Global Guerrillas

JOURNAL: Chinese Exceptionalism

The great part about being a Chinese dictatorship in a world with one rule set (Adam Smith's), is that your paramilitary forces can slaughter 140 156 protestors without even a whimper from the global community.  Western political elites just don't care because a) business with China is more important than human rights and b) China reacts like a spoiled child when chastised, which makes it not worth the hassle.   Of course, the reaction we see today on Chinese repression may become the same we see when similar things happen in the developed world.  

What's even more interesting is how the opposition is using the information terrain to help get the message out.  From twitter (like Iran) to cell phone cameras, the images of the event were broadcast around the world.  China's response?  A combination of "shutdowns" of information systems and counter attacks by loyalist information militias.  While the opposition is learning how to use information terrain better with each incident (this response was faster than what happened when China cracked down on Tibet), it still hasn't branched out into using those same tools to spread disruption (which is the only effective way to disconnect).

JOURNAL: The Switch to Local Manufacturing

Here's a think piece that you may find of value:

It is likely that by 2025, the majority of the "consumer" goods you purchase/acquire, will be manufactured locally.  However, this doesn't likely mean what you think it means.  The process will look like this:

1. You will purchase/trade for/build a design for the product you desire through online trading/sharing systems.  That design will be in a standard file format and the volume of available designs for sale, trade, or shared openly will be counted in the billions.
2. You or someone you trust/hire will modify the design of the product to ensure it meets your specific needs (or customize it so it is uniquely yours).  Many products will be smart (in that they include hardware/software that makes them responsive), and programmed to your profile.
3. The refined product design will be downloaded to a small local manufacturing company, co-operative, or equipped home for production.  Basic feedstock materials will be used in its construction (from metal to plastic powders derived from generic sources, recycling, etc.).   Delivery is local and nearly costless.

The switch to local manufacturing is being abetted by the following factors:

1. Ever more expensive energy and raw materials as far as the eye can see, although every time the economy slows, those costs will drop sharply.  This means that the costs of global transport and mass production (overproduction, failed products, etc.) will become too costly to maintain for all but the most valuable and difficult to manufacture products.
2. The collapse of generic demand.  The debt-deflation fueled process of economic collapse has just begun in the developed world.  It will continue for decades as incomes globally normalize (become equivalent in all "connected countries").  This means that the critical mass in demand necessary to support a global production supply chain won't exist in most localities.  Centrally shipped e-commerce will fill some of the gap, but it will be expensive.  As a result, the diversity of consumer products we currently enjoy will fall initially, but will soon be completely eclipsed by a torrential supply of virtual designs for every product conceivable.
3. Local fabrication will get cheap and easy.  The cost of machines that can print, lathe, etch, cut materials to produce three dimensional products will drop to affordable levels (including consumer level versions).  This sector is about to pass out of its "home brew computer club phase" and rocket to global acceptance.

RC JOURNAL: Spin Economics

When authorities resort to propaganda confidence building instead of substantive action in response to an actual crisis, you know you are in real trouble (Katrina, Iraq, etc.).  We are seeing this again today in regards to the global economic crisis, with media amplified whispers of green shoots and bald pronouncements of immanent recovery.

It won't help.  The underlying fundamentals are toxic:  US gross debt as a percentage of GDP (currently at 375%) is still climbing, housing prices are still falling (wealth destruction as far as the eye can see), un/underemployment is still rising (an inability to service debt), the financial industry is back to its old tricks (bonuses are shooting through the roof again, etc.), China is still manipulating its currency (dashing prospects of future jobs), commodities (higher costs for daily life) are shooting up again, etc.   Worse, what action has been taken is largely short term masking of symptoms and not a cure.  Our government "brain-trust" is using all of its financial powder on deprecated 20th Century economic measures to prop up the industries that got us into this crisis: like the greasing of palms in the bloated construction industry (what relation that industry has to our future prosperity is a big mystery) and the flooding of a failing oligopoly (the financial industry) with free money.  

In short, the economic decline we just experienced is being primed to continue (perhaps with greater force), when the spin eventually fails to convince.  Without a means to rectify our course except for spin economics, the trend towards a post-Westphalian century replete with neo-feudalism and global guerrillas is on an inexorable march.

JOURNAL: Nigerian Amnesty?

MEND's (an open source insurgency) campaign against the oil companies in the Niger delta continues to generate substantive results.   Nearly a million barrels of oil production (per day) has already been shut down.  Nigeria's government is facing a 32% shortfall in revenue (from lower oil prices and disruption) which is likely to increase unrest.  Chevron has shut down onshore operations and most of the rest, from Agip to Shell, have removed non-essential personnel.  Ukrainian weapons continue to flow in.  Bunkered oil continues to flow out.  

