12th November 2010: ‘Initial’ PhD Proposal

For the past 3-4 years I’ve been working on a PhD project. It’s gone through several topic changes and about 240,000 words of draft notes. I finally settled on a topic in early 2010: how strategic culture as a framework for understanding the decisions and preferences of national policy elites is adopted in counterterrorism studies, amidst renewed interest in anthropological research methods. I’m looking at both policymakers and terrorist individuals/groups.

You can read the ‘initial’ proposal here. It’s for Monash University’s School of Political and Social Inquiry. I’ll continue to post notes and literature review items on this blog over the coming months, as the project continues to develop.

10th November 2010: Overextension, Vulnerability and Conflict

Rosecrance, Richard. ‘Overextension, vulnerability, and conflict: the ‘Goldilocks problem’ in international strategy.’ International Security 19(4) (1995): 145+.

Nation-states face resource commitments — alliances, economic production and military power — to restrain competitors and challengers. Rosencrance examines the contributions of Barry Posen on military doctrine, Jack Snyder on domestic grand strategy, and Charles Kupchan on elite leadership. Cartel politics and overextension shaped the British Empire’s expansion into the Baltic states during the Crimean War and later into Africa. All three suggest that government officials and self-created myths drive policy, which underpin a strategic culture that elites use to justify their politico-military decisions. For Kupchan, strategic vulnerability — issues of decision stress — is an intervening variable which shapes how they formulate strategic culture.

Kupchan’s distinction between rising and declining states helps to explain several historical analogies made after September 11. In the immediate aftermath of this “high vulnerability” incident, the United States was compared to historical Rome and to Thucydidean war-fighting, given its percived overextension in Afghanistan and Iraq (and with a parallel renewal of interest in Clausewitz and Thucydides amongst classicists). Attention also focussed on the US-Israel and US-Saudi Arabia dyads. In contrast, China and India focused on macroeconomic expansion, and nonmilitary levers such as diplomacy and economic strategies. Snyder and Kupchan’s discussion of decision-making under such circumstances also may help to explain the 1979-1989 Soviet-Afghan War’s role in Al Qaeda’s genesis. It may also explain why Canada as a middle power has promoted human security in contrast to the US emphasis on ‘balance of power’ neo-realism.

Rosencrance’s discussion of interwar Germany and Japan as “low vulnerability” countries that pursued war emphasises the role of strategic intention. An intervening variable my be propaganda as a shaper of domestic contexts and decision-makers. This is discussed in Ian Buruma and Avishai Margalit’s Occidentalism: The West in the Eyes of Its Enemies (Penguin Books, New York, 2005), in which domestic elites and strategic culture become a driver of military war-fighting capabilities. In turn, this period influenced Reagan and Bush administration era neoconservatives, and how Salafi jihadist thinkers were initially perceived as strategists.

Interestingly, Snyder’s book Myths of Empire (1991) used the term ‘blowback’ to describe how an elite can become deluded by its own myths, a process that Chalmers Johnson later popularised after the 2003 Iraq War to describe Al Qaeda’s portrayal of the US as the “far enemy”. This suggests that the immediate post-Cold War debate about strategic culture may have foreshadowed later deveopments, and that this period is overlooked in the ‘three generations’ framework popularised by Harvard’s Alastair Johnston.

9th November 2010: Manufacturing Consent (1988)

Herman, Edward S. and Noam Chomsky. 2002 [1988]. Manufacturing Consent: The Political Economy of the Mass Media, New York, Pantheon Books.

Herman and Chomsky’s Manufacturing Consent was a significant influence on my undergraduate studies. Their propaganda model was one of the first analytical frameworks I encountered and used to examine Timor-Leste and other political issues. The model’s five filters are: (1) ownership structure; (2) advertising/funding; (3) sources; (4) flak and enforcers; and (5) anti-communism as an ideological framework. Herman would also apply the model in his follow-up book with Gary O’Sullivan, The Terrorism Industry (Pantheon Books, New York, 1989), which Andrew Silke praises for its network-level critique.

