Wednesday


Draghi and Padoan

If the Greek financial crisis were merely a financial crisis, i.e., a financial crisis and nothing else, it would be much less of a crisis than it appears to be today. Many commentators have remarked that Greek GDP represents only a very small portion of the total Eurozone economy, so that the amount of agony expended on the Greek problem is far out of proportion to the size of the problem. But the Greek financial crisis is not merely a financial crisis, it is also a political crisis, and it is a political crisis on many different levels. In so far as the Greek financial crisis is a political crisis, the financial crisis sensu stricto may be viewed as a trigger for larger events. It is this that has magnified the crisis.

Analyses of the crisis sometimes focus on the symbolic importance of a Eurozone nation-state going bankrupt, which is crisis for the idea of Europe, while others focus on the potential fallout and knock-on effects of allowing the Greek financial crisis to run its course without outside assistance (i.e., a bailout and debt forgiveness), which is a financial crisis that ripples outward and grows with its expansion — a trigger event with catastrophic consequences, the textbook case of which is the beginning of the First World War.

A few voices — not many, but a few — have suggested that, implicit in monetary union without banking union was the idea that future crises in the European Monetary Union (EMU) would force a reckoning that would presumptively be resolved by turning to ever closer European integration, so that Europe would gradually, hesitatingly, two-steps-forward-and-one-step-back, lurch its way toward full economic integration, and eventually even to full political integration. This is a more sophisticated analysis that sees the Greek crisis in a larger context, and I will not dismiss it out of hand, but I also cannot bring myself to make the many leaps that this argument requires. When have European crises been resolved by tighter integration? European integration has come about, when it has come about, as the result of peacetime negotiations, and not as a response to crisis.

This scenario has been hinted at (although not made fully explicit — nowhere is this formulation fully explicit) by no less a figure than ECB head Mario Draghi:

“This union is imperfect, and being imperfect is fragile, vulnerable and doesn’t deliver, doesn’t deliver all the benefits that it could if it were to be completed. The future now should see decisive steps on further integration.”

Even more recently, in an article on the front page of the Financial Times, “Italian finance minister says political union needed to ensure euro’s survival” (Monday 27 July 2015), Pier Carlo Padoan is quoted as saying, “The exit and therefore the end of irreversibility is now an option on the table. Let’s not fool ourselves… If we want to take that risk away, then we have to have a different euro — a stronger euro… To have a full-fledged economic and monetary union, you need a fiscal union and you need a fiscal policy… And this fiscal policy must respond to a parliament, and this parliament must be elected. Otherwise there is no accountability.” Here the whole program is laid out with the relentless logic of a domino theory: if you want to have the Euro, you need full-fledged, economic union, and if you want to have a functioning economic union, you need to have a European government with real power. The only thing missing in this account is the expectation that the first formulation of the Eurozone would inevitably result in crises, and the crises would be the trigger for these dominoes to fall.

Those who see the Greek financial crisis in its geopolitical context express concerns of Greek alienation from the Eurozone resulting in closer ties with Putin’s Russia, recalling Cold War fears when Greece was one of the proxy theaters of the Cold War. It is entirely possible that Greece, rebuffed by the Eurozone, may turn to Russia for loans, and the Putin would be ready and willing to provide these loans, despite the desperate condition of the Greek economy (and, for that matter, of the Russian economy as well), for political reasons rather than for economic reasons. (And in a changed political climate Russian loans would likely be paid back even if European loans were not paid off.) This strikes me as a more plausible scenario than the above interpretation involving a purposeful trainwreck.

It was a great Cold War coup that NATO was able to persuade rivals Greece and Turkey both to join NATO in 1952, when Greece was the only Balkan nation-state to be part of the western military alliance. Now other Balkan nation-states are NATO members, and Greece is not isolated in the region as a consequence of its NATO membership, but it would be a source of particularly acute tension to have a leftist Syriza government courting closer ties with Putin’s Russia at a time of European unease over Russian actions in Ukraine.

The attempt to unify Europe economically dates even to before NATO, and began as a geopolitical project to forestall European wars on the scale of the mid-twentieth century, and now that Eurozone is facing its greatest challenge since the implementation of the EMU, the unification of Europe will continue, if at all, as a geopolitical project.

