ISIS and radical Islamic terrorism are a threat to the Western world. And so far, we have not really developed any serious defense mechanisms to deal with it. Rather, we are mostly just reacting to seemingly random events.
My friend Dr. Woody Brock is one of the most brilliant game theory specialists that I know. He regularly applies game theory to economics and investing. Here, he analyzes the conflict between the West and ISIS. He says that because of our very values, we end up playing the “game” in a way that leads us to continual frustration.
Abacab Fund Sees Mispricing In Options As Black-Scholes Has Become “Inadequate”
Abacab Asset Management's flagship investment fund, the Abacab Fund, had a "very strong" 2020, returning 25.9% net, that's according to a copy of the firm's year-end letter to investors, which ValueWalk has been able to review. Commenting on the investment environment last year, the fund manager noted that, due to the accelerated adoption of many Read More
If Woody is right, we in the West are playing the wrong game. That is something to think about as we go into elections… not just in the US, but all over Europe. What game theory will the leaders we elect operate under? Seems a reasonable question to me.
I am extremely uncomfortable with some of Woody’s conclusions, especially when it comes to abrogating the rules of the Geneva Conventions. However, it makes for a far more open discussion if everything is put on the table so that we can examine the issues from all sides.
The Islamic Hatred of Modernity
Dr. Woody Brock
“Not free thought for those that agree with us, but freedom for the thought that we hate”
—US Chief Justice Oliver Wendell Holmes, Jr., 1929
Terrorism is here to stay, and it is now beginning to impact the economic performance of many nations—in particular, the performance of the service sector. In this brief Memo, we set forth a few thoughts about what underlies this phenomenon, and what to do about it.
ISIS versus Modernity and the West
Relative Power of ISIS versus Europe: The usual determinants of relative power (e.g. wealth or the size of an army) are not very relevant to assessing the struggle between ISIS and the West. [By ISIS, we refer not only to ISIS proper, but to any of its affiliated groups as well.] For the conflict is less a militaristic one than it is a war of nerves between Jihadists who carry out scattered sting operations, and Europeans and Americans lacking both the will and the coordination to properly respond. An additional source of Jihadist power stems from their status as “True Believers,” making them a very dangerous kind of opponent. Their moral certainty immunizes them against normal threats such as being killed. The number who do not fear death is sufficient to spell trouble for decades ahead.
What is it that makes these extremists so morally superior and so hateful of the West? In part, their superiority stems from their absolute faith in the truth of the teachings of the Koran. But this is only the tip of an iceberg of hatred. For their religious convictions are amplified by their detestation of the cultural, economic, ethical, and political values of Westerners. At a deep level, their terrorism stems from their hatred of modernity itself. We in the West are seen as weak and morally dissolute. For not only do we possess no religious fervor, but we lack moral resolve of any kind due to the anesthetizing effects of our materialistic, welfare-based social system. Such ethical values we have stem not from fear of any God, but rather from an attachment to mushy concepts of “fairness” ranging from the “right” to nine weeks of vacation, to the right to never be drafted to fight a war. In the US, citizens’ erstwhile chant of “give me liberty or give me death” has morphed into “give me liberty or give me a latte.” All in all, ISIS’ conviction of holding the moral high ground is a major source of their power over the West.
Reinforcing this power of fundamentalists is their strategy of implementing fragmented hit-or-miss strikes. They specialize in ongoing, unnerving terrorist attacks in public places. The West’s superiority in the number of security personnel and in intelligence-gathering does little to prevent these random attacks, which can occur in hundreds of different emporia. In this regard, it is sobering that more than 5,000 EU-based fighters have already been to Syria for training in terrorist tactics, according to the US-based consultancy Soufan. This number will grow given the poor economic conditions in Europe, where the unemployment rate of males under 30 exceeds 25% in many nations.
Finally, today’s ongoing Jihadist attacks are concurrent with the new European immigration crisis. Given the implications of soaring immigration for tighter border controls, the increasing threat of Brexit, and problems endemic to the Euro, it is likely that the EU as we have known it will cease to exist. There will then be no semblance of any “unified” EU stance against ISIS. Instead, we will observe fragmented and ineffectual responses as well as the suspension of many civil liberties now taken for granted.
This brief analysis suggests that the power of ISIS against Europe is much greater than might appear to be the case, despite Europe’s greatly superior power as traditionally measured.
A War against Modernity: The importance of the culture war underlying the Jihadists’ hatred of Westerners cannot be understated. In their eyes, we are modernist devil worshippers. Women should be kept at home, devoid of any rights. They should be virgins when they marry. Adultery is a sin punishable by death, as is homosexuality. The fact that many citizens of Muslim nations do not share these views does not seem to matter. Consider Iran: the majority of the people value democracy and even look favorably on the US. But so what? The Mullahs and the Red Guard rule with an iron fist, as we have seen during the recent elections when the candidates favored by most voters were stricken from ballot lists. Moreover, Iran’s autocratic leaders are out in front in an effort to fund terrorist groups, in one form or another.
Consider the words of the eminent Simon Schama in a recent March 26 Financial Times Op-Ed piece:
We are not talking fine points of Shia-Sunni theological controversy here. By every means possible, Isis is at pains to let us know they will kill as many of us as it takes to sow such mayhem in the heartland of the kaffir world that it will be impossible to resist mobilizing the “Crusader” army for the promised apocalyptic showdown out of which the Caliphate will emerge forever victorious.
