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Two Links on Political Economy

Friday, August 19th, 2011

That are complementary:

Fabius MaximusOur fears are unwarranted. America is in fact well-governed.

….America is in better shape than Europe and Japan.  We have good demographics, sound fundamentals, relatively easily solved problems, and no powerful enemies.  Why the constant sense of crisis?  QE2, hyperinflation, climate armageddon, Obama the socialist, AIDS, alar on apples, jihadists, debt, swine flu – a constant drumroll of doom, explained by Peter Moore in “The Crisis Crisis” (Playboy, March 1987).   Answer:  elites govern a weak people by exploiting their fears.  For example, look at the “government is broke” panic.

  • The Federal government’s net debt is only 2/3 of GDP, well below the 100% of GDP “red line” (that Italy reached many years ago).
  • The short-term deficit is mostly the result of the recession.  The medium-term deficit results from the Bush tax cuts.
  • Social security’s funding gap is small vs. GDP and easily fixed.
  • The massive funding gap is mostly Medicare, easily fixed by adopting features from the mixed public-private systems in Europe.

Panic pushes Americans to allow cuts to popular social services plus increased and highly regressive taxes.  No matter who wins, after the 2012 election our representatives will implement the necessary policy changes:  raising taxes, cutting expenditures, rebuilding our infrastructure, and beginning the long process of reforming health care.  It will be another morning in America.  There is no crippling polarization, just distracting noise masking a consensus between both parties about the key points of economic and foreign policy.

We do not see this long-standing pattern (see the previous post for details) because our collective OODA loop is broken (see section 6 here).  That makes us easier to lead.  Relying on wealth-based elites to run the country has a cost.  They take a large share of the pie; we take a small slice….

Global Guerrillas –JOURNAL: Global Financial Cancer

….A couple of years ago, I wrote that the underlying structure of the global financial system was a “bow-tie.”  Here’s what I said (it’s worth going back and reading the entire article and this paper on bow-ties from John Doyle at Caltech):

If we look at this new global system from a distance, its architecture is something called a bow-tie. This is a universal control system architecture that underlies complex systems from the Internet to cell metabolism.

Bowtie

What is a Bow Tie?

The bow-tie is a very powerful approach to organizing a complex system (it’s a system design that is used by controls engineers.)  Visually, it starts with complex inputs (the left side of the bow-tie), boils them down into simple build blocks (the knot), which then allows the construction of complex outputs (the right side of the bow-tie….

….Unfortunately, as I mentioned in the earlier article, bow-ties are vulnerable to organisms that attach themselves to the knot at their center (like the way cancer uses the body’s metabolism system).  These organisms relentlessly use the bow-tie’s knot to for selfish ends (rapid growth).  The end result is typically death for the system.  My suggestion was that the instability we were seeing in the financial system was an indication that it had been co-opted by a malicious, self-serving organism.

Of course, at the time there wasn’t much data to support this systemic analysis.  That has been rectified with a new paper, The Network of Global Corporate Control by Vitali et. al. from ETH in Zurich.  This paper finds, through extensive network analysis, that a small group of tightly intertwined financial institutions control the bow of the global financial system.  It is in effect, the world’s first super-organism….

They are both right. Probably not perfectly, the American economy, even more the world’s, is too complex a subject, but right enough.

FM is right that the emerging class of people I have been calling “the Oligarchy” the past couple of years do not intend to deliberately implode the system that is working outrageously to their benefit. They are currently in the stage of trying to come up with an arsenal of tax-farming schemes that will pass political muster (i.e. – not provoke uncontrollable, “Arab Spring” street demonstrations or a successful populist electoral revolt  that would eject their sycophants from government en masse in a single election) and are quietly, methodically and strategically neutering the capacity of the populace to resist their rule over the long term. It is there that we see seemingly unrelated measures as the coordinated political attack on public education and university education, restrictions on the ability of citizens to get courts to review arbitrary actions of Federal agencies, imposition of laws to permit total surveillance of US citizens and acquisition of their personal information and so on.

The elite, who are not completely cohesive or formally organized, are supremely confident in their ability to manage the technocratic economy they are putting into place, or if bumps in the road appear, to squeeze sufficient new leverage from the populace through inflation, devaluation and other forms of expropriation. Unfortunately, I am not confident that these folks are nearly as competent as they imagine themselves to be. Nor am I sure that the global system that they have built, a high-performance, deeply complex, ultra-leveraged, financial sector dominant political economy isn’t as fragile and dangerously unstable as people like John Robb and Nassim Nicholas Taleb have maintained it is. The system might not just crash, it could crash to extreme depths with unprecedented speed with unforseen consequences (financial systems also ensure the reliable and continuous logistical flow of *food* and *power* to population centers).

