Mobile Versus Immobile Societies

Samual Huntington and Bernard Lewis have described the current conflict with Al Qaeda as a Clash of Civilizations. An interesting perspective along those lines that I hadn't seen before is being put forth by Reuven Brenner in the Asia Times in an article titled Unsettled civilizations: How the US can handle Iraq. He describes the clash as being between an immobile civilization and a mobile civilization. An immobile civilization is generally agrarian or evolved from an agrarian society:

The main feature of agrarian societies has been their immobility. In these societies - as in almost all societies until the Industrial Revolution, and in much of the world still today - wealth was derived from the land. Farmers learned the minute details of cultivating their lands, of adjusting to changes in weather conditions and of the soil. This knowledge is so place-specific that it is no surprise that farmers were severely taxed by a maze of institutions, whose role centered around the idea of defending "one's land". It's always the least mobile who bear such burdens. [...]

In a world where wealth is derived from agriculture and natural resources (whether forests, coal, gold, diamonds, oil), the control of the territory must be insured. Controlling them means protecting, administering, exploiting and occasionally capturing lands. Without such controls, another land or resource-based country's army would capture the place. The institutions, values, culture, indeed the whole outlook of these societies, is shaped by being wedded to the territory. And though there are variations across such cultures, they give birth to one type of civilization - call it the "immobile" one.

Feudal lords, aristocracies and landed gentry, armed forces and police, government ministries, priesthood and bureaucracies provided protection to a place and, at times, imposed threats on neighboring, similarly immobile societies. A weak king or a weak ruler left his subjects at the mercy of his rivals. That's why people paid taxes - call it protection money, if you wish. The amount people willingly pay for such protection bears relationship to the costs of moving to a different area, out of both the plunderer's and the tax authorities' reaches. When people could not thus escape, and taxes became exorbitant, the immobile people occasionally rebelled.

Kings, feudal lords and dictators of various persuasion understood these features of immobile civilization. They saw the relationship between the areas they controlled and those controlled by others as hostile. One's gain of territory was another's loss. It was a zero-sum game world. Anything that would allow people to move more easily from one place to another was perceived as clear and present danger. It weakened one's power - and the tax base. Over time, people specialized in the myriad institutions of "immobile" civilizations and had a large stake in its survival. Whether their belief that this civilization continued to be "the best" when population grew was sincere or not, is irrelevant: delusions can be powerful when they serve one's interests. And deeds matter more than words.

It is not surprising, therefore, to observe throughout history and up to now that many rulers and governments have done everything in their power to condemn any trade or any group that drew its power from mobility. They were suspicious of merchants, traders, bankers and financiers, even people dabbling in technology, unless these technologies addressed solving the immediate problems of the immobile population. Some or all of these occupations had inferior status - usury laws being an early means of rationalizing such status. And although initially traders did not have such inferior status in Islam - Mohammed after all was a merchant before becoming a prophet - by the 10th century business become marginalized. This happened with the closing "of the gates of Ijtihad" (independent reasoning as applied to the sharia) in the 10th century, with some sects taking the Koran far more literally than others.

The priesthood helped conserve the status quo by teaching mythologies in the Middle East and later in Europe. India's caste system reflected a similar frame of mind. The bania, or businessman, is placed third in the four caste hierarchy, behind the brahmins (priests, teachers, intellectuals - the myth-justifying and preserving group) and the kshatryias (landholders, warriors, rulers), and one step ahead of the shudras (untouchables).

People in mobile societies, on the otherhand, have access to market capital and institutions that enforce contract law outside of government fiat. And it is this freedom to enter contracts that is the problem:

However, there is nothing more threatening to the institutions of immobile societies - based on the idea that contracts are a matter of status and hierarchy, and that everything is prohibited unless explicitly permitted - than a move toward contractual law. It takes time to escape perceptions shaped over centuries by institutions fitting an immobile world, and move from "status" to "contract". [...]

The mismatch between customs, traditions, institutions, skills and language - all still fitting a smaller, relatively immobile population - and the institutions needed to give an increasing number of young people hope and a stake in the future brings about instability, much as it happened in Europe for centuries. A fraction of these societies' members understand what's at stake, are ready to make the necessary adjustment and establish the institutions that would allow making the transition toward a "mobile civilization". This group looks to the US for guidance and support, political, military and financial. In contrast, members of the "immobile civilization" within Islamic countries consider that without the US's support, the "mobile" groups would lose power. With traditional leaders at the helm, traditional institutions would be sustained, and the glory of Islam could be revived. [...]