Also consider the comments of Professor R. Vaidanathan of the IIMB in Bangalore:
Radical Islam is not fighting Christianity—which anyhow is dead in Europe—but it is fighting modernity. Islam is frightened of modernity destroying their religion and culture, however unacceptable this culture may be to European liberals…
Europe thought—à la Merkel—that they can buy peace with radical Islam by “requesting” them to integrate. But integrate with what? Integrate with “immoral Europe” where women are exhibited as “open meat” [in the words of the Australian Imam] who are “poisonous.” [https://rvaidya2000.com/2016/03/23/idea-of-europe-is-dead/]
Contrast ISIS’ moral resolve with the pusillanimous attitude of Westerners. Most assert their disapproval of fundamentalism, of course. But their live-and-let-live attitude sees it as a “right” for people to “express their views” and espouse any religion they wish—including the Religion of Hate. The problem with this view is that the Religion of Hate is unlike any other religion in espousing the murder of all non-believers. Excessive tolerance further undermines the will of the West to fight back against Jihadism in a resolute way.
How the West Can Best Deal with Fundamentalism—Insights from Game Theory
In game theory, there is a fundamental distinction between positive-sum bargaining games and zero-sum games. In bargaining games, it is assumed that both sides can be better off by agreeing on a way to “divide the pie” instead of playing their optimal threat strategies and ending up with no pie—or worse. All such games are positive-sum in nature. In a zero-sum game, however, there is no pie to divide, and no bargaining compromise is possible.
Most of the analyses of how the West should confront fundamentalism fail to make this all-important distinction. Analysts implicitly assume that negotiation strategies exist, strategies that will somehow end up with an acceptable compromise. President Obama’s stance towards Iran, Russia, and China offer examples of this approach. In all three cases, he turned the other cheek and attempted to “reset” relations with these nations expecting they would reciprocate. All would end up better off. But his antagonists ended up taking full advantage of his weakness, reneged on many agreements, and made Obama look as incompetent at bargaining as he has proven to be.
Professor Schama is right in his comments above. He is stating that, in effect, we are playing a zero-sum game. ISIS wants nothing from us in exchange for something. They simply want to destroy us. Analogously, Iran has no intention of settling with Israel. Its stated goal is the elimination of Israel. In such cases, the optimal strategy (for the West) is to identify the enemy’s vulnerabilities, and having done so, to sow as much grief and pain as possible. The fact that the enemies are scattered and that some of their recruits are happy to blow themselves up does not relieve us of the responsibility to hit where it hurts: recruits that do not wish to die (the vast majority), all training camps (we know where some thirty of these are located), family members, etc. We must pursue such targets both on their home ground, as well as within the EU and the US. There is also the question of how to extract intelligence from terrorist murderers who are captured. Just as an intelligent economist does not believe in free trade for a nation unless other nations follow suit, likewise enemies should be treated in accord with the Geneva Conventions only if they themselves adhere to them—adherence enforced by, say, an effective United Nations if one ever exists. Saying this is, of course, politically incorrect in the extreme. But reality beckons.
The currently fashionable suggestion that what is needed is “for Europe to better ‘integrate’ immigrants” is as vacuous as the citations above assert. Most immigrants want to and are able to integrate over time. They end up great assets of the nations they immigrate to. But as a matter of faith, the bad guys will never integrate into that world of sinners they hate. The West needs a coherent, broad-based, long campaign dedicated to destroying every aspect of terrorist operations. This need not imply a decade with large numbers of troops on the ground. But there will be phases requiring such a presence. Just consider what Russia achieved in its recent and relatively mild strategy against the opposition to the Assad regime. They hit hard, it worked, and they have now pulled back—for the moment. Their effectiveness yet again renders the indecision of President Obama a national embarrassment.
Within Europe, security must of course be tightened, but not at the expense of the crippling day-to-day economic life of people—precisely the outcome ISIS seeks. Leaders should encourage a much more stiff-upper-lip response by citizens than they have.
Political Correctness and the Lack of Sense of Humor in All True Believers
There is one common denominator of all True Believers, namely a lack of sense of humor. This is as true of terrorists as it is of today’s political correctness police in the US, spearheaded by those who traffic in wooly ideas about gender and class. What is happening on US campuses is outrageous and recalls the moral absolutism espoused by Jihadists overseas. Freedom of speech is being seriously abridged, as are rights of free association. To repeal the right to free speech, all that is needed is some belief that certain comments are “inappropriate,” to use the word of the moment. “Trigger notices” warning that eight Shakespeare plays should not be taught constitute a reductio ad absurdum on the part of university heads. As for the rights of male students to a fair hearing in the case of alleged sexual harassment, hyper-risk-averse “administrative panels” now serve as prosecutor, judge, and jury. There is often no way for an accused male student to receive a proper defense. When the right to self-defense is abridged, it is time to vacate the new status quo.
What US Chief Justice Oliver Wendell Holmes wrote in 1929 about the all-important right of freedom of thought and speech (cited at the opening of this essay) remains as true today as it was eighty-seven years ago. Silencing people who say things you do not want to hear amounts to a surrender to oppression. If the PC police resent this reality, they should perhaps recall the words of President Truman: “If you can’t stand the heat, get out of the kitchen.”
Subscribe to John Mauldin’s Free Weekly Publication
Each week in Outside the Box, John Mauldin highlights a thoughtful, provocative essay from a fellow analyst or economic expert. Some will inspire you. Some will make you uncomfortable. All will challenge you to think outside the box. Subscribe now!