Brief Reminder: The 2008 financial contagion = the un-Gap (2009)

A slide I still use in the brief to show a real-world example of the Core-Gap divide.

Core countries are the reddish ones, meaning they experienced fast and furious downward market pressure once the contagion began.  The degree of change is measured across the first 90 days.  And if you toss Indonesia into the Core, as I am increasingly wont to do, the match is that much tighter.

The mostly grayed-out Gap is explained two ways:  1) no real markets; or 2) where markets exist, not much tied to Western ones.

Eventually the slowdown reaches the Gap through the reduced commodity demand of the Core, but Africa, for example, continues to grow--ever so slightly--even through the worst stretch.

Blast from my past: "Life After DoDth or: How the Evernet Changes Everything" (2000)

[Note:  This is the first published reference to the concepts that became the SysAdmin and Leviathan forces]

Life After DoDth or:

How the Evernet Changes Everything

by

Thomas P.M. Barnett

COPYRIGHT: The U.S. Naval Institute, 2000 (May issue, pp. 48-53); reprinted with permission

The relevance of DoD has declined steadily since the end of the Cold War.  Coming to grips with its passing won't be easy, but the Navy is working through the five stages of grief and toward a future in cyberspace.

First the unpleasant truth:

the Department of Defense's raison d'être died with the Cold War.  No one likes to talk about it, but that's what happened.  Created in the National Security Act of 1947, the DoD is wholly a creature of what eventually became the United States' hair-trigger during the nuclear standoff with the Soviet Union.  Prior to that, we basically stuck to the Constitution's mandate to "provide and maintain a Navy" on a constant basis and to "raise and support Armies" as the situation demanded.

The Cold War's odd combination of nonwar (we never fought the Soviets) and nonpeace (we constantly mixed it up in proxy conflicts and arms races) forced the merging of our republic's two historically distinct security roles:

• Maintain and protect our economic networks with the outside world
• Defend against direct threats to our national territory.

The two functions became one in the Cold War strategy known as containment, when we decided to extend our sense of territorial integrity to the entire Free World, thus subordinating economic rationales to security imperatives.[1]

But that strategy died with the start of the globalization era. Now, security rationales are subordinate to economic imperatives.  So why haven't we seen, as Joseph Nye might say, the "return of history" in the U.S. national security establishment?[2]  Why haven't we repealed the 1947 National Security Act and thrown away this outmoded unification of two defense concepts that constantly compete against one another—to the detriment of both?

I'm not saying jointness is a bad idea.  I'm saying it's the worst possible idea, precisely because it papers over the huge functional cleavages that logically separate the Army and Navy, leaving the Air Force to its own sad form of service schizophrenia.[3]

But I'm getting ahead of myself.  If we are going to come to grips with this death in the family, we will need to go through all the phases Elisabeth Kubler-Ross laid out in her seminal book, On Death and Dying:

1. Denial and isolation
2. Anger
3. Bargaining
4. Depression
5. Acceptance (followed by Hope).[4]

The good news is that we've spent most of the 1990s flailing away at the first three; we're beginning to see symptoms of the fourth (depression, otherwise known as the shipbuilding and conversion account); and acceptance (e.g., the Secretary of the Navy's search for a "transformation strategy") seems just around the corner.  And hope?  That's the Evernet part—a back-to-the-future outcome that represents the Navy's salvation and return to its historical roots.  But before we jump ahead, let's review the purgatory that was the 1990s.

Denial & Isolation

For this part, I'll use Kenneth Waltz's "three images" framework from his influential 1954 study, Man, the State and War, in which he investigated the causes behind interstate war across three distinct levels (see Figure 1):[5] 

1. Individual
2. State
3. International system.[6]

In the Cold War, things were fairly straightforward, as both the international system (through blocs) and individuals (through ideologies) were kept in strict subordination to the state-centered superpower conflict.  So when the Pentagon looked abroad, all it saw was "us" and "them" states, with that pesky nonaligned gang in between.  The focus on states remains to this day.  I call it the "Willie Sutton effect," after the famous bandit who, when asked why he robbed banks, replied, "Because that's where the money is."  Nation-states have long served as the preeminent collection point (i.e., taxes) for collective security efforts (militaries), but that has begun to change.

The United States has not yet adjusted its state-centered defense policy to account for the two biggest security trends of the globalization era:

• Power and competition have shifted upward, from the state to the system (in the form of the global economy, culture, and communications grid).
• Violence and defense spending (e.g., small arms races, private security firms) have shifted downward, from the state to the individual.

Worldwide state defense spending and arms transfers are down dramatically from their 1987 Cold War peaks, leaving the DoD in denial about its growing disintermediation from the global security environment—in other words, its almost complete irrelevancy to the rising market of system perturbations (e.g., financial crises) and its perceived impotence in responding to the booming market of civil strife.  Meanwhile, other international and private organizations increasingly step in to provide the same sort of ground-floor chaos containment that was DoD's bread and butter during the Cold War.

Nothing signals DoD's growing isolation more than its continued insistence on focusing so much planning on the so-called rogues, who, when stacked on top of each other, don't amount to a hill of beans in this strategic environment of rapid globalization. And yet, what is the hot security topic as the new millennium dawns?  National missile defense, of course!

So where can a military fit in this new global environment, where almost all the important crises are either too global or too local for most states to tackle with military force?  In a world featuring both integrating globalization and dis-integrating localization, the great challenge facing governments is fostering compromises between the two, otherwise known as glocalization—adapting the local to the global in ways that improve the former's living standards.  Naturally, this can be fairly contentious, with many societies resisting what Thomas Friedman calls "revolution from beyond."[7]

In short, glocalization is the containment of the globalization era—sort of a dot.communism, love it or leave it.  If you have a hard time thinking of how DoD fits into a U.S. foreign policy focused on promoting this nebulous concept, then you're beginning to move into . . .

