Terror, Control and the Future of the Nation-State

Early in 2008, Mexico lost its three top law enforcement officials to terrorist assassination in less than a week. These attacks were made by the Sinola cartel, one of Mexico’s biggest drug-smuggling organizations, in defense of its economic interests. During the same period, half a world away in Nigeria, a contract militia made a daring attack on an oil platform operated by Shell, as part of a larger disruption campaign that has already shut down 600,000 barrels a day of Nigerian oil production. Militias like this one, which operate under an umbrella group called the Movement for the Emancipation of the Niger Delta (MEND), are in the process of ejecting the Nigerian government and its corporate partners out of the Delta’s oil business. Jump yet again to Afghanistan, and we see Taliban attacks against NATO troops, using weapons and funds derived from Afghanistan’s massive opium business. With an economy larger than Afghanistan’s, the opium business is funding terrorist attacks against NATO and the Afghan government in order to protect future profits.

These are but a few of the many current examples of 21st century terrorism. In most cases we see that terrorism in the modern context isn’t about fringe groups terrorizing the populace. Instead, it is a direct result of competition between strong non-state groups and the nation state over economic control. The problem with this new equation is that almost all of the trends, from the economic to the social and technological, favor the eventual victory of non-state groups over the states they are fighting.

Let’s examine this more closely. The collapse of the Cold War and the rise of globalization have severely damaged the nation state. Without the Cold War, and its fear of communism, the nation state’s ability to claim extraordinary powers of mobilization and control has evaporated. Even recent hype over a threat from terrorism hasn’t been sufficient to reverse this trend. In parallel, the rise of a global market system has shorn the state of many of its historical prerogatives, including control over borders, the economy and immigration.

In each case, the global market’s needs have been placed before those of the state. As a result, what’s left of the nation-state is slowly being de-funded, privatized, and boxed in order to become more economically competitive. It won’t be long before a collapse in those services that protect and nurture the public good arrives; we are already seeing this in the developing world. Finally, without the Cold War as a galvanizing principle, the extreme economic competition of a global economy has made international cooperation (on any issue) nearly impossible. We simply can’t agree on anything anymore.

In contrast to the decline of the state, non-state groups are riding the wave of globalization and political fragmentation to new levels of power and influence. These groups, founded on globalization’s credo – everyone in competition everyone else – have been forming in the fertile soil of globalization’s dispossessed. From the resident of Sao Paolo’s favela (slum) who is a member of the PCC (the First Command of the Capital, a massive drug gang) to the Afghan farmer growing poppies, to the Russian software programmer working for the RBN (the Russian Business Network, a global Internet crime syndicate), to the Shiia member of Hezbollah, people are voting with their feet. Non-state actors offer something the state increasingly does not, group support in a vicious global economic competition.

What makes today’s terrorists starkly different from those of the last century is that they are formed around lucrative business interests. This means that they can fund their wars without relying on the donations of supporters. If we were to judge the length and intensity of this war based on economic means, the news isn’t good. The businesses these groups operate are global and growing fast (estimates from Moises Naim, editor of “Foreign Policy” magazine, are that illicit trade is US$2.5 trillion a year and growing at seven times the rate of legal trade) in the increasingly lax economic system that globalization has created. This is in contrast to the increasingly dire financial situation with nation states, which are now in the midst of a global financial meltdown.

Of course, at more than US$60 trillion, the legal global economy is still much larger than illicit global trade. However, there’s little good news in this. The amount available to states for security is only a small fraction of that, perhaps only two percent. Worse, the budgets for warfare aren’t comparable. Modern nation states spend the vast majority of their budgets on weapons and systems for state vs state warfare. When they do spend their money on fighting non-state foes, they are often outperformed by ratios as high as millions of dollars to one.

One reason for this is that terrorism as a method of warfare is much more effective than it was in the last century – mostly due to the extensive testing and learning done by terrorists on the proving ground in Iraq. One lesson learned by non-state groups around the world is that instead of simple attacks on civilians to generate fear, you can generate much better results by targeting economic networks that the state is obligated to defend. From the attacks on natural gas pipelines in Mexico, that cost a few thousand dollars but generated billions in damage, to the electricity system disruption in Iraq that has kept the country in economic limbo for five years, non-state groups are using the leverage generated by disrupting our vast global networks to their advantage.

Another reason is that non-state groups are not bound to strict hierarchal structures anymore. Instead, they are networks, often composed of a plethora of smaller groups spread out globally (similar to the open source development process used in the software industry). This means that the ability of nation states to roll-up non-state organizations is nearly non-existent. Crush one group, after extensive surveillance and legwork, and another springs up to replace it. Take out a key planner, and a dozen new entrants compete for the slot. It’s almost a lesson in futility.

A final reason that competitive budgets aren’t fairly comparable is that non-state groups innovate through low-cost tinkering networks. These networks, communicating via cell phone and the internet, can quickly produce new weapons that outperform those coming from commercial defense contractors as we saw in the three-year competition between the US military and Iraqi IED (improvised explosive device) makers. This competition will even apply to advanced weapons. In the internet crime industry, tinkering networks have produced incredibly sophisticated software that can seize control of millions of computers, which is quickly outpacing both government and commercial security efforts. We can expect to see similar results as biotechnology becomes more widespread and mature.

In sum, non-state groups that have both the means and the capacity to compete with nation states are in the ascent. However, the result of this competition will not parallel the previous century’s experience where such groups seek to replace the state politically. In case after case, from Lebanon to India to Iraq to Pakistan to Colombia, these non state groups have turned away from state replacement –why would they want that headache? Instead, those that continue to prosper have opted to hollow out the nation state by making it unable to exert control over its economy and territory while still maintaining the outward appearance of a government to the international community. In contrast, if a group violates this principle, as Hamas did recently, it pays for the mistake dearly as it becomes a target of the international community.

As we progress further into this century, we can expect to see state after state become hollow -- beset by transnational non-state groups that entice it with corruption and coerce or punish it with disruption. This will only worsen as technology continues to progress into biotech and nanotech since both are easily tractable to innovation within tinkering networks. Over time, if financial crisis and state weakness creates gaps within the states of the developed world, we will see the same dynamic described above where we live. Already, there are groups ready to fill such gaps, from the transnational MS-13 gang of the southwestern US to the resurgent mafia organizations of Italy to the vast Eastern European criminal syndicates. Fed by globalization’s economic bounty, these groups can and will expand to quickly take advantage of any momentary weakness. If left with a bountiful field of economically and financially disposed to draw from, they will entrench to form a cycle of decay and dislocation that has the capacity to hollow out a state in several short years.