“The only time I’m not thinking about Palantir…”

If you’re not following Palantir, it’s on track to be one of the most important new American firms in geopolitics and security, and it just launched its IPO on September 30. (For what it’s worth, my buy stop is around $12 right now.)

Founded by real-life Ozymandias and California Ideology archon Peter Thiel, and governed by Freud Institute-bloodline parvenu Alex Karp, Thiel has said it will be every bit as important as Facebook is today.

Reading this profile of CEO Alex Karp, in which Karp laments his loss of anonymity and all its hedonistic red-light opportunities, while building a billion-dollar big data company to empower clients like the CIA, reminds me of a quote from Getting Straight.

Why haven’t you learned anything?

It’s all there, it’s all there in Toynbee and those books on the shelf!

Suppression breeds violence!

You’re going to raise the curfew an hour?

Will you look outside?

You see that kid?

Last week he just wanted to get laid.

Now he wants to kill somebody!


  1. Same old story, same old song and dance Johanna Möhring, War on the Rocks
  2. Why Britain Brexited Tom McTague, the Atlantic
  3. Is it rational to vote? Julia Maskivker, Aeon
  4. Large countries and bad government Arnold Kling, askblog

Eye Candy: travel advice for Dutch citizens

NOL Dutch travel advice
Click here to zoom

Interesting map, for a few reasons. The United States is in green, which means there are “no special safety risks” to worry about. What I take this to mean is that as long as you stay out of, say, North Sacramento, or East Austin, when the sun goes down you’ll be safe.

The “pay attention, safety risks” label makes quite a big jump in my conceptual understanding of this map. What this warning means is that if you are particularly stupid, you won’t end up getting mugged and losing your wallet (like you would in green areas), you will instead end up losing your life or being kidnapped for ransom (or slavery).

This is quite a big jump, but it makes perfect sense, especially if you think about the jump in terms of inequality and, more abstractly, freedom.

A short note on the riots in Jerusalem

Big, violent riots in Jerusalem (July 22-23 2017). Last week, three Arabs Muslims with Israeli nationality killed two Israeli policemen in Jerusalem. Reminder: All of Jerusalem is under the control of Israel, has been since 1967. Before that, under Jordanian rule, Jews were banned from the Old City. The broader city today has a diverse population that includes Jewish Israelis, Muslim Israelis, a few Christian Israelis, Palestinian Muslims, a handful of Palestinian Christians, plus a constant flow of visitors from abroad. In addition, most Palestinians from the adjacent West Bank are allowed to visit on a controlled basis, for religious purposes only.

Israel gained control of Jerusalem in 1967 the same way the Muslims did in the seventh century: Military conquest legitimized by Sacred Scriptures.

As we all know, Jerusalem is a sacred city to several religions including Judaism, Christianity and Islam (by order of historical appearance). At the center of the preoccupations of the three monotheistic religions is a place called the Temple Mount. It’s the spot known as the last Jewish temple, destroyed by the Romans in 70 AD (or “Common Era”). The supposed last vestige of the Jewish Temple standing is the Western Wall (also, “Wall of Lamentations” for Jews) where Jews from everywhere, including Israel come to pray. The Christian Gospels show Jesus visiting the same temple several times including shortly before his crucifixion. Muslims revere the area because the Prophet Muhammad is said to have started there his whirlwind “Night Visit” to Heaven. It’s so important to Muslims that they built there not one but two mosques after they conquered the city in 630. One of the two mosques, the Dome of the Rock, is supposed to have been established over the place where Abraham sacrificed his son (one of his sons, not the same son, depending on which religious tradition).

Now, Jews are forbidden by Israeli law as a well as by some rabbinical religious decisions to visit the area occupied by the mosques. It is administered jointly by a Muslim clerical organization and by Jordan (Reminder: Jordan is an Arab country with a peace treaty with Israel.) Two consequences. First, frictions between Jewish worshipers and Muslim worshipers in the area are rare although they pray within a stone throw of each other. (Metaphor not chose at random.) Second, the top of the Temple Mount, the largest part of the area where the two mosques stand, is very seldom visited by Jews at all. It’s overwhelmingly used by Muslims, day in and day out. Repeating: If you threw a stone in the air on an average day while standing in that area, it would fall down on a Muslim or on no one at all. (Christians seem to not be much interested in visiting that particular spot.)