The Debate over the Influence and Extent of “Realism”

Tuesday, August 16th, 2011

 Kudos to Dan Trombly of Fear, Honor and Interest. Why?

First, for drawing attention to the debate between Dan Drezner and Anne-Marie Slaughter over, hmm, “Real-world Realism” in American foreign policy:

Dan DreznerMeet the new foreign policy frontier…. same as the old foreign policy frontier

….Well, this is… this is… I’m sorry, I got lost among the ridiculously tall strawmen populating these paragraphs.   I’ll go out on a limb and posit that not even Henry Kissinger thinks of the world the way Slaughter describes it.  Just a quick glance at, say, Hillary Clinton’s recent speech in Hong Kong suggests that actual great power foreign policies bear no resemblance whatsoever to that description of “traditional foreign policy.” 

Slaughter knows this very well, given that she was Clinton’s first director of policy planning.  She also knows this because much of her writing in international relations is about the ways in which traditional governments are becoming more networked and adaptive to emergent foreign policy concerns.  

Rebuttal time…..

Anne-Marie SlaughterThe Debate Is On! A Response to Dan Drezner

….I’ll take that bet. I think it’s exactly how Henry Kissinger still thinks of the world. Indeed, he has just published a book on China — of course, because from the traditional realist perspective China is by far the most important foreign policy issue in the 20th century, as it is the only possible military and economic competitor to the United States. Hence, as realists/traditionalists never tire of repeating, the U.S.-China relationship is the most important global relationship of the 21st century: what matters most is ensuring that as both nations pursue their power-based interests they do not collide catastrophically. Never mind that an avian flu virus that is both fatal and aerosol-borne arising anywhere in Asia could do far more damage to global security and the economy than China ever could — just see the forthcoming movie Contagion.

The second reason for giving Mr. Trombly props is that his excellent post in response to the above was a lot more interesting and substantive than their pleasantly jocular and Friedmanesque exchange:

Old School realism and the problem of society

….Waltz cares about states because states, in the time periods he examines, are the primary bearers of power. Power, not the state, is likely the more long-standing differentiation between the liberal/idealist and realist schools of international affairs. Realists generally care more about who has power, and particularly coercive power, because in the realist view, it is the power to control – not to collaborate, connect, or convince – which is the final arbiter and source of other forms of  socio-political-economic behavior.

For most of the history of thinkers identified with realism, the state did not exist, nor did the conception of the state as a unitary actor. Thucydides, long identified as one of the fathers of Western realism, was not a Waltzian structural realist in the slightest. As most early realists did, he cited the origins of political behavior in irrational and rational drives, which originate in the hearts and minds of men. There were no states in Thucydides’s day, but city-states, empires, and various other forms of political organization which did not survive to the present day. Thus one had to be quite conscious not just of particular parties and factions, but even individuals, who, in a polis such as Athens could completely upturn the designs of the Athenian state. In his description of the varying governments and systems of organization at play, Thuycdides actually shows a keen awareness of how regime types and the social composition can influence international politics, but only insofar as it involves the exercise of power. The exchange of goods, culture, and ideas matters far less to him. Slaughter does offhand mention that an Avian flu could kill far more than a war and be more likely. Interestingly enough, the plague of Athens does play an important role in Thucydides’s history

….This pessimism about the dangers of those lacking political virtue, or restraint of their passions, from acquiring power colors, in one way or another, much of the subsequent 2,500 years of realist thought. Ultimately, the interactions and aims of the various interest groups that Slaughter describes, and Drezner dismissed, are not necessarily prescriptively ignored but the subjects of active disdain, fear, and scorn

Much to like in this fairly lengthy post, which  I recommend you read in full.

Now for my two cents.

First, as a factual matter, it would not be hard to establish that Dr. Slaughter is correct and Dr. Drezner is not that Henry Kissinger does think like that. He most certainly did while he was in power, as is amply recorded in the National Archives, Kissinger’s memoirs and secondary works by historians and biographers who made Kissinger their subject. To all appearances, Brent Scowcroft, Kissinger’s protege thinks the same way, as did Kissinger’s master, Richard Nixon, whose private remarks regarding the unimportance of ephemeral actors to geopolitics were brutal. The UN, for example, Nixon dismissed as a place for “just gassing around” and Nixon was happy to use the UN (and George Bush the Elder) as unwitting props in his China Opening.

