Tags
Recent Comments
Receive "The World According to Tom Barnett" Brief
Where I Work
Where I write
Buy Tom's Books
  • Great Powers: America and the World After Bush
    Great Powers: America and the World After Bush
    by Thomas P.M. Barnett
  • Blueprint for Action: A Future Worth Creating
    Blueprint for Action: A Future Worth Creating
    by Thomas P.M. Barnett
  • The Pentagon's New Map: War and Peace in the Twenty-first Century
    The Pentagon's New Map: War and Peace in the Twenty-first Century
    by Thomas P.M. Barnett
  • Romanian and East German Policies in the Third World: Comparing the Strategies of Ceausescu and Honecker
    Romanian and East German Policies in the Third World: Comparing the Strategies of Ceausescu and Honecker
    by Thomas P.M. Barnett
  • The Emily Updates (Vol. 1): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    The Emily Updates (Vol. 1): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    by Vonne M. Meussling-Barnett, Thomas P.M. Barnett
  • The Emily Updates (Vol. 2): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    The Emily Updates (Vol. 2): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    by Thomas P.M. Barnett, Vonne M. Meussling-Barnett
  • The Emily Updates (Vol. 3): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    The Emily Updates (Vol. 3): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    by Thomas P.M. Barnett, Vonne M. Meussling-Barnett
  • The Emily Updates (Vol. 4): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    The Emily Updates (Vol. 4): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    by Thomas P.M. Barnett, Vonne M. Meussling-Barnett
  • The Emily Updates (Vol. 5): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    The Emily Updates (Vol. 5): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    by Vonne M. Meussling-Barnett, Thomas P.M. Barnett, Emily V. Barnett
Search the Site
Subscribe to Blog
Monthly Archives
Powered by Squarespace

Entries in new rules (41)

12:01AM

Getting Arctic hydrocarbons will be a lot harder than anticipated

FT special report on Canadian energy that highlights the difficulties of accessing Arctic oil and gas and bringing it economically to market.

First is the sheer remoteness.  Then there's the extremely hostile environment.  Even with the ice-clearing in the summer, the genuine window for exploitation is still measured in weeks.  Everything you use must be special built, platforms with extreme reliability.

And the fields in question need to be big - really big - to cover the high costs.  

In short, only the majors and supermajors should apply, because only they will have the "financial firepower."

This is all before governments issue ever stringent safety requirements to protect the environment, a bar that rises with each Deepwater Horizon.

Finally, there's how you get it to market, with the big choice being between fixed pipelines and ice-class shuttle tankers.  Neither is cheap.

Just a bit of cold water thrown on the anticipated "bonanza."

I note it with interest as I write the final report (while traveling most of the week) for Wikistrat's recent "How the Arctic Was Won" simulation.

12:04AM

Basel III derided further

Ft full-pager says Basel III et al will have the cumulative impact of driving investment money from banks to non-banks.  The killer quote from an expert on financial regs:  "It's now one-third more expensive to do business with banks, a powerful incentive to use non-banks" like hedge funds and other entities.

So the question becomes, how much of the money will escape "sectoral regulation."

A found description of non-bank lending:

Non-Bank Lending

Non-banks are ordinary intermediaries.  They act as a conduit between those with funds to lend and those in need of funds.  By pooling the funds of investors from whom they borrow, they can then lend in various amounts and periods.  For their service they charge a fee, usually in the form of periodic interest payments.  Their borrowing and lending increases the total credit market debt but has no direct effect on the money supply.  Non-banks simply intermediate the transfer of funds from the bank accounts of the original investors to the bank accounts of the ultimate borrowers.  

Non-banks usually borrow short-term at lower rates to lend longer term at higher rates.  That means a non-bank must be able to roll over its short-term debt at favorable rates.  It must also be able to borrow on short notice to manage any cash flow problem.  For that reason it must maintain an excellent credit rating, or it may not be able to borrow at all.  

A general rule:  for every crisis there is a new rule set, the response to which (either going overboard or escaping its grasp) usually sets the table for the next crisis.  Such is life.

Martin Wolf is among those unimpressed by Basel III, describing it as "the mouse that did not roar" (a great Peter Sellers' film):

To celebrate the second anniversary of the fall of Lehman, the mountain of Basel has laboured mightily and brought forth a mouse. Needless to say, the banking industry will insist the mouse is a tiger about to gobble up the world economy. Such special pleading – of which this pampered industry is a master – should be ignored: withdrawing incentives for reckless behaviour is not a cost to society; it is costly to the beneficiaries. The latter must not be confused with the former. The world needs a smaller and safer banking industry. The defect of the new rules is that they will fail to deliver this.

His basic complaint is that the amount of equity required is "far below" the levels markets would naturally demand if there was no chance of government bailout--so bad pricing of risk.  He then makes a case for much higher levels that he says wouldn't crimp the industry as much as feared.

12:05AM

Basel III--the directors' cut

FT, a while back, ran a full-pager analysis that said Basel III?  Ho hum, as the banking industry's regulators were cowed by the efforts of industry lobbyists into diluting the new rule-set package.

Still, when the deal was done last weekend, a lot of pubs hailed its historic nature.  So yeah, higher capital standards for banks, but not so high that most don't already meet them.  As for smaller banks?  Tougher row to hoe

Basel III is described as being different from what the US did under Obama:  "prescriptive rules to steer U.S. banks away from past errors."  Instead, Basel III allows the risky behavior to continue so long as the banks set up bigger capital cushions to absorb losses.

As rule-set resets go, a sort of reversal of the usual philosophies, with the global rules being more passive while ours are more active.   

The big thing, of course, is that some global rule-set package was agreed upon in the first place.

And yeah, markets around the world seemed to like that.

Is the reset finished?  Mebbe . . . mebbe not.  Some banks fear their national regulators will now step in with tougher standards, leading to "regulatory arbitrage" whereby banks seek out the locales with the loosest rules and shun those with the toughest.

A never-ending struggle . . ..

12:03AM

The sheer discovery that is simply analyzing all this new connectivity

Cool Economist piece on the social web in its Technology Quarterly, but it's really about business intelligence, a field that is skyrocketing in its ability to monitor, analyze and create new marketing strategies from the wealth of info that is naturally captured by online behavior.  Similar thing is coming down the pike in the healthcare industry with the advent of electronic medical records--huge bonanza.

In the first instance, a lot of biz intell used to simply keep existing customers by making them happier.  The most sophisticated stuff will be used to sniff our fraud and criminal behavior.

A classic example of an old concept of mine--actually the heart and soul of the "new map":  with connectivity comes circumscribed behavior because each connection reveals you to others, but in return you are offered fabulous access and efficiencies and the more tailored meeting of your desires.  It is a transaction: the more you reveal, the more respondents can predict your needs and wants and behaviors--both good and bad.

And the mapping technology (like my wonderful Google maps on my Motorola Droid) only kicks that process into high gear.

An amazing amount of new rules to work out on all of this--a fascinating process to witness in coming years.

8:34AM

Crowdsourcing request: interview subjects for cyber governance

For a side writing project I'm working on, I'm looking to do some interviews (either by email or phone) on the subject of cyber governance.

What interests me:  What are the models out there in the real world for doing this?  What's the experience base of success and failure?  What are the major schools of thought?  Where is this debate heading and what does the future of cyber governance look like--especially as we migrate from the early perceptions of a totally free Web to something more fenced off?

You can either submit a comment or just email me at thomaspmbarnett@mac.com.

Trying to wrap this up quickly, so speak up if you want a conversation.  Nobody needs to know everything; just make sure you've got something to say or can get me someone with an interesting perspective/experience base.

Likewise, if you know of some great citation on the subject, pass it along.

