Globalization, Black Swans and the Need for Resilience

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Former US Air Force pilot and tech entrepreneur John Robb explains in his book, “Brave New War: The Next Stage of Terrorism and the End of Globalization,” that, “war in the twenty-first century will be very different from what we’ve come to expect.”  Mainly, state-versus-state conflict is over (Creveld’s prophecy).  Nuclear weapons and globalization have created a situation where states have little to gain and almost everything to lose by going to war with each other.

Globalization

Instead we’ll be fighting non-state actors, or superempowered groups, Robb calls “global guerrillas.”   While globalization has unleashed amazing economic opportunities for all of us, it has also allowed for groups like al Qaeda to reap the benefits of low-cost technology, global communications, D-I-Y weaponry and information gathering.  Robb points out, the same tools we use everyday are being used against us by global guerrillas seeking to weaken and de-legitimize the state.

“Airplanes are being turned into flying bombs, cell phone networks are being used to simultaneously detonate bombs from miles away, and critical computer networks are being hacked.”

Rather than openly facing our military forces on the battlefield, most global guerrillas practice fourth-generation warfare (4GW), avoiding our strengths and exploiting our weaknesses.  One path through which they have found the most success in creating chaos is through systems disruption.  For example,

“…one small attack on an oil pipeline in southeast Iraq, conducted for an estimated $2,000, cost the Iraqi government more than $500 million in lost oil revenues.  That is a return on investment of 25 million percent.”

and in Africa,

“In February 2006, Nigerian guerrillas of the amorphous Movement for the Emancipation of the Niger Delta attacked the loading dock on Shell Oil’s Forcados export platform.  The attackers escaped without being captured or suffering casualties.  The estimated cost of the attack was $2,000…The cost to Shell was $400,000 in lost oil exports for an estimated two weeks and the indefinite shutdown of an adjacent oil field.  The estimated lost revenue to Shell was over $50 million.  The rate of return: 25,000 times the cost of the attack.”

For now these systems attacks have been taking place in far away lands, but there’s no reason to believe our nation is immune.  Global guerrillas are operating much closer to our border than most of us realize.

Black Swans

Of course, the example that hits closest to home is 9/11 (cost $500,000 to plan and execute) – which brings us to the idea of black swans.  Nassim Taleb explains in his brilliant book, “The Black Swan: The Impact of the Highly Improbable,” black swans are events with the following three characteristics:

• Outlier – “…it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.”
• Carries extreme impact
• Causes us to “concoct explanations for its occurrence after the fact, making it explainable and predictable.”

The frustrating reality is that black swans will continue to happen and there’s nothing we can do about them since, by their very nature, they’re impossible to predict.  In an increasingly interconnected world, the problem with black swans is that their impact can multiply exponentially.  Crisis in one country can easily lead to regional and global distress.

For example, the collapse of the Thai baht in 1997 led to a financial crisis all across Asia and was further linked to economic slowdowns in developing countries, the drop in oil prices, Russia’s default of 1998 and the collapse of Long Term Capital Management.  Regarding our extremely complex global system Robb warns,

“It is too complex for any single state, or group of states, to keep under control.  As a result, most of the systems we have built over the last several centuries to dampen the excesses of instability – enabled by markets, travel, communication, and other global systems – are now ineffectual.”

Resilience

How do we protect ourselves as a nation in an age marked by global guerrillas, increasing interdependence and financial volatility?  By building resilience into our networks and country.  The highly-centralized bureaucracy that characterizes much of our national security apparatus can barely keep up with the decentralized, rapidly evolving, open-source insurgencies at work around the world.

Robb feels, “the only way to ensure security in the future will be through survival and decentralized resilience.”

The term survival tends to invoke the image of surrender to impending doom, but before you go thinking this sounds like raising the white flag, Robb explains,

“A focus on survival and decentralization isn’t as simplistic or naive as it seems on first glance.  It doesn’t mean that we don’t pursue criminals, terrorists, and other threats that face us – far from it.  The state should pursue these individuals with all the means at its disposal.  It also doesn’t mean that we should attempt to remake the world in our image or attempt to fight grand battles for the hearts and minds of the world.”

At the state-level resilience means:

• Not allowing nationalism to destroy international trade
• Decentralizing security and emergency response efforts
• Decentralizing utility networks like the electrical grid – allow individuals to become both energy producers and consumers (see here)
• Thinking in terms of ecosystems and open-source networks
• Increasing sustainability, decreasing dependence

Some will dismiss Robb’s ideas and advice as far-fetched or “gloom and doom,” but they do so at their own peril. The world we live in today provides many of us with limitless possibility and freedom, but there is a collection of individuals, looming just below the surface of this new world order, who threaten to hijack globalization for their own aspirations – we must adapt to meet the challenge.

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1. 10 Steps to Increasing Your Financial Resilience
2. London, Not Central Asia the Real Terrorist Threat
3. What I’ve Been Reading (9.28.09)
4. David Foster Wallace on the Freedom vs. Security Discussion America Isn’t Having

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