THE ANALYST GUIDE TO THE SOCIAL SCIENCE UNIVERSE:USING SOCIAL SCIENTIFIC METHODOLOGY TO ANALYZE, EXPLAIN,

AND FORECAST PHENOMENA

by

Michael J. GainesMajor, USMC

NDIC Class 2009

Submitted to the faculty of the National Defense Intelligence College

in partial fulfillment of the requirements for the degree ofMaster of Science of Strategic Intelligence

June 2009

The views expressed in this paper are those of the authorand

do not reflect the official policy or position of the

Department of Defense, the United States Marine Corps, orthe U.S. Government

ABSTRACT

TITLE OF THESIS: The Analyst Guide to the Social Science Universe:

Using Social Science Methodology toAnalyze, Explain, and Forecast Phenomena.

STUDENT: Michael Julian Gaines, MSSI,

2009

CLASS NUMBER: NDIC, 2009 DATE: June, 2009

THESIS COMMITTEE CHAIR: LtCol Theodore R. McKeldin, USMCR

COMMITTEE MEMBER: CAPT Dean B. Markussen, USNR

I posed a question to a fellow intelligence analyst

regarding the historical accuracy of our opinions and

predictions; how many times have we been right? He answered

rather sardonically, “Not, much”. His answer led me to

research models that could help analysts explore the

underpinnings of individual, group, and/or

organizational/state dynamics in context of interactions

whether through exchange, cooperation, compromise, or

conflict.

The primary focus of this thesis will be the use of

economic and other social science tools to better examine,

explain, and (attempt to) forecast (>50% of the time

accuracy, ad infinitum) social phenomena. The topics explored

are particularly relevant to intelligence analyst who must

interpret complex phenomena and explain ‘what happened’,

‘what’s happening’, and ‘what’s going to happen’ and allow

decision makers to economize and address problems with

finite resources. The topic asks the question, “On what

experience or with what education are analyst providing

explanatory or predictive analysis regarding individual or

group intentions, polity atmospherics, and enemy

assessments?” The thesis topic provides the writer with the

opportunity to examine numerous social, economic, and

systems methodologies and tools; recommend the use of the

methodology or tool in the Intelligence Community (IC), and

explore the methodology or tool’s applicability to present

conflict throughout the spectrum of conflict.1

1 Mike Gaines. The writer posits that conflict when viewed as a spectrum can encompass any change in position that is not mutually beneficial and can encompass such exchanges as innocuous as competition in business or bargaining, to violent theatre/world level war.

Chapter two surveys the foundations of social

scientific methodology by reviewing the history of debate

regarding the individual and group interest. It explores

the roots of individual and group behavior under varying

conditions, and the reactions and influences of individuals

and groups given variable (e.g., self-interest, emotional

reactions, group influence) desires. Once the foundation is

laid, Chapter three explores the impossibility of complete

information and its connection to the past, and shows how

using social scientific methodology can assist analyst in

producing a better picture of events or phenomena.

The latter four chapters consider real life examples

from the abstract (defining today’s reality) to the specific

(examining the spectrum of groups for the individual to the

nation) and interpret phenomena through a social scientific

lens on a systems screen in hopes of understanding the

effects of individual behavior on the aggregate and vice

versa. Chapter four tests the methodology by examining the

new realities of a complex world and provides

recommendations of how to influence bad actors in this

environment. Chapter five explores a country-specific

example, Iraq. This Chapter applies social scientific

methodology to assess the complexities of counter-insurgent

operations (COIN) and provides a more holistic picture of

the conditions on the ground and recommendations given those

conditions. Chapter six then shows how the methodology can

be used at the group/organizational level to assess the

capabilities of our most dangerous threat, Al Qaeda and its

Associated Movements (AQAM). Chapter seven explores the

individual, group, and organizational level of the U.S.

polity and their increased influence due to inflationary

expectations in a system that allows it, and postulates a

new role for the IC using socio-economic methodology: that

of managing perceptions and expectations in an environment

where information permeates all facets of life and where

attention spans and trust are marginal and fleeting. We no

longer live in a world of total war and people’s opinions

influence our policy and ergo our analysis. The writer

posits that if these tools and methodology are used

appropriately in the right combination as a part of the

canon of intelligence tools, analyst will achieve greater

appreciation of the interplay between the individual and

group interest and achieve a higher level of understanding

in an interconnected and increasingly complex world.

ACKNOWLEDGEMENTS

This thesis could not have been completed without the

steadfast support of Ana Mara Bilik, the mother of my son.

Without her patience, heavy lifting of parental duties, and

writing guidance I would not have been able to complete this

thesis. I am grateful for her support, love, and

understanding. I would also like to thank my reader CAPT

Dean Markussen and chair LtCol Theodore McKeldin. Their

patience and understanding allowed me to “get it right”

before turning in a sub-standard product. I appreciate their

guidance and mentorship. Lastly I would like to thank my son

Julian Saul Gaines who, although he did nothing to

facilitate the completion of this thesis (quite the

opposite, actually), was a constant reminder of what is

really important in life. Love you, Kiddo.

CONTENTS

ACKNOWLEDGEMENTS vii

LIST OF FIGURES OR TABLES xi

CHAPTER

1. Why Do We Get It Wrong

Research Question Key Question The Hypothesis Methodology and Organization Research Design Collection Strategy Research Classification Assumptions and Limitations Definitions Literature Review Justification and Conclusion

1

1244455561418

2. Establishing the Basis of the Socio-Economic Lens

From Large and Small Alike: Combining Effort to Understand The Net and The Unlimited CatchFinding the Roots A Brief History of Socio-Economic Thought: The Rational Start Limits of the Rational: Applications in Public Goods Considering the Rational and Irrational Self-Interested Being Well What Do You Expect

19

19202122252933343536

ix

What About the Socio’s? Reaching Consensus Conclusion

3. Doomed to Repeat: The Relevance of Past Knowledge to Current and Future Events

Wait a Minute; You Didn’t Talk About History!Bound Mediocristan and Unbound Extremistan Finite Resources and Infinite Problems A Solution versus The Solution The Implausible ScenarioVilfredo Pareto and Disproportional EffectsBounded Rationality Even in the Margins And, They Learn (Even in the Margins) We’re Not so Different from the Romans, After AllYogi Berra and Predictions Let’s Play Plinko!Conclusion

38

383941414344454647474850

4. Defining Our Environment and Recommending Solutions: Influencing Empowered Non-State Actors in an Interdependent Environment

After Two World Wars, We Finally Get it Right and Then Things Changed! Globalization Globalization Empowers Non-State Actors Resetting the BalanceExplaining the Environment Though the SOCIO-economic Lens Aligning Rule-Sets at the Global LevelExplaining the Environment Through the socio-ECONOMIC LensRecommending Solutions Now that the Environment is UnderstoodConclusion

51

52

5254565859616466

x

5. A Country Specific Example: Iraq, the Complexities of Counter Insurgency, and Solutions as Seen Through the Socio-Economic Lens

Where We Were RealizationThe Pendulum of Competing Interest What About the Power Law or Matthew Effect? And Again, We LearnA Description of the Complex EnvironmentHow We Fight Now: Putting Socio-Economic Glasseson the MilitaryWhere Intelligence FitsGoing Back to School Another Organizational Suggestion? Patterns are Easier to See If You Have the Right Glasses Professionalizing Intelligence: On to Graduate Level ToolsConclusion

68

69717274757880828484868788

6. An Organizational View: Assessing AQAM Capabilities Through the Socio-Economic Lens

MethodologyHistory: The Grand Strategy or AQAM’s Big Idea The AQAM IdeaHow Sophisticated and/or Effective is AQAM, Really?Organizational Structure: From Effective Cells to Disconnected Entities AQAM Pre-System Response Franchisee or AQAM Post 9/11 Response An Organizational Structure Where Decentralization Works Logistics Finance

91

92939597979899100100101103104

xi

Transportation An Alternate View Through the Socio-Economic Lens The Argument of Emergence and the Efficacy of Disconnected Actions The Proverbial Last StrawConclusion

107109

7. Addressing Polity Influence: Examining How the Power Enabled Can Shape the Discourse in the NewEnvironment

The Backdrop: The American Zeitgeist Post 9/11Group Dynamics Affect the IC as Well The Executor in Power Enabled PolitiesManaging Perceptions, Expectations, and Tolerance The Environment Explained Managing Perceptions: The Nexus of Expectations and ToleranceStep 1: Gaining the Polities Trust Shaping Perceptions and ExpectationsPost Cold War and Pre-911: The Failure to DefineWhy Somalia MatteredPost 9/11: The Failure of Labeling Everything a Terrorist ThreatBeyond 9/11: The IC Getting it RightConclusion

111

111112114115117118119120121

124126

8. Our Tool Kit Has More Tools

What We Have Learned The Limitations The Unintended Consequence of this ThesisConclusion

129129130131132

xii

BIBLIOGRAPHY 133

xiii

LIST OF FIGURES or TABLES

1-1 Prisoner’s Dilemma Table 12

2-1 James Buchanan’s Interdependence Graphic 27

3-1 Impact and Probability Quadrant Model 43

3-2 Plinko and Skewed Distribution 49

3-3 Plinko and Skewed Distribution Showing Trend Line

49

4-1 The Power Enabled Polity 57

4-2 James Buchanan’s Interdependence Graphic 63

5-1 Traditional Intelligence Organization 70

5-2 Pendulum Track of Intrastate Competing Interest 73

5-3 The Dueling Sine Waves 76

5-4 Pendulum Track with Progression Factored 77

5-5 Virtuous Cycle 79

5-6 Updated Intelligence Organization 80

5-7 B2C2WG’s 81

5-8 DIME on PMESSI 82

5-9 Shifting the Gaussian Curves 83

xiv

5-10

Shifting the Curve By Skewing Inputs 86

5-11

Quantitative and Computational Social Science Virtuous Cycle

88

5-12

Skewed Inputs Skewing the Curve and Creating a Virtuous Cycle

89

6-1 The Effectiveness of AQAM Given System Response 96

6-2 The Pareto Distribution of Effectiveness 106

6-3 The Death Chart and Tom Ridge 107

7-1 Known and Unknown Threats and the Role of the IC

118

7-2 The Nexus of Expectations and Tolerance 119

7-3 System Response as a Function of Clarity of Interest and Cost/Benefit Pre-911

123

7-4 Post 9/11 125

7-5 Post Emotive Interest 126

7-6 The Right Combination when Expectation are Managed

127

xv

CHAPTER ONE

Why Do Analyst Get it Wrong?

The Research Question

Why do analysts fail more than they succeed in

interpreting the intent of past actions and fail miserably

in forecasting the probable actions of enemy

individuals/groups/states? The intelligence profession aims

to interpret, explain, and predict social phenomena that are

sometimes purposely hidden. The IC must use all available

tools in this exceedingly complex endeavor. Socio-economic

and systems methodology has over time proved to be an able

tool at interpreting social phenomena. Human interaction

appears to be based on satisfying marginal needs/wants with

limited resources (i.e., economics). While many scholars and

economists have contributed to the body of knowledge that

has allowed us to make sustainable corrections of mistaken

behavior and avoid possible worse case scenarios, many

theories are beyond the scope of this paper. This thesis

will conduct analysis using socio-economic and systems

1

methodology. Systems methodology provides a representation

of the environment; think of its use as the book that is

read or the screen that is watched. Socio economic

methodology provides the tools that allow one to read the

letters (or phenomena) on the book or understand the

pictures on the screen. The writer will use the

methodologies to critique the analytical biases that favor

simplistic modeling and conventional wisdom based on a priori

assumptions that do not fully interpret phenomena. This

thesis will also examine the efficacy (and futility) of

forecasting. Socio-economic premises such as public choice;

group dynamics in context of acquiescence, cooperation and

conflict, and emotive effects; and equilibrium testing will

be explored and employed to provide assessments of real

world phenomena and organizational function.

Historical examples abound of past failures of

intelligence analysts and the IC as a whole. There are a

myriad of reasons why analyst have failed to interpret what

was happening “in front” of their “eyes” (e.g.,

misinterpretation of leadership intent, seeing things from

2

our perspective vice the enemy’s, cognitive biases or

logical fallacies; etc). Many of the aforementioned reasons

are beyond the scope of this thesis. This thesis will only

explore the raison d'être of phenomena that may be explained

using socio-economic and systems methodology. For example,

preceding the Iraq War where were the majority of Saddam’s

resources concentrated? Using a rational actor paradigm,

analysts could have approached the problem from the

perspective of the observed based on a posteriori knowledge of

generally recognized human behavior. What would the rational

actor do in his situation, despite denial and deception

apparatus? The rational actor would economize resource

allocation against existential threats. The rational imagery

analyst would properly state that most resources were

located towards the Iranian border. The cautious decision

maker would then question the degree of rationality of the

opposing actor/collective actors.

Key Questions

In order to answer the research question a number of

key questions must be addressed. The first question is from

3

what or on what was past analysis based and how did we used

to understand? Further, why did our past analysis not work

(using historical examples)? How can social science

methodology and tools provide us with a better understanding

of social phenomena and if they can on what foundation is

the lens based (e.g., the self-interest of the rational

actor, group influence, emotions, etc.)? Can economic tools

help to see probable futures; what about the improbable and

if we cannot predict the future, what is the best way to

deal with it? And finally, are socio-economic and system

methodologies practical in intelligence analysis or does the

alternate hypothesis hold true? These questions will be

explored throughout the thesis and tested using real world

examples to compare and contrast conventional wisdom (or the

traditional methodology) used in a fixed, slower, or simpler

world of bi-polar competing interest (i.e., during the Cold

War or easily defined enemies such as Iraq in 1991 or North

Korea, presently) with social science methodology that must

be used to examine infinitely complex problem-sets. Other

concepts explored include the following:

4

Systems theory provides an avenue for holistic

interpretation even in open ended systems. Systems

theory is the geometric hyper-plane so to speak that

the writer will use to define the general environment

(i.e. the book or screen), while using socio-economic

methodology to explain phenomena (i.e., words or

pictures) in that environment.

Collective choice analysis, specifically negative

aspects within collective action: free-riding, intra-

group alliances/coalitions, preference falsification,

etc. applied to public choice.

The thesis will also explore the use of the general

equilibrium as a measurement of the ideal versus

reality. General Equilibrium applied to public choice,

biological cooperation or evolutionary equilibrium, and

general group dynamics.2

2 Ted H Emigh. "A Comparison of Tests for Hardy–Weinberg Equilibrium". Biometrics 4: 627–642, 1980. The writer makes an assumptionthat evolution takes place based on the Hardy-Weinberg evolutionary equilibrium based on mathematical probability. The Hardy–Weinberg principle states that both allele and genotype frequencies in a population remain constant—that is, they are in equilibrium—from generation to generation unless specific disturbing influences are introduced. Those disturbing influences include non-random mating, mutations, selection, limited population size, random genetic drift and gene flow. It is

5

Economic tools such as game theory, equilibrium models,

non-linear and linear/deterministic methodology and

models such as cellular automata to interpret the

“unknowns” in public choice.

The Hypothesis

The writer posits that intelligence analyst and the IC

community in the aggregate can better interpret social

phenomena if we gain a greater understanding of socio-

economic and system methodology and tools. However, the

writer also supposes that the proposed methodological

adoptions no matter how sophisticated are limited in scope,

especially when forecasting dynamic phenomena over periods

or breadths that allow for infinite variability.

Methodology and Organization

Research Design

The research design will incorporate holistic

approaches that substantiate and question the validity of important to understand that outside the lab, one or more of these "disturbing influences" are always in effect; i.e., the Hardy Weinberg equilibrium is impossible in nature. Genetic equilibrium (as with any equilibrium) is an ideal state that provides a baseline to measure genetic change against.

6

the hypothesis. The writer will explore the basis of

analysis and incorporate social science and systems

methodology to present day challenges. The writer will

explore works of a wide variety of social scientist to

include economic theory, cultural anthropology, political

science, and systems theory, synthesize the research, and

recommend an integrated framework to recognize phenomena.

Collection Strategy

The writer will use archival research at public and

specialized libraries at George Mason University, the

National Defense Intelligence College library, on-line

sources, and State and Defense department observation to

review available information pertaining to social science

and systems methodology. Scholarly work previously cited in

this proposal will also form the base argument of the

thesis. The writer proposes using non-traditional

methodology; ergo some tie-ins will be ‘new’ or a deviation

from conventional wisdom. In the latter chapters of the

thesis, the writer will test the methodology using real

7

world examples of analysis. This thesis will attempt to

synthesize social science and systems methodologies, apply

them to case and/or topic analysis, and compare results with

varied perspectives or expected outcomes with the intention

of incorporating socio-economic and systems methodology into

the current analytic framework. If the hypothesis holds the

writer anticipates using the methodology in conjunction with

traditional methodology in real world analysis.

Research Classification

My thesis will be unclassified due to the desire to

formulate and prove or disprove a general application

hypothesis. All the research is unclassified and the

methodology is currently used by many practitioners of

social science. The writer does not foresee using any

classified sourcing.

Assumptions and Limitations

Assumptions of the thesis include the following:

Rational actor model (RAM)/ rational individualism is

not absolute; i.e., he will be influenced by his

surrounding group as well as self-interest.

8

Emotive stimuli both positively and negatively affect

individual interaction/group dynamics.

Limitations

Forecasting and predictive analysis must be understood

to be an art resting on scientific foundations (or

tools); it will never approach 100% certainty without

complete information which is impossible, but we can do

better than “Not, much” in our predictive analysis.

The goal is to increase marginal utility of short range

forecast by being more right than wrong all (or most)

of the time (i.e., approaching the greater than 50%

accuracy all the time, ad infinitum which in turn is

infinitely better than 50% over time).

Definitions

Thirteen concepts that are frequently used throughout

the thesis are defined broadly to facilitate readability.

1. Free Riding - In economics, collective bargaining,

psychology, and political science, "free riders" are

those who consume more than their fair share of a public

resource, or shoulder less than a fair share of the costs

9

of its production. Free riding is usually considered to

be an economic "problem" only when it leads to the non-

production or under-production of a public good (and thus

leads to Pareto inefficiency or sub-optimization), or

when it leads to the excessive use of a common property

resource.3

2. Game Theory - An analysis that illustrates how choices

between two plays affect the outcome of a "game." Game

theory is commonly used in economics to illustrate

interdependent decision-making among oligopoly firms. It

illustrates that one firm makes a decision based on the

decision expected from the other firm. One key

conclusion from the game theory analysis is that firms

often make decisions that are "second best" or the

"lesser of two evils" in order to find commonality or

non-zero sum solutions (i.e. win/win). The classic

example of such a decision is the prisoners’ dilemma, in

which two prisoners both confess to a crime to avoid

3 Richard Cornes and Todd Sandler. The Theory of Externalities, Public Goods and Club Goods. New York: Cambridge University Press, 1986.

10

harsher punishment (i.e., surrender risk to attain

perceived advantage) when not confessing or cooperating

would avoid any (or at least garner less) punishment.4

3. Gaussian distribution - In probability theory and

statistics, the normal distribution or Gaussian

distribution is a continuous probability distribution

that describes data that clusters around a mean or

average and usually has a standard (or equal) deviation

from the mean. The concept is known popularly as the

bell curve.5

4. General Equilibrium – Literally as close to economic

(i.e., resource allocation given scarcity and Pareto

inefficiency) perfection as you can get. This is when

demand and supply are in balance (the market is in

equilibrium) for each and every good and service in the

economy. Nobody thinks that real-world economies can

ever be that perfect (remember, most equilibrium test

4 Economist.Com. “Economic Terms, Topics and Jargon from A-Z.” http://www.economist.com/research/economics/alphabetic.cfm?letter=G#generalequilibrium (assessed May, 2009.

5 Wikipedia.org. http://en.wikipedia.org/wiki/Normal_distribution

11

begin or end with the phrase ceteris paribus or ‘with all

things being equal’ when all things are never equal); at

best there is "partial equilibrium". Equilibrium testing,

however, is good for measuring ideal or normative

outcomes or variables (i.e., what ought to be) against

reality (i.e., what is).6

5. Group Dynamics - the study of groups, and also a general

term for group processes. Relevant to the fields of

psychology, sociology, and communication studies, a group

is two or more individuals who are connected to each

other by social relationships. Because they interact and

influence each other, groups develop a number of dynamic

processes that separate them from a random collection of

individuals. These processes include norms, roles,

relations, development, need to belong, social influence,

and effects on behavior (e.g., it is in the individual’s

interest to be in the group, ergo it is in the

individual’s interest for the group to succeed). The

6 Economist.com. “Economic Terms, Topics and Jargon from A-Z.” http://www.economist.com/research/economics/alphabetic.cfm?letter=G#gausian distribution (assessed May, 2009)

12

field of group dynamics is primarily concerned with small

group behavior. Groups may be classified as aggregate,

primary, secondary and category groups.7 Some of the

governing dynamics of group behavior include what the

writer has called the acquiescence function; that is

individual acquiescence in group settings is a function

of the marginal utility (or satisfaction and advantage

gained) of belonging to the group versus the marginal

utility of breaking away from the group. As a rule it is

almost always more advantageous to ‘be’ with the group

(even if it is another group) than not, no matter the

situation or how bad the condition (e.g., in totalitarian

regime). Another governing dynamic that the writer has

termed Yogi Berra’s Law of Similar Differences seems to

demonstrate that as group differences converge towards

commonality, equilibrium, or homogeneity, smaller

differences tend to take on more importance or have

greater effects. These smaller differences, however, can be

7 Donalson R. Forsyth. Group Dynamics, 4th Edition. Belmont, CA: ThomsonWadsworth, 2006.

13

managed on the lower end of the conflict spectrum by

identifying equilibria in disparate interest.

6. Legitimacy - As used in this paper, how acceptable

something is to an observer/participant especially in

context of constituent (or social) contracts. Early

political economist tried to describe a system that was,

in a philosophical sense, morally justifiable. Early

economics literature viewed justifiability as derived

from the extent to which the system was based on

individual primacy and inviolability with the goal of

reaching Pareto optimality or a state of Pareto

improvement throughout the system (i.e., where paying

Peter doesn’t rob Paul). The crux of legitimacy and

justifiability is whether the individual chooses to

voluntarily cooperate with the group. Legitimacy is also

a concept that pervades much of the non-economic

literature regarding the deterioration of social order

(e.g., governments not able to satisfy citizen needs,

wants, or expectations which lead to some type of change

14

in condition—e.g., elect someone else, rebel,

disintegrate, etc).

7. Marginal Utility (or Satisfaction) - The amount of a

person's total utility corresponds to the person's level

of consumption. Usually, the more the person consumes,

the larger his or her total utility will be.  Marginal

utility is the additional satisfaction, or amount of

utility, gained from each extra unit of consumption.8

Diminishing marginal utility refers to the diminished

satisfaction one receives for each additional amount

consumed; e.g., drinking that twelfth beer that makes one

sick. It is the same phenomena as the concept of

diminishing marginal returns which refers to how the

marginal contribution of a factor in production (e.g., in

a factory with limited space and labor, or a fixed plot

of land) decreases as more of the factor is used (e.g.,

one can only grow so much corn on a given acre). Utility

can also explain the usefulness or effectiveness (i.e., 8

Investopedia, A Forbes Digital Company. “Economic Basics: Utility.” http://www.investopedia.com/university/economics/economics5.asp (assessed May, 2009).

15

the cost/benefit) of an action given change in

conditions. For example, the efficacy of large conquering

armies who are trained to kill and break things in the

modern context diminishes post conflict in the occupation

phase given factors of the current environment (e.g.,

instant communication, expected military conduct, etc)

and change of authority (e.g., sovereign responsibilities

to meet citizen expectations for public goods).

