The long history of warfare is dominated by military entrepreneurs. That dominance was overturned only recently (within an historical context) with the rise of the nation-state and its ideologically motivated armies. However, the trend is going in the other direction, and quickly. Military entrepreneurship is again on the rise. We can see the adoption of military entrepreneurs by the coalition in Iraq. Private military companies (PMCs) field the second largest military force in Iraq, after the US -- the UK is a distant third.
This shift towards military entrepreneurship is even more pronounced in the insurgency in Iraq. Almost all of the guerrillas we are currently fighting were formed through this process. This should come as no surprise to readers of history (and particularly readers of this author, since it appeared here first). Arab warfare, until late in this century, was driven entirely by entrepreneurship. For example: Lawrence of Arabia, the father of modern guerrilla warfare, used combinations of direct payments and the promise of loot to build his forces. Faith played a major part, but it was almost always secondary.
- "Unlimited amounts" of violence capital for guerrilla entrepreneurs is flowing into Iraq from ex-Baathists, relatives of Saddam Hussein, Saudi sources, and bin Laden. Given global guerrilla ROIs (returns on investment) of up to 100,000 x, this should be cause for alarm.
- Loot from convoy hijackings, theft of oil through bunkering, and ransoms play a major part of the motivation for attacks. Fully 80% of the attacks fall into this category.
- A granular competitive market. There are over 50 guerrilla groups active in Iraq. The sheer diversity of the effort indicates a process that is very similar to historical patterns of Arab warfare.
- Price schedules for attacks. The going rate for placing an IED is $100-$300 (more for an RPG attack).
A New Dynamic
The financial dynamic we see in action in Iraq is a hallmark of global guerrilla warfare. It also creates its own dynamic. The destruction of the pillars of globalization through attacks on systems (both infrastructure and markets) serve to keep Iraq a failed state. As a failed state, Iraq is unable to provide economic alternatives to the insurgency. Further, even though Iraq is a failed state, it is awash in money. Fortunes will be made through the perpetuation of its chaos (as we see with the Narco warlords in Afghanistan, who combined generate $2.5 billion a year in revenue).
Given this trend line, we will likely see more advanced forms of this in the future, particularly market-derived financing. Guerrilla entrepreneurs will use prior knowledge of attacks to generate revenue from global financial markets (NOTE: this fits the strategy of fourth generation warfare -- it turns the strength of an enemy into a weakness). These efforts will include:
- Assaults on individual corporations (more here and here). Attacks on resources (particularly oil infrastructure) will influence the oil market. Billions could be made through this process.
- Attacks on oil infrastructure. Global guerrilla methods make it possible for the rise of a "Shadow OPEC" and all the financial leverage that entails.
- Taking states hostage.Global financial markets control the world. States exist to compete within them (the US does too, but it often doesn't acknowledge the fact). If a state underpreforms it is harshly punished regardless of the reasons. It is likely we will see a nation state targeted/threatened with infrastructure disruption unless they make a large ransom payment. States are willing to pay (the recent payment by Italy for the release of hostages is an example). Many aren't, but after some well orchestrated examples, they will likely to reverse that stance.