The economic rationale for European economic union seems to be present — i.e., the economic union of Europe seems to make sense, but just because something seems to make sense doesn’t mean that it is practicable. In the particular case of Greece, accession to the Eurozone was highly impractical. Greece entered into the European Monetary Union (EMU) with a wink and a nod. There was a sotto voce acknowledgement that Greece did not meet the macroeconomic requirements of joining the EMU, but everyone looked the other way anyway because it was thought that Greece was hitching its wagon to a star; the EMU and the European wide common market was going to be such a grand success that the problem was going to be keeping the “wrong sort” out (like Turkey, which repeatedly expressed its interest in joining the Eurozone, but excuses were always found to exclude the Turks). Here the political rationale trumps the economic rationale.

When a large and diverse geographical area is contained within the borders of a single nation-state — as with the United States, Russia, China, India, or Brazil — this geographical diversity is often expressed in economic diversity, with wealthy regions and cities contrasted with impoverished regions and cities. Within a single nation-state wealth transfers will sometimes be undertaken to offset these extremes in the form of state institutions and mechanisms. These wealth transfers can range from generous to nearly non-existent depending on the nation-state in question. We see this in a much more limited way in the international system, when wealthy nation-states will sometimes give aid and assistance to impoverished regions of the world, but this kind of aid never reaches the level of wealth transfers seen within a single nation-state.

The unification of a nation-state from multiple territories, and the subsequent imposition of a unified system of banking and taxation, constitutes a microcosm reflecting the opportunities and risks that face larger-scale attempts at economic and political unification, as in the case of the Eurozone. The unification of Italy from 1815 to 1871 — a process requiring more than a half century, but roughly corresponding to the span of time of post-war Europe — and the unification of Germany in 1871, both contain detailed lessons for a unified Europe. The unification of Germany has, of course, been a fraught matter. Libraries of books have been devoted to the topic. The unification of Italy has sometimes been cited as one cause of the economic backwardness of southern Italy in comparison to the dynamic north of the country; coupling these diverse norther and southern regions into one national state with a single set of national institutions has not come without consequences.

The reader who has made it thus far may find themselves expecting me to make a case for the rescue of the Greek economy at any cost in order to salvage the geopolitical project of the Eurozone, which was, after all, never conceived primarily as an economic project. It is an economic project secondarily, but a geopolitical project primarily. I am not going to make this argument, which has been made many times, and which is fatally flawed. Europe remains a continent of nation-states (like every continent except Antarctica). Power lies in the sovereign legislatures of each nation-state, in their economic capacity, and in their respective militaries (or the lack thereof). If Europe is salvaged as a geopolitical project, it will be because some European nation-state, or combination of nation-states, determines that it is in their sovereign interest to salvage the Eurozone, and not because some abstract entity like “Europe” commands the loyalty of any population or its military forces.

In Armed Prophets of Revolution I cited Machiavelli’s distinction between armed and unarmed prophets. Here is the passage in question:

It is necessary, therefore, if we desire to discuss this matter thoroughly, to inquire whether these innovators can rely on themselves or have to depend on others: that is to say, whether, to consummate their enterprise, have they to use prayers or can they use force? In the first instance they always succeed badly, and never compass anything; but when they can rely on themselves and use force, then they are rarely endangered. Hence it is that all armed prophets have conquered, and the unarmed ones have been destroyed. Besides the reasons mentioned, the nature of the people is variable, and whilst it is easy to persuade them, it is difficult to fix them in that persuasion. And thus it is necessary to take such measures that, when they believe no longer, it may be possible to make them believe by force.

Machiavelli, The Prince, Chapter VI

While it is no longer the custom in Europe to offer up prayers for ideological programs, the secular equivalents of prayers are daily being published in the organs of mainstream thought in Europe. The Eurozone (and its advocates among Europe’s elite opinion) are unarmed prophets of transnational political unification. As unarmed prophets, we would expect them, following Machiavelli, to be destroyed. But Europe exists under the security umbrella provided by the United States, so that while the Eurozone itself may be an unarmed prophet, it is an unarmed prophet with an armed faction prepared to defend it.

What will the US, as the security guarantor of Europe, see as its geopolitical interest in European unification? Will the US provide the muscle to allow the great European experiment to continue, or will it accept European fragmentation, as long as that fragmentation does not follow the pattern of the Balkan wars following the breakup of Yugoslavia (that other great European experiment in the political unification of the South Slavs, whose earlier fragmentation provided us with the term “Balkanization” and triggered the First World War)? At present, the US is making only cautionary statements and is not actively involved in what is, in effect, the re-negotiation of the Eurozone. With an upcoming US election, one would not expect any new political initiatives from the US in regard to the Eurozone. With the US deeply mired in crises in other parts of the globe, Europe is not high on the agenda.

