The First Violent Crisis of Globalization has Ended – the Next One is Emerging
The first crisis of globalization
Former British Prime Minister Gordon Brown has referred to the financial crisis of 2008 as the ‘first crisis of globalization’. This is a great descriptive applied to the wrong problem. Al-Qaeda was the first crisis of modern globalization. Financial crashes have previously infected inter-connected markets, but never before has a non-state group been able to set the global security agenda. Al-Qaeda and Bin Laden were able to do this by applying a mixture of medieval religious ideology and guerilla warfare to the dominant tools of globalization. Al-Qaeda seemingly understood the strengths, weakness and opportunities of globalization and exploited them for increasingly empty violent aims. The use of adaptive financial tools in the form of hawala banking, co-opting the apparatus of failed states and most spectacularly both weaponizing and de-stabilizing one of the primary drivers of globalization, in the form of civil aviation, allowed al-Qaeda to strike internationally. Al-Qaeda also virtualized itself and quickly moved into the new media space opened up by the explosion of the Internet but this also exposed its weakness as the Arab Spring has bloomed. Information wants to be free and al-Qaeda is poisoned by freedom. Al-Qaeda has been described as innovative and it certainly was the first movement out of the gate to exploit the conditions the world moved toward following the end of the Cold War. However, this particular crisis should now be regarded as closed. The United States and its western allies have formed effective tools to respond to threats such as al-Qaeda. Building new military systems and emphasizing technology, information use, surveillance systems and Special Forces have proven to be an effective doctrinal response — and are also appropriately what finally put an end to al-Qaeda’s leader. Read the rest of this entry »
The Intelligence of Yahoo!
One of the more interesting data-points produced by a recent Washington Post series into the workings of the Intelligence Community was the stated fact that over 50,000 intelligence reports are produced each year mostly dealing with terrorism and mostly dealing with ‘low hanging fruit’ analysis. This leaves actionable intelligence, such as real time traffic coming from Special Forces groups in say, Yemen mixed in with lower level non-actionable information. Prioritizing data in world of overwhelming data-flow is increasingly a significant problem and while some software tools are developing to help solve this problem. However, faulty understanding around the use of these systems means that they invariably suffer from the same ‘garbage in-garbage out’ problem they are seeking to alleviate.
Meanwhile, over in the world of journalism the battle continues for relevance and revenue. While many traditional news reporting agencies are trying blogs, iPad apps and kindle editions to stay in business a non-traditional news agency – Yahoo! – is trying something different. Yahoo! news is one of those sub-groups within Yahoo! which has developed a dedicated following based on the quality of the product, which isn’t infected by Yahoo!’s otherwise unsteady performance. Its recent offering is called The Upshot and is a news Blog that uses trends from search data to decide what it is going to report on. Simply put the Upshot Blog looks at what people are searching for on the web, and writes stories covering the most popular areas of search. The launch of the new blog was covered by the New York Times.
One way of using this idea within the Intelligence Community could be to assign analysts to topics, which are trending across community networks in the way Upshot is doing with news. If for example a wide number of searches are being conducted on Intellink and associated systems and then an IC analyst could be assigned to write a report on the topic covering the salient issues. While certainly, this shouldn’t be the sole driver of analytical product but it may be a way of introducing greater relevance into analytical units, such as the NCTC, which are coordinating roles over a number of agencies and therefore, should be able to see trends developing within the search patterns on its systems.
New Terrorism: Five days in Manhattan
Two events centered on New York City separated by five days demonstrated the end of one phase of terrorism and the pending arrival of the next. The failed car-bombing in Times square and the dizzying stock market crash less than a week later mark the book ends of terrorist eras.
