“Firewall” software designed to keep hackers out of computer systems did not stop them from breaking into a network in February 1996 belonging to the Los Alamos National Laboratory, which developed the atomic bomb. In February 2000, hackers bombarded the E*Trade brokerage website with data, which overloaded its system and blocked thousands of investors from accessing its site. Political activists Ricardo Dominguez and Stefan Wray routinely recruit computer programmers to attack the websites of any entities that they deem responsible for oppression. Indeed, malicious hackers can attack with virtual impunity because there is no centralized agency overseeing the Internet to organize a defense against them.

Those concerned about hackers often disagree about how to stop them. Many analysts argue that the government must mandate that Internet service providers set up procedures that will make it easier to identify attackers, perhaps making...