When our pediatric dentist told me a few years back that our adopted Chinese daughter was going to prematurely lose her top front baby teeth, it occurred to me that Wisconsin’s dairy industry was facing a long boom. A leap of logic, perhaps, but let this native “cheesehead” connect the dots on this stunning global-demand shift.
My wife and I adopted Vonne Mei when she was nine months old, by which time the fate of her baby teeth had been sealed by eighteen months of the diet in her native province of Jiangxi, part of China’s vast interior rural landscape. Being a “persona au gratin,” I was struck by the dearth of dairy in Jiangxi cuisine. There were poultry, pork, and vegetables galore, but few milk products and virtually no cheese. Butter seemed a luxury item. Think back to that childhood admonition: Drink your milk so you’ll have strong bones and good teeth! Well, Vonne Mei’s choppers turned out as brittle, as you might imagine, given that low-calcium diet. By the time we first noticed the large brownish areas on her front teeth, thinking they were plaque, it was too late. Our relatively high-sugar diet had destroyed what thin enamel our little Mei Mei possessed. Ten crowns and many procedures later, her top front four teeth were gone. Naturally, Vonne Mei’s diet is much improved here in the States, where calcium-rich dairy products abound. X-rays indicate that her permanent teeth will not suffer the same weaknesses. By adopting Mei Mei, our family radically elevated her up the global income chain, meaning she escapes certain medical liabilities associated with poor diet and picks up different ones associated with a rich diet, with the net effect being a longer, healthier—and somewhat “taller”—life.
Now consider India and China rapidly growing their economies, with upward of 2.5 billion people upgrading their diet as a result. For example, China’s per capita income has doubled in recent years, and Beijing’s leaders pledge to double it again over the next generation. As someone who has seen his own personal income rise like that over a similar time frame, let me say that I eat a lot better today than I did as a starving college student, not just more food but food of much higher quality. Invariably, Chinese and Indians are doing exactly the same, with the net effect being a huge increase in global demand for dairy products. The average Chinese consumed 11 pounds of dairy products per year a decade ago, but that number jumped to 51 pounds by 2006. Americans, by contrast, consume an average of 181 pounds of milk products a year, or the equivalent of 21 gallons. When a big chunk of humanity decides to quintuple its milk consumption over a decade, that triggers a profound global market shock. A 2007 New York Times article even went so far as to declare milk “the new oil,” noting that global milk prices had doubled since 2005, leading to “reports of cows being stolen on Wisconsin dairy farms.” So much for the feared “cheddar curtain”!
Now, here’s the trick on accommodating all that new demand. Unlike oil, dairy products are perishable, so dairy markets—like “all politics”—tend to be local. As the Times piece noted, “only about 7 percent of all the milk produced globally is traded across borders.” But with much greater Chinese and Indian demand coming online in the next decade or so, something’s got to give. Having worked on a dairy farm in my youth and lived for years with a nursing wife, let me present one inescapable fact about creating milk: It takes one heckuva lot of water. For the average dairy cow to produce nine gallons of milk a day, it needs to drink eighteen gallons of fresh, clean water, something booming China does not possess in abundance. China is already a top global milk producer and the world’s largest importer. With water tables dropping precipitously throughout the country, thanks to China’s prodigious use in both industry and agriculture, there’s little hope that the country can keep up with its booming dairy requirements, especially when you factor in the resource competition from the expanding domestic beef industry. China’s meat consumption has increased by more than 50 percent since 1995, higher than that of any other emerging market.
The upshot for my birth state, otherwise known as America’s Dairy-land, is that global milk prices increasingly surpass our subsidized domestic prices, meaning American farmers could dramatically increase exports without government support, something the dairy industry managed to do in New Zealand a while back. New Zealand, the “Saudi Arabia of milk,” exports dairy products to China like crazy. For the world’s major agricultural exporters as a whole, such trade expansion would only reemphasize that, as globalization’s advance triggers local resource constraints, nations are forced into greater economic interdependence—otherwise known as comparative advantage. Think about that whenever politicians propose turning America’s heartland into one giant ethanol plant as part of some quixotic quest for energy independence.
