The Industrious Spies – Industrial Espionage in the Digital Age

The Web site of GURPS (Generic Universal Role Playing System) lists 18 “state of the art equipments (sic) used for advanced spying”. These include binoculars to read lips, voice activated bugs, electronic imaging devices, computer taps, electromagnetic induction detectors, acoustic stethoscopes, fiber optic scopes, detectors of acoustic emissions (e.g., of printers), laser mikes that can decipher and amplify voice-activated vibrations of windows, and other James Bond gear.

Such contraptions are an integral part of industrial espionage. The American Society for Industrial Security (ASIC) estimated a few years ago that the damage caused by economic or commercial espionage to American industry between 1993-5 alone was c. $63 billion.

The average net loss per incident reported was $19 million in high technology, $29 million in services, and $36 million in manufacturing. ASIC than upped its estimate to $300 billion in 1997 alone – compared to $100 billion assessed by the 1995 report of the White House Office of Science and Technology.

This figures are mere extrapolations based on anecdotal tales of failed espionage. Many incidents go unreported. In his address to the 1998 World Economic Forum, Frank Ciluffo, Deputy Director of the CSIS Global Organized Crime Project, made clear why:

“The perpetrators keep quiet for obvious reasons. The victims do so out of fear. It may jeopardize shareholder and consumer confidence. Employees may lose their jobs. It may invite copycats by inadvertently revealing vulnerabilities. And competitors may take advantage of the negative publicity. In fact, they keep quiet for all the same reasons corporations do not report computer intrusions.”

Interactive Television Technologies complained – in a press release dated August 16, 1996 – that someone broke into its Amherst, NY, offices and stole “three computers containing the plans, schematics, diagrams and specifications for the BUTLER, plus a number of computer disks with access codes.” BUTLER is a proprietary technology which helps connect television to computer networks, such as the Internet. It took four years to develop.

In a single case, described in the Jan/Feb 1996 issue of “Foreign Affairs”, Ronald Hoffman, a software scientist, sold secret applications developed for the Strategic Defense Initiative to Japanese corporations, such as Nissan Motor Company, Mitsubishi Electric, Mitsubishi Heavy Industries, and Ishikawajima-Harima Heavy Industries. He was caught in 1992, having received $750,000 from his “clients”, who used the software in their civilian aerospace projects.

Canal Plus Technologies, a subsidiary of French media giant Vivendi, filed a lawsuit last March against NDS, a division of News Corp. Canal accused NDS of hacking into its pay TV smart cards and distributing the cracked codes freely on a piracy Web site. It sued NDS for $1.1 billion in lost revenues. This provided a rare glimpse into information age, hacker-based, corporate espionage tactics.

Executives of publicly traded design software developer Avant! went to jail for purchasing batches of computer code from former employees of Cadence in 1997.

Reuters Analytics, an American subsidiary of Reuters Holdings, was accused in 1998 of theft of proprietary information from Bloomberg by stealing source codes from its computers.

In December 2001, Say Lye Ow, a Malaysian subject and a former employee of Intel, was sentenced to 24 months in prison for illicitly copying computer files containing advanced designs of Intel’s Merced (Itanium) microprocessor. It was the crowning achievement of a collaboration between the FBI’s High-Tech squad and the US Attorney’s Office CHIP – Computer Hacking and Intellectual Property – unit.

U.S. Attorney David W. Shapiro said: “People and companies who steal intellectual property are thieves just as bank robbers are thieves. In this case, the Itanium microprocessor is an extremely valuable product that took Intel and HP years to develop. These cases should send the message throughout Silicon Valley and the Northern District that the U.S. Attorney’s Office takes seriously the theft of intellectual property and will prosecute these cases to the full extent of the law.”

Yet, such cases are vastly more common than publicly acknowledged.

“People have struck up online friendships with employers and then lured them into conspiracy to commit espionage. People have put bounties on laptops of executives. People have disguised themselves as janitors to gain physical access,” Richard Power, editorial director of the Computer Security Institute told MSNBC.

Marshall Phelps, IBM Vice President for Commercial and Industry Relations admitted to the Senate Judiciary Committee as early as April 1992:

“Among the most blatant actions are outright theft of corporate proprietary assets. Such theft has occurred from many quarters: competitors, governments seeking to bolster national industrial champions, even employees. Unfortunately, IBM has been the victim of such acts.”

Raytheon, a once thriving defense contractor, released “SilentRunner”, a $25,000-65,000 software package designed to counter the “insider threat”. Its brochure, quoted by “Wired”, says:

“We know that 84 percent of your network threats can be expected to come from inside your organization…. This least intrusive of all detection systems will guard the integrity of your network against abuses from unauthorized employees, former employees, hackers or terrorists and competitors.”

This reminds many of the FBI’s Carnivore massive network sniffer software. It also revives the old dilemma between privacy and security. An Omni Consulting survey of 3200 companies worldwide pegged damage caused by insecure networks at $12 billion.

There is no end to the twists and turns of espionage cases and to the creativity shown by the perpetrators.

On June 2001 an indictment was handed down against Nicholas Daddona. He stands accused of a unique variation on the old theme of industrial espionage: he was employed by two firms – transferring trade secrets from one (Fabricated Metal Products) to the other (Eyelet).

Jungsheng Wang was indicted last year for copying the architecture of the Sequoia ultrasound machine developed by Acuson Corporation. He sold it to Bell Imaging, a Californian company which, together with a Chinese firm, owns a mainland China corporation, also charged in the case. The web of collaboration between foreign – or foreign born – scientists with access to trade and technology secrets, domestic corporations and foreign firms, often a cover for government interests – is clearly exposed here.

Kenneth Cullen and Bruce Zak were indicted on April 2001 for trying to purchase a printed or text version of the source code of a computer application for the processing of health care benefit claim forms developed by ZirMed. The legal status of printed source code is unclear. It is undoubtedly intellectual property – but of which kind? Is it software or printed matter?

