by
Doug Casey
Casey Research

Recently:
Doug Casey
Addresses Getting Out of Dodge

As you know,
I think we’re moving into an era of intense international conflict.
And during the next ten years, you can plan your life around the
US being in the middle of anything and everything that even vaguely
resembles a war. It promises to be unpleasant, inconvenient and
dangerous.

This article
– which is long, but not nearly long enough to cover the subject
in as much detail as it deserves – explains why military conflicts
are in store, what they’re going to be like and what might be the
morality of the matter. This last has some importance, because we’re
talking in good part about terror. And, to paraphrase Nietzsche,
you may not be interested in terror, but terror is interested in
you.

A Matter
Of Definition

In discussing
any subject, I always like to begin with definitions of a few key
words, especially words I hear people using in vague and nebulous
ways. Sloppy definitions feed sloppy thinking, and they often disguise
the fact that the speaker doesn’t know what he’s talking about.
This is especially perverse in that it’s often the case with words
that have high psychological impact. “Terrorism” is absolutely
one of the worst offenders.

There appear
to be over 100 definitions of the word in use by different groups.
I suspect one reason there’s no commonly accepted definition is
simply that the term has become so useful for people in power, at
once a pejorative for enemies and a catch-all for prosecutors. The
latter was demonstrated in the 2008
Liberty Dollar case, when a US Attorney characterized the issuance
of the silver rounds as “a unique form of domestic terrorism.”

Of course that’s
a ridiculous assertion that only a fool would make, but the rhetorical
accusation places the accused in the same moral class as a child
molester. In point of fact, though, what can be presented as terrorism
to the popular mind is often just a matter of imagery. Or, perhaps,
the moral framework of the audience – which is why I’ll discuss
terrorism’s moral character later. The old saw “I’m a freedom
fighter, you’re a rebel, he’s a terrorist” is funny because
it’s so true.

Let’s look
at a couple out of over 100 definitions in use. One of the emptiest
and most provincial comes, unsurprisingly, from FEMA: “The
use of force or violence against persons or property, in violation
of the criminal laws of the US, for the purpose of intimidation,
coercion or ransom.” This definition would encompass most common
crimes; indeed, with more than 5,000 criminal laws on the US government’s
books, almost anyone might qualify as a terrorist. Oddly, violating
the laws of another country isn’t covered.

The FBI’s definition
is much narrower: “The unlawful use of force or violence against
persons or property to intimidate or coerce a government or a civilian
population, or any segment thereof, in furtherance of political
or social objectives.” The key word here is “unlawful,”
which would seem to imply that if something is lawful, it’s not
terrorism. It also implies that if an action has financial motives,
it’s not terrorism. So if the 9/11 hijackers had been in it for
the money, they wouldn’t have qualified as terrorists.

As an aside,
I might mention that of the 32 people on the FBI’s most-wanted terrorists
list, 31 have Arabic names.

Almost all
the definitions I’ve seen, however, are imprecise, incomplete and/or
concocted to make a prosecutor’s life easy. I prefer this definition,
which I created: “A tactic of using violence more for psychological
purposes than for physical damage and that is intended primarily
to delegitimize a regime by showing it to be ineffectual or by inciting
it to overreact.”

First of all,
it’s critical to note that terrorism is a tactic. As such, the idea
of a “War on Terror” is nonsensical and absurd. You can’t
have a war on a tactic. That would be like a war against frontal
assaults, cavalry charges or artillery barrages. Second, the tactic’s
operation is mainly psychological. This is important because, as
Napoleon observed, “In war, the moral is to the physical as
three is to one.” Third, terror has political motives – delegitimizing
a regime – because it’s a variety of warfare.

As von Clausewitz
points out in his most famous dictum, “War is the continuation
of politics by other means.” This view is seconded by Mao,
who said, “The power of the state grows out of the barrel of
a gun.” Both men understood the essentially violent nature
of the political process, of which war is the ultimate expression.

Here it’s worthwhile
observing that, although the US government has invaded a lot of
countries over the years, it hasn’t formally declared war since
1941. And I don’t believe it’s likely ever to do so again, as the
nation-state itself breaks down and the world moves more and more
toward asymmetrical and unconventional warfare. In other words,
war isn’t going away, but many of its traditional practices will
disappear.

That said,
Americans are used to thinking of terrorists as “the bad guys,”
even criminals. Some certainly are, at least in my view of what
constitutes being a bad guy. But whether someone is a criminal has
little to do with the use of terror per se. A criminal is simply
“one who initiates the use of force or fraud,” and that
has nothing to do with his choice of tactics. I urge you, therefore,
to discard any reflexive animus you may have against terror. If
you want to think rationally about a subject, it’s wise to identify,
and get rid of, emotional baggage.

In that light,
let’s look at a few high points in the long history of terror. It’s
helpful in putting today’s and tomorrow’s news in the proper context.

Some Background
On Terror

Most Americans
are shocked and angered to hear anyone assert that the US was born
with the aid of terrorism. That anger, however, is a knee-jerk reaction.
When you think about it, you realize that terror is intrinsic to
revolution, because revolution requires psychological trauma to
delegitimize the old regime.

Don’t get me
wrong. I’m a fan in many ways of the American War for Independence.
As it turned out, America was an excellent and unique place for
most of its existence. The Declaration of Independence was a superb
document, putting forth laudable ideals. The Constitution… not so
much, although it was, thankfully, salvaged to a good degree by
the Bill of Rights.