Following the assassination of two of its policemen last week, Israel took common sense security measures against repeated acts of terrorism in the Temple Mount mosques area. By the way, the two Israeli policemen assassinated were not Jews. They were Druze, people whom some Muslims consider Muslim and many not. No one, at any rate, thinks Druze are Jewish. The fact is that the assassinated police officers were working security in or near an area frequented by devout Muslims, rather that one of the many more numerous Israeli Jewish policemen (or worse, policewomen). This suggests to me that official Israeli policy was reasonably alert to Muslim faithful’s sensitivities.

The Israeli authorities took two new security measures (amazingly late in the game, if you consider the volatility of the area). They installed both surveillance cameras and metal detectors on the access points to the mosques esplanade. That’s was precipitated the rioting and yet more deaths, plus, the formal declaration of the Palestinian Authority that it was stopping all contacts with Israel (of which, more later). Now, I can sort of understand the Palestinians’ objection to the cameras. Many must imagine that Israel will use the film to spy on them further although it’s difficult to see how or what that would accomplish beside identifying criminals after the fact. The metal detectors are the same tools in place in almost every airport in the world. They can help intercept guns and knives.

Refer back up to the description of who spends time in the mosques area: Muslims. So here you have it: Palestinians, who have to be almost all Muslims, are rioting violently to protest security measures that will protect…Muslims. What serves as their government, the Palestinian Authority, cuts off contact with Israel also in protest. But Israel acts as a customs office for the said Authority. It collects monies on its behalf and faithfully hands them over. Palestinians protest common sense Israeli action that protect them by making it even more difficult for their government to do its job. By doing so, they create more of a vacuum, that Israel will, of necessity, have to fill.

Some Palestinian leaders think that if they force others to shed Palestinian blood very publicly, the world is going to take pity and come and impose the kind of settlement they want. The calculus is going on seventy years old. If you keep doing the same thing over and over again and it never works….

A personal note. I have had several Palestinian friends; they were easy to like for their warmth, for their courtesy, for their generosity. That’s on the one hand. I also think Palestinians are victims of history; that they have been paying for seventy years for the crimes of others. On the other hand, I have not much appreciated the Israelis I have known. They tend to have the smoothness of raw alligator skin, pretty much what you would expect of people reared in a garrison state. Politically, however, it’s very hard to be a friend of Palestinians. You try  and try, and then, they go and do something insane like this.

In case you wonder: I am not Jewish, never have been. I was raised a Catholic and I have been religiously indifferent as far back as I remember. I know my Bible pretty well (Old and New Testament). I try to study the Koran. It’s tough going because I am usually told that the translation I can understand is not legitimate. I am familiar with the Hadith second-hand (like most Muslims actually because few know Arabic).  I listen to Tariq Ramadan, a cleric or a philosopher connected to the Muslim brotherhood who speaks beautiful French and who seems to have made it his mission to explain Islam to intelligent and educated infidels. (That would be me, for example.)

BC’s weekend reads

  1. the Economist endorses the Liberal Democrats in UK election (in Europe, a liberal democrat is roughly the same thing as a libertarian in the US)
  2. One of the most important lessons of Trump’s success is that classically liberal rhetoric and positions were not very important to voters.
  3. It turns out that Westerners are rational, virtuous, and liberty-loving, while Orientals are irrational, vicious, and slavish.
  4. The West is indifferent to Afghanistan and Iraq’s world of terror
  5. Roman slavery, revolution, and magic mushrooms
  6. What the fuck?

A hidden cost of the war on drugs

AI just completed another paper (this time with my longtime partner in crime Vadim Kufenko) where we question an hypothesis advanced by Samuel Bowles regarding the cost of inequality. In the process, we proposed an alternative explanation which has implications for the evaluation of the war on drugs.

In recent years, Samuel Bowles (2012) has advanced a theory (well-embedded within neoclassical theoretical elements while remaining elegantly simple) whereby inequality increases distrust which in turn magnifies agency problems. This forces firms to expend more resources on supervision and protection which means an expansion of the “guard labor force” (or supervisory labor force). Basically, he argues there is an over-provision of security and supervision. That is the cost of inequality which Bowles presents as a coordination failure. We propose an alternative explanation for the size of the guard and supervisory labor forces.