Conversely, small entity (who could never symmetrically

fight a powerful army in conventional battle)

effectiveness of action (or returns on inputs) may

increase over time as occupying force polity expectations

for finality increase (i.e., the war isn’t over, yet).

Finally, marginal utility can be used to understand the

marginal interest of individual and aggregate behavior

which finds its basis in hyperbolic or temporal discount

functions. A simple test is asking a person if he wants

$50 now or $100 in a year; an overwhelming majority

choose $50 now. If offered $50 in five years or $100 in

six years, even though the year difference and the offer

16

to double the money remain constant, the results are

completely different; people will overwhelmingly choose

$100 in six years. People generally prefer smaller,

sooner payoffs to larger, later payoffs when the smaller

payoffs are imminent; i.e., their perceived interests are

marginal (or short sited) in forward moving time. People

have bounded rationality because they are limited beings;

e.g., they do not and cannot see or understand complete

information and must simplify or depend on group

advantages to make decisions.

8. Pareto Principle - Basically, the 80-20 rule that states

for many events, roughly 80% of the effects come from 20%

of the causes. Also interpreted as the law of the vital

few which denotes 20% of the people (or actors) owning

80% of the land (or influence). For this thesis, the

writer will apply the concept to population or group

influence in context of power struggles (i.e., increasing

advantage to the point of being sovereign and sovereign

responsibility is transferred to the winning side)

whether violent as in an insurgency or non-violent as in

17

democratic processes. The point of the law of the vital

few is that in majoritarian politics, the loudest 10% on

each side of a two party system control the debate.

Everyone else just cooperates, free-rides, or acquiesces

as long as the responsible party (the winning 10%)

provides expected public goods.9

9. Public Choice - studies the behavior of politicians and

government officials as mostly self-interested agents and

their interactions in the social system either as such or

under alternative constitutional rules. These can be

represented a number of ways, including standard

constrained utility maximization, game theory, or

decision theory. Public choice analysis has roots in

positive analysis ("what is") but is often used for

normative purposes ("what ought to be"), to identify a

problem or suggest how a system could be improved by

changes in rule-sets. A key formulation of public choice

theory is in terms of rational choice, the agent-based

9 Mike Gaines. The citizenry’s expectations may adjust after conditions change. That is where expectations were really high under an old government; they can adjust to new (e.g., lower) levels under new conditions.

18

proportioning of scarce means to given ends. An

overlapping formulation with a different focus is

positive political theory. Another related field is

social choice theory.10

10. Prisoner’s Dilemma - a problem in game theory. It was

originally framed by Merrill Flood and Melvin Dresher

working at RAND in 1950. Albert W. Tucker formalized the

game with prison sentence payoffs and gave it the

"prisoner's dilemma" name. In its classical form, the

prisoner's dilemma (PD) is presented as follows:

“Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies (defects from the other) for the prosecution against the other and the other remains silent (cooperates with the other), the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remainsilent, both prisoners are sentenced to only six months in jail for a minor charge. If each betraysthe other, each receives a five-year sentence [as graphically depicted below].

Prisoner 2

10 Gordon Tullock. The Economics of Special Privilege and Rent-Seeking. Boston& Dordrecht, Netherlands: Kluwer Academic Publishers, 1989.

19

Win Lose

Prisoner Win win win WIN LOSE

Lose

WINLOSE

LOSELOSE

Table 1

Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before theend of the investigation.”11

If we assume that each player cares only about minimizing

his own time in jail, then the prisoner's dilemma allows

a non-zero-sum game in which two players may each

cooperate; or allows a zero-sum outcome where each may

betray the other player. In this game the only concern of

each individual player (prisoner) is maximizing his/her

own payoff, without any concern for the other player's

payoff. The unique equilibrium for this game is a Pareto-

suboptimal solution, i.e., rational choice leads the two

players to both betray vice cooperate, even though each

player's individual reward (less punishment or a small

win-win) would be greater if they cooperated. Decreasing

11 Robert Aumann. “Acceptable Points in General Cooperative N-Person Games”, in R. D. Luce and A. W. Tucker (eds.), Contributions to the Theory 23 of Games IV, Annals of Mathematics Study 40, 287–324, Princeton University Press, Princeton NJ, 1984.

20

information asymmetry among the prisoners (e.g., I know

what he will do, so I’ll do this) allows for Pareto-

optimal solutions (i.e., my gain is NOT his loss).12

11. Rational Actor Model - The model based on the notion

that people make decisions based on the desire to obtain

the greatest amount of satisfaction or advantage.

Rational behavior essentially means that people prefer

more satisfaction to less satisfaction and less

dissatisfaction to more dissatisfaction. The presumption

of rational behavior underlies most economic analyses,

especially those applied to consumer demand theory. The

model is based on the philosophical premise of

methodological individualism which holds that broad

society-wide developments can only be understood as the

aggregation of individual decisions.13

12

Mark Lichbach. The Rebels Dilemma: Economics, Cognition, and Society Series. Ann Arbor: University of Michigan, 1998.

13 Investopedia, A Forbes Digital Company. “Economic Basics: Rationalism.” http://www.investopedia.com/university/economics/economics5.asp (assessed May, 2009).

21

12. Rent Seeking - When an individual, group, or

organization uses resources to obtain an economic gain

from others without reciprocating any benefits back to

society through wealth creation. Rent-seekers primarily

seek to capitalize on the scarcity value of a good or

service.14

13. Systems Theory - An interdisciplinary field of science

that examines the nature of complex systems. For the

purpose of this thesis, systems theory is a framework by

which one can analyze and/or describe any group of

objects that work in concert to produce some result, from

a single individual to a group, organization, large

organization (i.e., state), or the general environment

that effects them all.

Literature Review

The literature reviewed for this thesis was expansive

so the writer will only highlight authors that synthesize

the progression of knowledge that lay the foundations for

14 Anne O. Krueger. “The Political Economy of the Rent-Seeking Society.” American Economic Review 64 (June 1974); 291-303.

22

their works. Some of the authors that will not be discussed

in the Literature Review include Thomas Hobbes and Adam

Smith who presented the arguments that most social science

today is based: individual interest bound to group interest

and the best way to find equilibrium between the two. Most

of authors in the literature review cover these giants of

thought repeatedly. This literature review also does not

cover authors whose works were not major influences on the

general theme of the thesis (e.g., works related to specific

chapters that do not apply to the entire work).

James Buchanan’s Theory of Public Choice posits that

rational people can define the general will and authorize

government to carry out actions consistent with political

will.15 Intelligence analysts must gain understanding of

public will (even in authoritarian states) in order to

better predict or at least explore the unknowns of possible

scenarios. Public choice, however, is not a panacea for

interpreting social phenomena; it has limits. Public choice

15

James Buchanan. The Calculus of Consent: Logical Foundations of Constitutional Democracy. Ann Arbor: The University of Michigan Press, 1965.

23

in this writers opinion, does not holistically address the

problems of group forming, free-riding, intra-group

alliances/coalitions, preference falsification, and rent

seeking terms that will be explored further in various forms

of Group dynamics.

Group dynamics increases both interaction and the

number of variables considered from the individual to the

aggregate. An increase in considered variables is directly

correlative to an increase in the complexity of the

phenomena being interpreted. Whereas rational choice can

explain the actions of a single entity with defined

parameters over a short period of time, when you increase

the variability of the model (say by adding a few humans or

anything that interacts with our subject) it degrades one’s

ability to fully interpret the phenomena and makes the art of

prediction quite difficult. Public choice also fails to

comprehensively explore the effects of emotions on the

rationality of the individual and the collective and how

that affects the wants of the general will. Emotive stimuli

24

affect, both positively and negatively, interactions between

individuals and groups.

Thomas Schelling attempted to expand understanding of

conflict and cooperation. His book The Strategy of Conflict

explores that fact that almost all multi-person decision

problems contain a mixture of conflicting and common

interest that could be optimized using non-cooperative game

theory.16 Mark Lichbach’s Rebel’s Dilemma and Cooperators Dilemma

further explore individual dilemmas in group dynamics

(specifically his interpretation of the Prisoner’s Dilemma)

in collective choice/action.17 Lichbach furthers Buchanan’s

research and delves into the negative aspects of group

dynamics giving a more comprehensive explanation of

“rational” behavior and the structural method/design of

incentives and disincentives in eliciting desired responses

or outcomes.18

16 Thomas Schelling, The Strategy of Conflict. Harvard University Press, 1994.

17

Lichbach, The Rebels Dilemma.18

Mark Lichbach. The Cooperator’s Dilemma: Economics, Cognition, and Society Series. Ann Arbor: University of Michigan, 1996.

25

Jack Hirshliefer’s The Dark Side of the Force will also shed

light on interpreting phenomena. Hirshliefer posits exchange

theory and conflict theory constitute two co-equal branches

of economic analysis: the former based on win/win scenarios

and the latter based on win/lose scenarios. His theory opens

the door to using powerful tools to interpret (and maybe

“forecast” which will be explored in the latter portions of

the thesis) group interactions, specifically in the spectrum

of conflict.19 The writer will also incorporate concepts

such as conflict, rent-seeking, and band-wagoning to further

explore the complexity of the rational actor and the

aggregate actor.

The Research and Development (RAND) Corporation

comprehensive study of social science and system methodology

synthesizes disparate disciplines into a synergistic

framework taking advantage of the multiplying effects of

previously interpreted phenomena. The authors explore

terrorist phenomena through an interdisciplinary approach to

19 Jack Hirshliefer. The Dark Side of the Force: Economic Foundations of Conflict Theory.Cambridge University Press, 2001.

26

identify root causes (or relevant factors) and their effects

(from first order effects, to the actual act, to the effects

of the act) in order to propose systemic solutions to

elements of the phenomena that we can actually affect. The

authors explore multi-factor causal relationships to better

interpret and affect the phenomena.20 This thesis will

apply systems methodology as the underlying organizational

structure to integrate socio-economic methodologies to

interpret phenomena.

James Surowiecki’s The Wisdom of Crowds explores the

cooperative nature of groups and the rate of forecasting

accuracy of the group (i.e., the crowd). The writer will

attempt to prove that interpreting phenomena with an

infinite number of variables even with economic or

econometric methodology is an exceptionally complex (if not

impossible) enterprise. The writer will further prove that

forecasting phenomena without complete information even in

the near term is practically impossible. The writer will

explore concepts in Nassim Nicholas Talib’s The Black Swan that

20 Paul K. Davis, Kim Cragin, et al. Social Science for Counterterrorism: Putting the Pieces Together. RAND Corporation, 2009.

27

contrast the idea of interpreting and forecasting

complex/dynamic phenomena with finite/ “easily” definable

phenomena and defending against highly improbable yet highly

impactful risk. Finally, the writer will synthesize the

knowledge presented and conclude if the thesis disproved my

hypothesis or my alternate hypothesis.

Justification of Research and Conclusion

The overarching goal of this thesis is to expose

another set of tools for analyst to use to understand the

world. It is in the interest of the intelligence community

to explore methods and tools that improve

understanding/interpretation of social phenomena (and

intention) and advances analytical/predictive abilities of

its analyst. This thesis, however, is not a cure all; it is

intended to expose another set of tools and methods to

assist analyst in being “more right, than wrong”. The

methods and tools discussed in the thesis will give analyst

a greater understanding of not only what, where, when, and

how it happened, but why it happened and maybe even why it will

28

happen. If the dynamics that govern our system can be

explained better using methodology not normally used in

intelligence analysis, it is the responsibility of the

analyst and the IC as a whole to adopt methodologies that do

work. This thesis intends to reveal what methodologies can

work, given limitations of simplification, non in vacua, and

show how certain binding laws govern even individual

interest in a world of bound rationality.

29

CHAPTER TWO

Establishing the Basis for the Socio-Economic Lens

Since the dawn of recorded history, man has attempted

to explain what happened, what’s happening, and what’s going

to happen. Herodotus of Halicarnassus looked back to explain

wars between the Helines and the Persians; Plato using a

philosophic approach and Aristotle using an atomist approach

attempted to explain the nature of man and society; and the

Oracle of Delphi tried to tell what tomorrow would bring.

Even though aggregate knowledge (or recollection according

to Socrates/Plato) of the world has grown exponentially with

inflationary jumps since the enlightenment, analyst and

social scientist still struggle to answer these questions

today. What happened differently on December 7, 1945? Why

did it happen and who is to blame? Why was the United States

of America (U.S.A) surprised? Are we in a similar situation,

now? Can it happen again; will it happen again? Social

Scientist have been trying to answer these questions for

centuries, and as knowledge and sophistication of method

30

increase, so do the underlying complexity of the answers.

Exploring methodologies that unify reductionist and holistic

approaches can reveal immutable dynamics that govern

individual interest that are bound to a group’s desires and

interest and can assist analyst in understanding the world

they must explain.

From Large and Small Alike: Combining Effort to

Understand

There may have been a million reasons why an event

happened, might happen, or will happen depending on the

variables considered and/or observed. Social Scientists have

attempted to cast the widest net possible to capture and

understand the past, present, and (to the extent possible)

the future. They have developed tools that counter-

intuitively simplify complex phenomena such as mathematical

modeling in economics using reductionist approaches, and

find connections and interrelations within and among complex

phenomena especially in softer social sciences or the macro-

focused using holistic approaches. As Maurice Allais once

31

said, “the role of a science, in fact, is to simplify and to

choose.” While both approaches benefit the furtherance of

human knowledge alone, combining the knowledge gained from

both approaches and unifying them in the middle may give

incite that either alone overlook (e.g., explaining emergent

phenomena). For example, explaining ants and their behavior

hardly explains the formation of ant mounds (an emergent

result). If one approaches the behavior of the single ant in

a group setting (a bottom up approach) and considers the

conditions that over time guide ants behavior (a top down

approach), a more complete explanation emerges.

The Net and the Unlimited Catch: A Bit on Information

without the Annoying Epistemological Fight

The writer posits there are two ways to better

understand phenomena: A. one examines finite (or

constrained/bound) phenomena that no longer moves or only

moves slightly; e.g., past phenomena—one can argue

interpretation, but the actual event has past--, routine

phenomena --a person’s exercise routine on Thursday or

standardized operating procedures of the Russian army--, or

32

fixed phenomena--the size of your kitchen table and study or

examine it ad infinitum in effect becoming an expert. One

could define such phenomena as pyramid phenomena where the

base may have many variables, but the endpoint (or tip of

the pyramid) is defined, ergo constraining the possible

variables.

Or, B. One observes phenomena, tries to make sense out

of it (through deductive, inductive, or abductive

reasoning), labels, frames, or groups it to reduce possible

interpretations, and tries to figure out the next event

given interpreted information. We could define such phenomena

as Moving V (as in the letter v, denoting parabolic growth as

variables or perspectives increase) phenomena where

interpreted data is the starting point (which could be

wrong, hence moving V) and possibilities grow ad infinitum.

Analysts are pretty good at interpreting pyramid phenomena,

but not very good at interpreting moving V’s. Defining which

is which, however, would assist analyst in identifying the

appropriate analytical framework, and assist managers in

allocating resources and articulating planning guidance.

33

Finding the Roots

Social Scientists have defined what tools and

methodology to use under what circumstances; i.e., what

tools and methodologies are best suited for explaining types

of phenomena/information. Social Scientists are beginning to

synthesize disparate disciplines to increase perspective and

therefore the information available to understand the

underlying foundations of both types of information, at

least in a social context. They have sought to find answers

to questions and thus put in place mechanisms to promote

progression and diminish regression. Are humans self-

interested or altruistic (i.e., are they inherently good or

evil)? What motivates them to act in certain ways given

certain conditions? How does the aggregate affect the

individual and conversely the individual to the aggregate?

Social Scientists arrived at similar answers or at least

agreed upon assumptions throughout the various disciplines

(e.g., sociology and its subsets, economics, history,

psychology, etc.) to the aforementioned questions. Overtime

34

(particularly in modernity), they began to understand and

identify (usually separately) common root causes, the

effects those causes can engender, and the interrelatedness

of both the causes and effects of various social phenomena.

A Brief History of Socio-Economic Thought: the Rational

Start

The modern philosophic tradition that this thesis

adopts, owes its heritage to Thomas Hobbes whose Leviathan

proposed the self-interested man doomed to a life of

“continual fear, and danger of violent death; [whose life

will be] solitary, poor, nasty, brutish, and short.”21

Hobbes presented the rational man in constant conflict and

that in conflict, progress would never exist without a

central coercive or persuasive element (a strong state).

Later, particularly in the Scottish Enlightenment,

philosophers such as John Locke, David Humes, and Adam Smith

proposed counter arguments that hypothesized the inherent

nature of man may be one of self interest, but the outcome

21 Thomas Hobbes, Leviathan. Public Domain. http://publicliterature.org/books/leviathan/xaa.php (accessed June 01, 2009).

35

of aggregate self interest is the opposite of Hobbes’

prediction. It was in the interest of man to cooperate and

as one achieved cooperation through freedom of action that

maximized self and ergo aggregate interest. Adam Smith’s An

Inquiry into the Nature and Causes of the Wealth of Nations formalized the

alternate argument for moral philosophers and political

economist: interaction between competing self-interest

actually leads to optimal outcomes guided by an invisible

hand (which is essentially mean regression of aggregate

wants in a positively structured exchange/interaction

framework). Smith laid the foundations for modern economic

thought with this maxim. Socio-economic thought that

followed those publications have attempted to prove or

disprove the diametric conclusions proclaimed by Hobbes and

Smith. People hold contradictory interest, so conflict

appears inevitable given limited resources.

As discussed earlier, economic analysis developed

through the introduction of simplifying assumptions such as

perfect markets with perfect competition, general

equilibriums, and maximum utility. These assumptions brought

36

great analytic power to interpreting phenomena, but also

limited the applicable utility in explaining all but

generalizations and binary dispositions (i.e., highest,

lowest; perfect, imperfect; equilibrium, disequilibrium;

etc) which in turn limited the scope of phenomena economist

chose to examine. The writer is not saying that the

methodologies do not offer extraordinarily powerful tools;

just that economist guided by their economic forefathers

limited the use of economic tools to the functions of

business and the distribution of wealth. Smith was political

economist in the philosophic tradition; working via a top

down approach but accounting for things unknown at the

individual level (e.g., the famous “Invisible Hand”) in

explaining aggregate behavior.

Augustin Cournot advanced the study of economic

phenomena by applying mathematical concepts and proofs; he

was the father of mathematical economics which on one hand

expanded the power of analysis, on the other it decreased

the scope or reach of the top down and philosophical

approach of political economics. He made a soft science into

37

a hard one when he published his masterpiece Recherches sur les

Principes Mathematiques de la Theorie des Richess.22 Cournot also posed

the set of questions that initiated Walrus’ formulation of

General equilibrium. Since the work of Leon Walras’ Elements

of Pure Economics, many economists assumed the existence of

order and voluntary cooperation and based their analysis on

that assumption, again limiting the scope of study to the

perfect and imperfect. They used an atomist approach

explaining phenomena from the bottom up. Walrus and

economist influenced by him also focused on the marginality

of unit change.23 Again, the scope of many of Walrus’

22 Antoine A. Cournot. Recherches sur les Principes Mathematiques de la Theorie des Richess. 1838. In English, it’s Researches of the Mathematical Principles of the Theory of Wealth.

23 Although Walras came to be regarded as one of the three leadersof the marginalist revolution, he was not familiar with the two other leading figures of marginalism, William Stanley Jevons and Carl Menger, and developed his theories independently. Marginalism can be understoodas constraints at the borders or margins where a value that holds true given particular constraints is a marginal value, and a change that would be effected by a specific loosening or tightening of those constraints is a marginal change. Neoclassical economics usually assumesthat marginal changes are infinitesimals or limits. For example, the margins for an individual correspond to his relative position including opportunities to move up from that position. This position is determinedby many things including what he can do physically to influence outcomes, what he has at his disposal to influence outcomes (i.e., resources or advantageous position), and the outcomes of past decisions or advantages gained from those decisions. The writer posits that marginal behavior (or interest) of individuals in a group setting when aggregated can act as a powerful tool to explain group dynamics.

38

theories (including General Equilibrium) was limited because

of the mathematical approach used to explain phenomena (in

the case of General Equilibrium, the relationship between

supply and demand in multiple interacting markets). Walrus

and his contemporaries (minus Karl Marx) also failed to

examine instability and stability as a response to and as a

function of change, legitimacy (or acceptability

rates/happiness indices), justice, and fulfillment of the

social contract.

Carl Menger, the Austrian School founder, made major

contributions to micro-economic theory. Specifically, he

posited the modern concept of the individual’s role and

function (i.e., methodological individualism or the rational

actor). Menger’s protégé Eugen von Bohm Barwerk, and Bohm

Barwerk’s student, Joseph A. Schumpeter further expanded the

methodological individual/rational actor premise.24 Fredrick

24 Schumpter is also famous for describing the entrepreneur/innovator and the effects (i.e., creative destruction) their inputs have on general equilibrium which he described as the business cycle.

39

Hayek was also a strong believer in the rational

individual . . . to a point.

Limits of the Rational: Applications in Public Goods (A

Brief History Continued)

The principle socio-economic minds considering

collective action and the role and structure of the state or

sovereign were highly influenced by John Maynard Keynes and

his General Theory of Employment, Interest, and Money.25 Paul

Samuelson’s definitive articles on public goods and his

interpretation of Keynes’ theories expanded understanding of

the role of the state (or government) in managing the

environment to elicit optimal outcomes for public good

distribution. Kenneth Arrow’s insights into strategic

behavior and the impossibility theorem which postulates

binary choice as the only stable condition in loosely

25

Marilu H. McCarty, The Nobel Laureates: How the World’s Greatest Economic Minds Shaped Modern Thought. McGraw-Hill, New York, 2001.

40

coupled systems (e.g., democracies, vice tightly coupled

systems like command economies or dictatorships) further

pointed out the limitations of rational interest in

achieving optimal outcomes especially in group settings.

Collective action, however, had an indelible role along with

Knut Wicksell’s Finanzthcoretische Untersuchungen in influencing

James Buchanan and Gordon Tulluck’s seminal work on public

choice, The Calculus of Consent.26

Public Choice is the application of economic methods of

analysis to a subject matter usually thought to be within

the realm of political science (or the non-linear complex

system that does not allow simplification); it is one of the

first instances of socio-economic thought were top-down and

bottom up approaches were used collectively. A key question

in public choice concerns how economic decisions are made

when there is no price variable in effect asking how does

one measure interest in the aggregate without some indicator

or measure of desire/interest. Public choice seeks to define

26

Knut Wicksell, Finanzthcoretische Untersuchungen. Jena: Gustav Fischer,1896.

41

a unified field of political economy. Collective action,

which is the familial root of public choice, covers many of

the same subjects as public choice but is focused on limited

classical economic topics with defined parameters (e.g.,

temporal price equilibrium in imperfect markets).

Public choice posits that rational people can define

the general will and authorize government to carry out

actions consistent with that will as long as interdependence

cost are considered. Interdependence cost can be defined as

the cost of persuading individuals or groups to support

aggregate consensus, including the cost of identifying

individual/group interests, resolving conflicts, and off

trading concessions among the groups.27 Interdependence cost

also measures the externalities or negative cost associated

with the aggregate (i.e., the sacrifices or benefits lost).

Externalities based in group effects and individual

interests are also explored in public choice.28 The writer 27 Marilu H. McCarty, 49-5628

Buchanan and Tullock, 283. Specifically, they explore the externality of information hording (defined as an external cost to the voting system) and coalition building which undermine voting rules in power distributed/loosely coupled systems (like direct democracies whereeach vote counts and the outcome should match the aggregate

42

posits that one can use the model to measure the cost and

benefit of certain collective action. The writer also posits

that the curve can be used to ensure stable outcomes when

combined with bargaining (specifically non-zero sum)

methodologies. If persuasion cost are looked at as gains by

a proportion of the “voters” if certain actions are taken

and external cost are looked at as losses taken by a

proportion of “voters” if those same actions are taken, then

bargaining methodologies can employed to push/persuade all

voters to equilibrium (see below figure).29

desire/want/interest). 29

Marilu H. McCarty, The Nobel Laureates: How the World’s Greatest Economic Minds Shaped Modern Thought. McGraw-Hill, New York, 2001. Pgs 49-56. I use James Buchanan’s Interdependence Equilibrium Model to explore cost in collective decisions. Cost-benefit analysis must take place to reach actionable commonalities.