And much of the dangerous European torturing of language notwithstanding, there is no reconciliation between the two values. There cannot be. In this sense, the Osama bin Ladins of this world are right too: one of these societies must give up their fundamental values - or fight.

Based on this categorization of the civilizations, the author walks out on a limb and makes recommendations:

If the lasting remedy for preventing terror is then to speed up the move toward establishing institutions conducive to a "mobile" civilization within Islamic countries, what can the US do? First, as can be inferred from the above, the US had little choice but use power: the chances of domestic forces getting rid of a ruthless despot sitting on billions of gallons of oil are slim, if not nil. But what should the US do now? As the historical evidence summarized here suggests, expecting that one can create democratic institutions in countries where large segments of the population are still mired in mazes of institutions fitting an immobile civilization, is a dangerous delusion. Of course one can write beautiful constitutions, set up courts, institute voting. But remember, all Latin American countries, and some Middle Eastern, did that, without bringing about much real change. Who will enforce the spirit of these laws and institutions? Ataturk, remember, did it with the backing of the army, which followed him, having been the hero of the Dardanelles during World War I, defeating the allies at Gallipoli and being the only undefeated Ottoman commander when the empire collapsed at the end of World War I.

Iraq does not have either such a hero at present, an army, or even a reliable police force, and it is not clear how long it would take to build them. Without the presence of a force capable and willing to act, institutions promising "democracy", "rule of law", and "right to property" are no more than facades, giving rise to another "cargo cult". This term emerged on an isolated island in New Guinea. During World War II, airplanes would regularly arrive full of cargo, part of which was distributed to the natives. After the war, the planes stopped coming. Distressed, the natives built thatched-roof hangers, a beacon tower made of bamboo, and an airplane made of sticks and leaves. Priests prayed for the cargoes to return. And they waited. Many countries around the world, in the Middle East and Latin America in particular, became such cargo cults. Yes, the terms and institutions sound familiar: they have constitutions, promise equality before laws, have courts, and people vote. These societies have adopted the facade of a mobile civilization, but for the moment, leaving out its content. There cannot be such a thing as "democracy" where there are no "democrats". There may be a few in Iraq, but it does not seem that there are too many.

There seems to be little choice but for the United States and its allies to do two things: leave no doubts among Iraqis that the army is there to stay to back the emerging institutions. However, in order to bring about a speedier transition toward long-term stability, the US can encourage the move toward institutions that are the backbone of mobile civilizations: those that diminish corruption and encourage trade.

To achieve this goal more quickly, the US could suggest creating an international public trust fund, which would offer each and every Iraqi a fraction of oil-revenues, drawing on the Alaska model (as explained in my previous article for Asia Times, Oiling the wheels of a tribal society November 20, 2003). The other portion would be transferred to central and local governments, through institutions held accountable for the spending. This arrangement would ensure that people have an immediate stake in the new Iraqi system (pretty much as the giving of land and apartments had in post-communist countries), and incentives to cooperate and prevent sabotage, and offer collateral to up-start small commercial entities. The act would also offer a clear signal that the US is there not as an army plundering the country's resources, but to enforce the establishment of the type of institutions that an oil-rich, ruthless dictator would not do, imposing heavy costs on the rest of the world. It would give Iraqis collateral and something to start a new life with. Also, with less money flowing through a central government's hands, there could be less corruption. [...]

With revenues from oil being widely dispersed, the chances of much funding going for rebuilding centralized military and police powers are diminished. "Power" is dispersed and brought closer to the people.

Yup, that's all there is to it. Hang about for a few decades until they evolve into a mobile society. Works for me.

In the Knowledge Lies the Wealth

Jim summarizes various aspects of the state of the world and other than expanding a little on terrorism, there is nothing else I would change in his summary. Based on the summary, Jim asks what I (or anyone else on this blog) think the president should do for the next four years.

That's a tough, multi-faceted question. However, I'll start by going out on a limb on the domestic economic front. I think the President should pursue policies that maximize growth over the short term without being too concerned about the long term.

While this may seem reckless, I think there's substantially less risk to this approach than meets the eye. The reason I think this lies in asking why we are so much more productive than we were 100 years ago.

Economic texts often describe four factors of production: labor, capital (equipment, previously produced goods, etc.), land (natural resources), and entrepreneurship. The reason we are able to produce far more today than 100 years ago is that we have more knowledge. The labor force has more information available, we have more knowledge about how to optimize capital equipment, we have more knowledge about how to find and then minimize the use of expensive resources, and we have better understanding of business processes, motivational management, marketing, and finance.

