>> this is bbc "newsnight." funding for this presentation is made possible by -- the freeman foundation of new york, stowe, vermont, and honolulu, newman's own foundation, the john d. and catherine t. macarthur foundation, and union bank. >> union bank has put its financial strength to work for a wide range of companies, from small businesses to major coporations.

what can we do for you? >> and it now bbc "newsnight." utterly dependent on digital networks, but with multiple cyber threats, who will protect the system's you rely on? >> the world is waiting for a big event that will wake people up. >> the super rich. who are they and what are they doing to us? >> whether their residences are in the york, hong kong, or mumbai or here, the super rich are forming a nation unto themselves. >> and how the rest of us think about those who have a lot more

of everything than the rest of us. >> it is literally about the difference between the rich and poor. hello. world leaders are meeting in munich for their annual security conference and cyber warfare will be on their agenda for the first time. what is cyber war? russia and the u.s. have warned that the world needs to drawl rules of engagement to stop potentially devastating cyber weapons. we looked at the new cyber battlegrounds. >> after land, sea, air, and space, there is now a new battleground -- cyberspace --

and this domain is like no other because it is embedded in our everyday world, yet most of us are not aware of the threat. >> what the world is waiting for it is an event that will really wake people up. >> this is a cat and mouse game. the attackers are constantly developing new strategies. >> when we go to war, we go to war with our networks. >> attacks on the wired world could take many forms, nation against nation, cyber terrorism, or organized crime. we are now so utterly dependent on digital systems that cyber attacks could affect us all. everyone tells us that government intelligence agencies and industry are all walking up to the new cyber threat, but how ready are they to co when it is hard to imagine where in the world the next threat may come from and exactly what it is

going to look like? military and civil defense have to work together. after all, in many countries, the bulk of the national critical infrastructure is owned and run by commercial companies. defense contractors, like northrop grumman, are offering to train the public and private sector to deal with attacks on their system. >> this is the cyber range. think of it like a flight simulator. in the same way that you would not want to try dangerous experiments with a real aircraft, this is the same, but with networks. >> the idea is to display data from the exercises. >> now we are zooming into washington, d.c., and you can see the metro system. of course, the metro system is controlled by digital systems which are vulnerable to cyber attack. we have the metro system with

various positions of hospitals, police stations, fire stations, that kind of thing. but not is this kind of cyber simulation keeping defense companies in business, or do we really need to think in a new way about new types of threats? >> there are things out there right now that exist that the general public really does not know about. stealth technologies that can be embedded in systems that will run in you'll never see. >> to do what kind of thing? >> you could turn off the power grid, disrupting water systems, disrupt manufacturing processes. there are other things that you could do, gps in cars have capabilities to give wrong directions, have the car catch fire potentially, depending on how it is programmed. >> and as global cyber traffic increases, there have already been cyber defense that hint at what cyber warfare between foes

may look like. government websites came under attack in eastern india and 2007. on both sides of the russia- georgia dispute in 2008, and again in 2009 the so-called fourth of july independence day attacks. in each case, so called denial of service attacks flood it sites with massive traffic. proof of who was behind each attack has remained elusive. one cyber offense stands out above all others. that is the computer virus that one iranian official described as electronic war against the nation's controversy all uranium enrichment program. symantec monitors cyber attacks around the clock. ext. experts -- its experts said it attacked a physical target

using cyber methods. they say they have never seen anything like it before, aimed at the operating system of industrial devices. >> what we are looking for our programs operating in a specific state. what we know is that these devices are operating, and some of these devices are performing a uranium enrichment. a >> who carried out the attack? there is plenty of speculation that u.s. or israeli teams could have been behind it, and it is fairly safe to say that whoever it was was trying to slow down at the iranians. and there are some clues in the code itself. >> we believe it was some sort of nation state, and it would certainly not necessarily be a political party would not be a typical person with the

resources or the information to have the attack. >> government says the blunt instrument of turning off the internet, as egypt did in the early days of the uprising, but that is the only kind of regime that would tell internet service providers what to do. at the same reason cascade of popular uprisings, from iran to to the shatt to egypt, has at showed how powerful cyberspace can be. but the same technology in the hands of terrorist groups could prove equally powerful, and there are physical weaknesses in our wired world, too, under the ocean. this is one of a limited number of cable repair ships operating around the world. they fix undersea fiber-optic cables when they get damaged, whether by fishing trawlers or

