File-sharing: America’s huge intelligence leak

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Hello and welcome to the Intelligence from the Economist. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. Between last year's layoffs of tech workers and this year's plans to let more go, a quarter of a million people will be out of a job. So where are they all going and how might that change the tech industry? And the hygiene hypothesis suggests that pet ownership is good for babies. Immune systems, a helpful mixing of microbes that makes them more resistant. We examine a new study that shows which pets seem to make the most difference. But first, A suspected leak of highly classified Pentagon documents is starting to cause real havoc for America and its allies. The material seems to provide crucial details about Ukraine's war effort and exposes the methods and the targets of spying, including spying on those very same allies.

Anything that undermines the security, the stability and the prosperity of the Indo Pacific region in which we live is of interest to Australia.

Plenty of countries are doing damage control and American officials are clearly rattled. Secretary of Defense Lloyd Austin pledged that the source will be found and brought to justice.

We take this very seriously and we will continue to investigate and turn over every rock until we find the source of this and the extent of it.

For Ukraine, the timing of all this couldn't be worse. Its forces may have to rethink a long expected spring counteroffensive.

This is the biggest intelligence leak in a decade since Edward Snowden's revelations about the wholesale collection of intelligence.

Anton LaGuardia is the Economist's diplomatic editor.

These documents began to appear on a messaging forum used mainly by gamers. And our photographs of pieces of paper appear to be briefing slides for the Joint Chiefs of Staff. And they show all manner of things, mainly to do with Ukraine, all of which are extremely damaging, not only to the prospects for a counteroffensive, but also for trust in America as a country that can be trusted to keep secrets.

And given that we know misinformation plays a big role in this conflict, how do we know what it is you're looking at here are real?

There's evidence that some of them have been doctored, for example, to increase Ukrainian casualties and decrease Russian ones. But it was done very crudely and appears to have been done after they began to appear online. The rest of them show no obvious signs of tempering. And some of the things that they disclose align with things that senior officers have said off the record to journalists. And possibly the strongest evidence is just the sheer panic that you're seeing in the Pentagon and elsewhere in Washington about how they got out. You know, people are having to call allies and explain what happened and try to control the fallout. Journalists are being warned be careful about what they print because lives may be at risk. And a major investigation is ongoing to find out how they came to be leaked.

And so without putting any lives at risk, then, Anton, what's in these leaks?

I think there are two broad categories. One is an assessment of the state of the war in Ukraine that tells you, for example, how various Ukrainian units are being armed by the allies, over what time frame, what equipment has arrived, what equipment will arrive, and which units might lead the much awaited counteroffensive. A second thing in there is a sense of, for example, the very precarious and fragile state of Ukraine's air defenses, with estimates of when they will start to run out of what kinds of anti aircraft munitions. Right now, the Ukrainians have done a very good job of holding back the Russians, who tend not to fly much beyond terrain that they control, in other words, where they have their own air defenses. If they feel safer roaming at will over Ukraine, then that could make things a lot more dangerous for Ukrainian forces and potentially compromise the coming counteroffensive. Not least because it also encourages Russia to think that all it needs to do is hold on and the Ukrainians will start to weaken and run out of Western provided weapons. There's much more where that kind of thing comes from. There's specific locations of where some of the systems are placed, there's specific maps with the location of forces and so on, all of which would be useful to the Russians either to corroborate their own intelligence as to what's happening in Ukraine or to identify and spot where information about Russian forces is leaking out from.

So you're painting a picture here where the release of these documents might actually change the course of the war. Is that the feeling you get?

Potentially, yes. The Ukrainians have already said that they have changed some aspects of their planned counteroffensive because of the leaks. It, I think, is most corrosive of trust, the sense that the Americans can't be trusted with sensitive information about their plans. And it also embarrasses countries. For example, there's the disclosure that special forces from several NATO countries are operating In Ukraine, about 97 in all, including from France and the Netherlands, and some countries that have not announced that they have forces in Ukraine. And that will make it easier for Russian propaganda to say NATO is directly implicated, directly taking part in the conflict. That said, the specific timing and specific units that are going to be used in counteroffensive can be changed. And the Russians will be asking themselves, now that these disclosures are in the public, what have the Ukrainians actually changed? So I think there will still be a counteroffensive. It might be different from the one that the Ukrainians thought they were going to launch and may be different in turn from the one the Russians are expecting.