Peter Morch, a senior R&D team leader for CISCO was accused on March 2001 for simply burning onto compact discs all the intellectual property he could lay his hands on with the intent of using it in his new workplace, Calix Networks, a competitor of CISCO.

Perhaps the most bizarre case involves Fausto Estrada. He was employed by a catering company that served the private lunches to Mastercard’s board of directors. He offered to sell Visa proprietary information that he claimed to have stolen from Mastercard. In a letter signed “Cagliostro”, Fausto demanded $1 million. He was caught red-handed in an FBI sting operation on February 2001.

Multinationals are rarely persecuted even when known to have colluded with offenders. Steven Louis Davis pleaded guilty on January 1998 to stealing trade secrets and designs from Gillette and selling them to its competitors, such as Bic Corporation, American Safety Razor, and Warner Lambert. Yet, it seems that only he paid the price for his misdeeds – 27 months in prison. Bic claims to have immediately informed Gillette of the theft and to have collaborated with Gillette’s Legal Department and the FBI.

Nor are industrial espionage or the theft of intellectual property limited to industry. Mayra Justine Trujillo-Cohen was sentenced on October 1998 to 48 months in prison for stealing proprietary software from Deloitte-Touche, where she worked as a consultant, and passing it for its own. Caroll Lee Campbell, the circulation manager of Gwinette Daily Post (GDP), offered to sell proprietary business and financial information of his employer to lawyers representing a rival paper locked in bitter dispute with GDP.

Nor does industrial espionage necessarily involve clandestine, cloak and dagger, operations. The Internet and information technology are playing an increasing role.

In a bizarre case, Caryn Camp developed in 1999 an Internet-relationship with a self-proclaimed entrepreneur, Stephen Martin. She stole he employer’s trade secrets for Martin in the hope of attaining a senior position in Martin’s outfit – or, at least, of being richly rewarded. Camp was exposed when she mis-addressed an e-mail expressing her fears – to a co-worker.

Steven Hallstead and Brian Pringle simply advertised their wares – designs of five advanced Intel chips – on the Web. They were, of course, caught and sentenced to more than 5 years in prison. David Kern copied the contents of a laptop inadvertently left behind by a serviceman of a competing firm. Kern trapped himself. He was forced to plead the Fifth Amendment during his deposition in a civil lawsuit he filed against his former employer. This, of course, provoked the curiosity of the FBI.

Stolen trade secrets can spell the difference between extinction and profitability. Jack Shearer admitted to building an $8 million business on trade secrets pilfered from Caterpillar and Solar Turbines.

United States Attorney Paul E. Coggins stated: “This is the first EEA case in which the defendants pled guilty to taking trade secret information and actually converting the stolen information into manufactured products that were placed in the stream of commerce. The sentences handed down today (June 15, 2000) are among the longest sentences ever imposed in an Economic Espionage case.”

Economic intelligence gathering – usually based on open sources – is both legitimate and indispensable. Even reverse engineering – disassembling a competitor’s products to learn its secrets – is a grey legal area. Spying is different. It involves the purchase or theft of proprietary information illicitly. It is mostly committed by firms. But governments also share with domestic corporations and multinationals the fruits of their intelligence networks.

Former – and current – intelligence operators (i.e., spooks), political and military information brokers, and assorted shady intermediaries – all switched from dwindling Cold War business to the lucrative market of “competitive intelligence”.

US News and World Report described on May 6, 1996, how a certain Mr. Kota – an alleged purveyor of secret military technology to the KGB in the 1980’s – conspired with a scientist, a decade later, to smuggle biotechnologically modified hamster ovaries to India.

This transition fosters international tensions even among allies. “Countries don’t have friends – they have interests!” – screamed a DOE poster in the mid-nineties. France has vigorously protested US spying on French economic and technological developments – until it was revealed to be doing the same. French relentless and unscrupulous pursuit of purloined intellectual property in the USA is described in Peter Schweizer’s “Friendly Spies: How America’s Allies Are Using Economic Espionage to Steal Our Secrets.”

“Le Mond” reported back in 1996 about intensified American efforts to purchase from French bureaucrats and legislators information regarding France’s WTO, telecommunications, and audio-visual policies. Several CIA operators were expelled.

Similarly, according to Robert Dreyfuss in the January 1995 issue of “Mother Jones”, Non Official Cover (NOC) CIA operators – usually posing as businessmen – are stationed in Japan. These agents conduct economic and technological espionage throughout Asia, including in South Korea and China.

Even the New York Times chimed in, accusing American intelligence agents of assisting US trade negotiators by eavesdropping on Japanese officials during the car imports row in 1995. And President Clinton admitted openly that intelligence gathered by the CIA regarding the illegal practices of French competitors allowed American aerospace firms to win multi-billion dollar contracts in Brazil and Saudi Arabia.

The respected German weekly, Der Spiegel, castigated the USA, in 1990, for arm-twisting the Indonesian government into splitting a $200 million satellite contract between the Japanese NEC and US manufacturers. The American, alleged the magazines, intercepted messages pertaining to the deal, using the infrastructure of the National Security Agency (NSA). Brian Gladwell, a former NATO computer expert, calls it “state-sponsored information piracy”.

Robert Dreyfuss, writing in “Mother Jones”, accused the CIA of actively gathering industrial intelligence (i.e., stealing trade secrets) and passing them on to America’s Big Three carmakers. He quoted Clinton administration officials as saying: “(the CIA) is a good source of information about the current state of technology in a foreign country … We’ve always managed to get intelligence to the business community. There is contact between business people and the intelligence community, and information flows both ways, informally.”

A February 1995 National Security Strategy statement cited by MSNBC declared:

“Collection and analysis can help level the economic playing field by identifying threats to U.S. companies from foreign intelligence services and unfair trading practices.”

The Commerce Department’s Advocacy Center solicits commercial information thus:

“Contracts pursued by foreign firms that receive assistance from their home governments to pressure a customer into a buying decision; unfair treatment by government decision-makers, preventing you from a chance to compete; tenders tied up in bureaucratic red tape, resulting in lost opportunities and unfair advantage to a competitor. If these or any similar export issues are affecting your company, it’s time to call the Advocacy Center.”