Our alternative is that there can be over-provision of security and supervision, but this could also be the result of a government failure. We argue that the war on drugs leads to institutional decay and lower levels of trust which, in turn, force private actors to deploy resources to supervise workers and protect themselves. Basically, efforts at prohibiting illicit substances require that limited policing resources be spread more thinly which may force private actors to expend more resources on security for themselves (thus creating an overprovision of security). This represents a form of state failure, especially if the attempts at policing these illicit substances increase the level of crime to which populations are vulnerable. To counteract this, private actors invest more in protection and supervision.

Using some of the work of Jeffrey Miron and Katherine Waldock, we show that increases in the intensity of prohibition enforcement efforts (measured in dollars per capita) have significant effects on the demand for guard labor. Given that guards represent roughly 1 million individuals in the US labor market, that is not a negligible outcome. We find that a one standard deviation increase in the level of drug enforcement efforts increases the ratio of guards to the population by somewhere between 12.92% and 13.91% (which is the equivalent of roughly 100,000 workers).

While our paper concentrated on proposing an alternative to the argument advanced by Bowles regarding the cost of inequality, we (more or less accidentally) measured a hidden cost from the war on drugs. The insecurity (increased crime rates and spillovers from illegal markets into formal markets) brought forth by drug prohibition  forces an over-provision of security and supervision (our supervision measure which includes workers that supervise other workers were smaller than with the security guard measure).

Basically, a hidden (private cost) of the war on drugs is that we must reallocate resources that we could have used otherwise. Its a little like when I say that it is meaningless to compare healthcare expenditures to GDP in Canada and the United States because Canadians assume costs in a hidden manner through rationing. Waiting lists in Canada are longer than in the US. The cost is lost wages and enduring pain and that cost will not appear in measures of expenditures to GDP. The war on drugs works the same way. There is a fiscal cost (expenditures dedicated to it and the taxes that we must impose), there is a crime cost (destruction of lives and property) and there is a reallocation cost of privately providing security which is hard to measure.

*The paper is available here. 

The Re-Privatization of Security (World Peace edition)

Sean McFate, a political scientist at National Defense University in Washington, DC, has a fascinating article in Aeon about the reemergence of mercenary and quasi-mercenary security firms throughout the world. The whole article is fulfilling throughout, especially if you’re a well-read anarchist or a history buff, but I wanted to highlight this tangent:

With the fall of the South African apartheid regime, unemployed soldiers from special forces units such as the 32nd Battalion and the Koevoet (‘crowbar’ in Afrikaans) special police formed the first modern private military company, appropriately named Executive Outcomes. Unlike WatchGuard, Executive Outcomes was not a military enterpriser but a true mercenary firm, waging war for the highest bidder. It operated in Angola, Mozambique, Uganda and Kenya. It offered to help stop the genocide in Rwanda in 1994, but Kofi Annan – then head of UN peacekeeping – refused, claiming ‘the world may not be ready to privatise peace’. Annan’s was an expensive ideology, given the fact that 800,000 people died. By 1998, the company closed its doors, but the mercenary market for force surged.

Two aspects are important here, one said and one unsaid. First, the unsaid. If this mercenary outfit was “waging war for the highest bidder,” why did it offer to go in to Rwanda to stop the bloodshed? I think scholars assume the worst when it comes to stateless actors and warfare. Why has Anheuser-Busch begun shipping free cans of water into Flint, MI? Why does Wal-Mart donate billions of dollars to charity? When it comes to reputation, costs may sometimes not make sense to outside observers who don’t have a sufficient understanding of benefits. Why on earth would a corporation built solely to wage war for the highest bidder be interested in offering its services to a country that would not be able to afford its services? To ask the question is to answer it, of course, but understanding incentives using a costs-benefits framework requires more effort than you might suspect.

