Four years ago, I accompanied a State Department delegation of tech executives visiting the war zone of Baghdad in an attempt to introduce Silicon Valley ideas to a barely recovering Iraq. The trip was organized by Jared Cohen, then a sharp young policy deputy to Secretary Hillary Clinton. A Google employee told then-CEO Eric Schmidt about theWired article I wrote about the trip, and Schmidt contacted Cohen. Not long after, Cohen took Schmidt himself to Baghdad, and the bond between the two led to Cohen’s hiring as head of a new corporate enterprise dubbed Google Ideas. It also led to a book contract. Here, finally, is the typically ambitious fruit of that writing collaboration: The New Digital Age: Reshaping the Future of People, Nations and Business.

The New Digital Age starts off with a generically rosy depiction of the wonders technology will bring to us in coming years. But in subsequent chapters the authors dive into a dense, tough-minded examination of the impact of the coming changes in areas like diplomacy, war, terrorism, privacy and revolution. Best of all, this is not a book researched solely by mousing over to Internet sites—the authors embarked on a tour of 30 countries, and spoke to a wide range of sources, from national leaders to cyber-crackers, from Julian Assange to Henry Kissinger. The most interesting parts of the book come when those voices challenge the authors into envisioning more nuanced scenarios.

It wasn’t until I arrived at Google’s Chelsea Market offices in New York City that Cohen explained how I had been an unintentional midwife to the book. It was a good start to a long, spirited interview with Schmidt—now Google’s Executive Chair—and Cohen, who has recently been anointed as one of Time’s Magazine’s 100 Most Influential People in the World.

It’s the day your book is officially published. Someone has hacked into the Associated Press Twitter feed and posted that the White House was bombed, causing a temporary stock market crash. I felt like I was reading a scenario from your book.

Cohen: One of the things we write about in the book is whether you’re talking about a state actor or a nonstate actor, every incident of hacking, every cyberattack, and every nefarious activity in cyberspace sets precedents for what an actor can do and get away with. It also sets precedents for how individuals and states and companies will react.

Schmidt: We talk a lot about privacy and security and we concluded that this is a shared responsibility. The world is getting more connected, and all of us have responsibilities. If you think about it in terms of Google, you expect us to keep your information secure, but you also need to keep your password secure. Think of it as a shared problem. You have something to do and we have something to do.

In your book you imply that this problem will be mitigated by rational behavior. But people don’t always act rationally. Even though people understand the high stakes, they often omit precautions because it’s easier to take shortcuts.

Cohen: Like all things, it starts with education. Kids are coming online and connecting at a pace that’s faster than their physical maturation process. Would you ever imagine that you’d have to talk to your kid about phishing before you’re talking to him about the birds and the bees?

Schmidt: It’s very easy to bemoan the consequences of the interconnectedness of the world. It’s a better use of your time to make sure that you’re doing your part. Because it’s going to happen. The first thing we say in this book is that five billion people are going to join us online, which we think is generally wonderful. In particular it’s wonderful for education, for healthcare, for expanding markets, for globalization, for revenue growth, for new customers, for security. It also brings some problems, which involve the way governments behave, privacy issues, the terrorism issues, and so forth.

Jared Cohen (center) in Baghdad 2009. Photo: Steven Levy

__I have some skepticism about the last billion or so. A lot of people in the world don’t have electricity or water. Even this country isn’t fully connected. __

Schmidt: Let’s go through the math. There are roughly six billion people with mobile phones already, of which roughly five billion are feature phones, or dumb phones. They’re SMS capable, they’re not smart phones. If you simply do an installed base upgrade, every one of those features phones becomes a very low cost smart phone, which will happen in five years. By the way, there’s more than 6 billion humans on the planet, somewhat more than seven. So I’ll give you the last billion. But my point still stands.

Cohen: While researching this book we went to Chad, the poorest country in the entire world. Less than one percent of the population has electricity. We went to a village where we didn’t see power lines, we didn’t see really much in the way of infrastructure, and we certainly didn’t see pavement, and attended a local ceremony. And everybody’s pulling out smart phones and taking pictures of the ceremony and communicating with each other. It’s the poorest country in the world and everybody seems to be holding up a smart phone! Translate this into a situation where bad acts are being committed or discrimination is taking place or sexual and gender-based violence is taking place. All of those people are not just spectators, they’re also witnesses.