Knowledge dwarfs capital in importance when it comes to wealth creation. Imagine that there were two parallel universes. In universe A, one day all capital disappeared, but the inhabitants retained all their knowledge. In universe B, the inhabitants retained all capital but forgot most of their knowledge. I'm certain that in a few years time universe A would be far wealthier.

Germany had almost all of its capital destroyed in WWII. This is almost a perfect example of Universe A. Yes, the Marshall plan replaced some capital, but it was actually a fairly small investment. Within two decades Gernany had accumulated a lot of wealth.

Afghanistan under the Taliban is an example of universe B. They chose to suppress knowledge (other than knowledge of Islam) and even with international aid, they were living in complete poverty. They were basically choosing to live in the stone age.

So more knowledge about production and services means more wealth. And the beauty about knowledge is that it's indestructible and lasts a very long time. Sure, there's not a lot of use for the body of knowledge regarding buggy whip production any more. However, no matter what happens in the financial realm, we still have our knowledge and can recover quickly.

So where does knowledge regarding production and services come from? I think it comes from two sources: people with a need for the knowledge create it out of thin air (necessity is the mother of invention) and from people sitting around thinking with interest in some topic but with no particular need.

The first type of knowledge creation I call "pull knowledge" because I think it's similar to "pull content" on the Internet. Pull content is content that someone goes searching for on the web and they "pull" information from the sites that contain the knowledge that is interesting to them. As that person is searching, they encounter advertisements and other "push content" that's "pushed" on them. The person who sits around and thinks new thoughts needs to then push the new knowledge out into the world for it to have any effect. As a result I call that sort of knowledge creation "push knowledge."

Product development requires pull knowledge creation. Basic research is push knowledge creation. I think both types of knowledge are required for economic growth, though I'm not absolutely certain that push knowledge creation is strictly required. However, I am pretty sure that some mix of the two is optimal. A necessary condition for both types of knowledge creation is that the populace is adequately educated. Once that condition is met, pull knowledge happens spontaneously as part of a self organizing economic system. Pull knowledge is stimulated by potential demand and as a result is maximized both by minimizing the resources extracted from the economic system and keeping inhibitory factors such as regulation to a minimum. I believe economic growth strongly stimulates pull knowledge creation which then strongly stimulates economic growth.

Push knowledge doesn't happen spontaneously, and how to make it happen and pay for it has been, and will continue to be, a subject of great debate. I don't have anything to add to this debate except to say that from my narrow robotics entrepreneur perspective, it seems to be working pretty well. The research coming out the universities meets my needs and I have no complaints about the quality or quantity of work. The funding for robotics seems to come mostly from defense and defense related agencies, with some money from corporations and the NSF. The research seems to be well balanced between what is useful in the near term and what I think will be useful after ten years and more. While on paper the Universities seem to have extremely high overhead, I think that the extremely low pay for faculty just makes the overhead rates look high. I think that in the field of robotics, the system for creating push knowledge works quite well and I don't think it could be made significantly better.

So if we grow as fast as possible, we create knowledge which in turn leads to the creation of yet more knowledge and more growth. What a wonderful virtuous circle.

What if we grow too fast? What if we grow so fast that things get out of balance? What if we create some financial bubble or some other potentially catastrophic problem?

It's certainly possible. But please consider a couple of things. First, I'm not aware of any time that growth and the policies that help stimulate it ever causing any catastrophic economic problems, at least not by themselves. The Great Depression followed a period of rapid economic growth that helped create a stock market bubble and crash, but it was Hoover's tight monetary and fiscal policy that caused the depression, not the rapid growth of the 1920's. The 1987 crash hardly caused an economic blip because it was handled well from a fiscal and monetary standpoint.

The other thing to consider is that potentially catastrophic problems are always in the making and have little to do with growth. For example, the Social Security and Medicare liability issues will be even worse if there is no growth. Growth wasn't a particularly significant factor during the 16th century Dutch Tulip-Bulb bubble, but it happened nonetheless, and was followed by a long and severe depression.

Indeed, growth tends to blunt catastrophes because that catastrophe ends up being a smaller percentage of the now larger wealth of the country. So, on the growth front, I say "Let's Roll!"

Bret's Definition of Terrorism

Jim wrote an insightful post that I will respond to piecemeal. Unfortunately (well, maybe fortunately), I'm leaving on vacation for a week and a half starting Thursday, so there will be a bit of a break in the action.