And then, of course, there is Echelon.

Exposed two years ago by the European Parliament in great fanfare, this telecommunications interception network, run by the US, UK, New Zealand, Australia, and Canada has become the focus of bitter mutual recriminations and far flung conspiracy theories.

These have abated following the brutal terrorist attacks of September 11 when the need for Echelon-like system with even laxer legal control was made abundantly clear. France, Russia, and 28 other nations operate indigenous mini-Echelons, their hypocritical protestations to the contrary notwithstanding.

But, with well over $600 billion a year invested in easily pilfered R&D, the US is by far the prime target and main victim of such activities rather than their chief perpetrator. The harsh – and much industry lobbied – “Economic Espionage (and Protection of Proprietary Economic Information) Act of 1996” defines the criminal offender thus:

“Whoever, intending or knowing that the offense will benefit any foreign government, foreign instrumentality, or foreign agent, knowingly” and “whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will , injure any owner of that trade secret”:

“(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains a trade secret (2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys a trade secret (3) receives, buys, or possesses a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted without authorization (4) attempts to commit any offense described in any of paragraphs (1) through (3); or (5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (4), and one or more of such persons do any act to effect the object of conspiracy.”

Other countries either have similar statutes (e.g., France) – or are considering to introduce them. Taiwan’s National Security Council has been debating a local version of an economic espionage law lat month. There have been dozens of prosecutions under the law hitherto. Companies – such as “Four Pillars” which stole trade secrets from Avery Dennison – paid fines of millions of US dollars. Employees – such as PPG’s Patrick Worthing – and their accomplices were jailed.

Foreign citizens – like the Taiwanese Kai-Lo Hsu and Prof. Charles Ho from National Chiao Tung university – were detained. Mark Halligan of Welsh and Katz in Chicago lists on his Web site more than 30 important economic espionage cases tried under the law by July last year.

The Economic Espionage law authorizes the FBI to act against foreign intelligence gathering agencies toiling on US soil with the aim of garnering proprietary economic information. During the Congressional hearings that preceded the law, the FBI estimated that no less that 23 governments, including the Israeli, French, Japanese, German, British, Swiss, Swedish, and Russian, were busy doing exactly that. Louis Freeh, the former director of the FBI, put it succinctly: “Economic Espionage is the greatest threat to our national security since the Cold War.”

The French Ministry of Foreign Affairs runs a program which commutes military service to work at high tech US firms. Program-enrolled French computer engineers were arrested attempting to steal proprietary source codes from their American employers.

In an interview he granted to the German ZDF Television quoted by “Daily Yomiuri” and Netsafe, the former Director of the French foreign counterintelligence service, the DGSE, freely confessed:

“….All secret services of the big democracies undertake economic espionage … Their role is to peer into hidden corners and in that context business plays an important part … In France the state is not just responsible for the laws, it is also an entrepreneur. There are state-owned and semi-public companies. And that is why it is correct that for decades the French state regulated the market with its right hand in some ways and used its intelligence service with its left hand to furnish its commercial companies … It is among the tasks of the secret services to shed light on and analyze the white, grey and black aspects of the granting of such major contracts, particularly in far-off countries.”

The FBI investigated 400 economic espionage cases in 1995 – and 800 in 1996. It interfaces with American corporations and obtains investigative leads from them through its 26 years old Development of Espionage, Counterintelligence, and Counter terrorism Awareness (DECA) Program renamed ANSIR (Awareness of National Security Issues and Response). Every local FBI office has a White Collar Crime squad in charge of thwarting industrial espionage. The State Department runs a similar outfit called the Overseas Security Advisory Council (OSAC).

These are massive operations. In 1993-4 alone, the FBI briefed well over a quarter of a million corporate officers in more than 20,000 firms. By 1995, OSAC collaborated on overseas security problems with over 1400 private enterprises. “Country Councils”, comprised of embassy official and private American business, operate in dozens of foreign cities. They facilitate the exchange of timely “unclassified” and threat-related security information.

More than 1600 US companies and organization are currently permanently affiliated wit OSAC. Its Advisory Council is made up of twenty-one private sector and four public sector member organizations that, according to OSAC, “represent specific industries or agencies that operate abroad. Private sector members serve for two to three years. More than fifty U.S. companies and organizations have already served on the Council. Member organizations designate representatives to work on the Council.

These representatives provide the direction and guidance to develop programs that most benefit the U.S. private sector overseas. Representatives meet quarterly and staff committees tasked with specific projects. Current committees include Transnational Crime, Country Council Support, Protection of Information and Technology, and Security Awareness and Education.”

But the FBI is only one of many agencies that deal with the problem in the USA. The President’s Annual Report to Congress on “Foreign Economic Collection and Industrial Espionage” dated July 1995, describes the multiple competitive intelligence (CI) roles of the Customs Service, the Department of Defense, the Department of Energy, and the CIA.

The federal government alerts its contractors to CI threats and subjects them to “awareness programs” under the DOD’s Defense Information Counter Espionage (DICE) program. The Defense Investigative Service (DIS) maintains a host of useful databases such as the Foreign Ownership, Control, or Influence (FOCI) register. It is active otherwise as well, conducting personal security interviews by industrial security representatives and keeping tabs on the foreign contacts of security cleared facilities. And the list goes on.

According to the aforementioned report to Congress:

“The industries that have been the targets in most cases of economic espionage and other collection activities include biotechnology; aerospace; telecommunications, including the technology to build the ‘information superhighway’; computer software/ hardware; advanced transportation and engine technology; advanced materials and coatings, including ‘stealth’ technologies; energy research; defense and armaments technology; manufacturing processes; and semiconductors. Proprietary business information-that is, bid, contract, customer, and strategy in these sectors is aggressively targeted. Foreign collectors have also shown great interest in government and corporate financial and trade data.”