Policy makers do not think like IR academics do, even when they are IR academics like Dr. Slaughter or Dr. Kissinger. They don’t have the time or luxury of remove from events. The cool, detached, analytical, Harvard intellectual who wrote Nuclear Weapons and Foreign Policy became the emotive, egoistic, domineering, slightly hysterical, bureaucratic operator and diplomatic tactician as National Security Adviser. I suspect a six days a week, sixteen hour days of crisis management culture as Policy Planning Director at State likewise tempered Slaughter’s time for theorizing speculations.

That said, there is some room present for Dr. Drezner’s skepticism and Mr. Trombly’s “active disdain, fear and scorn”of non-state actors (which I think is a spot on gestalt of the Metternich-worshipping Henry the K).

The state as an organization of coercion and defense is unrivaled in human history by any other political form except the tribe. The state is fine-tuned to be a beast of prey and open challeges to the state, in all it’s panolpy of might, without a long preparatory period of eroding it’s legitimacy and attriting it’s will to power, seldom turn out well unless the challenger is another state. Non-state actors who challenge state authority tend to survive and thrive initially only by being elusive, deceptive, adaptive, faster and by inflicting moral defeats until they accumulate enough armed power to co-opt, thwart, deter or topple the state by force. This requires the challenger engaging the state in such a way that it habitually reacts with excessive restraint punctuated by poorly directed outbursts of morally discrediting excessive violence ( see Boyd’s OODA Loop)

When non-state actor challengers gain sufficient political momentum and break into a full-fledged armed insurgency, a dangerous tipping point has been reached because insurgencies are generally very difficult, expensive and bloody to put down, often representing a much larger pool of passive political discontent. The advantage begins to turn to the challenger because the mere existence of the insurgency is itself an indictment of the state’s competence, authority and legitimacy. Some states never manage to regain the initiative, slipping into state failure and co-existing with the insurgency for decades or being ignominously defeated.

We live in an era of state decline, or at least an era of erosion of the state’s willingness to use force in self-defense with the unconstrained savagery of a William Tecumseh Sherman or a Curtis LeMay. While overall, the zeitgeist favors the non-state actor, challenging the state a much harder trick when it is ruled by a charismatic sociopath, an authoritarian lunatic or when the machinery of security is organized on the basis of extreme and homicidal paranoia. Very little political “room” exists in such circumstances for non-state actors of any size to emerge because the state has used terror to atomize society and dissolve natural bonds of social trust; dissidents, if they are to be effective, often must rely upon external support and patronage.

This is not to say that the power Dr. Slaughter commends, to “collaborate and connect” is unimportant. Far from it, as it represents a very formidible long term threat to the omnipotence of states by permitting a highly networked and wealthy global civil society to self-organize to check their power. At the inception though, “collaboration and connection” is very fragile and vulnerable to state interdiction. Representing oneself as a political challenge to the state before power is acquired to any significant degree is unwise; if empowering civil society in tyrannies through “collaboration and connection” is the goal of the USG, it ought to be done under the radar with plausible pretexts and without an obvious affiliation to American sponsorship.

That would only be…..realistic.

New Book: Storming the World Stage by Stephen Tankel

Monday, August 15th, 2011

Storming the World Stage: The Story of Lashkar-e-Taiba by Stephen Tankel

I returned from Texas yesterday to find on my doorstep, a review copy of Storming the World Stage: The Story of Lashkar-e-Taiba by Carnegie scholar Stephen Tankel.  Mirv Irvine of CNAS describes it thusly:

…one of the definitive accounts of Lashkar’s rise as well as the 2008 Mumbai attacks, and his book should be the go-to-guide for those looking to understand Pakistan’s reliance on proxies against India and its attached baggage

Moreover, my co-blogger and expert on esoteric religious militancy, Charles Cameron has already expressed book envy of this review copy and covets it. Heh. With such strong endorsements, I am moving it to the top of the pile for immediate reading.

Trial of a Thousand Years, by Charles Hill—a review

Thursday, August 11th, 2011

 trial of thousand years

by J. Scott Shipman 

Trial of a Thousand Years, World Order and Islamism, by Charles Hill

Ambassador Charles Hill’s Grand Strategies, Literature, Statecraft, and World Order was the best book I read in 2010, so I had high expectations for this volume and was not disappointed. Ambassador Hill provides a 35,000-foot view of the relationships between the West and Islam in history focusing on the subtitle of his earlier work in the form of “world order.”