Globalization is going to need all the future farmers it can get. By 2030, world food production is predicted to rise by a whopping fifty percent, and hardly just in the low-end foodstuffs. That means we’ll need to continue and dramatically speed up our current “green revolution” through biotechnology, yet another issue where America will find itself more in line with rising New Core pillars (e.g., China, India, Brazil, Argentina, Chile, Australia, and South Africa) than with Old Core Europe and Japan.
Not only does this emerging global reality provide hope that the Old Core will soon abandon its ruinous agricultural subsidies, thus freeing the WTO’s Doha Development Round currently held hostage to them, it’ll also force the Old Core economies (including America) to both upgrade their current systems of food inspection and export them to other states in a bid to globalize such transparency. Again, given the high stakes involved (i.e., tainted food can close an overseas market permanently to your products), it won’t be enough to sample every nth portion. No, you’ll see the rise of pervasive and persistent scanning throughout the supply chain.
That may strike you as an implausibly expensive goal, but only because you’re thinking about this in terms of running every item past a choke point of scanners when the future of nanotechnology suggests a far different path. Nanosensors (atomic- and molecular-sized) can be clustered in the thousands on a tiny tag-emitter slapped onto every wrapped or boxed agricultural product (or sprinkled throughout bulk supplies only to be removed later in processing). The emitter only needs to be strong enough to signal the next one over, which then signals the next one over again, and so on, until larger sensors, placed along the supply chain, pick up the distress call. In short, we don’t need to run everything past some sensor; in the future we’ll simply embed nanosensors throughout the process. I’m not talking science fiction here; I’ve seen plenty of these nanosensors in my status as visiting strategist at Oak Ridge National Laboratory in eastern Tennessee. Australian cattlemen already do a simple version of this with their beef, using sensors to track every cow from birth to death in this manner.
Such biometric or genetic-mapping technologies represent the future of supply-chain management, including the processing of travelers whom we must always suspect of passing disease in this day and age. So don’t be surprised if these nanosensors are embedded through jetliners in coming years, triggering all sorts of new protocols, because the future of all such safety regimes is to move away from spot checks, like those in airport security lines, and toward environments with ubiquitous sensing. In this manner, what America should be doing right now is giving away such technology to any less wealthy nation that connects up to us on any level, making that a key component of future aid programs. By generating such “external improvements” for our trade partners, we heighten our own security while buttressing their ability to “fast-pass” their products and people into our system.
This would be the best kind of connecting aid, one that extends the transparency of our networks (think our national security community wouldn’t be interested in that?) while making sensor-dark portions of the global economy less opaque. As our sensor networks expand, driven largely by our own fears of what all this connectivity can do to us, less of the world will be able to remain off-grid and therefore attractive to transnational bad actors who prefer anonymity the vast m
ajority of the time. This is swamp-draining of the best sort: increasing our nation’s safety while bolstering its economic efficiency and therefore competitiveness. I say, don’t be frightened or dismayed when Wal-Mart starts hiring its own small army of intelligence officers. Instead, weave them and their growing capabilities into your system.
In an age when “worldsourcing” replaces outsourcing, all these know-your-chain rule sets are both inevitable and good. As Don Tapscott and Anthony Williams argue in their book Wikinomics: How Mass Collaboration Changes Everything, smart global firms are abandoning the multinational corporate model completely and turning themselves into systems integrators of entire production and buyer and even R&D chains. In moving in this direction, we see companies exhibiting the same sort of system-administrator approach long seen in the world of information technology, but now employing it upon the larger universe of the global economy, thanks to the rise of service-oriented architectural thinking: Anything that can be netted will be netted, and so services and even entire companies can be reconfigured around networks instead of networks merely being adapted to their existing structures. The principles of “wikinomics” are the same ones I’ve been preaching across these “realignment” chapters: Be open (connect!), treat peers as equals, and don’t force hierarchies (no primacy please!); share both technology and workloads (like those sensor nets I just described), and act globally whenever possible (i.e., make globalization truly global!).