43

Figure 2-1

Ronald Coase expanded Buchanan and Tullock’s argument by

further exploring the issue of positive and negative

externalities and identifying a theoretical equilibrium of

the cost and benefit of the externality compared with

aggregate (or in this case, total) gain.

Later writers would extrapolate the increasingly

complex questions that could not be explained in public

choice as presented by Buchanan and Tullock. Herb Simon,

Daniel Kahneman, and Amos Tversky explored bounded

rationality by developing prospect theory that describes

decisions between alternatives that involve risk (or future

cost). Bounded rationality takes into account variables that

limit rational optimization. The rationality of individuals

is limited by the information they have (or do not have),

the inability to completely process information they have

(or do not have), and the finite amount of time they have to

make decisions implying simplification. Another way to look

44

at bounded rationality is that, because decision-makers lack

the ability and resources to arrive at the optimal solution,

they instead apply their rationality only after having

greatly simplified the choices available. Thus the decision-

maker is a satisfier, one seeking a satisfactory solution

rather than the optimal one. In other words humans have

marginal interest and are marginal beings precisely because

we are human and bound or limited to the finite. Bounded

rationality can also be used to explain conformance in

groups; it is in the interest of the individual (for

survival purposes) to be a part of a group for a few

reasons. First since the individual is in a constant state

of incomplete information, group living allows short cuts

(e.g., I saw him run, so I started running and I did not

even see the lion). Another example is acting in the groups

interest even though it is not in the individuals interest

because the cost of being self interested at that time may

incur too high a cost (e.g., I did not steal the bread

because I am bound by group rule-sets and they would have

thrown me to the lion).

45

Thomas Schelling explored causes of conflict and

cooperation in his work The Strategy of Conflict.30 Turning

attention away from zero-sum games, Schelling emphasized the

fact that nearly all interactive exchange scenarios in group

context contain a mixture of both conflicting and common

interest. Schelling was able to analyze interaction between

competing groups using non-cooperative game theory and

proved that equilibria exist (e.g., the mutually assured

destruction and brinkmanship of deterrent strategies during

the Cold War). Schelling’s proofs were expanded by later

conflict theorist who explored the dilemmas of intra-group

(or large group) cooperation, commitment, and coordination.

Considering the Rational and Irrational Self-Interested

Being

Collective action theories are designed to explain the

causes, courses, and consequences of individual

participation in groups.31 Mark Lichbach used arguments

discussing public goods and game theory (principally the

30 Thomas Shelling, The Strategy of Conflict. Harvard University Press, 1994.

31

Lichbach, Cooperator’s Dilemma, pg 18.

46

Prisoner’s Dilemma) to reveal that “under certain

conditions, the equilibrium outcome of voluntary

contributions to the general welfare will be Pareto

deficient.” 32 It is in the collective interest of all to

cooperate, but in the self interest of none. So why do

people cooperate? Lichbach proposes using four approaches to

examine the question: the market, the community, the

contract, and the established hierarchal. Each approach

examines individual acquiescence or cooperation within group

context given the individual’s non-interest (according to

the Pareto deficient outcome) in cooperating and the author

provides solutions using each approach. Some of the solution

examined in the market approach include increasing benefits

and reducing cost, reducing the supply of public goods

(decreasing expectations), using incomplete information,

restricting exits of individuals, and increasing

probabilities of success in competitive scenarios (meeting

expectations). Community solutions include using common

32

Ibid. Note. Pareto deficient denotes that the outcome (or system)can be improved.

47

knowledge to overcome mutual ignorance (in effect increasing

knowledge and incentivizing specialization) and using

value/belief system manipulation to elicit cooperation.

Contract solutions include self-government and mutual

exchange and tit-for-tat agreements. Hierarchal solutions

view levers through a coercive lens. Lichbach concludes that

people cooperate because it IS in their interest to do so in

the long run whether looking through the interactive

approach lacking organization or the interactive approach

with in-place systems; our ancestors that did not cooperate,

died off. Lichbach also examines the incentives and

disincentives to cooperate (or choose sides) in internecine

conflict in his The Rebel’s Dilemma.

Lichbach’s Rebel’s Dilemma further explores why people

cooperate by testing the Hobbesian dilemma: why, if people

are doomed to conflict given competing self-interest do they

live their daily lives in a coordinated fashion; why do they

cooperate and contribute (for the most part) to social order

and public goods? Lichbach explains rational interest in the

context of the public good of social order and the ability

48

of the state to deliver those goods. He explores collective

dissent in the tradition of the Scottish philosophers and

their maxim of the citizens’ divine right to rebel. Lichbach

explores his hypothesis by finding Nash equilibria in games

that weigh dissent and cooperation; or cost and benefit

analysis given collective or group influence that can

challenge state authority (e.g., individuals weigh the costs

and benefits of joining a rebel group who controls their

village, as rebel groups weigh the cost and benefits of

dissent or cooperation within the state given differences in

interest). Lichbach again uses the market, community,

contract, and hierarchal approaches to demonstrate that a

solution to stability is allowing conflict (i.e.,

competition in the social context or politics) within social

forces permits manageable change in power enabled polities.

The state maintains social order because social disorder

pervades dissident groups (i.e., the dissident group or

rebels are unable to deliver the goods because of non-

cooperation within the group and actions taken against the

group). This dynamic is not permanent and the right

49

combination of persuasion and coercion from the state or

dissident group (once it is organized) can cause a

convergence of influence which tends to increase in momentum

as the state’s legitimacy is put into question because it is

unable to deliver a public good (e.g., internal security)

that may lead to the eventual overthrow of the state.

David Hirshliefer explores the dynamics of conflict in

his work The Dark Side of the Force. 33 He explores the roots of

exchange and production posed by Vilfredo Pareto:

“The efforts of men are utilized in two different ways:they are directed to the production or transformation of economic goods, or else to the appropriation [through mutually beneficial exchange or otherwise] of goods produced by others.” 34

Hirshliefer posits conflict shares with exchange the central

analytic paradigms of optimization of individual interest

and societal equilibrium when aggregated. He believes the

key difference is while exchange seeks mutual benefit or

advantage (or a non-zero sum solution), conflictual outcomes

disturb Pareto efficiency (i.e., outcomes are zero-sum games

33Hirshliefer, pg 1-22. 34

Ibid, pg 1.

50

were benefit or advantage gained by one side is usually at

the expense of the other). Hirshliefer offers two

propositions regarding cooperation and conflict that take a

Hobbesian stance: 1. cooperation, with few exceptions,

occurs only in the shadow of conflict (denoting threat,

risk, or future cost) and 2. when people cooperate, it is

generally a conspiracy for aggression against (or protection

from) others.35 He also believes the sources of conflict

include the contending parties’ opportunities to gain an

advantage, preferences guided by bound factors such as

history, emotion, etc. that can lead to irrational conflict,

and the perceptions (again a bounded phenomenon) of the

relative costs and benefits of future action with incomplete

information which as discussed earlier in the thesis leads

to marginal rationality and unintended consequences. For

example, the ‘plan’ said the war would be won in a year, but

it has been five years and now we are just fighting to

survive day to day (i.e., reactive responses given conflict

equilibrium or stalemate).

35

Hirshliefer, 12.

51

Marcus Allais also explores the conflict in context of

the bounded nature of individuals and groups. Allais sought

to explain the basic structure of the economy by identifying

the governing dynamics of the following:

“ . . . permanent regularities, particularly quantitative, from the history of civilizations, dealing with economic systems, standards of living, technology, monetary phenomena, demographic factors, inequality and social classes, the respective influences of heredity and environment, international relations, exogenous physical influences on human society, and political systems.”36

The previous statement (admittedly an ambitious goal) was

tackled eventually by an equally ambitious set of ideas.

Allais who also worked as a physicist studied the periodic

behavior of pendulums and applied his understanding of

physical phenomena to the social realm and observed striking

regularities in social phenomena which were as striking as

those observed in the physical realm.37 He concluded that

everything happens as if, irrespective of the institutional

framework, contingent historical situations, and their 36

Marcus Allias, “The Passion for Research,” in Michael Szenberg (ed), Eminent Economist: Their Life Philosophies, Cambridge University Press, New York, 1993. 37

Ibid, 176.

52

particular aspirations, people react in remarkable similar

ways (as if mechanically) to identical (or similar) complex

phenomena.38 In other words our perceptions, interest, and

therefore rationality are conditioned by or bound to our

past (or as Socrates and Plato would say, our collective

knowledge). Implicit in his proposition of the idea is

synthesis; i.e., that the present (or marginal) and

therefore future state of experience is primarily a

condensed or aggregate synthesis of past experience. Allias

also concluded that economics is the synthesis of all social

sciences including psychology, sociology, political science,

and history. He believed economics unified such disparate

phenomena as the workings of democracy, the balance among

different levels of economic power, and the competition for

power. By synthesizing knowledge, one gains understanding of

the interdependencies and complementarities that link all

aspects of social phenomena (note: the writer believes the

interdisciplinary systems approach accomplishes synthesis

38

Ibid, 177.

53

without all the math and therefore will use it as the book

that socio-economic methodology allows one to read).

Well What Do You Expect: The Effects of

Expectation Given Competing Interest

John Muth described rational expectation as the

equivalent of forecasting outcomes on stochastic systems;

you cannot accurately accomplish it. His theory sent

shockwaves throughout the micro-economic world because

according to rational expectations, individuals decide their

current behavior according to their expected benefits and

costs using the information that is currently available

(i.e., they are limited and guided by marginal interest).

The writer agrees with Muth’s theory, to a degree; it makes

sense when one is looking from the bottom up and not

factoring in the influence on individual interest by

aggregate interest. In other words, much of our rationality

is bound to institutions, norms, values, pressures, etc.

that normalize or govern our behavior and therefore one can

extrapolate probabilistic trends given the bounded nature of

humans. Robert Lucas expanded Muth’s insight to the macro-

54

economic world by positing that societal institutions and

groups manipulate aggregate interest by managing

expectations and price dishonestly to assuage and stabilize

current conditions. His point is that if individual

interest and expectations are unpredictable, any

manipulation of the interests or expectations of the

individual will lead to nominal or inflated outcomes. For

example, are union workers’ salaries real (or in equilibrium

given all other interest) or falsely inflated? According to

Lucas, actions that interfere can lead to permanently

inflated expectations, which in the long term can lead to

unstable solutions. Although Lucas applied firm or business

cycle methodology (or something fixed) to societal paradigms

without acknowledging the limits associated with bound

individual interest, his argument can help explain the

phenomena of increasing expectations and determining

legitimacy of state actions.

What About the Socio’s in Socio-Economic Methodology?

The writer would be remiss if he did not mention other

contributors to socio-economic methodology. The writer (like

55

all humans) is a limited being and therefore must produce a

limited scope thesis. Some of the major contributors to

socio-economic methodology who are not heavily discussed in

this thesis are Max Weber whose primary questions concerned

legitimacy and authority which is the intellectual

progenitor of my law of the loudest few; Emile Durkheim who

applied the concepts of mechanical and organic solidarity to

explore societal division of labor and its effects on

cooperative behavior (and who is discussed somewhat in

Chapter four); Karl Marx who examined class conflict and

proposed communal distribution of wealth as the solution to

the societal cooperation question; and Niccoli Machiavelli

who provided a basis for realist philosophy and Hobbsian

perspective. These men made significant contributions to

socio-economic methodology and sought to answer the

underlying theme of this thesis: the duality of the

seemingly diametrically opposed conditions of social

conflict and cooperation, and the interest of the individual

compared to that of the aggregate interest and vice versa.

56

Their contributions to socio-economic thought and by

extension to this thesis cannot be overstated.

Reaching Consensus

Generally most social scientist agree that evidence

showed that humans are selfish (or self-interested) beings;

that they tend to rationally act (given limitations) in ways

that are in their interest, and that being a part of a group

is usually in their interest. They also generally agree that

groups tend to ‘organize’ to some degree and divide labor,

and individuals within the group generally accept stations

as prescribed by the supposed perceptions of the group

(i.e., they are bound or tethered to the group). Groups also

distribute or acquire resources based on some form of

exchange (whether through beneficial exchange—i.e., service

for service, money for product, etc- - - or deleterious

exchange – i.e., stealing, rent seeking, taking without

giving, etc); and are marginally rational (i.e., what’s good

for me at this time, with over time taking a back seat) at

57

the individual level even when observed in a group

context.39 The writer posits that emotive variables must

also be considered when examining information, especially in

forecasting and defining intent. Emotive variables

constitute a continuum from happy to sad/mad and are based

on satisfaction in the relative sense; i.e., perception of

fairness of situation and expectations govern rationality

outside of a vacuum. 40

Conclusion

In this thesis the writer has chosen among a myriad of

methodologies and theories and presented those that best can

be utilized to understand social phenomena given what he

39

Mike Gaines. As a rule people would rather have $50 now than $100in a year; that is their interests are marginal. If one offered $50 in five years or $100 in six years, even though the year difference and theoffer to double the money remain constant, the results are completely different; people will overwhelmingly choose $100 in six years.

40 Ibid. For example, person X and person Y make one and two dollars respectively for the same work; as long as person X does not know person Y is making twice what he makes he is satisfied in his relative position. However, once person X finds out, satisfaction decreases because of loss of relative position compared to what person Xbelieved as fair, and emotive responses ensue (i.e., person Y gains an advantage and ergo can satisfy his interest easier in the future and person X understands this).

58

believes constitute immutable facts and constraints.

Methodologies must consider agreed upon parameters,

characteristics, and dynamics of groups, time constraints of

analyst, and types and relevance of information. The

strongest methodologies are those that use the agreed upon

root assumptions as the base to answer the ‘what happened’,

‘what’s happening’, and ‘what’s going to happen’. These

assumptions are best handled given the interconnected nature

of the current environment (or system) by public choice,

game theory and the cooperative/non-cooperative nature of

conditions with imperfect info, and a systems framework to

define the environment. These methodologies are primarily

found in the realm of economics and the interdisciplinary

mechanisms of systems theory. Both disciplines cast wide

nets using simplifying tools that offer explanations of

various group dynamics and the emergent phenomena that take

place in complex and chaotic interactions. The writer will

primarily draw upon the unifying (as in micro to macro)

theorems of the rational actor considering his irrational

tendencies and marginal interest that are bound to group

59

interest (or bounded rationality). Theories such as public

choice, the Pareto principle, equilibrium testing in the

normative (what ought to be) sense and game theory to find

equilibria in the philosophic sense (i.e., not using the

math) also help to explain governing dynamics of group

interaction. The writer will also utilize normal and skewed

distributions to reveal given the bounded nature of

individual interest that actions can be taken to influence

or guide desired outcomes in the general sense. The writer

will synthesize the collection of immutable rules or

governing dynamics found in individual to group, and group

to individual interaction to make sense out of the system of

the human condition in context of current IC problem-sets

(i.e., Iraq, Terrorism, and U.S. Polity expectations). But,

before one can understand the present or future one must

understand the relevance of past information.

60

CHAPTER THREE

Doomed to Repeat: The Relevance of Past Knowledge

to Current/Future Events

Wait a Minute; You Didn’t Talk About History!

The writer purposely did not include history as one the

social sciences used in this thesis for three reasons: 1.

Historical perspective is not immutable (i.e., there is

bias); there is no exact description except that something

did or did not happen; 2. Finding source info to explore the

examples in chapters four through seven was exhaustive (you

wouldn’t believe how many books and articles are published

about Iraq and Al Qaeda); and 3. The writer thought it more

pertinent to explore history’s immutable truth: that despite

bias and imperfection, it is still highly relevant to

understanding current states and future probabilities. So

to all of ye history buffs, the writer did not forget about

George Santayana’s often misquoted remark, "Those who cannot

remember the past are condemned to repeat it."41

41 George Santayana, Reason in Common Sense. As a part of Vol 1 of TheLife of Reason: The Phases of Human Progress. London Constable, 1906. The quote

61

Santayana’s aphorism is an immutable truth and the writer

chose to approach history via socio-economic methodology and

reveal its applicability and relevance in interpreting

phenomena.

The age old question 'do past lessons

and knowledge apply to today’s fight' has been given great

attention in the recent discussions by military

"experts"? Are the tenets of the Powell Doctrine applicable

to counterinsurgency? Is Sun Tsu still relevant? The reader

may wonder why of all the social sciences discussed in the

thesis, the writer has not discussed the relevance of

history in interpreting (or forecasting) phenomena. The

thesis does discuss history and its relevance but does so in

the tradition of Herb Simon and Marcus Allais. This short

chapter will explore how a careful examination of Nassim

Nicholas Taleb's The Black Swan: The Impact of the Highly Improbable and

James Surowiecki's The Wisdom of Crowds will reveal how past

knowledge, however imperfect, can be relevant to existent

conditions and future events by understanding the

is usually stated as “Those who don’t know history are doomed to repeat it.”

62

interdependency and randomness of cause and effect and the

uncanny ability of mankind to make sense out of random

phenomena and apply lessons to similar phenomena.  

Bound Mediocristan and Unbound Extremistan

The Black Swan by Nassim Nicholas Taleb explores the

idea of the predictable and unpredictable, the certain and

uncertain, the non-scalable and the scalable, the geometric

and the fractal in his contrast of Mediocristan and

Extremistan.42 He admits that when “history crawled” (i.e.,

when the environment was less complex) things were subject

to gravity and therefore predictable—the world of

Mediocristan. Humans achieved stability by observing similar

phenomena over the millennia and bit by bit learning from

them. However, Taleb believes that the tempo and

interconnectedness of activity and phenomena has increased,

ergo increasing the complexity of the world. In this new

world of Extremistan, stimuli can have disproportionate

42 Nassim Nicholas Taleb. The Black Swan: The Impact of the Highly Improbable. New York, Random House, Inc. 2007

63

effects in contrast to expected results. Therein lies the

crux of Taleb's argument: that in a world not controlled by

the laws of physics (e.g., influence, ideas, knowledge,

information; etc), things that we don't know that we don't

know can have a disproportionate impact on our lives ergo

restricting the utility of prediction.

Taleb’s argument has its intellectual roots in the

works of John Muth and Robert Lucas. Muth and later Lucas

postulated the impossibility of forecasting rational

expectations by revealing how expectations are never

perfectly rational. Put simply, if one has100% perfect

information one can be 100% rational. If one is 100%

rational on the first move, he can be 100% on the 2nd, 3rd,

4th, . . . Nth. Since perfect information is impossible,

one can only be 90% rational on a great day. On the 2nd, 3rd,

4th, and Nth day even if he maintains 90% efficiency, the

percent of rationality decreases because of the

imperfectness of the start day when stochastic causes and

effects (or non-deterministic variables) are bound

64

(e.g., .9*.9*.9*.9*= 65% and will approach zero as time

moves forward).43

Taleb’s argument can also be understood by employing

marginality. For example, imagine a system that gets it

(whatever it may be) 99% of the time right. Its physical laws

and limitations are understood and the majority of its

weaknesses are worked out or corrected over time. If

something does go wrong (that 1% chance) it can have

disproportional effects because it is unexpected (changing

to an unknown state that has not been experienced and

learned before). Since information is never complete (even in

a closed or deterministic system) the stochastic system can

only approach and never reach 100% efficiency. Something

will eventually go wrong and our marginal expectations (and

all the future expectations we have tied to the initial

expectations) will be affected greatly.

43 Mike Gaines. One can also understand the phenomena exploring the probability of hitting all the balls in the wholes with one shot in a billiards game. After about the 4th strike the number of variables that have to be considered becomes so great (e.g., the gravitational pull of the Jupiter on the balls) that the probability of success approaches zero.

65

Finite Resources and Infinite Problems

Bureaucratic organizations experience this phenomenon

all the time. For example, the counter-intelligence (CI)

executive has about a 99.9% success rate at keeping out or

rooting out spies; however, if one spy is missed, he can

have disproportional effects on the perceived effectiveness

of the CI executive. The CI must continuously weigh the cost

and benefit of resource allocation given the limits to

achieve the ever distant 100% (i.e., the closer one gets the

farther one is away).

One of the primary weaknesses of Taleb’s argument is

that he does not consider the reality of the finite and the

limited and the requirement to economize; i.e., time,

resources, weighted rewards/punishments, etc. Black swans

are highly impactful precisely because: 1. We have not

thought of them and therefore are not prepared for them, and

2. Our interconnectedness and irrational expectations

magnify its effects. However, what if we did not emplace

measures that provided system robustness against something

66

that was highly impactful AND highly probable? What if

Washington D.C. did not have a fire department?

A Solution versus The Solution

Fires are highly probable in a city the size of D.C.

and could be highly impactful due to the proximity of row

houses and the probability that the fire would find more

fuel (wood, plastics, etc) in the adjacent houses. A

solution is to prioritize and allocate resources to

establish an integrated fire and rescue apparatus adding

robustness to the system (i.e., D.C.) because the event is

probable AND impactful.  

The solution, however, is elusive given finite reality

(limits). Taleb points out how we seek validation through

observation without understanding the complexity of a

problem. Taleb’s aphorism about the Black swan highlights

the problem of induction, e.g., all swans I have observed

(past tense) are white, therefore all swans are white

(present and future). Until, that is, one observes a black

one. The complexity of how one breed of swan turned out

black is a key facet of the Taleb’s argument; observations

67

are just that, observations. Observations, no matter how

many, will never constitute complete information or all that

is possible in infinite variability. However, the

information is not useless; we can learn. 

For example, let us use the D.C. fire example. ‘True’

robustness may be found by building with fire proof

materials that have no (known) unintended consequences.

Taleb, however, rightly argues that one can never see the

whole picture and can never truly deduce absolute cause and

effect in complex phenomena, ergo one should concentrate on

the minutia or think in the margins (i.e., what is rational

at that time, over time). For example, one buys fire

insurance and practices fire safety to add robustness in the

event that the improbable house fire takes place. Although,

Taleb correctly points out the impossibility of complete

information, he does not give credence to what we have

learned and that we continue to learn through our bound

rationality given mutual interest and limited resources. The

purpose of the below figure is to show the rationality of

68

economizing resources to address the competing forces of the

finite with infinite possible causes and outcomes.

Figure 3-1

For example, it is correct to allocate resources to things

that the USA KNOWS can hurt it. It is rational to focus

effort and resources to high impact/high probability problem

sets. Taleb's point is that in a complex world, the cause of

a high impact/low probability event can be as simple as a

farmer taking revenge on a corrupt insurance system who

69

refused to pay his brother's insurance claim and that one

should insure against (i.e., mitigating the damage by adding

robustness to the system) those unknowns.  

The Implausible Scenario 

The farmer, who was once an Idaho militiaman, was

an explosives expert who was inspired by Al Qaeda attack

cost disproportionality to US response cost (that happened

to be tracked and posted daily on the Al Qaeda website). His

best friend Hanz, a South African whom he met over the

internet at a site called ‘The Friends of Homogeneity’,

purchased nuclear materials with money he had left over from

the sale of a $1000000 diamond he found twenty years ago,

gave him a dirty bomb. The refusal by the black actuary to

pay for his brother's losses because the municipal did not

have firefighters was the last straw. Boise goes up in

flames, the Constitution is torn up, and everybody's looking

for their Semitic neighbors. 