12:10AM

State on top! No, Big Business back on top! No, tougher state rules!

So much back and forth on who's ruling the universe--states or big business.

Strong arguments that states take the upper hand as a result of the global financial crisis (like Bremmer's book, "The End of Free Markets"), but now that the dust settles (to include, apparently, last-minute changes to Basel III that make that new banking rule-set seem more robust), we get arguments saying that not all that much has changed.

From an FT full-pager analysis by Patrick Jenkins and Edward Luce:

On some level, it seems the best of both worlds:  pols confident of their new rules and bankers not feeling too unduly hemmed in.

Only time will tell, but clearly, not nearly the great or permanent shift predicted by many--meaning Bremmer's actual conclusions inside the book hold up better than the bold title on the cover.

Still, I would expect perceptions of who's "winning" to shift back and forth repeatedly in the months ahead, with all sorts of conflicting analysis--meaning only time will tell.

12:06AM

New banking rules underwhelm--by default

FT full-page analysis on new banking rules out of Basel, to be known as Basel III (the third great rule-set to emerge over the years).

The main changes:

. . . tightens the definition of what banks can count as highest-quality "tier one capital"--the main assets they hold to protect against losses.  It also requires lenders to hold liquid assets sufficient to see them through a 30-day crisis and sets a global "leverage ratio" to limit overall bank borrowing.

Why many experts are underwhelmed:  on every point, the initial draft of new rules was more stringent, only to be watered down after heavy lobbying by big banks.

But the FT says, on the basis of a quiet survey of the regulators themselves, that the real reason why the rules were watered down was fear of sabotaging the weak recovery--not the lobbying of banks. The initial draft, say the regulators, simply created too much fear across the industry.  The original liquidity rule, for example, was considered exorbitant.  As one regulator put it, "There isn't enough stable funding in the world to meet the requirements."

My take-away:  the global financial system remains too heterogeneous for a tough new blanket of rules.  We have varying levels of maturity across the board--as in, so many frontier economies, so few rules that everyone can follow to the same degree.

The financial crisis hit the system too early for such tough, across-the-board regulations, and so we await the Great Rebalancing (which no one is quite sure how to achieve without great trade protectionism on the part of the debtor states) for such rules to emerge.  Until then, we have too many differing economies trying to do too many different things for uniform rules to emerge.

12:04AM

Waiting on the first civil suit: GPS-aided stalkers

Phone companies pretty much always know where you are--to within 100 feet.  Annually, about 25,000 people are stalked across these United States.

Eventually the two trends meet, to the detriment of the stalked.

Therapists who work with domestic-abuse victims say they are increasingly seeing clients who have been stalked via their phones. At the Next Door Solutions for Battered Women shelter in San Jose, Calif., director Kathleen Krenek says women frequently arrive with the same complaint: "He knows where I am all the time, and I can't figure out how he's tracking me."

In such cases, Ms. Krenek says, the abuser is usually tracking a victim's cellphone. That comes as a shock to many stalking victims, she says, who often believe that carrying a phone makes them safer because they can call 911 if they're attacked.

There are various technologies for tracking a person's phone, and with the fast growth in smartphones, new ones come along frequently. Earlier this year, researchers with iSec Partners, a cyber-security firm, described in a report how anyone could track a phone within a tight radius. All that is required is the target person's cellphone number, a computer and some knowledge of how cellular networks work, said the report, which aimed to spotlight a security vulnerability.

Inevitably, protections will be put in place, and those who are lax about respecting them will be sued by victims--in part because their pockets are deep and they should know better.

Now abuse shelters tell women to turn off their phones the minute they walk through the door, but this is a sad state of affairs.  Eventually, the phone companies will have to become part of the solution.

How that might work:

The organization put that policy in place after a close call. On Feb. 26, Jennie Barnes arrived at a shelter to escape her husband, Michael Barnes, according to a police affidavit filed in a domestic-violence case against Mr. Barnes in New Hampshire state court. Ms. Barnes told police she was afraid that Mr. Barnes, who has admitted in court to assaulting his wife, would assault her again.

Ms. Barnes told a police officer that "she was in fear for her life," according to court filings. The next day, a judge issued a restraining order requiring Mr. Barnes to stay away from his wife.

Later that day, court records indicate, Mr. Barnes called his wife's cellular carrier, AT&T, and activated a service that let him track his wife's location. Mr. Barnes, court records say, told his brother that he planned to find Ms. Barnes.

The cellular carrier sent Ms. Barnes a text message telling her the tracking service had been activated, and police intercepted her husband. Mr. Barnes, who pleaded guilty to assaulting his wife and to violating a restraining order by tracking her with the cellphone, was sentenced to 12 months in jail. 

The cat and mouse on this one will be fascinating to watch.  New rules galore.

12:05AM

Personal data as a sellable asset

Our Bynamite heroesNYT story that I've been waiting a while to read:

On the Internet, users supply the raw material that helps generate billions of dollars a year in online advertising revenue. Search requests, individual profiles on social networks, Web browsing habits, posted pictures and many Internet messages are all mined to serve up targeted online ads.

All of this personal information turns out to be extremely valuable, collectively. So why should GoogleYahooFacebook and other ad businesses get all the rewards?

That is the question that animates Bynamite, a start-up company based in San Francisco. “There should be an economic opportunity on the consumer side,” said Ginsu Yoon, a co-founder of the company. “Nearly all the investment and technology is on the advertising side.”

Bynamite, to be sure, is another entry in the emerging market for online privacy products. The business interest in such products, of course, is being fed by worries about how much personal information marketers collect. Also playing a part are recent outcries after Facebook changed its privacy practices and Google introduced a social networking tool, Buzz, that initially shared information widely without users’ permission. Venture capital has been pouring into Web-based monitoring and privacy protection products like ReputationDefender and Abine, as well as services that help parents protect children’s privacy online, like SafetyWeb and SocialShield.

Bynamite brings a somewhat different perspective to the privacy market. “Our view is that it’s not about privacy protection but about giving users control over this valuable resource — their information,” Mr. Yoon said.

Both the protection and the value approaches to the privacy market could well pay off, says Randy Komisar, a partner at Kleiner Perkins Caufield & Byers, the venture capital firm. “What’s intriguing about Bynamite,” he said, “is its emphasis on privacy as revolving around choice and ownership of data, and ultimately a notion of an exchange of value.” (Kleiner Perkins is an investor in ReputationDefender but not in Bynamite.)

I think this is a great step forward toward an inevitable future. In my mind, the Googles of the world are largely ripping us off and achieving way too much power.  The backlash will come, but this is the right way to channel it.

12:07AM

California toques the lead on legal pot!

Economist story on how California always leads with new rules, and always leads on pot, so inevitable the two strains shall meet in this age of stressed state public finances.

Not that America leads the way on decriminalizing pot--far from it.  We're bringing up the rear in the Core.

A bill now working its way in Sacramento:  treat pot just like alcohol.  

I think this is the path we're on.

Much shturm und drang to follow, but I see this happening eventually.

12:05AM

Dodd-Frank will not lead to global imitations

Economist editorial on the 2,300-page bill.

What it got right was dealing with the fragmented regulatory nature of our financial system.

But the rule-set's global influence will be limited:

At the G20 Mr Obama boasted of “leading by example” on financial reform. In fact, Dodd-Frank is too idiosyncratically American and too incomplete to be a true template for others. And his claim that it would keep a financial crisis like the one the world just went through “from ever happening again” is bound to prove wrong. Yet imperfect though it is, the reform is proof that even a government as fractious as America’s can move with impressive speed when the motivation is there.

Expecting more or better in this age of globalization's rapid expansion is simply unwarranted. We may have birthed the system, but it has grown in complexity and heterogeneity beyond our ability to lead by example in rule-set resets.