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During the initial iteration of the Eurozone Crisis I blogged extensively on the problem, and have occasionally returned to the problem in subsequent pieces, including the following posts:

The Dubious Benefits of the Eurozone

Shorting the Euro

Will the Eurozone enact a Greek tragedy?

A Return to the Good Old Days

Can collective economic security work?

Poor Cousins

What would a rump Eurozone look like?

An Alternative to the Euro

The Old World in Turmoil

Gibbon, Sartre, and the Eurozone

Europe and its Radicals

Default in the Eurozone

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Wednesday


Frank Knight

Frank Knight on risk and uncertainty

Early Chicago school economist Frank Knight was known for his work on risk, and especially for the distinction between risk and uncertainty, which is still taught in economics and business courses. Like Schumpeter, Knight was interested in the function of the entrepreneur in the modern commercial economy, and he employed his distinction between risk and uncertainty in order to illuminate the function of the entrepreneur.

Although it is easy to conflate risk and uncertainty, and to speak as though facing a risk were the same thing as facing uncertain or unknown circumstances, Knight doesn’t see it like this at all. A risk can be quantified and calculated, and because risks can be quantified and calculated, they can be controlled. This is the function of insurance: to quantify and price risk. If you have correctly factored risk into your calculation, it is no longer an uncertainty. You might not know the exact date or magnitude of losses, but you know statistically that there will be a certain number of losses of a certain magnitude. It is the job of actuaries to calculate this, and one buys insurance to control the risk to which one is exposed.

The ordinary business of life, and of business, according to Knight, involves risk management, but the unique function of the entrepreneur is to accept uncertainty that cannot be quantified, priced, or insured. The entrepreneur makes his profit not in spite of uncertainty, but because of uncertainty. No insurance can be bought for uncertainty, so that in taking on an uncertain situation the entrepreneur enters into a realm in which it is recognized that there are factors beyond control. If he is not destroyed financially by these uncontrollable factors, he may profit from them, and this profit is likely to exceed the profit made in ordinary business operations exposed to risk but not to uncertainty.

Here is how Knight formulated his distinction between risk and uncertainty:

To preserve the distinction which has been drawn in the last chapter between the measurable uncertainty and an unmeasurable one we may use the term “risk” to designate the former and the term “uncertainty” for the latter. The word “risk” is ordinarily used in a loose way to refer to any sort of uncertainty viewed from the standpoint of the unfavorable contingency and the term “uncertainty” similarly with reference to the favorable outcome; we speak of the “risk” of a loss, the “uncertainty” of a gain. But if our reasoning so far is at an correct, there is a fatal ambiguity in these terms which must be gotten rid of and the use of the term “risk” in connection with the measurable uncertainties or probabilities of insurance gives some justification for specializing the terms as just indicated. We can also employ the terms “objective” and “subjective” probability to designate the risk and uncertainty respectively, as these expressions are already in general use with a signification akin to that proposed.

Frank Knight, Risk, Uncertainty, and Profit, CHAPTER VIII, STRUCTURES AND METHODS FOR MEETING UNCERTAINTY

Knight went on to add…

The practical difference between the two categories, risk and uncertainty, is that in the former the distribution of the outcome in a group of instances is known (either through calculation a priori or from statistics of past experience), while in the case of uncertainty this is not true, the reason being in general that it is impossible to form a group of instances, because the situation dealt with is in a high degree unique.

Frank Knight, Risk, Uncertainty, and Profit, CHAPTER VIII, STRUCTURES AND METHODS FOR MEETING UNCERTAINTY

The growth of knowledge and experience can transform uncertainty into risk if it contextualizes a formerly unique situation in such a way as to demonstrate that it is not unique but belongs to a group of instances. Of the tremendous gains made in the space sciences during the last forty years, during our selective space age stagnation, it could be said that the function of this considerable gain in knowledge has been to transform uncertainty into risk. But this goes only so far.

Even if the boundary between risk and uncertainty can be pushed outward by the growth of knowledge, the same growth of civilization that attends the growth of knowledge and technology means that the boundaries of civilization itself will also be pushed further out, with the result being that we are likely to always encounter further uncertainties even as old uncertainties are transformed by knowledge into risk.