Vilfredo Pareto and Disproportional Effects

70

The point of the latter example and figure is to give

an example of how insignificant events or causes can have

disproportional or Paretoesque (i.e., the 80/20 rule)

effects; especially when one is not prepared for it due to

low probability of occurrence and a misunderstanding of the

"true" and complete picture. Taleb's weakness is that he

does not give credence to white swans (i.e., highly probable

and highly impactful) or to the human capacity to learn even

when confined to imperfect information and marginal

rationality.  

Past information/observations ARE relevant, but become

less so as complexity and interdependence (i.e., everything

effects everything else) increases. However it becomes less

so not because the immutability of relevance of past

knowledge is challenged, but rather less relevant to the

application of the knowledge as a function of the tempo (or

increased pace of interaction and variability) of

marginality and the limits of processing information given

the increase in information availability that is present in

today’s environment; i.e., it’s less relevant because in the

71

margins life is so fast that we cannot learn or correct fast

enough so we have to insure or hedge our bets.44 Sun Tzu is

relevant in conflict; his tenets are applicable because

human activity is bound by physics/limits (i.e., human

experiences will be similar and ergo lessons can be learned

and applied). However, as conditions are never exactly the

same, as interpretation of past conditions is never truly

accurate, and as complexity and interconnectedness

increases; the lessons can have less effect because the

causes have infinite variability or randomness

and inflationary or exponential effects even though based in

human endeavor and bound by physics--remember we are talking

about Extremistan and information accessibility; i.e., the

more you know, the more you know that you don't know.  

Bounded Rationality Even in the Margins:

The Self Interested and Wise Group

44 Mike Gaines. Paradoxically, Taleb’s conclusions would point to using more mitigating or controlled measures (i.e., defensive where variables reduce because the endpoint is known vice using offensive actions where 2nd, 3rd, or 4th order effects can lead to unintended consequences) against phenomena; e.g., just insure against the damage once a terrorist attack DOES happen.

72

James Surowiecki explores ways to identify the things

that we don't know. In his seminal work, The Wisdom of Crowds,

he explores the advantages and disadvantages of collective

thought. Surowiecki contends that crowds are wise as long as

certain pitfalls are avoided: diversity of opinion must be

maintained, independence of thought must be recognized,

decentralization to allow increase of perspective should be

encouraged, and a method for aggregating independent

judgment must be utilized.45  

If the latter 4 elements are employed, crowds or groups

can overcome the inherent problems of cognition (e.g., all

agree that it's a Coke can and don't care about the

year/make/model that experts on Coke cans may argue),

coordination (e.g., natural behavioral optimization; i.e.,

following the path of least resistance) and cooperation

(e.g., doing what is best for the group because it is in

one's interest to do so). Surowiecki smartly explores the

problems of cognition, coordination, and cooperation

45

James Surowiecki. The Wisdom of Crowds. New York, Random House, Inc.2004

73

giving examples of the wisdom and madness of crowds

differentiating the two states by showing how diversity,

independence, decentralization, and aggregation optimizes

the wisdom of crowds and the lack thereof increases the

madness of crowds (e.g., mobs, imitation, emotive cascading,

etc).

And, They Learn (Even in the margins) 

Elements in Surowiecki's argument also reveal the

utility of past information. His coordination and

cooperation phenomena can both be explained by the

limitations and advantages of marginal rationality. Humans

over time have internalized many cooperative behaviors

because, as a race, it was in its interest, to do so (i.e.,

the guys who were not a part of the group got ate by lions).

Over time humans as a race on the individual level have also

figured out that it is better to follow the path of least

resistance (coordination); the guys that didn't died hacking

their way through the jungle. My point is Surowiecki's

argument that humans are internally cooperative and

intrinsically coordinate has theoretical basis (i.e.,

74

natural selection) and are explored in many proponents of

socio-economic methodology including Herb Simon, Marcus

Allias, and the bounded rationalist; Gary Becker and the

cost/benefit advocates, and even opponents of the utility of

bounded rationality such as John Muth.

We’re Not so Different from the Romans, After All

(despite the internet)

Accepting the evolutionary basis allows one to

understand the advantages of marginal rationality, and,

ergo, the limitations. Over time, the aggregate gets (to an

acceptable level) what it desires or expects. Individuals,

however, are bound by aggregate desires and expectations and

therefore are connected to the aggregate. The individual

marginally rationalizes within the limits of what Taleb

would call Mediocristan; that is they are bound by physical

laws as well innate social laws.  

If one accepts the limitations of marginal rationality

one understands how individuals bound by the physical and

75

social world, aggregate needs, aggregate behavior, and

aggregate desires; one can recognize how individual behavior

will look remarkably similar over time. The choices and

decisions they make will be remarkably similar over time,

and there interest will be remarkably similar over time.

Change will be evolutionary vice revolutionary. Therefore

one could apply past experiences, situations, and lessons

learned by our close cousins of the past to our present

situation and (somewhat) to our (very marginal) future.

Yogi Berra and Predictions

Yogi Berra is given credit for saying, “it’s hard to

make predictions, especially about the future.” While on the

surface the statement seems unintelligent, when examined

closely the indisputable truth of the statement becomes

clear. The future is hard to predict especially as distance

in time increase and variable interactions (cause and effect

inputs) increase. Add to that the goal of predicting

‘specifics’, as in specific expected outcomes given inputs

76

in a non-deterministic system when variability grows

infinitely, and one could rationally recommend Berra for a

Noble Prize. Berra is fundamentally correct, but some

predictions are better (or easier) than others. If the

governing dynamics of bound rationality, marginal interest,

and broadened expectations (i.e., widening the acceptable

variability of the prediction –e.g., if A is done, something

close to B may result) are considered, better predictions can

be made.46

Let’s Play Plinko!

Surowiecki and Taleb both believe the future is

inherently unpredictable being comprised of infinite

variables. Surowiecki, however, believes groups can pick

(given limited choices; e.g., which horse will win) the

right solution a majority (>50%) of the time if one uses

techniques (i.e., diversity, independence, decentralization,

and aggregation) to avoid pitfalls.47 When individual

46 Mike Gaines. Broadened expectations denotes probabilistic outcomes; i.e., generalizations and approximations are the best one hopefor in non-deterministic systems.

47 Surowiecki, 44-54.

77

guesses are aggregated over time, the collective gets it

right more than wrong (note: the assumption is based on

evidence cited by Surowiecki and collective or societal

development/advancement over the millennia). The below

Plinko figure explores this concept by graphically depicting

individual choices even only skewed by a single percentage

point can have dramatic affects in the aggregate.48

51%49%

51%49%

51%49%

51%49%

51%49%

51%49%

Towards Pareto Distribution

51%49%

51%49% 51%49%

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51%49% 51%49%

51%49% 51%49%

51%49% 51%49%

51%49% 51%49%

Towards Pareto Distribution

51%49% 51%49%

Figure 3-2

If the Plinko board is laid on its side, a trend (whether

positive or negative) is easily identified.

48 Mike Gaines. This concept will be explored more in Chapter 5 ofthe thesis and will show how individual and better yet coordinated inputs skewed in a general direction when aggregated can achieve generaltrends towards desired outcomes even in complex non-deterministic systems (i.e., Iraq).

78

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Figure 3-3

The interconnectedness of the aggregate and the limitations

of the physical (only 9 horses are running) bind the guesses

of the individual’s cumulative (or past) experience, which

are partly defined by the aggregate (i.e., how others

experienced the cumulative phenomena), to expected outcomes.

Outcomes are limited, therefore individual

perspective increases the available information for the

event once aggregated; e.g., I think horse F will win

because of my past experience that is bound to the past

experience and perspective of the aggregate.

Conclusion

Nassim Taleb and James Surowiecki both give

sophisticated and convincing arguments regarding the

79

complexity of an interconnected world and interpretation of

information. While Taleb’s weakness lies in his over

reliance on randomness decoupled from learning, Surowiecki

gives too much credence to the “Invisible Hand” and not

enough to the randomness of cause and effect. Do we learn

and are those lessons applicable to explain present or

future events/phenomena? Yes, but our experiences will never

be the same (no matter how similar) and individual

perspective and interest (no matter how tethered to the

aggregate) is still individual even as our

interconnectedness increases. Paradoxically, Taleb proves

the relevance of past information by showing that the system

has corrected itself (or learned in the aggregate) over

time, and it now is dealing with marginal problems that have

disproportionate impacts only because of irrational

expectations. Sun Tzu definitely applies, but not in exactly

the same way. Or to quote Aldous Huxley, “The charm of

history and its enigmatic lesson consist in the fact that,

from age to age, nothing changes and yet everything is

completely different.” The writer agrees, but also believes

80

socio-economic methodology can help clarify why everything

(or the conditions that shape everything) is different.

81

CHAPTER FOUR

Defining Our Environment and Recommending Solutions:

Influencing Empowered Non-State Actors in an Interdependent

Environment

One of the most obvious methods of finding out if

things are different is by taking a present state or

condition and comparing it to a past state or condition. For

example, one knows the environment is different today than

it was say 200 years ago: we no longer allow slavery (to a

probabilistic certainty) and we have cell phones (again, to

a probabilistic certainty).49 Our world has become smaller;

we live in a world more interconnected and interdependent

than arguably anytime in human history. Conditions are

definitely (or at least marginally) different for the

analyst that once examined most phenomena through a binary

lens must understand the world as a system of interconnected

and interdependent interest where the parity of power no

49 Mike Gaines. The writer posits that even ‘knowns’ can be understood probabilistically in stochastic complex systems; e.g., slavery still exists in some form in the world and not everyone has cellphones.

82

longer rest explicitly in the confines of a sovereign or

state authority. The world has changed and analyst must

adapt in sophistication to that change. Exploring the

effects of globalization and the transmission of power

enablers such as knowledge, guns, and opportunities to

influence which enables non-state actors (individual/group

and multilateral/international meta-governing organizations)

to affect transnational security, allows analyst to better

interpret the environment and recommend solutions to affect

a desired outcome. Analyst must consider the ‘new’

realities that govern our ‘new’ environment. Socio-economic

methodology can assist analyst in understanding the transfer

of power from the state to the individual (or small group);

it can assist them in finding cooperative and conflictual

mechanisms to influence the environment from the individual

to the international level; and can assist analyst in

providing recommendations to mitigate the effects of newly

empowered malevolent non-state actors.

83

After Two World Wars, We Finally Get it Right and Then

Things Changed!

A prominent threat facing our global system of security

and economic prosperity is the emergence of transnational

non-state actors. Our current system can influence malicious

"state" actors through international organizations such as

the United Nations or the World Trade Organization; through

regional organizations—from security and diplomatic

organizations such as the North Atlantic Treaty Organization

(NATO) to economic organizations such as Mercado Comun del

Sur (MERCUSOR) or the Association of South-East Asian

Nations (ASEAN); or through internal state action (e.g.,

law, tariffs, elections, civil conflict, etc.) or external

state action through (bilateral or multilateral) diplomatic,

economic, informational, or military response. We must

emplace similar mechanisms that effectively control non-

state actors.

In the broadest sense, a non-state actor is an actor on

the national or international level which is not a state.

Examples of non-state actors run the gamut from non-

84

governmental organizations (NGOs), multinational

corporations (MNCs), and international media outlets to

transnational Diaspora communities and transnational

terrorist or criminal organizations.50

Globalization – Convergence of Information and

Influence

The knowledge revolution – marked by advanced

communication and storage devices, the establishment of

liberal trade policies, and the advancement of enhanced

logistic capabilities (e.g., containerization, tracking,

through-put enabling technologies, and reduction in

transportation cost) – promotes the free flow of goods,

ideas, and people between countries. In the aggregate,

globalization has been a positive force in the world,

ushering in economic growth, stability, and prosperity; it

opens up access to power enablers to any actor who is

connected to the knowledge revolution. Power enablers

include everything from guns and money to knowledge,

50 Joseph Nye, Understanding International Politics: An Introduction to Theory and History. Harvard: Longman Classics in Political Science, 2007. Pg, 8-9.

85

influence, and persuasion. In today’s world, access to

information provides access to power.

Globalization, however, also creates paradoxical

disadvantages. As it enhances the relative wealth of many of

its beneficiaries, it may in fact decrease the relative

wealth of the marginalized if not in actual terms at least

from their relative perspective (e.g., he earns $2 a day

instead of $1, but now sees that you make $500 a day). As

globalization illuminates the similarities among all people,

it also highlights our differences, promoting homogeneity

among common groups rather than a homogeneity of ideals

(e.g., rule of law, justice, freedom, liberty) among all

people. People identify themselves by those similarities and

differences; they also see disparity clearer. With new found

power through information, people who perceive themselves to

be marginalized tend do something about that disparity.

Globalization has also increased the effectiveness of

all forms of non-state actors. For example it contributed to

raising the bottom line for MNCs, increasing the

effectiveness of development programs for NGOs, or

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augmenting the organizational/technical acumen of terrorist.

The current global system’s flows of information, ideas,

knowledge, goods, and people allows a determined non-state

actor to manipulate conditions to spread its brand of

knowledge, ideas, goods (or ‘bads’), and people throughout

the world. Information technologies not only allow Save the

Children to increase donation coffers, they also allow Al

Qaeda and associated movements (AQAM) to disseminate their

virulent form of hatred to a wider audience.

Globalization Empowers Malevolent Non-State Actors

AQAM and other malevolent non-state actors exploit new

communications technologies, ease of movement between

borders, and global financial networks to achieve their

political goals.51 AQAM has mastered taking advantage of

technologies that enable them to prosper (or at least

survive and remain relevant) even in a very hostile current

environment. After being seriously crippled during the

initial onslaught of American and Coalition power, AQAM

dispersed and reorganized into loosely connected cells

51 Lynn E. Davis, Globalization’s Security Implications. RAND Cooperation, 2003.

87

(hence the associated movements moniker) that use

communications technology (e.g., internet, cell phones,

PDAs, etc.) and centralized ideals to attain extraordinarily

decentralized execution.52 For example, when Gen David H.

Petraeus briefed Congress on the gains achieved by the

“surge” after the implementation of the clear, hold, and

build strategy, he specifically mentioned the cyber battle-

space as one of the primary remaining challenges.53

The internet has become AQAM’s most important tool in a

battle of ideals in an environment where it has diminished

access to sanctuary, funding, and centralized structural

leadership. AQAM is able to inspire motivated youth through

internet propaganda laced with religious fervor and half

truths; AQAM uses an overarching ideal to organize

disaffected, marginalized, and under-utilized people looking

for common cause, group acceptance, and ways to tap into

their perceived potential.54 AQAM no longer needs training

52

Marc Sageman, Understanding Terror Networks. University of Pennsylvania Press, 2004.

53 Sagemen, 44.54 Ibid.

88

camps and sanctuaries as long as their ideals appeal to

those aforementioned, and they continue to have access to

technology to spread their fundamentalist message.

The free movement of people and goods also empowers

AQAM. Operatives of the organization take advantage of

efficient transportation systems and liberal travel policies

of nations to establish sleeper cells in countries that may

be potential targets. Even post 9/11, where many of the

loosely networked cells are second and third generation

Diasporas who feel marginalized within their own nation,

potential dangers exist. It is much easier to get in most

countries if the traveler is from a stable and prosperous

“friendly” country (e.g., a British citizen traveling to the

United States). The potential terrorist can not only “plug”

into the international transportation system, he could also

plug into the associated supply chain system. Imagine if a

disenfranchised or marginalized (from one’s relative

perspective) British citizen of Pakistani decent,

sympathetic to AQAMs vision of a peaceful world ruled by

89

Sharia law, decided to use his unused (because he was unable

to “plug in” to his desired career field or reach his ideal

expectations) bio-chemistry degree to further the cause. He

may not be able to “plug in” to the local economy, but he

certainly can plug into the international transportation

system. Imagine if he also shipped chemicals to a friend

that alone are harmless but when combined are deadly;

imagine if he then traveled to the United States and

combined those materials into the deadly substance using the

knowledge he attained in university and an AQAM website.

Imagine if he unleashed the substance into some system

(whether food, transportation, electric, etc.) to cause

catastrophic disruption. Imagine if he did this without AQAM

even knowing about it (note: these assessments will are

further explored in the Chapter six of this thesis and

reveal an alternate assessment of the state of AQAM viewed

through a socio-economic lens. How do we stop the super-

empowered individual or non-state actor? How do we prevent

super-empowered and loosely affiliated networks from

90

“plugging in” to and becoming empowered by the convergence

of enabling factors of information and influence?

Re-setting the balance of power

To explore the complex phenomenon of power disparity,

it is helpful to begin by examining extreme examples (or a

reductionist approach) to simplify and better understand the

nuances of the phenomena. The most extreme case of power

disparity is when one party or state has all the power

enablers and the individual has none. Over the millennia

mankind has demanded, through laws, market based economies,

democratic forms of government; or taken advantage of

phenomena such as knowledge enhancing technologies, flow of

people and goods, or blurring of state boundaries, to reduce

the power disparity and afford protection (or at least

rights) and opportunities of empowerment to the individual.

As new rights and technologies afford more power to

individuals and non-state groups, the balance of power

parity has begun to converge in their favor as depicted in

the below figure.

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Power/Influence

Dem ocratizing Forces/Power Enablers

Low

High

Low High

Power/Influence

Dem ocratizing Forces/Power Enablers

Low

High

Low High

Figure 4-1

The figure shows that as democratizing forces/power enablers

(such as information symmetry, weapons availability,

increase in individual rights, and decrease in state

sovereignty) broaden the power of the individual/group to

influence state system survival, the power of the state as

compared to the extremes example decreases; i.e. the power

of the state to influence the individual decreases (esp. if

system---state or otherwise---is not robust enough to handle

system disruption; i.e., a suitcase nuclear bomb in

Manhattan).55 Again, as with any equilibrium test or chart,

55 Mike Gaines. Note: the writer does not posit that any of the curves in the graphs are monotonic (i.e., only rise positively or only decrease negatively vs. a detailed track of actual behavior—e.g., the stock market indicator); rather, the writer wants to show a general trend line, again simplifying complex phenomena to gain greater

92

the point is not to demonstrate certainties, but to measure

the ideal against reality (or in this case a postulated

extreme of reality).

An empowered individual or group can disproportionately

affect aggregate systems (i.e., agreed upon rule-sets,

transportation systems, food systems, etc.). Equilibrium

must be identified so that individuals/groups hold

acceptable levels of power and influence while maintaining

the peaceful benefits of compliance to group rule-sets.

Explaining the Environment through the SOCIO-economic

Lens

Emile Durkheim argued that the degree to which a person

participates in and identifies with a social system or group

depends on two basic sources of cohesion: mechanical

solidarity and organic solidarity. Mechanical solidarity is

cohesion based on shared culture and way of life, a

consensus over values, norms, and beliefs resulting from

understanding. The writer does believe, however, that the monotonicity (or general slopes) of both slopes have high correlations (i.e., as one goes up given variables and conditions, the other goes down given the same variables and conditions).

93

socialization and common experience operating primarily on

the familial/tribal end of the social system spectrum.56

Organic solidarity asserts that control or cohesion is based

on the interdependency caused by specialization and

divisions of labor; social cohesion is a balance of

complementarities between people.57 For example, one person

wants a car, and another person has the knowledge to build

one. If the first person learns how to efficiently build

that car, the equilibrium shifts in favor of the empowered

individual who has learned how to satisfy a need that once

made him dependent on someone else (see convergence chart on

previous page which is applicable to said phenomena). While

degrees of power may shift between individuals and disturb

the balance of organic solidarity, states and the

international community can leverage aspects of mechanical

solidarity in a common global or regional framework to

control empowered individuals and non-state actors.

56 Allen Johnson, The Blackwell Dictionary of Sociology (BlackwellPublishing, 2000), 46-47

57 Ibid.

94

States can affect individuals and groups by taking

advantage of existing control mechanisms (e.g., taking

advantage of decentralized group governance). States (be it

democratic federal systems organized by local, state, and

federal governments or authoritarian regimes organized along

tribal and religious lines) can align the levels of

intrastate power ensuring that power enablers such as law

enforcement, school systems, etc ensure group and therefore

individual compliance. In group dynamics, the individual

sacrifices individual wants and needs in order to be

accepted in the group. It is rational for them to give up

certain wants and needs because it is in their self interest

to survive. People are by nature social beings; the ones

that were not have died off. Groups (e.g., familial, peer,

school, nationality, religious, ideological, etc) are the

primary socializing entities that ensure conformity to

acceptable rules. States can ensure group and individual

conformity at the national level by incentivizing acceptable

behavior (i.e., allowing the group to “plug in” if the

individuals in the group conform) and marginalizing or

95

ostracizing actors who deviate from the acceptable norm

(e.g., using the power of law to punish individuals and the

power of the media to “shame” the group). The state retains

many levers with which to influence its citizens even as

individuals, groups, and international organizations gain

power; the state must adapt to the current convergence of

power attained through information and influence by non-

state actors, be they individuals, intrastate groups, and

interstate networks such as the EU, UN, AQAM, etc.

Aligning Rule Sets at the Global Level

Aligning mores, values, and rules at the national level

(from state laws to group rules; from individual rights to

economic privileges afforded to those who accept the group

rule sets) will help states govern individual and groups

that have experienced relative gains in power parity. States

can also affect empowered non-state actors in the

international realm by applying similar pressures and

incentives at the international level, insisting that a

state’s citizens must behave acceptably or the state cannot

plug in to the global economy. In order to achieve the

96

aligned conformity, states must also satisfy its end of the

“social contract” by providing opportunities through

sustainable economic growth and development (e.g., providing

infrastructure, good governance, health care, literacy,

political stability, sound banking and financial structures,

etc).

States have a higher chance of achieving growth and

development if they adhere to certain rule-sets accepted by

international or regional institutions (e.g., the Washington

Consensus, International Monetary Fund, etc), allowing them

to connect to the system. A positive feedback loop is

created where states are aligned to “global norms” and are

allowed to “plug in” to the system. This increases the

probability that a state can provide opportunities to its

citizens, which increases the probability that its

individuals and groups satisfy components of their ideal

selves, which decreases the willingness of the super-

empowered individual to disrupt or destroy the system.58

58 Mike Gaines. The writer posits based on the research of Marc Sageman and the application of governing dynamics as discussed earlier in the these that the causal chain of terrorism is as follows: If acceptance of international meta-governing bodies has reduced influence

97

Aligning rule-sets in an international context, however, can

seem impossible at times especially in the transitioning

international system where individual states have given up

absolute power to plug into a regime of collective security

(UN or regional apparatuses), free trade flows (WTO or

regional blocs), global market opportunities, and financial

and development assistance (IMF and the World Bank).

States can reduce the pain of aligning their rule-sets

to international rule-sets by finding commonality throughout

the system and effectively organizing based on those

commonalities to defeat malevolent non-state actors. People

find commonality of purpose in many things whether through

pre-disposed genetic bias (i.e., those who could not find

common purpose or cohesion in the group died off) or through

collective memory. For example, most people want to survive

of states power then that leads to less control of individuals; if individuals are controlled less and have increased accessibility to democratizing (or empowering) elements then that leads to increased influence and increased knowledge of perceived disparity; if empowered individuals/groups “feel” that their potential/ability is unrealized (i.e., ideal self) then they will find a system or group that gives themthe expectation that their potential can be realized; if the empowered groups find comfort and hope in that idealized system and see’s disparity in the current system, then they will try to change or disruptthe current system (e.g., globalization).

98

and thrive in a stable, secure, and prosperous setting; that

is why we give up certain desires to live in that group

setting. Once comfortable within that setting, however,

differences are noticed within the group and between other

groups (i.e., Yogi Berra’s Law of Similar Differences).

Competition or conflict arises, and the ‘survival’

phenomenon (or the race to obtain marginal advantages) takes

over. The first rule of any organism is survival; that

stands true for organizations and groups as well.