Unsurprisingly, as in Grand Strategies Hill goes back to the roots of modern order in the Treaty of Westphalia (1648). He provides a brief review of the world ushered in by the men who negotiated, and quotes another historian who said, “men who were laboring, each in his own way, for the termination of a terrible war. They had no idea of progress. The word “innovation” was anathema to them. The last thing on their minds was the creation of a new system of sovereign states…” Here we are 363 years later and “from the seeds sown at Westphalia” the system they set in place is has grown, but has been under siege many times from many fronts.

Westphalia was distinctive because it was “procedural, not substantive” and required a minimum number of procedures/practices to which to adhere and allowed disparate parties with different, “even mutually antagonistic, substantive doctrines and objectives” to work together. Hill points out four distinctions:

  • Religious arguments were not allowed in diplomacy.
  • The State was the fundamental entity.
  • Interstate/international norms and laws were encouraged, absent “divine sources” but based on mutually beneficial/positive agreements.
  • Use of professional military and diplomats with “its own set of protcols.” [Personal note: In another life, I was an arms control inspector enforcing the START I and INF Treaties—protocol was very serious and the true measure of the actual treaty language. There was also a strong and consistent application of reciprocity that made each party think before stretching protocol—this happened to my teams more than once.]

For Hill a central mission of the United States is the defense of the Westphalian world order. In less than 165 pages and six chapters, he outlines the origins of modern Western order and correspondingly covers Islamic order. From the beginning to the end Hill provides ample evidence of challenges to Westphalia, often from indigenous Western sources, but focusing mostly on our trials with Islam.

Hill sets the sources from whence the Western and Islamic world orders arose, where the West was grounded in Christianity, and the Islamic in the Caliphate. For two religions claiming Abrahamic roots, their worldviews were, and in many instances remain diametrically opposed. Central was the question of duality or unity. For the West, the State and religion were two complementary systems/powers—following the teaching of Christ ““Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s” (St Matthew’s Gospel 22:21) For Islam there was no distinction, and the very thought was hateful to Islamists. Islam’s “unswerving devotion to monotheism” continues to this day among those groups and states using terror to upend existing world order.

I am sympathetic to Hill’s ideas; however recognize with globalization and the internet tweaks may be required. And I’ll take this segue to introduce an idea for consideration.

Westphalia’s removal of religion made trade possible among former religious enemies. Unambiguous rules for contracts and dispute resolution evolved. What if we could bridge the gap between Western jurisprudence and tribal, or non-Western legal systems? What if, instead of insisting our way or the highway we design a solution that would allow both sides to keep their respective legal processes and procedures, thereby opening untapped markets?

At least one person has already considered these alternatives. Michael Van Notten (1933-2002) was a practicing lawyer in the Netherlands and married into a Somali tribe. Van Notten used his legal training and insights gained as a member of his new family to design a method of contracting where tribal law and Western jurisprudence could peacefully and prosperously coexist. Van Notten recorded his ideas in a book called The Law of Somalis, A Stable Foundation for Economic Development in the Horn of Africa. I’ll not review this book, but wanted offer this as a teaser alternative.

After reviewing the history of the West and Islam, Hill identifies seven Clausewitzian centers of gravity for both: legal, military, the State, women, democracy, nuclear weapons, and values. Hill makes the distinction between the use of diplomacy by Islam and the Islamist (the fundamental variety). No surprises, to the Islamist a secular State is an “apostasy,” as is international law (Sharia being the single source), democracy and the rights of women.

Hill concludes, “Islamic civilization entered the international system under duress,” which he believes has contributed to the current situation of failing states and lagging economies that establish conditions where radicalized Islam can flourish. The radicalized elements reject the secular Westphalian world order, however Hill points out that some in Islam insist that sharia imposed by the state “cannot be the true law of Islam. It is not possible to apply sharia through the state; it can only be applied through acceptance by human beings (An-Na’im).” Another alternative is the Medina polity established by the Prophet (“later called the Pact—kitab—of Medina) “guaranteeing each tribe the right to follow its own religion and customs, imposing on all citizens rules designed to keep the overall peace, establishing a legal process by which the tribes settled purely internal matters themselves and ceded to Muhammad the authority to settle intertribal disputes…Although this document has been called the first written constitution, it was really more of a multiparty treaty” (Ansary).

Hill convincingly demonstrates that more often than not, rulers have co-opted Islam as a way to dominate the people (Iran comes to mind.). He quotes Professor L. Carl Brown of Princeton, “nothing exclusively “Islamic” about this Muslim attitude towards politics, any more than the politics of feudalism or of imperial Russia was distinctly “Christian.” It is the political legacy of Muslims, not the theology of Islam…”

For the Islamist, secularism is the booger man, but secularism in the Westphalian order has its own set of problems. Hill writes, “A new phenomena arose: wars motivated by religious convictions were replaced by wars driven by ideologies—surrogates for religion—each aimed to oppose, undermine, destroy and replace the Westphalian system. The greatest of these was international communism, the latest is international Islamism.”

