The Information Economy and the Future of War
 
(first version June 1996, revised Dec. 10, 2001)

There are two central objectives for a typical citizen: personal safety and wealth.

In practice, ninety-nine percent of the time, the issue of personal safety is subsumed in that of wealth. In the United States, people of means do not fight to the death for control of inner-city neighborhoods. They move to the suburbs instead. Put another way, people act according to a fairly unsentimental cost-benefit analysis. No one who has any real choice in the matter chooses to defend the sacred soil of Flatbush or South Boston. Now that the World Trade Center bombing has made the dangers of skyscrapers apparent, the remaining offices are also moving to the suburbs  (*) . Personal safety is ultimately an economic question in the sense that with sufficient money one can always buy a comparatively safe place and move there. I suggest that this analysis operates at the national level as well. The "suitcase revolution," in which hundreds of thousands of Frenchmen left Algeria in the early 1960's, thus ending a colonial war, would be an example. Eventually the refugees were rehoused, and found jobs, and that was the end of the matter. The consequences of losing ultimately boiled down to the economic costs of certain housing projects in France. It is too early to draw lessons from the Balkan conflict, but a considerable driving force behind ethnic cleansing seems to be the prospect of commandeering someone else's house. Correspondingly, the typical penalty of losing in this war consists in having to move into a refugee camp until such time as one can obtain a refugee visa for Italy, Germany, or Sweden  (**) .

In the 1950's and 1960's the United States had its own internal "Balkan Crisis" in the Deep South. Internal migration formed a considerable component of our means of coping. Southerners (Black and White) came to Detroit and got high-wage assembly-line jobs protected by import restrictions. We liberalized criteria for welfare benefits, primarily in the North, but eventually in the South as well, in order to moderate conflict. In effect, we curtailed our normal imports of Mexican labor until the Deep South became stable. We decided, in effect, that shooting in the streets of Birmingham, Alabama was more dangerous than comparable violence in the Mexican state of Jalisco. Even if the latter had led to a revolution, it could have been addressed across the wide open spaces of the Southwestern desert. At present, Europe imports labor from Sub- Saharan Africa. If Europe were to curtail this importation, and import people from the Balkans instead, this might lead to trouble in Lagos or Accra, but such trouble would be less of an urgent threat to the security of Europe.

I have observed that ninety-nine percent of the time, personal safety is a question of wealth. That leaves an occasional exception, which I shall deal with later. For the time being, however, let us assume that the legitimate object of war is to obtain or preserve wealth. If we are going to think about the purposes of war in terms of economics, we must therefore think about them in terms of technology. Serious conflict is not going to occur over resources which are hyperabundant, and which defy all efforts at monopolization.

Wealth consists of raw materials transformed by manufacture into products, organized and delivered by services. Furthermore, as even conventional establishment economists are at long last beginning to recognize, we live in an information economy.

The information economy starts with raw materials. Raw materials are becoming more interchangeable. The trend is towards plastics, ceramics, composites, etc. which do not contain rare elements, but are instead highly controlled arrangements of the most abundant elements. Increasingly, the most promising source of raw materials is one's own trash-- and sewage. In a sense, oil is the final raw material-- a mere unidimensional energy source. Commerce in raw materials has none of the complexity it used to have. In the nineteenth century ships sailed to the west coast of South America for guano, as a source of nitrates. That was before the Haber process pulled nitrates out of the air. As late as the first half of the twentieth century, rubber came from Southeast Asia. That was before synthetic rubber. Thirty-five years ago, the industrial-grade diamonds of South Africa were a critical resource-- until synthetic diamonds came along. When the production of liquid fuel from coal becomes common and inexpensive-- as it will-- that will be the end of the idea that raw materials are worth fighting for, or paying very much money for. In a sense, the Persian Gulf War was an oddly anachronistic war, a throwback to the sixteenth century when there were literally hundreds of different commodities considered worth fighting wars over, because science was so primitive that nobody could see how to make any of them with the materials at hand-- or underfoot  (***) .

Even land itself is not the attraction it once was. The stated German motive for the Second World War was "lebensraum," which can be approximately translated at the level of the common man as the desire to become a petty junker somewhere east of Moscow. If you talk to ambitious young men, you will find that their ambitions no longer center around land, but rather around microelectronics, computer programming, molecular biology, etc., Their ambition is contained in so small a spatial compass as can only be seen under a microscope. Agriculture itself is becoming more and more preoccupied with highly mechanized intensive cultivation, growing more and more food on less and less land.

Any very considerable casualties would have taken the Gulf War over the edge of the irrational, in the sense that the cost of the war would have exceeded the cost of getting oil by other means, such as the conversion of coal. There are coal deposits scattered all over the world, in such a way that any one country is exceedingly unlikely to secure hegemony over them. Coal is a far more common mineral than petroleum. Turning it into oil is merely a matter of expenditure and plant construction.

Thus, raw materials are ceasing to be viable basis for conflict. Superimposed on raw materials is the issue of manufacturing.