Tactically, MEND continues to innovate (already adept in standing orders 1, 2, 3 , and 4).  With their most recent attacks against Shell, they have expanded their operations into the eastern part of the Niger Delta (relatively untouched to date).   Note, the expansion of systems disruption (at the operational/strategic level) is a dominant strategy for post-industrial insurgency since it yields high ROIs, thins government forces, drains government/corporate coffers, generates limited popular opposition, etc.  This is in stark contrast to the expansion of the low yield "blood and guts" terrorism that Taliban factions and their open source allies are using in Pakistan.  

To combat the rise of MEND, the Nigerian government first attempted a classic crack down.  Unable to locate leadership (most of the coordinators are out of country) or groups (hired and virtual) to bribe/kill, the army failed in its objectives.  Now, the Nigerian government is planning to fund an amnesty program for Delta guerrillas.  In a classic fashion, the amnesty program envisioned spends the bulk of its money on internal operations (rife with graft) with only a modest payments for participating guerrillas (~$250), minimal thought on reintegration/retraining, and vague notions of "reconstruction."  It's doomed to failure.  MEND is completely intact (not under substantive pressure by competitive groups), has strong sources of income/arms (due to connections to the global economic system), and continues to generate successful attacks (low casualties and high ROIs).  The open source war Henry Okah started against global oil companies will continue. 

JOURNAL: Useful Briefs for the Pandemic

With the swine/avian flu pandemic already at 5/6 on the CDC danger scale, we may all soon find out (following Mexico's lead) what it means to endure a national emergency that cancels all public gatherings, closes borders, stops people from going to work, and creates massive service/product disruptions.  In short:  severe disconnection.  

Here are some quotes/links to two briefs I wrote just before the pandemic (built on concepts pioneered in Brave New War).  It's useful to see it as part of a larger and increasingly common pattern of massive global shocks.  This path inevitably leads to a more resilient design for the global system: one populated by resilient communities (a societal design that makes telecommuting the standard for global knowledge work).  

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Scale invariance is a requirement for societal resilience. It is also something anyone seriously thinking about the topic of resilience must be familiar with. Here's why. Our global system is composed of intermeshed and tightly coupled networks. These interlinked networks enable our system to be efficient and relatively robust against random shocks. However, large shocks can overwhelm this type of network design, causing it to either act erratically (turbulence) or break apart (into smaller clusters via cascades of failure). We saw systemic turbulence in action via the recent brush with a global financial meltdown in September 2008 and we are seeing it currently with erratic swings in markets, trade, and other forms of economic activity. Examples of network failures that result in disconnected clusters are seen with every black-out in the electricity network. A pandemic would be a mix of the two, intentional clustering (quarantines) and high turbulence. 

From the brief:  Resilient Communities and Scale Invariance

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This is interesting from the perspective of societal decision making. Improvements in robustness and increasing returns over the short to medium terms, drives society (from common wisdom to academic doctrines) to assume that our situation will/can only get better and better. This experience has also led to the assumption that radical increases in connectivity (Internet, financial integration, etc.) will only accelerate this process of betterment. However, network analysis indicates that these massive increases in connectivity have made the possibility of an extinction event (cataclysmic Black Swan) much, much higher than in the past. Therefore, assumptions that we will eventually progress (something we have to assume), should be moderated by the fact that our future may be increasingly (more frequently) punctuated by periods of and extreme and prolonged system failure. In that regard, the connectivity we have in this Century makes it truly unique in all of history, and therefore any comparisons to historical experience should be used with extreme caution.  

From the brief:  The Increasing Frequency of Black Swans

JOURNAL: An Open Source Counter-insurgency for Pakistan?

Among those who are reported to have fled is Fateh Khan, a wealthy Buner businessman. Mr. Khan had been one of the main organizers and financiers of the private armies in Buner.NYTimes 23 April 2009.

Pakistan is on its way to, if not already, a hollow state.  In short, that's a nation-state that controls the capital and has international legitimacy, but has ceded control over much its territory to non-state groups.  Here's some notes on recent developments:

The "Taliban" recently (and quickly) took the town of Buner in northwestern Pakistan and is now consolidating its gains (by making alliances with existing centers of moral legitimacy -- elders, etc.).  Further advances will come.  Like Colombia and Iraq, the best source of opposition to the advance of the Taliban will be from wealthy local land owners, businessmen and tribal elders willing to build/hire their own militias and not from the government's uniformed military or its auxiliaries.  

These militias aren't getting support, instead the opposite is happening: the government is extending authority and legitimacy to the Taliban through promises of self rule (deals should only be made to the extent they divide the opposition).  As these militias fall and the wealth of their owners is distributed (paid off to locals with a cut to the external Taliban warlords making the advance), the Taliban's plausible promise of economic justice and fair sharia rules/courts gets stronger.   This will attract more self-organizing groups to join the effort.

