Global Guerrillas

JOURNAL: Prospects for Global Depression and Unrest

The respected Economist Intelligence Unit (part of what is arguably the best news/business magazine on the planet) has just published an important report entitled, "Manning the Barricades" (here's more..)  It's completely out of step with the Panglossian rhetoric that passes for economic analysis on Wall Street and in DC.  It comes up with the following outlook:

• 60% Stimulus stabilizes economies in developed countries.
• 30% Global depression. 
• 10% Global depression w/ massive social upheaval. 

Additionally, the EIU estimated the potential for political unrest.  It places the US, UK, France, and China at a moderate risk of instability (see inset).

In sum, this is a decent report (although the analysis of how unrest plays out is very weak due to the use of legacy thinking).  The dire forecast it contains is as negative as a mainstream publication can go (based on my years of experience as a top rated analyst) without clashing disastrously with status quo interests.  The high potential of negative outcomes it projects, should serve as wake up to people that are thinking seriously about the future of warfare and community resilience. 

PARASITIC PREDATION

Some Boydian logic -- a new construct for decision making -- to brighten your day. Not likely.  However, the aim of this brief is not to convince you.  Instead, it is to get you thinking in new ways, to challenge assumptions, and spur creativity -- all of which is essential to our collective long term success.

__________

Back in 1974, the long running connection between improvements in worker productivity and wage growth was severed.  Median per capita wages for individuals have stagnated since then, replaced with measures of growth in house hold income (two workers instead of one) and growth derived from growing the labor pool (mostly illegal immigration).  During this time, the money derived from productivity improvements over the last decades (which would have doubled the incomes of American workers under the post-WW2 to 1974 social contract), was shunted to capital markets under the ideological assumption (seen in Greenspan's thinking)  that these markets would make better investments in future prosperity than individuals.  That assumption has been proven false.  The money was gambled away or spent on lavish increases in the lifestyles of oligarchs and their underlings.  

However, it would be bad enough if it ended there, with the realization that two generations of American wealth was squandered by capital markets in a frenzy of excess.   It won't.  There is increasing evidence that this group of "oligarchs" has ideologically captured all forms of US governance in a situation similar to what we have seen in emerging markets.   The situation in the US today, particularly to those that saw it first hand while at the IMF, is very similar to what they saw in past crises in Argentina and Russia (in their view, our situation is worse than Japan).  Here's a couple of posts that warrant further reading:

The Quiet Coup by Simon Johnson (the Atlantic)

Re-emerging as an Emerging Market by Desmond Lachman (Washington Post)

Comparing the US to Russia and Argentina by Glenn Greenwald (Salon)

This development has major implications for those of us that think about the future of warfare.  The devolution of the US economic system into crony capitalism, replete with the parasitic predation of oligarchs, paints a picture of warfare punctuated by:

rampant crime, rapidly declining military/government budgets, inopportune withdrawals from foreign adventures/development efforts (money for this dries up), corporate armies, deep urban decay, spot starvation/health crises, broad privatization of public goods (theft or fire-sale prices), widespread poverty, etc.  

To think that a parasitic oligopoly (akin to Russia's) can't happen here, despite factual evidence to the contrary (trillions of $$ given away to bank/hedge funds/etc. without the slightest reform, hope for economic return, or accountability), is a failure of decision making due to doctrinal/ideological rigidity.  However, if it's true, a move to the primary loyalties of manufactured tribes (gang, clan, sect, etc.) by a large segment of the population will be almost inevitable.  Many of these new groups will both defend and advance their interests through violence.  

JOURNAL: More on Banksters

I mentioned at the time I wrote this brief, that viral violence targeting the barons of global finance was likely incoming (but that it wasn't here yet).  Here's a small addition to that trend line (that builds on the thousands of death threats that have been received).  In the UK, vandals hit the home of the former CEO of the Royal Bank of Scotland, 'Sir' Fred Goodwin (he and his family have already fled the country).  Windows on the ground floor of the home and his Mercedes S600 were smashed.  E-mails from a group claiming the attacks said,

We are angry that rich people, like him, are paying themselves a huge amount of money, and living in luxury, while ordinary people are made unemployed, destitute and homeless. This is a crime. Bank bosses should be jailed. This is just the beginning.

