Balance of Power: The Five New Realities

Note: This is Part II of a series on the rise of non-state actors. For additional reading, beyond these posts, check out my book, Warlords, Inc: Black Markets, Broken States, and the Rise of the Warlord Entrepreneur.

Traditionally treated with a mass media omertà, the release last week of the Panama Papers broke the usual silence around transnational crime. Commentary, however, fell short of identifying how pervasive the influence of transnational crime is on our global political-economy.

As highlighted in my previous post, the modern institutions — nation-states and the international community — chartered with managing international peace, are challenged to combat the growing threat of violent non-state actors and transnational crime. Whether that threat come from drug cartels or terrorist organizations, it is reshaping the balance of power in global politics and security. At least five new realities now influence international affairs as a result. These new realities are inspired by Dr. Phil Williams’ work at the Strategic Studies Institute, who has identified them at a high level in several presentations and papers, but also represent key insights developed from my research for and editing of Warlords, Inc.

Reality #1: International security is more complex than it ever has been. When assessing the global security landscape, it is no longer sufficient to focus solely on nation-states. Today, violent non-state actors, both national and transnational, vie for political power and economic gain across a range of geographies and through a wide array of means. Threats to international security are now more diverse and more pervasive than they have been in the past. Such actors can challenge states’ traditional monopolies of violence, influence their control over markets, and in some cases supplant the state as arbiter of public good. While states may not be keen to negotiate with such actors, their pervasiveness today means that no state can act internationally without the consideration of non-state forces. Conversely, some states and state-sponsored bodies are keen to collaborate with such actors as ways to find new leverage or obfuscate activities. Inasmuch as, international security is now more complex than it has been, arguably, since the Westphalian peace.

Reality #2: The distinction between foreign and domestic security is gone. One cannot have homeland security in isolation from global security, and vice-versa. This is not true solely for the United States, but is the case internationally. As we see with the recent terrorist attacks in Paris and Brussels, and with the growing threat of continued acts of violence from the Islamic State throughout Europe, security issues span borders, political coalitions, intelligence agencies, and law enforcement entities. Managing aspects at one end of the security value chain means addressing variables across all other parts of the value chain, as well. Further complicating the coordination between these different parties are the issues of individual privacy and civil liberty concerns, which arise from the ostensible surveillance and monitoring of civilian communications. The advent of this reality is much less a matter of speculative tensions arising from issues like terrorism, than it is an inevitability resulting from the evolution of information technology and globalization, and is therefore worth distinguishing on its own.

Reality #3: States are not what they once were. Relatively few of the sovereign states represented in the United Nations can truly claim a monopoly of violence or an principal position to maximize the market opportunities for citizens within their territorial borders. This is a fundamental change that has been under-appreciated as a global phenomenon partly because the challengers have taken different forms in different parts of the world over the past half century. These forms include bottom-up pressures, such as tribal and ethnic groups, warlords, drug-trafficking organizations, street gangs, terrorists, militias, insurgents, and transnational criminal organizations. However they also include top-down pressures, a group Nils Gilman identifies as the ‘plutocratic insurgency’, such as tax-haven lawyers, currency speculators, and resource-extraction magnates. These actors use political leverage, economic position, and graft, to a attack the capacities of the state to limit or manipulate its functions for personal gain. In many cases these actors — both bottom-up and top-down — are challenging the state; in others they are cooperating and colluding with state structures; in some, the state is a passive by-stander while non-states fight one another. In several instances they are both fighting one another and confronting state structures that seek either to destroy them or to bring them under control. In all cases, the position and role of states must not only account for this type of activity, but adjust to maximize its abilities to protect its populations.

Reality #4: Non-states are everything that states are not. Non-state actors are inherently illegitimate under the traditional state-centric system. However, this does not mean they are not the source of alternative forms of governance or economic development. These actors, particularly, in regions where state-held governance is weak or overly repressive, frequently provide public services, enforce taxes, offer utilities, drive local economic activity, and maintain law and order. Additionally, such actors display many qualities that are difficult for traditional states to presently develop. Structurally, non-state actors are typically highly networked, transitional, flexible, rapidly learn from their mistakes, can embed themselves invisibly into existing financial-economies and other communities, and regenerate in a way that national policy-makers simply do not appreciate. This allows for threats such as terrorist organizations and drug cartels to both establish control within geographic boundaries, persistent and temporary, and have an outsized impact on their surrounding political-economic systems.

Reality #5: Globalization has dark sides. Fundamentally, the rise of non-state actors is a corollary of the growth of our modern, globalized economy. This depraved form of globalization, as identified by Nils Gilman, Jesse Goldhammer, and Steve Weber as “deviant globalization”, refers to the underground movement of human trafficking, drug dealing, gun running, cross-border waste disposal, organ trading, sex tourism, money laundering, and transnational gangs. Entrepreneurs in this space create enormous profits while extruding inefficiencies from huge markets, and they often go to extreme lengths to drive new business ventures to success, placing their economic livelihood and sometimes their lives at risk. With access to global industrialized systems, but at fractions of traditional costs due to information technology, these actors can rapidly launch, scale, and develop influence in a fashion similar to a Silicon Valley start-up. Brought into the context of international trade and diplomacy, this underside of globalization has become both an engine for economic development and a tool for political power. It is used by cartel overlords and heads of state alike to achieve their crooked goals — from weapons distribution to money laundering — by any means necessary.

So what?

This new balance of power now requires that states, corporations, and non-governmental organizations find new means of coordinating policies, capabilities, and actions to counteract the rise of non-state actors. Activities must not only be coordinated across a dizzying array of transnational entities, comprised of multiple organizations with differing objectives and responsibilities, but adapt to new techniques employed by the world’s criminal organizations.

For those working internationally — businesses, governments, and INGOs — this shift creates additional friction between state, state-backed, and private institutions trying to establish detente and strengthen foreign policy and operations. In turn, it has become a means through which non-conventional, non-state actors grow more influential and problematic for the global political-economy.

This means, essentially, no matter who you are or what your commercial focus is, it’s no longer expedient to simply ignore the problems that non-state actors and transnational crime, whether they be terrorist groups or tax-haven lawyers, pose. As revealed in the Panama Papers, these challenges reach even the top of our society, and stand to impact each and everyone one of us.

Further analyzing and addressing these issues will be a key focus of this blog moving forward.