Schneier on Security

Clive Robinson • January 27, 2011 10:01 AM

As Philip Storry notes above about Governments (of supposadly democratic nations),

“[It] will escape those at the top. They can only focus on the effect, not the cause.”

That is they appear only concerned about the “loss of secrets” not “why we have secrets” in the first place.

The “why we have secrets” is an important question and needs answering because it criticaly effects the way Government behaves and how it is treated by those it seeks to govern and those who govern others in other states.

Put simply there are only two things of importance to mankind as a whole “resources” and “knowledge”. Resources are those things constrained by the pysical laws of our tangable universe and boil down to “matter” and it’s flip side “energy”. Knowledge is information about information or resources.

Due to the issues of “mating privilege” controling resources brings benifit to humans. There are two basic ways you can control a resource, the first is by having possession of the resource and preventing other accessing it, the second is to hide the resource, or more correctly hiding the knowledge about a resource from others. In general it requires no energy to hide knowledge, where as it can take considerable energy and other resources to protect the control of a resource.

Thus there is some considerable advantage in hidding knowledge and or “keeping secrets” and the main reason for doing it is sometimes known as “competative advantage”.

One of the reasons we have the concept of “ownership” as oposed to just “possession” is that knowledge will always become known to others at some point, be it by chance, disclosure or that it is discernable that someboby has knowledge that is unknown and thus they seek it out.

Put simply if you discover where a bees nest is then you have a considerable advantage in that in effect the honey delongs to you. You can chose to disclose the source of the honey to those you trust or you can keep it secret. However if you keep it secret the honey is only of limited use to you as to effectivly maintain the secret others must not know you have honey therefore you cannot use it to trade etc. However once an untrusted party knows you have access to honey they can devote effort to following you around etc to discover the source.

Thus for a resource to improve it’s utility to you or to others by way of trade you need the concept of “ownership” and the ability to transfer it for some reason.

However honey has little value at certain times of the year and considerably more at other times of the year, thus it is to your advantage to keep secret the knowledge of your honey source untill that time.

The concept of “ownership” thus has a persistance over and above simple immediate possession. However it only works if you can trust others to respect your assumed right of ownership over mear possession.

There are a number of ways you can bring about trust, the first is by having a codified system of punishment for transgression (ie the law) or by establishing “self interest” of another.

Now you can view people obeying the law as another form of self interest.

Thus to maintain a secret you have to be able to keep the self interest of all those that know it in align with them not revealing the secret to others. And as we know from long experiance to do that you have to offer something in return.

The problem with the threat of punitive action after the revealing of a secret is only effective if you can actually do it. Thus even though a country might have the death sentance for revealing state secrets it is of little worth if the person defects to another country where they are effectivly protected from such a punishment. Which is why in some parts of the world they go after family and friends in lieu of the actual person.

This would sugest that in many respects you keep the number of secrets down to a minimum and the number privy to them to a minimum as well. However as noted by others some Governments don’t appear to have caught on to this, thus the question is why?

And the answer is the “utility of the knowledge”, knowledge that is unknown is information or if it is stored in some manner data.

By far the majority of Government “secrets” are neither “unknown” or actually “hidden”, because the data they are based on is widely available.

In the past the UK Government under the direction of Maggie Thatcher actually tried to prosecute under the Official Secrets Act a journalist who had agrigated publicly available information into a coherent whole (a book). The case ended up as a bit of a fiasco and embarrassment to the UK Gove.

One of the major changes which ICT has enabled is the agrigation of vast data sets that are almost freely available to be searched.

As private industry appears to be able to analyse the data considerably better than the various government agencies it becomes possible to envisage a time when it will not be possible for a Government to maintain any substantive secret.

The question then arises will anybody be able to maintain anything more than trivial secrets in the near future and what will that do to society in general…

Clive Robinson • January 27, 2011 9:49 PM

@ nycman,

“Question: If your adversary/competitor is better able to maintain secrets than you are, do they have an advantage?”

The simple answer is in many things it depends on your viewpoint and it’s drivers.

First off the organisation should ask “why are we keeping secrets?” and then “to what advantage?”

If the answer to both those questions makes a legal, rational and compelling case, then the organisation should have a rational and cost effective policy for dealing with secrets.

Importantly though the same questions should be asked of each and every potential secret, prior to evaluating the complex benifit/cost/risk/time surface involved with it.

For instance lets assume you are a jet engine manufacture, and you have discovered a way to make turbo prop blades 5% stronger and 10% lighter than other “known” existing processess.

The value to the company is clear as it makes the engines designed using the capabilities of this new process considerably more efficient (~14% decrease in engine loss) in use which would have a significant market advantage for the airlines using such engines in their airframes.

Thus the sole knowledge of the process gives a competative advantage to the company that would not be there if the process was known to all engine manufactures.

So there is a clear rational for keeping the process secret.

However you then need to establish the benifit/risk/cost, not just now but in the near and longterm future.

On analysis it might become clear that the process is such that it involves other organisations etc over which maintaining control would be difficult. Thus consideration might be given to bringing critical parts of the process “in house”, but this may entail a cost that could remove any short term benifit.

This sort of anaylsis should provide some indication of where the best points in the process are to be kept secret and for how long the secret will give a competative advantage, thus a series of rational choices can be made.

Part of the analysis should rightly look into your point of,

“Question: If your adversary/competitor is better able to share information within their organization, at the risk of less security, do they have an advantage?”

The answer to this can be found by looking at “lead times”.

If it takes say five years to incorporate the benifits of a new production process into a new product or range of products then you can estimate what the advantage is of keeping the secret to a very limited subset of people for that period of time.

However as I noted above (about trading honey) once it is known you have an improved engine design your competitors are going to analyse it in depth to find out where the improvments are and if possible how the improvments are gained. You can estimate what the lead times are for this and work out various time windows and what can be achived within them.

It is thus a trade off, a competative advantage that is not used or used ineffectivly through overly restrictive secrecy losses a lot of it’s advantage against the competition.

The hard point is working out the “sweet spot” for maintaining the advantage to best effect and usually most people will over estimate the advantage of secrecy and the time for which it should be used.

It is usually called “erring on the side of caution” and is counter balanced by “nothing ventured nothing gained”

In many modern non manufacturing organisations the managment view point is very short term and based almost entirely on “share holder value”. A main driver for “share holder value is to give projections of growth based on information that gets disclosed. Thus the managment of such organisations do not see lead times giving viable windows of oportunity, thus the “nothing ventured…” viewpoint is overplayed and secrecy is thus seen as an inhibitor to “shareholder value” except in certain small areas such as planning prior to announcement or implementation of the plan.

Which is one of the reasons we have irrational markets, they sacrafice long term substantial gains for short term at best marginal advantage.

The reason being is that unless an organisation has significant investment in it’s own stock, share value is of little or no conciquence to the strength of the business (the investment cycle ended when the stock was initialy sold). However shareholders want to see immediate returns due to their “butterfly nature” and unfortunatly for the business they have a say in who runs the business and how…

Which might account for why some of the more successfully run private businessess use mortgages on assets to raise capital rather than giving away control of the company via shares.