The Real Systemic Risk 

This leads me to a broader topic.  The real systemic risk we face isn't from a financial seizure.  That risk is mild in comparison to the risk of a widespread collapse in legitimacy.  Due to excesses (too many to name), legitimacy is rapidly draining from the global financial system and the networked groups that give it their primary loyalty (like Fred above).  In recognition of this, nation-states should hold this system at arms length to limit damage to their own legitimacy.  Given the constraints on resources faced by nation-states, a plan that would bulk up legitimacy would focus on reorganizing financial institutions (not bailing them out) and repairing the balance sheets of individual citizens (the only group in the chart to the left that is still loyal to nation-states).  That isn't happening and the damage incurred from this mistake will be significant.

NOTE: The other thing that the inset chart tells us is that this crisis is due to debt, overreach, and insolvency.  Until the US collectively writes/pays off $20 trillion plus in excess debt, not much will change.  Transferring debt from financial firms to the government (as in the Paulson/Geithner plan), only accelerates the decline of nation-states relative to an already dominant global financial/economic system.  

WANTED: Afghan Strongmen

If the glowing treatment in the WSJ is any indicator, the US has found a potential Pashtun "strong man" to manage Afghanistan:  Agha Shirzai.  He apparently has demonstrated an ability to both navigate tribal politics and to cement their obedience.  The article also claims he has reduced poppy production in the small province he is currently running (after amassing a fortune of $300 million growing/smuggling the same in Kandahar), has been able to complete infrastructure projects (heavily corrupted), and is ramping up the use of tribal militias (independent of gov't controls).   Sounds familiar.

JOURNAL: Tribal Raids and Medieval Defenses

The small town of Cuauhtemoc, Mexico (pop. 3,700) has a big problem (Dudley Althaus has the story).  It is now the target of 'tribal raids' for hostages and loot by gangs of pistoleros.  In a nearby town of San Angel (pop. 250), 15 SUVs loaded with gunmen recently raided the town and took five men hostage.  

Here's a neo-feudal moment.  To defend themselves (the police and military are unable to provide support), the townspeople have built a moat around the town -- including all access roads.  They even manned the moat with volunteer sentries (since removed due to an acknowledgement that they would be insufficient).  Good luck.

HOLLOW STATES vs. FAILED STATES

A considerable number of analysts contend that Mexico and other countries suffering assaults by open source insurgencies/crime aren't in danger of becoming failed states.  They are right given the limitations of their modeling.  A failed state is a complete breakdown in the delivery of political goods (security, law, health, education, infrastructure, etc.), the dissolution of most arms of the government (often what's left is in absentia), and widespread chaos.  Think Somalia.  

In contrast, these states are well on the road to becoming hollow states.  A hollow state is different from a failed state in that it continues to exist on the international stage.  It has all the standard edifices of governance although most are heavily corrupted and in thrall to global corporate/monied elites.  It continues to deliver political goods (albeit to a vastly diminished group, usually around the capital) and maintains a military.  Further, in sections of the country, there is an appearance of normal life.  

However, despite this facade, the hollow state has abdicated (either explicitly as in Lebanon's case or de facto as in Mexico's) vast sections of its territory to networked tribes (global guerrillas). Often, these groups maintain a semblance of order, as in rules of Sao Paulo's militias or the Taliban's application of sharia.   Despite the fact that these group control/manipulate explicit economic activity and dominate the use/application of violence at the local level, these groups often grow the local economy.  How?  By directly connecting it to global supply chains of illegal goods -- from people smuggling to drugs to arms to copytheft to money laundering.  

The longer this state of affairs persists, the more difficult it is to eradicate.  The slate of alternative political goods delivered by these non-state groups, in contrast to the ineffectiveness of the central government, sets the stage for a shift in legitimacy.  Loyalties shift.  Either explicitly through membership in tribal networks, or acknowledgement of the primacy of these networks over daily life.

So, if the question is whether Mexico, Pakistan, Nigeria, etc are in danger of becoming hollow states, the answer is yes.  In fact, I suggest that they are already there.  Are we headed in the same direction?

JOURNAL: Another 'Awakening' in Iraq?