But the Revolution
itself wasn’t widely popular; perhaps two-thirds of the residents
of the British colonies in the 1770s were loyal to the Crown and
saw the rebels as terrorists (although the term itself wasn’t yet
in vogue). Rebels were notorious for intimidating loyalists, burning
their homes and barns and even lynching them. Rebels launched assaults
and ambushes on the colonies’ legally constituted army, starting
with the Boston Massacre in 1770 and continuing beyond the skirmishes
at Concord and Trenton in 1775. The Boston Tea Party of 1773 was
a clear act of terrorism. Although nobody got hurt, it involved
the destruction of private property – the tea was on consignment
from the East India Company to private merchants.

The nastiest
type of war is almost always a civil war (with two or more indigenous
groups fighting for control of the same population and territory),
and the American Revolution had many aspects of a civil war. It
was by no means just a war of “Americans” against the
British. The British and loyalists correctly saw the insurrection
as terrorism and high treason – the worst of all crimes, for which,
even then, you could be (in sequence) drawn, hung, eviscerated,
quartered and incinerated. Did the formation of an American government
in 1776 change the facts of the matter and make the insurrection
less of a crime against the Crown?

Like all governments,
the new American government was just a legal fiction with believers,
although it did allow the “terrorists, “insurrectionists”
or “rebels” to see themselves as a separate nation. If
you make your own laws, I suppose you become, by that fact, legitimate.
A change in perception by people with weapons can result in changed
reality. But the point I’m making is that, based on their own history,
Americans have no cause to be self-righteous about terror. They
are on a spectrum, very far from both the beginning and the end.

Closer to the
beginning, one instance of revolutionary terror we know of was conducted
by the Zealots of ancient Israel, who used terror against fellow
Jews who collaborated with the Romans. They found killing just a
few people served as a salubrious example, making it unnecessary
to kill more.

The Romans
themselves understood the value of terror. Massacring everyone in
a recalcitrant town served as a cautionary example to folks further
up the pike, encouraging prudence in their decision about submitting
or resisting. This is why Genghis Khan and Tamerlane went to the
trouble of piling up the skulls of resisters into pyramids.

These are early
examples of what might be called state terrorism. But is there actually
any difference between terrorism conducted by a state, as opposed
to a group that is resisting a state or trying to start a new one?
I think not. What makes a state so special? This is a question few
even bother to ask.

Guy Fawkes
may be the first modern terrorist, for his emblematic attempt to
blow up the House of Lords, including the king, on November 5, 1605.
His case shows how terrorism can easily morph into a military operation.
Why attempt to depose the king using an unwieldy army, when one
man can take out the whole government at a fell swoop? You have
to appreciate the fact that Guy is widely known as the only man
who ever entered Parliament with honest intentions.

The Middle
East is the current focus of terrorism, and the Israelis are viewed
as stalwarts in the “War on Terror.” But two incidents
of terror, in particular – at the King David Hotel in 1946 and Deir
Yassin in 1948 – were pivotal in the founding of Israel.

At Deir Yassin,
a village of about 1,000, roughly 250 people were massacred by elements
of the Irgun and the Stern Gang. Menachem Begin, later an Israeli
prime minister as well as a Nobel Peace laureate, was quoted as
saying, “Accept my congratulations on this splendid conquest. As
at Deir Yassin, so everywhere, we will attack and smite the enemy.”
This understandably caused widespread panic among the Palestinians,
and roughly 650,000 conveniently left their lands shortly thereafter
and emigrated as refugees.

Begin was also
in back of the terror bombing of the King David Hotel in 1946, which
killed 91 people. The King David incident, combined with the kidnapping
and execution of two innocent British soldiers in reprisal for the
execution of several Jewish terrorists, moved the British to withdraw.
I’m not, incidentally, trying to paint Begin as a particularly bad
guy, just as a hypocrite; he was actually a very effective commander.

It’s important
to keep terrorism in context. It’s simply a method of conflict.
Conflict itself isn’t good; I believe violence is a last resort
and should be avoided at almost all costs. But terror, which is
essentially and primarily a method of psychological warfare, is
potentially much less destructive, as well as more effective, than
conventional war.

If you want
to win a conflict, terror is an extremely useful tool, but, like
any tool, it has to be used properly and can sometimes be a suboptimal
choice of tactic. For instance, the main point of Rumsfeld’s notorious
“shock and awe” bombing of Baghdad was to induce terror
to help bring down the regime, a supplement to destroying the Iraqi
Army. But destroying the army of a backward Third World country
is one thing, and destroying the infrastructure of its capital city
is something else, especially when the whole object of the exercise
purportedly is to remove one man and his cronies. Here it would
have been much more cost effective to forgo the terror bombing and
use assassination, which I’ll discuss shortly.

Sometimes terrorism
is painted as a simple act of war, which sanitizes and legitimizes
it. The destruction of Hamburg, Dresden, Hiroshima and Nagasaki
were all acts of state terror. It was very late in World War II,
and they were civilian targets, with no military value, only psychological
value. If the Allies had lost the war, the Axis would have been
quite correct in putting the perpetrators on trial for war crimes.

Sometimes,
however, acts of war are painted as terrorism. The bombing of the
USS Cole in Aden in 2000 was widely reported in the US as an act
of terrorism. But in point of fact, it should be classed as a successful
guerrilla operation. Clinton called its perpetrators cowards. If
they’d been US soldiers, however, they’d (deservedly) have been
given the Medal of Honor. The same is true of the truck bombing
of the Marine barracks in Lebanon in 1983, where a local used available
resources to take out foreign troops occupying his homeland.