The collection methods range from the traditional – agent recruitment and break ins – to the technologically fantastic. Mergers, acquisitions, joint ventures, research and development partnerships, licensing and franchise agreements, friendship societies, international exchange programs, import-export companies – often cover up for old fashioned reconnaissance. Foreign governments disseminate disinformation to scare off competitors – or lure then into well-set traps.

Foreign students, foreign employees, foreign tourist guides, tourists, immigrants, translators, affable employees of NGO’s, eager consultants, lobbyists, spin doctors, and mock journalists are all part of national concerted efforts to prevail in the global commercial jungle. Recruitment of traitors and patriots is at its peak in international trade fairs, air shows, sabbaticals, scientific congresses, and conferences.

On May 2001, Takashi Okamoto and Hiroaki Serizwa were indicted of stealing DNA and cell line reagents from Lerner Research Institute and the Cleveland Clinic Foundation. This was done on behalf of the Institute of Physical and Chemical Research (RIKEN) in Japan – an outfit 94 funded by the Japanese government. The indictment called RIKEN “an instrumentality of the government of Japan”.

The Chinese Ministry of Posts and Telecommunications was involved on May 2001 in an egregious case of theft of intellectual property. Two development scientists of Chinese origin transferred the PathStar Access Server technology to a Chinese corporation owned by the ministry. The joint venture it formed with the thieves promptly came out with its own product probably based on the stolen secrets.

The following ad appeared in the Asian Wall Street Journal in 1991 – followed by a contact phone number in western Europe:

“Do you have advanced/privileged information of any type of project/contract that is going to be carried out in your country? We hold commission/agency agreements with many large European companies and could introduce them to your project/contract. Any commission received would be shared with yourselves.”

Ben Venzke, publisher of Intelligence Watch Report, describes how Mitsubishi filed c. 1500 FOIA (Freedom of Information Act) requests in 1987 alone, in an effort to enter the space industry. The US Patent office is another great source of freely available proprietary information.

Industrial espionage is not new. In his book, “War by Other Means: Economic Espionage in America”, The Wall Street Journal’s John Fialka, vividly describes how Frances Cabot Lowell absconded from Britain with the plans for the cutting edge Cartwright loom in 1813.

Still, the phenomenon has lately become more egregious and more controversial. As Cold War structures – from NATO to the KGB and the CIA – seek to redefine themselves and to assume new roles and new functions, economic espionage offers a tempting solution.

Moreover, decades of increasing state involvement in modern economies have blurred the traditional demarcation between the private and the public sectors. Many firms are either state-owned (in Europe) or state-financed (in Asia) or sustained by state largesse and patronage (the USA). Many businessmen double as politicians and numerous politicians serve on corporate boards.

Eisenhower’s “military-industrial complex” though not as sinister as once imagined is, all the same, a reality. The deployment of state intelligence assets and resources to help the private sector gain a competitive edge is merely its manifestation.

As foreign corporate ownership becomes widespread, as multinationals expand, as nation-states dissolve into regions and coalesce into supranational states – the classic, exclusionary, and dichotomous view of the world (“we” versus “they”) will fade. But the notion of “proprietary information” is here to stay. And theft will never cease as long as there is profit to be had.

Also Read

Russia’s Idled Spies

Russian Roulette – The Security Apparatus

The Greatest Savings Crisis in History

The Typology of Financial Scandals

The Bursting Asset Bubbles

(Case Studies: The Savings and Loans Crisis, Crash of 1929, British Real Estate)

The Shadowy World of International Finance

Hawala, or the Bank that Never Was

Money Laundering in a Changed World

The Varieties of Corruption

Corruption and Transparency

Straf – Corruption in CEE

The Criminality of Transition

The Kleptocracies of the East

The Enrons of the East

Bully at Work – Interview with Tim Field

The Economics of Conspiracy Theories

The Business of Torture

Fimaco Wouldn’t Die – Russia’s Missing Billions

Treasure Island Revisited – Maritime Piracy

Organ Trafficking in Eastern Europe

Begging Your Trust in Africa

Slush Funds


Games People Play

Games and role-playing are as ancient as Mankind. Rome’s state-sponsored lethal public games may have accounted for up to one fifth of its GDP. They often lasted for months. Historical re-enactments, sports events, chess tournaments, are all manifestations of Man’s insatiable desire to be someone else, somewhere else – and to learn from the experience.

In June 2002, Jeff Harrow, in his influential and eponymous “Harrow Technology Report”, analyzed the economics of Massively Multiplayer Online Role Playing Games (MMORPG). These are 3-D games which take place in comprehensively and minutely constructed environments – a medieval kingdom being the favorite. “Gamers” use action figures known as avatars to represent themselves. These animated figurines walk, talk, emote, and are surprisingly versatile.

Harrow quoted this passage from regarding Sony’s (actually, Verant’s) “EverQuest”. It is a massive MMORPG (now with a sequel) with almost half a million users – each paying c. $13 a month:

“(Norrath, EverQuest’s ersatz world is) … the 77th largest economy in the [real] world!  [It] has a gross national product per capita of $2,266, making its economy larger than either the Chinese or Indian economy and roughly comparable to Russia’s economy.”

In his above quoted paper, “Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier”, Professor Edward Castronova, from California State University at Fullerton, notes that:

“The nominal hourly wage (in Norrath) is about USD 3.42 per hour, and the labors of the people produce a GNP per capita somewhere between that of Russia and Bulgaria. A unit of Norrath’s currency is traded on exchange markets at USD 0.0107, higher than the Yen and the Lira. The economy is characterized by extreme inequality, yet life there is quite attractive to many.”

Players – in contravention of the game’s rules until recently – also trade in EverQuest paraphernalia and characters offline. The online auction Web site, eBay, is flooded with them and people pay real money – sometimes up to a thousand dollars – for avatars and their possessions. Auxiliary and surrogate industries sprang around EverQuest and its ilk. There are, for instance, “macroing” programs that emulate the actions of a real-life player – a no-no.

