Presentation to the 2008 Air Force Strategy Conference
What are Black Swans?
The term Black Swan comes from a book by Nassim Taleb, The Black Swan: The Impact of the Highly Improbable. The title derives from the fact that in Europe all swans were white. Therefore, it was naturally assumed in the era before Darwin that only white swans existed. Not until explorers made their way into the Pacific and visited Australia did they discover the existence of black swans.
According to Taleb, a Black Swan has three characteristics:
* First, it is an outlier, as it lies outside the realm of regular expectations;
* Second, it carries an extreme impact; and,
* Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
Some examples of Black Swans:
* The world on the eve of the events of 1914 would have helped you guess what was to happen next. No one would have been more surprised than Gavrilo Princip, the inept assassin of the Archduke and his wife;
* The rise of Hitler and the subsequent war;
* The rise, and then the precipitous demise of the Soviet bloc;
* The rise of Islamic fundamentalism, or more specifically of its jihadist/terrorist strain;
* The spread of the Internet, much less Youtube, Facebook, texting and Google;
* Market crashes; and, of course,
* September 11.
Eventually the existing political, economic and social structures do respond to Black Swans. Sometimes they are able to get out ahead of them. The obvious examples of these are the Allied defeat of the Axis and the successful containment of the Soviet Union. In other cases, those same structures are not able to successfully meet the challenge posed by the Black Swans. In some instances this may mean nothing more than changing the list of corporations that make up the Dow Jones. In other instances, the ones that should concern us today, that empires and nations shuffle off this mortal coil.
Failure to anticipate or at least hedge against Black Swans can prove extremely costly, not least in terms of the lives of military personnel who must hold the line with obsolete or irrelevant capabilities until appropriate responses can be identified and implemented.
This leads to something very important to defense planners, particularly in an era of strategic uncertainty: the problem of risk. It is exceedingly difficult to manage the risk of Black Swans because they are low probability events. The present value of risk mitigation efforts therefore is low. On September 10 it would have been very difficult to get U.S. airlines to pay the price of securing cockpit doors.
This is not the only problem in adequately anticipating and hedging risks. Taleb notes that current research into the way the human brain deals with risk avoidance suggests that it is antiquated and unfit for the modern world; it is made to counter repeatable attacks and learn from specifics. Good for avoiding the threat of saber tooth tigers. Not so good for anticipating hijackers crashing airplanes into buildings.
Even were we hardwiring better, it would be a challenge to think about the kinds of extreme events – Black Swans – that might confront the Department of Defense in the future. This does not mean we shouldn’t attempt to do it. At the very least the effort to think about Black Swans might make it easier to sort through the various trends that contribute to making the present environment one of uncertainty.
Trends, Threats and Black Swans
There are many trends of interest:
* Demographics: Mix of youth bulge and aging;
* Population migration, particularly urbanization;
* Environmental changes;
* Explosion of technology and its rapid diffusion;
* The globalization of economic activity;
* Changing patterns in the availability and use of resources;
* Changing strategic relationships: U.S.-Europe;
* Shifting locus of power to Asia and in that context growing power of China;
* Changing patterns of governance; and, of course,
Which of these constitute threats? The answer is, so far, only the last one. Jihadism, in general, but more particularly, ideo-religious terrorism/insurgencies is the threat of the day. Taleb points out that once a Black Swan event occurs there is a tendency to normalize it. Indeed, one could go farther and argue that there is a strong inclination to generalize the experience. For example, this was the behavior of the “Greatest Generation” which, during the Cold War, tended to interpret all interstate conflicts through the lens of the tragic experience of the pre-war decade. So we had an understandable preoccupation with appeasement. It also explains why in the aftermath of September 11 the United States raised the fight against Al Qaeda to the status of a global war on terrorism. That is what we knew how to do.
Yet, the experience of September 11 and the subsequent battles against Al Qaeda do not reflect the historical evidence with respect to terrorist/insurgent groups. The reality is that such groups rarely have been successful. Oxford scholar Dr. Audrey Kurth Cronin examined almost 500 such groups and concluded that all but a handful failed to survive, much less triumph. Many did not last a year; most not ten. Al Qaeda is unusual in that it has survived twenty.