Terror On
A Spectrum Of Options

Let’s look
at terror by comparison to other options for conflict. Try to see
it on a spectrum of violence, ranging from a schoolyard fight between
a couple of boys on one extreme, to global thermonuclear war at
the other extreme. I suspect its bandwidth on the spectrum will
grow considerably, it will become much more overt, and it will,
for a number of reasons, predominate for the foreseeable future.

Looking at
political violence on a gradient scale, from the most narrowly to
the most broadly focused, I mark it into four zones:

• Assassination
• Asymmetric/unconventional
  war
• Conventional
  war
• Nuclear
  war

I won’t discuss
nuclear war per se in this paper. But we will almost certainly see
nuclear detonations in the real world in the years to come.

Assassination

Assassination
is the premeditated murder of a political figure. The assassin is
the smallest actor playing on the stage of political violence with,
usually, only one perpetrator and one target. When it comes to creating
political change, assassination is the simplest program available:
do-it-yourself warfare. Its effect is immediate and direct, up-close
and personal; and its costs and collateral damage are both very
low.

One would think
threat of assassination should be the most effective means of making
a government comply with political demands. After all, a government
isn’t a magical entity; it’s really just a few people who wanted
power and got it. Officials don’t want to die a violent death any
more than the next guy. That’s why an “offer you can’t refuse”
from the mafia is usually accepted. And it’s widely admitted that,
certainly if an assassin is willing to die in the process, nobody
is proof against it.

That’s why
it’s quite surprising to me that the systematic assassination of
high officials of the opposing government isn’t SOP in war. Even
during WWII it wasn’t considered cricket to go after Hitler as an
individual. The meme has long been propagated that assassination
– especially of a king or head of state – is an especially heinous
crime. But upon consideration, the elevation of political assassination
into a special category of crime doesn’t hold up.

Why should
the death of a politician be more serious than the death of anybody
else? Murder is never a good thing, but isn’t the death of a scientist,
an artist or a businessman necessarily a bigger loss to society?
Isn’t the death of some politicians (certainly including known mega-killers
– Hitler, Stalin, Mao, etc., etc.) a good thing? I would say that
making assassination a special offense is fallacious propaganda,
encouraged by states whose leaders are investing in professional
courtesy.

But not always,
as shown by Hasan al Sabbah.

Hasan ibn al-Sabbah,
known as “The Old Man of the Mountain,” founded the order
of the assassins in the late 11th century. He apparently maintained
his power not by fielding expensive armies, which are blunt-edged
instruments at best, but by fielding well-trained assassins whose
identities were unknown outside his inner circle and infiltrating
them into enemies’ upper ranks. A conflict with Sabbah, unlike a
conventional war, was almost certain to result in the opposing ruler’s
death. Unlike in war, the common people were never hurt and, I suspect,
almost always quietly applauded the death of their ruler – even
if he was replaced by another just like himself.

Sabbah notwithstanding,
assassination, even more than terrorism, can never be official state
policy, simply because it overturns the basis of politics itself.
People who get to the top of the government heap view themselves
as part of a class, with as much loyalty to their peers – other
political leaders – as to the entities they govern. The last thing
they want is to encourage something that not only might come back
to bite them but would estrange them from their peers. It’s a pity,
really, because assassination is a much better way of effecting
political change than war from everyone’s viewpoint – except that
of the rulers.

Most assassinations
throughout history have been perpetrated by lone cranks or ideologues,
with no plans beyond killing a perceived miscreant and no backup
organization to capitalize on the resulting power vacuum. Two rare
and famous exceptions are Brutus’ killing of Caesar in 43 BCE and
Stauffenberg’s attempt on Hitler in 1944. You’ve got to be sympathetic
with Sabbah. The fact is that, throughout history, most leaders
who were targets of assassination actually needed killing. Historically,
assassins have been the benefactors of mankind. They may be due
for a comeback, in the mold of Sabbah’s group, or perhaps the heroes
of the novel The Four Just Men.

Assassination
can stand on its own but also can be a part of a larger plan.

Unconventional/Asymmetric
Warfare

This is largely
the world of the terrorist and the guerrilla. A terrorist is essentially
just a step up from an assassin on the scale of political violence
and a step below a guerrilla. Guerrillas are embedded in a society;
as Mao said, a guerrilla swims among the people as does a fish in
the sea. He avoids toe-to-toe contact with the enemy; as Mao said,
the enemy advances, we retreat; the enemy retreats, we advance.

An assassin
tries to achieve an objective by taking out individuals; a terrorist
seeks his objective by using violence to change mass psychology.
A guerrilla does both and also uses small units to attack the enemy’s
police and military.

Terrorism and
guerrilla action are the best-known elements of unconventional and
asymmetric warfare, but terrorism is in the ascendant as a method.
Guerrilla warfare is useful for replacing one form of nation-state
with another – but the nation-state itself is a dead man walking.
So guerrilla movements will decline as their prey, nation-states
and conventional armies, both wither away.

Terrorism is
much more in tune with how the world is evolving and much more flexible.
Terror is a bit like shrimp, the way it was described by Forrest
Gump’s friend Bubba. You can fry it, broil it, bake it, sauté
it, fricassee it or serve it raw. You can serve it with tomato sauce,
mayonnaise or lemon butter. You can eat it hot or cold, fresh or
as leftovers. You can use it in a thousand ways. It’s as idiotic
to declare war against terror as it is to declare war against shrimp.

Terrorism has
a big role in both unconventional and asymmetric warfare. You’ll
be hearing much more about these styles of conflict in the future.