12:03AM

The rule-set clash heats up on medical pot

 

NYT story on the growing complexity of new rules regarding medical marijuana, with Colorado as ground zero for experimentation.

Opening bit:  don't assume you can get rich quick selling medical pot, because the restrictions are dazzlingly complex.

“You’d never see a law that says, ‘If you want to sell Nike shoes in San Francisco, the shoes have to be made in San Francisco,’ ” says Ms. Respeto, sitting in a tiny office on the second floor of the Farmacy. “But in this industry you get stuff like that all the time.”

As usual, the economics races ahead of the politics, but the politics is struggling to catch up.

One of the odder experiments in the recent history of American capitalism is unfolding here in the Rockies: the country’s first attempt at fully regulating, licensing and taxing a for-profit marijuana trade. In California, medical marijuana dispensary owners work in nonprofit collectives, but the cannabis pioneers of Colorado are free to pocket as much as they can — as long as they stay within the rules.

The catch is that there are a ton of rules, and more are coming in the next few months. The authorities here were initially caught off guard when dispensary mania began last year, after President Obama announced that federal law enforcement officials wouldn’t trouble users and suppliers as long as they complied with state law. In Colorado, where a constitutional amendment legalizing medical marijuana was passed in 2000, hundreds of dispensaries popped up and a startling number of residents turned out to be in “severe pain,” the most popular of eight conditions that can be treated legally with the once-demonized weed.

More than 80,000 people here now have medical marijuana certificates, which are essentially prescriptions, and for months new enrollees have signed up at a rate of roughly 1,000 a day.

As supply met demand, politicians decided that a body of regulations was overdue. The state’s Department of Revenue has spent months conceiving rules for this new industry, ending the reefer-madness phase here in favor of buzz-killing specifics about cultivation, distribution, storage and every other part of the business.

Whether and how this works will be carefully watched far beyond Colorado. The rules here could be a blueprint for the 13 states, as well as the District of Columbia, that have medical marijuana laws.

The rule-set reset unfolds . . .

12:02AM

Another era when it comes to child labor on farms

NYT story on how Labor Dept. is cracking down on farms that employ children and pay them less than the minimum wage.

Story caught my eye because I spent a few years as a child (above 12 but below 18) working on a local farm for what was then less than the minimum wage (I got paid $3/hr and thought that was pretty good in the late 1970s).  A 1938 US law allows kids 12 and over to work on farms with almost no limitations or rules, but Labor is changing that landscape because nowadays, it's most migrant kids doing the labor.

The Obama administration has opened a broad campaign of enforcement against farmers who employ children and underpay workers, hiring hundreds of investigators and raising fines for labor and wage violators.

A flurry of fines and mounting public pressure on blueberry farmers is only the opening salvo, Labor Secretary Hilda L. Solis said in an interview. Ms. Solis, the daughter of an immigrant farm worker, said she was making enforcement of farm-labor rules a priority. At the same time, Congress is considering whether to rewrite the law that still allows 12-year-olds to work on farms during the summer with almost no limits.

The blueberry crop has been drawing workers to eastern North Carolina for decades, but as the harvest got under way in late May, growers stung by bad publicity and federal fines were scrambling to clean up their act, even going beyond the current law to keep all children off the fields. The growers were also ensuring that the workers, mainly Hispanic immigrants, would make at least the minimum wage of $7.25 an hour.

“I picked blueberries last year, and my 4-year-old brother tried to, but he got stuck in the mud,” said Miguel, a 12-year-old child of migrants. “The inspectors fined the farmers, and this year no kids are allowed.”

Child and rights advocates said they were encouraged by these signs of federal resolve, but they were also waiting to see how wide and lasting the changes would be. Across the country, hundreds of thousands of children under 18 toil each year, harvesting crops from apples to onions, according to a recent report by Human Rights Watch detailing hazards to their health and schooling and criticizing the Labor Department for past inaction.

Most definitely a different era, but hard to argue against improving the lot of low-tech, low-education workers in this country, because impoverishing them serves nobody's needs.

I remember my farm labor with a certain romanticism, although I don't know any grown-up former farm kids who do, because they worked the longest hours and didn't really get paid.  Plus, there was no quitting the family farm until adulthood got them an out, which most took, happy enough if they left with all their fingers in tact.

12:02AM

The virtual "combat zone"

FT story on a long-overdue rule-set reset:  the fencing off of the web for porn.  It reminds me of Boston’s efforts in the 1980s to put all the city’s porn and strip clubs and prostitution (and—implicitly—drug sales) into a recognized downtown section known as the “combat zone.”

The .xxx domain is one of hundreds of new suffixes being created by ICANN, the International Corporation for Assigned Names and Numbers.

The word “sex” accounts for a quarter of all searches on the web.

The porn industry has been lukewarm to the idea, which a US-based company spent the last seven years fighting ICANN to create.  Why?  It fears a ghettoization effect, just like what happened with the combat zone in Boston, which eventually faded away to a much smaller space.

On a more prosaic but more important note, ICANN also just allowed the introduction of Chinese script to top-level domain names.

Less worry of ghettoization there.

12:06AM

Sad story for Rhode Island's cliff walks

NYT story on courts clearing way for lawsuit by tourist against city of Newport for allegedly not having enough safety measures WRT its famed Cliff Walk.

Usual dumbass behavior by off-islanders: guy walks off trail down to water, slips and paralyzes himself.  Usual trick is to stand very close to edge of water for picture-taking, and while back to water, sneaker wave sucks person off shore to watery death. 

Having lived on the island for 7 years and spent countless hours on various cliffs and beaches and shorelines, I'd see this behavior all the time.  And I'd just shake my head and make my polite warnings, but my advice was just as quickly blown off by know-it-alls as would be any additional signs or fences.  People will just not be told what to do when they're on vacation, and then they want somebody else to pay for their mistakes.

Don't get me wrong, me and mine would engage in all sorts of similar behavior--just with our eyes wide open (I will confess to slipping past the cops with my kids to surf during hurricane surges).  And we loved RI's landscape for all those opportunities afforded to commune with nature. But nature is nature, not a Disney ride.

12:05AM

By virtue of Obama's vigorous use of drones, he needs to establish the rule-set cover for their operators

WAPO story by way of WPR's Media Roundup.

The essential danger/challenge:

On The Post's op-ed page Sunday, Treasury Undersecretary Stuart Levey called the killing of Yazid a "major blow" to al-Qaeda because "Yazid has essentially served as al-Qaeda's 'chief financial officer,' coordinating the group's fundraising and overseeing the distribution of money essential to its survival." By the ACLU's reasoning, this would make the strike that killed Yazid illegal. Does the ACLU want to see the Predator operator who took out al-Qaeda's third in command prosecuted for murder? The ACLU has already gone after CIA interrogators -- surreptitiously photographing these covert operatives and sharing the images with al-Qaeda terrorists in Guantanamo. CIA drone operators may soon be in for similar treatment.

The Obama administration has put the Predator operators at greater risk by dramatically narrowing the legal underpinnings for their actions. State Department legal adviser Harold Koh -- a harsh critic of the Bush administration -- explained in a March 25 speech that the Obama administration was no longer invoking the president's Article II authority as commander in chief to justify many of its policies in the war on terrorism. But Koh said that drone attacks were lawful because "Congress authorized the use of all necessary and appropriate force through the 2001 Authorization for the Use of Military Force (AUMF)."

The problem -- as Koh's predecessor, John Bellinger, told The Post last week -- is that Congress authorized the use of force against those who "planned, authorized, committed, or aided" the attacks of Sept. 11, 2001. And many of those currently targeted -- particularly outside Afghanistan -- had nothing to do with those attacks.