While it may have survived, Al Qaeda has experienced more than a few a strategic failures. The central premise of Al Qaeda’s strategic plan, that terrorism against their far enemy, the United States and its allies, would lead to a loss of support for and the eventual collapse of the true and near enemy, the various authoritarian states of the Middle East, has proven totally fallacious. Equally important, Al Qaeda’s methods have promoted a political and ideological backlash the impact of which we have seen in places such as Iraq.
Moreover, successful groups need territory and support in order to advance beyond the level of a limited and local nuisance. Territory, or a base of operations, enables the kinds of activities – planning, organization, training, testing of capabilities and the deployment of technologies – that can turn a terrorist organization with limited capabilities into one with global reach and impact. Support comes in many forms but recent history has shown that money, technology and training can turn limited threats into major ones.
We have learned that it is not necessary to totally eradicate terrorist groups. Deny them sanctuaries and interdict their support and they wither.
The last six and half years have demonstrated that jihadism or Islamic terrorism is less of a threat than we had assumed. Put another way, they have set themselves goals – the overthrow of the state, return of the Caliphate, etc. – that are extremely difficult to achieve were they not being hounded and harassed. This is often true even when the states they oppose are relatively fragile.
In many instances, successful movements owe their triumphs as much to the interplay of trends and externalities as to any actions on their part. Were it not for a train ticket to the Finland Station, V.I. Lenin would probably have remained a somewhat scruffy middle-class revolutionary content to fight out internecine ideological battles within the Russian émigré community and Russian history probably would have taken a very different course. Had the Japanese not begun a rampage through China, Mao and the CCP may well have been destroyed by Chang Kai Shek and the Nationalists or, at best, would have remained one of a number of relatively modest independent regional governments.
About what should we be concerned in the trends I have discussed? Where should we look for potential Black Swans? Virtually all these trends, from demographics to governance have been with us for a very long time. Each has both positive and negative aspects. The interplay of these factors is quite complex and how they will eventually play out is extremely hard to predict.
What I will argue here today is that what is new and challenging for strategic planners is the impact of technology on the rise of new threats. The explosion of technology, particularly IT, is empowering current and prospective adversaries, particularly if their goal is not to replicate U.S. capabilities but to counter them.
Recent intelligence estimates emphasize the impact of access to emerging technologies on the evolution of threats to the U.S. Among the technology trends of concern are:
* The availability of the knowledge and technology needed to produce and employ weapons of mass destruction;
* Longer-range ballistic missiles that are growing more mobile, accurate and harder to find. Ballistic missiles are increasingly being designed or employed to penetrate advanced missile defense systems.
* Improvised devices and suicide weapons as weapons of choice;
* The growing ability to target and attack space-based communications, intelligence, surveillance and reconnaissance assets;
* The proliferation of precision conventional anti-tank, anti-ship and anti-aircraft missiles, including to nonstate criminal or terrorist networks;
* The sophisticated ability of select nations and nonstate groups to exploit and perhaps target for attack our computer networks; and,
* Efforts by potential adversaries to conceal and protect their military leadership and special weapons programs deep underground, which makes them increasingly difficult to locate and, if directed, to attack.
Now, combine access to technology with economic power and growing political aspirations and interesting possibilities begin to emerge. When deployed by well-organized and financed polities, these technologies pose a serious threat to U.S. global military power. In a recent speech, CIA Director General Michael Hayden discussed Chinese military trends:
“The Chinese have fully absorbed the lessons of both wars in the Persian Gulf. They’ve developed and integrated advanced weaponry into a modern military force. And while it’s certainly true that those new capabilities could – could – pose a risk to U.S. forces and interests in the region, that military modernization is at least as much about projecting strength as anything else. After two centuries of perceived Western hegemony, China seems to be determined to flex its muscles. It sees an advanced military force as an essential element of great power status, and it is the Intelligence Community’s view that any Chinese government, even a more democratic one, would have similar nationalist goals.”
Yet, Hayden makes it clear that China is not viewed as a threat. The evolution of China from a rising power to the status of adversary will depend on the evolution and interplay of other trends – demographic, economic and political. But without modern technology, the ability of China or any prospective adversary to act on their intentions will remain strictly limited.