Unconventional
warfare addresses itself not to the enemy’s military so much as
to his society. The idea is to win by inducing a sense of hopelessness,
war weariness, internal dissension and general economic, social
and political chaos and malaise in the enemy. It’s psychological
warfare waged with violence, and terrorism is at the heart of it.
The US Special Forces have long specialized in this; although they
call themselves “counter-terrorist” specialists, in fact
most of their time is spent training locals to act as terrorists
or guerrillas against what Washington considers undesirable regimes.
Sabotage, subversion, low-level assassination, the destruction of
enemy morale and the creation of general chaos are key to successful
unconventional war.

Asymmetric
warfare is characterized by conflict between groups with significantly
different powers or tactics. The key to success is never to engage
the enemy at his strong points, only at his weak points. In other
words, don’t expect to see NATO fighting tank battles against the
Russians, and don’t expect to see divisions of the US Army arrayed
against the Chicom Red Army. Proper guerrillas and terrorists are
masters of both unconventional and asymmetric warfare. I discuss
the implications of asymmetric warfare in the section below on technology.

Most people
in the world are poor. Many, especially those who take Islam seriously
(poor people are usually more religious than rich people) have real
or imagined grievances against the West in general and the US in
particular. Because they’re poor, they’ll use poor people’s weapons
– but I’m not talking about hoes, scythes or machetes – to battle
the US Empire. The majority of the weapons of advanced nation-states,
however, are intended for fighting the conventional armies of other
nation-states. Combat with the US will be, therefore, asymmetric.
It’s no longer a question of a tank against another tank, but a
tank against an IED.

Conventional
War

Conventional
war is focused on destroying the enemy’s military. But this style
of war – massive armies, tanks, bombers, aircraft carriers – no
longer makes much sense. It’s entirely too expensive and entirely
too destructive. Even in the 1980s, when most people were worried
about a Soviet invasion of Europe, I already felt it most improbable
simply because the nature of wealth has changed.

Today wealth
is largely intangible. It’s technology, businesses, skills and knowledge.
These things can’t really exist without something approximating
a free market; you can’t effectively steal them. Owning land and
buildings is pointless if you can’t use them productively, something
collectivists are chronically incapable of. It’s not like war in
the old days, where the point was to steal the gold, the cattle
and the finery in the palace while turning the population into slaves
for profitable sale. In ancient times, war could be a gainful undertaking
for the winner. Today it just guarantees eventual bankruptcy for
everybody.

It’s been obvious
for years, to everybody but the generals and defense contractors,
that the current generation of military weapons – the stuff the
US spends scores of billions of dollars a year on, is little more
than high-tech junk. Of course that’s nothing new, in that the military
always fights the last war. They were investing in cavalry before
WWI. They were big on battle ships before WWII. Now they have huge
investments in aircraft carrier groups that are vulnerable to nuclear
strikes or to massive assault by supersonic sea-skimming missiles
or to torpedo boats. Giant war machines are really only useful for
fighting conventional forces, and only nation-states can field conventional
armies and navies. Technology, however, holds a major change in
store for everyone.

Technology:
The Revolutionaries’ Friend

As I say that,
though, nation-states and their conventional militaries are developing
the next generation of weapons and tactics. It’s very much the way
they were still building battle ships after the aircraft carrier
was already ascendant. Five areas are evolving at once:

• Computer
  warfare
• Robotic
  warfare
• Biotech/nanotech
• Nuclear
  weapons and
• Special
  ops

As might be
expected, the state took an early lead in all five areas, just as
it was the first to get gunpowder at the end of the Middle Ages.
The Internet is the classic example of how this works. It started
out as a DARPA (Defense Advanced Research Projects Agency) project,
but it quickly migrated to society at large. Now DARPA is irrelevant
to the Internet, just another user. It’s only a fluke they invented
it to start with; someone else would have in short order if they
hadn’t.

Computer
Warfare

In computers,
the state had the money to spend on the biggest and fastest supercomputers;
but now networks of laptops, owned by everybody, are better and
much cheaper. People, however, are the critical element of computer
power, and it’s inconceivable that government employees will ever
have a fraction of the talent of independent hackers – in addition
to the fact they’ll be outnumbered 100 to 1. This is an important
point, in that not only is all of the world’s infrastructure now
run by computers, but so are all the military’s toys. Computer-oriented
terrorists won’t have to blow this stuff up, they’ll be able to
disable it or even take it over. Hackers may wind up co-opting a
lot of the military’s robotics when they’re actually being used
in battle.

Robotics

The military
is advancing rapidly in robotics, actually at the rate of Moore’s
Law. They already have a quadruped
that can outrun a human over rough ground. It seems likely that
in only a few years Terminators and Robocops will be a reality.
Airborne drones are increasingly competent and will replace manned
fighters for most applications.

Now that the
cat’s out of the bag, anybody can have his own panther, and I’m
not just talking about the 20 other governments that are developing
their own programs. Individuals can play this game. One example
that came to my attention a couple years ago was a New Zealander
who built a homemade cruise missile, including the jet engine and
avionics, for $6,000. The military version costs $1.5 million per
copy.

Biotech/Nanotech,
3-D Printers and Lasers 

Just as two
generations ago a couple of kids in a garage could make breakthroughs
in computer tech, the same thing is happening all over the world
in biotech. The cost of research equipment is plummeting, while
knowledge of and interest in biotech processes are expanding rapidly.
The same is true of nanotech, which is a related scientific discipline.
As you know, I believe nanotech has the potential to change the
nature of life itself – quickly and totally.

There are lots
of breakthrough technologies aborning. One of the most interesting
is the 3-D printer, which allows anyone to rapidly and cheaply “print”
an object the way a 2-D printer produces an image. Soon it will
be possible to create almost anything in the comfort and privacy
of your own home. A.E. van Vogt’s vision in The
Weapon
Shops of Isher is soon to be realized.