Good grand strategy goes with the major flows of the age. It exploits the technologies that must appear instead of waiting on ones (like effective strategic missile defense) that may never appear. It tries to get in front of major resource and money flows, sensing that is where the future infrastructure will be built and thus where future sensor nets must go. It utilizes the undeniable forces of the era to effect its desired ends (e.g., ubiquitous sensing to drain the swamp), instead of asking local governments to leapfrog into capabilities not easily transferred, like democracy. At its heart, good grand strategy is both economically deterministic and technologically opportunistic.
THE NEW NORMAL: IN SEARCH OF NEW DETERRENCE
As someone who works with national security agencies and the military to figure out what their roles need to be in this age of rising connectivity, I can readily attest to the following dynamic: This community tends to bump into some new aspect of America’s rising interdependency with the global economy and then will immediately—and rather reflexively—declare the protection of that network a “national security requirement.” Since the community is already overburdened by ongoing operations and has a tendency to completely discount any private-sector efforts to protect such chains, this requirement is also immediately dubbed an “unfunded mandate,” meaning it would be nice to do but we don’t have enough resources. Public-private partnerships are pursued, mostly just conversations about the shared vulnerabilities (“Both you, the military, and we, this sector, rely on these networks!”), and in the end a certain amount of faith is extended in each direction, with the national security community hoping the private sector will do its part to keep these networks safe and the private sector assuming the military will show up and help out if some serious system perturbation erupts down the road. The rest, as the professional fearmongers say, is “pure chaos”!
But in truth, the two sides usually respond to such crises completely differently, so cooperation is hard to come by. The private sector responds to system disruptions by further decentralizing the networks—more workarounds equals more resilience. The national security community, however, does just the opposite: more centralization (“Get me a czar!”). The private sector wants a flexible rule set, able to change with circumstances, and the government favors a fixed, clear rule set, subject to periodic review. The private sector seeks to adapt itself to regular disruptions, the government seeks to deter them altogether. The private sector lives in a world of constant network breakdowns and break-ins (high-probability and low-impact events), while the government focuses on preventing low-probability and high-impact events. The private sector views globalization as being all about security—very non-zero-sum. The national security community still views globalization as being all about complicating defense—a very zero-sum dynamic. By and large, these two communities speak very different languages; I base this statement on my years of experience in each, with the private sector having left the Cold War completely behind, and the national security community still largely trapped in the Cold War mindset. All you have to do is check their respective views on China to verify this.
The search for “Deterrence 2.0,” as one U.S. Strategic Command 2008 workshop report (to which I contributed) on the subject put it, “is as much an emerging phenomenon as it is a sought-after method for dealing with both state and non-state actors in an increasingly interconnected world.” By admitting this, the report’s authors simply acknowledged that we’re still in the learning phase regarding globalization’s dense connectivity. We’re not sure what constitutes effective trust or realistic deterrence, or why some networks are inherently resilient while others are more brittle. We have a crude sense of firewalls, both technological and cultural. We search for the sensational scenarios even as we know that what we really seek is to understand the “dogs that did not bark”—the blasé outcomes that no one remembers because they weren’t considered truly disruptive. We want to fathom danger when what really matters is the mundane.
Because the Cold War’s defining conflict scenario was so binary (nuclear war happens or it does not), the national security community has a hard time translating concepts of deterrence into the globalization era: The interconnectedness of everything makes most threats of retaliation seem counterproductive—every response feeling like we’re cutting off our nose to spite our face (not a great competition with nihilists who have no expectation of winning, and whose reward is heaven). We seek to confuse and disinform terrorist groups online or to shame them within their real-world communities, and generally endeavor to make our response pattern highly unpredictable (“You just never know where we’ll be, do you?”). But all these responses seem so asymmetrical: our top-down planners against their bottom-up searchers, to recall William Easterly’s terminology. They capitalize on the “wisdom of crowds,” while we pool expert opinion. As someone who has worked with the intelligence community for years, I can’t help thinking that it is better off joining that which it cannot beat.