Recognizing this negative cycle of differentiation and

competition, steps must be taken to incorporate the

competing demands of different state systems and

international organizations to achieve non-zero sum or

cooperative solutions to problems.

Explaining the Environment through the socio-ECONOMIC

Lens

Compromise in a vacuum is unnecessary; compromise in an

interdependent international system is indispensable.

Effective compromise occurs when common purpose is weighed

99

against cost and benefit correlatives to accomplish win-win,

cooperative, or Pareto improving (or at least not Pareto

deficient) solutions. The commonality may not be a gain all

of the time; it may also be a reduction in unacceptable

losses for all sides (i.e., the Prisoner’s Dilemma). Common

purpose and compromise help state and international actors

to survive and prosper in a collectively non-hostile (or at

least less-hostile) environment; cooperation is required in

interdependent systems. Cooperation, however, can be very

difficult to achieve and can even be ineffective or

inefficient, especially in the short term.

Organizations want to survive and grow so they tend to

promote things that lead to survival and growth (i.e.,

seeking marginal advantages vs. long term stability). Such

behavior is rational at that time, over time. The only

problem is that in interdependent environments such behavior

leads to conflict (in its various forms), asymmetry in

information (or the opposite of transparency), and group

coalitions that weight wants and needs (i.e., creating

environments where finding commonalities are difficult).

100

Self (or group) interests in the margins trump collective

interest in the long term, every time. Equilibria, however,

can be found in collective decisions by measuring and

leveraging the interdependence cost that affect long-term

success in collective stability (i.e., free trade, economic

stabilizers, security, and development).

James Buchanan developed the theory of public choice

that posits that rational people can define the general will

and authorize government to carry out actions consistent

with that will.59 This principle could be applied to

international organizations (IOs), regional organizations,

or any group decision to define the commonalities or

aggregate will and identify the interdependence cost.

Interdependence cost is defined as those cost of persuading

individuals or groups to support aggregate consensus,

including the cost of identifying individual/group

interests, resolving conflicts, and off trading concessions

among the groups. Interdependence cost also measures the

external or negative cost associated with the aggregate

59 Marilu H. McCarty, 49-56

101

(i.e., the sacrifices or benefits lost).60 Using Buchanan’s

interdependence curve we can define the commonalities of the

various groups and define the cost or sacrifices to

implement the collective will (e.g., defining free trade as

a part of the collective will to benefit from the tenets of

David Ricardo’s theory of comparative advantage, while

accepting the cost of opening boarders, increased rates of

heterogeneity, increased cost of port security, and the cost

of fighting terrorism).61

Inter

dependence Cost

Low

High

0 100X

% of Populations/Group

Inter

dependence Cost

Low

High

0 100X

% of Populations/Group

Figure 4-260

Marilu H. McCarty, 49-5661

Ibid.

102

The writer posits that one can use the model to measure the

cost and benefit of certain collective action. The “X”

represents equilibrium. The writer also posits that the

curve can be used to ensure stable outcomes when combined

with bargaining (specifically non-zero sum) methodologies.

If persuasion cost are looked at as gains by a proportion of

the “voters” if certain actions are taken and external cost

are looked at as losses taken by a proportion of “voters” if

those same actions are taken, then bargaining methodologies

can employed to push/persuade all voters to equilibrium. For

example, if the good or gain we are getting is access to

global systems and the loss we are taking is less rights (or

adherence to more rules/more transparency) then the

framework of the commonality (in this case security) can be

agreed upon/bargained on. Another example would be a state

gaining access to the system at a cost of ensuring

malevolent actors are controlled with its borders. The

methodology works at all levels of the social system, from

the IC to state and the state to the individual. The point

of the exercise is to attain optimal choices over the long

103

term (i.e., future goals or commonalities) while deciding in

the margins (i.e., what is good or good enough for the

voters now). Once equilibrium is achieved and commonalities

are identified groups must organize in the most

efficient/effective manner to realize the collective

consensus.

Recommending Solutions: Implementing Practical

Mechanisms

Now that the Environment is Understood

The international community of nation-states (ICN) must

organize smartly and use available leverages (i.e.,

international, regional, economic, development, and trade

organizations) to defeat malevolent non-state actors. The

ICN can learn a lesson from the US Military and the growing

pangs experienced after the implementation of the Goldwater-

Nichols Act. The US Military learned to fight in a joint

arena identifying commonalities in will, reducing

redundancies in systems, and finding synergies in tactics,

techniques, and procedures (i.e., learning to fight with

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common purpose interdependently). The scourge of terrorism

and the failure to forecast and stop the 9/11 attacks have

motivated many other bureaucracies to embrace ‘joint-ness’.

The US Government better uses all elements of national power

(diplomatic, informational, military, and economic means)

across the available international, regional, and national

leverages to affect horizontally organized and loosely

coupled non-state actors; however, significant improvement

can occur throughout the enterprise by better defining

common purpose, integrating planning and execution, and

reducing redundancy. The ICN must also adapt its system and

institutions to better influence non-state actors by

harmonizing purpose and embracing commonality and

inclusivity in planning, directing, and executing collective

action.

The institutions, however, must be constantly examined

to find commonalities, efficiencies, and synergies while

eliminating disparity, redundancies, and disruptions within

the system.62 Institutions must be flexible and amenable to 62 Mike Gaines. The writer posits based on experience that balance

must be attained in the correlation of generalization and specialization

105

change if our system plans to keep pace with highly

flattened, non-hierarchical, and loosely organized groups.

Individual or group decision cycles will always outpace that

of cumbersome bureaucracies; however, with proactive

mitigation strategies (e.g., consequence management, force

protection strategies, etc.) to minimize the effects of

attempted or successful malevolent acts and a robust

structure of cooperative organizations and mutually

supportive rule-sets or laws we can defeat (or at least

marginalize and control) the non-traditional enemies we face

in our globalized environment.63

to expose synergies and reduce redundancies. For example, many bureaucracies perform similar functions with redundant capabilities; these organizations also fall into the trap of the survival instinct andtherefore horde information that could benefit other organizations with redundant capabilities thus creating “stovepipes”. The writer is not postulating getting rid of the redundant organizations (redundancies create robustness in systems), just to share information and processes to attain synergistic results.

63 Ibid. The writer posits that states can take advantage of the knowledge and information empowering individuals and groups to mitigate damage of a system disruption. For example, if a population is aware of the damage that an act will cause and the procedures to follow once the act has been committed, it is less likely to lose confidence in the system (i.e., state, global, etc). An example of the correlation of information access and confidence in the system can be found in recent trends in supply chains. Hording of valued units (i.e., information---I have something that I do not want you to know about--- and goods---I must increase safety stocks in order to hedge against system instability) in supply chains has decreased as information in (or transparency of) the supply chain increased.

106

Conclusion

The global system must put mechanisms in place that

promote and protect the benefits of globalization by

identifying cooperative and stable solutions and

incentivizing participation in the global framework. Analyst

must assist policy makers in shaping an environment where

cooperative solutions create space for individual self-

fulfillment, while simultaneously reducing the probability

of system disruption or destruction by empowered malevolent

non-state actors. Socio-economic methodologies can enhance

analyst perception of activities and interactions within the

global system. Policy makers must devise common parameters

for bargaining and conflict resolution that can mitigate the

disruptions that can be caused by change in position (in

this case the change in relative position of advantage and

disadvantage due to the convergence in disparity of

information and influence to non-state actors).64 A multi-

layered, multi-faceted approach taking advantage of

64 Joseph Nye, 4-5.

107

commonalities must be implemented in order to allow

benevolent non-state actors access and while denying

malevolent non-state actors. This is a complex undertaking,

and analyst would be wise to view the system through the

socio-economic lens. Mechanisms such as common belief

systems (i.e., individual to collective values, mores, and

beliefs) and intrastate, interstate, regional, and

international mechanisms of control can be used to manage

and influence individual and collective behavior. States,

understanding that their influence on individuals and

interstate organizations has declined in relative terms,

remain the arbiters of “real” power and therefore must bear

the majority of the responsibility of containing the dangers

of malevolent non-state actors and analyst must assist those

state policy makers. However, states, like individuals, must

embrace global collective security by accepting a similar

social contract with the international community; giving up

certain rights, adhering to certain rule-sets, and finding

common ground to reap the benefits of an interconnected and

interdependent world. Finding commonalities in disparate

108

interest is applicable throughout the spectrum of group

dynamics from the ICN to the state; and from the state to

the individual. Many adherents to Hobbesian view of the

world may scoff at the prospect of finding equilibria among

competing interests and would advise analyst to assume

conflict in competing interest. However, as demonstrated in

the next chapter the natural state of man may be conflict

but the level of conflict is inversely correlative to the

level of cooperation.

109

CHAPTER FIVE

A Country Specific Example: Iraq, the Complexities of

Counter Insurgency, and Solutions as Seen Through the Socio-

Economic Lens

Today’s complex environment necessitates unified action

in order to attain objectives. The Iraq War and the ongoing

stability operations within the country illustrate this

point with deadly consequences. The United States learned

from the first three years of the war and implemented a

comprehensive Iraq strategy that fully integrates all

elements of national power in a cohesive manner to affect

security and stability. The strategy of clear, hold, and

build (which is essentially the ink blot strategy used in

Vietnam) uses security as the foundation to stability;

however, it also takes into account other “atmospherics”

that influence stability. Responsibility for identifying the

phenomena behind those “atmospherics” has to fall throughout

the agencies, specifically the intelligence community (IC)

and departments that represent our elements of power.

110

The military intelligence function has begun to adapt

to the realities of our complex environment by defining the

atmospherics in the Iraq War. Intelligence professionals

have begun to look at an expanded environment where

political considerations, social and economic health,

infrastructure development, and informational dominance are

interrelated to the military environment in which our troops

fight. Intelligence professionals shifted focus from

geographic and temporal terrain to aspects that encompass

human terrain. Comparing and contrasting the intelligence

focus of the first phase of the Iraq War to later phases

demonstrates a shift in the IC methodological paradigm; the

IC went from focusing on fixed phenomena (i.e., Iraqi Order

of Battle) to analyzing group dynamics through a socio-

economic lens. The shift in focus also reveals how the

intelligence community has initiated efforts to horizontally

integrate capabilities across functional staffs and

agencies. The IC has adopted social science methodologies

to depict the environment (interpreting self and group

interest and contrasting it to state interest) and

111

streamlined bureaucratic processes (finding cooperative

avenues) to achieve desired effects in a complex and mosaic

insurgent environment against enemies who intend to

counteract our stabilization efforts.

Where We Were

Joint Publication (JP) 1-02 defines an insurgency as an

organized movement aimed at the overthrow of a constituted

government through use of subversion and armed conflict.65

Military officers would not define the Iraq War as an

insurgency during the first few years of the war for

political reasons. Whether Iraq was essentially a war of

choice is debatable, but popular support (the center of

gravity in any war) in initially popular wars usually

diminishes over time as expectations of speedy conclusions

increase.

During the initial years of the war intelligence

focused on traditional intelligence concerns such as enemy

65Joint Publication 1-02. Department of Defense Dictionary of Military and Associated Terms. 2002.

112

order of battle, closed system analysis (i.e., weapons

systems, power projection analysis, etc), and hunting bad

guys. Those were important components of enemy capabilities

that needed to be understood by maneuver and special

operations forces (SOF) in order to defeat the enemy in

phases 0-3 (i.e., operational and intelligence preparation

of the battle-space, and the subsequent maneuver and SOF

operations to defeat conventional enemy forces).

Intelligence was organized to fight in that environment

using a top-down versus a bottom-up approach that maximizes

effectiveness in large maneuver operations (see left side of

the below chart).

Figure 5-1

113

Our capabilities were technology intensive (conventional

Intelligence, Surveillance, and Reconnaissance (ISR),

vertically organized, and strategically focused to assist

national level decisions and planning). The transnational

threat of terrorism and the insurgent operational

environment (OE) challenged the core tenets of intelligence

responsibilities and focus.

The JP 1-02 dictionary’s definition of counter-

insurgency (COIN) underscores the complexities of phases

four and five (i.e., stabilization and reconstruction, and

withdrawal) of the Iraq War. JP 1-02 defines COIN as those

military, paramilitary, political, economic, psychological,

and civic actions taken by a government to defeat an

insurgency.66 JP 1-02 clearly delineates the importance of

using all mechanisms of state power that influence the COIN

environment in the stabilization and reconstruction phase of

the operation.

Despite years of political wrangling over the words

used to describe it, Iraq today is experiencing a contained

66 Ibid.

114

(as of this writing) low grade civil war – insurgency by

definition is a low grade civil war. It began (or was

justified) as a preemptive war of necessity and was fought

with maneuver and blistering speed. It would involve kinetic

targeting of a known enemy pitting coalition strengths

(maneuver and lethality) against Iraqi weaknesses

(predictability; intelligence is great at providing relevant

information to decision makers in a conventional environment

where our forces enjoy an asymmetry of information

dominance). Coalition forces would begin withdrawal no later

than the end of summer in 2003. Popular support surely would

not wane in an atmosphere of terror where clear links

between al Qaeda and Saddam Hussein were established by

intelligence professionals (note: U.S. Polity Expectations

will be explored in Chapter seven of the thesis). The IC’s

job would remain traditional, predictable, and supportive of

national policy.

Realization

Iraq is now deemed by the majority of the polity a war

of choice fought at many levels (from the individual to

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groups to states), with many weapons (kinetic and non-

kinetic), encompassing all instruments of national power

(diplomatic, informational, military, and economic or DIME),

and integrating non-state actors and international

organizations including the United Nations (UN), other

international organizations (IOs), non-governmental

organizations (NGOs), private volunteer organizations

(PVOs), multinational corporations (MNCs), etc.

The operational environment (OE) is a composite of the

conditions, circumstances, and influences that affect the

employment of capabilities and bear on the decisions of the

commander; the OE in COIN (being a type of conflict that

particularly aims at influencing population) as a part of

stability operations is extraordinarily complex. The

intelligence community’s job in this complex environment is

not traditional, hardly ever predictable, and its

assessments sometimes contradict that of political will.

However, “the key to operational advantage in COIN is

timely, reliable intelligence.”67 If counter-insurgents are

67 Colin S. Gray, Irregular Enemies and the Essence of Strategy: Can the American Way of War Adapt? A Common Perspective: U. S. Joint Forces Command Joint

116

to root out an insurgent-terrorist infrastructure, they must

gather and obtain information which can come only from the

local public at large or from defecting insurgents, which is

to say that they must positively influence the population.

The Pendulum of Competing Interest:

Defining Competing Intrastate Interest (or Insurgent

Conflict)

Before one can counter insurgency, one must put on

socio-economic lens and reexamine the nature of conflict and

cooperation, specifically intrastate and group for this

chapter, given disparate interests. In other words, one must

understand the dynamics of insurgency before one can counter

it. As was indicated in Chapter two of this thesis, one of

the immutable truths is that individuals find that it is in

their interest to be a part of a group. Insurgencies (or for

that fact any intrastate political conflict between two

parties) follow general rules or dynamics over time.

Competing interest of the loudest 10% (from the law of the

Warfighting Center Joint Doctrine Group’s Newsletter, 2006, pages 4-6.

117

loudest 10%) on both sides of the pendulum and the proximity

of the remainder of the population to those with the loudest

voice generally follow a pattern. As one side wins and his

ideals (and therefore interest) are promulgated to the

masses, the burden of rule (i.e., becoming guarantor of

public goods) and individual interest usually reign in the

pure ideas and ushers in the rulers decline and the

ascension of competing interest. The pendulum track of

competing interest over time can be depicted by the below

figure.

Time

1

8

4

1

1

42 8

42

4

4

24

2

4

4

1

8

11

P/c

C/p

Time

1

8

4

1

1

42 8

42

4

4

24

2

4

4

1

8

11

P/c

C/p

1

8

4

1

1

42 8

42

4

4

24

2

4

4

1

8

11

P/c

C/p

Figure 5-2

The circled P= Persuasion (or carrots) and the circled C =

Coercion (or sticks); the optimal mix and degree used to

illicit compliance, cooperation or societal cohesion depends

on circumstance. Generally those in charge (i.e.,

accountable for providing public goods) use more P than C or

Big P and Little c. Those trying to change things

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(especially in immature political processes or foundations)

use more C than P or Big C and Little p. The numbers inside

the curve denote degree of confluence to whichever side is

perceived to be winning. As discussed earlier in the thesis,

the loudest 10% (or the Law of the Loudest Few) tend to have

disproportionate effects on the social environment. The

acquiescent 80% tend to follow whichever side seems to have

the proximal or relative advantage (i.e., who can have the

greatest effect on me because of proximity or some other

relative factor) whether by adopting the belief because it’s

their interest to do so (i.e., falsifying preference,

bandwagoning, or free riding – taking a non-cooperator’s

assets to gain an advantage; etc) or sincerely adopting

beliefs because expectations are being met, again following

their interest. 68

68 Mike Gaines. Note: this is derived from Kenneth Arrow’s insights into strategic behavior and the impossibility theorem which postulates binary choice is the only stable condition in loosely coupledand decentralized systems like democracies, vice tightly coupled systemslike command economies or dictatorships. This not to say that systems where power is distributed throughout the system (e.g., from individual to neighborhood, neighborhood to municipality, municipality to county, county to state; etc) only have dual interest, but to say that those interest can be generally grouped in two camps of aggregate interests that must find equilibrium with individual interest.

119

Immature or less than developed states that trend

towards using more C than p and degrade expectations of the

citizenry to an unsustainable level (i.e., citizens are less

apt to contribute to future success because it is not in

their interest to do so) usually end in instability

(dictatorships in Africa come to mind and failing or failed

states) and do not fit this model. If the model or political

process includes more than binary aggregate interests (i.e.,

interest can be generally grouped into two camps) and the

coinciding interests of the individual, the model does not

work. For example, if groups have no overarching guarantor

of public goods (i.e., a sovereign or state government),

then a state does not exist and group conflict ensues until

the strongest can consolidate power. A functioning state of

some degree is assumed in any insurgency. Non-violent

movements (of the MLK type) in politically mature states

also do not fit the model; ideas are adopted without

changing power in some instances.

What about the Power Law or Matthew Effect?

120

Logically one could deduce that once an advantage is

gained according to the Matthew Effect, it should grow on

itself and create a permanent advantage. This would be true

if not for the following: once in power the sovereign or

governing executor relinquishes his “loudness” or purity of

ideals because he is burdened by the people’s expectations

of the delivery of public goods and meeting the aggregate

interest. The state tends to adopt and act on interest that

illicit the highest degree of citizen acquiescence or at

least eschew or not act on interest that tend to disturb

acquiescence especially in environments were citizens and

groups are power enabled. Equilibrium of competing

interests is reached as the sovereign way the costs and

benefits of ruling and settles on optimal solutions that are

usually some form of compromise (i.e., the best of the worst

options or the small win/win). The Matthew Effect is also

diminished by the increase in the effectiveness (or

increased marginal utility) of action by group with

competing interest. All the loser has to do is show that

the winner cannot meet the expectations of the citizenry

121

(specifically proximal citizenry—e.g., in rural areas), and

that they can exceed the expectations of the citizenry

(e.g., showing how their action degrades the state’s ability

to provide the essential public good of security). Public

goods as discussed earlier include everything from internal

and external security, to health care and wealth

distribution in mature democracies.

And Again, We Learn

However, reductionist strategies never really represent

reality with a high degree of accuracy. The pendulum track

would probably look more akin to the figure below with the

loudest 10%’s interest or position of advantage represented

by the crest and trough of the dueling sin waves.

Figure 5-3

122

The interactions and transitions of course are never smooth

and can adopt paths that lead to instability and

overreaction. However, because we do learn (as discussed in

the Chapter three because of bounded rationality), we tend

to find immutable commonalties that reduce the differences

among competing groups; i.e., we tend to find equilibrium in

generally satisfying the interest of the individual within

the group or the competing party in a large group (or

state). Two important dynamics of the pendulum of change are

1. That the interest of one is tied (or bound) to the other,

so rate of change is limited to the position and relative

strength of the competing interest and 2. Because the

interests are bound, they may converge and a positive or

negative trend can develop that can lead to aggregate

equilibrium, stability, and mature processes to settle

disparate interest (depicted by the green line). When

interests converge, phenomena or actions taken to address

competing interest may become less extreme; differences may

be marginally managed or managed with the less cost because

divergence in interest is diminished.

123

Mature and stable states can manage small changes or

even gradual shifts through the political process. The

highly impactful negative phenomena have been corrected out

of the system or insured against because we learn (or learn

to compromise). For example, differences in interest that

people know cause instability and bloody conflict are either

unthinkable or have highly negative consequences attached to

them. The following interest depicted in the below figure

are arbitrary notions, but demonstrate how interest converge

and progression arises.

124

Figure 5-4

The figure demonstrates how opposite phenomena (that

represent interest) converge as individual and aggregate

interest approach equilibrium. Numbers inside the curve

denote degree of belief in interest or what in one’s interest to

believe or support (i.e., ABC/D/EFG) because of proximity.

The trend line (depicted in green) is positively sloped

denoting adoption of interest that trend towards equilibrium

in aggregate interest. In this model the writer arbitrarily

uses ending slavery (or granting individual freedom of

action to pursue interest) as a step towards progress or the

aggregate equilibrium. Understanding the interplay between

125

competing intrastate interest and the dynamics that govern

those interactions can assist the analyst in defining the

operational environment the insurgency is taking place and

recommend actions to counter the insurgency.

A Description of the Complex Environment

In 2006 the U. S. Army and Marine Corps updated their

counterinsurgency (COIN) doctrine for the first time in

twenty years. The publication recommends holistic approaches

along logical lines of operation incorporating diplomatic,

economic, and informational power with military muscle

producing synergistic results in order quell insurgencies

and gain the trust of host nation citizens.69

In an interconnected world were tenets of power are

distributed and public opinion shuns, brutal actions,

counterinsurgents cannot rely on pre-modern methods (e.g.,

torture, civilian casualties, etc) of influencing insurgent

actions and achieving population acquiescence. "Modern"

69 Approved and signed by LTG. David H. Petraeus and LtGen John F.Amos. Field Manual 3-24 Counterinsurgency (2007). 1-1.

126

Security

Economic Opportunity

Political and Soci

alStability Virtuo

us Cycle

Security

Economic Opportunity

Political and Soci

alStability

Security

Economic Opportunity

Political and Soci

alStability Virtuo

us Cycle

counterinsurgency focuses on winning the "hearts and minds"

of native populations. U. S. counterinsurgents attack

insurgents across the elements of national power

(diplomatic, informational military, AND economic, or DIME)

in the hopes of creating an atmosphere that will foster

stability and a virtuous cycle (or positive Matthew effect)

creating momentum towards the desired result.

Figure 5-5

Measuring and affecting (through DIME) acceptability rates

(or acquiescence of population perceptions, sensibilities,

and desires ) in the margins is a far more effective

approach in influencing baseline atmospherics that allow

counterinsurgent forces to implement agendas that lead to

desired end-states (whatever they may be).

127

We live in a world of instantaneous communication and

marginal attention spans. U. S. personnel are expected to be

ethical because of historical precedent and purposeful

marketing (or strategic communication). The COIN FM devotes

half of a chapter to ethics.70 Any deviations from those

expectations tend to have disproportionate affects (e.g.,

the “strategic” Sergeant at Abu Ghraib). We present

ourselves as the fair arbiter between factions by being open

and transparent because we live in a world democratized by

mass communication and diminishing power parity between

citizen and state (whether occupying force or legitimate

government). If the population of the nation does not see

the benefit of the occupying force or believes that the

force is illegitimate, meaningful intelligence collection

that is accurate, tactically based, and timely is nearly

impossible, and the counterinsurgency will ultimately fail.