And as you say, in the meantime, America has been careless with information it's gathered from allies.

Yes, indeed, there are two classes of difficulty. One is that information shared with allies has got out. The other is that the United States has actually been spying on allies. It's not a secret. Everybody knows that countries spy on each other, but it's still an embarrassment when it comes out. So, for example, apart from spying on the Ukrainians and the Russians, the Americans appear to have been spying on the Hungarians, Israelis, the South Koreans, and so on. And every day there's more revelations. For example, there was a report that the Americans assessed the Egyptians were selling rockets to the Russians. And another assessment that the United Arab Emirates were secretly making common cause with Russian spooks. So lots of countries are starting to react to these stories, saying either they're not true or demanding explanations for what the Americans have been up to. The other point is that it also hints at methods of collection. So when these intelligence reports make reference to specific conversations that have been had, then it suggests that particular people's phones are being hacked or particular facilities are being listened in upon, which gives the Russians and others the opportunity to try and close down those sources of information.

And as you say, one of the big questions here is how this stuff got out. Is the assumption at this stage just a rogue actor somewhere within the American system?

It's very hard to tell. It does have the smell of someone fairly low in the food chain wanting to show off about information that they have. We've seen that in the past. At the same time, there's also this evidence that some of the documents were subsequently doctored, and they were also transmitted and amplified in networks where Russians are known to be active. So there may well be a Russian involvement as well. But who originally got them and how they were leaked is still a mystery.

But whatever its source, this particular genie is out of the bottle. That's surely going to make allies reluctant to share information with the U.S. i.

Think that is absolutely true. There's a lot of worry about this affecting intelligence cooperation between allies and trusts in the US in the short term, that is certainly true. The United States will need to be seen to be tightening up its procedures. But there have been scandals and intelligence leaks in the past, notably Edward Snowden's. But in the end, America is still the world's intelligence superpower. Countries will need to cooperate with it and share information with it, not least because they want America to share information with them. So in the longer term, I think trust will need to be restored and people will return to the habits of cooperation which are increasingly necessary in a world where America and its allies need each other to confront either increasingly aggressive powers or increasingly powerful rivals.

Anton, thanks very much for joining us.

Thank you, Jason.

This year has so far been full of bad news for American tech workers. Fired workers are expressing heartbreak over social media. They got the bad news early via an email at c once. Sitting atop of the financial mountain during the pandemic, tech companies are feeling the effects of a return to normalcy. In February, Mark Zuckerberg, the boss of Facebook owner meta, declared that 2023 would be the year of efficiency. And in business speak, efficiency means firings. Last month, Meta announced a pile of job cuts.

Meta CEO Mark Zuckerberg says in a.

New blog post the company will lay off 10,000 employees.

That was on top of the 11,000 staff it laid off last November. Days later, Amazon said it would cut a further 9,000 corporate employees. Having already sacked 18,000 white collar types.

This news coming from CEO Andy Jassy in a memo to Amazon employees that.

Is now shared on the company's website.

All those pink slips are adding up.

So far this year, American tech firms have announced plans to lay off 130,000 workers, which is in addition to the 140,000 workers they laid off last year.

Tom Lee Devlin is the Economist's global business correspondent and co host of Money Talks, our sister show on business and finance.

Underlying this is really a shift in mindset in the industry for workers. This is all, of course, incredibly disorienting. But investors, for their part, are loving the newfound focus on profitability. With the tech heavy NASDAQ index up by 18% since its lows last December.

130,000 workers this year, 140,000 last year. Let's put those numbers in context because they're kind of eye watering numbers at the outset here.

