NSA Revelations Kill IBM Hardware Sales in China

For several months there have been warnings that the NSA revelations will seriously upset American technology companies’ bottom lines. Though not directly implicated in any of the leaks thus far it appears that IBM’s Chinese growth predictions have just been fed through a wood chipper. From Zerohedge:

In mid-August, an anonymous source told the Shanghai Securities News, a branch of the state-owned Xinhua News Agency, which reports directly to the Propaganda and Public Information Departments of the Communist Party, that IBM, along with Oracle and EMC, have become targets of the Ministry of Public Security and the cabinet-level Development Research Centre due to the Snowden revelations.

“At present, thanks to their technological superiority, many of our core information technology systems are basically dominated by foreign hardware and software firms, but the Prism scandal implies security problems,” the source said, according to Reuters. So the government would launch an investigation into these security problems, the source said.

Absolute stonewalling ensued. IBM told Reuters that it was unable to comment. Oracle and EMC weren’t available for comment. The Ministry of Public Security refused to comment. The Development Research Centre knew nothing of any such investigation. The Ministry of Industry and Information Technology “could not confirm anything because of the matter’s sensitivity.”

This is the first quantitative indication of the price Corporate America has to pay for gorging at the big trough of the US Intelligence Community, and particularly the NSA with its endlessly ballooning budget. For once, there is a price to be paid, if only temporarily, for helping build a perfect, seamless, borderless surveillance society. The companies will deny it. At the same time, they’ll be looking for solutions. China, Russia, and Brazil are too important to just get kicked out of – and other countries might follow suit.

Now, IBM et al. aren’t necessarily purely victim to the NSA’s massive surveillance practices: there likely are legitimate domestic market changes that are also affecting the ability of Western companies to sell product in China and other Asian-Pacific countries. But still, that NSA can be used to justify retreats from Western products indicates how even companies not clearly and directly implicated in the scandals stand to lose. One has to wonder whether the economic losses that will be incurred following the NSA revelations are equal to, or exceed, any economic gains linked to the spying.


Notes EM: Disorder as resistance


I found this in the Letters section of the latest issue of The Times Literary Supplement (dated March 15, 2013). It doesn’t seem to be online:

Binder families

Sir, – In David Winters’s review of The Demon of Writing by Ben Kafka he mentions a clerk who saved the actors of the Comédie-Française during the Terror, by soaking their death warrants in a tub and throwing the balls of pulp out of the window (February 15). In the 1960s I worked as a welfare case worker, along with several hundred others, in a vast office in downtown Chicago. Each of the families of my 300 clients existed, bureaucratically speaking, as a large binder filled with forms and written notes. When the families had been on welfare for several generations, the binders were equivalent to two or three large telephone books.

Overwhelmed with an avalanche of forms, telephone calls, clients waiting for hours downstairs to see me, home visits to the high-rise housing projects in which they lived, I was taught by the veteran case workers to simply go into the huge library where the binders were stored, alphabetically on endless shelves, and “accidentally” file binders out of place. Then I could innocently plead that I was unable to take any action on the case because I could not find the binder. Without the binder nothing in the status of the clients could change, their cheques would continue to arrive, and I could “miraculously” locate their binder if I needed to. Sadly, we were on the verge of the computer age, the information was beginning to appear on IBM punch cards, and the binders were soon to become obsolete, signalling the beginning of a far more ruthless era in which no clerk could make inconvenient facts disappear.

MICHAEL LIPSEY 75 San Marino Drive, San Rafael, California 94901.

This speaks volumes to the humanity that “inefficient” bureaucratic organization can enable. Further, it foregrounds how contemporary drives towards efficiency and order can obviate some historical means of bureaucratic resistance, resistance that was significant for maintaining and improving people’s daily lives.


IBM’s efforts to add ‘intelligence’ to cities – and thus make them more manageable – is an ongoing effort. While what they’ve developed in Rio is interesting, I suspect that several facets of the ‘defence mechanism’ obfuscate residents’ economic realities.

Specifically, the video notes that residents of favelas may receive text messages that warn of oncoming disasters. This is good, but misses the point that a warning system without a capacity to absorb/protect residents who are fleeing poorly-build environments is effectively useless.

While the IBM ‘smart city’ project may  make the city more intelligent, and improve daily operations, such intelligence doesn’t necessarily mean that the city can temporarily house residents of favelas in ‘safe’ areas of the city if a major disaster occurs. Unfortunately, the sale of technology in this video obfuscates this key truth of disaster preparation.