You paint a picture of two worlds, physical and virtual. But in my sense that “virtual” modifier peels off as more of our activities are conducted online.

Schmidt: It’s a subtle point. You’re a citizen of the country and are located in a physical space but you’re also a citizen of a virtual space, which you also inhabit. The virtual space can be thought of as a community that keeps the physical space in check. If your government starts to do horrendous things, you can appeal to the virtual space for help. You can publicize it, you can shame your government, you can send out a message saying, "Help, invade us." The same is also true in the inverse. If you are doing something inappropriate or criminal in the virtual space, it’s highly tracked, so the people in the physical space can keep your virtual identity in check. You exist in both spaces, and you’re subject to the rules of both as a result.

Cohen: We talk about a dictators’ dilemma in the future. We like the idea of dictators having a dilemma, by the way. Imagine a dictatorship that’s 80 million people, and say the vast majority of those people are online. They’ll have maybe a Facebook, Google+, a LinkedIn, Skype, Gmail, blogs–they’ve created a virtual entourage of themselves. It’s much easier for a dictator to account for 80 million physical people and use the military to intimidate them. But now, he’s faced with several hundred million people in the virtual space. The dictator can’t distinguish between what’s just noise being generated by a small number of people with big virtual entourages versus what’s actually real. That could lead the dictator to miscalculate and make mistakes that ultimately irritate the population and cause them to go to the streets.

You are pessimistic about the future of China, noting that censorship will not hold off a connected population. Is that correct?

Schmidt: In our chatting with people in Beijing, the message over and over again was the same– the problems inside the country are so large that active and aggressive censorship is not going to hold the people back. The problem with dictators is that their self-interest is not the same thing as the shared value of the citizens. Consider the recent environmental protests in China. In a police state, you would be very afraid to do an environmental protest, because you know that as a protestor, your phone is tracked, they have pictures of you, the secret police can come and beat you, imprison you, or what have you. Yet the environmental situation is so obviously bad, that parents are willing to risk their lives to do the equivalent of tweeting and Facebook, to get the message out. Governments can be shamed.

Cohen: The number of people who believe in stopping violence in the world is wildly greater than those that want to perpetrate it. When everybody has a smartphone, the ability for people to actually do something about violence goes up significantly. And look at the percentage of the world’s population that are women. That’s a lot of women keeping the men in check, and ultimately that makes the world safer.

And then you have North Korea, which you visited, which isn’t online at all.

Schmidt: It’s the last one, right? North Korea absolutely blocks the Internet at its borders, and with the exception of an elite that’s within the government, the citizen has no access to the Internet. We went to North Korea to try to convince them it would be good to let a little bit of the Internet in. Having talked to them for three days, I can tell you that we don’t know what they’re going to do.

You think they haven’t already considered it and decided not to?

Schmidt: You don’t know until you ask, right?

__

So what did they say when you made your argument?__

Schmidt: One of the bizarre characteristics of North Koreans is that they don’t say a word. All the meetings in North Korea start with a scripted report, which always began with a discussion of the extraordinary capabilities of the respected leader, who turns out to have been the world’s best gynecologist, the best computer scientist, the best physicist, the best golfer ...

Do they believe that?

Schmidt: All that I can tell you is that we saw no doubt in their behavior. There were no wry smiles and so forth. It’s partly because when you give a speech there, everyone is watching what you do and writing things down. So we would then give our nice little response speech, which was thank you very much, and then we would talk about the brilliance of the open internet for making good things happen in our society. And they had exactly no reaction whatsoever. Because if they’d nodded their head, that would be a yes, this would be a no, and then someone would write that down, and they’d all go to the gulag. The only person in the country who could make the decision was their respected leader.

Were you disappointed that you didn’t see him?

Schmidt: We would’ve loved to have seen him.

__ You should’ve brought Dennis Rodman with you.__

__

Schmidt__: It did not occur to us to bring Dennis Rodman.

__Your book discusses a “New Code War” where countries use the virtual world as a theatre of conflict. You argue that it could be a way to vent off steam that otherwise might be expressed in a physical attack. But couldn’t acts of online aggression or cyberattacks just as likely lead to real-world military responses? __

Cohen: States will be willing to do things to each other online that they would never do in the physical world. The U.S. and China are a perfect example of this. They’ll steal intellectual property online, they’ll repress their population online, they’ll test the waters and see what they can get away with in terms of cyber-attacking, but they won’t do the physical-world equivalent of those things. Iran does the same thing.