Nor is EverQuest the largest. World of Warcraft from Blizzard Entertainment has 1.5 million subscribers. The Korean MMORPG “Lineage” boasts a staggering 2.5 million subscribers. “The Matrix Online”, released by Warner Brothers Interactive Entertainment and Sega Corporation in 2004-5, may surpass these figures due to its association with the film franchise – though Star War Galaxies, for instance, failed to leverage its cinematic brand.

The economies of these immersive faux realms suffer from very real woes, though. In its May 28, 2002 issue, “The New Yorker” recounted the story of Britannia, one of the nether kingdoms of the Internet:

“The kingdom, which is stuck somewhere between the sixth and the twelfth centuries, has a single unit of currency, a gold piece that looks a little like a biscuit. A network of servers is supposed to keep track of all the gold, just as it keeps track of everything else on the island, but in late 1997 bands of counterfeiters found a bug that allowed them to reproduce gold pieces more or less at will.

The fantastic wealth they produced for themselves was, of course, entirely imaginary, and yet it led, in textbook fashion, to hyperinflation. At the worst point in the crisis, Britannia’s monetary system virtually collapsed, and players all over the kingdom were reduced to bartering.”

Britannia – run by Ultima Online – has 250,000 “denizens”, each charged c. $10 a month. An average Britannian spends 13 hours a week in the simulated demesne. For many, this constitutes their main social interaction. Psychologists warn against the addictive qualities of this recreation.

Others regard these diversions as colossal – though inadvertent – social experiments. If so, they bode ill – they are all infested with virtual crime, counterfeiting, hoarding, xenophobia, racism, and all manner of perversions.

Subscriptions are not the only mode of payment. Early multi-user dungeons (MUD) – another type of MMORPG – used to charge by the hour. Some users were said to run bills of hundreds of dollars a month.

MMORPG’s require massive upfront investments. It costs c. $20 million to develop a game, not including later content development and technical support. Consequently, hitherto, such games constitute a tiny fraction of the booming video and PC gaming businesses. With combined annual revenues of c. $9 billion in 2001, these trades are 10 percent bigger than the film industry – and half as lucrative as the home video market. They are fast closing on music retail sales.

As games become graphically-lavish  and more interactive, their popularity will increase. Offline and online single-player and multi-player video gaming may be converging. Both Sony and Microsoft Internet-enable their game consoles. The currently clandestine universe of geeks and eccentrics – online, multi-player, games – may yet become a mass phenomena.

Moreover, MMORPG can be greatly enhanced – and expensive downtime greatly reduced – with distributed computing – the sharing of idle resources worldwide to perform calculations within ad hoc self-assembling computer networks. Such collaboration forms the core of, arguably, the new architecture of the Internet known as “The Grid”. Companies such as IBM and Butterfly are already developing the requisite technologies.

According to an IBM-Butterfly press release:

“The Butterfly Grid T could enable online video game providers to support a massive number of players (a few millions) (simultaneously) within the same game by allocating computing resources to the most populated areas and most popular games.”

The differences between video games and other forms of entertainment may be eroding. Hollywood films are actually a form of MMORPG’s – simultaneously watched by thousands worldwide. Video games are interactive – while movies are passive but even this distinction may fall prey to Web films and interactive TV.

As real-life actors and pop idols are – ever so gradually – replaced by electronic avatars, video games will come to occupy the driver seat in a host of hitherto disparate industries. Movies may first be released as video games – rather than conversely. Original music written for the games will be published as “sound tracks”.

Gamers will move seamlessly from their PDA to their PC, to their home cinema system, and back to their Interactive TV. Game consoles – already computational marvels – may finally succeed where PC’s failed: to transform the face of entertainment.

Jeff Harrow aptly concludes:

” … History teaches me that games tend to drive the mass adoption of technologies that then become commonplace and find their way into ‘business’.  Examples include color monitors, higher-resolution and hardware-accelerated graphics, sound cards, and more. And in the case of these MMORPG games, I believe that they will eventually morph into effective virtual business venues for meetings, trade shows, and more. Don’t ignore what’s behind (and ahead for) these ‘games’, just because they’re games…”

Also Read

The Madness of Playing Games

Notes on the Economics of Game Theory

God and Science

Religion and Science

If neurons were capable of introspection and world-representation, would they have developed an idea of “Brain” (i.e., of God)? Would they have become aware that they are mere intertwined components of a larger whole? Would they have considered themselves agents of the Brain – or its masters? When a neuron fires, is it instructed to do so by the Brain or is the Brain an emergent phenomenon, the combined and rather accidental outcome of millions of individual neural actions and pathways?

There are many kinds of narratives and organizing principles. Science is driven by evidence gathered in experiments, and by the falsification of extant theories and their replacement with newer, asymptotically truer, ones. Other systems – religion, nationalism, paranoid ideation, or art – are based on personal experiences (faith, inspiration, paranoia, etc.).

Experiential narratives can and do interact with evidential narratives and vice versa.

For instance: belief in God inspires some scientists who regard science as a method to “sneak a peek at God’s cards” and to get closer to Him. Another example: the pursuit of scientific endeavors enhances one’s national pride and is motivated by it. Science is often corrupted in order to support nationalistic and racist claims.

The basic units of all narratives are known by their effects on the environment. God, in this sense, is no different from electrons, quarks, and black holes. All four constructs cannot be directly observed, but the fact of their existence is derived from their effects.

Granted, God’s effects are discernible only in the social and psychological (or psychopathological) realms. But this observed constraint doesn’t render Him less “real”. The hypothesized existence of God parsimoniously explains a myriad ostensibly unrelated phenomena and, therefore, conforms to the rules governing the formulation of scientific theories.

The locus of God’s hypothesized existence is, clearly and exclusively, in the minds of believers. But this again does not make Him less real. The contents of our minds are as real as anything “out there”. Actually, the very distinction between epistemology and ontology is blurred.

But is God’s existence “true” – or is He just a figment of our neediness and imagination?

Truth is the measure of the ability of our models to describe phenomena and predict them. God’s existence (in people’s minds) succeeds to do both. For instance, assuming that God exists allows us to predict many of the behaviors of people who profess to believe in Him. The existence of God is, therefore, undoubtedly true (in this formal and strict sense).

