In Terrorism Game, Intelligence Is Big Loser
James P. Pinkerton
July 31, 2003
Should the government be gambling on death and destruction?
The short life span of the Pentagon's Policy Analysis Market - the program was canceled the day after it became public - might be best left to comics were it not so revealing about the flaws in U.S. intelligence. And those flaws won't be fixed by canceling this particular venture.
The idea was to create an online futures market for terrorist events. So if you were sure that Israel was going to get nuked, you could bet on that nuking. How does this sound? Like a good use of taxpayer dollars?
The idea was that by monitoring the worldwide bidding/betting as it unfolded on their "market" - markets, after all, are information-rich - U.S. policy makers might learn something about terrorism.
To be sure, we've got some learnin' to do. As Deputy Defense Secretary Paul Wolfowitz said on Sunday, explaining away the false "facts" that helped spur the Iraq war, "the nature of terrorism intelligence is intrinsically murky."
So in the effort to de-murk intelligence, the Pentagon deserves some credit for thinking outside the box. But what led it to the idea that a market - really, more of an elaborate simulated game - would clear things up? One reason is the overall enthusiasm for market capitalism over the last two decades. As the Pentagon explained, "Markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information."
Free markets are, in fact, the best available mechanism for allocating goods and services. But only a libertarian ideologue would claim that they are clairvoyant. The value of markets comes over the long run, as individuals and firms optimize efficiencies. In the short run, markets are basically a crap shoot, subject to bubbles that swell and burst, as anyone who rode the dot-com stocks up and down over the last five years will attest.
Indeed, it's unfortunate that Charles Kindleberger isn't around to comment on the Pentagon's venture. The author of the 1978 classic, "Manias, Panics, and Crashes: a History of Financial Crises," who died July 7, was no socialist. But he learned over his career not to put too much faith in capitalists. His book was a chronicle of financial follies, repeated over and over again. In one chapter, "Financial Crisis: a Hardy Perennial," Kindleberger observed that "speculative excess is . . . historically common." All of which suggests that watching speculators and day traders isn't the key to understanding terrorists.
Since the whole point of setting up a terror "market" was to prevent attacks, there would be little occasion to let this "free market" operate. And yet at the same time, there's a deep moral hazard inherent in any such program. It was widely rumored, for example, that al-Qaida "shorted" airline stocks before 9/11 - that is, bet that those stocks would go down. If this rumor happens to be true, then al-Qaida has made a lot of money. Which, of course, is not the sort of behavior that the United States would like to encourage.
But as the Pentagon searches for the intelligence equivalent of elixirs and magic potions, the hard work of national security is still neglected.
David Colton, a longtime intelligence community observer, offers one scary for-instance. "In the '40s and '50s, the U.S. launched a massive effort to train 'area specialists,'" Colton recalls, "funding whole institutes for Soviet and Eastern European studies to grapple with the Cold War threat."
By contrast, today there's been no equivalent effort to ramp up our comprehension of the Muslim world. Indeed, he continues, one of the most damning discoveries emerging from the 9/11 commission report is the fact that in the year 2000, the United States graduated just six area specialists for the Mideast. That number has since increased, but it hasn't kept pace with the increased volume of Arab-language material to be analyzed. "Almost two years after 9/11," Colton concludes, "we're still flying blind in that region."
If he's right, we don't need a fake market to tell us what's going to happen. We need some old-fashioned knowledge about the people we're dealing with, starting with their language and culture.
Copyright © 2003, Newsday, Inc.
newsday.com |