In order to accomplish desired effects, intelligence in

COIN and stabilization operations must be focused in the

70 Ibid.

128

tactical arena (i.e., from the bottom up) and must be

population centric (see the right side of the below figure).

Figure 5-6

Where does the intelligence professional fit in such an

environment?

How We Fight Now: Putting Socio-Economic Glasses on the

Military

Adapting to this reality entails breaking out of

traditional roles of intelligence. We must first examine how

Multi-National Forces-Iraq (MNF-I) fights to find where

intelligence fits. According to Field Manual 3-24 (FM 3-24),

COIN involves the controlled application of national power

across political, information, economic, social, and

129

diplomatic spheres to positively affect measures of

stability across logical lines of operation(LLOs).71 LLOs

are essentially methods or ways (as in ends, ways, and means

methodology) that involve and address the use of national

power resources and capabilities. FM 3-24 further states

“LLOs are directly related to one another. They connect

objectives that, when accomplished, support achieving the

end state. Operations designed using LLOs typically employ

an extended, event-driven timeline with short, mid, and

long-term goals.”72 The point of organizing in a means,

ways, and ends construct is to identify and frame a problem,

set goals, determine the actions necessary to achieve those

goals, determine the resources necessary to achieve the

goals, and determine the optimal design or organization of

resources to achieve the most efficient and effective

outcome.73

71 Ibid. 4-4

72Ibid.

73Anthony C. Zinni and Tony Koltz. The Battle For Peace: A Frontline Vision of America’s Power and Purpose (Palgrave MacMillan, 2006), 146.

130

MNF-I achieves optimal design by using best practices

established throughout a multitude of enterprises. They use

collaborative mechanisms such as cross functional and

interagency boards, bureaus, centers, cells, and working

groups (B2C2WGs) as illustrated below to integrate

capabilities achieving optimal organizational efficiency

across all elements of national power (i.e., DIME).74

Figure 5-7

Intelligence professionals sit on all relevant B2C2WGs

and other collaborative mechanisms and their input is sought

and required throughout the planning and decision cycles.

When DIME is appropriately implemented against

74Gary Luck. Insights on Joint Operations: The Art and Science. A Common Perspective: U. S. Joint Forces Command Joint Warfighting Center Joint Doctrine Group’s Newsletter, 2006, page 1-2.

131

interconnected environmental factors that affect desired

outcomes (i.e., the political, military, social,

infrastructure, informational, and economic or PMESII), war-

fighters and intelligence professionals can better identify

nodes, links, strengths and weaknesses within both systems

as the graph depicts below.75

Figure 5-8

Where Intelligence Fits

The “system on systems” approach provides the war-

fighter (and therefore the intelligence professional) a

holistic view of friendly and enemy capabilities and

limitations and allows integration, synchronization, and

identification of synergistic actions. It requires 75 Ibid.

132

horizontal integration and inclusivity in the planning and

decision making process which promotes efficient

organization and flattens and blurs previously inefficient,

vertically organized stove-pipes. Intelligence professionals

must adapt to the realities of systemic complexity and

contribute integrated interdisciplinary analysis in order to

provide accurate, timely, and relevant knowledge to decision

makers by reducing uncertainty (at least to the greatest

extent possible) across the PMESII OE.

COIN operations place greater emphasis on civil

considerations ergo increasing the number of variables and

factors, creating complex environments that intelligence

professionals must describe. Questions dealing with the

“atmosphere” of the OE were once the realm of weather

forecasters; now such questions denote everything from

spectral descriptions of the populace (i.e., from friendly

to hostile intent) and effects of MNF-I actions on the

populace curve (i.e., have we pushed more of the population

toward the friendly side of the spectrum—see below graphs)

to identifying patterns in seemingly disconnected phenomena

133

(e.g., an increase in traffic on an insurgent ratline after

a reconciliation program was abandoned).

Figure 5-9

New and more powerful tools must be used by the intelligence

professional to depict complex environments.

Going Back to School

Describing the effects of the OE in COIN and stability

operations in general is difficult; describing a complex

environment without the proper tools is impossible.

Intelligence professionals must collect data, recognize

patterns and connections in that data, evaluate and

134

synthesize the patterns to gain knowledge, and disseminate

it across the collaborative enterprise . . . in a timely

manner. The requirements sound daunting; however

intelligence professionals can achieve desired results if

they continue to adopt powerful non-traditional tools that

were once considered the realm of social science (i.e.,

sociology, economics, cultural anthropology, etc.) and

mathematics (e.g., statistical analysis and computational

social analysis).9

Developing an understanding of the “atmosphere” (or OE)

involves factoring in civil considerations such as people,

history, and government; it requires taking into account the

affects of key infrastructure, civil institutions, culture,

local values, mores, and interest on the local populace and

COIN forces (again focusing on human terrain).10

Understanding social structures, culture, language, the

politics of power and authority, and societal expectations

such as provision of essential services (including

security), economic well being, and political participation

135

requires integrating (and learning) with specialist and

professionals in those fields.

Another Organizing Suggestion?

Throughout the thesis, organization optimization has

become a common theme. Answering the questions of how best

to group, divide labor, collaborate, and synergize efforts

to achieve optimal interest or desired outcomes are

fundamentally a socio-economic in nature. Given limits, how

can one organize his or her group to achieve optimal

advantage? Intelligence is currently organized along the

traditional lines of method of information capture; one

either sees it (IMINT, HUMINT, OSINT), hears it (SIGINT,

HUMINT, OSINT), or deduces from information available some

physical measure (MASINT, SIGINT, OSINT, HUMINT) or past,

present, or future intent (HUMINT, IMINT, SIGINT, OSINT, and

MASINT). Why not incorporate SOCIALINTs within the

intelligence enterprise: ECONINT or POLINT; infrastructure

or cultural anthropological INT (ideas which are currently

being tested in the human terrain team concept), etc? When

we are deducing some intent we will be able to understand a

136

more complete picture when the SOCIALINT variables are

included and understood as a part of the analysis process.

Managing system disruption and instability by

preventive, preemptive, or reactive action will remain the

U. S. military’s primary function in our interconnected,

interdependent, and semi-unipolar environment. Understanding

the underlying causes of instability (be they economic

failure, security breakdown, or political collapse) by

learning the “soft” sciences will allow Intelligence

professionals to “forecast” (and I’m using that loosely)

possible outcomes and assist commanders in decision

processes in this complicated environment. Incorporating

socio-economic methodology within the intelligence

enterprise (i.e., learning the basics) allow intelligence

professionals to utilize sophisticated tools to skew the

inputs and shift the normally distributed curve as depicted

in the figure below. The inputs that the U.S. forces can

control are the elements and sub-elements our instruments of

national power (DIME) pitted against elements that our

inputs can influence (i.e., the Political, Military,

137

Economic, Social, Infrastructure, and Informational – or

PMESII -- aspects of the HN).

Figure 5-10

Think of the black dots as our DIME inputs. If the inputs

are not skewed in one direction or other through a conscious

effort of collaboration and coordination within the

organization (in this case the executive branch) and getting

it more right than wrong by understanding the OE through a

138

socio-economic lens, unintended consequences may develop

that may facilitate instability.

Patterns are Easier to See If You Have the Right Lens

One must attain a sophisticated understanding of the

“atmosphere” in order to effectively recognize patterns.

Pattern recognition aims to classify data patterns based on

either a priori knowledge or on statistical information

extracted from the patterns. The patterns to be classified

are usually groups of measurements or observations.76

Patterns help to identify correlations between actions and

trends. For example, when an intelligence specialist notices

the frequency of attacks in Anbar has decreased

significantly since a reconciliation conference, he can use

regression analysis or other tools to deduce probability

that the conference helped to cause the reduction in

violence. Intelligence professionals must continually

analyze numerous patterns to develop a clear picture of the

environment and grasping socio-economic methodology can help

76 Dr. Robert Popp. Utilizing Social Science Technology to Understand and Counter21st the Century Strategic Threat, DARPAtech Symposium, 2005, page 106.

139

analyst discern patterns. Recognizing patterns is a

pertinent step in reducing uncertainty, and allows the

analyst to recommend solutions while reducing unintended

consequences (or skewing inputs) to influence probable

outcomes.

Professionalizing Intelligence: On to Graduate Level

Tools

Understanding and countering today’s complex threats

and forecasting desired effects is not easily achieved with

classic analytical models (i.e., trend modeling, linear

regression analysis, etc). 77 Applying quantitative and

computational social sciences whose tools offer a broad

range of nonlinear mathematical and nondeterministic

computational theories and models can help further

understanding of social phenomena in the OE. 78 These tools

when used correctly can forecast unitary, binary, or

multivariate conflict and cooperation in reaction to

external influence or deliberate action.79 These 77 David H. Petraeus and LtGen John F. Amos, 3-4.78

Popp, 106.79

Popp, 109.

140

sophisticated tools when combined with broad spectrum

analysis (as depicted below) and organizational acumen give

our leadership the means to detect and anticipate

instability and conflict and preempt or prevent it at the

onset when options are numerous (cooperative, collaborative,

punitive, etc) and can be combined to achieve greater

effect.

Figure 5-11

Conclusion

The 21st century strategic threat triad—failed states

which can affect regional stability, global terrorism which

can disrupt the global system, and weapons of mass

141

destruction (WMD) proliferation which can destroy the global

system—poses a great threat to our national security and our

global interest.14 Intelligence preparation of the battle-

space in complex environments must mitigate and prevent

threats to our globalized system. We have learned valuable

lessons fighting in the COIN environment, where analysis

requires personnel to work in areas like economics,

anthropology, and governance – areas that are outside the

traditional realm of intelligence professionals.

The military and its intelligence professionals now

understand the significance of persuading the populace that

their interests are best served by COIN (or global system)

success. Integrating staff and drawing on expertise across

departments, agencies, and bureaus that comprise our

national power is essential. Intelligence professionals must

reduce uncertainty with the most powerful tools in our

arsenal, identify key nodes and links in the PMESII OE;

organize, integrate, and synchronize our efforts to achieve

optimal, robust, and adaptive results from our synergized

actions. We cannot afford to wait; our enemies are real and

142

they are dangerous. Our integrated effort has fostered an

environment where stability is possible. Our efforts have

pushed the population wave (or Gaussian curve) toward the

neutral-participant-ally end of the spectrum (as depicted in

the graph below) by focusing on the PMESII aspects of the HN

(all aspects of the human terrain).

Population

Curve

Adversary Neutral Participant AllyRecruit

W here W e W ant to Be

Security

Econom ic O pportunity

Political and SocialStability Virtuous

Cycle

Population

Curve

Adversary Neutral Participant AllyRecruit

W here W e W ant to Be

Security

Econom ic O pportunity

Political and SocialStability Virtuous

Cycle

Security

Econom ic O pportunity

Political and SocialStability

Security

Econom ic O pportunity

Political and SocialStability Virtuous

Cycle

Figure 5-12

The U.S.A. must continue to act ethically and morally if we

are to solidify gains in the occupied country watched by the

world. We must continue to make the transition to the

realities of modern intelligence. If the U.S.A. does not, we

risk losing our competitive edge in battle, our ability to

143

maintain stable outcomes, and ultimately our ability to win

this and that other long war with terrorism.

144

CHAPTER SIX

An Organizational View: Assessing AQAM Capabilities

Through the Socio-economic Lens

Al Qaeda and its associate movements (AQAM) is a highly

adaptive and complex organization guided by overarching

ideas80. After the 2001 invasion of Afghanistan and opening

success of the US military, the organization reorganized,

learned from its mistakes, and adapted to new realities. The

level of adaptation, however, is debatable. Some proponents

believe that AQAM is as influential as they were pre-9/11;

others believe AQAM to be significantly weakened and

therefore less effective, less sophisticated, and less

organized albeit still relevant. Exploring both theories

using economic and systems methodology allows the counter-

terrorist to form a more complete picture of the

capabilities of AQAM.

80 Mike Gaines. The writer posits that the franchise structure of Al Qaeda promotes decentralization of the organization to a point of accentralization whereby groups or individuals plan and/or carry out or attempt to carry out acts inspired by al Qaeda or the ideas that al Qaeda posits without any real connection.

145

Methodology

Many of the conceptual frameworks used to analyze

operational and threat capabilities of traditional enemies

are not applicable when analyzing loosely affiliated

organizations (at least not using traditional methodology).

Therefore, system analysis and non-traditional (i.e.,

economic) methodologies will be utilized to explore the

organizational structure, the effectiveness of the post-

response organizational structure, and adaptation of

tactics, techniques, and procedures (TTPs) in the context of

system response and whether the adapted TTP’s (less

sophistication, interconnectedness, or unity of effort) can

have synergistic (even though emergent and not necessarily

connected) effects over time. To put this in context, a

brief discussion of the history of al Qaeda will show that

it has always been guided by an overarching idea that now

has to compete with divergent ideas in a very hostile

environment and explore their relative strength pre-

response.

146

History: The Grand Strategy or AQAM’s Big Idea

Many Arab Muslims were disaffected by the rise of an

enlightened and industrialized west, while witnessing the

decline and stagnation of the Middle East. Arab Muslims

remembered the glorious past of conquering Arab Muslim

armies and the establishment of a Caliphate that (arguably)

was the light of the world until the 14th century.81 After

the fall of the Ottoman Empire, the occupation of Muslim

lands by western powers, and the establishment of a Jewish

state in Palestine, many looked for ways to re-establish

Muslim prominence in the modern world dominated (at least in

perception) by Christians (USA) and Atheist (USSR).

Gamel Abdel Nasser provided the hope of prominence by

emulating Mustafa Kemal’s Turks and adopting western (or

modern) models and methods (i.e., technologies, processes,

forms of government). The Pan Arab movement (as history

would label it) promised a return to greatness by looking

towards the future; however, it never materialized. Instead,

Arab countries suffered embarrassing defeats at the hands of

81 Lawrence Wright, The Looming Tower: Al Qaeda and the Road to 9/11. Knopf Publishing, 2006, pg 43.

147

the Israeli Defense Forces. Many times in history, when a

future outlook does not deliver desired effects, people look

to the past to find guidance and hope.

The modern Islamist movement found their roots in

preaching of Sayyid Qutb and the disappointment of Pan

Arabism.82 Qutb preached that Muslims must return to a

purity of sharia law and devout practice assumed to be the

foundation of Islamic greatness in times past (usually

interpreted as the period from the conquest of the Prophet

Mohammed to the Abbasid Caliphate). The leaders of Al Qaeda

(Bin Laden and al Zawahiri) were greatly influenced by Qutb;

al Qaeda’s stated goal is to rid Islamic lands of western

influence and form a new Islamic Caliphate ruled by Sharia

law. 83

The AQAM Idea

AQAM intends to rid Islamic lands of western influence

by attacking the international system in which power is

believed to be based: i.e., globalization or the

interconnected international system. AQAM’s grand strategy

82 Ibid, 4383 Ibid, 79

148

seeks to defeat western systems by attacking systems

established after WWII to promote global stabilization and

peace. The Bretton Woods Agreements (and subsequent meetings

and agreements) established a fragile system of mechanisms

and frameworks to affect global crisis management and

promote peace and prosperity. The mechanisms include

impartial trade arbiters (WTO and regional trading blocs), a

tethered/consensus security apparatus (i.e., the UN,

regional security blocs), economic stabilizing entities

through finance and development frameworks (IMF and World

Bank, respectively), and transparency underpinning the

foundation of each mechanism84.

AQAM intends to bring about their stated goals by

attacking the system from within; they are fourth generation

warriors who use the system against itself (e.g., the air

transportation system to attack financial and military

symbols of the – arguably – global system, or the 9/11

84 Mike Gaines. The writer posits that systems/frameworks/enablersencompass ease of cross border travel and transportation, reduced trade barriers for goods and finance, conflict arbitration and collective action, and monetary and development stabilization mechanisms.

149

attacks in the USA). AQAM believes it understands the

fragility of the system; they attack it in a myriad of ways

via violence and media influence to create psychological

tension in a western populace, religious fervor for

disenfranchised Muslims, and system strain on globalization

enablers (i.e., transportation, communications, reduced

barriers, etc.). AQAM uses tactics, techniques, and

procedures that allow them to cunningly blend in, adapt to

their surroundings, and use asymmetrical attacks to

detrimentally affect the global system. AQAM TTPs epitomize

adaptive and (arguably) emergent strategic vision.

Operatives must blend in, improvise, stay covert, and wait

for the opportune time to strike in manners that achieve

disproportionate results as compared to investment.

Operatives of the organization take advantage of

efficient transportation systems and liberal travel policies

of nations to establish sleeper cells in countries that may

become potential targets or at least havens for planning

(e.g., Germany, Spain, or Britain to name a few). AQAM

exploits new communications technologies, ease of movement

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between borders, and global financial networks to achieve

their political goals. AQAM has mastered TTPs that enable

them to survive and remain relevant in a very hostile environment

post system response. AQAM learns from its mistakes, adapts

to new realities, and carries on with missions that they

believe will achieve objectives that lead to the fulfillment

of their stated goal; however, the international system has

also learned. After being seriously crippled during the

initial onslaught of American and Coalition power, AQAM

dispersed and reorganized into loosely connected cells that

use communications technology (e.g., internet, cell phones,

PDAs, etc.) and centralized ideals to attain extraordinarily

decentralized execution . . . or so it has been argued.

How Sophisticated and/or Effective is AQAM, Really?

An alternate argument is that system response has

detrimentally effected the sophistication of AQAM planning

and operational effectiveness. The writer posits that the

effectiveness of AQAM in context to Arab Muslim acceptance

is a function of and is inversely correlated to the

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robustness of system (both positive and negative) responses

and is directly correlative to the appeal and capacity of

AQAM’s big idea to affect positive change versus a new

(i.e., authoritarian market based systems—UAE/China model--,

democratic/market based systems) or old (e.g., Pan

Arabism/modernization, or the old strong man principle)

idea. The below figure depicts the idea graphically.

Competing Idea, i.e., a frameworkthat works in the context of robust system response

AQAM Idea

System Response (+ or –) over tim e

Accepta

nce, Relev

ance,

and E

ffectiveness

H

L

Positive (+) responses include nation building responses not related to kinetic operations; e.g., economic development, political/governance guidance, security assurance, etc.

Negative (-) responses include typical hard/kinetic approaches; counter-terror ops, arrest, capture, killing, interrogating, etc.

Both responses combined with the coordinated efforts of bureaucratic elements (DIM E) and multilateral participation produce a more complete and robust response.

Competing Idea, i.e., a frameworkthat works in the context of robust system response

AQAM Idea

Competing Idea, i.e., a frameworkthat works in the context of robust system response

AQAM Idea

System Response (+ or –) over tim e

Accepta

nce, Relev

ance,

and E

ffectiveness

H

L

System Response (+ or –) over tim e

Accepta

nce, Relev

ance,

and E

ffectiveness

H

L

Positive (+) responses include nation building responses not related to kinetic operations; e.g., economic development, political/governance guidance, security assurance, etc.

Negative (-) responses include typical hard/kinetic approaches; counter-terror ops, arrest, capture, killing, interrogating, etc.

Both responses combined with the coordinated efforts of bureaucratic elements (DIM E) and multilateral participation produce a more complete and robust response.

Figure 6-1

Therefore, the true effectiveness of AQAM’s decentralized

system is therefore in question. Some arguments contend that

AQAM has successfully adapted to the global system response

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by decentralizing and becoming a grass-roots terrorism

organization.85

Bruce Hoffman contends that the leadership of AQAM is

highly relevant despite system response.86 The real answer

lies in the effectiveness of AQAM’s idea and its primary

mechanism (loosely affiliated groups who adhere to the idea)

to achieve desired results in a hostile environment where an

alternate idea could thrive in the global framework (for

instance the UAE model) and achieve desired Arab—even Pan

Muslim—desired results/outcomes. Examination of AQAM

organizational structure and its “logistic” capability

points to the diminished effectiveness of the organization

and contrasting relevance of AQAM’s Idea.

Organizational Structure: From Effective Cells to

Disconnected Entities

A historical approach (pre and post 9/11—global system

response) is an effective technique in examining AQAM 85 Marc Sageman. Leaderless Jihad: Terror Networks in the Twenty-first Century.

University of Pennsylvania Press, 2008.86

Bruce Hoffman, “Myth of Grass-Roots Terrorism: Why Osama bin Laden Still Matters.” Foreign Affairs Journal May-June 2008, 133-138.

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organization and force structure. AQAM has always been a

decentralized organization because of its clandestine

nature. Although doggedly resilient, AQAM’s relative ability

to affect global systems has diminished as it has adapted to

system responses by becoming even more flat and more

decentralized. Even though guided by an idea, AQAM is

losing its ability to effectively coordinate and synergize

efforts as compared to pre-9/11 structure and strength.

AQAM Pre system response

Al Qaeda was founded in 1988 by Abdulla Yussaf Azzam

after the Soviet War in Afghanistan.87 As the association

defined its mission and matured it established hierarchal

and vertical organization assigning specific functions to

individuals and sub-groups. Bin Laden is the Senior

Operations Chief and emir while Zawahiri is his deputy.

According to Jamal al Fadl, a former operative turned US

agent, Committees and cells are also organized by function:

87 Lawrence Wright, The Looming Tower: Al Qaeda and the Road to 9/11. (Knopf Publishing, 2006), 43.

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The Military Committee is responsible for training operatives, acquiring weapons, and planning attacks.

The Money/Business Committee runs business operations, provides air tickets and false passports, pays al-Qaedamembers, and oversees profit-driven businesses.

The Law Committee reviews Islamic law and decides if particular courses of action conform to the law.

The Media Committee which used to publish a news paper,but is still active via internet sites and message promulgation via analog media—tapes, etc.

The Islamic Study/Fatwah Committee issues religious

edicts.88

Franchisee or AQAM Post 9/11 Response

AQAM has adapted to the post 9/11 response by

decentralizing to a point beyond organizational control.

AQAM’s centralized leadership, training, and support

structure has evolved from a “traditional” cell structure to

loosely affiliated cells where AQAM’s idea and TTPs are the

only established mechanisms of “command and control”.

Command is essentially the exercise of authority and

direction by a designated executor over forces or enablers

(people, ideas, and things) to attain a desired outcome.

AQAM, whose cells are loosely coupled to the overarching

88 Johanna McGeary, et al. “A Traitors Tale”, Time Magazine Feb 19, 2001.

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organization, are given broad guidance and even broader

leeway. Bin Laden has an extraordinary ability to inspire

and motivate followers even to the point of

suicide/martyrdom denoting leadership, however, control is

loose (i.e., vertical management of action is limited). The

“commander’s intent” is broad (fight the West) and

uncomplicated (i.e., as long as you follow directed TTPs—

e.g., blend in, improvise, stay covert, etc.—operatives have

broad leeway of how and when to attack the system/West).

However, today’s “AQAM cells” are not traditionally trained

operatives; these cells use the AQAM “brand” in furtherance

of the cause (or overarching idea) and access TTPs and broad

guidance via the internet. These traits are positive (from

the point of AQAM) because it makes it harder for the system

to capture and kill operatives, however, the positive

effects created by horizontal decentralization are a

function of the goals to be accomplished and the

organizational structure most fit to achieve those goals.

Even Spencer Ackermen’s comments and assertion of the

dangers of Abu Musab al-Suri’s call for fighters to become a

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member of al-Queda by “a system of action, not a

centralized, secret organization for action”, deserves an

examination of the efficacy of random murder stamped with

the AQAM logo.89

An Organizational Structure Where Decentralization

Works

The positive aspects of decentralization include the

following: freedom of action throughout the organization,

rapid adaptability of response to stimuli, greater ability

to effect change in assigned lanes (esp. in marginal context

of immediate information), and the aggregated effects of

“rational” actors in decentralized organizations.