Anger

The best example of post-Cold War anger comes from the Department of the Navy, which became so mad after its "poor showing" in the Persian Gulf War that it immediately struck out in search of a post-Cold War vision.  With the Soviet blue-water navy speeding toward the dustbin of history, it was Desert Storms for as far as the eye could see.  Right?

Many of us "best and brightest" were thinking exactly that when we assembled in late 1991 for the Naval Force Capabilities Planning Effort, which eventually begat ". . . From the Sea."  Faced with a system-level security environment in which the United States reigned supreme and a subnational one in which it seemed like all hell (i.e., ethnic bloodletting) was breaking loose, most of the assembled officers expressed disgust for the dilemma the Department of the Navy faced—namely, with sea control a given, it was either "influence events ashore" or wait for a peer competitor.

Not surprisingly, we chose the former and quickly replaced the Soviets with the best enemy we could get our hands on at the time—the Air Force.  Given that Washington's way of using the Air Force for crisis response (bomb first, talk later) correlates best to the mini-Hitler type exemplified by Saddam Hussein and Slobodan Milosevic, the bureaucratic stage was set for a decade-long Navy-Air Force face-off on who could deliver the most crushing blow the fastest—or at least a sexy PowerPoint briefing "proving" the same.

The problem with our choice?  Over the course of the 1990s, it became clear that "bolt from the blue" regional crises were hardly the norm.  The large majority of DoD's crisis-response activity involved Somalia, Haiti, and the Balkans (not to mention the Saddam sequels), and not only weren't they bolts from the blue, not a single one involved an enemy of stature.  Our one encounter with a "near peer" (China over Taiwan) was mere shadow boxing—a virtual conflict befitting a virtual age.

So, after redirecting itself to battling serious hegemons, the Navy spent the entire decade doing almost anything but.  Meanwhile, the Marines chased their particular vision of the "three block war," and both Army and Air Force reconfigured to accommodate their increasingly robust military operations other than war (MOOTW) market shares.[8]

In short, the 1990s have left the Navy in a post-DoDth limbo: it buys one navy (high-tech, which drives down numbers) while operating another (global presence force, which needs big numbers).[9]   By trying to cover both bets while competing with the Air Force on rapid response, the Navy has channeled its post-Cold War anger into a negotiating stance on force structure it cannot sustain, which gets us to . . .

Bargaining

The contours of the Navy's bargaining are best captured by Hank Gaffney's notion of the "Three-Way Stretch," which basically states that the U.S. military, and the Navy in particular, is killing itself trying to cover all three slices of DoD's now highly fragmented market.[10]  Unable to move beyond DoD's functional demise, the Navy ends up replicating its death spiral, and to me, that's throwing the baby out with the bathwater.

Using Waltz's three levels as touchstones, I paraphrase Gaffney as follows:

• On the system level, the Navy works hard to maintain its high-tech edge against would-be peer competitors capable of generating global instabilities.  This is the future force of "silver bullets" and networked technologies, featuring deep strike and emphasizing speed.  It is your basic research-and-development Navy, and it's very expensive.
• On the state level, the Navy struggles to maintain its bread-and-butter warfighting edge against would-be rogues capable of triggering regional instabilities.  This is the surge force full of sealift and blue-green power projection, featuring anti-antiaccess stratagems and emphasizing inevitability.  It's your Navy held to the two-major-theater-war standard, and it takes a lot of care and feeding.
• On the individual level, the Navy labors mightily to maintain its operational edge against a world of so-called transnational actors capable of instigating all manner of civil strife and nefarious activities.  This is the presence force of many platforms and MOOTW skills, featuring military-to-military ties and emphasizing operations tempo.  It's your see-the-world Navy, and it wears out faster than you think.

If all that sound like too much, it is.  The Navy's stretch not only leaves the institution increasingly exhausted but also drives its never-ending search for a grand unifying theory that will somehow result in a high-tech navy of robust projection capabilities and manned by a smaller, smarter workforce that is easier to retain.  Network-centric warfare is the theory du jour, but it will never go the distance so long as it aspires to be all things to all threats.

Just tracking the title inflation of the Department of Navy's white paper gives you all the macrostrategic data you need to make the case on overreach:

• First it was just ". . . From the Sea," which seemed simple enough.  We'd be a power-projection navy that influenced events ashore.
• Then it ballooned into "Forward . . . From the Sea," lest anyone think we weren't still the be-everywhere-all-the-time navy.
• Now we pump up the volume still more to "Power and Influence . . . From the Sea," just to make it clear that we'll remain hypertech, too.

But as any psychologist will tell you, the Superman Syndrome leads to overload, then to breakdown, and finally to . . .

Depression

It is depressing to be a sailor today—and DoD has the polling data to prove it.  Maritime service is simply too draining, too demanding, and not enough fun.  Worst yet, we are not attracting—much less keeping—the best and the brightest needed to bring network-centric warfare to reality.

A key reason it is becoming so hard to attract new talent to the Navy is that young people increasingly perceive it as a career cul-de-sac.  They want to be part of something that's growing toward a brighter future, and they just don't see one in the works for the Navy.  And they're right.

Eventually, the Navy will succumb to the strain of the three-way stretch, and when it does, it will be forced into the same box it climbed into in  ". . . From the Sea"—a state-focused crisis-response strategy.  What's wrong with that?  Plenty.

Harkening back to Waltz's three levels, power and competition migrate upward from the state to the system, and violence and defense spending migrate down to the level of the individual.  This pushes the nation-state more into the role of a relationship and information broker and away from the industrial era's resource and power brokering, signaling the advent of what Richard Rosecrance calls the "virtual state."[11]  Or, as Thomas Friedman says, globalization isn't about bigger or smaller government but about better government.[12]

But no matter how you describe it, future conflicts won't be concentrated at the level of nation states but rather at the supranational and subnational levels, where globalization and localization collide.  Sure, some Lenin-after-next may figure out how to turn all that individual anger at the system into political revolution, and yes, the information age is likely to spawn the Next Ideology, just as the Industrial Age did [13]—but these new political movements won't concentrate their strategies at the nation-state level but rather will aim above (international organizations seeking new rule sets for the global economy) or below (microstate collections of individuals looking to drop out and go it alone).