You have to think that if Obama lays out his case, however classified the presentation, to the Congress and says, "I'm taking the fight to them where they hide and I need this legality question settled for the long haul of this Long War," that he'd get the fix the CIA needs and deserves.

The longer the administration delays this inevitable step, the more jeopardy to which operators will be subjected.

Pretending this fight can be prosecuted in a neat, country-by-country basis, with all i's dotted in advance by Congress, is dangerous.  Better to clear the air and incentivize the operators. No reason to be mealy-mouthed about it or hide behind "interpretations."  Most Americans will see this as a very reasonable extension of Executive Branch writ.

12:01AM

Blast from my past: PNM's "New Rules for a New Crisis"

[NOTE:  As I slowly rebuild old pages from the old site, I will use this weekly feature for that purpose.]

 

Deleted Scene #22

Chapter Five: The New Ordering Principle

The Missing Section Entitled: "New Rules for a New Crisis"


Commentary: This twenty-second "deleted scene" was the originally planned third section of the chapter (coming after "The Rise of System Perturbations" and before "The Greater Inclusive"), which Mark Warren cut simply to reduce the size of the chapter. My sense was that he felt the chapter already had more than enough theoretical material and did not need this long detour on rule sets. I include the section here because I really do like the material quite a bit, even as tough as it is to lay out before the reader without lapsing into theoreticalspeak. Plus, this section was my sole capture from the one workshop I ran for the Office of Force Transformation during my stint there, so I feel like the bits of wisdom I pulled from that effort (and all those big brains that attended) should find a home somewhere!

 

I should note who were the attendees at that workshop in March of 2002. Here's the list:

1) Arthur Cebrowski, Office of Force Transformation
2) John Garstka, Joint Chiefs of Staff C4 Directorate 
3) Stuart Umpleby, George Washington University 
4) Douglass Carmichael, Big Mind Media 
5) John Petersen, The Arlington Institute 
6) David Gordon, National Intelligence Council 
7) Stephen Schlaikjer, Political Advisor to Chief of Naval Operations 
8) Shane Deichman, JFCOM 
9) Ahmed Hashim, Naval War College 
10) Daniel Pipes, Middle East Forum/N.Y. Post 
11) Jeff Cares, Alidade Consulting 
12) Richard Landes, Center for Millennial Studies 
13) Kori Schake, National Defense University 
14) Joshua Epstein, Brookings Institution 
15) Mitzi Wertheim, The CNA Corporation 
16) Tony Pryor, International Resources Group 
17) Hank Gaffney, Center for Strategic Studies 
18) Yaneer Bar-Yam, New England Complex Systems Institute 
19) Lee Buchanan, consultant 
20) Bill Halal, George Washington University 
21) Adam Siegel, Northrop Grumman 
22) Cdr. John Dickman, CNO Strategic Studies Group 
23) John Landry, National Intelligence Council 
24) Jerry Hultin, Stevens Institute of Technology

Here is the agenda of the workshop:

AGENDA FOR 19 MARCH SYSTEM PERTURBATIONS WORKSHOP

0730-0800
Check-in and continental breakfast

0800-0900
Barnett briefs the System Perturbation slide package

0900-0915
GroupSystems warm-up
INSTRUCTIONS: The scenario is this: you are asked by the Mayor of New York City to pen a paragraph on the significance of 9/11 for inclusion in a time capsule to be buried beneath the permanent memorial being erected at Ground Zero in lower Manhattan. In the next 5 minutes please enter your thoughts on the laptop in front of you. At the end of five minutes, you will be encouraged to read the entries of others and enter additional comments on those texts.

0915-1000
SESSION I: Does 9/11 serve as existence proof for the concept of System Perturbations as a identifiable category of international crisis?
INSTRUCTIONS: After some introductory slides on this notion, you will be asked to participated in a GroupSystems brainstorming activity of approximately 5-7 minutes, answering the question, "Please give us examples of System Perturbations in history and explain what each example tells us about this concept." Following that activity, Dr. Barnett will lead a discussion on this question for approximately 30 minutes. At the end of that discussion, you will be asked another GroupSystems brainstorming question, "What are the lasting perturbations to the global system from 9/11?" You will be asked to enter your ideas into 6 separate "buckets": 

  1.  Economics
  2.  Politics
  3.  Technology
  4.  Environment
  5.  Cultural/media
  6.  Security.

 

1000-1015
Coffee break

1015-1100
SESSION II: Can/should System Perturbations serve as a new ordering principle for U.S. national security?
INSTRUCTIONS: After some introductory slides on potential outcome scenarios for the Global War on Terrorism (GWOT), you will be asked to participated in a GroupSystems brainstorming activity of approximately 5-7 minutes, answering the question, "Give us your description of the defining global conflict paradigm for the next 10-to-20 years." You will be given four, admittedly overlapping "buckets" to choose from in terms of placing your entry:

  1.  Division by competency/success
  2.  Division by culture/civilization
  3.  Division by great power-led camps
  4.  Division by ideology.

 

Following that activity, Dr. Barnett will lead a discussion on this question for approximately 30 minutes. At the end of that discussion, you will be asked another GroupSystems brainstorming question, "What are the new rule sets that emerge as a result of 9/11 and the ongoing GWOT?"You will be asked to enter your ideas into 3 separate "buckets":

 

  1.  Security within our borders
  2.  Security at our borders
  3.  Security beyond our borders.

 

1100-1200
SESSION III: Who are the dominant crisis trigger agents in the current global era?
INSTRUCTIONS: After some introductory slides on potential downstream institutional consequences for DoD as a result of 9/11 and the GWOT, you will be asked to participated in a GroupSystems brainstorming activity of approximately 5-7 minutes, answering the question, "What will future enemies of the U.S. learn from 9/11 and the GWOT?" You will be given three "buckets" to choose from in terms of placing your entry:

  1.  Super-empowered individuals
  2.  Transnational networks
  3.  Nation-states.
Following that activity, Dr. Barnett will lead a discussion on this question for approximately 40 minutes. At the end of that discussion, you will be asked another GroupSystems brainstorming question, "What are the long-term institutional ramifications of the home game/away game dichotomy?" You will be asked to enter your ideas into 3 separate "buckets":
  1.  A future Department of Homeland Security will someday rival DoD in importance
  2.  DoD will remain the predominant national security player in all spheres
  3.  DoD will bifurcate into a classic warfighting force and a constabulary force
 (Back to the pre-WWII future).

 

1200-1300 Lunch break (served in the conference room)

1300-1500
SESSIONS IV-IX: Building the System Perturbation model piece by piece
INSTRUCTIONS: After some review slides on the six proposed categories of the System Perturbation, you will be asked to participate in 6 sequential 20-minute sessions exploring each category. Each 20-minute session will begin with a 5-minute GroupSystems brainstorming activity where you will be asked to offer new or better definitions, examples, analogies, etc. for the category. Following that, you will participate in a facilitated discussion for 15 minutes before moving on to the next category. The six proposed categories are:

  1.  Agents
  2.  Triggers
  3.  Medium
  4.  Transmission
  5.  Barriers
  6.  Consequences.

 

1500-1515 Coffee break

1515-1645
SESSIONS X-XII: What is to be done by whom?
INSTRUCTIONS: After some introductory slides on the concept of burden-sharing and new linkages with regard to System Perturbations, you will be asked to participate in 3 sequential 30-minute sessions exploring three broad questions:

  1.  In responding to future System Perturbations, how much responsibility falls to DoD versus the rest of the US Government?
  2.  How much falls to the public sector versus the private sector?
  3.  How much falls to the United States versus the rest of the world?
Each 30-minute session will begin with a quick GroupSystems vote, followed by approximately 20 minutes of facilitated discussion, and ending with another GroupSystems brainstorming activity where you will be asked to suggest useful steps the US Government could take in the coming years to meet the challenges associated with future System Perturbations such as 9/11.