Trends generally develop slowly. However, threats can manifest themselves much more quickly. Even if it is a matter of years, this may be too short a time for the threatened party to muster an effective response.
I am thinking here of the British ten year rule. Each year, beginning in 1818, the British Government assessed the possibility of a strategic threat arising. The Government took a ten year perspective because that, it thought, would provide enough time to respond and rearm. Churchill thought it was such a good idea that he argued for making it self-perpetuating. In January 1933, with the rise to power of Adolph Hitler, the British Government decided that a threat had, indeed emerged. Of course, it turned out they had less than ten years in which to respond.
The British Government also thought it could deal with the problem through half measures, by a strategy of limited containment. In essence, Great Britain and its allies in Europe helped create the Black Swan that was World War II.
There is a tendency to think about the role of the U.S. in the world as somehow separate from the new forces and trends that cloud our ability to see the future. Yet, the U.S. itself, or its behavior in the new world may be a Black Swan.
U.S. as a Black Swan
Intelligence assessments and Pentagon planning documents always assume that the U.S. is and, for the foreseeable future, will remain the world’s sole superpower, engaged in the world. One probably would have made a similar assumption about Great Britain as a global power, albeit not a hegemon, even as late as the early 1970s. Then, a crisis in Sterling forced a radical reduction in defense spending. As a result, the British Government decided to withdraw from all its security positions east of Suez. Then the U.S. was present to step into the breach. Now who would perform that function?
Will the U.S. be willing to continue paying the price of global leadership? The price of this leadership is becoming expensive, in part, because as a Nation we have systematically underfunded defense for nearly two decades. The other reason is the natural increase in the costs associated with the kind of military we have chosen to maintain.
Air Force leaders know this problem extremely well. They are facing an unprecedented procurement bow wave. There is a need to modernize across the board: fighters, tankers, ISR platforms, CSAR, long-range strike, nuclear forces. Even then, forces will continue to age, just at a slower rate.
Even with increased base funding and supplementals it is going to be very difficult for the Air Force – and the other Services – to meet all the demands of the current conflicts and prepare for those that lie in our future.
Recent studies by a number of organizations, including my own, have concluded that the expenditure of approximately 4 to 4.5 percent of gross domestic product would enable the U.S. to maintain a military establishment along current lines, with appropriate modernization for the foreseeable future.
Even if defense planners are granted sufficient resources to do the job, the question remains what conflicts to prepare for? This question has taken on greater importance as time between modernization cycles has increased and the expected life spans of major systems have lengthened. What we buy today and in the near future is likely to be with us into the middle of this century, if not longer.
The U.S. military has demonstrated an ability to take forces designed primarily for major conflicts and apply them to lesser contingencies. I am not certain it will work the other way, particularly if prospective adversaries can acquire and train with advanced technology weaponry.
Moreover, it is not certain that the U.S. would be able to respond in time if it faced a strategic surprise. It would be a mistake to think that we can always respond with the relative alacrity that we showed in the cases of Afghanistan and Iraq. Certainly not if the surprise comes from state actors that can deploy advanced technologies in quantity.
The problem is not just one of long procurement cycles. The defense industrial base built during the Cold War has shrunk significantly. Some would argue that it has lost critical skill sets. The U.S. may no longer be the arsenal of democracy.
A concern for the future has been labeled “next war itis.” I would submit to you that it would be very foolish for the Department of Defense not to be thinking about the next war, as well as the one we are in today, when making momentous decisions about new systems that will be in service for three, four or even five decades.
It is also important that defense leaders think very carefully about how military power needs to be shaped to deal with an era of strategic uncertainty.
Military Power in a Period of Strategic Uncertainty
The current period is much more complex and challenging for strategic planners than what has been experienced for most if not all of the modern era. They understand, perhaps better than anyone, the limited relevance of most forms of military power to the kinds of crises we are seeing or can anticipate in the future.
Some analysts see military power as a “cork in the bottle.” Others argue that military power will be needed to ensure order in the global commons or to provide the enforcement of international norms such as the prevention of genocide.
Military power can smooth some of the rough edges that are sure to emerge as various trends progress and the future unfolds. We have to anticipate that the future will include major political and societal dislocations.