There are strong indications that the Iraqi Awakening program that shut down Iraq's open source insurgency program is in trouble. Rod Nordland has the story: 

These are among the signs that the fighters’ patience is fraying badly at a difficult moment. After months of promises, only 5,000 Awakening members — just over 5 percent — have been given permanent jobs in the Iraqi security forces. Those promises were made last year when Iraq was flush with oil money. Now with Iraq’s budget badly battered by falling oil prices, the government is having trouble even paying existing employees, much less to bring in Sunni gunmen already regarded with much suspicion by the Shiite-led government. In interviews with leaders from a dozen local Awakening Councils, nearly all complained that full-time jobs were lacking, that pay was in arrears and that members were being arrested despite promises of amnesty.

It's important to remember that this arrangement was open source counter-insurgency in action, and not the officially sanctioned COIN doctrine (since the groups aren't loyal to the Iraqi government).  To entice participation, these groups were provided a combination of money, training, and protection by US forces (against Shiite militias and the Iraqi government).  Once that ends, as it appears to be, these groups will shift back into active opposition to what they see as an illegitimate government.   

See:  "Open Source Counter-Insurgency" for more.

NOTE: Busy

Slow posts continue, busy working on ways to make more money thinking about the future of warfare.  On a side note, I've been asked to testify to the House Armed Services Committee in early April on the future of warfare and how that should influence our defense spending.  That should be interesting.

JOURNAL: Los Tios

We can live in peace, as long as we obey the uncles ("los tios", the colloquial name for the "new" Shining Path). 
Peruvian Villager.

We live in a post-ideological age.  Revisionist groups, if they are to survive, will focus exclusively on advancing the economic interests of their members -- rather than on the propagation of conflict and ideology necessary for regime change.  A good example of this is the revival of the Shinning Path.  During the end years of the last Century, it was a Maoist group bent on replacing the government.  That effort failed at a cost of 70,000 lives.

However, like Colombia's FARC, it has recently made the shift from revolutionary movement to a well run narco-tribe.  It is has since begun to prosper.  

It doesn't care about ideological conversion.  Relationships with villagers/civilians are based on hard-edged and paternalistic business arrangements.  It doesn't need broad-based civilian terrorism to force military over-reaction.  It only needs to carve out a local area of operations, free of (uncorrupted) military or police control, by making control too expensive to maintain (22 of the 26 people they killed last year were police/military).  It does need to produce wealth, and does so as part of a global criminal economic ecosystem, within which it participates as defenders of production/supply to a lucrative export industry.  

As the global economic depression deepens, driven by a dynamically unstable global system, the legitimacy of nation-states will suffer mightily (usually due to impotence, confusion, or corruption).  The global response won't be mass movements and new compelling ideologies, but rather post-ideological tribes focused on the economic and social advancement of their membership.  In short, global guerrillas.

JOURNAL: Zeitgeist Watch

A central theme of this blog over the last five years has been that nation-state is caught in the grip of two aggressive groups of super-empowered global guerrillas -- the global barons of financial capitalism attacking from above and tribes/gangs/terrorists thrusting from below.   The results of the early returns indicate that the nation-state is losing its fight with these groups.  

It appears that realization of the situation is going mainstream.   For example, Matt Taibbi's article The Big Takeover  (read the whole thing, colorful language and all), captures this shift.  This article is currently spreading across the Internet virally (via Twitter/blogs).

JOURNAL: Targeting Banksters?

Viral violence incoming. As this NYTimes article points out, the public is actively targeting AIG execs.  Death threats have resulted in armed guards posted at the company's offices and at executive mansions.  

The ugly collapse (it won't be coming back anytime soon, despite the expensive charade to the contrary) of financial capitalism will make banks, hedge funds, and other financial institutions targets of violence in the near term.  At the individual level, the motivation to "postal" violence is likely to grow since these institutions are actively creating a vicious financial undertow that is sinking formerly "middle class" families (through usurious credit card rates, foreclosures, a  Dickensonian bankruptcy process due to recent "reforms", etc.).  The motivation for small group violence will be based to the idea that financial companies will be depicted as the "betrayers" behind the rapid diminishment of "America."  Actual, rather than threatened, violence will likely become commonplace as the depth and scale of the crisis becomes apparent in 2010.  

RC JOURNAL: Schwundgeld

NOTE:  Here's some fun thinking about local currencies (a topic that may become increasingly relevant in the coming years).  Hope you find it of use.

Regional or local currencies, or scrip, are designed to catalyze and grow local economies.  Typically, they gain steam when a regional/local economic depression is exacerbated by national/global deflation (asset collapse and monetary hoarding) -- as we are experiencing today.  These currencies take a variety of forms, from "hour of work" equivalents, food/energy stockpile backed currencies, to depreciating currencies (called Schwundgeld in Germay, arguably the most popular).  