The evolution of the existential risk concept

In many recent posts I have been discussing the idea of existential risk. These posts include, but are not limited to, Moral Imperatives Posed by Existential Risk, Research Questions on Existential Risk, and Six Theses on Existential Risk. The idea of existential risk is due to Nick Bostrom. (I first heard about this at the first 100YSS symposium in Orlando in 2011, when I was talking to Christian Weidemann.)

Nick Bostrom defined existential risk as follows:

Existential risk – One where an adverse outcome would either annihilate Earth-originating intelligent life or permanently and drastically curtail its potential.

And added…

An existential risk is one where humankind as a whole is imperiled. Existential disasters have major adverse consequences for the course of human civilization for all time to come.

“Existential Risks: Analyzing Human Extinction Scenarios and Related Hazards,” Nick Bostrom, Professor, Faculty of Philosophy, Oxford University, Published in the Journal of Evolution and Technology, Vol. 9, No. 1 (2002)

In his papers on existential risk and the book on Global Catastrophic Risks, Bostrom steadily expanded and refined the parameters of disasters that have (or would have) major adverse consequences for human beings and their civilization.

Table of six qualitative categories of risk from 'Existential Risks: Analyzing Human Extinction Scenarios and Related Hazards'

Table of six qualitative categories of risk from ‘Existential Risks: Analyzing Human Extinction Scenarios and Related Hazards’

The table from an early existential risk paper above divides qualitative risks into six categories. the table below from the book Global Catastrophic Risks includes twelve qualitative risk categories and implies another eight; the table further below from a more recent paper includes fifteen qualitative risk categories and implies another nine. From a philosophical point of view, these further distinctions represent in advance in clarity, contextualizing both existential risks and global catastrophic risks in a matrix of related horrors.

Table of qualitative risk categories from the book Global Catastrophic Risks.

Table of qualitative risk categories from the book Global Catastrophic Risks.

The specific possible events that Bostrom describes range from the imperceptible loss of one hair to human extinction. Recently in Moral Imperatives Posed by Existential Risk I tried to point out how further distinctions can be made within the variety of human extinction scenarios, and that some distinct outcomes might be morally preferable over other outcomes. For example, even if human beings were to become extinct, we might want some of our legacy to remain to potentially be discovered by alien species visiting our solar system. Given the presence of space probes throughout our solar system, it seems highly likely that these would survive any human extinction scenario, so that we have left some kind of mark on the cosmos — a cosmic equivalent of “Kilroy was here.”

Qualitative risk categories, Figure 2 from 'Existential Risk Prevention as Global Priority' (2012) Nick Bostrom

Qualitative risk categories, Figure 2 from ‘Existential Risk Prevention as Global Priority’ (2012) Nick Bostrom

Further distinction can be made, however, and the distinction that I would like to urge today is that of distinguishing existential risks from existential uncertainties.

The need to explicitly formulate existential uncertainty

Once the distinction is made between existential risks and existential uncertainties, we recognize that existential risks can be quantified and calculated. Ultimately, existential risks can also be insured. The industrial and financial infrastructure is not now in place to do this, although we can clearly see how to do this. And this much is obvious, because much of the discussion of existential risk focuses on potential mitigation efforts. Existential risk mitigation is insurance against extinction.

We can clearly understand that we can guard against the existential risks posed by massive asteroid impacts by a system of observation of objects in space likely to cross the path of the Earth, and building spacecraft that could deflect or otherwise render harmless such threatening asteroids. It was once thought that the appearance of comets or “new stars” (novae) in the sky heralded the death of kings of the end of empires. No longer. This is the perfect example of a former uncertainty that has been transformed into a risk by the growth of knowledge (or, at very least, is in the process of being transformed from an uncertainty into a risk).

We can also clearly see that we could back up the Earth’s biosphere about a truly catastrophic global disaster by transplanting Earth-originating life elsewhere. Far in the future we can even understand the risk of the sun swelling into a red giant and consuming the Earth in its fires — unless by that time we have moved the Earth to an orbit where it remains safe, or perhaps even transported it to another star. All of these are existential risks where “risk” is used sensu stricto.

There are a great many existential risks and global catastrophic risks that have been proposed. When it comes to geological events — like massive vulcanization — or cosmological events — the death of our sun — the sciences of geology and cosmology are likely to mature to the point where these risks are quantifiable, and if industrial-technological civilization continues its path of exponential development, we should also someday have the technology to adequately “insure” against these existential risks.