 

1645-1700
SESSION XIII: The Elevator Drill
INSTRUCTIONS: You will be given an opportunity for one last comment, the scenario for which will be revealed at this time.

1700
ADJOURN

Here are the slides that resulted from the workshop:

Finally, here is the deleted scene itself ….

Deleted Scene: Barnett's Rules on System Perturbations

[TEXT BEGINS]

Since I am constantly going on about "rules," it only seems fitting that, along with this definition of a new crisis type, I offer some rule sets regarding how it unfolds and what are good strategies to deal with it. Truth be told, what I will offer here are more observations than rules, but in keeping with my rule that no audience likes a wishy-washy visionary ("Oh, I dunno, it could sort of be like that"), let me display the usual arrogance of the grand strategist and pretend what I am about to tell you are hard rules.

How did I come about these rules? I did the usual thing one does in my business: I held a workshop and invited all my friends, plus some newbies to shake things up. You invite your friends because you want a good conversation, and because you know what they are capable of in terms of big ideas. These are the people that will not fight your ideas and premises tooth and nail because you have a reputation with them. But you do not want a lovefest. Although I always say my workshops are all about making me smarter, you do not want to go overboard in that arena, like it is some communist party congress and your brilliant observations are constantly interrupted by [stormy applause]. No, you want some agitators in the group, or some people who will, by their very nature, anger plenty of others in the room.

The agitators need to be serious experts in the field you are stealing from. I say "stealing from," because I do not pretend to generate original thought, by and large. As my mentor Art Cebrowski likes to describe me, I am a true synthesist, which is a polite way of saying I never really come up with any ideas of my own. But Art is right: I basically weave ideas and concepts together from other sources, other fields, other cultures. I am a concept arbitrager, who learned this skill less from any one field of study than from simply learning a number of languages over the course of my life (French, Russian, German, and Romanian). Can I speak any of them today? Not really. But what I can do almost instinctively is learn new languages quickly -- I mean really plunge into a field and come back out with enough terminology and understanding to manage a dangerous version of its spoken language. I say "dangerous" because, inevitably, my use of that language angers the purists, which is my snotty way of saying people truly expert in the field. That gets me back to the agitators.

I invited a few people truly conversant in complexity and chaos theory to the workshop, knowing that my use of System Perturbation would offend their sensibilities. I mean, they already have loads of fairly firm rules about their ideas, and both these terms (system and perturbation) have specific meanings to them. I wanted to respect their expertise, but only up to a point, because I am engaging in conceptual arbitrage here -- moving concepts from one field to another. Since my field, political science, is essentially a bastard science with almost no good rule sets, it is hard to offend anyone in my neck of the woods. But when I start talking System Perturbations and using words like medium, transmission, etc., I invariably anger the complexity guys, because they believe that, by using their tools, you really can explain the world and how it works -- almost from A to Z. Of course, most of their computer models tend to zero out human emotions, reducing everything to rational choices by rational people, but since I have never really visited their world of rational people always acting rationally, I think I can only do so much damage with a few of their concepts.

Now, the rules I will present here really are not based on complexity or chaos theory, but based on observations I arrived at after listening to a bunch of social scientists discuss the concept of System Perturbation as a new definition of security crisis, with a smattering of complexity theory types in the room to goad and taunt them about their lack of true expertise in the subject-matter. Naturally, I conducted such a deviously designed workshop inside the Beltway, which such behavior is considered quite normal.

What I got from the workshop was a ton of disparate ideas about how vertical and horizontal scenarios play out among vertical and horizontal political systems. That was the weird thing about this workshop: I introduced the concept of vertical and horizontal scenarios and pretty soon everyone in the room was talking about vertical and horizontal societies or political systems. I like those phrases better than "authoritarian" and "democratic," because those phrases come with so much baggage and are so all-inclusive, whereas my workshop participants seemed to use the phrases vertical system and horizontal system with far greater freedom. For example, both China and Russia could be described as having far more horizontal economic systems than political systems, meaning their economies are increasingly built more around ties among firms and among individuals thanbetween the political leadership and firms, or the more vertically arranged patterns of authority and activity under past communist rule. Their political systems may still be quite vertically arrayed, from top to bottom, but their economic systems are far more horizontal.

You might ask, Why not just call them authoritarian market economies? Clearly I could do just that, but I prefer referring to vertical and horizontal systems because, that way, I can talk about how different aspects (i.e., economic versus political, or social versus security) of China might respond to a System Perturbation differently. I think China's economy and society are more horizontal in form than vertical, but I believe the Communist Party and People's Liberation Army remain extremely vertical in form, so a System Perturbation hitting China hits different sectors differently. Why is that important? Well, here I go back to the dinosaurs and mammals notion: a System Perturbation may disrupt or destroy different aspects of different systems across China. For example, SARS was more challenging for the political leadership than for the economy, which in the end proved awfully resilient whereas the Party looked awfully stiff. The mass media displayed a surprising amount of horizontal form, whereas the military assumed its usual stonewall stance. You get the idea. I just want more flexible concepts because I am still fumbling my way around this new strategic concept.

Before I give you the rules, let me spin out this description of vertical and horizontal systems a bit more by offering a series of examples. I will say horizontal systems tend to be replete with elites, meaning they possess multiple types of powerful people: political, business, military, technology, mass media, cultural icons and heroes, and so on. Vertical systems, on the other hand, really only have one elite -- the political leadership. You can tell you are in a vertical system when the political leader is also the military leader, is also the richer landowner, is also guiding hand of the economy, and so on. In vertical systems, you have to join the government to have power and wealth, but in horizontal systems, you typically have to leave the government to get wealth.

A second difference I have touched upon before: horizontal systems rotate leaderships with routine regularity, while vertical systems tend to have permanent leaderships. As such, horizontal systems tend to feature market-dominated economies, while vertical systems tend to feature state-dominated economies.

A third package of differences concerns the nature of communications and dialogue. In the horizontal system, you tend to see universal networks, where everyone can connect up to everyone else. This facilitates a question-based dialogue, where basically all subjects are on the table. The government in a horizontal system tends not to make any effort to steer that discourse, but only to deal with downstream behavior that may result. You want to yell "fire" in a crowded theater and people get hurt in the resulting stampede? Well then, you are going to be in trouble.

Vertical systems are just the opposite on communication. Their networks tend to be drill-down networks, or connectivity that runs from the leader to the led. Instead of letting any and all conversations occur, vertical systems typically feature upstream content control, because the dialogues that are permissible are severely restricted in terms of taboos. In short, it is a world of "don't go there, girlfriend!" I use the feminine here with purpose, since far more of the taboos involve women and restrict their behavior. What do young Iranian women do overwhelmingly when they get on the Internet? They race to Yahoo chat rooms to discuss sex, dating and marriage? Why do they have to go to such effort? These subjects are not discussable in public Iranian society under the mullahs. So what do you talk about in a country like Iran? You mostly talk about what you cannot talk about. That is what I did in the Soviet Union when I lived there briefly: I had lots of conversations with Russians where we talked about all the subjects you could not talk about. We did not actually discuss those subjects, we just talking about Russians' inability to talk about them. Vertical systems are a sort of strange, Seinfeldian universe in that way: all of your conversations really are about nothing.

Now that I have explained my terminology, let me lay out the five questions I seek to answer with these rules:

1) Who's really in charge during a System Perturbation? For example, is the agent which triggers the vertical shock really running the show?

2) What's really at risk during a System Perturbation? Are all systems equally at risk of disruption and crisis?