So what happens to the Navy and its sister services?  You'll see a clear division of labor emerge, with each given its own corner of DoD's highly fragmenting market:

• The Air Force becomes the future high-tech force that rules air, space, and cyberspace and plays "system administrator" to the global security environment.
• The Navy and Marine Corps become the classic surge crisis-response force that separates belligerents in state-on-state war and punishes would-be hegemons who break the rules.
• The Army becomes the boots-on-the-ground, day-to-day, low-tech presence force that works in those offline regions where backward types still fight over little bits of land.

Sound okay?

Not by my way of thinking, for I see the Air Force's market as booming, the one on which the U.S. government focuses a lot of attention trying to keep virtual systemic crises—usually triggered by financial tumults—from blossoming into real conflicts among states.  In comparison, although the Army's market probably won't grow, it is historically stable.  Globally there have been a good three to four dozen conflicts every year since World War II that generate 1,000 or more casualties.[14]  And while these conflicts are real, U.S. interests tend to be virtual, affording us the flexibility to choose the ones we want to deal with (e.g., Bosnia and Kosovo) and to turn a blind eye to those we don't (e.g., Rwanda and the Congo).

Meanwhile, the Navy and Marines' market will slowly dry up.  The early 20th century's high volume of state-on-state warfare will not carry over into the 21st.  Nuclear weapons ended great power-versus-great power warfare back in 1945, and as John Keegan predicts, the future belongs far more to civil strife than traditional war.[15]

But there is hope, especially once you move toward . . .

Acceptance

Security in the future will a lot broader than anything a one-stop DoD can provide.  The signs are all around us:

• The biggest system instability of the 1990s—the global financial crisis of 1997-98—showed who is really in charge of deterring international chaos:  the Department of the Treasury, the Federal Reserve, and the International Monetary Fund.[16]
• The Y2K Problem, described as the biggest global management challenge since World War II, saw DoD play a minor supporting role to corporate turnaround specialist John Koskinen's star turn, signaling a new era in government-industry cooperation on computer security.[17]
• The G-7 expands to G-8 and now to G-20, leaving the United Nations, NATO, and the rest of the politico-military alliance system in its wake while demonstrating the supremacy of economics in creating summit opportunities today (transforming arms control into the "Waldo" of the international scene).

In general, more and more of DoD's assumed "lesser includeds" (terrorism, computer hacking, electronic warfare) are being reclassified by an increasingly net-aware Washington as global law enforcement areas, with the relevant federal agencies aggressively building networks of international cooperation, buttressed by a worldwide explosion in private security firms.  Increasingly, when one scans the international security environment's to-do list, DoD looks like a cyber-age dinosaur.

I see merit in the efforts of the Secretary of the Navy and others to plot out a "transformation strategy," but transform to what?  Too much of what I see coming out of the Pentagon today seems hopelessly focused on future high-tech shootouts among trade-bloc-toting hyperpowers.  I'll hold open the possibility that Globalization II (1946 and counting) could disintegrate in ways similar to Globalization I (1870-1929), but we need a game plan that covers both the mother-of-all-global-financial-meltdowns scenario and the far greater likelihood that it is the international security environment itself that is being revolutionized and not merely DoD's increasingly irrelevant tool kit.

Better yet, we need two separate game plans.  Accept that notion—and with it the functional demise of DoD—and the Department of the Navy finally moves out from the Cold War's shadow and into the light of the globalization era.  We are going to have to make the break sometime, so why not talk about it openly and plan ahead?

The Coming Evernet

The planet is undergoing a broad economic transformation that is loosely described as the rise of the New Economy.[18]  This jarring makeover of virtually every business model we hold dear is exemplified by the astonishingly global spread of the Internet and e-commerce.  But that is just the tip of the iceberg in DoD's path, for whenever economics changes, politics must follow.

The defining achievement of the New Economy in the globalization era will be the Evernet, a downstream expression of today's Internet, which most of us still access almost exclusively through bulky desktop personal computers anywhere from a few minutes to several hours each day.  Over the next ten or so years, this notion of being "online" versus "offline" will completely disappear, because of:

• The computing industry moving to molecular-based computer circuitry
• The breaking up of the desktop computer's functions into a myriad of tiny gadgetry that humans will wear or have embedded throughout their living spaces and work environments—and ultimately even their bodies via nanotechnology
• The maturation of ultra wideband wireless technologies that link all of these sensors, gadgets, satellites, computers, and grids
• The continued development and extension of the earth-based portion of the Global Information Infrastructure (GII), especially the so-called last mile
• The coming revolution in near-space (earth-to-moon) information infrastructure—quadrupling of satellites by 2010, then vast waves of nano/picosatellites—that provide real-time wireless coverage across the entire planet
• The migration of vast portions of human commerce, social, educational, religious and political activity to the Internet and World Wide Web, which come to encompass all current personal and mass communication media.[19]

In other words, we go from today's limited-access Internet to an Evernet with which we will remain in a state of constant connectivity.  We will progress from a day-to-day reality in which we must choose to go online to one in which we must choose to go offline.  This is not some distant fantasy world.  Almost all the technology we need for the Evernet exists today.  It mostly is just a matter of achieving connectivity.

The rise of the Evernet will be humanity's greatest achievement to date and will be universally recognized as our most valued planetary asset or collective good.  Downtime, or loss of connectivity, becomes the standard, time-sensitive definition of a national security crisis, and protection of the Evernet becomes the preeminent security task of governments around the world.  Ruling elites will rise and fall based on their security policies toward, and the political record on, the care and feeding of the Evernet, whose health will be treated by mass media as having the same broad human interest and import as the weather (inevitably eclipsing even that).