My guess is
that laser weapons are also going to become the hot set-up. I’m
not just talking about the megawatt devices that have already been
developed by the military, but cheap hand-held lasers. Even now
a revamped
laser from a commercial projector can blind an opponent at hundreds
of yards. You can be sure that hackers are going to make quantum
leaps in developing this, and it won’t be long before these weapons
are both cheaper and better than firearms.

Nuclear

The world has
had nuclear weapons for close to 70 years. The time is coming when
any billionaire can make one for himself. The technologies are well
known, and the equipment needed is vastly better and cheaper than
it was in the relatively primitive Manhattan Project days. After
all, if the North Koreans can succeed in it, so can anybody. But
the cheaper, easier way to get a nuclear weapon is to steal or,
better, buy one from some Russian, Pakistani or Indian general,
with instructions for deploying it. At that point, it’s just a slow
boat or a fast cargo plane ride to New York or Washington. And there’s
no need to clear customs.

Special
Ops

Historically,
being a soldier meant drilling incessantly, doing lots of brainless
manual labor and following orders like a dogbot. This is why throughout
history – notwithstanding the obvious, exciting aspects of the trade
– soldiers have been scraped from the bottom of society’s barrel,
potential cannon fodder who couldn’t do better for themselves.

This is now
changing. It used to be that members of the Special Forces were
looked upon as oddballs by the Army leadership, and it was a dead
end for a career. That’s changed with the rise of unconventional/asymmetric
warfare. Now all branches of the military have large special ops
units. Members are significantly above the average dogface in terms
of physical ability, intelligence, aggressiveness, training and
equipment. In effect, the soldier is morphing back into the warrior,
and as such is worthier of respect.

However, special
ops guys are still government employees, even if they’re also trained
killers. All the skills (and most of the equipment) they use are
readily available to their opponents in the world of terrorism.
Once these guys are mustered out of national armies, they gravitate
toward mercenary companies, like Blackwater/Xe and Sandline. Then
they will join any group that makes it worth their while.

Technology
has always been both a politically and an intellectually liberating
force for the common man. Gunpowder allowed a peasant with a firearm
to best a heavily armored knight. Cannon allowed a peasant army
to destroy the hilltop castles of the “nobles” who once
dominated them. Much the same is happening today, except much faster
and to a greater degree.

On a human
level, success in most things – certainly including war and politics
– boils down to economics and psychology. In the economic sphere,
it’s a question of capital costs, operating costs and return on
investment (ROI). In the psychological sphere, it’s largely a question
of will. At this point, for the US the costs are astronomical and
the ROI deep in the red. It doesn’t matter how rich you once were;
anyone can go bankrupt.

Meanwhile,
the average American or European can see his ship of state taking
on water rapidly. In a world of asymmetric war, that means the “little
guys,” the outsiders, the disadvantaged – the groups most likely
to make terror their friend – have much more going in their favor
than ever before. And they may have a big psychological advantage
since, as poor people, they have little to lose.

Let’s look
at a few simple examples.

An AK-47 costs
less than $500 most places in the world; the bullets cost about
20 cents apiece, and the teenager to employ them costs nothing at
all. In fact, teenagers in the Muslim world are in such oversupply
that they can be said to have a negative cost.

A US soldier,
by contrast, is immensely expensive. Even though most of them come
from lower socio-economic levels, a substantial investment has been
made in taking them even through Grade 12. Then comes the cost of
recruiting, training, equipping, paying, insuring, housing and transporting
them in the military. I’m not sure the cost of a US soldier in the
field has ever been accurately computed, but it has to be well over
a million dollars for a simple grunt and much more for a specialist.
That’s not counting the lifetime of pension benefits and medical
care for the maimed. And with battlefield medical as good as it
now is, the ratio of seriously wounded to dead is much higher than
ever before. You may sympathize with the US soldier, but he’s definitely
on the wrong side of the equation.

An M-1 tank
costs about $5 million a copy. It, or any other vehicle, can be
destroyed by an IED fabricated from fertilizer or unexploded ordnance.
Even if it’s not destroyed, or not even severely damaged, the brains
of its occupants are likely to be scrambled by the blast wave. This
is, incidentally, something that is underappreciated. A blast wave
bounces a brain around in a skull like an egg inside a tin can.
Considering that IEDs are both devastating and extremely hard to
detect, it’s no wonder they’re so popular.

Have you ever
wondered why there’s no reporting on the numbers of tanks, APCs,
Humvees, helicopters and other (immensely expensive) hardware being
destroyed in the current US wars? It’s classified, because the numbers
would be so embarrassing. Unlike in Vietnam, there’s no longer any
body count of the enemy because that would be politically incorrect.
But it doesn’t matter how large it is; every dead jihadi is a dragon’s
tooth that will grow back as ten replacements. That’s why there’s
really no way to win a guerrilla war before you go bankrupt – no
way short of genocide or at least serious mass murder.

A $1,000 RPG
will easily destroy a million-dollar armored personnel carrier and
its occupants. A $10,000 shoulder-launched missile can take out
a $10 million helicopter or a $40 million F-16. It may be practically
impossible to shoot down a $1 billion B-2 bomber, but that’s academic;
they were built to fight a nuclear war against the USSR. They’re
useless except to deliver atomic weapons, but the new enemy lives
in refugee camps and scattered within teeming cities. The B-2’s
codename should be changed from Spirit to Albatross, because it’s
not only totally uneconomic, it’s almost totally useless.