3) Where are the boundaries of a System Perturbation? Where do these horizontal waves tend to dissipate? What are the natural barriers to transmission?

4) When do we gain the upper hand in a System Perturbation? Which is another way of saying, How do you come out on top after one?

5) How do we deal with other states during a System Perturbation? Who naturally tend to be our friends and who are our natural enemies?

Let me assigns three rules to each of those five questions, starting with question 1 and working my way down.

Who's really in charge during a System Perturbation? 

Rule #1: Super-empowered individuals may rule vertical scenarios, but nation-states still rule horizontal scenarios. I got this one from a senior personal aide to the Secretary of Defense, who made the observation during a brief I gave him and a slew of his colleagues. His point was simple: a terrorist like Osama bin Laden can put together the people, money, and logistics to hijack three planes and fly them into buildings, but that vertical shock will trigger significant long-term responses from the threatened nation-states. The responses from these states are true horizontal scenarios that stretch on for years, like the global war on terrorism. A serious campaign like that takes an enormous amount of resources, which really only nation-states can muster. So, a super-empowered individual like Bin Laden can certainly pull off a "heist" here and there, but the "police" are able to spend years hunting him down. As my old boss Art Cebrowski likes to say, the terrorist has few resources, but lots of will, whereas the state tends to have lots of resources, but difficulty maintaining will, or vigilance. So it is a cat-and-mouse sort of game over the long run: he has to be shifty, we have to be relentless.

Rule #2: Vertical scenarios choose us, but we choose horizontal scenarios. This concept stems from an observation made by an historian of millenarian movements, or groups with apocalyptic agendas. Richard Landes of Boston University says, look back through any nation's history and you will find defining moments, or what he calls "chosen trauma." These events shape the ethos of the society because people there have chosen to mark them as key turning points in their collective history. In the United States, our chosen trauma include the Boston Tea Party, the Battle of Gettysburg, the attack on Pearl Harbor, and now 9/11. Not every bad thing that happens triggers this response. America could have chosen to respond to the 1993 bombing of the World Trade Center to launch a global war on terrorism, but we did not. In general, a chosen trauma can be summarized by the phrase, "Remember the ______!" So Americans "Remember the Alamo!" and "Remember the Maine!" But we do not really chose to remember Columbine or Oklahoma City in the same way. The point of this rule is simply to remind us that we have the ability to say no to responding to a vertical scenario, and that when we do decide to respond, like with a global war on terrorism, that is not a choice forced upon us, but one we make freely -- thus signifying control. It is one of those things we all learned in kindergarten: anyone can hurl an insult or a rock, but you only have to fight when you want to.

Rule #3: Once the vertical scenario plays itself out, control reverts back to nation-states, so long as they stay on the offensive. You could say this one also comes from the Office of the Secretary of Defense, because that has been the basic philosophy they have advocated in America's global war on terrorism. In other words, once the dust cleared after 9/11, it was America's task to keep hounding Bin Laden and Al Qaeda until they are completely destroyed as a threat. Our enemy's goal is clear: they need to keep hitting us with vertical shocks that cumulatively depress our stock of rules, our collective sense of individual security, and our belief in the stability of our system. A vertical shock like 9/11 immediately creates a sense of rule-set void: people are thinking, "We are clearly short of the right rules because if we had had them, this disaster never would have happened in this way." If an Al Qaeda can maintain a certain frequency of shocks, America never really fills that void back in with new rules, because we would be constantly scrambling to understand -- yet again -- "how something like this could happen?" But if we maintain a constant pressure on the enemy, those vertical shocks are few and far between, allowing us to fill in any voids created by our original sense of shock and horror. This is the essential difference between America and Israel since 9/11: we have never been hit again, but Israel keeps suffering the vertical shocks of suicide bombings, thus Israeli society suffers systematic brutalization and thus responds more brutally with time. My point: you take the offensive, you limit the need for brutality in your response. You get the bad stuff over as quickly as possible.

What's really at risk in a System Perturbation?

Rule #4: In response to System Perturbations, horizontal systems tighten up vertically, but vertical systems tighten up horizontally? After 9/11, a horizontal system like the United States will tighten up its rule sets by forging more comprehensive cooperation between local, state and federal agencies, or along vertical lines of authority. Horizontal systems like the U.S. naturally fear that their distributedness is their weakness, when in reality, it is their strength. But tightening up along vertical lines only makes sense, sort of defense-in-depth philosophy that is more logical than, say, states coming together per se. In a vertical system you tend to see the opposite sort of response: when the Great Leader finds his rule under attack, he starts reining everyone in because he is never quite sure who to trust. So you see crackdowns on untrustworthy groups and more palace guards. That was basically Saddam Hussein's tack across the nineties after the U.S. booted Iraq out of Kuwait: he kept creating new, ever more trustworthy troops to surround him, and he put those troops under his most trusted relatives. More generally in response to 9/11, we saw plenty of vertical political systems around the world use the excuse of the global war on terrorism to target dissidents, separatists, and the like, reclassifying everyone as a terrorist and seeking the U.S.'s blessing for that designation. So what is at risk here is basically the civil rights of citizens the world over, because a vertical shock can easily send even the most horizontal systems over the top in their search for security.

Rule #5: Vertical scenarios scare horizontal systems more, while horizontal scenarios scare vertical systems more. People living in horizontal systems typically enjoy significantly larger amounts of freedom, and so it is easier to slap a vertical scenario like a terrorist attack on an open society than a closed one. Naturally, people living in more horizontal systems understand that vulnerability and fear vertical scenarios, or the bolt-from-the-blue, far more than horizontal scenarios, or some slow-developing problem against which you can mobilize your network of resources. 9/11 really shocked America, even though the death total was fairly small when you compare it, say, to deaths from car accidents each year (40 to 50 thousand), but those death unfold in small increments, spread out across the land, whereas 9/11's victims died all at once. Plus, Americans understand the risks of driving; we know those rule sets. But 9/11 triggered the response of "People just shouldn't have to die that way," meaning it offended our sense of rules regarding warfare. Bolts-from-the-blue like 9/11 tend to haunt U.S. strategic planners, because we know there is little we can do to prevent an enemy from getting that first sucker-punch in on America, whereas in a long, knockdown drag-out fight, we are very confident that we will prevail. Vertical systems tend to fear horizontal scenarios more, say, like the slow build-up of resistance to rule. Soviet Russia went nuts over individual dissidents like Andrei Sakharov, because they feared he would slowly "poison" the minds of an entire generation, making both rule and reform impossible. They were right to be afraid. Similarly, the political leadership in China runs scared when a Falun Gong movement develops secretly on its own, using the network connectivity of the Internet to spread its gospel. When several thousand Falun Gong disciples showed up one morning on Tianammen Square, what was frightening to the Chinese leadership was less their non-violent protest than the their obvious self-organizing capabilities. So if horizontal systems fear political assassinations, vertical systems live more in fear of grass roots movements. 

Rule #6: Vertical scenarios harm vertical systems more, while horizontal scenarios harm horizontal systems more. This rule simply says that Rule #5 is basically wrong, despite what people in both systems tend to believe. In reality, vertical strikes can do little damage to truly distributed systems. If someone wipes out the White House, Congress and the Supreme Court one afternoon, nothing would really change in our country in terms of our ability to maintain rule. Yes, it would be a huge shock, but it would not be hard to replace all those leaders rather quickly. I could find you 535 ex-senators and representatives living within a ten-mile radius of the Capitol itself who could easily step back into rule, tell me how hard it would be to find nine lawyers in Washington who think they are smart enough to sit on the Supreme Court! But even beyond those facile examples lies the reality that we have 50 "farm teams" around the country, each complete with their own set of executives, supreme courts, and legislative branches. You if you wipe out our national leadership you do not really kill our capacity for leadership, because we have got more political leaders than we can count! What really stresses out horizontal systems like the U.S. are the horizontal scenarios that never seem to end, like a Great Depression, which really only ended when the vertical shock of Pearl Harbor put the country on another pathway. In contrast, vertical systems like Saddam Hussein's regime can really be dismembered quite profoundly simply by taking out the leadership. Remember the "most wanted" deck of cards? That said we really needed to nail only about 50 bad actors in Iraq and we would have eliminated the bulk of the Baath party rule.