Eventually, the Evernet and the Pentagon will collide, with the most likely trigger being some electronic Pearl Harbor, where DoD is unmasked as almost completely irrelevant to the international security environment at hand.[20]

The result?  DoD will be broken into two separate organizations:

• The Department of Global Deterrence (DGD), to focus on preventing and, if necessary, fighting large-scale conventional and/or weapons-of-mass-destruction-enhanced warfare among nation-states
• The Department of Network Security (DNS), to focus on maintaining the United States' vast electronic and commercial connectivity with the outside world, including protection and large-scale emergency reconstitution of the Evernet, and to perform all the standard crisis-response activity short of war (with a ballooning portfolio in medical).

In effect, we will split DoD into a warfighting force (DGD) and a global emergency-response force (DNS), with the latter aspiring to as much global collaboration as possible (ultimately disintermediating the United Nations) and the former to virtually none.  To put it another way, DGD is deterrence; DNS is assurance.

Who gets the "kids" in this divorce?

DGD includes:

• U.S. Army (ground & armored)
• U.S. Air Force (combat)
• U.S. Navy (strategic)

DNS includes:

• U.S. Army (airborne)
• U.S. Air Force (mobility and space)
• U.S. Marine Corps
• U.S. Navy (rest)
• Air/Army National Guards.[21]
• DNS also picks up the U.S. Coast Guard, U.S. Agency for International Development, U.S. Information Agency, U.S. Customs, and a host of other specialized units from other federal agencies (e.g., Justice, Treasury).

DNS will discard the traditional notion of military service separate from civilian life.  For most personnel, it will adopt a consultancy model, whereby the agency rents career time versus buying entire lifetimes (essentially the National Guard model).  DNS's officer corps will remain career managers, but with frequent real-world tours of duty in technology, industrial, and business fields.  This organization will be networked in the extreme, because networks will be what it is all about.  This means no separate legal system and the end to posse comitatus restrictions.

New Rules for a New Navy

This vision of the future probably will strike many as far too revolutionary, and much of what I describe is admittedly beyond the current bureaucratic purview of a Secretary of Defense, Chief of Naval Operations, or Commandant of the Marine Corps.  Nonetheless, there are steps the Department of the Navy can take to position itself for what lies ahead:

• Focus on conflict paradigms favoring the many and the cheap over the few and the costly.[22]
• Focus network-centric warfare on crisis prevention and termination, leaving high-end conflict to others.
• Reach out to and build cooperation with all federal agencies that provide system- and individual-level security services; use military-to-military programs to do the same abroad.
• Accept that external information-technology networking is more important than internal networking (no LAN is an island).
• Get involved in global information infrastructure security efforts in every way possible.
• Get involved in space control in every way possible.
• Go as lean as possible on sea control, freeing resources for space and cyberspace.
• Rethink aircraft carriers and attack subs into cyber-age motherships, but everything else is up for grabs.[23]
• Recast naval information warfare to focus more on generating and reconstituting networks than on taking them down.
• Don't indulge the naval strategic community, for they must eventually leave the nest.

Hope for the Afterlife

When Encarta first appeared on the scene a few years ago, Encyclopedia Britannica blithely brushed off the notion that this upstart could ever threaten its position as the preeminent marketer of English-language reference compilations.  After all, Encyclopedia Britannica was the industry standard—the best seller of hard-copy reference material marketed directly to households.

At first, Encyclopedia Britannica simply could not imagine being disintermediated from its customer base, because it simply could not reimagine themselves as anything but the seller of hard copies.  Today, Encyclopedia Britannica is on the web, practically giving away the same information for which it previously charged so much.  Apparently, they finally reimagined themselves into some new and different—perhaps just in time.

So ask yourself, Department of the Navy, what is it that you really do?  Are you just ships and sea control?  Can you remember life before DoD?  Can you imagine a sweet hereafter?  And what you would do once you got there?

The Navy's new holy trinity is sea, space, cyberspace.  I suggest we all start worshipping today.

[1]    Extending the nuclear umbrella to both Western Europe and Japan is the best example of our redefinition of territorial integrity. The Marshall Plan, the promotion of a military-industrial complex, and the severe restrictions on trade with the East Bloc are just some of the examples of subordinating economics to security.

[2]    Joseph S. Nye, Jr., "In Europe, The Return of History," The New York Times, 26 November 1989. 

[3]    Examples of USAF schizophrenia are found in its internal debates over manned versus unmanned, air versus space, bombers versus fighters.

[4] Elisabeth Kubler-Ross, Elisabeth, On Death and Dying (reprint, New York: Collier, 1997).

[5]    A version of this slide first appeared in my The U.S. Marine Corps and Non-Lethal Weapons in the 21st Century: Annex B—Briefing Slides, Quick-Response Report 98-10 (Alexandria VA: Center for Naval Analyses, September 1998).

[6]    Kenneth Waltz, Man, the State and War (New York: Columbia University Press, 1954).

[7]    Thomas L. Friedman, The Lexus and the Olive Tree: Understanding Globalization (New York: Farrar, Straus and Giroux, 1999), ch. 8.

[8]    Military operations other than war, which I define broadly as all operations short of war—meaning, if it ain't called a "war," it's a MOOTW.  The Air Force's reconfiguration is seen in its reorganization into air expeditionary forces, and the Army's comes in its moves to go as light and mobile as possible. We can argue whether either service made the moves willingly or under duress, but they clearly are adjusting to changes in their respective "markets."

[9]    For analysis of this notion, see Henry H. Gaffney Jr., Thomas P.M. Barnett, and Micky Tripathi, Three Visions of the Future With Corresponding Naval Force Structures, Annotated Briefing 95-100 (Alexandria VA: Center for Naval Analyses, October 1995).

[10]    H. H. Gaffney, "Alternative Evolutions of U.S. Forces," CNA, 99-1364, Working Paper of December 1999.