The vagaries of history and civilization

When it comes to scenarios that involve events and processes not of the variety that contemporary natural science can formulate, we are clearly pushing the envelope of existential risks and verging on existential uncertainties. Such scenarios would include those predicated upon the development of human history and civilization. For example, scenarios of wars of an order of magnitude that far exceed the magnitude of the global wars of the twentieth century are on the outer edges of risk and, as they become more speculative in their formulation, verge onto uncertainty. Similarly, scenarios that involve the intervention of alien species in human history and human civilization — alien invasion, alien enslavement, alien visitation, etc. — verge onto being existential uncertainties.

The anthropogenic existential risks that are of primary concern to Nick Bostrom, Martin Rees, and others — risks from artificial intelligence, machine consciousness, unintended consequences of advanced technologies, and the “gray goo” problem potentially posed by nanotechnology — are similarly problematic as risks, and many must be accounted as uncertainties. In regard to the anthropogenic dimension of many existential uncertainties I am reminded of a passage from Carl Sagan’s Cosmos:

“Biology is more like history than it is like physics. You have to know the past to understand the present. And you have to know it in exquisite detail. There is as yet no predictive theory of biology, just as there is not yet a predictive theory of history. The reasons are the same: both subjects are still too complicated for us. But we can know ourselves better by understanding other cases. The study of a single instance of extraterrestrial life, no matter how humble, will deprovincialize biology. For the first time, the biologists will know what other kinds of life are possible. When we say the search for life elsewhere is important, we are not guaranteeing that it will be easy to find – only that it is very much worth seeking.

Carl Sagan, Cosmos, CHAPTER II, One Voice in the Cosmic Fugue

This strikes me as one of the most powerful and important passages in Cosmos. When Sagan writes that, “[t]here is as yet no predictive theory of biology, just as there is not yet a predictive theory of history,” while leaving open the possibility of a future predictive science of biology and history — he wrote as yet — he squarely recognized that neither biology nor human history (much of which derives more or less directly from biology) can be predicted or quantified or measured in a scientific way. If we had a science of history, such as Marx thought we had discovered, then the potential disasters of human history could be quantified, and we could insure against them.

Well, we can insure against some eventualities of history, though certainly not against all. This is a point that Machiavelli makes:

It is not unknown to me how many men have had, and still have, the opinion that the affairs of the world are in such wise governed by fortune and by God that men with their wisdom cannot direct them and that no one can even help them; and because of this they would have us believe that it is not necessary to labour much in affairs, but to let chance govern them. This opinion has been more credited in our times because of the great changes in affairs which have been seen, and may still be seen, every day, beyond all human conjecture. Sometimes pondering over this, I am in some degree inclined to their opinion. Nevertheless, not to extinguish our free will, I hold it to be true that Fortune is the arbiter of one-half of our actions, but that she still leaves us to direct the other half, or perhaps a little less.

I compare her to one of those raging rivers, which when in flood overflows the plains, sweeping away trees and buildings, bearing away the soil from place to place; everything flies before it, all yield to its violence, without being able in any way to withstand it; and yet, though its nature be such, it does not follow therefore that men, when the weather becomes fair, shall not make provision, both with defences and barriers, in such a manner that, rising again, the waters may pass away by canal, and their force be neither so unrestrained nor so dangerous. So it happens with fortune, who shows her power where valour has not prepared to resist her, and thither she turns her forces where she knows that barriers and defences have not been raised to constrain her.

Nicolo Machiavelli, The Prince, CHAPTER XXV, “What Fortune Can Effect In Human Affairs, And How To Withstand Her”

What remains beyond the predictable storms of floods of history are the true uncertainties, the unknown unknowns, and these pose a danger we cannot predict, quantify, or insure. They are not, then, risks in the strict sense. They are existential uncertainties.

It could be argued that our inability to take specific, concrete, effective measures to mitigate the obvious uncertainties of life has resulted in religious responses to uncertainty that systematically avoid falsifiability and thereby secure the immunity of hopes to exterior circumstances. Whether or not this has been true in the past, merely the recognition of existential uncertainty is the first step toward rationally assessing them.