Conflict can also arise from changes in the balance of power and efforts by states either to maintain the old international order or force the creation of a new one. To some degree, these kinds of struggles are natural and even appropriate.
Military planners need to consider how best to address prospective confluence of events or conditions that could most readily produce a Black Swan experience. I am speaking here of circumstances in which a state or group sees the resort to force as a more effective way of gaining their ends than other avenues. In particular, they need to ensure that their military forces can offer the prospect of dissuading potential aggressors from the resort to violence.
To meet the various challenges of a period of uncertainty, including that posed by Black Swans, forward thinking military institutions need to have certain general characteristics:
* Employ capabilities-based, rather than threat driven, planning;
* Versatility, responsiveness, reach, speed of response;
* Malleable; and,
The focus of military planning should not be directed at avoiding any specific Black Swan; we don’t know where the next one is coming from. The focus should be on what general lessons can be learned from those that have occurred in the past. Much of what we have to learn is not about the science of prediction but the art of timely response.
U.S. air and space power – and to that we must add cyber power – will, if anything, increase in importance in the new millennium. It is one of this country’s most important asymmetric advantages, whether dealing with individual terrorists, regional adversaries or the potential near peer. Control of the aerospace and cyber domains denies those adversaries sanctuary and unimpeded lines of communication. It forces adversaries to operate in ways that limit their mobility, reach, timing, concentration and organization. It provides the combination of agility, reach and speed that are going to be highly desirable in an uncertain world.
Hunting Black Swans
I want to return to the title of my presentation. The Department of Defense needs to consider and prepare for potential Black Swans. At this point in my presentation, I am sure you are waiting for me to tell you what the future holds, what are the Black Swans against which we should prepare.
Well, I am not going to do that. I have no greater insight into the way the future will unfold.
Taleb observes that, “in order to understand a phenomenon, one needs to first consider the extremes – particularly if, like the Black Swan, they carry an extraordinary cumulative effect.”
So, can we imagine the extremes for which the U.S. military needs to prepare?
* A catastrophic event in the homeland;
* An inadequate conventional deterrent in the face of a rising peer competitor;
* Inability to access key regions, friends and allies; or,
* Loss of technological preeminence in an area critical to military success.
You will certainly note that I have not mentioned many of the scenarios common in discussions of the future strategic environment. Terrorism, economic and resource competitions, failed states, migrations and new political and social structures will certainly be part of our future. And we will find reasons to respond to some of them. But most of them do not rise to the level of potential strategic Black Swans.
What does all this mean with respect to thinking about Air Force strategy?
* Plan for the broadest range of scenarios. You cannot ignore the prospect for high-end conflict if only for the fact that it is one of the few situations that could challenge fundamental U.S. interests.
* Maintain a credible strategic deterrent. However improbable, a strategic attack on the U.S. homeland would unquestionably be a high-consequence event. Because we cannot be certain that deterrence can be maintained under future global conditions that we cannot yet anticipate, we need to consider very carefully the deployment of air, missile defenses, space and cyber defenses.
* Ensure aerospace dominance. This is the key capability which allows U.S. commanders to shape the strategic and operational environments in ways that allow them to determine the course and outcome of conflicts.
* Ensuring aerospace dominance means continuing to win the competition for technological superiority. More specifically, ensuring aerospace dominance will require, among other things, acquiring advanced tactical and strategic platforms such as the F-22 and an advanced technology bomber in sufficient numbers to counter the high-end anti-access capabilities that adversaries are sure to deploy. In light of how much the U.S. spends on national security, these are relatively modest investments to ensure the access, influence and control that are central to all U.S. military planning.
* Having essentially solved the problem of precision strike, the Air Force needs to ensure intelligence that will allow this capability to be fully exploited. This means figuring out how to find, track and target fleeting targets or those in complex backgrounds. It also means continuing to be able to address large, organized target sets, those with significant EW and CCD capabilities. Yes, it means investing in lots of advanced unmanned ISR platforms. But, for example, it also means upgrading the venerable JSTARS with the same MP-RTIP capabilities.
* Stay competitive in the cyber warfare arena. This involves much more than just preventing a so-called cyber “Pearl Harbor.” It means figuring out ways of exploiting the vast potential of cyber operations in the pursuit of U.S. national security.
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