Security: Power To The People

The next decade holds mind-bending promise for American business. Globalization is prying open vast new markets. Technology is plowing ahead, fueling--and transforming--entire industries, creating services we never thought possible. Clever people worldwide are capitalizing every which way. But because globalization and technology are morally neutral forces, they can also drive change of a different sort. We saw this very clearly on September 11 and are seeing it now in Iraq and in conflicts around the world. In short, despite the aura of limitless possibility, our lives are evolving in ways we can control only if we recognize the new landscape. It's time to take an unblinking look.

We have entered the age of the faceless, agile enemy. From London to Madrid and Nigeria to Russia, stateless terrorist groups have emerged to score blow after blow against us. Driven by cultural fragmentation, schooled in the most sophisticated technologies, and fueled by transnational crime, these groups are forcing corporations and individuals to develop new ways of defending themselves. The end result of this struggle will be a new, more resilient approach to national security, one built not around the state but around private citizens and companies. That new system will change how we live and work--for the better, in many ways--but the road getting there may seem long at times.

Open-Source Warfare

The conflict in Iraq has foreshadowed the future of global security in much the same way that the Spanish Civil War prefigured World War II. Unlike previous insurgencies, the one in Iraq is comprised of 75 to 100 small, diverse, and autonomous groups of zealots, patriots, and criminals alike. These groups, of course, have access to the same tools we do--from satellite phones to engineering degrees--and use them every bit as well. But their single most important asset is their organizational structure, an open-source community network very similar to what we now see in the software industry. It is an extremely innovative structure, sadly, and results in decision-making cycles much shorter than those of the U.S. military. Indeed, because the insurgents in Iraq lack a recognizable center of gravity--a leadership structure or an ideology--they are nearly immune to the application of conventional military force. Like Microsoft, the software superpower, the United States hasn't found its match in a competitor similar to itself, but rather in a loose, self-tuning network.

The second insight Iraq gives us is that the convergence of international crime and terrorism will provide ample fuel and a global platform for these new enemies. Al Qaeda's attack on Madrid, for example, was funded by the sale of the drug Ecstasy. And Moisés Naím, in his new book, Illicit, details how globalization has fostered the development of a huge criminal economy that boasts a technologically leveraged global supply chain (like Wal-Mart's) and can handle everything from human trafficking (Eastern Europe) to illicit drugs (Asia and South America), pirated goods (Southeast Asia), arms (Central Asia), and money laundering (everywhere). Naím puts the value of that economy at between $2 trillion and $3 trillion a year. He says it is expanding at seven times the rate of legitimate world trade.

This terrorist-criminal symbiosis becomes even more powerful when considered next to the most disturbing sign coming out of Iraq: The terrorists have developed the ability to fight nation-states strategically--without weapons of mass destruction. This new method is called "systems disruption," a simple way of attacking the critical networks (electricity, oil, gas, water, communications, and transportation) that underpin modern life. Such disruptions are designed to erode the target state's legitimacy, to drive it to failure by keeping it from providing the services it must deliver in order to command the allegiance of its citizens. Over the past two years, attacks on the oil and electricity networks in Iraq have reduced and held delivery of these critical services below prewar levels, with a disastrous effect on the country, its people, and its economy.

The early examples of systems disruption in Iraq and elsewhere are ominous. If these techniques are even lightly applied to the fragile electrical and oil-gas systems in Russia, Saudi Arabia, or anywhere in the target-rich West, we could see a rapid onset of economic and political chaos unmatched since the advent of blitzkrieg. (India's January arrest of militants with explosives in Hyderabad suggests that the country's high-tech industry could be a new target.) It's even worse when we consider the asymmetry of the economics involved: One small attack on an oil pipeline in southeast Iraq, conducted for an estimated $2,000, cost the Iraqi government more than $500 million in lost oil revenues. That is a return on investment of 25,000,000%.