But does God exist outside people’s minds? Is He an objective entity, independent of what people may or may not think about Him? After all, if all sentient beings were to perish in a horrible calamity, the Sun would still be there, revolving as it has done from time immemorial.

If all sentient beings were to perish in a horrible calamity, would God still exist? If all sentient beings, including all humans, stop believing that there is God – would He survive this renunciation? Does God “out there” inspire the belief in God in religious folks’ minds?

Known things are independent of the existence of observers (although the Copenhagen interpretation of Quantum Mechanics disputes this). Believed things are dependent on the existence of believers.

We know that the Sun exists. We don’t know that God exists. We believe that God exists – but we don’t and cannot know it, in the scientific sense of the word.

We can design experiments to falsify (prove wrong) the existence of electrons, quarks, and black holes (and, thus, if all these experiments fail, prove that electrons, quarks, and black holes exist). We can also design experiments to prove that electrons, quarks, and black holes exist.

But we cannot design even one experiment to falsify the existence of a God who is outside the minds of believers (and, thus, if the experiment fails, prove that God exists “out there”). Additionally, we cannot design even one experiment to prove that God exists outside the minds of believers.

What about the “argument from design”? The universe is so complex and diverse that surely it entails the existence of a supreme intelligence, the world’s designer and creator, known by some as “God”. On the other hand, the world’s richness and variety can be fully accounted for using modern scientific theories such as evolution and the big bang. There is no need to introduce God into the equations.

Still, it is possible that God is responsible for it all. The problem is that we cannot design even one experiment to falsify this theory, that God created the Universe (and, thus, if the experiment fails, prove that God is, indeed, the world’s originator). Additionally, we cannot design even one experiment to prove that God created the world.

We can, however, design numerous experiments to falsify the scientific theories that explain the creation of the Universe (and, thus, if these experiments fail, lend these theories substantial support). We can also design experiments to prove the scientific theories that explain the creation of the Universe.

It does not mean that these theories are absolutely true and immutable. They are not. Our current scientific theories are partly true and are bound to change with new knowledge gained by experimentation. Our current scientific theories will be replaced by newer, truer theories. But any and all future scientific theories will be falsifiable and testable.

Knowledge and belief are like oil and water. They don’t mix. Knowledge doesn’t lead to belief and belief does not yield knowledge. Belief can yield conviction or strongly-felt opinions. But belief cannot result in knowledge.

Still, both known things and believed things exist. The former exist “out there” and the latter “in our minds” and only there. But they are no less real for that.

Also Read

Atheism in a Post-Religious World

The Science of Superstitions

The Myth of Mental Illness

“You can know the name of a bird in all the languages of the world, but when you’re finished, you’ll know absolutely nothing whatever about the bird… So let’s look at the bird and see what it’s doing – that’s what counts. I learned very early the difference between knowing the name of something and knowing something.”

Richard Feynman, Physicist and 1965 Nobel Prize laureate (1918-1988)

“You have all I dare say heard of the animal spirits and how they are transfused from father to son etcetera etcetera – well you may take my word that nine parts in ten of a man’s sense or his nonsense, his successes and miscarriages in this world depend on their motions and activities, and the different tracks and trains you put them into, so that when they are once set a-going, whether right or wrong, away they go cluttering like hey-go-mad.”

Lawrence Sterne (1713-1758), “The Life and Opinions of Tristram Shandy, Gentleman” (1759)

I. Overview

II. Personality Disorders

III. The Biochemistry and Genetics of Mental Health

IV. The Variance of Mental Disease

V. Mental Disorders and the Social Order

VI. Mental Ailment as a Useful Metaphor

VII. The Insanity Defense

I. Overview

Someone is considered mentally “ill” if:

  1. His conduct rigidly and consistently deviates from the typical, average behaviour of all other people in his culture and society that fit his profile (whether this conventional behaviour is moral or rational is immaterial), or

  2. His judgment and grasp of objective, physical reality is impaired, and

  3. His conduct is not a matter of choice but is innate and irresistible, and

  4. His behavior causes him or others discomfort, and is

  5. Dysfunctional, self-defeating, and self-destructive even by his own yardsticks.

Descriptive criteria aside, what is the essence of mental disorders? Are they merely physiological disorders of the brain, or, more precisely of its chemistry? If so, can they be cured by restoring the balance of substances and secretions in that mysterious organ? And, once equilibrium is reinstated – is the illness “gone” or is it still lurking there, “under wraps”, waiting to erupt? Are psychiatric problems inherited, rooted in faulty genes (though amplified by environmental factors) – or brought on by abusive or wrong nurturance?

These questions are the domain of the “medical” school of mental health.

Others cling to the spiritual view of the human psyche. They believe that mental ailments amount to the metaphysical discomposure of an unknown medium – the soul. Theirs is a holistic approach, taking in the patient in his or her entirety, as well as his milieu.

The members of the functional school regard mental health disorders as perturbations in the proper, statistically “normal”, behaviours and manifestations of “healthy” individuals, or as dysfunctions. The “sick” individual – ill at ease with himself (ego-dystonic) or making others unhappy (deviant) – is “mended” when rendered functional again by the prevailing standards of his social and cultural frame of reference.

In a way, the three schools are akin to the trio of blind men who render disparate descriptions of the very same elephant. Still, they share not only their subject matter – but, to a counter intuitively large degree, a faulty methodology.

As the renowned anti-psychiatrist, Thomas Szasz, of the State University of New York, notes in his article “The Lying Truths of Psychiatry”, mental health scholars, regardless of academic predilection, infer the etiology of mental disorders from the success or failure of treatment modalities.

This form of “reverse engineering” of scientific models is not unknown in other fields of science, nor is it unacceptable if the experiments meet the criteria of the scientific method. The theory must be all-inclusive (anamnetic), consistent, falsifiable, logically compatible, monovalent, and parsimonious. Psychological “theories” – even the “medical” ones (the role of serotonin and dopamine in mood disorders, for instance) – are usually none of these things.