Schwundgeld is a form of currency that actively discourages hoarding/savings through aggressive rates of depreciation -- as in, notes issued at the start of January depreciate by 2% per month, meaning it is worth 98% of face value in February and 96% in March.  This rate of depreciation incentivizes immediate use, or demand, in depressed economies.  It also minimizes societal stratification due to financial accumulation, discourages hoarding, and minimizes non-productive behavior.  The arguments against Schwundgeld and regional currencies in general, as outlined in "Regional currencies in Germany - local competition for the Euro" by Gerhard Rosl and commissioned by the German Bundesbank, fall into the following categories:

• It depresses trade with global system, reducing total potential wealth generation.
• Users of the system are not indifferent to immediate vs. delayed demand.   While this does stimulate demand in the short term, it limits growth of the currency and its ultimate stimulative effect.
• Profits from the system are misused.  

In short, according to this analysis, depreciating currencies don't work as well as the theoretical models of national fiat currencies in stimulating economic growth.  Of course, the theoretical models in question don't reflect our current experience, since we are now in depression/deflationary economic environment with accelerating hoarding/income stratification.  In light of this development, the response to the critique is that potentially sub-optimal solutions are often better than no solution at all (as in Churchill's famous dictum: "democracy is the worst form of government, except for all those other forms that have been tried from time to time").  Specific responses:

• Local currencies ensure that minimal local needs can be met in the absence of a functioning or available global system.  In this respect, it minimizes or hedges against catastrophic downside risk and reduces uncertainty.  This is an aspect that the national system fails to address.  National systems are indifferent to local malfunction.
• While depreciating currencies don't enable rapid monetary growth and accelerating stimulation, they are very effective at dampening excesses (everything from stratification, hoarding, and non-productive behavior).  Currencies of this type aren't designed as a store of value over the long term.  Alternatives exist for that, and savings are accomplished either through conversion to national currencies, assets, or fungible commodities.  The system does what it is designed to do.
• Cui bono?  The most telling critique is the issue of, "how is the excesses generated by administering the system spent?"  This can be addressed by limiting administration costs to a fixed percentage of the system and allocating the remainder to public platforms -- everything from maintaining an electrical microgrid (in order to eliminate/lower transaction costs) to baseline production of food/energy/etc. 

How does this apply to warfare?

If you are working on COIN or stability operations and you aren't thinking about the potential uses of local currencies/scrip, you aren't even in the game.   Connecting devastated local economies to a chaotic and hyper competitive global economy does not auto-magically occur, it needs to be built/grown organically and insulated against rapid reversals.  Local currencies could play a significant or central role in mitigating and restarting economic activity following:

• Disconnection of local economies due to COIN operations (ink spots) post instability.
• Economic development in areas where national corruption/mismanagement make services highly uncertain.   
• Recovery from rapid economic collapse (when formerly developed areas, heavily dependent on the global economy, are economically devastated).    

JOURNAL: Will China Survive a Depression? Don't bet on it...

The surge in China’s exports could prove to be as unsustainable as the rise in US (and some European) home prices. They might end up being mirror images … as Americans and Europeans could only import so much from China so long as they could borrow against rising home prices.  Brad Setser, CFR blog.

China's exports cratered in February, a drop of 25.7%, in line with the drops in exports experienced by other mercantilist countries (Japan, Germany, Korea, and Taiwan).  However, unlike those countries, China doesn't have an organic source of legitimacy except for its ability to deliver economic growth.  As I have said earlier, the real threat from China isn't that is a potential peer competitor (a device used to sell big weapon systems), its that it could collapse:

So, what happens when China's high performance, globally connected capitalist economy which is flying at dangerously high speeds hits the inevitable speed bump? The answer is: it will derail (hollow out and fragment). The chaos it will produce in SE Asia is the real threat we have to deal with. Predicting the black swan that kicks off the death spiral is impossible, but as we have seen in other export-oriented Asian economies the shock will likely be economic. At that point, the dream of upward ascent and rising expectations, reinforced by global media, will be seen as a lie. 

