Snowden revealed to the world that the NSA was systematically spying on all of us. Maybe more critically, we have learned that the NSA is spying on all American citizens. In fact, the NSA is even spying on its own congress. This spying violates the US constitution.

We also know that such spying is ineffective when it comes to stopping terrorists. A cost-benefit analysis shows that the NSA is wasteful.

So why are they doing it?

They are doing it precisely because it is very expensive.

This seems counterintuitive, but only if you haven’t spent years around bureaucrats. You see, whereas private entrepreneurs try to make as big a profit as possible, bureaucrats try to grow their budget. That is, to government bureaucrats, things like profit or cost-benefit are irrelevant. The only thing that matters is how big your budget is…

As an illustration, consider college professors. Nobody ever does a cost-benefit analysis of their research projects. Given two professors with the same output, whoever has spent the most money will be the winner. The need to acquire more money drives many research projects.

So I am sure it applies to NSA spies as well: given two agents, one that proposes a cost-effective technique with proven results… and one that proposes a over-engineered massively expensive endeavour… the second one will win every time. NSA managers want to be able to go to the president with arguments as to why their budget needs to be so large.

It is even more fun for the NSA since its budget demands are classified. So there can be no downside to asking for more money. And to ask for more money, credibly, you have to have proposals. There are only so many bona fide terrorists that need be tracked. And most of them are blundering idiots. But everyone is a potential terrorist if you are creative enough. So spying on everyone is naturally what any spy agency will want to do… you can then justify almost infinite budgets.

If I am right, then it puts a dent in the theory that the NSA is 10 years ahead of the rest of the world in mathematical cryptography. The problem with mathematics is that it is dirt cheap. Even if the NSA hired all of the top-notch mathematicians who want to work for a spy agency… it would still not be a large expense. So it is unlikely that mathematics has much clout at all. In fact, mathematicians never have much clout within a bureaucracy…

1 Comment »

  1. I think this is *one* of many reasons why they are doing it, and frankly it solves a short term problem in exchange for a longer term one. The reality is that the storage costs for data follow a Moore-like decline over time, even as data explodes. So the long term cost for doing what they do would be, at best, less than inflation, which means while it provides a significant one-time boost in spending, in the end it becomes a reason to cut spending.

    I think there is a far more obvious upside for budget discussions. If you’re about to go before Congress to justify your budget, wouldn’t *you* want to have a comprehensive history of all digital communications of everyone involved in the process, their family, their friends, and their staff? It’d be great both for understanding how to position yourself as well as the always popular blackmail scenario. It’d be great even if you *never looked at it*.

    Comment by Christopher Smith — 11/1/2014 @ 16:28

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