- End of an era for terrorism
The attempt by Faisal Shahzad to detonate a car bomb in Times Square was notable not just for its failure but also the severely limited systemic impact a car-bomb could have, even when exploding in crowded urban center. Car-bombs or Vehicle-Borne IED’s have a long history (incidentally one of the first was the 1920 ‘cart and horse bomb’ in Wall Street, which killed 38 people). VBIED’s remain deadly as a tactic within an insurgency or warfare setting but with regard to modern urban terrorism the world has moved on. We are now living within a highly virtualized system and the dizzying stock-market crash on the 6th May 2010 shows how vulnerable this system is to digital failure. While the NYSE building probably remains a symbolic target for some terrorists a deadly and capable adversary would ignore this physical manifestation of the financial system and disrupt the data-centers, software and routers that make the global financial system tick. Shahzad’s attempted car-bomb was from another age and posed no overarching risk to western societies. The same cannot be said of the vulnerable and highly unstable financial system.
Computer aided crash (proof of concept for future cyber-attack)
There has yet to be a definitive explanation of how stocks such as Proctor and Gamble plunged 47% and the normally solid Accenture plunged from a value of roughly $40 to one cent, based on no external input of information into the financial system. The SEC has issued directives in recent years boosting competition and lowering commissions, which has had the effect of fragmenting equity trading around the US and making it highly automated. This has created four leading exchanges, NYSE Euronext, Nasdaq OMX Group, Bats Global Market and Direct Edge and secondary exchanges include International Securities Exchange, Chicago Board Options Exchange, the CME Group and the Intercontinental Exchange. There are also broker-run matching systems like those run by Knight and ITG and so called ‘dark-pools’ where trades are matched privately with prices posted publicly only after trades are done. As similar picture has emerged in Europe, where rules allowing competition with established exchanges and known by the acronym “Mifid” have led to a similar explosion of types and venues. Read the rest of this entry »
Open Versus Closed Systems
“The principal characteristic of twenty-first-century international relations is turning out to be nonpolarity: a world dominated not by one or two or even several states but rather by dozens of actors possessing and exercising various kinds of power. This represents a tectonic shift from the past.”
“Today’s world differs in a fundamental way from one of classic multipolarity: there are many more power centers, and quite a few of these poles are not nation-states. Indeed, one of the cardinal features of the contemporary international system is that nation-states have lost their monopoly on power and in some domains their preeminence as well.”
-Richard Hass, Head of the Council on Foreign Relations and former head of Policy Planning at the U.S. Department of State, writing in 2008.
Google’s rise over the past ten years has coincided with and arguably assisted in the creation of extra-state entities, which can project enormous power globally. The equation can be simplistically stated: in an information economy, control of information equates to raw power. The Industrial Revolution fueled the British Empire, control of markets fueled the American Empire, control of information is fueling the Google empire. In the space of ten years, the Internet has gone from supporting pets.com to being the pre-eminent vehicle for projecting power. However, the continuation of the open Eco-system of information, innovation and development, which has provided the platform for this success is not assured (as has been highlighted by a variety of Internet scholars and strategic thinkers). Open systems are messy, and therefore, closed wall Internet systems may grow in popularity as consumers seek protection from some of the anarchy that reigns online. This scenario is not new. The United States is the original messy open political system and by managing to control this method of organizing society it became a super-power. China offers an alternative: a closed wall system to protect its citizens from the anarchy of open society. Google has been the champion of the open Internet. Just as American exceptionalism has driven the United States to intervene globally to uphold Jeffersonian values, Google intervenes in FCC auctions to ensure the open access to information. Of course the commercial imperative cannot be denied – the United States has financially benefited from promoting the market state, and Google financially benefits wherever there is an open (uncensored) Internet. It has been unclear whether Google would ever seek alliances with nation-states given its extra-territorial virtual nature, but that time appears to have arrived. Read the rest of this entry »
Climate Change as a Security Metric
As the United Nations Climate Change Conference in Denmark approaches the debate about climate change will bounce to the front of the global agenda. From a security perspective much attention will be given to the potential for protesters to make some kind of statement, even though 2009 has been the year when street activism has notably failed to adapt, or score any success. Beyond the tactical security concerns of the event itself the real rallying cry should be the need to embrace climate change as a security metric. The CIA has recently opened a climate change center to examine the national security implications of climate change and this work can be replicated at a corporate and non-governmental level.