There is simply no logical coherence to the idea that, in a world where stateless mercenary firms are the prominent form of security, violence and lawlessness will reign supreme; nor is there any evidence whatsoever to suggest that “[m]ore mercenaries means more war, as they are incentivised to start and expand wars for profit, and turn to criminality between contracts.” Indeed, as McFate notes in his excellent article, the market for security is already becoming freer and while he ends his piece on a depressing note, lamenting this indisputable fact of the present-day world, I couldn’t help but remember the now-famous graph on battle death trends produced by political scientist Jay Ulfelder (using data from the Uppsala Conflict Data Program [UCDP]), which illustrates nicely the overall decline in deaths due to warfare violence around the world:

blog battle deaths
Notice that the most deadly conflicts are the ones involving states with armies that had been nationalized?

The always excellent Max Roser and his Our World in Data project has another graph worth highlighting, with this one using data from Steven Pinker’s The Better Angels of Our Nature… and the UCDP:

blog battle deaths pinker data

Now, two graphs showing that deaths from warfare have been in decline for half a century does not necessarily mean that a freer market in security services has led directly to this overwhelmingly good news. I am confident in claiming, though, that the freeing up of security services markets, combined with the steady presence of a few, still-powerful nationalized armies has led to a reduction in war-related deaths (and violent conflict in general). Both graphs illustrate well what happens when there are too many nationalized armies vying for power and prestige. (It is worth noting here that the main goal of diplomats and policymakers everywhere, no matter their ideological orientation or citizenship status, is still to avoid another world war.)

Second, the said. Annan’s refusal to decriminalize mercenary activities led directly to the 800,000 Rwandan deaths. How is this moral failing any better than when a mercenary firm breaks its contract and ends up killing a few dozen more people than it was supposed to? Again, the graphs are useful here: When conflict is nationalized, everybody suffers; when it is privatized, atrocities happen but not on the same scale we have seen with nationalized conflicts. It’s not even close. Annan’s short-sightedness reminds me of economist Scott Sumner’s 2012 summary of Hillary Clinton’s view of the War on Drugs:

[…] in response to a final question on drugs (from a Latin American reporter), she said drug legalization would do no good because drug dealers are really bad people, and they would simply do other crimes. No discussion of how America’s murder rate fell in half after alcohol was legalized in 1933.

Like drug use, the privatization of security services causes many people, well-educated or otherwise, to bristle at the notion without quite thinking through its logical implications. While ugly, mercenary firms are far more efficient and effective at quelling “bush wars” than are nationalized armies and, in turn, mercenary outfits are far less capable of sowing the type of destruction that nationalized armies routinely carry out.

I don’t think that a world with a few nationalized armies and an abundance of mercenary firms is necessarily the best option going forward, though. It is, however, a better option than most scholars and analysts give it credit for. In fact, it’s the best option at the moment, and while the status quo may sometimes be ugly, remember the graphs. Privatization of security services has contributed, at least in part, to a more peaceful and less violent world.

In order to move forward from this status quo it is best not lament the way things are going, but to acknowledge that things are the way they are for a reason, and then look for avenues to alter the status quo without falling back on a blanket policy like nationalizing security services again. The horrors of the World Wars should still be fresh in our minds, and the horrors of those wars were enabled and encouraged by nationalized security forces.

The best way to move forward is by looking at where these “bush wars” are taking place and begin thinking about ways to incorporate these regions into the global order (such as it is). This policy represents a departure from traditional post-war thinking about international relations, but it doesn’t make it radical or unfeasible. Indeed, there is a long tradition of republican thinking in Western thought pertaining to international relations. The West needs to start recognizing the legitimacy of secessionist sentiments in the post-colonial world, even if it means friction with Russia and China.

Washington and Brussels will have to endure charges of hypocrisy when it comes to ignoring the lobbying efforts of places like Tibet and Dagestan, but Biafra should have become a member state of the United Nations long ago. Baluchistan should have access independent of Pakistan and Iran to the IMF and World Bank. Two or three soccer teams from the region known as Kurdistan could easily be present in all major FIFA tournaments. Examples abound throughout the world. The West should also be open to recognizing arguments made by Russia and China for the independence of regions. There is no good reason why Western diplomats should ignore Moscow’s recognition of places like South Ossetia and Donetsk; doing so only hardens Russia’s stance on recognizing secession in parts of the world where its influence is limited or non-existent and forces the West into bed with unsavory post-socialist regimes.