[11]    Richard Rosecrance, The Rise of the Virtual State: Wealth and Power in the Coming Century (New York: Basic Books, 1999).

[12]    Friedman, The Lexus and the Olive Tree: Understanding Globalization, ch. 7.

[13]    On these speculations, see Graham E. Fuller, "The Next Ideology," Foreign Policy, Spring 1995, pp. 145-58, and Fred C. Ikle, "The Next Lenin: On the Cusp of Truly Revolutionary Warfare," The National Interest, Spring 1997, pp. 9-19.

[14]    Thanks to Art Money, ASD C3I, for this observation.

[15]    See "War Ca Change: The End of Great Power Conflict," Foreign Affairs, May/June 1997, pp. 113-116.

[16]    See Joshua Cooper Ramo, "The Three Marketeers," Time, 15 February 1999, pp. 34-42.

[17]    Look for future international computer security regimes to be even more industry dominated, as network-monitoring services outgrow the military and large corporation markets to encompass e-commerce and the Internet as a whole.  The security model here?  ADT Security Services—the home burglar alarm company.  See John Markoff, "Beyond Computers in Computer Security," The New York Times, 3 April 2000.

[18]    The best description of the New Economy is found in Kevin Kelly's New Rules for the New Economy: 10 Radical Strategies for a Connected World (New York: Viking Penguin, 1998).

[19]    For an excellent and imaginative description of this future reality, see Michael Vlahos, "Entering the Infosphere," Journal of International Affairs, Spring 1998, pp. 497-525.  The proposed merger of AOL with Time Warner is a serious first step in the direction of the Evernet.

[20]    Thanks to Dave Freymann for the idea of the "electronic Pearl Harbor." For the briefest hint at this future, see Thomas L. Friedman, "Boston E-Party" The New York Times, 1 January 2000.

[21]    See Thomas P.M. Barnett and Henry H. Gaffney Jr., A Critique of the National Defense Panel Report, Occasional Paper (Alexandria VA: Center for Naval Analyses, April 1998).

[22]    See Thomas P.M. Barnett, "The Seven Deadly Sins of Network-Centric Warfare," U.S. Naval Institute Proceedings, January 1999, pp. 45-47.

[23]    I applaud VAdm. Arthur Cebrowski's effort to reimagine surface combatants via the Streetfighter concept.  See VAdm. A.K. Cebrowski, USN, and Capt. Wayne Hughes Jr., USN (Ret.), "Rebalancing the Fleet," U.S. Naval Institute Proceedings, November 1999, pp. 31-34.

Dr. Barnett is a senior strategic researcher at the U.S. Naval War College.  Visit him at www.geocities.com/ResearchTriangle/Thinktank/6926.  He would like to thank John Dickmann, Dave Freymann, Hank Gaffney, Bradd Hayes, Hank Kamradt, Lawrence Modisett, Pat Pentland, and Mitzi Wertheim for their feedback on earlier drafts of this essay.

Heavy will lay the crown of world’s biggest energy consumer

Series of WSJ and FT stories on the International Energy Agency declaring China the world’s energy demand center, an old slide of mine that goes back to the year 2000.

Humble China disputes the charge!  The IEA counters that China’s official figures have been so bad in the past that they’ve led lots of energy trackers to issue projections that are routinely ratcheted up or down with great statistical violence over the years.  I can attest to this:  when I put out the Asian Energy Futures report a decade ago, I was forced, within a year, to amend the report because the new Dept. of Energy figures so altered its projections on China in just one year’s time that it rendered the report stunning obsolete in some of its assumptions. 

The latest IEA numbers put China at 2.52T metric tones of oil equivalent, about 4% higher than the US, which was the world’s largest consumer of energy for the vast majority of the 20^th century—as in, since it rose to economic prominence in the earliest years of the century.

China is claiming this happened only because the US was in recession and the IEA botched its numbers on China’s actual use, but this is a nonsense reply in terms of clear trends.  China is simply on a rocketing course, so arguing about which month it actually overtakes the US is silly.  Look at it this way, in 2000, the US consumed twice the energy of China and just a decade later China consumes slightly more than America.  Our annual efficiency improvement now stands at 2.5%, while China’s is 1.7%.

And understand that China uses coal to a stunning degree (well over half its energy), while the US share is dropping from its historical range of 40%, thanks to increased use of gas.

Now, at first blush, everyone on both sides will take this as a matter of ego, as in, “check out how powerful China has become!”

But over time the reality will set in:  China is now the most vulnerable economy in the world, and it doesn’t have a military that matches that immense dependency.

Then all we have to do is sit back and see how China likes that new burden, because all the world’s antiglobalization forces, both “soft” and deterministically kinetic, will catch on to this new reality soon enough.

China is THE globalizing/shrink-the-Gap force today

Cool series of global trade charts from Bloomberg Businessweek.  One in particular shows the growth in Chinese exports to regions over the past decade.  Seventy-two percent increase to Europe, 410% to North America, 593% to rest of Asia (to include Persian Gulf), 1800% to Africa and 2133% to LATAM.

Corporate exposure to China, in terms of how much of their revenue comes from China:  Siemens and Boeing only around 7-8%, but Intel at 17%, Yum Brands (like KFC) at 34%, and major mineral companies like Valle and Billiton in the range of 20%.

Top US export by far to China is soybeans at almost $10B.  Would seem to account for the vast fields I see all over central Indiana.  Semiconductors second place at $5B.

Most fascinating to me, the huge upticks in Chinese exports to Gap countries over the past decade, clearly marking China as THE globalizing force on the planet today.

Fly me to the moon--privately!

Holman Jenkin’s column in WSJ taking Obama to task on his space policy.  It’s not that Jenkins disagrees with the internationalization thrust.  He just says Obama has done a terrible job of getting Congress on board.