Given the rate of the advance, the Taliban may soon be in a position to cut critical services (energy, water, etc.) to key cities.  

JOURNAL: The Plausible Promise of Pakistan's Insurgency

"This was a bloody revolution in Swat. I wouldn’t be surprised if it sweeps the established order of Pakistan."  Pakistani official who oversees Swat to the NYTimes.

Open source insurgencies -- an insurgency composed of many small groups without any hierarchical leadership or organizational structure that typifies 20th Century practice -- needs a single plausible promise or vision that binds the groups together to a common purpose.  It looks like the insurgency (a number of groups collectively known as the Taliban) in Pakistan's Swat valley may have finally found (mostly likely due to the innovation of the "radio mullah" Maulana Fazlullah) a plausible promise that could ignite an open source insurgency that goes well beyond Pashtuns and into the rest of Pakistan.  Simply, a diffuse promise to rectify economic injustice and corruption through the distribution of land and fair (in this case Sharia) courts.  It will be interesting to see if Fazlullah's radio foco will the start of an open source insurgency that hollows Pakistan out in the next couple of years.  I'm betting that it will.  All the West has on its side, is a corrupt system (in collapse due to a a global depression), a mustachioed dictator (to be released as required) and some UAVs.

JOURNAL: A Global to Local to Global Criminal Example

Nice tersely worded example on how predation by the global economic system helped drive Somali piracy.  From David Axe:

Recall that Somali piracy has its roots in the 1990s, when the collapse of the Somali government threw open the doors to major foreign fishing companies to illegally enter Somali waters and fish out all the tuna, which once comprised one of Somalia’s major commodities. The first Somali pirates were fishermen who decided to render a “fine” on any boats they found illegaly fishing Somali waters. Well, guess what. Piracy has effectively cut in half tuna hauls for major foreign fishing companies working near Somalia, according to Warships International Fleet Review. Today piracy is essentially organized crime, at sea. But the piracy mafia has inadvertently accomplished what the original pirates set out to do. Somali pirates have every reason to be proud. Whether on purpose or not, they have defended their waters while evading the combined might of the world’s navies.

Technology driven connectivity makes it possible for these "remote" groups to take the fight back to the global system.  Remember, in a flat globalized world, everyone is in competition with everyone else.  There aren't any meaningful barriers.  We are going to see this dynamic again and again...

If you find yourself alone and naked in a global gun fight -- tribe up!

JOURNAL: Playing with Global Economic Dominos for Fun and Profit

One of the most unappreciated aspects of our global economic system is the ability of small groups, typically driven by greed, to severely disrupt it.  

The oil crisis, that drove prices to nearly $150 a barrel, was due to a combination of a tightly coupled global economic system with a 2 million barrel a day shortfall in supply due to growth in Chinese demand.  That production shortfall was the result of systems disruption.   Small groups of guerrillas in both Iraq (~1 to 1.5 million barrels a day) and Nigeria (up to 1 million barrels a day) routinely blew up pipelines, mostly for personal profit.   The oil spike drove up costs to unacceptable levels for stretched American households.  This resulted in a spike in defaults on subprime mortgages as the economy slowed and marginal household budgets failed.  In parallel a relatively small group of financiers concentrated in a score of companies, added egregious instability into the global financial system (excessive debt and leverage + "too complex to understand" derivatives) for personal profit.  This unstable system amplified these subprime mortgage defaults (a relatively small slice of total debt) into a global financial crisis.  

Nothing has changed.  Much more of this behavior is on the way.  For a more complete preview of how this is done, read Brave New War.  I wrote it with the intent that it would eventually be viewed as the first installment on a definitive manual for 21st Century conflict.

PS.  Being an occasional mercenary, in 2004 I spoke to a dozen huge hedge funds in London (individually) about how the dynamic of small group disruption + extreme global system leverage would drive up oil prices to astounding levels.  Those that headed this advice, made tens hundreds of billions of $$.  

JOURNAL: The Pentagon and Economic Warfare

The Pentagon just completed a wargame that involved overt economic warfare between Russia, China and the US.  While I applaud the DoD for thinking more broadly, the entire premise is completely flawed.  Economic warfare between major economic powers in an integrated world is mutually suicidal (akin to "how can you win a nuclear war?").   The recent financial crisis points to how interlinked we are and how fast a  contagion of distrust can spread.  No, the real threat of economic collapse is due to an inability to effectively manage a dynamically unstable global economy or overspending on security (due to a failure of strategy).  If there is a threat of economic warfare, it is from asymmetric attack by open source enemies (which could make it deniable).