Wednesday, February 23, 2005

Terrorism more effective as economic disruption than body count


The decline of the nation-state is seen in a graph of the ability of small groups to replicate the state's most vital commodity -- large scale violence. Lethality_of_small_groups_1 The Yale economist, Martin Shubik examines this in his paper 'Terrorism, Technology, and the Socioeconomics of Death' (PDF). His conclusion? Rapid technological improvement and global information transfer (part of a larger context of interconnectivity) has produced a spike in the ability of small groups to produce mass casualties (see attached graph). "
System Disruption and the Democratization of Violence

If we look at different metrics of violence, such as the economic costs of system disruption, the picture changes dramatically. Unlike traditional terrorism, system disruption doesn't focus on casualties but rather on the dislocation of infrastructures and markets. The effectiveness of these attacks are measured in the financial damage it causes the target economies.

Attack_severity_1Analysis indicates that the results of attacks that cause system disruption do not follow a power law but rather a linear function. This makes the method much more suitable for sustained warfare against nation-state targets. Attacks can be planned with a relatively high degree of confidence in the results. Additionally, the results are sufficient to provide substantial returns on the invested effort and capital (direct losses to Iraq due to systems attacks are over $7 billion, to the world economy the damage is in the hundreds of billions due to the influence of the attacks on the supply of oil to global markets). The reasons for this superior performance include:

* The barriers to systems disruption are de minimus. The methods are therefore available to the vast majority of groups that attempt it (a 99.9% solution). Specialized knowledge helps, but it isn't necessary to accomplish an attack with a substantial impact.
* Infrastructures and markets provide vast vulnerabilities that can be exploited with relative safety. As a result, attacks against systems can be easily replicated over time -- for example, routine attacks on gas and oil pipelines that connect to the Iraqi refinery/power plant complex in Baiji usually result in $50 million + in damage per attack.
* Attacks gain leverage from the technology and interconnectedness of the networks being attacked. Even small attacks can generate outsized returns. In contrast to traditional terrorism, systems attacks do not suffer diminishing returns.

The quantity of damage routinely generated by systems disruption far exceeds the pay-off of traditional terrorism (the area under the curves). This technique is therefore a viable method of warfare that can challenge nation-state military power today.

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