Existential risk suggests a clear course of mitigating action; existential uncertainty cannot, on the contrary, be the object of planning and preparation. The most that one can do to address existential uncertainty is to keep oneself open and flexible, ready to roll with the punches, and responsive to any challenge that might arise, meeting it at the height of one’s powers; any attempt to prepare specific measures will be fruitless, and quite possibly counter-productive because of the wasted effort.

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Tuesday


At the present moment the most strategically interesting place on the planet is Libya. Both diplomats and the popular press seem hesitant to call this a civil war (yesterday’s Financial Times’ headline nearly acknowledged this fact, saying, “Libya closer to full-blown civil war”), but if we are going to call a spade a spade, then we need to call the conflict in Libya a civil war. Government forces hold several cities (Tripoli, Sirte, Bin Jawad, and others that Gadhafi’s forces sought to re-take yesterday and again today), rebel forces hold several cities (Tobruk, Benghazi, Grega, possibly Ras Lanuf, Misrata, and Zawiya), and there are ongoing clashes between government and rebel forces. Each side, government and rebel, has its strengths and weaknesses, and there is no indication that one side or the other will suddenly collapse, though this remains a possibility for either party to the conflict.

So civil war it is, and civil war in a land made for war, according to the great documentary series about the Second World War, The World at War:

“This land was made for war. As glass resists the bite of vitriol, so this hard and calcined earth rejects the battle’s hot, corrosive impact. Here is no nubile, girlish land; no green and virginal countryside for war to violate. This land is hard. Inviolable.” (The World at War, opening words of the narrator to “Episode Eight: The Desert: War in North Africa” )

The same stretch of desert now divided east and west between Libyan government and rebel forces is the same stretch of desert the Deutsches Afrikakorps (DAK) and the British Western Desert Force during the Western Desert Campaign 1940-1943. Richard Holmes in his BBC documentary Battlefields said of North Africa that, ” desert fighting was a tactician’s dream” with its perpetually open flank and tanks moving in the desert like ships at sea.

Now seventy years later, this battleground is to be fought over again. At first it seemed that Gadhafi was so unhinged that he would be incapable to taking the kind of action that would be necessary to preserving his regime, with his statements that all his people loved him and his attempted scare tactics to the West that the instability in Libya was due to Al Qaeda. Gadhafi’s befuddlement, however, did not last long, and he has been consolidating his control over the coastal cities still within his grasp as well as striking back at cities under rebel control.

A great deal is being said and written about the situation Libya, but there is little in the way of hard information that one can count on from either a tactical or strategic perspective. We know that some Libyan airforce pilots have defected, but we also know that government planes are engaging in attacks on rebel cities (probably striking Ras Lanuf as I write this). We know that Libya has a history of stationing its armed forces close to the Egyptian border, thus positioning materiel in an area now controlled by rebel forces, but it has been widely reported that Gadhafi has been allowing the armed forces to deteriorate fearing a coup. Like many dictators, Gadhafi chose to place his trust and his money in a hand-picked private army whose loyalty he can count on.

There has been discussion of enforcing a “no fly” zone over Libya, which would neutralize the government’s air superiority, but this would involve the reduction of Libya’s air defenses, which many Western nation-states are entirely capable of doing, but which they would hesitate to undertaking for appearances sake. Far more likely is the supply of intelligence, expertise, and precision weaponry to the rebels. Recall that during the Soviet invasion and occupation of Afghanistan that the US and Pakistan facilitated the introduction of Stinger missiles, carried by donkeys over traditional smuggling routes, which had the effect of partly neutralizing Soviet air superiority.

High technology precision weaponry of the kind that can be carried by one or a few soldiers is one of the great levelers of contemporary combat, neutralizing advanced and expensive air and armored assets. If such resources are made available to the rebels in Libya, they will not need a no fly zone to succeed. The rebels have only to endure. Each day they survive adds to their credibility and makes Gadhafi look weak for being unable to enforce a security regime within the borders of his own nation-state. Strategic Forecasting has argued that the rebels would have great difficulty marching on Tripoli to take the city, and this is no doubt true, but they need not take Tripoli if they can convince the outside world that they represent the future and Gadhafi represents the past.