So the economics
of guerrillas attacking an invading superpower are excellent. In
response, the economics of a superpower attacking guerrillas or
terrorists are disastrous. In its current wars, the US winds up
using cruise missiles, at around $1.5 million each, to blow up wedding
parties. The direct expense is bad enough; the vastly greater indirect
expense is the creation of a clan of new enemies. The best result
is for the missile to just pulverize some sand. Even if it hits
a few mujahidin, that’s placing an implied value of several hundred
thousand dollars apiece on their heads.

In other words,
whether we’re looking at offense or defense, the economics of destruction
are tilted not just 10 to1, not just 100 to 1, but probably closer
to 1,000 to 1 in the favor of insurgents.

Perhaps you’re
thinking further advances in technology will tilt the equation back
toward the US. But as I explained above, the effect of each innovation
will be just the opposite after only a short period of technological
monopoly. People have a lot of misplaced confidence in the so-called
“defense” establishment to come up with marvelous devices
to confound groups designated as the enemy. Of course advances will
be made, at least for as long as the US government has scores of
billions to spend on RD annually – which it soon may not, for
financial reasons. But even if it diverts funds from its myriad
other projects, the procurement process is stultifyingly bureaucratic,
slow and costly. It’s not at all entrepreneurial, which it still
was to a degree even during WWII, when the P-51, the best fighter
of the war, was taken from concept to production in nine months
and turned out for $50,000 a copy.

The US will
even lose the war for new weapons as time goes on, simply because
the Defense Department bureaucracy is so counterproductive. It’s
like the company Dilbert works for in the cartoon pitted against
millions of independent entrepreneurs in the Open Source world.
Dilbert’s company moves like a dinosaur, while the Open Source world
watches, imitates, innovates and improves at warp speed.

Today a ponderous
state supposedly represents our side (I italicize that because,
although I truly dislike many of the people it’s fighting against,
I consider it to be an even greater danger). At best, it resembles
a dim, tired old Tyrannosaurus up against hundreds of smart young
Velociraptors intent on eating it. The outcome is obvious: a bunch
of the attackers will get killed, but the T-Rex is dead meat.

Remember that
there are more scientists and engineers alive today than in all
of human history before them, the vast majority from non-OECD countries.
The ones who are any good don’t want to work in a constrained, bureaucratic
environment with no financial upside. Entirely apart from that,
if the minions of the perversely named Defense Department come up
with a real super-weapon, in today’s world it’s easy to replicate
and improve on, and for a fraction of the original cost. That’s
why there are scores of thousands of apps developed for most any
electronic device that hits the market today – in addition to the
device itself being “knocked off” illegally by small factories
that could be anywhere.

How Terrorism
Will Evolve

Now back to
our core story. Although everyone, from the largest nation-state
down to the smallest informal group, employs terror (because it’s
cheap and effective), it really only concerns Americans when terror
is used against them. Instead of minding its own business and being
a friendly beacon for the rest of the world (which would obviate
99% of the potential problem), the US has invaded several countries,
is attacking several more and has troops in a hundred more.

Americans,
however, seem incapable of understanding that the natives don’t
appreciate invaders any more than Americans would like an army of
Muslim teenagers running around Texas, breaking down doors at midnight
and generally shooting up the place while trying to uplift it with
their own culture. Americans, foolishly, are living in the past
and think the world still sees them as liberators, as they were
in France almost 70 years ago. Is it possible, instead, that the
US has turned into an aggressor abroad and a police state at home?

So far, with
the exception of the events of 9/11, the US has had very little
blowback for attacking foreign countries without even the courtesy
of a declaration of war. However, as Washington antagonizes more
groups around the world, the targets eventually will decide to take
the war back to the US simply because it’s the intelligent way to
fight. So in the years to come, the US is likely to see lots of
terrorism in the “homeland” (a disturbing new term) itself.
It will, perversely, have created exactly what it was trying to
avoid.

Let’s state
the obvious: opponents of the US Empire are now concentrated among
the world’s over one billion Muslims. The new enemy won’t model
themselves after past icons of insurgency, like Mao, Che or Ho Chi
Minh; those men were guerrilla theorists, trying to supplant one
type of nation-state with another. The jihadis’ model will, instead,
be Osama, himself a creation of Washington in Afghanistan. And he’s
an ideal model for them. Osama clearly stated not only why he was
fighting (foreign troops in Muslim homelands, US support of corrupt
puppet regimes and US support of Israel – reasonable points). But
he clearly stated an attainable objective – the bankruptcy of the
US Empire. And he clearly specified a practical method of attaining
the objective – terrorism. The US has fallen into his trap.

The US Empire
is acting like an enraged giant dinosaur in its death throes and
is irrationally cooperating in its own demise. Think, for instance,
of the destruction of wealth and freedom that Homeland Security
even now causes, in the face of a de minimis terrorist threat. Yes,
every year they make a spectacle out of a ridiculous underwear bomber,
or they talk some halfwit into fomenting a transparent plan of some
sort so they can arrest him and produce some security theater to
justify their existence. However, eventually (soon) they will provoke
some real and serious terror strikes, perhaps after provoking a
real war with Pakistan or Iran.

What form will
it take? Perhaps massive systems disruption, which is quite simple
to do in an advanced country. Blowing up a bunch of electrical substations
would be easy. Poisoning municipal water supplies would create chaos.
Or perhaps RPG attacks on refineries and oil tank facilities. Or
explosive attacks on large computer server farms.