James Surowiecki, author of The Wisdom of Crowds, says the collective mind outperforms individual expertise when the following conditions are met: (1) there is a diversity of opinion in the pool; (2) there is independence among participants (no bandwagoning through implicit hierarchies); (3) the group is decentralized; and (4) there is some mechanism to aggregate opinions efficiently. When you hear those requirements, the first examples that may come to mind are gambling pools. But you could describe Wikipedia in much the same way. Indeed, it comes closer to the concept of a “central intelligence agency” than our own CIA—in its infinite secrecy—does. Ground truth, or the shared understanding of what’s actually happening in any unfolding event, is the most powerful source of deterrence (“We know exactly what you’re up to!”), and to be achieved, it must be assembled from a vast array of characters, none of whom retain control over their inputs. This is the essential problem of information sharing within the intelligence community (IC): ORCON, or “originator-controlled” information. When every participant in the discussion decides what others “need to know,” pretty much everyone ends up being treated like a mushroom (the IC joke being “You’re kept in the dark and fed a lot of shit”). The IC has most everything it needs to become a wise crowd: diversity (not a lot, but enough), independence (all agencies completely distrust one another), and decentralization (despite the creation of a director of national intelligence, each agency still largely goes it own way). What has been lacking up to now is a mechanism for aggregating opinion, because that mechanism requires the death of ORCON. The
good news here is that the IC is currently in the process of creating several such aggregating venues (e.g., blogs, social networks, an Intellipedia modeled on Wikipedia) that mirror much of what you and I currently enjoy on the Web today. My recent favorite nongovernmental offering is Wikileaks, which basically serves as a wormhole between the two communities—the secret and the unclassified. The Wikileaks motto—“We protect you and get your disclosure out to the world”—marks it as the Radio Free Europe of the surveillance age.
After we have flattened our intelligence community in this way, which will be incredibly helpful, the next step in improving our situational awareness is to connect our collective intelligence to on-the-ground reporting in countries of interest. Here, the blogging phenomenon provides a rich harvest (something I’ve spent some time over the years preaching to the IC). Not surprisingly, most of the countries we worry about are those that have half embraced globalization: allowing broadband connectivity while trying to control for content. China and Iran are two good examples. Naturally, both have vast and thriving blogging communities (funny how that works!) that remind me, quite frankly, of our own military’s burgeoning online community. A few years back, many regular soldiers and officers who were fed up with the pace of change in training began their own discussion groups to swap tradecraft in much the same way that Robb’s global guerrillas do, their lack of secrecy based on the notion that they weren’t discussing anything the terrorists and insurgents didn’t already know! Over time, the U.S. Army and Marine Corps have become smart to invite many of these online forums inside the “wire” of accepted military Internet traffic—yet another example of established behemoths buying up innovative start-ups.
If working their hearts and minds online is one strategy, and matching their decentralization is another, a third strategy for dealing with what Ori Brafman and Rod Beckstrom call “starfish” organizations (as in, regenerative) is to force centralization upon them. They dub this the “cow approach,” in honor of the U.S. Government’s tactic in the American West of giving nomadic Native American tribes (in one celebrated case, the Apache) cattle to force them into a more sedentary lifestyle, where rewards became less symbolic and more material. In short, when people have less, honor matters more, so attacking that social structure basically amounts to bribing them “down” to our level. What would constitute “cattle” today? Given the overwhelming demographic skew inside many Gap regions toward restless youth, I can’t think of anything better than MTV and iPods and cell phones for the connectivity, but—most important—decent-paying jobs for the lifestyle tie-down, because jobs allow young men to marry and start families. In a traditional society struggling to retain cultural coherence, nothing matters more for reducing the pool of idle young males.
Great Powers Page 39