There is a wealth of information available relating to climate change, what isn’t available is local or individualized synthesis to make sense of this data for an organization. The terms, ‘increased resource competition’, ‘water scarcity’, ‘extreme weather events’ and ‘coastal flooding’ are all in the popular consciousness– but what would all this mean for governments, companies or individuals? Given the interconnected nature of environmental systems this is tough analytical work but increasingly looks highly necessary especially when considered projects with longer time horizons. Read the rest of this entry »
Information War – this time its personal
Spin
Destroying or attacking brands isn’t a new idea, however it is acquiring more potency with the ubiquitous use of social media and the ability to seed negative themes about brands now massively distributed — rather than concentrated in the hands of a top down media system. The company Interbrand produces an annual list of the most valuable brands and goes so far as to ascribe a dollar figure to the brand itself. Examining the methodology for ascribing a dollar figure to the brand also illustrates how the brands are more vulnerable than ever before to being disrupted at critical points in their value chain particularly where the brand connects with the customer or potential customer. Disconnecting customers from the brand can clearly be achieved by a targeted use of disinformation emanating from the lower reaches of the world’s wired social networks. Most companies have experienced some version of this, one of the most long-standing examples is the disinformation campaign mounted against Starbucks, which in its various iterations claims the company refused to ‘give free coffee to western troops fighting in [insert name of war]’. Starbucks have used the web to deny this but still the message continues to be re-worked and re-used. It has become clear that the only way to fight an online crowd is with another online crowd but those cannot be simply manufactured but building up online supporters is as important as building loyal customers.
Much of this isn’t news but the ability to apply these principles at an individual level within any given society is becoming more pronounced. Attacking an individual’s reputation by either hijacking their online identity or surrounding their virtual identity with damaging information is currently a relatively easy proposition. Anyone savvy enough to know how a search engine is powered, how to manipulate social networks and how to sign-up for the myriad of free online networks and services can launch devastating reputation attacks against individuals by hijacking or smearing their personal brand. Very little technical knowledge is required to be effective. This is likely to become a significant trend in the near-term as digital natives play out rivalries in virtual spaces leaving employers, credit agencies and any other outside assessor bemused by how to assess the human sitting in front of them.
Bankrupt Revolution
Book Cover of the 1929 version of 'The Crab Cannery Ship'
The most important power transfer in 50 years has just occurred in Japan with the election of Yukio Hatoyama from the Democratic Party of Japan. While this election was certainly a seismic shift one thing certainly didn’t shift at all and that was the representation achieved by the Japanese Communist Partyand the corresponding number of seats they achieved in the Japanese House of Representatives (link to data on Japanese election results here).
Renting time on UAV’s
The recent edition of the Economist’s Technology Quarterly has a good round up of the expanding military use of Unmanned Aerial Vehicles (UAV’s). One of the most arresting parts of the report deals with the growing demand for ‘renting time’ on UAV fleets. The impetus for this comes from the intelligence needs of smaller countries, which are not being met by their immediate allies. Of course this market also opens up a whole host of options for private sector intelligence analysts. For example, security analysts at shipping companies could rent time on UAV’s to ‘clear’ the routes for their ships of known maritime security hazards or oil company analyst’s could have UAV’s overfly their vulnerable pipeline routes looking for anomalies. Companies such as Insitu seem to be offering just that.
For now the costs are pretty high at $2,000 an hour, but as with all technology driven innovation this is likely to come down. There is also of course the option of building your own UAV’s an idea boosted by the editor of Wired Magazine, Chris Anderson. His DIY Drone’s blog gives a wealth of information on developing your own UAV. However, renting time and perhaps more crucially, analysis from one of the entrants into this new market will no doubt become of feature of future private intelligence analysis. As timeshare private jet companies struggle in the downturn they may want to diversify into UAV’s — fromNetJets to NetUAV’s.
