In the mil-speak du-jour Deterrence/Application of Irregular Threats is about much more than just kinetic operations; it also requires a robust, concurrent, and effective non-kinetic component.
On a macro level the intersection between basic human nature and the just allocation of necessary resources, aka
politics, can be a very messy and high stakes business. Taking a Western-Centric viewpoint I have a few questions. Will British MEP Sharon Bowles be able to convince the European Parliament’s Committee on Financial Regulation that since 80% of Europe’s Hedge funds are in London that it’s best for EU Regulations to follow the voice of experience? Will, or should, George Osborn be able to abolish the British Financial Services Authority and beef up the Bank of England’s regulatory portfolio? Will helicopter Ben be able to shape and define the appropriate roles for the US Federal Reserve and Securities Exchange Commission? Where do Sovereign Wealth Funds fit into all of this? Depending upon how these questions are resolved will determine whether or not society’s capital will be efficiently applied in order to Deter Irregular Threats so that we may continue to enjoy our shared prosperity.
On a decidedly more micro-level when things are quiet, security is good, and electricity & clean water are plentiful it's fun to slowly build binomial asset pricing models, continuous time models, monte carlo models, and quasi monte carlo models using Excel spreadsheets (thank you
Steven E. Shreve and
Simon Benninga) and dream about having the time to use Mathematica (chill out
Stephen Wolfram) in order to fully exercise that one semester of differential equations while exploring some of the boundary conditions that are discussed in the Black-Scholes equation...all this effort so that one day I too might enter the ranks of the leisure class. While wearing cammo, carrying a rifle & pistol, and wading through the waters of backed up combined sewer systems in foreign lands I sometimes wonder more about applied economics: What are today’s tax revenues, what does the capital budget need to look like in order to fix this particular situation, what percent of the project budget will be lost due to corruption, how are the salaries of the sewer department employees holding up in relation to the local economy, how many local engineers are left in the department, how many people will get sick due to cross contamination in this particular neighborhood and not contribute to the local economy for the next few weeks, and of course what's the current bounty on an American going for these days anyway? Civilian work has some differences, no uniform, better security, much less corruption, bigger projects, but its still very much about gaining a through understanding of what’s needed versus what’s desired. :wry:
It’s getting late, but it appears to me that at both the macro and micro levels effective Deterrence/Application of Irregular Threats require the efficient use of capital. This is why I feel that it is important to examine how and why capital is being used by various actors. Another thread is always welcome, but I don’t think we will be able to ever separate money from war.