Jim wrote:

Terrorism is an extreme form of intolerance combined with a fanatical desire for retribution of perceived wrongs.

I would say that terrorism is sometimes used by those with extreme intolerance and fanaticism, but I would like to propose a more general definition:

Terrorism is a military tactic, generally utilitized by organizations having no possibility of victory in a conventional or nuclear military conflict. As with all military tactics, the goal is to "defeat" the enemy, in other words to cause the enemy so much pain/cost that they become willing to take some action deemed important by the organization utilizing terrorism.

Terrorism usually (but not necessarily) contains a component consisting of violence directed at civilians. As such, it can generally only be used against populations that consider it highly immoral to intentionally kill civilians, even in military conflicts. If this were not the case, the attacked population, with its superior conventional military strength, would simply exterminate the population (civilian, military, and terrorists alike) partaking in, and supporting, the terrorist tactics.

I personally have difficulty distinguishing between terrorism and guerilla warfare. Since I have personally worked on weapons systems that have been deployed in Iraq and Afghanistan, I consider myself a perfectly legitimate military target, even though I've always been a civilian. In addition, the United States has intentionally attacked civilian populations several times (Hiroshima, Dresden, etc.), so clearly, it's a common conventional military tactic as well.

Osama's goal in using this military tactic called terrorism, is to destroy the West. And indeed, he considers that retribution of perceived wrongs. Those perceived wrongs extend all the way back to the crusades of the 12th century (he's mentioned those several times in his rambling video tapes). If he has his way, we will either all be dead or be muslims ruled by a caliphate headed up by Osama. As an interim step, he would probably accept that we completely leave all muslim countries and allow Israel to be destroyed. I don't see any realistic way to placate him, so we will have to kill him and his followers. Unfortunately, as Jim points out, military response to terrorism often seems worse than the disease, as it "tends to spread more intolerance even within the society that responds as well as within the receiving faction." So Osama may be able to bring down western civilization: if we don't respond, we're sitting ducks (for example, 9/11); if we do, we fan the flames of hatred and intolerance (for example, Madrid). Bummer!

More Jobs

More good economic news, this time reported in the The Guardian:

Another 284,000 jobs were created by the US economy in May as signs that the country's "jobless recovery" was over grew, Labour Department statistics showed today.

The number of new non-agricultural jobs exceeded Wall Street expectations of 200,000, strengthening expectations that the Federal Reserve would start raising interest rates from their current 46-year low of 1%.

Further evidence that strong economic growth was finally feeding into the job market was provided when jobs growth in April and March was revised upwards by a total of 74,000.

Over the past three months, the US economy created 947,000 jobs, the best three-month gain since the summer of 2000. [...]

Many economists now expect the economy to generate around 200,000 jobs a month for the remainder of this year - a pace that would meet the White House's once-derided forecast of a 2.6 million increase in job numbers this year.

Bret Still Feels Safer, Here's Why

It's funny (to me), but reading the Globe and Mail article referred to by Jim's post, made me assume that Chipman's comments were overwhelmingly negative. For example, the Globe and Mail uses adjectives like "dire" and says that the occupation and invasion of Iraq "proved" to be "powerful recruiting" points.

I then went and read Chipman's press release and it reads (to me) completely differently. To be sure, Chipman lists many criticisms (and I don't disagree with them), but it's much more balanced, with some room left for optimism, and little "proven" or "dire".

I've never argued that the Iraq war didn't have the potential to increase terrorism in the short term. I don't think even Bush claimed that there would be no short term increase. The long term is more important.

Even more important to me than the amount of terrorism in the long term, is the likelihood of the terrorist acts causing the downfall of western (and maybe all) civilization. The West can probably withstand suicide bombers and snipers and the like. After all, Israel does it, and we can probably get used to it too. And I think we'll have to. We can most probably even withstand a 9/11 size attack every few years and I think we'll have to learn to deal with that as well. I think we can most likely recover from chemical and biological attacks as well.

But what we may not be able to withstand is a nuclear attack. If terrorists manage to set an atomic bomb off some major U.S. city, that may well start a rapid progression towards the end of civilization. And then billions die.

I think it is unlikely that the terrorists can put together a nuclear weapon on their own. They will need a state sponsor for that. I think that Iraq was a potential state sponsor. Maybe not, but to me it's not worth taking the chance. I'm certainly willing to put up with more small scale attacks to potentially avoid the big one.

So yes, I feel safer.