Isn’t there the danger that one side or the other says, “Enough!” and attacks?

Cohen: So this is the question that we ask in the book. The big unknown is, at what point is a cyberattack so significant that it warrants a physical-world response.

__

Schmidt__: Let’s go through a Dr. Strangelove example. I’m old enough to have actually seen the movie.

Cohen: I’m too young and fragile.

Schmidt: It’s one of the greatest movies of all time, Jared. And it’s directly applicable to this. Let’s imagine that we have a rogue commander in China who manages to discover that they can turn off the electric power grid to the U.S. Southwest. Without bothering to get permission from his superiors, because he believes in his own essences or he’s just crazy, he actually does the attack. The Chinese premier calls up the president and says, “Sorry, we were just kidding, we apologize.” What would America do? So you start going through these fascinating scenarios. Hopefully we won’t encounter any of them. By the way, I think it’s unlikely that such an attack could occur now – we’ve spent a lot of time trying to strengthen our electric grid, our financial systems, and so forth. But you never know.

Cohen: It’s very easy to focus on the U.S. and China, but the vast majority of countries are more nascent connected states. Some people haven’t even heard of some of these countries, but even states that have smaller economies and a small military– or even no military–will be able to punch above their weight internationally because of what they’re able to do with regard to cyber capabilities. That’s why we argue that states will have two foreign policies. One for the physical world and one for the virtual world, and they may have different degrees of power depending on which domain they’re operating in.

I was fascinated to find you spoke to Julian Assange for the book.

Schmidt: We did not speak about his criminal issues. This was a purely technical meeting. The argument that he made that was the most interesting to me– I’m reporting this and not endorsing it in any way–is that systematic evil has to be written down and that if a culture existed where systematic evil was leaked before it occurred, the pressure and surveillance from normal people would prevent this systemic evil from actually occurring. I found the argument appealing in principle, but was struck by a problem with the argument–who gets to decide what gets leaked? In his mind the answer is him, but I was never able to understand why he would’ve been chosen over anyone else.

You talked to a lot of people and visited many places researching the book. What was the most striking impression you were left with?

__

Schmidt__: I came back with a sense of how much more desperate people are for information than I thought. Things are so easy for us, sitting in our nice offices here in our nice, well-run country. Then you see what happens in the developing world. We visited these very unfortunate women who had been acid-attacked by men. They have no faces and they’ve got no vision— it’s the most horrific thing you’ve ever seen. And they are using the Internet to build businesses and try to build lives for themselves. To see this in person is to understand the greatness of human values, but also the terrible things that can be done, especially to women. I’ll never forget that.

Cohen: For me, it was astonishing how much of the current conversation about technology and geopolitics centers around only the 2 billion people already connected. Think about 5 billion new people coming online. Those are actually going to be the vast majority of future users. So I like to think about our travels to different parts of the world as meeting some of these future users, understanding the challenges that they’re encountering without technology, and envisioning how technology might help them.

When those people come online, how will those all of us in the first two billion be affected?

Schmidt: These are people just like us. They’re trapped in a bad system, but they are human beings. They have the same perfection and brilliance and foibles and intuition and that we do. So the sooner we can get them the tools to get themselves organized, to get the corruption addressed, to get the healthcare better, the better off we’re all going to be. When you sit in one of these villages, and ask, how does your healthcare work, there’s a pause and they say, Well, there really isn’t any. Well then, what happens when you get sick? Sometimes you get better, and sometimes you die. It’s the most bizarre conversation. We take these things for granted, and yet this is their reality.

Cohen: The companies that originally make the tools of connectedness will come from the parts of the world that are already connected to that first 2 billion. But ultimately the best and most interesting and most creative use cases will come from the next 5 billion, because those people do more with less, and necessity drives innovation.

Schmidt: Here’s something for people who read Wired. The responsibility that you have as a person building this infrastructure is far greater than you think. We visited Libya, and met some schoolgirls who explained to us they use Google Earth to map the path from their homes to their school, because they knew where the NATO bombings were going to be. This stuff is life and death. So the responsibility that you have, right, in terms of information and accuracy, is literally life-affirming. That’s how important this is.