to the 2012 Olympic Games. His city delivered on its bid and the British reaped a record number of medals as more than 10,000 athletes participated (1).

Usain Bolt for one has become a legend for his endearing lack of false modesty. But how many of us can name more than a few competitors from countries not our own? Rather media covered most foreign results by counting the medals per country. This makes it easy for instance to see that, out of more than 200 nations, the five permanent members of the United Nations Security Council captured almost 50% of all gold medals.

Yet it would be a mistake to restrict the Olympic Games to a peaceful version of the competition among states under the banner of the International Olympic Committee. Itself a non state world power, headquartered in Switzerland under the current rule of a Belgian, the IOC financed the London games in part by carefully orchestrating another competition among non state world powers. From Acer to Visa (2), the victors poured out their resources to become sponsors just as the United States and China did to win medals by the dozens.

Some regret what they call the commercialization of Pierre de Coubertin's ideals. The latter would have hardly welcome the performance of professional athletes in venues refreshed with Coca-Cola colors. But wouldn't he have understood the import of a fortnight of cooperation by all world powers, states and non states, a truce to be savored and further favored even when the ban on ambushes is so ruthlessly enforced?

For it is time to restructure what the mainstream media calls its business section. Does it put news from Afghanistan in its travel section? Rarely alas, today. Why then doesn't it report about other war skirmishes without using euphemisms? Take Standard Chartered. It has been presented to the general public as yet another bank caught in dereliction of duty, a case in which justice has been rendered, if perhaps a tad too fast.

In less than ten days, "Benjamin Lawsky, New York state's banking supervisor [...] secured from StanChart [...] $340m for his state", Shahien Nasiripour writes in a candid assesment (*). Given the normal course of Justice, such lightning speed strains credibility, as if Usain Bolt suddenly ran 100m in less than 8 seconds. This however was no justice but a bold coup de main in which a state has bettered a non state enemy.

Had Standard Chartered been a sponsor, had New York state sent athletes under its own flag, would this act of war taken place as it did during the Olympic Games? I doubt it. Would indeed have World War I happened if Olympic Games had been under way in the dying days of July 1914?

Benjamin Lawsky "alleg[ed] that Standard Chartered falsified records and impeded government investigations when it came to illicit transactions with Iran". I have in the past defended the need for regulations and the plight of regulators, in the United States a much maligned and endangered species. Yet if capitalism is but an utopia and the rule of the law tainted by the purchase of lawmakers, it may be fruitful to see regulation less as a tool to make markets more efficient and more as a weapon states can hurl at non state rival powers.

Rules are said to be useless as clever lawyers can always help their corporate clients to run circles around them. In the light of the Olympic flame, this perennial complaint becomes an instance of the race between the gun and the armor, a waste of resources war imposes on willing antagonists.

Against rules, non state world powers regularly deploy distance, speed and complexity. Look at Apple and its cash piles held outside of the reach of US tax collectors (3). Think of high speed trading. Read Azam Ahmed and Ben Protess (**). "Criminal investigators are concluding that chaos and porous risk controls at [MF Global], rather than fraud, allowed" "the disappearance of about $1 billion in customer money". Jon Corzine may have destroyed his non state power but he made sure his troops could retreat without surrendering any prisoner. Many generals prove less prudent.

Unexpertly wielded, weapons may claim victims. Such is speed as earlier this month Knight Capital was hoisted by his own petard. Today's enemies may be tomorrow's allies. Together with electoral campaign contributions and antitrust investigations, non state world powers account for threats from national courts as a cost of maintaining external relations. Yet they are wont to petition the same national courts for relief against competitors.

Never is the fog of battle thicker than in these courts. "Nestlé has lost a bid in Germany to stop two rivals from selling coffee capsules that were marketed as fitting Nespresso coffee machines", James Shotter reports (***). "Düsseldorf's regional court [argued] that in buying a Nespresso machine, a consumer also acquired right to operate it as he or she saw fit, including using with capsules produced by other manufacturers".

According to this decision, consumers who buy "tethered devices" should be free to fit them with whatever compatible applications they want. But the logic of war is might, not right. Do not expect Brussels to crack open the Apple Palantír, grandfathered as it is by Steve Jobs' constant behavior. But will the European Commission even frown at Frommer's acquisition, a sly step toward Google's closing its open recommendation system?

War under cover of dealing justice or conducting business is nothing new. Well managed states must care for their people. And so they want jobs to be created, taxes to be levied, while for profit non states want to minimize such costs, having neither people nor location to tie them down.

In the past non state powers were inclined to take over a whole state as they did in mercantile cities like Genoa or Venice (4). Modern pronaocracies are diluted version of this extreme. But to money and people, our Information Age has now added data, the paramount asset, equally attractive to state and non state powers and the most mobile of all. It turns data companies into the archtype of non state actors and server location into a power play, ideally for states to protect their citizens, practically to better check on them.

Notice however how our vocabulary fails us once again, as far as data is concerned. Surveillance is simply acquiring data, censorship controlling its communication. Yet when we speak of censorship or surveillance, we think of state actions and the daily reality reinforces this bias.

Wendy Ruderman and Aaron Edwards tell us "investigators can legally confiscate a cellphone and review footage only after obtaining a court order" (****). Private data is also taken when "the owner consents". But as "Professor Cunningham of St. John's University School of Law in Queens" says. "Consent is a tricky thing, because sometimes [the takers] dont' make it seems you have much of a choice". Free services do enslave people One wishes Google, Facebook and Amazon were bound by similar rules. No such luck as non state spying is thought to be no surveillance.

To see the truth, get Google to sponsor the Rio Games, the IOC to confiscate Apple devices, turn off Microsoft Bing, kick athletes from Facebook!

Philippe Coueignoux

• (*) ....... New York regulator has the last laugh in the transatlantic war of words over whether it jumped the gun in making Iran allegations, by Shahien Nasiripour (Financial Times) - August 16, 2012
• (**) ..... No Criminal Case Is Likely in Loss at Corzine Firm, by Azam Ahmed and Ben Protess (New York Times) - August 16, 2012
• (***) ... Nestlé loses fight over coffee capsules, by James Shotter (Financial Times) - August 17, 2012
• (****) . Police Sought Cellphones of Bystanders Who Captured Fatal Times Square Shooting, by Wendy Ruderman and Aaron Edwards (New York Times) - August 15, 2012
• (1) for more details, see the 2012 Summer Olympics in the wikipedia
• (2) for more details, see the 2012 Summer Olympics marketing sponsors in the wikipedia
• (3) A quick solution is needed to US groups' foreign cash, by Richard Waters (Financial Times) - Sept 1, 2011
• (4) Dr Primrose had these two examples in mind when he defined pronaocracy as when "the laws govern the poor, and the rich govern the laws"