The outcome is a bewildering array of ever-shifting mental health “diagnoses” expressly centred around Western civilisation and its standards (example: the ethical objection to suicide). Neurosis, a historically fundamental “condition” vanished after 1980. Homosexuality, according to the American Psychiatric Association, was a pathology prior to 1973. Seven years later, narcissism was declared a “personality disorder”, almost seven decades after it was first described by Freud.

II. Personality Disorders

Indeed, personality disorders are an excellent example of the kaleidoscopic landscape of “objective” psychiatry.

The classification of Axis II personality disorders deeply ingrained, maladaptive, lifelong behavior patterns in the Diagnostic and Statistical Manual, fourth edition, text revision [American Psychiatric Association. DSM-IV-TR, Washington, 2000] or the DSM-IV-TR for short  has come under sustained and serious criticism from its inception in 1952, in the first edition of the DSM.


The DSM IV-TR adopts a categorical approach, postulating that personality disorders are “qualitatively distinct clinical syndromes” (p. 689). This is widely doubted. Even the distinction made between “normal” and “disordered” personalities is increasingly being rejected. The “diagnostic thresholds” between normal and abnormal are either absent or weakly supported.


The polythetic form of the DSM’s Diagnostic Criteria only a subset of the criteria is adequate grounds for a diagnosis generates unacceptable diagnostic heterogeneity. In other words, people diagnosed with the same personality disorder may share only one criterion or none.

The DSM fails to clarify the exact relationship between Axis II and Axis I disorders and the way chronic childhood and developmental problems interact with personality disorders.

The differential diagnoses are vague and the personality disorders are insufficiently demarcated. The result is excessive co-morbidity (multiple Axis II diagnoses).

The DSM contains little discussion of what distinguishes normal character (personality), personality traits, or personality style (Millon) from personality disorders.

A dearth of documented clinical experience regarding both the disorders themselves and the utility of various treatment modalities.

Numerous personality disorders are “not otherwise specified” a catchall, basket “category”.

Cultural bias is evident in certain disorders (such as the Antisocial and the Schizotypal).

The emergence of dimensional alternatives to the categorical approach is acknowledged in the DSM-IV-TR itself:

  • “An alternative to the categorical approach is the dimensional perspective that Personality Disorders represent maladaptive variants of personality traits that merge imperceptibly into normality and into one another” (p.689)

    The following issues long neglected in the DSM are likely to be tackled in future editions as well as in current research. But their omission from official discourse hitherto is both startling and telling:

    • The longitudinal course of the disorder(s) and their temporal stability from early childhood onwards;

    • The genetic and biological underpinnings of personality disorder(s);

    • The development of personality psychopathology during childhood and its emergence in adolescence;

    • The interactions between physical health and disease and personality disorders;

    • The effectiveness of various treatments talk therapies as well as psychopharmacology.




III. The Biochemistry and Genetics of Mental Health

Certain mental health afflictions are either correlated with a statistically abnormal biochemical activity in the brain or are ameliorated with medication. Yet the two facts are not ineludibly facets of the same underlying phenomenon. In other words, that a given medicine reduces or abolishes certain symptoms does not necessarily mean they were caused by the processes or substances affected by the drug administered. Causation is only one of many possible connections and chains of events.

To designate a pattern of behaviour as a mental health disorder is a value judgment, or at best a statistical observation. Such designation is effected regardless of the facts of brain science. Moreover, correlation is not causation. Deviant brain or body biochemistry (once called “polluted animal spirits”) do exist but are they truly the roots of mental perversion? Nor is it clear which triggers what: do the aberrant neurochemistry or biochemistry cause mental illness or the other way around?

That psychoactive medication alters behaviour and mood is indisputable. So do illicit and legal drugs, certain foods, and all interpersonal interactions. That the changes brought about by prescription are desirable is debatable and involves tautological thinking. If a certain pattern of behaviour is described as (socially) “dysfunctional” or (psychologically) “sick” clearly, every change would be welcomed as “healing” and every agent of transformation would be called a “cure”.

The same applies to the alleged heredity of mental illness. Single genes or gene complexes are frequently “associated” with mental health diagnoses, personality traits, or behaviour patterns. But too little is known to establish irrefutable sequences of causes-and-effects. Even less is proven about the interaction of nature and nurture, genotype and phenotype, the plasticity of the brain and the psychological impact of trauma, abuse, upbringing, role models, peers, and other environmental elements.

Nor is the distinction between psychotropic substances and talk therapy that clear-cut. Words and the interaction with the therapist also affect the brain, its processes and chemistry – albeit more slowly and, perhaps, more profoundly and irreversibly. Medicines as David Kaiser reminds us in “Against Biologic Psychiatry” (Psychiatric Times, Volume XIII, Issue 12, December 1996) treat symptoms, not the underlying processes that yield them.

IV. The Variance of Mental Disease

If mental illnesses are bodily and empirical, they should be invariant both temporally and spatially, across cultures and societies. This, to some degree, is, indeed, the case. Psychological diseases are not context dependent but the pathologizing of certain behaviours is. Suicide, substance abuse, narcissism, eating disorders, antisocial ways, schizotypal symptoms, depression, even psychosis are considered sick by some cultures and utterly normative or advantageous in others.

This was to be expected. The human mind and its dysfunctions are alike around the world. But values differ from time to time and from one place to another. Hence, disagreements about the propriety and desirability of human actions and inaction are bound to arise in a symptom-based diagnostic system.

As long as the pseudo-medical definitions of mental health disorders continue to rely exclusively on signs and symptoms i.e., mostly on observed or reported behaviours they remain vulnerable to such discord and devoid of much-sought universality and rigor.

V. Mental Disorders and the Social Order

The mentally sick receive the same treatment as carriers of AIDS or SARS or the Ebola virus or smallpox. They are sometimes quarantined against their will and coerced into involuntary treatment by medication, psychosurgery, or electroconvulsive therapy. This is done in the name of the greater good, largely as a preventive policy.