That’s just
scratching the surface. It would be easy to replicate what happened
in Mumbai in 2008; a dozen men, equipped with simple weapons, could
shut down a city. Or, if they wanted to be more subtle, they could
copy the two snipers who, in 2002, operating from the trunk of a
car, caused mass hysteria in Washington; they were only caught by
accident. The anthrax scare, the Unabomber – anyone with a couple
hours of idle time and a bottle of Jack Daniel’s could come up with
a score of viable terrorist schemes. The key words are easy, cheap,
effective, unpredictable and unstoppable. Leave the rest to the
US government, which, because it needs to “do something,”
would lock down the country like one of its numerous new prisons.

I doubt the
attacks will be gloves-on, like those of the IRA in the latter years
of its war against the British. To oversimplify the matter, the
IRA was a response to (what it perceived as) the British Army’s
occupation of Northern Ireland. At first, like today’s Muslim jihadis,
they fought a war against the actual soldiers occupying Ireland
and their local collaborators. They eventually came to the conclusion
that, even though it was gratifying, it was not only an inefficient
use of resources but even counterproductive.

The IRA, intelligently,
recognized that you shouldn’t make your home into a free-fire zone
just to keep out unwanted guests; so it stopped producing violent
incidents in Ireland. Why antagonize people where you live? Second,
it figured out its real enemy wasn’t so much the troops in Belfast
(they were just pawns), it was the British government in London;
so that’s where it redirected its attacks. Third, it made sure not
to harm innocents; before it set off a bomb in London, it would
alert the media, so that the area could be cleared. They changed
their image from mad dogs to aggrieved citizens in the tradition
of Jefferson and Franklin and achieved many of their objectives.
They used terror tactics but totally changed their image, thereby
largely defusing the moral objection to terror.

Unfortunately,
when the jihadis bring terrorism to the US, it won’t be the measured
version the IRA deployed against the British government. Why should
it be? Unlike the IRA, their real demands will be secondary; instead,
they’ll be looking for pure revenge. And, certainly after Washington
hits a place like Iran or Pakistan, millions will feel the US deserves
some real payback. The attacks will be sloppy, nasty and structured
for maximum casualties. At that point, it’s completely predictable
that the US government will lock the country down. In fact, we may
finally find out whether those rumors about FEMA camps are real.
In any event, they’ll overreact, which is one of the objects of
terrorism, and the reason why it can be so much more successful
as a tactic today than it ever was under the Romans or Tamerlane.
There’s a good chance, at that point, that the US will go wild and
use nuclear weapons against the Muslim world, and Boobus americanus
will predictably and thoughtlessly support it.

A Nod To
Morality

English-speaking
cultures, like the Americans and especially the British, like to
fancy they “play fair” in war. Of course that’s delusional
self-mythologizing. But it makes them feel especially self-righteous
when denouncing unconventional and asymmetric warriors as terrorists.
I’ve tried to show that terrorism is just another tactic. Its use
can be criminal, but no more criminal than any other tactic.

In any event,
the concept of “fair” makes even less sense in war than
it does in street fighting, because the stakes are so much higher.
“Fair” in war is for idiots, who will probably also be
losers. Just so you know, I disapprove of violence in general and
very much dislike war in particular. But I think it’s important
to look at the issues rationally. And there’s such a thing as the
intelligent use of a tactic and the stupid use of a tactic. It’s
stupid use that gives terror a bad name.

The morality,
or lack thereof, of terrorism is what seems to bother most people.
But morality has always been a rare commodity in war. Especially
since World War II, with the popularization of total war, where
civilians and non-combatants became targets. Normal warfare today
intimately involves innocent parties, although lip service is always
paid to how unfortunate collateral damage is.

But let’s take
right and wrong out of the picture for a moment. Causing non-combatant
casualties is simply unintelligent in most cases; it’s bad public
relations and, as the IRA found, doesn’t make friends in any quarter.
Conventional armies, with set-in-stone orders executed by scared,
testosterone-charged teenagers, are a terribly blunt instrument.
A proper terrorist attack on a specific target by a small number
of trained personnel should be, ideally, highly selective about
who gets hurt.

But not always.
Take, for instance, the bombings of the US Embassies in Nairobi
and Dar es Salaam in 1998. On the one hand, killing hundreds of
innocent people might have created a huge blowback against al-Qaeda.
But it doesn’t appear to have done so because the terrorists (correctly)
argue that those hanging around were a species of collaborator –
looking to work for the enemy, looking to get visas to visit the
US. It served as a warning to locals to stay away from the Americans,
pinpointing them as unwanted interlopers and associating them with
danger and death.

The 9/11 attack
on the US, assuming the accepted conventional wisdom is correct,
was misdirected in many ways. Instead of hijacking civilian airliners,
the attackers could more easily have purchased some old cargo jets
and loaded them with explosives for much more effect; no innocent,
sympathy-garnering passengers need have died. Instead of attacking
commercial buildings of the World Trade Center, they could as easily
have attacked purely governmental targets. The Pentagon was fine
from that viewpoint; it’s a purely military target, and few people
have warm feelings toward it. Attacking the IRS headquarters in
Washington and/or Martinsburg, West Virginia, would have actually
drawn applause from most Americans (however muted, for reasons of
discretion). A third target might have been CIA headquarters in
Langley. A fourth might have been NSA at Ft. Meade, Maryland.

That would
have been smart terrorism, the way the IRA would have done it. It
would have, to a degree, divided sympathies in the US instead of
uniting the country behind a crusade against Islam. It could have
sustained a morality-based defense.

