Thursday, December 18, 2014

The Sony Hack and the Nature of Government

By Robert Wenzel

We are all aware by now that the Sony motion picture company has suffered at the hands of hackers, who have launched something of an intimidation campaign, by releasing hacked Sony emails and other documents, in an effort to halt the release of the comedy movie The Interview.

The hackers also threatened movie goers who planned to see the film. Many theater operators cancelled their planned showing of the film and Sony has now announced that it has pulled the film.

It is estimated that
pulling the film could cost Sony more than  $100 million in revenues (SEE:Cancellation of the Film "The Interview" May Cost Sony $100 Million in Revenues) .

This, to say the least, is a tremendous loss.  Serious economic damage has been done and there is no question that the hack itself was a criminal act that is a violation, from the libertarian perspective, of the non-aggression principle. From a libertarian perspective, Sony can not be faulted for attempting to go after, and seek redress, from those who launched the hack attack and released the emails and other documents (The threat of doing harm to moviegoers is of a more complicated technical nature that skirts a fine line of criminality, but, the nature of threats versus actions, I am not going to discuss here and does not limit what I plan to cover.)

It is being alleged in mainstream media that the hack of Sony and document disclosure camapign is the work of North Korean government hackers. This may or may not be the case, but let us assume for the moment that it is, what should be done?

Clearly, Sony failed to properly anticipate the reaction from North Korea. Should this be of concern to every American?

Americans everyday face all kinds of threats and in most cases they simply act in a manner to avoid being in harms way.

The New York City subway system at 3:00 AM pretty much carries only men. I have commented elsewhere that it is something of a men's club at 3:00 A.M.. Women, with justification, don't feel safe in the subway system at that hour.

It would probably not be wise to walk through the Tenderloin District of San Francisco at 3:00 AM.

It is probably unwise for an American to go on a picnic in ISIS occupied territory of Iraq.

There is some danger in jumping out of a plane with a parachute, that is why most people don't do it.

My point is that we don't live in Paradise and that there are risks all around us. But I don't feel that I have an obligation to personally cure these risks. You will not, in other words, see me walking from car to car in the NYC subway system every night at 3:00 AM to make the subway trains safe for women, You will not see me donning camouflage gear and heading out to ISIS occupied Iraq, to make the region safe for Americans who want to picnic,

It would be nice if women felt comfortable and were safe travelling an NYC subway at 3:00 A.M. and it would be nice if Americans were safe to picnic in ISIS occupied Iraq, but reality is different. There are dangers in attempting these things and that is why most simply avoid these dangers.

Sony has now determined that it is in its best interest to not release "The Interview." That is they are attempting to limit risk. Just like women do who don't go on the subway at 3:00 A.M. It would be great if Sony didn't have to feel threatened, but this is not Paradise, and they do. They need to act based on their own cost-benefit/risk assessment analysis. It is, quite frankly, their problem.

When news, that Sony was cancelling the launch of the film, first hit, I speculated that such a threat launched against the government would have resulted in all sorts of government types calling for escalation with North Korea. And, although, Sony is a private sector firm, I was quickly provided with examples of how government types think:

And this from NYT:
Officials said it was not clear how the White House would decide to respond to North Korea. Some within the Obama administration argue that the government of Mr. Kim must be directly confronted, but that raises the question of what consequences the administration would threaten — or how much of its evidence it could make public without revealing details of how the United States was able to penetrate North Korean computer networks to trace the source of the hacking.

Again, it is terrible that Sony has to deal with this threat, but why exactly does the US government have to get involved in this? That is, why does the government have to "respond" to this alleged-action by North Korea? There are risks all around. Add to the pile of risks, the possibility that if you make a film about assassinating  North Korean "Supreme Leader" Kim Jong-un, he might get pissed at you---really pissed.

I can think of a bunch of people that it would not make sense to make fun of, even if you don't turn the fun into a major motion picture comedy. Such is life.

And why do government types think that Sony should escalate and, thus, increase risk?

Governments love to escalate, they love to posture and they love to get us into wars. These people are, quite frankly, nuts. It is nuttier than an assassination comedy about Kim Jong-un to escalate against North Korea over a damn bad comedy, but that is the way governments operate. Everything is raised to a national level of crisis. Simple cost-benefit/risk assessment analysis by individuals, groups and corporations are replaced by calls for a national response. Hey, I had nothing to do with making the movie and I really don't care what kind of hit Sony is going to take to the bottom line. They made an error in cost-benefit/risk assessment analysis and it has nothing to do with me.

Further, it is not exactly clear that the threat is actually coming from North Korea. Wired makes the case that the hack was not likely done by North Korea, the former Chief Security Officer for NewsCorp makes the sane case, as does security expert Marc Rogers.

In other words, before we have all the facts in, we have government types launching verbal attacks on a potential innocent that is an easy punching bag, an "enemy" government. That's government opportunism for you.

In reality, this is a Sony problem and it should stay a Sony problem. Gingrich, Romney and Obama should stay the hell out of it. Their talk of retaliation and urging an in your face response from Sony is a typical response of mad men who fail to understand the nature of individual responsibility and the cost-benefit/risk assessment analysis that goes with such responsibility. Government can't turn the world into Paradise and it is only posturing on the part of government types, when they give the impression they can. In fact, I specifically used, as examples in this essay, areas where there is great risk, the Tenderloin, and the NYC subway system at 3:00 A.M. Both of these locations are now government territories that are for all practical purpose dangerous and completely unprotected areas. Government protection is mostly a myth. Calls for government action to protect individual actors is simply propaganda to advance the preposterous notion that the government is here to help us and can actually do so.

Robert Wenzel is Editor & Publisher at and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics


  1. the FBI said they found no evidence of North Korean involvement.