In the world of cybersecurity, it often feels like a relentless battle, a digital tug-of-war between those who build and protect, and those who seek to tear down and exploit. While cyber attackers can cause significant damage and disruption, a fascinating perspective from the world of economics suggests that, in the long run, their model is fundamentally flawed and destined to fail. The 2024 Nobel Prize in Economic Sciences provides a powerful framework for understanding why.
The Nobel Prize and the Tale of Two Systems
The 2024 Nobel Prize was awarded to Daron Acemoglu, Simon Johnson, and James A. Robinson for their groundbreaking research into why some nations achieve lasting prosperity while others remain trapped in poverty. Their answer does not lie in geography or culture, but in the nature of a country’s institutions. They identified two fundamental types:
- Inclusive Institutions: These are systems that distribute political and economic power broadly. They protect property rights, uphold the rule of law, and encourage investment and innovation. In an inclusive system, people are motivated to work and create because they know they will be able to enjoy the fruits of their labour. These societies create and grow wealth, leading to long-term prosperity.
- Extractive Institutions: These systems concentrate power in the hands of a small elite, who use this power to extract wealth from the rest of the population. There is little incentive for ordinary people to innovate or invest, as any gains are likely to be expropriated. These societies do not create new wealth; they simply transfer it to the top, which ultimately stifles growth and leads to stagnation.
The laureates demonstrated this with a “reversal of fortune.” Many regions that were prosperous before colonisation, often with highly extractive systems in place, are now among the world’s poorest. Conversely, less populated areas where colonisers established more inclusive institutions to encourage settlement have become the most prosperous today. The lesson is clear: value creation trumps value extraction every time.
Cybersecurity Through an Economic Lens
This framework can be applied directly to the digital world and the conflict between cybersecurity professionals and malicious actors.
Cyber Attackers as an ‘Extractive’ System
Cyber attackers operate on a purely extractive model. They do not create anything of value. Instead, they exploit the systems, innovations, and hard work of others to steal data, money, and intellectual property. Their actions mirror those of an extractive elite:
- They exploit vulnerabilities for short-term gain.
- They undermine trust, making the digital “society” a more dangerous and less productive place.
- Their success depends entirely on the existence of value created by others. If there were nothing of value to steal, their model would collapse.
A ransomware attack is a perfect example. The attacker does not build a business or offer a service; they simply seize control of an asset built by someone else and demand payment to return it. This is a purely extractive act.
Cybersecurity as an ‘Inclusive’ System
On the other hand, the cybersecurity industry and the businesses that invest in it are building an inclusive system.
- They create a secure and trusted environment where commerce, innovation, and communication can flourish.
- They protect the “property rights” of the digital world, ensuring that organisations can retain the value they create.
- By building defences, they encourage further investment and participation in the digital economy, fostering growth that benefits everyone (except the attackers).
When a business invests in robust security measures, it is not just protecting itself. It is contributing to the overall stability and health of the digital ecosystem, reinforcing the inclusive model that drives progress and prosperity.
The Inevitable Outcome
While cybercrime can be profitable for individuals in the short term, the economic principles outlined by the Nobel laureates show why it is an unsustainable model. An economy based purely on theft eventually runs out of things to steal. It creates a spiral of distrust and decline.
In contrast, an economy based on security, trust, and creation is self-reinforcing. The more secure the digital world becomes, the more value is created within it. This creates a vastly larger and more resilient economic engine. The market for protecting digital assets will always, in the long run, be more powerful and sustainable than the market for stealing them.
The work of building secure systems is the work of creating long-term, shared prosperity. The actions of cyber attackers, while harmful, represent a parasitic model that is, from an economic standpoint, doomed to fail against the sheer force of value creation.
Secure Your Place in a Prosperous Digital Future
Understanding this perspective reinforces that investing in cybersecurity is not merely a defensive expenditure. It is a strategic investment in the principles of trust and security that enable long-term growth and success. By strengthening your defences, you are not only protecting your assets but also casting a vote for an inclusive, innovative, and prosperous digital world.
If you are looking to enhance your organisation’s security and align your business with the principles of long-term digital success, Vertex is here to help. Contact us to learn more about our tailored cybersecurity solutions and how we can help you build a more secure and resilient future.