In anticipation of this, the Chinese government is following the lead of many other nations by radically improving the capabilities of its paramilitary force for domestic security (to the tune of one million men). However, this many not be enough. Global guerrilla theory indicates that the endemic corruption will combine with the same forces of anti-state guerrilla action we have seen in other places in an attempt to disconnect portions of China from the central government... (it will work).  

JOURNAL: Cleveland

Here's a must read article from the NYTimes Magazine by Alex Kotlowitz on the effects of the foreclosure tsunami on Cleveland.   It paints a compelling portrait of a complex system that has become completely unhinged and why we are likely to see a similar situation develop in cities across the country.  

This situation demonstrates why it is important to avoid/stall foreclosures by using "tactics of delay" within your community.   Once the infection starts.....

QUOTES: Kevin Kelly on Collapsitarians

Kevin Kelly (we've worked together on a couple of projects in the past and I've found him incredibly insightful) posits a very interesting premise that I think deserves scrutiny:  

The idea of progress has been slowly dying. I think progress lost its allure at the ignition of the first atom bomb at the end of WWII. It has been losing luster since. Even more recently the future has become boring and unfashionable. No one wants to live in the future. 

The jet packs don't work, and the Daily Me is full of spam.  Nobody finds the Future attractive any longer. 

The only thing left to believe in is collapse. That's not boring! 

The end of civilization would be terribly exciting, and unlike any future we could imagine, probably more likely. Dystopias are a favorite science fiction destination now. We all are collapsitarians these days.

This is a conclusion that I think Nietzsche would concur with.  In short:  it implies that without a real challenge that tests the limits of our creativity as individuals or as a species-civilization, we wither.  It that light, the growing doom is a violent psychological reaction to the terrible soul-draining ennui of Fukuyama's "end of history."

Glad to find that I'm not the only one pondering this element of the zeitgeist.  

JOURNAL: Markets Tracking Nicely to D2 Scenario

Dshorts four bad bear markets graph.  

Unfortunately, the transitional period of decline is tough place to be.  Inertia (connections and loyalties to existing organizations and ways of life), a reluctance to write off sunk costs (investments from portfolios to worthless homes), and confusion (what will I do in the future to get by?) pose roadblocks.   Perversely, once the system hits bottom, its easier to decide (the options become clear) but you don't have the resources needed to make changes anymore. 

This is going to be an interesting couple of years decade.  ;->

NOTE:  The US unemployment rate, currently at 14.8%, is set to fly by the 1982 record of 16.3%. 

TRIBES!

This may fill in some gaps for people thinking about surviving the future intact.

 

How do you manufacture a strong community that protects, defends and advances the interests of its members?  You build a tribe.  Tribal organization is the most survivable of all organizational types and it was the dominant form for 99.99% of human history.  The most important aspect of tribal organization is that it is the organizational cockroach of human history.  It has proven it can withstand the onslaught of the harshest of environments.  Global depression?  No problem.

 

If you are like most people in the 'developed world,' you don't have any experience in a true tribal organization.  Tribal organizations were crushed in the last couple of Centuries due to pressures from the nation-state that saw them as competitors and the marketplace that saw them as impediments.  All we have now it is a moderately strong nuclear family (weakened via modern economics that forces familial diasporas), a weak extended family, a loose collection of friends (a social circle), a tenuous corporate affiliation, and a tangential relationship with a remote nation-state.  That, for many of us, is proving to be insufficient as a means of withstanding the pressures of the chaotic and harsh modern environment (D2 in particular).

 

The solution to this problem is to build a tribe.  A group of people that you are loyal to you and you are loyal in return.  In short, the need for a primary loyalty to a group that really cares about your survival and future success.  

 

So how do you build a tribe?  A strong tribe, in this post-industrial environment*, isn't built from the top down.  Instead it is built organically from the bottom up.  A simple tribe starts with cementing ties to your extended family, a connection of blood.  The second step is to extend that network to include other families and worthy  individuals.  A key part of that is to build fictive kinship, a sense of connectedness that leads to the creation of loyalty to the group.  That kinship is built through (see Ronfeldt's paper for some background on this):

• Story telling.  Shared histories and historical narratives.  
• Rites of passage.  Rituals of membership.  Membership is earned not given due to the geographic location of birth or residence.
• Obligations.   Rules of conduct and honor.  The ultimate penalty being expulsion.
• Egalitarian and often leaderless organization.  Sharing is prized.  
• Multi-skilled.  Segmental organization (lots of redundancy among parts). 
• Two-way loyalty.  The tribe protects the members and the members protect the tribe.   If this isn't implemented, you don't have a tribe, you have a Kiwanis club. 

