WHY SPY?AN INQUIRY INTO THE RATIONALE FOR ECONOMIC ESPIONAGE*
University of Calgary
Economic espionage can yield desirable strategic effects as well as cost savings forfirms in a spying country. The spying country will typically gain even thoughcounter-espionage operations will often be conducted by target countries. When twoproducing countries spy on each other, it is possible that both will be better off because of the technology transfer which is implicit in espionage. Economicespionage is generally beneficial to consumers. [F12, O031]
1. INTRODUCTIONEconomic espionage, it would appear, is a increasingly common phenomena. Whilethe clandestine nature of spying precludes systematic empirical verification, anecdotalaccounts in the popular media abound. For example, Pierre Marion, former director of the French intelligence services, has stated that: “It would not be normal that we do spyon the (United) States in political matters; we are really allied. But in the economiccompetition, in the technological competition, we are competitors; we are not allied.”(Security Management, 1992) Similarly, Stansfield Turner, former director of USintelligence has said that: “The United States ... would have no compunction aboutstealing military secrets to help it manufacture better weapons. If economic strengthshould now be regarded as a vital component of national security, paralled with militarypower, why should Amecica be concerned about stealing and employing economicsecrets?” (Turner, 1991) Further, a document from France’s Direction Générale de laSécurité Extérieure (DGSE) that was leaked to a news service (Time Magazine, 1993,June 7) appeared to suggest that some of the most technology-intensive in US firmswere targets for French intelligence agents. The DGSE, it seemed, was seekinginformation on manufacturing processes as well as sensitive information on corporateand government plans. It is often argued that the end of the Cold War has contributed toan increase in economic espionage by releasing intelligence resources. In addition, theperceived need for Western nations to cooperate against a common threat has eased,turning military allies into more vigorous economic competitors. The counter-argument
INTERNATIONAL ECONOMIC JOURNAL
Volume 13, Number 2, Summer 1999
*An earlier version of this paper was presented at the 1994 meetings of the CanadianEconomics Association in Calgary, Canada. The authors acknowledge helpful comments andsuggestions from J. R. Church, T. Terriff, R. Ware and an anonymous referee. The authors,however, are responsible for any remaining shortcomings of the paper.