The way he makes it sound, the White House is in full retreat, accepting a compromise bill by FLA senator Bill Nelson, “the ‘compromise’ being that the programs the president wanted to cancel will be renamed and spending accelerated.”

Missing in Nelson’s bill is all the money Obama wanted to redirect to private entrepreneurs to take over the task of keeping low Earth orbit projects supplied with astronauts and material. 

The usual answer from pork barrel-rollers in Congress persists:  only NASA is qualified to operate in space, an opinion that dooms us to suboptimal outcomes that eventually, entrepreneurs from elsewhere—apparently, will surpass.

Jenkins notes that while the private sector is clearly incentivized to strive for the safest possible operation that is economically feasible, NASA is just as clearly incentivized to “spend as much as possible to do as little as possible.”

Jenkins says the private space industry in the US has survived on mega-rich angel investors, pinning their hope that Obama would pull a space-age equivalent of the Air Mail Act of 1925, which had the effect of lofting the early airline industry.

Instead, Nelson bests Obama strictly out of greed for jobs in his state.

Sad state of affairs.

We can only hope that Richard Branson and Burt Rutan’s Virgin Galactic dramatically outshines NASA in the eyes of taxpayers, who thereupon should demand better use of their tax dollars.

Excellent piece by Jenkins.

Cash squeeze means more privatization in local US gov

Despite all the public resistance to foreign investment in public infrastructure here, this WSJ story reports that cities are moving into privatization of services in a big way, to include everything from janitors to cops:

After years of whittling staff and cutting back on services, towns and cities are not outsourcing some of the most basic functions of local government, from policy to trash collection.

Despite the usual concerns voiced, cities say they have little choice.

Expect California, with its $19B deficit, to lead the way in terms of local experimentation.

BP's disaster alter Brazil's future

One big casualty of the BP disaster in the Gulf:  Brazilian estimates of how easy it’s going to be to tap that huge oil find off its coast.   Insurance goes up, as will regulations, as will safety margins in general.  Worst, the whole planning process currently underway has seen a huge injection of uncertainty added to the mix, especially since the technological challenges of the Brazilian fields significantly surpass those of Gulf wells (deeper drilling and further out at sea).

Brazilian regs on deepwater drilling are already viewed as more stringent than those of the US, but many in the industry wonder if the NOC (national oil company) in question, Petrobras, is really up to the challenge.

The market seems skeptical:  of the global majors, Petrobras’ stock is the second-worst performing this year, trailing only that of stricken BP.

Hermes' trojan horse market entry strategy

Interesting FT story on Hermes, the luxury brand, creating a special subsidiary that’s completely separate from the Hermes line to pursue a market expansion strategy in China.  The goal is a Chinese brand, from Chinese designers, using Chinese production.

Question is whether Hermes is diluting its primary brand or finding a way around growing Chinese protectionism.  Hermes will continue its 18 stores in China and the main line will create no specific products for the Chinese market.

It’ll be interesting to see if the strategy works.  Are the Chinese ready to shift loyalties to a Chinese luxury brand or will they want to stick with their foreign favorites?

Stephens: inching toward realism on Iran's nukes

Bret Stephens in the WSJ asking, why hasn’t Israel bombed Iran yet?

First, he asks, why didn’t Israel strike in the spring of 2008, when such speculation was far hotter than even today?

He answers that Olmert saw it as too big a gamble, and why not let all the diplomatic angles be exhausted first?

After that, the blame shifts to Obama’s election, because of his offer to talk with Tehran.

Now, says Stephens, all such hopes were clearly misplaced.

So why hasn’t Netanyahu struck, as Stephens was certain he would do earlier this year?

Four reasons offered: 

1. Israeli military had low confidence of success;
2. Israel bides its time for defensive measures like Iron Dome to be perfected;
3. Min of Def Ehud Barak opposes Netanyahu and instead believes deterrence is reasonably achieved; and
4. as far as relevant history is concerned, forget about the Osirak strike in 1982 and instead think of 1956 and how the US opposed Israel’s efforts with France and the UK to humiliate Nasser, whom Stephens compares to Ahmadinejad today.

Stephen now places his faint hopes in an Obama Administration reconsidering the utility of military strikes—two plus years later, which makes no sense at all.  If it was a gamble for Israel in the spring of 2008, how can it be any better of a gamble after Iran has had two and a half years to improve its countering preparations?

When even Stephens is reduced to such hope-mongering, you begin to get the sense that the world is learning to accept what was always inevitable.

India: not so happy with Iranian sanctions

Petroleum Secretary S. SundareshanWSJ story about India’s top energy official complaining that new US-engineered sanctions on Iran’s oil & gas industry would prevent India’s desired strategy of making investments there.  Simultaneously, India has revived talks with Tehran about the long-proposed gas pipeline from Iran to India through Pakistan.

Of course, the sanctions ask far more of the East than the West, because the latter has extensive energy connectivity while the former is seeking to ramp up their own at high speed, and, as far as India is concerned, close-by Iran is THE obvious choice.

As the chart shows, India’s crude imports of oil have come close to doubling since just 2007, so one imagines all the low-hanging fruit has been plucked in terms of investments, making Iran all that much more attractive as a target.

And remember that, when talking nuclear sanctions, this is an India that went down the same path prior—despite much hand-wringing in the West, so no surprise that the Indians feel no particular need to freak out about Iran’s obvious ambitions.

Turkey's populism is America's gain

FT full-page analysis on Turkey’s new orientation in foreign policy.

Core logic by way of a Turkish expert at Brookings (Omer Taspinar):

What we are witnessing is not the emergence of an Islamist foreign policy but rather the rise of a populist government that caters to and exploits Turkish frustration with America and Europe.

Nothing odd there compared to, say, a rising America of the late 19^th century.

Complain as you care to, but this is the best we can hope for.  You want a “multi-partner world”?  This is what it looks like:  rising powers with foreign policies that cater to their emerging middle classes in all their conflicting desires.   There is no alternative.

