What Are the Limits of Legitimate Economic Espionage?

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What are the limits of legitimate economic espionage? The indictment of five PLA officers for stealing U.S. intellectual property brings economic espionage into the same spotlight lately enjoyed by diplomatic cryptography.  The U.S. decision immediately produced a firestorm of criticism from China, as netizens and the government alike pointed out evidence of widespread hacking efforts on the part of the United States.

The United States attempts to distinguish legitimate from illegitimate espionage by concentrating on the theft of private secrets for public gain. Chinese hackers steal U.S. private property, and hand that property over to Chinese state firms.  The United States, on the other hand, merely steals public (as in collectively owned) information for public gain.  This includes intercepts of diplomatic communications that can give the U.S. an advantage in trade negotiations, as well as surveillance against foreign state-owned corporations. This last point is particularly important, as the United States intelligence community tends to regard (not entirely without cause) state owned firms as an arm of foreign governments.

These arguments aren’t quite wrong, but they do edge towards incoherence. For one, China is hardly the only country to employ espionage in furtherance of direct economic gain. As Robert Gates and others have pointed out, France regularly conducted economic espionage against its allies, with the fruits of intel benefitting major French firms. During the Cold War, the United States intelligence community regularly gathered intelligence about the Soviet military — data that eventually found its way to private defense contractors.

Indeed, even the idea that respect for intellectual property should cross international borders is a relatively recent phenomenon. The motivating concept for intellectual property protection is that legal defense for inventors can allow them to capitalize on a temporary monopoly..

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