Where are the boundaries in System Perturbations?

Rule #7: Vertical scenarios are always preceded by horizontal scenarios that generated the preconditions for system shock. This one I definitely stole from the complexity guys. Their basic point is that no vertical shock occurs in a vacuum. With 9/11, there were a host of horizontal scenarios on our side that led to all that lax security and our government's downplaying the threat from Al Qaeda. So looking for that one "smoking gun" is always an illusion, despite the fact that we always pretend to ourselves that we have really found one, like the FBI "Phoenix Memo." To believe that one little memo should have turned the tides on all those long-term horizontal scenarios is just fantasy. You cannot turn conventional wisdom on its head without a serious shock. On Al Qaeda's side, 9/11 was the culmination of a slow build-up of capabilities and demonstrated strikes over the years. This group did not appear out of nowhere, nor did their grievances.

Rule #8: Vertical scenarios are invariable followed by horizontal scenarios that generate preconditions for future shocks. This one sort of says, "Be careful what you wish for." Japan attacks Pearl Harbor and hopes it will shock the U.S. into rapid defeatism. Instead, we respond with the Pacific Campaign, or a methodical dismantling of Japan's empire. Hitler thought Germany might conquer Russia with the same blitzkrieg that overwhelmed Poland and France, and he got the Battle of Stalingrad and the Siege of Leningrad instead. Al Qaeda thought America would be shocked into isolation after 9/11, and got a Bush Adminstration hell-bent on transforming the Middle East. Of course, as part of that transformation, we invaded Iraq and toppled Saddam Hussein's regime. That was the "big bang" America put on the Middle East as a whole. But that vertical shock invariably creates its own horizontal scenarios like leaving tens of thousands of U.S. troops trapped in Iraq for the long haul, pulling in jihadists from all over the world to try and kill the "infidels," and forcing the U.S. into an accommodation with the UN it had long sought to avoid regarding postwar Iraq. What new vertical shock comes out of that maelstrom of horizontal scenarios? Good question.

Rule #9: The potential for conflict is maximized when states with differing rule sets are forced into collaboration/collision/clashes. This rule basically defines America's dilemma in pursuing this global war on terrorism: we will constantly be getting into bed with countries whose rule sets do not go well with our own, like Egypt, Saudi Arabia, or even Syria. How does America cooperate with essentially non-democratic states to spread democracy? Then again, if you want converts, you better work among the sinners, yes? But even tougher questions abound in response to 9/11. You could say, for example, that in pursuing this war on terror, America is basically adopting the Israeli approach of an-eye-for-an-eye, which is problematic for most Americans. Israel may, for religious and cultural reasons, be comfortable with that Old Testament approach, but America is basically a New Testament-style democracy, where the "golden rule" of "do unto others as you would have them do unto you" drives most of our rule sets. As I stated earlier, I think the Core-Gap division forces some genuine bifurcation in our security rule sets, and yet, there is no pasting over the reality that this war on terror will cause very profound rule set clashes within America itself.

When do we gain the upper hand in System Perturbations?

Rule #10: A strong offensive strategy can force a certain amount of structure on the most asymmetrical of enemies. Because I believe state-on-state wars are fundamentally a thing of the past, I have strong expectations that the enemies -- whatever form they take -- will be both fairly distributed in their organizational structure and seek to wage war on us in the most asymmetrical means. This enemy could be an Al Qaeda, or a SARS, or an anti-American intifada in Iraq. In these situations, defensive strategies inevitably fail, because all the initiative is left to your enemy. Some might say, "But if you cut off one head of the Hydra, then ten more with appear!" But to be perfectly blunt, I hate arguments that take you down the path of saying in effect: "Whatever we do, let's not piss off the terrorists." If you don't take the fight to the enemy, the enemy brings the fight to you, so we can do this in Manhattan or in Iraq -- and I prefer Iraq. You can counter with, "But what all those soldiers dying in Iraq?" Those lives are no more, nor any less precious than the almost 3,000 we lost on 9/11. But the big difference is that there are soldiers, not civilians. Taking the fight to the enemy forces that enemy to adapt himself to whatever offensive strategy you pursue. If you shoot on sight, then he will hide. If you track him across networks, then he will have to stay mostly off-grid. If you plant yourself in Iraq and Afghanistan, then you will fight him in Iraq and Afghanistan, not New York and Washington.

Rule #11: Our individual plays unfold with utmost speed, but in ignoring any "game clock," we remember that our strength is our inevitability. America's strategic tempo in this global war on terrorism must be deliberate, not rash. We need to line up allies before we strike, not be forced to bribe them afterwards. We want to make clear every time we act, what rule sets we are upholding or proposing. In sum, it is a "rash" U.S. military establishment the advanced world fears most: reckless, trigger-happy, and prone to unilateralism. An inevitable military Leviathan, on the other hand, is what the global system needs most: decisive in its power projection, precise in its targeted effects, and thorough in its multilateralism. So while we will strike with amazing speed, and coordinate our operations with eye toward rapidly dominating any enemy we take on, our strategic choices must be made with great care. Living in an interconnected world, America must understand that almost any time it intervenes militarily overseas, it sets off a series of horizontal scenarios both good and bad. The rest of the Core will invariably have to live with all those resulting scenarios, so they cannot just be forewarned, these countries must be consulted, enlisted, and convinced to the best of our abilities, and that takes effort up front. So tactical and operational speed are doubleplusgood because they save our soldier's lives¸ but strategic speed is fundamentally bad because of its negative effect on the global security rule sets we seek to enhance with every intervention we undertake.

Rule #12: Our efforts to dissipate horizontal scenarios will invariably trigger unintended consequences that take on a life of their own. In the Y2K scenarios, we called this the "Iatrogenic Zone." Iatrogenic refers to "unexpected side-effects that result from treatment by a physician." People who own computers know this one instinctively, whether they realize it or not. Iatrogenic is when you try to download this nice little program from the web to fix this itsy-bitsy problem on your computer, and three hours later you are looking at a complete wipe of your hard drive for your troubles. America's occupation of post-Saddam Iraq places the global war on terrorism in the Iatrogenic Zone. The USA Patriot Act, in many critics' minds, places the Justice Department squarely in the Iatrogenic Zone, where they fear the new powers to fight terrorism will represent a cure worse than the disease. But again, while I cite this rule I see no need to slavishly submit to its logic. All "slippery slope" arguments end up pushing you toward inaction versus action, defense versus offense, and disparate tactics instead of real strategy, so you do not want to go too far with this one.

How do we deal with other states during System Perturbations? 

Rule #13: There is no statute of limitations on cultural blowback, so avoid providing future foes with chosen trauma. Middle East experts will tell you 9/11 is twenty years of blowback from Afghanistan and the mujaheddin we supported there, half a century of blowback from the creation of the state of Israel, and even eight centuries of blowback from the Crusades. Like in your marriage, no "past sins" are ever forgotten, so it is crucial that in our responses to any System Perturbation, we do not simply plant a host of new historical grievances in the hearts of those we hope ultimately win over and integrate into the Core. This is, of course, the great danger of the Big Bang strategy of toppling Saddam Hussein's regime. My Muslim colleagues from that part of the world have told me repeatedly that, immediately following 9/11, America had the chance to win over not just a small percentage of the Muslim world, but a very large one -- depending on its response. These same friends tell me now that that share of potentially winnable Muslims is far smaller, and far more difficult to win, precisely because we have provided them with a newchosen trauma. What is our solution now? As Thomas Friedman likes to argue, America's best hope now is to do whatever it takes to make Iraq a beacon of freedom and progressive change in the Middle East. In effect, we need to turn that chosen trauma into a chosen triumph -- not ours, mind you, but the Iraqi people's.