Conspiracy theories notwithstanding, it is impossible to ignore the enormous interests vested in psychiatry and psychopharmacology. The multibillion dollar industries involving drug companies, hospitals, managed healthcare, private clinics, academic departments, and law enforcement agencies rely, for their continued and exponential growth, on the propagation of the concept of “mental illness” and its corollaries: treatment and research.

VI. Mental Ailment as a Useful Metaphor

Abstract concepts form the core of all branches of human knowledge. No one has ever seen a quark, or untangled a chemical bond, or surfed an electromagnetic wave, or visited the unconscious. These are useful metaphors, theoretical entities with explanatory or descriptive power.

“Mental health disorders” are no different. They are shorthand for capturing the unsettling quiddity of “the Other”. Useful as taxonomies, they are also tools of social coercion and conformity, as Michel Foucault and Louis Althusser observed. Relegating both the dangerous and the idiosyncratic to the collective fringes is a vital technique of social engineering.

The aim is progress through social cohesion and the regulation of innovation and creative destruction. Psychiatry, therefore, is reifies society’s preference of evolution to revolution, or, worse still, to mayhem. As is often the case with human endeavour, it is a noble cause, unscrupulously and dogmatically pursued.

VII. The Insanity Defense

“It is an ill thing to knock against a deaf-mute, an imbecile, or a minor. He that wounds them is culpable, but if they wound him they are not culpable.” (Mishna, Babylonian Talmud)

If mental illness is culture-dependent and mostly serves as an organizing social principle – what should we make of the insanity defense (NGRI- Not Guilty by Reason of Insanity)?

A person is held not responsible for his criminal actions if s/he cannot tell right from wrong (“lacks substantial capacity either to appreciate the criminality (wrongfulness) of his conduct” – diminished capacity), did not intend to act the way he did (absent “mens rea”) and/or could not control his behavior (“irresistible impulse”). These handicaps are often associated with “mental disease or defect” or “mental retardation”.

Mental health professionals prefer to talk about an impairment of a “person’s perception or understanding of reality”. They hold a “guilty but mentally ill” verdict to be contradiction in terms. All “mentally-ill” people operate within a (usually coherent) worldview, with consistent internal logic, and rules of right and wrong (ethics). Yet, these rarely conform to the way most people perceive the world. The mentally-ill, therefore, cannot be guilty because s/he has a tenuous grasp on reality.

Yet, experience teaches us that a criminal maybe mentally ill even as s/he maintains a perfect reality test and thus is held criminally responsible (Jeffrey Dahmer comes to mind). The “perception and understanding of reality”, in other words, can and does co-exist even with the severest forms of mental illness.

This makes it even more difficult to comprehend what is meant by “mental disease”. If some mentally ill maintain a grasp on reality, know right from wrong, can anticipate the outcomes of their actions, are not subject to irresistible impulses (the official position of the American Psychiatric Association) – in what way do they differ from us, “normal” folks?

This is why the insanity defense often sits ill with mental health pathologies deemed socially “acceptable” and “normal”  – such as religion or love.

Consider the following case:

A mother bashes the skulls of her three sons. Two of them die. She claims to have acted on instructions she had received from God. She is found not guilty by reason of insanity. The jury determined that she “did not know right from wrong during the killings.”

But why exactly was she judged insane?

Her belief in the existence of God – a being with inordinate and inhuman attributes – may be irrational.

But it does not constitute insanity in the strictest sense because it conforms to social and cultural creeds and codes of conduct in her milieu. Billions of people faithfully subscribe to the same ideas, adhere to the same transcendental rules, observe the same mystical rituals, and claim to go through the same experiences. This shared psychosis is so widespread that it can no longer be deemed pathological, statistically speaking.

She claimed that God has spoken to her.

As do numerous other people. Behavior that is considered psychotic (paranoid-schizophrenic) in other contexts is lauded and admired in religious circles. Hearing voices and seeing visions – auditory and visual delusions – are considered rank manifestations of righteousness and sanctity.

Perhaps it was the content of her hallucinations that proved her insane?

She claimed that God had instructed her to kill her boys. Surely, God would not ordain such evil?

Alas, the Old and New Testaments both contain examples of God’s appetite for human sacrifice. Abraham was ordered by God to sacrifice Isaac, his beloved son (though this savage command was rescinded at the last moment). Jesus, the son of God himself, was crucified to atone for the sins of humanity.

A divine injunction to slay one’s offspring would sit well with the Holy Scriptures and the Apocrypha as well as with millennia-old Judeo-Christian traditions of martyrdom and sacrifice.

Her actions were wrong and incommensurate with both human and divine (or natural) laws.

Yes, but they were perfectly in accord with a literal interpretation of certain divinely-inspired texts, millennial scriptures, apocalyptic thought systems, and fundamentalist religious ideologies (such as the ones espousing the imminence of “rupture”). Unless one declares these doctrines and writings insane, her actions are not.

we are forced to the conclusion that the murderous mother is perfectly sane. Her frame of reference is different to ours. Hence, her definitions of right and wrong are idiosyncratic. To her, killing her babies was the right thing to do and in conformity with valued teachings and her own epiphany. Her grasp of reality – the immediate and later consequences of her actions – was never impaired.

It would seem that sanity and insanity are relative terms, dependent on frames of cultural and social reference, and statistically defined. There isn’t – and, in principle, can never emerge – an “objective”, medical, scientific test to determine mental health or disease unequivocally.

VIII. Adaptation and Insanity – (correspondence with Paul Shirley, MSW)

“Normal” people adapt to their environment – both human and natural.

“Abnormal” ones try to adapt their environment – both human and natural – to their idiosyncratic needs/profile.

If they succeed, their environment, both human (society) and natural is pathologized.

Also Read

On Disease

The Insanity of the Defense

In Defense of Psychoanalysis

he Metaphors of the Mind – Part I (The Brain)

The Metaphors of the Mind – Part II (Psychotherapy)

The Metaphors of the Mind – Part III (Dreams)

The Use and Abuse of Differential Diagnoses

Althusser, Competing Interpellations and the Third Text