Yeah, of course, I mean, quarter of a million people being fired is undoubtedly a big headline number. And again, that comes with a heavy toll on the people involved. But you do need to put it in perspective. So the American tech industry employs just shy of four and a half million people. So we're talking about six percent of industry employment. And what's more, many parts of the tech industry actually continued hiring pretty enthusiastically through most of 2022. So it really wasn't until the start of this year that we started to see the total number of people employed in tech plateau and then start to decline very slightly. And I mean, just for comparison, from the peak of the dot com boom in the early 2000s to its low point around 2003, America's overall tech workforce declined by something like 23%. This is not the same situation as the dot com boom. The tech industry is very different today from what it was then. But it is interesting because it suggests that tech layoffs might not be over yet. And companies are still adjusting to this world of higher interest rates and greater pressure on margins from their investors. So last month we saw Amazon and Meta both announced their second round of layoffs, and others like Salesforce are expected to announce more layoffs in the weeks ahead as well. So I suspect there is more still to come here.

And of the ones that have already gone, is there a particular part of the sector that's getting the chop?

Yeah, tech specialists. So people in jobs like software engineering or tech data science have mostly been spared the worst of it, although in some cases they have also been on the chopping block. Meta, for example, is in the process of restructuring its tech teams at the moment. But in most cases the axe has really fallen disproportionately on business functions like sales and marketing and recruitment. And arguably that's appropriate because actually those types of non tech occupations have steadily grown as a portion of the technology industry's employment over the past few years, which some, and certainly investors interpret as a sign of bloat.

But once that perceived bloat is taken care of, could the tech specialists who have until now been spared, maybe face the danger that they haven't yet?

I think the short answer is yes. But what I will say is that those workers, the coders and data gurus and machine learning experts, are amongst the most in demand workers in the economy. In fact, the unemployment rate for those workers in America is an incredibly tight 2.2% compared to 3.6% for the workforce as a whole at the moment. And actually, the fact that those workers are being released back into the wild, so to speak, could be a boon for the parts of the economy that have been desperately trying to get their hands on those skill sets for some time now.

And what parts of the economy is that?

Yeah, so one good example of this would be a company like John Deere, which is a big American tractor maker. And they've been eagerly snapping up tech workers from Silicon Valley over recent months, looking for people with expertise in things like artificial intelligence to help them with developing remote controlled and autonomous farm machinery and industrial goods. Companies like John Deere are really a great example of this pattern. Traditionally unsexy industries that are trying to reinvent themselves for the digital era, but struggling to attract this type of talent that has in recent years been sucked up in the vortex of Silicon Valley. You're also seeing this in car makers who are increasingly focused on software, as well as banks, health insurers, retailers and many others as well. And I'll just add as well that not all these techies are leaving the industry. And it's also exciting to see that many of them are exploring, going out on their own and establishing the next generation of tech startups.

So your move fast and break things startups, your metas and your Amazons have become the establishment and now these techies want to be free.

Exactly. And there's a lot for them to do. There is a sense in the industry right now that we have entered an exciting new phase of technological innovation and that's really been fueled by the recent emergence of these so called generative artificial intelligence tools, things like ChatGPT, which use massive models to produce anything from essays to works of art. And so we've seen a flurry of new startups and venture investment into that space in recent months. So, yeah, I mean, I think this is clearly a tough time for many workers in the tech industry, but perhaps they can take comfort in the fact that there are some incredible opportunities on the horizon for them to drive the next wave of disruption, whether that's in legacy industries or perhaps even in the tech industry itself.

Tom, thanks very much for joining us.

Thanks for having me, Jason.

Don't go that way, doggy. Don't go that way. My sweet baby.

I don't want you to fall.

You would have to be pretty hard hearted not to get a little warm fuzzy from videos of babies and puppies meeting Interact. Oh, look at that. Instagram always delivers. Lots of families think that raising kids with animals is important, right up to pup and babe sharing a crib.

Yeah.

Did you just wake up? Did you get to sleep in the.

Bed for a few minutes? Lucky you.

There's this idea that it's bad for children to grow up in households that are overly clean. And pets are a good way of exposing children to to all sorts of microbes and bacteria that they wouldn't otherwise encounter.