The development of fictive kinship will likely be key to the development of resilient communities (as it is already for global guerrillas).  We can already see this process at work in the UK's Transition Towns movement with their story telling, honoring elders, re-skilling, and leaderless approach (see the 12 steps).

 

*Nationalism is a form of fictive kinship manufactured/bent to serve the needs of the state during our industrial phase of economic organization.

RC JOURNAL: Food Security + Local Currency

Jason Bradford, has an excellent story on his group's efforts to start a local currency for his town of Willits, California.  Worried about local food security (as in one day after a systemic breakdown, the grocery store's shelves are bare), they devised an excellent scheme to build up local reserves.  They founded a reserve currency backed by specific quantities of dried rice and beans called the Mendo Credit.  The story provides an excellent description of the bootstraping process required to get this type of effort off of the ground and rolling.  

GG JOURNAL: More on Disruption

Some items of interest:

• Gang war between Hells Angels and Immigrant gangs over the drug trade rock Copenhagen.
• Major gang fight/riot in Juarez prison.  20 dead.  
• Russia's energy infrastructure consists of long pipes with little redundancy.  For example, a Transneft oil pipeline leak and subsequent fire starved three refineries and two ports of supplies.  It's a small event that points to the future defense strategy of Estonia and Georgia re: Russia.  If they were smart, they would dump most of their conventional military and build/hire "bear teams" to hit critical Russian energy infrastructure. Remember, Russia is now an energy company with an army.  Coercive force that damages there present and future energy income works.  
• Ralph Peters and Michael Klare paint a world full of disorder due to the global depression.   Ralph's "Rise of the Demagogues"due to economic depression might apply to the US as well:  Rush Limbaugh is starting to look like a new Kingfish.
• Nigeria's open source insurgency (MEND serves more of a bazaar function) was able to shut down 70,000 barrels of Shell's oil production and associated facilities (they have shut down 1 m barrels a day of production/condensates since 2006).  Their ongoing attacks, including kidnappings, has led to the Nigerian oil workers union to call for a strike unless security improves (classic knock-on effects of corporate targeting).  
• Large volume looting of abandoned US build sites.
• More later. 

SOCIETAL EVOLUTION AND RONFELDT's TIMN

A systemic crisis is usually a catalyst for transformational societal change, and it's likely that the current crisis of global capitalism is large enough to play this role.  However, if change is coming, where is it bringing us?  David Ronfeldt, a global guerrilla guru, has an interesting take on this from an organizational perspective.  He calls the model TIMN.  It's composed of four organizational forms:

• Tribes
• Institutions 
• Markets 
• Networks 

Societies, within this framework, began with tribal structures (99.9% of our history as human beings was spent in tribal structures) and expanded into institutional structures (nation-state bureaucracies) and finally into markets. Previous forms weren't abandoned, instead, they were enhanced by the addition of a new form.  Ronfeldt argues that the tri-form structure of tribes, institutions and markets are now nearly universal. Here's his description of the evolutionary process: 

At first, when a new form arises, it has subversive effects on the old order, before it has additive effects that lead to a new order. Bad actors may prove initially more adept than good actors at using a new form... As each form takes hold, energizing a distinct set of values and norms for actors operating in that form, it generates a new realm of activity — for example, the state, the market. As a new realm gains legitimacy and expands the space it occupies within a social system, it puts new limits on the scope of existing realms. At the same time, through feedback and other interactions, the rise of a new form/realm also modifies the nature of the existing ones.

The implications of this model, and I'm giving it short shrift given its richness, is that this crisis will show us the value of networked organizational forms.  For example: innovation/tinkering networks, resilient communities, and cyberdemocracy efforts.  The objective of a successful society should be to incorporate the value of networked forms into the existing TIM (tribal, institutional, and market) framework that already exists.  Ronfeldt again:

Societies that can elevate the bright over the dark side of each form and achieve a new combination become more powerful and capable of complex tasks than societies that do not. Societies that first succeed at making a new combination gain advantages over competitors and attain a paramount influence over the nature of international conflict and cooperation.