In retrospect, Manufacturing Consent is a synthesis of Herman’s institutional finance expertise, Chomsky’s knowledge of propaganda, and the duo’s past work on human rights abuses in Laos, Cambodia, Vietnam, Timor-Leste, and Nicaragua. CNN and Fox News now function as flak although Michael Moore‘s projects now use this as a public relations strategy. The ‘global war on terror’ was the Bush administration’s equivalent to the Reagan administration’s ‘anti-communism’. Source range from ‘official’ government officials to academics, think-tanks and ‘idea entrepreneurs’ — the range of viewpoints and quality of information gives counterterrorism studies an instability as a subfield of national security. Barry Saunders and I considered some of the philanthropic foundations and other funding mechanisms for investigative journalism here, including a brief discussion of Steve Coll, Dexter Filkins and Lawrence Wright.

8th November 2010: ‘Behind The Curve’

Cronin, Audrey. ‘Behind The Curve: Globalisation and International Terrorism.’ International Security, 27(3) (Winter 2002/03), 30-58.

Cronin is a Professor at the US National Defense University (LinkedIn profile). This review essay summarises the strategic thinking in counterterrorism circles after Al Qaeda’s terrorist attacks on 11th September 2001. Cronin discusses the definition and history of terrorism including the work of David Rapoport, Walter Laqueur, and Bruce Hoffman. She concentrates on the intersection of three trends: (1) religiously motivated or ‘sacred’ terror; (2) globalisation as a driver of international terrorism; and (3) ‘communities of support’ in Middle East states. Her policy prescriptions include more long-term thinking; Special Operations Forces-type operations; and a greater reliance on grand strategy and nonmilitary options such as diplomacy, economic and informational levers. These are themes that Cronin develops in her later research. In particular, Cronin notes that the policy orientation of counterterrorism has to-date been perceived as a barrier to multidisciplinary academic researchers. She touches on the absence of strategic culture or its narrow definition as state-centric military force.

Cronin’s paper points to a couple of recurrent themes in pre-September 11 understandings of strategic culture in counterterrorism studies. The policy emphasis of counterterrorism needed to be embedded in a national security culture. Globalisation and religious beliefs illustrate the adaptability of an adversary’s strategic culture to new conditions. The lack of a coherent grand strategy and nonmilitary calculus will become clear in flashpoints like Guantanamo Bay and the debate on anti-money laundering initiatives.

7th November 2010: The ‘Cultural Turn’ in War

Porter, Patrick. ‘Good Anthropology, Bad History.’ Parameters, 37:2 (Summer 2007), 45-58.

Patrick Porter is a military studies academic at King’s College, London. This article is condensed from what would later become the first chapter of Porter’s study Military Orientalism: Eastern War Through Western Eyes (C. Hurst and Co., London, 2009). Porter examines the US military’s resurgent interest in anthropology and a group of historians and strategists who adopt a culturally determinist viewpoint. However, the experiences of Afghanistan and Iraq suggest that adversaries can use strategic culture in varied and coevolutionary ways which cultural determinism either overlooks or devalues. The ‘war college’ tradition of Sun Tzu, Machiavelli and Clausewitz must adapt to current warfighting conditions. Each of these texts — and others such as Salafi jihadist strategies — can be ‘read’ and used in different ways by adversaries. Porter uses this to reinterpret historic clashes — Gallipoli, the Bush administration’s War on Terror, Sri Lanka’s response to the Liberation Tigers of Tamil Eelam — to show how cultural traditions in warfighting are more contingent and complex than cultural determinism allows for. Such errors may have contributed to misjudgments by the US about Iraq insurgents, and the Israeli Defence Force about Hezbollah in Lebanon. Porter argues that historians and military strategists must adopt a more coevolutionary and contingent view, in which strategic culture is adaptable, flexible, and counterbalanced by other factors such as individual leadership, resources, and power relationships.

6th November 2010: Kates, Eltham & Keynes

Ben Eltham takes RMIT economics lecturer Dr. Steven Kates to task about Australia’s monetary policy. A few other thoughts arose in reading Eltham’s post.

Kates appears to minimise the vast fixed income market in government bonds. Fixed income is not a ‘zero sum’ market with private firms in equities markets. Both have different dynamics.

Project finance as a third market may rely on money markets or corporate bonds depending on the yield to maturity. Managers in fixed income, equities and project finance all use public-private partnerships as an investment vehicle.

