Global Guerrillas

JOURNAL: Amplification

Here's an example (via al Qaeda's propaganda video) of how core global functions are hijacked (Google, in this case) to amplify messaging and how decentralized tinkering networks (al Qaeda's media arm) improve over time: "The Power of Truth" Review of the video by Jarret Brachman, research Director at the CTC: "It's beautifully crafted propaganda, and it's a huge problem for us... You're left shaking your head and saying, 'Yeah, I guess they're right.' "

BOW-TIE CONTROL SYSTEMS

Here's some fun big picture thinking that may help explain current global gyrations/shocks as we head into the rest of a difficult year. I find it to be an interesting model although your results may vary. As always, use it or discard it, it's your choice. Feedback is always welcome.
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The rapid growth of global guerrillas (the systems disrupting, crime fueled sons of global fragmentation), non-bank financial firms (hedge funds and investment banks that are cumulatively known as the "shadow banking system"), and cybercriminals can be explained by a fundamental restructuring of our global economic, energy, and communications system. In a little over a decade, this collection of relatively isolated systems (markets and networks) firmly ensconced within nation-state regulatory/legal structures (political economies and national networks) have merged into a single fluid global system (absent any meaningful global governance). This new structure has enabled a form of parasitic predation by these newly empowered participants, that puts the entire global order at risk.

The Bow-Tie
If we look at this new global system from a distance, its architecture is something called a Bow-Tie (aka "Platform"). This is a form of universal control system architecture that underlies complex systems from the Internet to cell metabolism (for background, read the excellent article, "Bow ties, metabolism, and disease" by Caltech's Marie Csete and John Doyle). While Bow-Tie architectures existed within the nation-state system, it was organically intertwined with political controls.
This new system is devoid of those organic connections. It's pure. The Bow-Tie architecture has the following features:

• Nearly unlimited scalability. The ability to accept a wide variety of inputs (the left bow) and convert them into a small set of universal building blocks (the knot). This, in combination with protocols for interconnection, enable a plug-and-play approach to building a wide variety of outputs (the right bow).
  
• Robust and evolvable at the same time. As environments change in the short term, new combinations can be made from the basic building blocks and protocols to meet new demands. Additionally, since the system is shared, any evolutionary innovation quickly propagates across the entire system.
  
• Fragility. The entire system is vulnerable to changes, perturbations, and hijacking within the core set of building blocks and protocols.

Parasitic Predation
The strength of the Bow-Tie is evident in its ability to handle a wide variety of environmental demands, both efficiently and quickly. However, it can suffer catastrophic breakdowns when the core building blocks and protocols (the knot) are hijacked by parasites. These parasites can use access to the core to radically accelerate growth and gain new flexibility/adaptability. Eventually, other critical processes are crowded out and the entire system collapses.

AUTOMATING HIERARCHY?

Modern information networking technology, if used correctly, can make a 50 person company look like 500. It also works in reverse, you can take a 500 person company and pare it down substantially (although usually not all the way down to the level of a company organized from scratch around automated processes).

I would go even further, in order to gain any meaningful return on the technology investment, you HAVE to radically reduce head count. This isn't merely due to straight forward calculations of profit and productivity (although reason enough by themselves), it's due to the fact that the organization will devolve into a pile of mush if you don't. Simply, with everyone hyper connected/productive the volume of mostly needless interactions will grow exponentially. Soon after the arrival of the technology, the entire organization's decision making capacity will be lost in discussions and white noise -- OODA loops will sputter, spark, and eventually fail. It will also prevent the reorganization necessary for decentralized decision making by super-empowered employees (parallel processing in uncertain environments).

This appears to be exactly what is going on in the US military. While the US military has been investing heavily information networking technology, it hasn't changed its basic organizational structure. Its organizations are still staffed to balloon (via conscription) to fight the large conventional wars of the last century. That means lots and lots of mid to senior level management with nothing to do but generate lots of white noise. To get a glimpse into what this means in practice, please go read Tyler Boudreau's article, "The Internet age comes to the battlefield."

THE RESILIENT COMMUNITY: SCRIP

A growing number of communities now use scrip (aka a community currency or loyalty program) as a way to keep business activity local and thereby increase community resilience to economic shocks. Here's how it works. Customers buy scrip that can only be used with local businesses to buy goods and services. This is usually done in response to a community initiative. Businesses that accept scrip can either pay employees with the same (to the extent they accept it), provide it as change to customers (again, limited by acceptance), or exchange this scrip for hard currency (usually at a steep discount). Examples of scrip range from the Ithaca HOURS, Berkshares, to the Totnes Pound. While these attempts at scrip are better than nothing, in almost all cases these efforts have fared about as well as most "green" initiatives:

• participation is meager (it is relegated to a lifestyle choice)
  
• velocity is weak (low turnover),
  
• it is vulnerable to economic contraction (when times are tough, participation among retailers falls off due to a scramble for a dwindling amount of hard global currency)
  

How to Accelerate Scrip
However, despite the spotty record so far, scrip is an extremely powerful means of accelerating local economic activity when nothing else seems possible (in economic extremis). Past experience with depression era scrip like Austria's Worgl indicate that the following will accelerate scrip adoption, velocity, and robustness:

• Allow community members to use it to pay all or part of their tax liabilities to local governments. This instantly establishes a market for the currency. Also, pay local government employees a portion of their wages in scrip.
  
• Deflate the value of the scrip (optimally, one percent per month) to promote immediate use rather than hoarding.
  