This model is very useful for analysis of our current situation.  However, there are a couple twists that may make its application problematic.  Here's a critique:

• If the crisis is too severe, it can force society backwards into tribal or TI (tribal plus institutional) structures.  Neo-feudalism and totalitarian states.
• This model assumes that countries, defined as discrete bordered geographies, are the only container within which these organizational forms exist.   It's possible that the elevation of markets to a global level, beyond the nation-state or country container, has left nation-states vulnerable to predation.  In that globalized system, market participants (who define themselves solely within context) prey on organizationally weak nation-states (T plus I).
• Global markets are supercharging tribal, institutional (corporate), and networked organizational types.  As a result, they are likely to prey upon nation-states too.

GG JOURNAL: The Taliban Raj

Taliban guerillas, a loose collection of semi-autonomous groups, are extending their reach into Peshawar (a city of more than 1.4 m people in north western Pakistan).  To staunch the spread of temporary autonomous zones (no go areas of kidnapping, assassination, and theft) the government is arming DIY militias. Ayesha Nasir, reporting for the CSM, provides an update (these quotes should sound familiar to readers of this weblog since they apply to a growing number of locales):  

"Since the police is repeatedly being targeted by militants, we are having major problems recruiting more people into the police force. We need all the help we can get, and if civilians can do some part of our job..." Peshawar police spokesman. 

"That's when I realized my security was in my hands. Now, I never travel without carrying my Kalashnikov with me." A journalist. 

"The writ of the state is very weak and the police don't have the ability to protect its citizens. As a result, security has become privatized."

GG QUOTE: Piracy

...piracy is a barometer of order. It has been so since Roman times. When order weakens, pirates flourish. When order returns, pirates are hunted down and hanged. The piracy barometer tells us order is vanishing fast. That should not surprise us, since order in the post-Westphalian world depends on states... Piracy not suppressed represents history lifting its leg on the whole state system." Bill Lind manufacturing insight, yet again.

RC JOURNAL: Wall Street Icon Jim Rogers calls for Resilient Communities?

The legendary investor Jim Rogers (via CNBC), known for sniffing out global trends worthy of investment, lets loose:

"I think it's astonishing, they're [the big bankrupt banks and their government enablers] ruining the US economy, they're ruining the US government, they're ruining the US central bank and they're ruining the US dollar... You are watching something in front of our eyes, very historically, which is basically the destruction of New York as a financial center and the destruction of America as the world's most powerful country. The idea that you have too much debt, too much borrowing and too much consumption and you're going to solve that problem with more debt, more consumption and more borrowing? These people are nuts. Power is shifting now from the money shifters, the guys who trade paper and money, to people who produce real goods. What you should do is become a farmer, or start a farming network."

He's getting to the nut of the idea behind resilient communities.

GROWING AN INSURGENCY IN THE US

NOTE:  At little as a year ago, the prospect that the narco-insurgency raging in Mexico would successfully  expand into the southwestern US was remote.  That is not true to today.  The difference?   A black swan economic event has so completely destabilized the regional economy, that the existing social system is likely to fragment.  Here's a list of previous posts on this blog re: Mexico.

It appears that increasing militarization of both the US and Mexico's "war on drugs" is having an impact, although not what the governments had in mind.  The myriad of groups that are dependent on the narco/smuggling economy now consider the two governments to be more of a threat to their continued success than each other.  As a result, they are inevitably moving towards an agreement on a plausible promise for an open source insurgency.  

What is a plausible promise that could unite ~100,000 Mexican narco-guerrillas into an open source insurgency?  Simply:

To force the Mexican and US governments to cede de facto control over northern Mexico and Arizona/Southern California/New Mexico/Southern Texas.  

By itself, it's doubtful that a narco/smuggling open source insurgency could accomplish this goal, although it would make a very good run at it (particularly given the declining budgets of their opponents).  However, the prospects for successful achievement of the plausible promise would radically improve  if the coming global depression drives 

• the creation of new violent groups -- new primary loyalties formed from fear, revenge, and necessity -- and 
• the economic deprivation necessary for a vibrant bazaar of violence -- this is a marketplace that forms when, due to a need to purchase food and shelter, there is an endless pool of people willing to kill for a couple hundred bucks.

That circumstance, the arrival of new groups and millions of new participants willing to do anything for a buck, would accelerate this open source insurgency to the level necessary to paralyze both the Mexican and US militaries in short order.  Spread of the insurgency will be via hubs (cities) and spokes (suburbs) model of propagation.