earthquakes. this can hold enough fiber-optic cable to go around the equator, and each one of these cables carries the equivalent of about 1 million ordinary household broadband connections. with all cables like this and flung across the ocean floor, we rely on more than 90% of our global internet traffic. privately, people have told us this network of fiber-optic cables is an obvious target, particularly because in some parts of the world that are bunched up in just a few so- called chokepoints. at a london conference on cyber warfare last week, experts were brainstorming this and other worst-case scenarios, and there are signs the military at least is changing its stance, starting to talk about the need to fight back. >> just letting somebody continue to attack you, lobbed missiles or fly aircraft, is not

a good way to go to war. we want to be able to counter that threat in some way, either do a counter attack, or disable the threat, and that is also getting more attention when it comes to national awareness. the recognition that we cannot simply just let people keep targeting our systems, we actually want to take action against them. >> he stressed he is speaking for himself and not necessarily the u.s. air force, but if nation states are to go on the offensive, do we need rules of war for cyberspace? we have been shunned proposal circulating at the meeting of world leaders at their annual security conference in munich this weekend. for the first time, cyber security is on their agenda, and u.s. and russian experts are calling for new rules of engagement for cyber conflict. the geneva convention for

cyberspace. they say we may need to protect zones that run hospitals or schools and at some cyber weapons may be so devastating they have to be banned. the proposal also calls for a fresh definition of nation state, with new territories and players in cyberspace as well as governments, such as multinationals, and leo's, and citizens. it -- ngo's, and citizens. perhaps the idea of peace or war is too simple in the internet age, when the world could find itself in a third other than war mode. >> we are seeing a new dimension of international politics that we have to have discussions about. whether that means new rules or treaties, i would suspect they will come. do we have to throw out everything we have learned?

that i don't that is true. >> almost every day, there are reports of cyber incidents, but our notions of all out cyber war misplaced? >> they are extensively hyped. in terms of the involvement of the big military companies, you have to realize that they are finding it extremely difficult to sell big heavy equipment of the sort they are used to because the type of wars we are involved in tend to be against insurgents. they are desperately looking for new product areas, and the obvious product area, they think, is cyber warfare. >> yet cyber war will be fought in a demand that is neither military or civilian. it was best equipped to take charge? the ranks of the seriously wealthy grow and grow, and the gap between them and society grows wider and wider.

could it be that have more in common with each other than the people they purport to live among? we asked our global editor at large to tell us what she makes of them. >> through my work as a business journalist, have spent the past decade shadowing people and extended the close of conferences and observing high- powered dinner parties in manhattan. some of what i have learned is entirely predictable. at the rich are, as f. scott its jerrold noted, not different from you and me. what makes them different? are they hard working business people or greedy fat cats? and how much influence do they have? the answers to some of those questions are to be found here.

[music plays] the world economic forum in switzerland is a honey come to those with personal fortunes. and it is not just out pinstripes' part of this club. the super rich are young, creative. >> that is my fault, because i had the yellow. >> she is good. >> to that or you got the idea? -- is that where you got the idea? >> it was finished, and she said

it was not. >> did it meet your expectations? but, if people are here? >> everybody has made a good one. nobody has made a bad one. >> many of today's rich elite are the beneficiaries of globalization. as a result, they're becoming it trends global community that have more common -- more in common with one another than their countrymen back home. whether in new york, hong kong, mumbai, or kiev, today's super rich are forming a nation and himself. >> i live in london, france, new york, connecticut, hong kong,

back to connecticut, and now belly. -- delhi. >> are you worried about that? >> it is a problem, no doubt. how do you have the best scientists in the west, how you expect the scientist to understand or come up with the right product or business model for 700 million people in our country? it is impossible to understand what their lives are. >> in this area, there are just. consumers, few in number, but disproportionate and their income and consumption. this winner-take-all phenomenon has been particularly stark in the united states.

between 2002 and 2007, 65% of all income growth went to the top 1% of the population. >> we have returned to very high levels of income inequality and we need to think about the consequences of that. it is one of the odd features of what has occurred, you might have thought as that occurred we would have used progressive taxation. what we have actually done is decreased the progressive overtake of the tax systems that have reinforced what is happening at the pre-tax level. >> globalization and the technology revolution have created a wave of prosperity and puts hundreds of millions into the middle class. but this is not without consequence. in many countries, at income inequality has grown dramatically.

there were dead has grown too extreme and some of the biggest problems will be coming. how would you describe today's super elite? what is their culture, what is their personality type? >> it is hard to generalize amongst this group. they are drawn from many parts of society. it is not just government or business or academia or media, they're not in isolation. even though they are here together in davos and elsewhere, they are dependent on selling products, interacting with society air around the world. the notion they can go off and be counted himself is difficult to fathom in one sense. we are all related to each other. >> i had a discussion with somebody who said, why don't you

basically do security checks at home like airlines? why can't you just check on line and beat your boarding pass on line. i said, but you mean? it took me 10 minutes to realize he never flew on a commercial flight. >> he did not realize he could already checking online? >> that is right. >> here is the de la motte -- in today's hyper competitive global economy, we need the super rich out and the income they create more than ever, but they need us, too, as consumers, employees, and even people. we spoke with the co- founder of a luxury concierge service.

