Abstract

Until 1945, both academics and politicians were keenly aware of the interaction between economics and security; wealthy nations could afford large armies and navies, enabling them to expand territory or at the very least protect trade. But nowadays a web search on `economics’ and `security’ turns up relatively few articles. The main reason is that after 1945 both academics and officials working on economics drafted apart from those working on national security; nuclear weapons were thought to decouple national survival from economic power, and while the USA confronted the USSR over security, it fought with Japan and the EU over trade.

Over the last half-dozen years, interest in security economics has revived, driven by information security problems. From bank card fraud through spam and phishing to digital rights management, many of the thorny problems of the information age resist purely technical solutions. Incentives matter, and very often things fail because the people defending a system are not the people who suffer the costs of failure. Internet insecurity has been likened to environmental pollution: someone connecting an insecure PC to the Internet does not face all the costs of their action, any more than someone heating their house with a coal fire.

Prof. Anderson will discuss recent research in security economics, which is starting to spill over from pure information security issues to neighbouring problems from system dependability to the economics of crime and conflict.