"In practical terms, this means encrypting all information that passes over the network and equipping every computer with its own host-based firewall."

This is an anti-recommendation. Besides the obvious observation that Garfinkel's friend's network probably doesn't work too well if his whole company is connected by *hubs,* there is a serious flaw in this logic. If all security is host based, then control is in the hands of each individual employee. This doesn't make sense in a corporation, where policy needs to be in the control of the people who own the network. If policy is in the control of the individual, then this requires an organizational struture where everyone is an independent contractor who is responsible for his own personal business. Despite how attractive this idea might seem, business organization should be designed around what helps people work better, rather then what helps computers work better.

Do firewalls really give protection?