Thursday, September 30, 2010

Stuxnet and Socionomics

If you have not been following the story of the Stuxnet malware that has come to light recently, I strongly recommend that you get yourself up to speed on at the least general nature of this amazing piece of code. Some resources include:

The fascinating technical aspects of this computer worm aside, I'd like to view this story in the context of socionomics.

If we work on the assumption that the vast majority of societies are in a negative mood trend (though currently experiencing a positive mood rally in the context of the overall negative trend), and if that trend is one that will result in an enormous bear market, then our view of Stuxnet can easily shift from seeing it as a one-off "dirty trick" used to hit at Iran by parties "unknown" (very similar to something the U.S. did to our Soviet friends a few decades back) to another leading indicator of what a world governed by negative mood might look like.

Bear markets eat the heroes that were raised up by the preceding bull market. This goes for Warren Buffet and the Incredible Charlie Munger - who are going out of their way to out-Goldman Goldman-Sachs when it comes to arrogance and mob-baiting. I think this concept can also be applied to other "concepts" that enjoyed great prominence in the preceding bull market. And if there was ever a poster child for the late great bull market, it was the computer. Even with the bursting of the tech bubble, computers and software have remained powerful symbols of U.S. expertise and dominance.

Bear market moods bring barriers and walls to physical goods. In the past, those same barriers included barriers against information, new ideas and foreign concepts, and the methods of enforcement included book burnings and torture. Responses to that included the formation of underground secret societies, secret libraries and who knows what manner of individual retaliation.

In the modern era, expressions of this aspect of negative mood might include wave upon wave of increasingly sophisticated malware, resulting in the political elites clamping down on use of communications and computer networks. What makes this latest hack so impressive is that it made the leap to SCADA systems and could actually affect equipment in the "real" world. Now that hacker teams know that someone has bridged that gap, I would expect the black hat community to be all over it. Granted, this initial attack looks like an expensive piece of code, almost certainly sponsored by a nation-state. But with all the cheap processing power and brilliant minds out there, one can expect a coming round of malware hell-bent on crashing infrastructure systems and causing a bit of chaos. The walls, restrictions and barriers that will be put up in response will further reinforce the negative mood and trash the reputation of "computers" as agents of progress and benign utility.

Just a thought.

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