The true strength of Deming management models (i.e.,

statistical process control in the context of new management

techniques) is the horizontal distribution of decision-

making, in effect increasing the amount of information

available to the individual therefore increasing the rate of

reaction or response to stimuli in the aggregate (i.e.,

89 Spencer Ackerman, “The Washington Independent.” Washingtonindependent.com. June 30, 2008. http://washingtonindependent.com/view/al-queda-goes-viral (accessed July29, 2008).

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marginal and ergo speedier actions, interaction, and

reaction). For example, if an assembly line worker sees

something wrong with a car at the beginning of the assembly

process that will affect all cars after it, he or she can

stop the process and take corrective action immediately

(i.e., in the margins) which positively affects the

aggregate process. Decentralization works in tightly coupled

organizations precisely because they are too tightly

coupled; one malfunction and the entire system fails to

produce desired outcomes. The weakness of over-

decentralization or acentralization is that the aggregated

response of the organization is not coordinated, synergized,

or controlled effectively90. An examination of AQAM’s

logistic capabilities will further demonstrate the

ineffectiveness of the decentralized structure post system

response.

90

Mike Gaines. The writer posits that decentralization carried out to its logical end leads to disconnectedness that resembles incoherence in that actions although guided by a general idea do not produce predictable effects; you’ve decentralized to the point of being the opposite of centralization; i.e., acentralization. Instead any effects produced are desultory, haphazard, or by chance (even if the attacks combined over time take on some emergent quality).

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Logistics

As stated in the previous paragraphs, AQAM takes

advantage of preexisting systems; all they have to do is

blend in and plug in. Traditional methodology (i.e.

analyzing self-contained supply, maintenance,

transportation, health services, etc) for analyzing tightly

coupled organizations with established logistic chains is

inadequate in assessing the capabilities of an Actor that

uses stealth, cunning, and patience to achieve goals.

Analyzing the logistic “chain” of AQAM requires a non-

traditional approach which will focus on the finance of

activity and opportunity to plug/contract into and (if the

opportunity presents itself) detrimentally affect existing

primarily transportation systems. It is also prudent to look

at the “logistic” (i.e., finance and transportation) system

pre and post system response (i.e., pre and post 9/11).

Finance

AQAM does not have a self contained logistic chain;

they rely on the market to supply them with most goods

(including dual use chemicals) and services. All indications

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of organization maturation (establishing bases and training

camps, formalizing hierarchal organizational structure, etc)

have given way to decentralization and loosely connected

franchises (or associated movements fighting under the AQ

brand). Where AQAM once took advantage of existing banking

systems (both western and Islamic) to fund training and

attacks, those opportunities are no longer easily available.

World response after 9/11 has crippled AQAM’s ability

to plug into the highly scrutinized banking systems and

charitable organizations. Even AQ in Iraq (AQI), arguably

the most formalized and hierarchal variant of AQAM with an

estimated membership in the hundreds has had to adapt to

pressures applied by the global security apparatus (i.e.,

banking, intelligence, law enforcement, security, military,

etc). The “traditional” money/business committee (also

called financers) no longer exists (at least in any

effective form).91

91 Wikipedia Article referencing Al Qaeda based on testimony of Jamal Al Fadl documented in “A Traitors Tale”, Time Magazine Feb 19, 2001

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AQAM is now reduced to using informal banking systems

(hawalas) where money is transferred through informal

brokers (hawaladars); most available intelligence indicates

the present effectiveness of the system is questionable at

best.92 The system is also a double edged sword. The hawala

system may provide money transfers with no transaction

record, but it also exposes AQAM to possible infiltration by

western allied Muslim agents.

Most variants of AQAM now operate within the economy

using TTPs discussed previously; they blend in (recent

trends indicate that many of AQAM operatives are citizens of

their target countries, e.g. ethic Pakistanis in Britain’s

Glasgow attacks), self finance (get jobs), learn new TTPs

via the internet (e.g., how to make explosives with common

household items), and find inspiration in the broad guidance

issued by their “leaders” in caves thousands of miles away.

Operatives (if you can even call many of them that) wait for

92

Sebastian R. Mueller, Hawala: An Informal Payment System and Its Use to Finance Terrorism (Dec 2006)

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the opportune time to carry out attacks that have diminished

in affect.

Transportation

AQAM’s transportation capabilities are (like all the

rest of its “traditional” capabilities) linked to access to

established systems. Pre 9/11 system response, AQAM was able

to carry out extraordinarily visible and destructive attacks

on the global system. Nineteen operatives were able to

attack three global systems (transportation, financial, and

–at least symbolically—the global security guarantor – the

US Military) at low cost and with sensational effect. AQAM

operatives were able to learn how to fly planes at

established schools (vice learning in an internal flight

school), rent cars, buy plane tickets, and hijack the system

because of opportunities to plug into the system.

Many of the opportunities to plug into existing systems

have been negated by an increased and more coordinated

security apparatus. Coordination, standardization, and

cooperation among global and regional law enforcement,

intelligence, military, finance, and trade organizations in

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the aggregate have served to decrease accessibility of the

system by AQAM operatives. Decreased accessibility

(especially to flight systems) has encouraged adaptation of

action from AQAM to target other transportation systems.

AQAM has been able to utilize and attack ground

transportation systems (i.e., the London and Madrid

bombings), but with less spectacular effect93. The

spectacular affect of attacking ground systems by less

professionalized “operatives” has achieved marginal results.

Spain, although arguably affected greatly, did not allow the

collective zeitgeist and desire for revenge trump due

process of law—i.e., Spanish courts acquitted some of the

bombing suspects despite overwhelming evidence because of

technical/prosecutorial missteps (which denotes robustness

of law). In other words, Spaniards allowed the rule of law

93Mike Gaines. The author posits the following psychological axiom: the innate human ability to adapt expectations and tolerance (especially in Europe where terrorist attacks have been experienced overlonger periods) is not confined specifically to individuals or small horizontal organizations; complex organizations and systems adapt as well. In other words, large systems as an aggregate of individual and small systems can relegate the perceptually existential (bomb attacks onbuses) to the (perceptually) marginal nuisance (i.e., it’s the same as IRA attacks in the 70’s; it bothers us, but the problem has been identified and is being dealt with so life goes on).

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and rationality (or system) to trump latent emotions.

Londoners rode the buses and trains the next day despite

fear of follow on attacks (kudos to the ole’ stiff upper

lip). Even if one posits the latter two attacks as highly

connected to Al Qaeda and view them as large, coordinated

attacks that achieved consequential results (i.e., Spain did

pull its military out of Iraq after the attack), post 9/11

responses have detrimentally affected AQAM’s desired outcome

(i.e., Spain has contributed to the fight in Afghanistan and

actively participates in coordinated intelligence and law

enforcement efforts).

9/11 may have been the apogee of AQAM’s ability to use

transportation systems with the intent of negatively

affecting them. All other efforts will garner diminishing

returns in its ability to affect the desired results of

AQAM’s idea. The horizontal and decentralized organization

of AQAM has reduced its abilities to detrimentally affect an

increasingly robust global system.

An Alternate View Through the Socio-Economic Lens

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Many proponents in the intelligence, defense, and

security communities argue that AQAM and its idea are

actually getting stronger and more widely accepted. They

base their arguments on data pointing to the increased

number of terrorist attacks since 9/11 and the increased

number of Al Qaeda franchisees. However, a closer look

reveals the flaws in their conclusions. First the increased

number of terrorist attacks has to be looked at in context.

While it is true the number of attacks has increased, the

majority of the attacks are occurring in conflict zones

(i.e., Iraq, Afghanistan, etc.).94 Labeling all attacks as

terrorist in the context of a conflict is not an honest

assessment. Secondly the very definition of or at least the

labeling of a terrorist attack has changed over time. In an

era where terrorism is perceived to be the greatest threat

to stability, peace, and prosperity, it’s in the interest of

the Intelligence Community (IC) to connect most things with

94Office of the Coordinator for Counter-Terrorism, US Department of State. Country Reports on Terrorism National Counterterrorism Center:Annex of Statistical Information. http://www.state.gov/s/ct/rls/crt/2006/82739.htm. The report finds that the number of terrorist attacks have increased (data derived from 2004-2006)with the majority of the increase in Iraq and Afghanistan.

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terrorism; i.e., ensuring organizational relevance—

guaranteeing funding, eschewing blame, etc--in a time when

polity already believes everything is related to terrorism

creating a self-reinforcing cycle (e.g., I believe this is

related to AQAM, and you tell me it is therefore it must be

true).

Some might argue that AQAM desires to defeat coalition

forces in Iraq and Afghanistan precisely to start the system

retreat out of Muslim lands. While a valid point, one can

also interpret the rise in attacks as part of the sectarian

conflict that is only loosely correlated to AQAM and its

stated goal. It can be interpreted as: 1) a power struggle

in a low grade civil war, and 2) a response to an occupying

power vice a coordinated response to degrade influence of

the international system.95

The Argument of Emergence and the Efficacy of

Disconnected Actions95

Mike Gaines. The writer posits that AQAM’s goal of removing western influence in Muslim lands is fundamentally a fight against the international system of interconnected interest where the haves disproportionately benefit because preexisting advantages and duplicitous manipulation of the system that favors the haves self interest.

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Another popular opinion for the growing vice

diminishing power of AQAM and its decentralized organization

is the argument of the phenomenon of emergence and the

efficacy of the hydra-headed organization despite post

system response. While it is true that disconnected actions

can produce desired effects, those effects are not

specifically a function of the disconnected action even when

guided by an overarching principle (i.e., AQAM’s big idea),

especially in the context of system response to those

actions.

Open system emergence can be simply defined as the

whole exhibiting properties independent of its various

parts; i.e., the proverbial 1+1+1 equaling something more

than 3 in an environment that facilitates the outcome; or

the creation of attributes, structures, or capabilities that

are not inherent to any single node in a network.96 The

termite mound serves as an example of emergent consequences

where individual termites are not specifically following 96 Peter A. Corning. "The Re-Emergence of "Emergence": A Venerable

Concept in Search of a Theory. Complexity (2002) 7(6): 18-30. The author explores the history of emergent theory and the underlying principles ofemergence. The writer summarized Corning’s conclusions to simplify his complex interpretation.

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engineering schemata, but a consequence of the various

parts/termites of colony is the mound. Another example is

the phenomenon of human “thought” forming out of

interactions between cellular structures and chemicals that

in turn can be reduced to atomic structures. The point of

the hypothesis is that the cells and the atoms formed and

interacted without the intent of producing human “thought”;

human thought is a by-product or consequence of those

interactions. AQAM actions may take on some emergent

property whereby the actions produce some deleterious effect

on the international system furthering their stated goal,

but the efficacy of their actions even when guided by the

stated goal is diminished as a result of system response.

Consequences of these actions (even if intended) are

unplanned at best and unintended (i.e., the occupation of

Iraq and Afghanistan) at worst.

Another problem with the emergence argument is that it

assumes the aggregate of the post system response attacks

will have a greater effect than pre-system response attacks

(i.e., greater affect than 9/11 at moving AQAM closer to

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their goals). However, closer examination reveals that

aggregate effects in the long tail of a Pareto distribution

do not have the same effect of a large event (i.e., the 5%

that has 95% of the effect) as demonstrated in the chart

below.

Figure 6-2

People, organizations, and states have the uncanny

ability to adapt, adjust, accept, or get used to things (or

learn) over time especially when cost or risk/benefit

analysis is weighed; e.g., knowing the risk of driving a car

and driving anyway because benefits are high and the risk

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have been mitigated or insured against over time (e.g., seat

belts, air bags, licensing, safety rules/laws, etc) even

though thousands die in cars accidents each year as depicted

in the below figure.97

Figure 6-3

Other causes of death far outnumber those of terrorism.

Small, unsophisticated, or uncoordinated attacks can run the

risk of becoming car accidents; i.e., something so common

(e.g., bumping into another bumper while parallel parking in

downtown Chicago) or uncommon (catastrophic accidents) and

97 Chart shows death rates in the U.S.A from 2001 to 2006 based oninsurance industry data.

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so mitigated that they lose the effect of influencing the

system. The perceived cost to the terrorist outweighs the

perceived benefit (i.e., I can blow myself up, but no one

will care) . . . unless functioning as a tipping point, the

proverbial last straw when coupled with other factors.

The Proverbial Last Straw

Small, unsophisticated, and uncoordinated attacks

carried out by franchisees of AQAM have marginal effects

(especially when the system is actively responding to and/or

mitigating the attacks or the effects of the attacks) in the

context of diminishing influence of the international system

(or the “West”) in Muslim lands unless coupled with all

other variables that negatively impact the system. For

example, the combination of financial or economic crises,

political instability, ideological friction, etc. and the

cumulative effects of increased security, as a result of

attacks, becoming barriers to the free movement of people

and goods acting as the last straw can break the

internationally connected system’s back; i.e., countries

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disconnect, eschew international standards, erect barriers,

and focus on home.

The counter argument proposes that AQAM attacks

(specifically in the context of Iraq and Afghanistan) only

have to degrade coalition popular support to affect the pull

out of troops from Muslim lands and thus begin the cycle of

removing all system (or western) influence in Muslim lands

ushering in a the new caliphate. However, the argument

presupposes that 1) the international system is weak and

under pressure will break because of small attacks over time

2) all interaction (economic, diplomatic, and informational)

with the international system (and thus influence on the

system) will cease in Muslim lands because the military

component of interaction is diminished in said lands, and 3)

the population of the Muslim lands will embrace AQAM’s

establishment of a caliphate when the strength of competing

ideas (and examples of success such as the UAE/Qatar models)

are growing in popularity, all very large presumptions.

Again the writer does not suppose that the small,

uncoordinated, and unsophisticated attacks carried out by

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AQAM franchisees will have no effects, only that synergistic

results will only occur as a part of larger and more pertinent

international system stressors (i.e., economic, financial,

demographic, ideological, etc).

Conclusion

Examining AQAM through the socio-economic lens allows

analysts to more accurately portray their true capabilities

and allows decision makers to affect appropriate action to

counter the organization. Decentralization works in mature

organizations because rules are codified and control

mechanisms are solidly in place. Manufacturing firms are

highly coupled organizations which is why decentralization

works. Decentralization and therefore its effectiveness is

relative to the organization; AQAM has always been

decentralized and further decentralization and decoupling

has led to diminished efficacy. One could argue that AQAM is

just in the strategic defensive stage of classic Maoist

insurgency strategy; however, the fact is that the

comparison is inaccurate. Classic Maoist insurgency is set

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in the context of countries with large pools of tightly

coupled leadership. Insurgencies do not achieve their goal

(for the most part) until they are in the strategic

offensive stage; i.e., they are a tightly coupled,

hierarchal, regular army with proximal if not majority

support. The counter argument is the global system is

fragile and AQAM only has to affect popular buy-in to the

global framework, however, globalization is strengthening

vice retracting.

AQAM and its idea cannot effectively direct synergistic

actions of disparate and decoupled franchise “operatives”

while the appeal of that has reduced and the robustness and

response on the global system has developed. AQAM has become

a loosely organized movement directed by a singularly

defined mission with broadly defined guidance for

decentralized mission execution. However, the efficacy of

AQAM execution has diminished as the system has responded,

and they have become an accentralized organization guided by an

idea that has peaked and is waning and is now competing with

alternative ideas that may bring about the reemergence of

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the past glory of the Middle East. The task of the IC is to

help defeat AQAM, its ideas, and operatives and facilitate

the growth of the competing ideas that are compatible with

the international system ensuring a continuation and spread

of peace, prosperity, and opportunity for future generations

to all of the world’s citizens. When those competing ideas

are accepted, the number of environments (or states) that

facilitate terrorism will decrease as the expectations of

their citizenry (or polity) increase . . . as long as those

expectations are managed.

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CHAPTER SEVEN

Addressing Polity Influence: Examining How the Power Enabled

Can

Shape the Discourse in the New Environment

The Backdrop: The American Zeitgeist Post 9/11

The general atmosphere in the United States after the

attacks of 9/11 encompassed fear, terror, paranoia, anger,

and revenge. People looked to government to protect them

from the boogeyman that attacked their nation. The

atmosphere of fear and anger lowered the threshold of proof

in assigning blame for perceived injustice. Voices of

dissent were quickly and loudly silenced and obstacles were

flattened to conform to prevailing national and political

will (or aggregate emotive interest). Formal and informal

fallacies perpetuated an overarching atmosphere of fear,

anger, and revenge and penetrated the intelligence presented

to the polity and decision makers that substantiated war (or

revenge).98 Groups and organization effects added to

98 Mike Gaines. There are numerous formal and informal fallacies that when explored can assist analyst in avoiding analytical pitfalls. For example, if analysts understand causal logic they can better

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decision maker bias towards action influenced the

intelligence community (IC) reinforcing aggregate sentiments

that dissuaded objective intelligence.99 An understanding of

socio-economic methodology could have allowed analyst to

recognize the realities in which they worked; an

understanding of socio-economic methodology would have

allowed them to understand their OE.

Group Dynamics Affect the IC as Wellinterpret the past and present, and emplace strategies, mechanisms, and methods to guard against bias in evaluation of evidence, false causal relationships, and estimating probabilities. Understanding formal fallacies such as the bare assertion fallacy (e.g., the President said ergo it must be true), fallacies of false dilemmas (e.g., if we don’t attack, Iraq will give AQAM WMD), and affirming the consequent (e.g., ifyou assume that Iraq has connections to AQAM, then Iraq participated in 9/11) give analyst powerful tools to interpret when the phenomena occurs. Understanding informal fallacies like petito pricipi (implicit assumptions), appeals to ridicule (making the dissenting argument seem ridicules), ad hominem/ reducto ad bad guy (attacking the person/dissenter), argumentum ad baculum/populum (appealing to force or popular belief—e.g., you’ll lose your job and Hitler and anti-Semitism),and various appeals to emotion (fear, spite, etc—e.g., AQAM is everywhere) further enable analyst to interpret the environment and avoid pitfalls.

99 Ibid. The writer posits that without recognizing the influence of aggregate/popular feelings and emplacing mechanisms to mitigate penetration of objectivity and rationality by popular desire/aggregate emotion, we are doomed to repeat the intelligence failures of the past. The objective versus the emotive system must be examined from the top down (large group or group representative—elected executive) and from the bottom up (from the individual/cognitive to group effects). The writer also believes that waves of emotion (vice rationality and objectivity) wash away the mechanisms, procedures, and methods (i.e., ACH, structuring, framing, etc) developed to guard against individual bias and group influence in the IC.

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Groups affect individual conformity. Humans by nature

gravitate towards groups (family, tribe, friends, etc); the

more cohesive, accepting of rules, and conforming the person

is the more likely he will survive, prosper, and multiply

(ergo, producing more offspring that exhibit with conformist

traits). Aristotle had it right; people by nature want to

belong to a polis, or belong to a group. The desire to be a

part of the group and the inherent biological bias to be

group oriented (remember, those not part of the group

probably did not reproduce as well as those who belonged to

a group) gives groups powerful levers to influence

individual action. The individual usually gives up certain

wants, rights, or expectations in order to conform to

collective will. The IC is not an exception; analysts are

also affected by collective will within the IC and by the

inherent need to belong.

Performance critiques of the IC in the run-up to the

Iraq invasion provide excellent examples of small group

effects influencing IC process and output. One report’s key

finding was that “[a] series of failures, particularly in

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analytic tradecraft, led to the mischaracterization of the

intelligence.”100 The report further states that “ ‘group

think’ dynamic[s] led Intelligence Community analysts,

collectors and managers to both interpret ambiguous evidence

as conclusively indicative of a WMD program as well as

ignore or minimize evidence that Iraq did not have active

and expanding weapons of mass destruction programs. This

presumption was so strong that formalized IC mechanisms

established to challenge assumptions and group think were

not utilized.”101 Groupthink swayed analysts to disregard

countervailing evidence and be part of a cohesive group

(indicating individual conformity) and concurrence seeking

collective psyche that desired revenge.102 In addition to the

small group effects on IC performance, critiques also

highlighted detrimental organizational effects.

100 Report On The U.S. Intelligence Community's Prewar IntelligenceAssessments On Iraq Senate Session 3, Senate Support Conclusions, 4.

101 Ibid.

102 Mike Gaines. The author posits that individual analyst were affected by the aggregate emotional desires of the polity (i.e., the people and the representative government)

179

Graham Allison in his seminal work The Essence of Decisions

provides a useful paradigm to explore the effects

organizational bureaucracies had on pre-war intelligence.103

A combination of adhering to organizational process,

constraints of bureaucratic boundaries, and bureaucratic

politics where a prominent idea was weighted (in compliance

with underlying societal desires) over competing ideas

created an atmosphere that “did not encourage analysts to

challenge their assumptions, fully consider alternative

arguments, accurately characterize the intelligence

reporting, or counsel analysts who lost their

objectivity.”104 Competition within the organization (which

is good for challenging assumptions) was stifled leading to

faulty intelligence; conversely, competition between

organizations within the IC results in stove-piping as well

as lack of communication and sharing of information. The IC

as an organization has a myriad of intrinsic problems (i.e.,

an organizational challenge to balance “cry wolf” warnings

103 Graham Allison, Essence of Decision: Explaining the Cuban Missile Crisis, New York, NY. Harper Collins Publishers, 1971.

104 Senate Support Conclusions, pg 9.

180

with improbable possibilities; worst case warnings with most

likely courses of action; protection of sources with

dissemination of vital information; and finite resources

against seemingly infinite problem sets). Organizational

design and interest affected pre-war intelligence that

reinforced the collective desire to attack an enemy for

perceived wrongs; a desire that permeated the psyche of the

leadership as well.

The Executor in Power Enabled Polities

Leaders in democracies are seldom immune to the

zeitgeist of the polity. Emotional fervor of the masses can

persuade leaders to make hasty and irrational decisions to

satisfy (or satisifice—i.e., finding a “good enough” action)

the aggregate desire for revenge. If the leader has a

predisposed policy (regime change in Iraq) that if adjusted

(connect Iraq and 9/11 by cherry picking information) can

satisfy aggregate desires in the short term, then a self

reinforcing cycle of inevitability will further diminish

objective and balanced analysis and judgment.105 In many

105 Mike Gaines. The writer suggest reviewing Dooley’s “Spies, Lies, and Weapons: What Went Wrong” to gain further understanding of how

181

instances leaders want information and intelligence to prove

or approve a presupposed policy--remember leaders set the

priorities and paradigm in which analyst work—which

encourages analyst to go along with prevailing desires from

above, amongst peers, and within (cognitive and the looking

glass self). Once a direction is chosen, a belief anchored,

and momentum generated it is extraordinarily difficult for

an analyst to speak truth to power or for a leader to speak

truth to aggregate desires (especially when his/her beliefs

coincide with the aggregate).

National interest or desires are often overlooked in

historical analysis of intelligence failures. There have

been many papers, articles, and books dedicated to the

ineptness of the IC, the influence of the West Wing in

controlling intelligence, and the indictment of both in

duping the public; however, there are few (if any) that

indict the public fervor for war/revenge after being

a commitment or predisposition to policy helped to bring about the inevitability of subjective intelligence “proving” an anchored conviction. Dooley also discusses the role of the Office of Special Plans in the Pentagon (headed by Paul Wolfewitz and Doug Fieth) that cherry-picked intelligence that supported the pre-existing position.

182

attacked on 9/11. Aggregate or majority desires permeate the

organizational, small group, and cognitive environment. If

national emotions are not addressed in analyzing “what went

wrong” we will not address the systemic and interconnected

causes with objective and holistic scrutiny. Heuer, Paul,

Elder, and Moore all delve into the science of thinking and

the influence and biases (whether cognitive, group, or

organizational) that affect thinking and have suggested

strategies, techniques, and procedures to mitigate the

negative effects of aggregate desires on objectivity.