Rule #14: In response to vertical scenarios, horizontal systems naturally come together, as do vertical systems. This one we saw in spades following 9/11, as the world's free states rushed to our support and joined our substantial multinational coalition that toppled the Taliban's rule in Afghanistan. Horizontal systems naturally saw a common threat in the attacks, meaning something that could just as easily happen to them. But vertical systems, in general, saw something very different in 9/11. First, since many such states are not our friends, they saw America receiving her comeuppances for past sins. Second, since a few of these states have long been identified as state sponsors of terrorist groups, they knew they could soon be on receiving end of any general U.S. response. Of course, when President Bush identifies an "axis of evil" by name, then the U.S. simply drives this countries even closer together, furthering their collective disconnectedness from the rest of the world. I do not see anything wrong with that, because I believe in calling a spade a spade. It is just that once you generate such a list, expectations are immediately raised about what you intend to do about that list, so follow-through is crucial. In that way, you could say that the "axis of evil" is a self-declared "domino theory" for the global war on terrorism: America sets itself up for having to deal with the entire lot to demonstrate significant milestones in the war. Is this an aggressive approach to shrinking the Gap? You bet.

Rule #15: Transitional states are forced to choose during System Perturbations, and their choices reveal which direction they are truly heading. By this I mean that the world is full of states trapped somewhere between truly vertical and horizontal system status -- China, Russia, Iran, to name a few. For these states, a System Perturbation represents a real moment of truth: to which "side" do they move? This is what Thomas Friedman describes as the choice between the "Lexus world" and the "olive tree world," and it is what I call the choice between the Core and the Gap, or -- most fundamentally -- a choice between connectedness and disconnectedness. I think we learned plenty about Russia, China, India, and several other New Core members following 9/11. In the case of those three countries, despite the fact that the Pentagon had more than a few nasty things to say about each prior to 9/11, all came down firmly on the U.S. side following this huge loss in our security. They chose. How did Iran choose? Saudi Arabia? Here I fear we are talking about states moving in the wrong direction, although there are better signs from Riyadh following the fall of Saddam Hussein. With SARS, China clearly had a choice to make, and it did so clearly, again reinforcing the perception that the nation is moving deeper into the Core. With our Big Bang in Iraq, America has forced a lot of countries to choose all over again, and we will know the outcomes according to the uniforms that ultimately appear in any UN-sponsored peacekeeping force for Iraq.

* * *

One of the main reasons why I think we are far enough along in our understanding of System Perturbations to start identifying some of the rule sets is because 9/11 was not just an existence proof for the concept, it started a whole new discussion on -- even a whole new lexicon for describing -- the nature of system-level security crises. Look at how the phrase "9/11" has become a touchstone for shocks that remake rule sets. The Chinese have repeatedly referred to SARS as "our 9/11." Australia suffers a great loss of life due to terrorist strike against its citizens touring in Bali, the biggest number of Australians killed in one hostile act since World War II, and they refer to it as "our 9/11." India's Parliament is bombed by terrorists, and many Indiana refer to it as "our 9/11." Russia is confronted by terrorists holding a theater full of hostages in Moscow, and its tragic outcome is described by many Russians as "our 9/11." In each instance, people are talking about security suddenly revealed as inadequate, rule sets suddenly sent into flux, and political systems deeply perturbed.

Understanding how System Perturbations unfold is crucial, in my mind, for understanding war within the context of everything else. This understanding is not only good for helping us stabilize the Core progressively over time, but also in shrinking the Gap, a process that is likely to be regularly punctuated by significant System Perturbations perpetrated by the United States itself, the most revolutionary country the world has ever known. To that end, the Pentagon needs to rethink its ordering principle, as does the entirety of the U.S. national security establishment. The wars we wage and the peace we win across the 21st century will be shaped decisively by how America comes to define crisis in the age of globalization.

[TEXT ENDS]

12:05AM

How goes the International Criminal Court?

Economist editorial and article.

As usual, the mag argues that the court, despite low expectations for effectiveness and high expectations for useless meddling in the superpower affairs of America, "has not done too badly."

The ICC has laid bare important facts about forgotten wars (all Gap).  It has issued 13 indictments (all Gap). No, it hasn't nabbed Sudan's Omar al-Bashir, but it has put him on notice, and yeah, that counts when you're trying to build up new rules.  111 countries have signed up, and most have signed some sort of immunity agreement with the U.S., in effect acknowledging our sheriff role and the credibility of US military justice.

America signed the treaty but did not ratify--a rare achievement.  Most non-members, like India, Indonesia and China, simply never signed.

The Economist laments an upcoming review of the ICC being held in Uganda, because on the agenda sits some promised exploration of the notion of punishing state-on-state aggression (the old League of Nations dream) instead of just remaining focused on the crimes against humanity.  If the notion should be explicitly expanded in any direction, it should be about terrorism, which is on the rise, instead of state-on-state wars, which are going the way of the dinosaur.

Pinning down a definition of all war as crime was denounced most elegantly, says the editorial, by Sir Austen Chamberlain in 1928 (Brit Foreign Secretary) when he said that such an effort would end up creating a "trap for the innocent and a signpost for the guilty."

In other words, by circumscribing the limits of criminal aggression, the world would seem to be permitting all that lay outside those limits.

In other words, the ICC would effectively undo everything it's done, which is highlight government crimes against their own peoples.

We live in a world of transnational terrorism and civil strife; the ICC should focus on both and not the past.

12:09AM

Learning a thing--but not two--from Kazakhstan on banking

FT column.

Call-out text states it plainly enough:

Until recently it was generally assumed that when a bank ran into problems it would either be bailed out or go spectacularly bust.

Well, unlikely Kazakhstan provides a better example:  getting the creditors to suffer the pain. They absorb all or most of the losses, keeping the bank a going concern.

Says Tett, “In America, there is every chance that the future financial reform bill will contain some features that would impose creditor losses in the future.”

The big question?  Is this discipline imposed by a central 3rd party or the courts.

Investment groups hate the notion, but Tett calls it the least bad option.

How democratic.

Meanwhile, she laments the alternative that Europe seems to be pursuing:  “a system based on ever tighter bank rules and implicit taxpayer bail-outs.”

12:03AM

Big Oil to BP: No, you're the problem!

Artwork here

FT piece.

BP, naturally, keeps selling the Deepwater Horizon disaster as indicative of industry-wide problems, while the rest of Big Oil says otherwise—also to no surprise.

Other firms want deep-water drilling to continue, stating that their practices are better.

What I found interesting about the chart showing where everybody is drilling in the Gulf:  Deepwater’s water depth is listed as 5200 feet, but of the 18 other rigs listed, 8 are equally deep or a lot deeper (in the 7-8,000 ft range).  Companies drilling at that deeper depth include Shell, Chevron, Anadarko and Noble.

Of the 33 rigs left idle by Obama’s ban, we’re talking costs of about $12m a day.

The industry plans to invest about $170B in deep-water drilling tech and gear between now and 2014, or something on the order of $30-35B a year.

Naturally, BP’s massive screw-up (less the original accident, I would wager, than the incredibly incompetent response since) will perturb the entire industry, because America’s new rules on the subject will have global impact.