The West needs to start being more inclusive when it comes to its own federal and republican institutions, too. Morocco, for example, should have had its 1987 application to join the European Union taken seriously (same goes for Turkey). The US federation needs to be actively courting polities like Puerto Rico, Coahuila, Alberta, and Micronesia to join the union. Both the EU and US are contracts designed to dampen violent conflict by fostering diplomatic, economic, and cultural intercourse between provincial polities. The reasoning behind exclusionary policies simply doesn’t answer why these republican, supranational organizations should not be actively recruiting neighboring or geopolitically useful administrative units into their representative systems.

Without this change in mindset the status quo will continue, which again if we remember the graphs is not all that bad, but something worse may happen: There could be a reversion to the blanket nationalization of security services that we saw during World Wars I and II.

From the Comments: So what should the US do with Syrian refugees?

There have been a number of excellent discussions in the ‘comments’ threads recently. I have been following them all, but I’m trying to space out, for beauty’s sweet sake, what I think are especially good insights here (my fellow Notewriters are welcome to do the same).

Dr Khawaja’s answer to Dr Delacroix’s question about what he would do “with respect to the Syrian refugees coming to this country” is worth another look:

I would do exactly what the Obama Administration is doing. Let the Syrian refugees in, vet them, and accept the risks. I more or less said that in one of the links I posted [here – BC]. Here’s the vetting procedure, by the way:


I haven’t heard anyone explain what’s wrong with it. Its rigor far exceeds anything applied to student visas or tourist visas.

As for the “Zionist extremists who helped during the war of independence,” the Irgun and Lehi were by all accounts terrorist organizations. They began a campaign of terror well before the war of independence. Their doing so was instrumental to bringing about the mass exodus of Palestinians from what was to become Israel. The Irgun was led by Menachem Begin, who was later to become Prime Minister of Israel. In other words, Israel was not only founded by terrorists, but the Israelis had no compunction electing the self same terrorists to lead their country in subsequent years (Shamir and Sharon being the other two).

I don’t know where you get the idea that “the Jews that the US failed to take in before WWII were German Jews.” Why couldn’t they have been, say, Polish or Russian? And where is the difficulty in imagining militantly communist or fascist Polish or Russian Jews?

“I think it’s not difficult separating Muslims from Christians. Boko Haram does it all the time.”

Well, if we’re going to use arguments like that, why don’t I just say that it’s not difficult separating terrorists from non-terrorists. The TSA does it all the time. Now, if you’d like to propose that we start hiring members of Boko Haram for positions in the TSA, I’m skeptical, but all ears.

I should point out that in one of the posts I pasted up there, I was the one pointing out to someone at my blog that there is no eliminating the risks if we allow the Syrian refugees in. The risks are ineliminable. But I live in the New York City area. I go in to Manhattan whenever I get the chance. If there is a terrorist attack, it’s likely to take place right here. It’s not as though I’m merely imposing risks on other people and cowering somewhere else in safety.

Well? Is the vetting process as it stands good enough? Without reading the link Dr Khawaja provided, I feel confident claiming that it is. Violent criminals shouldn’t be allowed into this country (unless the crimes were committed a long, long time ago), of course. Sex offenders is too tricky a topic to deal with right now (think about getting in trouble for mooning in Russia or something like that), but if the crimes weren’t violent I’d opt for a let ’em in and wait approach. Terrorists of the Islamist variety that come from failed Arab states tend to be good boys at home. What about people with military backgrounds? What about the fact that states in the Arab world have laughable bureaucracies and that records should be taken with a big ole’ dose of salt?

Irfan hasn’t had the pleasure of knowing Jacques as long as me or Dr Terry, so his responses are bit more polite and more serious than what we tend to throw at him now. I forget sometimes just how important obstinate, bellicose ignorance can be for igniting important dialogues (Donald Trump, anyone? Bernie Sanders?).

On a slightly different note: I wonder if the uncomfortable fact that some of Israel’s founders were terrorists, coupled with the fact that Israel is the most successful state in the post-Ottoman world today, is an unacknowledged reason why Arabs have turned to the same tactics today. Why would anybody want to copy a failure, after all?