However, if we do not take into account the aggregate

desires of the body politic (specifically in democracies),

we are doomed to rely on stop gap and disconnected measures

that will allow the mistakes of the past to become the

mistakes of tomorrow.

Managing Perceptions, Expectations, and Tolerance:

Correcting Intelligence Failures by Revealing Tomorrow’s

Threats in the New Environment

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The IC failed pre-9/11 by not revealing why stability

mattered in far off lands in an interrelated international

system, and as a consequence terror networks were able to

establish safe havens, perpetrate an attack, and

unintentionally stir the polity’s emotive interest for war.

As previously discussed, the IC was not immune to this

fervor. The IC then failed post 9/11 by relating all things

to terrorism after 9/11 falling prey to polity emotive

interest and hence to the typical under-reactive/OVER-

reactive cyclic scenario in most unstable conditions.

Managing polity perceptions, expectations, and tolerance by

first being honest and truthfully "connecting the dots" will

lead to better management of system disruptions (be they

potential terrorist attacks, stabilization ops, PKO, PEO, or

major wars) by clarifying interest and increasing the tools

available for system management.

The IC is quite often the poster child for blame and

culpability when desired effects are not accomplished, when

operational goals are not met, or when the nation is

surprised. Comparing and contrasting the system management

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responses pre- and post-9/11, using Somalia and Iraq as case

studies, reveal that intelligence professionals can play a

key role in managing perceptions, expectations, and

tolerances, which the writer believes is the crux of

influence in an environment of a power-enabled polity (i.e.,

voting citizenry where executors are accountable to voters)

where clear and present dangers are difficult to discern.

The IC can clarify interest and foster support for

appropriate action which ultimately increases the system-

response options available to the executor. This can be

done by demonstrating system interdependencies and

interconnectedness in an environment where potential threats

are hard to see (i.e., not connecting seemingly disconnected

variables and there second, third, and fourth order

effects--Somalia) and by not falling into traps of

connecting actions or proposed actions, that although

politically expedient, have no basis or at least have low

correlative value in reality (i.e., Iraq and 9/11). First,

it is necessary to explain the environment in which the IC

operates.

185

The Environment Explained in the Context of a System

A system is defined as a set of interacting or

interdependent entities, real or abstract, forming an

integrated whole.106 The structure in which the majority of

the world operates is a sovereign state system functioning

in the context of international law, norms, and agreements.

This system governs trade, finance, development, and

conflict by managing incentives and disincentives to foster

cooperation and interdependency.107

The system has worked well at decreasing the

probability of great power conflict, however, it has created

an environment that has decreased the level of acceptable

action for system management (i.e., economic, diplomatic,

and military incentives/disincentives) as we have grown

safer and the obvious existential threat has dissipated. 106Alexander Backlund "The definition of system". In: Kybernetes

Vol. 29 nr. 4, pp. 444-451, 2000.

107 Mike Gaines. The author posits that although the realist framework of independent states chaotically interacting between one another holds a high degree of truth, the influence of the interconnected and interdependent global system cannot be ignored when interpreting cause and effect in the context of post World War II (and more accurately, post Cold War) international relations.

186

Convincing the American polity that stabilizing Somalia is

the “the right thing to do” became an impossible task,

because the connections of greater system stability were not

clearly expressed to the polity. In an era of relative peace

and prosperity where threats are hard to delineate,

intelligence must adapt and take on a role more akin to

marketing (as depicted in the graph below) than to pointing

out the locations of tank columns which grows easier as the

IC becomes more technically and artfully more effective as

it gains greater asymmetry in information dominance.

Figure 7-1

As the clarity of the threat increases, it becomes

exponentially more important to

understand the enemy and his intentions (i.e., the polity

know the Soviets are their enemy, so how do they beat/deter

187

it?). However, the “Big Scary Soviet Bear” is no longer out

there or at least in a form we’re used to seeing. Managing

perceptions of the polity (i.e., answering the “why should

one care” question about seemingly innocuous acts or actors

who are not perceived as threatening) when the threat is

vague becomes exceedingly important.

Managing Perceptions: The Nexus of Expectations and

Tolerance

Managing perceptions can be an extremely difficult

undertaking especially in the current environment of a power

enabled polity where the polity has as much influence on the

IC as the IC has on the polity. For example, as discussed

previously one can argue that the polity and the emotions

prevalent within it post-9/11 affected the IC’s ability to

deliver unbiased analysis regarding the threat of Saddam

Hussein.108 The verity of the powered-enabled polity and the

influence of IC recommendations on those perceptions can

108 Mike Gaines. This idea of the dual influence where the polity effectswhat the IC presents as fact and the reinforcing nature of the intelligence provided by the IC on the polity’s beliefs will be exploredlater in the paper.

188

best be managed by understanding the nexus between the

increasing expectations of the power-enabled polity and the

decreased tolerance levels of not meeting those expectations

as explained in the chart below.

Loosely Coupled Systems: Democracies, M arket Based Economies, Power Enabled ActorsW here expectations increase and tolerance decreases ( W e want more mentality or consumption based)

Tightly Coupled Systems: Autocracies, Regulated Economies, Dependent/Less Enabled ActorsW here expectations diminish and tolerance increases (At least I have the basics mentality or M aslovianbased)

X represents an arbitrary beginning point with all things being equal.Point being while one system fosters increasing expectations the other fosters high tolerance.

Both can lead to temporal stability depending on the situation at hand

Tolerance

Expectations

H

L H

L

x

Shade in graph represents rate of interaction between actors or rate of acceptable changeThe darker the shade the higher the level of individualism and the higher the marginality of interest

Loosely Coupled Systems: Democracies, M arket Based Economies, Power Enabled ActorsW here expectations increase and tolerance decreases ( W e want more mentality or consumption based)

Tightly Coupled Systems: Autocracies, Regulated Economies, Dependent/Less Enabled ActorsW here expectations diminish and tolerance increases (At least I have the basics mentality or M aslovianbased)

X represents an arbitrary beginning point with all things being equal.Point being while one system fosters increasing expectations the other fosters high tolerance.

Both can lead to temporal stability depending on the situation at hand

Tolerance

Expectations

H

L H

L

x

Shade in graph represents rate of interaction between actors or rate of acceptable changeThe darker the shade the higher the level of individualism and the higher the marginality of interest

Figure 7-2

As Robert Lucas posited infinitely increasing expectations

can lead to unstable outcomes and inflated or skewed

perceptions of reality.

189

Step 1: Gaining the Polity’s Trust

The IC can play a key role in managing polity

perceptions, and thereby influence polity expectations and

tolerance levels, by first increasing its credibility.

Intelligence professionals may find that increasing

credibility with the polity can be a difficult undertaking

with seemingly all the cards stacked against them; the

future is very hard to predict, especially when variables

are purposely hidden. Gaining the polity’s trust, however,

is an essential first step if we hope to manage its

expectations.

Intelligence professionals must be able to frame and

understand the complex environments in which they operate.

They must identify problems (current) or potential problems

(future) and use the best processes and methodologies

available to interpret, influence, and affect social or

physical phenomena. They must make the appropriate

organizational improvements to best work within a complex

environment while simultaneously collaborating with key

stakeholders in a combined effort to achieve synergistic

190

results. They must utilize the demonstrated “best practices”

and strive to improve the art and science of intelligence,

recognizing biases and pitfalls and implementing measures to

correct them. When the state of the art is improved, the

level of accuracy should increase. As the subsequent levels

of understanding increases the level of opaqueness will

decrease, thereby improving intelligence credibility and

situational awareness among the polity.

Shaping Perceptions and Expectations

Intelligence professionals can help manage expectations

and increase tolerance for action, even costly action, once

credibility is established. With increased credibility, the

polity will be more inclined to accept complex

interpretations and hard-to-see connections that

intelligence professionals claim will affect them directly

or indirectly. The polity will be more inclined to accept

costs, if the real costs are truthfully revealed to them up

front.

As awareness, knowledge and therefore clarity of

international connectedness increase among the polity; fear,

191

short-sightedness, and selfish interest should decrease as

collective interest of a stable system are revealed.

Tolerance for action to manage system perturbations that

could have devastating second, third, and fourth order

effects should also increase. As such, the options available

to the executor to manage system disruptions should also

increase as the polity becomes aware of the interrelatedness

and interdependency of the global system and the need to

manage what may seem to be innocuous disruptions that may

have systemic consequences.

Post Cold War and Pre-9/11: The Failure to Define

Why Somalia Mattered

The vast majority of Americans could not understand how

sending troops and treasure to Somalia would affect their

lives. The IC failed to connect the dots of seemingly

disconnected events and circumstances. More importantly,

the IC failed to convey to the polity the menace of the

growing threat of non-state actors in the new environment

lacking existential threats. The threat and capability of Al

192

Qaeda in Somalia grew because of this failure. Initial

enthusiasm for Operation Restore Hope (in Somalia) waned

over time and the coalition executor (President Clinton)

redefined system management criteria to be more in tune with

the perceived interest. Further Clinton efforts of system

management decreased in scope and degree as the polity grew

weary of the cost involved.

Clinton was able to regain political capital and

rebuild coalitions by adhering to the politically acceptable

rate of system management109. The danger in such acquiescence

is that it: 1.) Ties the hands of the executor, 2.)

Encourages politically palatable intelligence analysis and

findings, and 3.) Misses pertinent connections that could

have detrimental consequences. Bowing to political pressure

starts a trend that can be repeated therefore creating a

positive feedback loop from the polity’s perspective where

it gains power and a negative feedback loop from the

109 Donald M. Snow. Uncivil Wars: International Security and the New Internal Conflicts. Boulder: Lynn-Rienner Publishing, 1996. Chap 5. Snow discusses how in the aftermath of Somalia, President Clinton reset criteria (via PDD 25) for future intervention and peacekeeping operations where American interest was clearly affected and public support existed for intervention.

193

executor an IC’s perspective where power, leverage, and

influence are lost. As the expectations of the polity

increase, the tolerance levels decrease, and the ability of

the IC to speak truth to power is overwhelmed by what is

politically acceptable.

For example, Clinton’s interventions after Somalia

sought to reduce the cost involved in order to retain the

support of the polity which demanded low cost (in lives and

treasure), high impact solutions where interest were clearly

defined, explained, or demonstrated. For example, Operation

Restore Democracy was politically acceptable because

Floridians could see Haitians washing ashore.

Low tolerance for anything perceived as counter to the

polity’s individual or small-group marginal interest

prevailed in the US zeitgeist to the detriment of the

collective interest. The IC was unable or unwilling to

connect the dots and reveal how instability and depravation

in faraway lands could affect US public interest. Combine

the low tolerance for cost with the increased expectations

caused by the widespread approval of the Powell Doctrine

194

(i.e., the efficacy of overwhelming force in a clearly

defined mission for the military), the accuracy and

lethality of new weapons systems, and the military’s general

distaste for operations other than war (due largely to US

successes in Operations Just Cause and Desert Storm) and one

understands how Clinton’s available options for system

management were reduced. The only options available were low

risk/low cost, high payoff options (e.g., the missile strike

that had limited risk and a high probability of achieving

desired results/effects)

195

L

L

H

H

PerceivedBenefit

Perceived

Cost

21

3 4

System M anagement Options (1-4)

L

L

H

H

PerceivedBenefit

Perceived

Cost

21

3 4

System M anagement Options (1-4)

L

L

H

H

Interest

Perceived

Clarity

21

3 4

Acceptable M issions (1-4)

L

L

H

H

Interest

Perceived

Clarity

21

3 4

Acceptable M issions (1-4)

Polity or Large Coalition Pre-9/11

•Low understanding of system interdependence (2nd or 3rd order effects of perturbation); who cares what happens in Afghanistan; it doesn’t affect me•High susceptibility to nominal or inflationary input (mass m edia, group dynamics, emotive effects, etc) which obscures real cost and real benefits•High susceptibility to individual and group marginal interest v.long term interest which obscures long term judgment•High expectations of wants (or don’t wants) and needs; low tolerance for anything perceived as counter to marginal interest. Highly Empowered because of perceived safety— No perceived existential threat

110

Figure 7-3

The polity, the executor, and therefore the IC focused

on marginal interest instead of exploring the

interconnections between the nodes and links of the system

that could clarify long term interest. The IC failed to

clearly delineate the importance of system stability in the

post Cold War system and to show how stability in Somalia

affects US interest. As a result, clarity of interest was

low and system management options were reduced to low

110 Mike Gaines. The author posits that only low cost/high benefit system management options were available pre-9/11. Red =No, Yellow=Maybetilting towards Yes, and Green=Yes.

196

cost/low risk tools and actions that did not address the

second, third, and fourth order system effects of actions or

inaction. The environment that fostered our posture and

limited responses to system management had systemic

consequences; consequences that emerged as planes flown into

buildings. 111

Post 9/11: The Failure of Labeling Everything a Terrorist

Threat

One of the few benefits of 9/11 is that it granted

George W. Bush enormous political capital that allowed him

to manage the system with more tools such as ground troops,

invasions, governance imposition operations, stabilization

operations, and treasure. The polity was willing to become

more regulated and to accept more cost as long as the system

was managed properly. The “existential” threat was

recognized and easy to understand. Initially, the polity

had higher tolerance for the cost associated with system

management (i.e., any mission is acceptable as long as you

111 Nasim Nicholas Taleb. The Black Swan: The Impact of the Highly Improbable.2007. Chap 1. Taleb posits that highly improbable events can have highlyimpactful effects or consequences

197

keep us safe) and lower expectations (or higher tolerance)

of prospective cost versus benefit in affect increasing

options available to Pres. Bush as depicted in the below

chart.

L

L

H

H

PerceivedBenefit

Perce

ived

Cost

21

3 4

System M anagement Options (1-4)

L

L

H

H

PerceivedBenefit

Perce

ived

Cost

21

3 4

System M anagement Options (1-4)

L

L

H

H

Interest

Perce

ived C

larity where

Every

thing is related to

Terrorism

21

3 4

Acceptable M issions (1-4)

L

L

H

H

Interest

Perce

ived C

larity where

Every

thing is related to

Terrorism

21

3 4

Acceptable M issions (1-4)

Polity or Large Coalition Post-9/11

•Higher understanding of system interdependence (2nd or 3rd order effects of perturbation); we care what happens in Afghanistan; it does affect me•High susceptibility to nominal or inflationary input (m ass m edia, group dynamics, emotive effects, etc) which promotes collective compliance•Long term interest and defined by the group outweighs m arginal self /sm all group interest (at least in the short term)•Lowered expectations of wants (or don’t wants) and needs (keep me safe first); increased tolerance for cost (at least temporarily; i.e., I willaccept higher cost). •Less Empowered because of perceived lack of safety— Perceived existential threat; Ergo less leverage on Executor (Pres Bush)

Figure 7-4

The IC, however, failed to delineate true interest and

instead connected all interest (all the dots) to terrorism,

including the overthrow of a marginalized dictator in Iraq.

There is plenty of blame to go around for the failures

of Iraq, be they executor manipulation of intelligence

(e.g., Doug Fieth’s office in the Pentagon or Vice-President

198

Cheney’s cherry picking and/or support of particular

intelligence offered), however the IC cannot get away with

eschewing blame. The IC did not properly manage perceptions

of the polity. Instead it embraced emotive reactions of the

polity and reinforced what the executor believed. The IC

failed to speak truth to power. Although Bush was given an

extensive “honeymoon” in regards to available system

management options, the honeymoon would not last and the IC

would be put in the position of conveying truth in a

confusing environment.

Beyond Iraq and Somalia: The IC Getting it Right

The positive power disparity began to diminish as the

polity’s perceptions, expectations, and tolerance readjusted

over time (see below chart).

L

L

H

H

PerceivedBenefit

Perce

ived

Cost

21

3 4

System M anagement Options (1-4)

L

L

H

H

PerceivedBenefit

Perce

ived

Cost

21

3 4

System M anagement Options (1-4)

L

L

H

H

Interest

Perce

ived

Clarity

21

3 4

Acceptable M issions (1-4)

L

L

H

H

Interest

Perce

ived

Clarity

21

3 4

Acceptable M issions (1-4)Until perceived security is restored and then back to . . .

199

Figure 7-5

Maintaining the support of the polity in war or smaller

scaled system management options is the center of gravity

for any large coalition governing system especially in the

American democracy. How do we manage expectations of the

polity to elicit the optimal desired result?

Some may argue that futility in influencing polity and

executor perceptions, and suggest that the elected executor

and therefore the polity, determines the IC’s agenda. That

is a valid argument, but only to the degree to which the

polity understands the threat. For example if clarity of

interest is high, the IC will deliver finished products that

support that clarity. For example, the Nazis and the Soviets

were generally perceived to be the enemy and the IC did not

have to tell the polity that. However, in today’s

environment the IC must delve into the unknown and make it

known; the IC must connect dots that seem incoherent and

unrelated. Additionally, the IC must manage polity

perceptions, expectations, and tolerance and become the

truthful “tail that wags the dog” by conveying true interest

200

and allowing maximum flexibility for the executor to manage

those interests.

L

L

H

H

PerceivedBenefit

Accurate

Up-front C

ost 21

3 4

System M anagement Options (1-4)

L

L

H

H

Interest

Perce

ived C

larity where

Interrelate

dness of dispara

te Is accepte

d 21

3 4

Acceptable M issions (1-4)

The “Right” combination where Polity Perceptions and Expectations are M anaged .

L

L

H

H

PerceivedBenefit

Accurate

Up-front C

ost 21

3 4

System M anagement Options (1-4)

L

L

H

H

Interest

Perce

ived C

larity where

Interrelate

dness of dispara

te Is accepte

d 21

3 4

Acceptable M issions (1-4)

The “Right” combination where Polity Perceptions and Expectations are M anaged .

Figure 7-6

Conclusion

The options available for system management Pre-9/11 in

Somalia were constrained when compared and contrasted to the

options available Post-9/11 in Iraq where all things were

perceived to be connected to terrorism. The options

available were directly correlated to emotive interest and

unrealistic expectations of the polity’s perceived aggregate

interest. However, memories are short and the vulnerability

that the polity felt diminished over time. This decreased

the system management options available to Bush when true

201

interest moved back to maintaining stability in a vital

region of the international system and convincing the polity

that it is in our interest to see a stable Iraq. The IC must

become adept at managing polity perceptions and expectations

by first being honest and gaining the trust of the power-

enabled polity. The IC must also learn how to manage polity

perceptions in order to increase the awareness of true

threats and tolerance for action to allow the greatest

amount of choice. This will allow the President to manage

our complex and interconnected world. The IC must find a

balance between accountability to the large coalition who

grants the executor power, the freedom of action of the

executor to optimally perform his or her duties, and

revealing true interest to both clients in this new

environment. Intelligence professionals must act now, for we

live in perilous times where we must show how and why

butterflies do cause hurricanes.

202

CHAPTER EIGHT

Conclusion: Our Tool Kit Has More Tools

The purposes of this thesis was to recommend a set of

principles and methodology found in the social sciences, and

by case study show the efficacy of the principles and

methodology; i.e., add a set of tools to the analyst

toolkit. The writer believes using social science

methodology greatly enhances the analyst ability to

interpret, explain, and marginally forecast complex social

phenomena and that the hypothesis was not disproven.

What We Have Learned

The most pertinent truth of this thesis is that

individual interests are marginally based, and that his

interests are bound to the interest of the group to which he

belongs. Individual choice, government legitimacy, conflict

and cooperation, optimal or equilibrium solutions, and

rational actor theory must all be explained in the context

of the individual within the group. Traditional socio-

economic theory was a reaction to the Hobbesian

203

pronouncements that individual interest are always and

everywhere in conflict. Socio-economic thinkers challenged

such notions and pronounced through methodology that people,

despite divergent interest, can live in harmony. In a

harmonious state where Nash equilibria can be found, self-

interested behavior actually benefits society reducing

conflict to beneficial competition and cooperative exchange.

People join groups because of self interest, not despite of

it and by joining the group they bind themselves to the

interest of that group and are ‘rewarded’ for acquiescence

to group desires. Institutional arrangements, rule-sets, and

proximity help to govern negative self-interested behavior

such as rent-seeking, band-wagoning, and emotive interest

and foster cooperative behavior that benefits the society at

large while imposing the least cost on its individual

members.

We have also learned that tackling any problem requires

the analyst first to define the environment in which he is

working. Socio-economic methodology in a systems context

allows the analyst to account for a greater number of

204

variables that are often overlooked in stove-piped

disciplines such as realism or idealism. The world is too

complex to rely on singular theories to explain all

phenomena which is why the focus of this thesis is to add

tools to the toolkit and not take any away. The utility of a

particular methodology is a function of the time available

to the analyst, the parameters set by the decision maker,

and the type and relevance of the phenomena being

interpreted. Using socio-economic methodology to decide the

utility of bargaining with a hungry lion instead of running

is useless; analysts who choose to explore that option will

be eaten.

The Limitations

The complexity of the challenges analyst face today are

daunting and call for an expansion of the tools available to

him or her to interpret and explain complex phenomena.

Social science methodology does help shift the

interpretation of phenomena from the deductive end of the

spectrum based on personal introspection to inductive

205

reasoning based on empirical evidence. Inductive thinking is

messier and more difficult. It begins with apparently

chaotic data and seeks the grid or system, when applied to

the chaotic data, reveals some fundamental order and

immutable or governing dynamic. Organizing and analyzing

apparently chaotic data became the first step in the process

of formalizing the ‘science’ aspect of socio-economic

methodology and unraveling the complex patterns of human

responses to incentives and interactive exchange.

However, reductionism has its limits and can be as

damaging as eschewing socio-economic methodology all

together. Human interaction is not fully amenable to

simplification and reductionist application. Human

interaction is an approximate or probabilistic phenomena and

cannot be explained fully even by the immutable truths or

governing dynamics described in this thesis. Humans do not

live in vacuums and ceteris paribas does not apply in open

systems because all the variables interacting in life are

never equal. There is an inescapable tension between complex

reality and socio-economic simplicity. Making all things

206

equal runs the risk of postulating cause and effect

relationships that are not useful and at worst completely

false. Individual interests are for more complex than the

sum of cost benefit analyses in the margins even after

considering group effects. However, the utility of socio-

economic methodology is evident and real in interpreting

phenomena that cannot be explained adequately with

traditional analytical methods that leave intelligence

analyst ‘getting it wrong more than they get it right’.

The Unintended Consequence of the Thesis

The writer learned that most solutions to the problems

addressed in this thesis involve group or organizational

improvement; finding Pareto optimality and efficiency within

the group and among collaborative groups (e.g., cooperation

among U.S. executive departments). Establishing cooperative

mechanisms and incentives within the structures of stove-

piped bureaucracies increase perspective and therefore the

information available that may provide greater understanding

207

of complex phenomena (especially in our ongoing stability

operations in Iraq and Afghanistan).

Conclusion

The crux of this thesis can be summed up in the words

of a poet who this writer considers a socio-economic thinker

in the literary tradition. Rudyard Kipling summed up tension

between individual interest and aggregate interest in an

excerpt of a poem called “The Law of the Jungle” in his

brilliant work The Junglebook:

“Now is the Law of the Jungle---as old and true as the sky; And the wolf that shall keep it may prosper, but the wolf that shall break it must die. As the creeper that girdles the tree-trunk, the Law runneth forward and back--- For the strength of the pack is the wolf, and the strength of the wolf is the pack.''

The ‘Law’ that Kipling refers to are what the writer calls

the immutable facts or governing dynamics of social

interaction. If analyst can understand this seemingly simple

maxim and apply it when interpreting phenomena and heed its

advice by sharing information across organizations, the IC

and the decision makers it supports will reap the benefits.

208

The strength of the pack is the wolf, and the strength of

the wolf is the pack, indeed.

209

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