Gilad Amit is a science correspondent for the Economist.

And this is thought to prime their immune systems for healthier adult lives.

And where did this dirt is good idea actually originate?

So there were a number of studies that seemed to suggest that as societies grew richer, as people moved from the dirty countryside to the comparatively less microbe infested city, had smaller families with fewer siblings, people developing more and more allergies. And so there was this landmark 1989 paper which coined the term the hygiene hypothesis that tried to make sense of all these studies. And the point it made was that there are microbes that it is beneficial to be exposed to when young.

So that still holds up then, that bringing pets home is a good idea to get that microbial exposure.

That exposure is definitely a good thing. And pets can help increase the microbial diversity of the home. But the one point, the one subtlety that has emerged over the last 30 years is that this term hygiene hypothesis has really taken off. And there has been this belief that all kinds of dirt are good and it's worth deliberately downgrading the quality of the domestic hygiene. That is very much not the case. The kinds of microbes that we're talking about here are not the sorts of microbes that you would get rid of. And there are all kinds of other negative consequences that come when you lower the standard of hygiene. So that's just an important subtlety that might have been lost in some of the discussions since the 1989 paper. But exactly how good owning pets can be for getting rid of allergies in children is the subject of a very comprehensive recent paper.

Tell me more about that.

So the paper comes out of Japan, where researchers looked at an enormous data set that tracked 100,000 or so pregnancies between 2011 and 2014. And they looked at these survey answers to see whether there were relationships between pet ownership and food allergies diagnosed in the first three years of the child's life. And about 22% of the children in this survey were born into households with pets. And so there's a large number of children being studied here. And they found a couple of interesting trends. Children in households with dogs tended to have lower than average rates of allergies to eggs, milk, and nuts. Those that shared homes with cats were more tolerant of eggs, wheat, and soya beans. Those in households with turtles, terrapins, and birds seemed unaffected either way. And those in households with hamsters, for reasons that remain mysterious, appeared more likely than average to be allergic to nuts.

Sounds like the prescription here for optimal bug coverage is to have at least one dog, one cat.

That would seem to cover it, yes. But it is very important not to jump straight from the conclusions of this study to the pet store. There are some holes in the way the study was conducted that can be picked. For example, in order to determine whether children were allergic, the researchers relied on diagnoses from doctors. But we know that childhood food allergies are massively under diagnosed, so that may not be the most reliable data set. There are other variables that could confound the conclusions. The households that owned pets were more likely to live in the countryside, where there are all kinds of other sources of microbes. And you could say there's also the risk of the sneeze wagging the dog, in that it's not just that households without pets may be more likely to develop allergies. It's also that households more likely to develop allergies prefer not to have pets. So the relationships could be the other way around. There's a lot of work needed to untangle all of these different factors.

Much more work, as you say, to figure this out. In particular, in the case of the hamster, that doesn't help. But what is the actual mechanism here? Do we have an understanding of that?

So this is still being debated, but one explanation that seems very plausible is that the microbes necessary to prime the immune system in children live in the gut. It's also called the gut microbiome. And we know that the gut microbiome has a tremendous impact on health of all kinds, physical as well as mental. And much of the microbiome is formed very soon after birth. And one of the interesting things that this study showed was that the relationships they found only held true in households that owned pets both before the child was born and after. In other words, if they got rid of the pet before the child came, or they didn't have the pet before the child was born, the relationships disappeared. So this suggests that it is critical to have a pet in the household when the child is born. And this is also the moment when a lot of the infant microbiome is formed. And so it's very possible that there is a real connection here, but we need a lot more evidence before we can make any health prescriptions.

Gilad, thanks very much for joining us.

Thank you, Jason.

That's all for this episode of the Intelligence. If you're not a subscriber to the Economist, you really are missing out. But dive in with the deal we've got going on at the Moment, a free 30 day digital subscription. Just go to economist.com intelligenceoffer or click the link in the Show Notes. We'll see you back here tomorrow.