Chart of the day: German militarism is dead

Economist chart showing the demilitarization of conscription in Germany over the post-Cold War years.  When the 1990s began, the ratio of conscripts going into actual military service compared to community service was 2-to-1.  Now, more go into community service than military service, primarily because the number going into military service has collapsed to just over one-quarter of the 1990s total.

A sign of how Europe is opting out of the kinetic side of frontier integration in this age, which means we have no alternative but to go with the rising powers of the age—aka, the incentivized.

The sequential trip--ended

Took off Sunday morning, flew to DC, just getting to Dupont Circle hotel before big, nasty, thousands-lose-power summer storm hits.  First leg of trip for USG sponsor of conference at Center for Strategic and International Studies, where I gave closing brief to better than half-day mini-conference on creating resilience in communities (maybe 60 or so in audience).  Saw some old friends from the Rumsfeld days in the Pentagon. Gave a pretty good speech, which CSIS taped, but the tape was bad, so no posting.  It wasn't a great room for doing that, but the audience was good even as I struggled in a couple of spots (my struggles tend to be a second or two in length, but they seem like hours to me) as I hadn't done the brief in almost five weeks--an eternity to moi.

After that, a follow-on meeting with relevant parties, then first leg of trip done and I lose the rental.  So on foot and subway the rest of the way, for the middle segment--pure Enterra.  Slew of meetings in various locals and one nice meal with two new friends from Israel.  Get shifted over to one night at the Mandarin, but no chance to swim in their fabulous pool.  Yoga instead this entire trip.  Spend a usual bare minimum of time in my room--mainly to sleep.  But get to walk around perimeter of White House a bunch of times at various points one day (just seemed to crisscross the area repeatedly between meets), which was nice. Very touristy time, but I always liked that when I lived in the region.

Wed then I fly out of Reagan to Albany, then driven up by shuttle to Saratoga resort (pic above) on Lake George in Adirondack Park (6m acres!).  Nice boat ride and dinner that night with participants at investors conference hosted by Morgan Keegan (firm).  Up in ayem to finalize brief, then speak 0800-0900 to about 80.  About an hour of follow-up Q&A offline with various people.  Investors tends to be hugely inquisitive people with a lot of knowledge of history, so a lot of fun.  Then driven back to Albany and fly through Charlotte home.

Did just about every mode of travel on this one, and now have to file three separate expense reports.  But I'm used to segmented trips like that, and will make another one in late August to DC area, where one segment will have me giving my annual brief to the classes of the Industrial College of the Armed Forces (National Defense U) and the Marine Corps University.  

Toward a muddling-out option on Afghanistan

Show me the exitHaas piece in Newsweek is intelligent enough.  In effect, he argues that a nation-building effort designed to make Afghanistan whole will not succeed and will cost too much, so accept that this fake state will feature a Taliban-heavy south a la Blackwill and then make your choices on how you want to manage the situation, his big choice being either you seek “reintegration” with the Taliban or you acquiesce to their enclave in the south and spend your time and money building up the north and competing enclaves in the south (Tajik, Baluchi, Hazara) that would otherwise be trapped in an achieved rump Pashtunistan.

Haas argues that Pakistan would never accept a true Pashtunistan because it would threaten the integrity of its own fake state, which is probably true in terms of initial reaction, but I suspect that Islamabad would ultimately see such a soft border solution as to its advantage—legitimizing its “strategic depth” argument.  The question would be, would that be enough for Islamabad or would it pursue its historical habit of wanting Pashtun control to extend all the way to Kabul.

As I’ve argued earlier here, I see real promise in soft border solutions both north (Pashtunistan) and south (Kashmir) of Islamabad, not in the sense that I see them as easy outs, but rather that I don’t see any other long-term solution that will work better.

I honestly see the Pashtun southern enclave solution in Afghanistan to be not that much unlike the Kurdistan Regional Gov in Iraq.  Yes, the sheer existence raises the possibility of a “greater X” ambition on the part of co-ethnics “trapped” in neighboring states, but it’s an elegant solution compared to any drive to re-unify the fake state through force or even soft-power nation-building.  Plus, it creates the breathing space opportunity to work economic solutions on the enclave itself, which, in the case of the Taliban-controlled south, will admittedly be far harder to pursue than in the welcoming-if-corrupt KRG.

Nagl’s countering analysis on Petraeus’s approach:  that same strategy that stabilized Iraq can work in Afghanistan—the effective building up of Afghan’s security forces to defend themselves against the Taliban.  Frankly, if Petraeus and Caldwell (working the issue directly as a subordinate) can’t make it work, I don’t know who can.

The golden lining to date:  Petraeus convincing Karzai to allow him to pursue McChrystal’s plan to create community-based security forces.  To the extent that Petraeus succeeds, his contribution could dovetail with the Haas/Blackwill notion of  reintegrating the Taliban to the extent of recognizing their enclave in the south while building up the capacity of competing enclaves there to defend themselves.  What you end up with X months/years down the road is a Lebanon-like situation where the Taliban are forced to compete with outside-financed nation-building efforts in a reasonably stable country.  The expectation would be that the Taliban are no Hezbollah, and that Pakistan wouldn’t extend itself to compete via the Taliban in such nation-building, given that the south of Afghanistan was implicitly recognized as constituting a sphere of its influence.

Chinese in the Rear View Mirror May Appear Larger than They Are

FT story on how the West’s diet industry “drools over China’s desire to lose weight.”

Fat Chinese?  Yup.  A stunningly fast outcome of the one-child policy is the supersizing of the “little emperors,” who are supposed to fight over insufficient number of Chinese women WRT marriage AND take care of their parents and grandparents in their old age AND (according to whack-job Western demographers) somehow be willing to join the military and fight overseas wars because of their “surplus” status AND (according to this story) will have to do all these things while fighting their own personal battles of the bulge.

These poor fellows.