• To the extent possible, connect scrip to local production rather than retail. Locally produced food (farmer's markets), energy (via local microgrids), products (personal fabs), and labor/services. Further, work with local banks to establish checking accounts for scrip and to enable conversions hard currencies (at a slight discount).
  

NOTE: Scrip should also be considered to be a part of a 21st century approach to economic development (likely superior to microcredit), (open source) counter-insurgency, and disaster/crisis recovery. For more background read the economist Irving Fisher on depression era scrip. The rambling utopian tract by Silvio Gesell is also interesting.

GLOBAL OIL PRODUCTION UNDER SIEGE

Systems disruption, made effective superempowerment, has now gained control of pricing on global energy markets. Returns on investment (ROIs) for attacks are now routinely counted in billions. This is particularly evident as MEND's open source war against the government and its corporate partners (Shell, Chevron, etc.) speeds up. In one week, they have taken out over 400,000 barrels a day of oil (This represents a half of one percent of total global production. It is also a substantially larger percentage of light crude, which has a larger impact on prices):

• Shell's off-shore Bonga Platform. 225,000 barrels a day disrupted. Guerrillas in speedboats towing dugout canoes attacked a platform 75 miles offshore (likely guided there by hand held GPS navigation). Jeff Vail has some good analysis of the attack.
  
• A gang attack on Chevron's pipeline near Escravos Nigeria. 100,000 barrels a day disrupted.
  
• An attack on the Escravos facility itself. An additional 100,000 barrels a day of production.
  

Again, this demonstrates (particularly the offshore attack) rapid cycles of improvement while maintaining strategic focus -- the result of decentralized tinkering/innovation by the many groups participating in the effort under the same plausible promise. The large number of groups involved in MEND also makes it nearly impervious to government counters. In the larger context, these attacks put at risk one of the world's foremost sources of new production -- which was slated to bring 1.25 m more barrels a day of offshore production online in the next couple of years, all of which is now at risk. So, instead of 2.5 m barrels a day climbing to 4 m barrels a day, production has dropped to ~1.3 m barrels a day (and is continuing to fall).

NOTE: Disruption isn't limited to Nigeria. A remote control bomb by the FARC on Occidental Petroleum's pipeline in Colombia just knocked out 100,000 barrels a day. It's also interesting to note how irrelevant the US military/national security system has become in regards to global energy security. The entire paradigm of warfare has changed but the $1 Trillion behemoth has barely budged.

JOURNAL: Task Force ODIN and Cloud Power

'Cloud Airpower' -- a three dimensional blanket of microsensors and machines that can dominate a target zone -- is the future of the Air Force. It's how the Air Force will participate in the future of warfare (which will be mostly a form of special operations and not conventional warfare). However, the AF leadership doesn't want to acknowledge it. Instead, the US Army is doing the innovation/tinkering necessary (this is a rough early effort, but it is coming from the right direction - from the bottom up):

The battalion is called Task Force Odin — the name is that of the chief god of Norse mythology, but it also is an acronym for “observe, detect, identify and neutralize.” The task force of about 300 people and 25 aircraft is a Rube Goldberg collection of surveillance and communications and attack systems, a mash-up of manned and remotely piloted vehicles, commercial aircraft with high-tech infrared sensors strapped to the fuselage, along with attack helicopters and infantry...

The Army cobbled together small civilian aircraft, including the Beech C-12, and placed advanced reconnaissance sensors on board. Also assigned to the task force are small, medium and larger remotely piloted Army surveillance vehicles, including the Warrior and Shadow, with infrared cameras for night operations and full-motion video cameras.

All are linked by radio to Apache attack helicopters, with Hellfire missiles and 30-millimeter guns, and to infantry units in armored vehicles.

RC QUOTE: Competitive Advantage

"We don't want to save the World and we don't claim that Marburg will revolutionize climate action. But we must chart new territory in order to ensure a future supply of energy independent of oil and gas.... No south-facing roof will be left unused." Fritz Kahle, the Mayor of Mahberg, Germany (80,000 people) on the change in the city's building code that requires solar collection (thermal or PV) whenever a roof is renovated, a heating system replaced, or an addition made.

How will a home or a community be valued by the marketplace in the future? By the amount of solar energy it captures (via heating, PV, or photosynthesis). Changing building codes is gradual way to make your community more competitive, reduce exposure to risks, and improve property values.

BOOK REVIEW: The Unthinkable (Ripley)

Just wrote a review of Amanda Ripley's new book, "The Unthinkable" for the City Journal. This book is about how human beings respond to disasters (psychologically and biologically) and what can be done to improve your odds of survival.

JOURNAL: DIY Rocket Launchers

Here's a photo of a formerly mobile DIY Rocket launcher rusting at BIAP.

JOURNAL: More on the Shadow OPEC

I have a guest post up on "The Oil Drum" (an excellent "out of the box" site on energy topics) on how global guerrillas can use disruption to set global oil prices. Have fun.

NOTE: On cue with this brief, a MEND attack on a Nigerian offshore facility (Shell's flagship project, Bongo, 75 miles offshore) took out 200,000 barrels a day of production yesterday. About ~9% of potential production and ~14% of existing production in one event. Didn't get the computer control room though (probably forgot the thermite). This is also likely light sweet oil production and it is at a level that is more than enough to offset the planned Saudi increase in heavy oil production (although not the Chinese price hike).

NOTE 2: More disruption in Nigeria. Chevron lost 120,000 barrels a day when its pipeline in the delta was breached on Thursday. This time from a youth group (gang). Open source insurgency at work...