>> apart from a lot of money, do they have other things in common? >> sure, i think they are investing around the world. increasingly, they run global businesses and they attract global capital. they do a lot of business with one another. one person said to me, i run into people i know. i am more likely to run into a person i need to meet in the four seasons hotel in shanghai then in my neighborhood in upstate new york. >> what are these people like? >> they are very international, a very mobile, and they are very successful. in this country, what is different from the rich of yesteryear, in 1975, the top thousand richest people, 75%

inherited their wealth. today, 75% of those people have created that wealth themselves. in 5% of those people have created that wealth themselves. in terms of where they live, you are right, they are out often at no fixed address. in terms of the consequences of which society they live in, that is the issue. >> what does it do to a society when you have this core of people who owe no real loyalty to anywhere? >> they are avoiding tax. it is not like because they like to hang out and airports and hotels. they're not spending enough days in any country to be taxed. they tend not to be very big on integration. >> what about your view? >> i don't think there is anything wrong with being rich

in and of itself. the problem is how they got ripped -- how they got rich and what they do with it when they get it. in the past, they felt they had an obligation to society. they wanted to be positive. >> the suspicion and the current climate, which has changed, the suspicion is these immensely wealthy people are up to something, because we don't know what they're doing. are they up to something? >> sort of they are. one person, a behavioral economist, one of the things he has specialized in is doing mri scans that shows something intuitively we already know, which is that we as human beings are very good at rationalizing to believe the things that are in our own self-interest are really good and correct. i think we see it happening ahead of the financial crisis.

that needs to be one concern of ours. as the super elite form this separate global group, without understanding it is happening, they will start thinking of the world and big policy issues in ways that suit their own self interest but maybe not suit everybody else's. >> something has changed in the nature of capitalism. you mentioned that most of these people are self-made and they did not consider they have the same obligations. a>> it is a big change. that group of people has a record annual and come that they could not hopefully spend in 10 lifetimes. if they had the sense of obligation, it would be great. >> it would be great if. >> it is also our problem, too.

we as a society tolerate that bankers take their bonuses. you think about the comparison, their income bonus would pay 50, 60 nurses' salaries per year. we are allowing people to value themselves at that kind of rate. i>> this money is not according to them because of their own brilliance. >> in some ways, it is. if you invest in microsoft project -- >> in some cases. >> it is their own money. >> we have to remember many of them are not. many of them are taking public money and occurring benefits for themselves. this is never the way anybody intended for it to work.

>> it is not simple, you want to have these people in your country because a lot of them are creating a legitimate businesses and you would rather have them doing it in your country than elsewhere. a hard thing that we have to cope with as a society is the dynamic of the world economy right now, as it was in the 19th century, is tending to create this big gap. i think the super rich and everybody else have to think hard about that. socially, it is very difficult. >> it has consequences for the country, too, does it not? >> if you have hundreds of oligarchs buying up expensive cars, it dries up the properties. >> at this time, welcoming those people from all corners of the world, thank god it's is people want to come to london and do business and employ people. i think they should be welcomed

in all of the inequality issues, i understand the sensitivity, at this time, but to cast these people as evil, ugly people is absolutely the wrong thing to do. >> their risk hard data to show as the gap increases, every single social metric decreases. the super rich are dominating. >> there are things like crime, violence. >> quick final word? >> something apart from taxes, as we see this phenomenon, it is probably working harder to create more shared, collective experiences. it is something that is real.

things like that i think what we also need to be thinking about thinking about this issue. there is such a thing as a society. >> thank you very much indeed. >> that is all for this week. from all of us, not good bye. it -- from all of us, goodbye. >> funding was made possible by -- the freeman foundation of new york, stowe, vermont, and honolulu, newman's own foundation, the john d. and catherine t. macarthur foundation, and union bank. >> union bank has put its global expertise to work for a wide range of companies, from small businesses to major

corporations. what can we do for you? >> bbc "newsnight"