If Gadhafi confines himself to fortress Tripoli with a few thousand well-armed loyalists, events will squeeze him as be becomes more marginal over time. It is true that Gadhafi has an enormous amount of oil money flowing in to pay mercenaries and to buy weapons, and there will always be mercenaries willing to fight and industries willing to sell arms, but there will also be those who look to the rebel forces as the future of Libya, and they may cut deals with the Rebels. There is a pipeline to Tobruk, and in the coming months the revenues from the oil flowing through the pipeline (if it is not cut) may ultimately accrue to the rebels. Tobruk will likely be able to hold out for and extended period of time. We know from the experience of the Second World War that Tobruk is eminently fortifiable, and can outlast an extended siege.

If the rebels fail to convince the rest of the world to deal with them, or if the rebels cannot get high-tech high-precision handheld weaponry, or if the rebels get weak in the knees, then their resistance will collapse. That is a lot of ifs. One can formulate a similar list of “ifs” for Gadhafi and his loyalists. Both are vulnerable, and since it would be so difficult for either party to the conflict to dislodge, much less annihilate, the other, both are most vulnerable to political and diplomatic developments. While there are many industries and nation-states around the world that will continue to be happy to take Gadhafi’s money, he has few friends in the world. There are autocrats and dictators that share interests with Gadhafi, even they will withdraw and keep their silence as Gadhafi becomes marginalized and ineffective.

If we view recent social unrest in the Arab world as a regional movement in an area of the world in which the nation-state system has never put down deep roots (it has been called a region of stateless nations and nationless states), we can see the early non-violent revolutions in Tunisia and Egypt as the idealistic youth of the movement. But the idealism of youth cannot long endure when confronted by the realities of entrenched power, especially when that power is jealously held and not willingly surrendered. In Libya, aspirants to non-violent regime change will be forced either to give up hopes of ousting Gadhafi, or it must win a civil war in order to remove him. Gadhafi will not be toppled from power by protests in Tripoli.

That being said, the aspiration to the ideals of non-violent regime change is the most powerful force that the rebels have on their side. As I observed above, it is the political and diplomatic maneuvering rather than the maneuvering of soldiers that is likely to be decisive in Libya. Nevertheless, the rebels must show that they can fight when necessary, and this they have shown. Now they must show that they can take losses and still sustain the fight.

We should not view the outbreak of violence in Libya as the failure of a non-violent movement, but rather as a revolutionary movement coming to maturity. The revolutions in Tunisia and Egypt are far from consolidated, and there remain protests. The future of the governments in these nation-states is not yet determined. The shape of regional politics and the fate of the revolutions in Tunisia and Egypt will be determined, in part, by what takes place in Libya. It is still entirely possible for no substantive changes to occur in Tunisia and Egypt; if the rebels in Libya are successful, it will make it possible for non-traditionalist regimes to come into power in Tunisia and Egypt, thus consolidating the gains of the early non-violent revolutions. We must see the whole movement in regional context, and judge its success or failure on a regional level.

This is as much as to say that the rebels fighting in Libya are the armed prophets of a social revolution, and, as we know from Machiavelli, unarmed prophets fail whereas armed prophets sometimes succeed:

It is necessary, therefore, if we desire to discuss this matter thoroughly, to inquire whether these innovators can rely on themselves or have to depend on others: that is to say, whether, to consummate their enterprise, have they to use prayers or can they use force? In the first instance they always succeed badly, and never compass anything; but when they can rely on themselves and use force, then they are rarely endangered. Hence it is that all armed prophets have conquered, and the unarmed ones have been destroyed. Besides the reasons mentioned, the nature of the people is variable, and whilst it is easy to persuade them, it is difficult to fix them in that persuasion. And thus it is necessary to take such measures that, when they believe no longer, it may be possible to make them believe by force.

Machiavelli, The Prince, Chapter VI

The non-violent social revolutions in Tunisia and Egypt were the work of unarmed prophets, and the arms remained in the same hands who possessed them prior to the revolutions. Such revolutions would be easy to undo. Circumstances have forced the prophets of revolution in Libya to take up arms and become armed prophets.

Immediately before his classic reference to armed and unarmed prophets, Machiavelli wrote about the difficulty of establishing a new political order:

“…it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly, in such wise that the prince is endangered along with them.”

This is precisely the difficult thing that the revolutionaries in the Arab world are attempting to do: to introduce a new order of things. They are visionaries and prophets, and they face all the problems that Machiavelli elaborated. The difficulty of being a prophet requires for success that one become an armed prophet, and this is what we see occurring in Libya. If the Libyan armed prophets of revolution are successful, they will provide yet further proof of concept and facilitate revolutionary regional change.

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