Better read Paul French’s book, already out:  “Fat China:  How Expanding Waistlines are Changing a Nation.”

Remember such trends when you scan all these “China will rule the world” tomes and fend off the litany of expert predictions of why we must go to war with China over developing region resources.  China isn’t merely moving up the production scale with speed, it’s likewise moving up the Western scale of social problems with equal speed.

I mean, how many “literate peasants” do you expect will be willing to lay down their lives in overseas adventures for these chubby little emperors back home?  Given China’s loooong history of military adventurism distant from its shores (hmm, where did I put that volume?)?

Many-fat destiny beckons . . . 

Mistaking resource dependency as strength

WSJ piece on China stepping up global mining buys.

When we’re talking acquisitions that link China to Australia, Canada and Brazil, I see only win-wins for everybody—the global demand center getting deeply in bed with extant global players.

But lots of Chinese investment on this score see it moving into Africa, a trend we tend to assume plays only to China’s advantage—like taking a lot of responsibility for African stability will only be a good thing for China when it was never the case for the West in the past.  Yes, by bringing in Western firms, China spreads the risk a tad bit, but eventually, when things go bad in certain places, it’s unrealistic to think the West will pony up the requisite security to save China’s bacon just because Western firms are involved.

So go easy on the widespread assumption that China merely gains influence and no responsibility on this path, because that is strategic naïveté of the worst order.

To shrink the Gap for real starts with fixing "broken windows/states"

Al Shabaab's handiwork in KampalaZakaria on failed states being an enabler of terrorism:  he makes the finer point that it’s mostly the weak states that give the West trouble rather than the truly failed, so a Pakistan trumps a Somalia.

Fair enough, but weak states are often defined by their proximity to truly failed ones, like Pakistan is to Afghanistan and the shared non-state of Pashtunistan.  Truly troubled weak states rarely, if ever, exist in isolation (NorKo is a Cold War leftover).

So the argument shouldn’t be, let’s beg off working failed states and concentrate on weak ones.  The argument should be, let’s be realistic that, until we deal with failed states, expecting the regional environment to improve to the point where weak or rogue nations are forced into better behavior is a pipe dream.  If you want a strong regional community, fix the “broken windows” and raise the security level as a whole.

What Zakaria is peddling here is the Colin Powell sort of benign neglect:  ignore Somalia until al Shabaab pulls off something truly large and we can spot the clear al Qaeda ties.  Then he says, strike.  That sounds like a redux of Clinton’s approach in the 1990s, which was amazingly ineffective.

But notice that Zakaria’s assumptions here seem to be all about what America alone can achieve.  If your starting assumptions are that myopic, then his caution is warranted.  But why start with such myopic assumptions?

China and India and Brazil are coming to Africa in big ways.  Africa is clearly the emerging center of globalization’s integrating dynamics.  Why view Somalia through the lens of Clinton’s 1990s mindset?

More strategic imagination, please.  Time-wise, pay and play it forward—not backward.

Getting hospitals ready for a WMD event

pic here

Bernadine Healy piece in Newsweek catches my eye because of Enterra’s emerging/ongoing work with major hospitals in the NYC area (and now in TX) regarding this very same issue:  how to maximize and coordinate cooperation among major hospitals in the event of WMD terrorism.

Healy cites a Thomas Tallman, head of emergency services at the fabled Cleveland Clinic on 4 key points:

First, hospitals must be ready to respond to any large-scale terrorist attack via robust contingency plans for patient flow (something Enterra works on a lot).

Second, all healthcare workers are trained up on WMD drills and can rely on plans posted throughout the facility.

Third, and most importantly in our minds, “networks of local and regional hospitals have been created to work closely with public authorities so resources can be shared.”  This is what the exercises are for, making everyone aware of and conversant in the network established.

Fourth, the chain of command is clear and practiced ahead of time—another key aspect of exercises, in my experience.

All really basic stuff but hard to achieve in facilities that operate—as a rule—as close to 100% capacity all the time in order to save money.

Healy’s point:  even if you do all four, no plan will survive contact with an actual WMD event, due to the immense complexity.

That’s where Enterra comes in with its focus on rules smart enough to rule themselves and change in response to altered conditions (altered as far as the plans are concerned). 

Bottom line:  your plans have to be reconfigurable on the fly.

Oil output rising in Iraq

Iraqi Oil Minister Hussain al-Shahristani addresses the oil symposium.WSJ story on deals that signal rising oil output by Iraq is coming.  Despite the lingering violence and political paralysis, the government seems doubly intent on moving forward with its big plans.  Immense logistical challenges are described, and yet the foreign firms are already working on their blocs.

Two licensing auctions awarded 11 deals last year.  If all proceed as planned, Iraq goes from a fraction of Saudi output to basically matching it in seven years. The foreign firms must cooperate on a massive water-injection system to be shared. 

Meanwhile, BP and Sinopec are bragging that they’re increasing production at the massive Rumaila field already by 100bpd.

All this is important news, because nothing will encourage political cooperation in Baghdad more than increased revenue to be shared.

South Africa as the Core's great integrator of the continent?

WSJ on successful World Cup symbolizing South Africa's ambition to unite the continent economically.

Intra-African trade remains paltry by global standards, largely due to missing interior infrastructure, as one colonial legacy is that the entire place is built to move commodities to the coasts.

South Africa now pushes a Cape Town-to-Cairo free trade zone as part of its ambitious vision.  The self-confidence shown is a big deal, because South Africa has the biggest and most liquid financial markets on the continent, so everything has to start there.

But South Africa is part of the problem:  a ten-fold increase in trade with China since the century began, but only a 4-fold increase with the rest of Africa.  So gateway ambition, yes, but not gateway performance--yet.

But Africa is poised for better things, we are told, because it escaped the financial crisis and because it's sizable middle class continues to emerge--and spend.

Here's hoping South Africa's ambition and self-confidence are catching.