Manufacturing is becoming automated. Routine labor is of diminishing value. Automation is continually superseding manpower. The remaining manpower required is of a higher and higher grade, doing less and less routine tasks, which are less and less susceptible of outside judgment or administration. Coercive methods have less and less value in either procuring or motivating labor. In addition, all kinds of manufactures and manufacturing processes are becoming more interchangeable, as they become more automated. The point towards which manufacturing is converging is the device which Arthur Clarke postulated in _Profiles of the Future_ (1963), the so-called "universal replicator," a kind of three-dimensional computer printer which can produce any object from a program. A given good or service can be produced almost anywhere, on increasingly short notice. An increasingly small community can manufacture everything it needs, trading information with the outside world and nothing else. In the long run, information is best exchanged by telecommunications, rather than by any kind of physical contact or travel.

If the World Trade Center had not been destroyed, it would nonetheless have probably been bankrupt within five years. The WTC would have had to compete with internet-connected office space in outer suburbia and small towns, costing only a tenth as much, or less.

The sum and total of all the forgoing trends is a raw materials and manufacturing economy which is not only immune to any kind of fundamental shortages, but which is also highly decentralized, and consequently immune to disruption or sabotage. In this new economy, possession of information is a sufficient condition for possession of wealth. The forgoing is hardly controversial in economic policy circles, but its military implications need to be considered.

For the time being, until the automation is perfected, it may be profitable to manufacture in backwards countries. But if someone invades the country, or starts a revolution, the manufacturer need not bother to do anything about it. He need only make copies of the blueprints, patterns, formulae, etc., kept safely at the main office or the research establishment in a developed country, and start a new factory in a new backwards country. But of course, in the long run, no human, however cheap, can compete with automation in routine work.

Of course, it is possible for someone to make off with technological secrets, or to use them in violation of patent rights, but to attempt to oppose this with military force is manifestly an exercise in futility. It is merely an invitation to the infringer to publish the information to all the world. In practice, however technical information depreciates rapidly. Wealth depends on having the ability to invent more technology, and to go in inventing it indefinitely. This means that wealth is ultimately a matter of recruiting, training, and cultivating highly skilled people. In this area, coercive methods are supremely ineffective, as was conclusively demonstrated by the economic collapse of the Soviet Union.

Thus, summing up the technological bases of our emerging economy, the only thing worth having is human imagination or creativity, something which does not lend itself to being taken by force. There seem to be fewer and fewer good economic reasons for fighting aggressive wars.

Furthermore, in many instances, the proper response to an aggressive war is not to stand and fight, but to withdraw beyond the aggressor's reach, leaving him in possession of substantially worthless real estate. There may be a role for "Dunkirk" operations. For example, let us suppose the Peoples Republic of China were to invade Taiwan. The only thing in Taiwan worth anything is the Taiwanese people. If they could be extracted and resettled somewhere else, any Mainland conquest would be a merely pyrrhic victory, especially if the Taiwanese did a fairly thorough demolitions job on their way out. In practice, realistic evacuation capability would probably be a substantial deterrent. This does not mean that retreat is the correct solution in all cases, of course. It does mean that, provided one evacuates the population, one can afford to retreat to a defensible line, such as a major ocean or a broad desert.

Something along these lines became apparent when Hong Kong reverted to China. The upper strata of Hong Kong society bought themselves western passports (a typical rate being $20,000 for a South American passport, rising to a million or so for a United States passport on short notice, via the large investor clause).

One persistent type of war has been terrorism. Terrorism constitutes the one small exception to the general rule that wealth and personal safety are equivalent. However, the nature of terrorism is that it only works when it not forseen, not only in the sense of specific attacks not being forseen, but in the sense of whole classes of attacks not being foreseen.

For example, the WTC bombing has already triggered a migration out of large buildings, and the city centers dependent on large buildings. A number of airlines are approaching bankruptcy, so emphatic has the shift away from air travel been. Of course, in both cases, the more fundamental cause was that skyscrapers, downtowns, and airlines could not compete with the internet as a means of exchanging information, and therefore, only a comparatively small push was required to ruin them. The postal service was also already in decline, due to the growth of the internet-- the anthrax terrorism is merely accelerating the process.

Specifically military anti-terrorism operations, such as hostage rescue, might justify a large country in maintaining a battalion, or even a brigade of Special Operations troops, but not an army.

In sum, remarkably few military operations pass the test of national interest in the age of information economies.

Andrew D. Todd
1249 Pineview Dr., Apt 4
Morgantown, WV 26505

adtodd@mail.wvnet.edu (formerly  U46A8@WVNVM.WVNET.EDU)

(**) To put the consequences of loosing the Bosnian war in human terms, I should like to cite April Saul's "Surviving Bosnia: Women and the War of Ethnic Cleansing" (Alternate title: "No Place to Be"), Philadelphia Inquirer Magazine, Philadelphia Inquirer, July 11, 1993, pp. 22-31. The propagation of the Balkan civil war has a good deal to do with the experience of destitution.

(***) See, for example, Jonathan Rauch's "The New Old Economy: Oil, Computers, and the Reinvention of the Earth," The Atlantic Monthly, January 2001. While, from the standpoint of an engineer, this article lacks something of the virtue of audacity (a quality much the same for an engineer as for a soldier), it nonetheless forms a good introduction for the educated layman. The use of computers and electronics in oil drilling has much the same kind of implications that radar had in 1940.