So was 9/11
simply poor strategic thinking on the part of fanatics? Or was it,
on the contrary, sophisticated strategy on the part of an enemy
group who wanted to get the US involved in fighting wars against
a bunch of Muslim tar babies? Or was it a Reichstag fire, as some
have asserted? Osama said he approved of it but denied it was an
al-Qaeda operation. I suspect there’s more to the attack than meets
the eye. Certainly the subsequent investigation was, at best, superficial
and incomplete, with the strange collapse of WTC 7 being just the
most obvious of the many unanswered questions.

But this is
the nature of asymmetric/unconventional/terrorist-oriented conflict.
We’ll be seeing a lot more of this kind of thing in the future,
where the identities of the players, their motives and even the
moral issues are murky. The era of formal conflict, where one government
declares war against another, and supposedly “good wars”
like WWII, is essentially over. At least for anyone with any smarts,
who’s not a pathological nationalist.

How This
Will End

So what’s in
store for us? It seems that major trends have lives of their own,
and almost nothing can turn them around. Could anything have stopped
the collapse of the Roman Empire? I doubt it, based on the fact
that the long decline really started after four good emperors in
a row (Trajan, Hadrian, Antoninus Pius and Marcus Aurelius). Could,
therefore, the election of Ron Paul in the US turn around the ship
of state? No. Even if he were still willing and able to do anything
after he got a severe talking to by the heads of various Praetorian
agencies, he’d find the populace too corrupted, indebted and apathetic
to change. These things have lives of their own. That’s the point
the Kondratieff Wave theory and the generational theory of Strauss
and Howe in The
Fourth Turning and Bob Prechter in his Elliott Wave theory
publications all make.

Even with a
roughly $1.5 trillion annual cash deficit (the more accurate accrual
deficit is much higher), the US government is showing absolutely
no movement toward cutting expenses. Nor will they; deficits are
only going to get larger from here on. Everywhere, hack economists
are urging them to spend more. It will surprise me if the annual
deficit doesn’t go much, much higher as the Greater Depression deepens.

But who will
buy all that new debt or even roll over existing debt? At roughly
zero percent interest, it will no longer be foreigners; they’re
really not that stupid. In fact, the Europeans, Chinese and Japanese
have massive problems that will likely force liquidation of much
of what they have. The Fed will be forced to buy, and monetize,
much more of the government’s debt. Inflation is going to explode
but, unfortunately, that may happen only after a credit collapse.
If so, we’ll get the worst of all worlds in sequence, a tour of
miseries.

Where will
the US government cut back out of the roughly $3.5 trillion it spends
annually? Social Security ($705B) and a myriad of welfare and pension
programs ($624B) will lose ground to a debased dollar. Medical spending
($820B) will be means tested. Interest is $200B, and all the rest
of government together $400B. And “defense” – a misnomer
if there ever was one – is $850B. Where do you cut $1.5 trillion
to eliminate the deficit? I promise I could find twice that easily,
but I guarantee Washington won’t find a tenth of it. A financial
disaster of the first magnitude is absolutely guaranteed. If someone
can show me where I’m wrong, I’d be most eager to hear it.

Will they cut
the military? Americans love to “support the troops,”
which seems to boil down to throwing money at them for pointless
wars. Congressmen love “defense” spending for all kinds
of reasons, including that weapons are among the few things this
country makes anymore. The president (all of them for the last 30
years) appears to love war. Although Gadhafi is dead, I’ll warrant
the war in Libya is far from over; there’s going to be a civil war
that lasts for years. And Obama has just sent combat troops to Uganda.
Yemen and Syria look like they’re on the runway. Pakistan and Iran
could each go critical; even as I write, Washington, London and
Tel Aviv are talking openly about a joint strike. One can only hope
Washington doesn’t antagonize the Chinese into a confrontation.

The only good
news is that the US may be asked to leave by Iraq and Afghanistan;
hopefully that will occur before it’s necessary to evacuate people
from the rooftops of the embassies, a la Saigon in 1975. The only
real hope is that Washington will be forced to cut spending simply
because it’s no longer creditworthy.

On a broader
plane, I don’t know how you can eliminate conflict from human action.
It’s probably not possible unless you can both cleanse each and
every individual of psychological aberrations that lead to initiating
aggression and also eliminate the state, which institutionalizes
violence. Until then, the best you can do is to limit the role of
politics in every facet of life. And emphasize men relating to each
other voluntarily to get what they want, through free markets. Remember,
once again, von Clausewitz’s shrewd observation: War is the continuation
of politics by other means. And one other thing: try to profit from
the sorry situation. Although we didn’t make the rules, we still
want to win the game.

Profits

As my friend
Richard Russell has said, in a depression nobody wins; the winner
is the guy who loses the least. And the truth of that is only compounded
when you add war into the equation.

What are the
options? First, make sure you’ve got a considerable percentage of
your assets in physical gold and silver. Second, make sure you have
a considerable percentage of your assets diversified in one or (preferably)
more foreign jurisdictions and that those foreign assets include
real estate. Third, plan on future bubbles being inflated. Including
one in gold mining stocks, which now offer excellent value.

That’s advice
you’ve read here many times before, but it bears repeating because
it’s so important. You are, however, likely asking yourself what
might be done to profit from war. Defense contractors are an obvious
play, and we’re going to take a close look at them – especially
the small, obscure ones. That will be in a future issue; there’s
no urgency to get into stocks right now that I can see. Rare earths,
since they’re high-tech metals, are of interest – but they’re not
bargains, and the stocks of companies that explore for them are
very overpriced.

I’d love to
be a war profiteer. But it’s much more important to ensure you don’t
become a casualty.

January
7, 2012

Doug
Casey (send him mail)
is
a best-selling author and chairman of Casey
Research, LLC., publishers of Casey’s
International Speculator.

Copyright
© 2012 Casey
and Associates

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