by Rod D. Martin
March 1, 2003

Not long before September 11, the bipartisan Hart-Rudman Commission concluded its three year study of America’s security needs over the next quarter century. Chartered by former President Clinton and former House Speaker Newt Gingrich, the commission reached some truly alarming conclusions.

Some, like the threat of nuclear terrorism, are on everyone’s minds today. But others were not so obvious.

The commission gravely warned of a new era of internet-borne weapons. In Gingrich’s words, “our adversaries are becoming more sophisticated…. From breaking down communications systems to initiating electrical blackouts to infiltrating and disrupting our financial systems, there are a number of major disruptions that could unravel our economy, diminish our quality of life and generally destabilize the nation.”

This threat is real: I have witnessed it first-hand. PayPal — the world’s premier internet payments solution — has been assaulted by every manner of criminal and hacker, even the Russian Mafia. So far we have turned back every threat, and our co-founder, Max Levchin, was even named “Innovator of the Year” by MIT’s Technology Review for his work in fighting online fraud.

But others have not been so lucky: at the same time PayPal was winning its fight, fraudsters wiped out 13 of its 19 competitors. Just as our government is in a race to stop a nuclear 9/11, we are all racing the criminals, terrorists and foreign governments who would create chaos in any system dependent on computers — from air traffic control to nuclear power plants to police databases — all for the cost of a cheap PC.

Understanding their motivation is crucial. Our enemies do not hate America, or even democracy, but freedom: freedom and all the spiritual and material wealth it creates. And the beating heart of freedom is capitalism.

In capitalist societies, creativity is essential even to daily life, driving boundless progress, growth and opportunity. Free expression in every imaginable field is not only possible but necessary, as every year both permits and demands an increasing specialization. Men who today in Afghanistan would till crops like their ancestors, women who in Iran would have no opportunity at all, here produce movies, write novels, create vast enterprises and cure deadly diseases.

This is the essence of freedom: men and women doing what they deeply desire to do, on their own terms and in their own way. Economic freedom encompasses all of life in a way political freedom alone never can. And it is that economic freedom, most clearly expressed in the technological wonders of our age, which infuriates our foes.

We cannot afford to ignore the distinction. In the world without borders freedom has created, evil men are increasingly able to use the fruit of our creativity against us, whether hijacking an airliner and using it as a missile or creating — for pennies — a computer virus like Nimda or ILoveYou that does billions of dollars in damage.

What we face is a second, larger “Axis of Evil”:

• Totalitarians, including obvious enemies such as fascist Iraq, Communist North Korea and China, and even a growing number of Russian hackers who see themselves as carrying on the Cold War by other, newer means. They are happy enough with technology and wealth: they just want to use it to create an Orwellian nightmare;

• Medievalists and other Luddites, ranging from the Unibomber here at home to Sunni and Shiite extremists (whether the Wahabbi, Saudi Osama bin Laden or Hezbollah and their Iranian sponsors). They seek to return us all to the 7th century; and

• Garden-variety criminals, from the Russian Mafia to corrupt executives to the crack dealer down the street. Few of these are ideologically-motivated; and yet, whether robbing your bank account, threatening your life, or just raising the tax burden necessary to support police and courts, they are every bit as destructive as our more exotic foes.

It is this last category, though, which raises a vital point: defeating the current rogues’ gallery alone will not solve our problem. Crime has always been with us, adapting to every technological development from the stagecoach to the supercomputer. The difference now is that technology provides our foreign enemies with weapons that more resemble crime than war. Against this threat, planes and ships can do nothing: we need all the technological prowess our civilization can amass.

Government’s role in the war on terrorism is essential. But much of what government does at home, particularly regarding technology — and thereby the economy and the freedom we seek to defend — is frankly destructive, sometimes to a degree the terrorists can only envy. The Byzantine regulatory nightmare of the 1996 Telecommunications Act has inexorably worked its destructive path through America’s entire technology sector. Likewise, the current deflationary recession — of which this writer warned years before — was the inevitable result of a Federal Reserve gone mad, fighting an imaginary inflation and thus destroying every sector of the economy which depended heavily on debt.

Just as this idiocy earlier destroyed the family farm, so it crippled thousands of America’s most innovative entrepreneurs, and humbled the investments of millions of working Americans.

Government cannot give us the technology we need to win our war; more to the point, in harming technology’s development, in bleeding the entrepreneurs who make it possible, and in undermining the savings of millions of retired and working Americans, government does the terrorists’ work for them.

In the global war against capitalism — and all the blessings of freedom capitalism creates — we need all the anarchic brilliance millions of Americans can freely muster. We do not need a government which kills the goose that laid the golden egg. The enemy wants to destroy our system. We need to believe in it. Our system creates; their system merely steals, and destroys.

If we are allowed to run it, that is a race they’ll never win.