Fund managers have risk management tools to manage interest rates, such as rho (interest rate exposure) and gamma (the second derivative of delta 0r the rate of change in the underlying asset).

Raising the cost of capital simply means that fund managers will choose a different structure of debt and equity dependent on finance, transaction costs and tax (the Modigliani-Miller theorem). Some managers will go heavily into the fixed income opportunities described above. Others will look to ’emerging’ and ‘frontier’ markets for equities, particularly if they are ‘global macro’ managers who want to minimise the ‘home’ bias of investing mainly in your home country’s equities market.

The Reserve Bank of Australia‘s policies are creating ‘carry trade’ opportunities, and hence arbitrage possibilities. Kates appears to minimise the fact that the RBA coordinates its activities — as per open market macroeconomics — with other central banks.

Amongst the other points Eltham makes, cheap credit in 2007 created a short-term bubble in private equity deals and asset management buy-outs.

Perhaps we should all follow Keynes’ example and establish school-level portfolios and inter-university trading instruments. Or recast these blog posts as investor commentaries. The skills in analysis and critique are those required to assess and monitor the validity of trading ideas.

5th November 2010: US Geopolitics and Idea Entrepreneurs

Lee, Oliver M. 2008. ‘The Geopolitics of America’s Strategic Culture’, Comparative Strategy, 27, 267-286.

Geopolitics, or how geography affects foreign policy and shapes military and economic power, shapes strategic culture. However, many discussions of strategic culture are unclear about geopolitics and also confuse strategy with military culture and tactics. United States foreign policy is shaped by its geography, Puritan history, and isolation from Eurasia. The US has two strategic subcultures: interventionist and isolationist. Lee contends that a national security elite has historically been interventionist and has come to the foreground of a usually isolationist domestic politics. Public disillusionment about human casualties acts as a constraint on US military culture. The author suggests trend analysis, social indicators and area/regional studies may inform models of strategic culture.

Mueller, John. 2010. ‘Capitalism, Peace, and the Historical Movement of Ideas’, International Interactions, 36:2, 169-184.

History is shaped by ‘idea entrepreneurs’ who promote beliefs and ideas such as environmentalism, women’s rights, and the scientific method. However, ideas that are adopted may have independent trajectories and are not always dependent on each-other. Mueller examines the correlation of capitalism and peace as war-aversion. He suggests these ideas rely on three beliefs: (i) growth of economic well-being as a dominant goal; (ii) peace can promote innovation, progress and growth more effectively than war; and (iii) trade supports wealth creation rather than conquest. Mueller examines each of these beliefs and cites a range of historians, philosophers and other intellectuals who have both pro- and con- views, such as an exchange by naval historian A.T. Mahan and international relations exponent Norman Angell on the economics of war. We may misunderstand the causal links between capitalism, democracy and peace, Mueller argues. Rather than capitalism promoting peace, it may in fact be that the conditions for peace are promoters of capitalism and democracy.

2nd November 2010: Lockheed’s F-35 Fighter

The New York Times‘ Christopher Drew reports cost blowouts and project delays on Lockheed’s F-35 Fighter. Flight tests, parts delays, and software code is blamed.

Perhaps Lockheed could revisit the legendary military strategist John Boyd, and in particular, his work in the late 1960s and 1970s on the Lightweight Fighter program.

DNI.net’s former archive of Boyd’s papers and presentations can be found here.

1st November 2010: ‘Dim Sum’ Bonds

The Asian Development Bank‘s release of ‘dim sum’ bonds in Hong Kong illustrates several key processes in financial innovation.

First, understand the circumstances of local markets. As the issuer, the ADB has watched the People’s Bank of China‘s monetary policy and the opportunities to issue yuan-denominated debt. Second, identify potential clients who want to take advantage of the local markets, or cross-border opportunities. The ADB has targeted several client types: (a) overseas firms who need a financing mechanism to expand into China via joint venture or foreign direct investment; and (b) institutional investors who want to hedge, arbitrage or speculate on foreign exchange markets. Third, develop a ‘bespoke’ or tailored financial instrument that enables you as issuer to act as a liquid market-maker for clients, raise the dollar value of assets under management, and that exploits the information asymmetries, inefficiencies, and circumstances of either local markets or inter-market movements.