In many respects, Trials is as good as Grand Strategies. Ambassador Hill is to be commended for his insight, courage, and conviction—this little book packs a big, enlightening punch. Strongest recommendation.

References you may find of interest (links to quoted authors above are links to the respective reference):

The Incoherence of the Philosophers, Abu Hamid Muhammed Al-Ghazali

The Crisis of Islamic Civilization, Ali A. Allawi

The Caliphate, Thomas W. Arnold

Sayyid Qutb and the Origins of Radical Islamism, John Calvert

Crimea: The Last Crusade, Orlando Figes —Figes’ The Whisperers was very good.

The Morality of Law, Lon L. Fuller

The Muqaddimah, Ibn Khaldun (Translated Franz Rosenthal)

The Clash of Empires: The Invention of China in Modern World Making, Lydia H. Liu

The Government of the Ottoman Empire in the time of Suleiman the Magnificent, Albert Lyber

Byzantine Civilization and The Fall of Constantinople, both by Steven Runciman

The First World War, Hew Strachan

Mozart and the Enlightenment; Truth, Virtue and Beauty in Mozart’s Operas Nicholas Till

Muslim Intellectual: A Study of Al-Ghazadi, W. Montgomery Watt

Dialectic of Enlightenment, Max Horkheimer and Theodor W. Adorno 

 

 

Killebrew on The End of War

Thursday, August 11th, 2011

Colonel Robert Killebrew comes to a conclusion I would endorse as both empirical and probable for reasons of economics – interstate warfare and military establishments are very expensive, while irregular conflict is both cheap and accessible to many hands of various motives. Great power wars can still happen, but as ventures of existential risk.

The End of War: Nonstate violence is the new norm

In “The Invention of Peace,” British historian Michael Howard notes that it was the rise of the modern state, with powerful kings, that first brought the idea of “peace” to the Western world. So long as the king or government retained sufficient power, determining “peace” and “war” remained the prerogative of the state, to be managed as required. Hence, the marching armies of August 1914. In the beginning years of the 21st century, though, we are entering into a new historical period. The state no longer has a monopoly on violence, and national borders are not as inviolate as they were in the long-ago 20th century. No other concept for managing fractious relations between states has yet emerged. (Except, perhaps, the concept of “bigness,” as in, “I’m big enough to do this and get away with it.”)

Since the attacks of Sept. 11, 2001, constant conflict has been the norm not only for the U.S. but also for much of the world, whether because of ideological struggle (the Balkans and Southwest Asia), political conflict (the Middle East and Eurasia), tribal wars (the Balkans and Africa), criminal insurgencies (Mexico, Central and South America) or terrorism (global). The pat-down at your local airport is a sign that the world has changed. Looking back, it’s hard to believe that Americans and Europeans used to vacation in spots where they would be beheaded today. In Central America – now the most violent region in the world – citizens report the social fabric that held their civic life together is disintegrating in the face of gang violence and government impotence.

Five global conditions that have grown exponentially since the end of the Cold War are challenging governments everywhere: first, the enormous growth in criminal wealth over the past two decades, fueled by drug money, human trafficking, illegal arms sales and other crimes; second, mass migrations of peoples from south to north, pressing in on developed countries; third, the Internet and other technology that has brought violent organizations into the same technical sphere as governments; fourth, the free flow of arms that supplies firepower equal (or superior) to government security forces; and, finally, the empowerment of violent extremists who use the first four conditions to attack states and their legal institutions, whether to overthrow them, neutralize them for criminal or other purposes, or out of simple nihilism.

….It is increasingly clear that the greatest armed threat the U.S. faces is the attack on international civil order that violent extremists represent. The most likely use for U.S. armed forces in the coming century will be to help extend the rule of law to states struggling against extremists that also threaten the U.S. This does not mean the end of armored warfare, for example; future battlefields are impossible to predict. But the Afghan and Iraqi conflicts have already begun to align U.S. military thought toward the more complex world of the 21st century. Conflict changes both winners and losers, and the armed services’ world after Iraq and Afghanistan will not be a return to the good old days of predictable deployments and annual training cycles, any more than the Army in 1946 was able to go back to the garrisons of 1935. While the development of aggressive, highly skilled units and combined-arms capabilities is still very necessary, the uses to which they are put will change….

ADDENDUM:

Posting from me will be light until next Monday.


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