The DaVinci Model: A Paradigm and Methodology of International Relations Theory as Applied to National Security Grand Strategy for Capitalist Social Democratic Republics

The DaVinci Model:                                A Modus Operandi A Renaissance in Strategic Thinking                                                                 A Methodology enhanced with Present Technology,                         Multi-Dimensional Reality & Classical Philosophy; A Better World Order                    For the 21st Century!                                                                 Principals of Thought for Strategic Management for: Diplomatic and Military Effectiveness National Security Organizational Competence and Operational Efficiency Political, Economic and Social Strategic Success                                                                       Illustrations & graphic design by

Copyright @ 2007 by A. Kendro Jr. & Associates

 

The model, methodology and paradigm of International Relations Theory applied to the preparation of National Security Grand Strategy for Capitalist Social Democratic Republics presented in this paper rest on over thirty years of practical experience and twenty years of academic research. The weight of the model is driven by practical applications, but it should be a source of comfort that the framework presented below is a synthesis of thousands of years of thinking driven in the end, like all good ideas, by the questioning of Socrates, the vision of Plato, and the systematization of Aristotle. In its application to the field of International Relations Theory and National Security Grand Strategy[1], the model and its associated apparatus are also derived from and an extension of the ideas of Thucydides, Sun Tzu, Musashi, Smith, Kant, Clausewitz, Marx, Lenin, Pareto, von Mises, Hart, Hayek and Boyd.[2]

This classically grounded pattern of thought, that we assert are the necessary and sufficient elements for the epistemological foundations of the social sciences, embodies a wisdom that has been repeatedly lost and rediscovered.[3] The model, associated framework and applications orientation completely reject the proclivities of contemporary social science academia for false novelty and unacceptable passivity. The approach demonstrated in this paper rejects false novelty via a Classical grounding that recognizes the fundamental truth of Aristotle and Thucydides that absent a massive and systematic selection event, human nature remains relatively constant, with a limited number of patterns of arrangements of orders of the total affairs of human beings; hence the enduring relevance of the Classics.[4] In its applications orientation, the model completely rejects the unacceptable passivity of all too much of the current professoriate via supposed “value free” inquiry; our orientation is best stated by paraphrasing Marx, “Philosophers of the past believed the point of their endeavor was to understand the world; we believe the point is to better manage the world, and especially to avert avoidable catastrophic errors.”[5]

The purpose of the presentation of the model, methodology and paradigm of thought in this paper is to provide an integrated framework for thinking about International Relations theory and apply the model to strategic thought for national security strategists, researchers and institutions operating in Western capitalist social democratic republics. Such institutions, strategists and researchers operate within national, international and global economic, social and political environments (in the model ESP), that the model provides a powerful framework for interpreting. The framework also provides an understanding of the interagency processes of national security institutions, as well as their external interactions with ESP environments, with sufficient depth, breadth and scope to effectively integrate not just political-military elements within the government in the construction of national grand strategy, but also to integrate social and economic factors into political-military strategic thought, plans and actions. The model thus provides a framework for academics to make a contribution to the effective functioning of such institutions, and especially to help prevent catastrophic errors of the low probability-high consequence form.[6]

It should be emphasized at the outset that the model, methodology and paradigm apply to all institutions, not just political ones like national security and other governmental bureaucracies, but also to social institutions like universities, and economic institutions such as privately owned corporations. Thus, the DaVinci model and paradigm are equally useful for strategic thinking and management for institutions of any type. The general usefulness of the model follows not because it imposes a narrow “military/political” style of thought on economic or social institutions inappropriately, but because it provides a powerful framework for thinking about institutions in general. From an academic point of view this general applicability holds because the model constitutes a general theory of the social sciences, which makes it possible to apply the model across economic, social and political institutions.

With respect to this paper, International Relations and National Security are not just about external military power, homeland security and law enforcement. National Security also has an economics and sociology, as well as depends on the balance of the parts of the Body[7], in which the institution as a Human Body is one of the core premises to be developed below. As the DaVinci framework is extremely flexible in application across all institutions and external environments, it is extremely useful for the high level of analysis appropriate for national security grand strategists, those trying to make sub-units of the Western style governments function together efficiently and effectively in interagency processes in the National Security field, as well as academic researchers analyzing international relations past, present and future.

The reason that the paper centers on Leonardo is first, because his work in the Renaissance reawakened the classical spirit after the Dark Ages, and we are calling for a Renaissance in thought. We believe that the radical changes in technology of the last thirty years have created conditions for which a Renaissance in thought is vital for the construction of a better future.

The second reason for the centrality of Leonardo is because the nature of his universal genius points the way towards the generalist outlook necessary for the proper theorizing of International Relations as well embodying the applications oriented approach necessary for National Security Grand Strategy construction in terms of visualizing the environment of any institution as consisting of not just political, but also social and economic factors; this is labeled in the exposition below by the helpful mnemonic ESP. The complexity of modern life has led to overspecialization as the seemingly easy coping mechanism, when what is needed instead is a new paradigm of thought for integrating, at the strategic thought, academic and management/decision maker level, the quantitative and qualitative work of economists, sociologists and political scientists.

The third reason Leonardo is central to this work is because Leonardo’s simple illustration of the human form offers a powerful analytical device and paradigm for understanding the world, namely, the metaphor of any institution as a Human Body. As to the metaphor of any institution as a Human Body, it is only by acquiring an understanding of what it means to be human that we can analyze our own creations, as everything we create is in fact a reflection of our Humanity; hence the metaphor of the model of the institution as a Human Body.[8] To reiterate the reason for the Classical grounding of the work in thought West and East, it is only natural when calling for a new paradigm of strategic thought and orientation to International Relations theory to return to the original questions that marked the beginnings of rational thinking, because the questions asked in the Classical Age by the Greeks, as well as by classical Chinese and Japanese strategists, were foundational in character, and what we need today is a new foundation of  thought appropriate for visualizing International Relations and National Security Grand Strategy for the twenty first century.

As to the power of visualization, we introduce our first version of Cubical Triangulation, the core methodological device of the model that enables us to visualize complex interactions. Looking at the diagram, ask yourself how many faces do you see?

 

Think a minute. If you said three, you were not visualizing the hidden faces. Note, if we visualize the Cube, we can rotate the Cube in our mind and see the three hidden faces, for a total of six. 

If we think of each face as having an exterior and interior component, we now have a total of twelve faces to visualize. If we think of the space inside and outside the Cube, we have fourteen aspects of the Cube to consider. Finally, if we consider that the Cube is passing through time, we have fifteen aspects of the Cube to consider. Now if the reader is intimidated by the complexity of this discussion, just remember the technological atmosphere we are breathing, and feel immediately reassured. Although our world properly interpreted is multidimensional, and therefore difficult to state in a purely verbal form, if we visualize it correctly with the assistance of modern computers, that complexity can be reduced to manageable proportions.

The strength of the DaVinci model is that it allows us to visualize the multidimensional nature of our external environment, thereby avoiding the danger of missing variables vital to achieving excellence in thought, while simultaneously preventing our minds from becoming overwhelmed by the complexity of our environment. Not only does the technology of the model allow us to visualize where we are, it allows us to plot a course to where we wish to go, or to make course corrections effectively. We conclude this discussion by emphasizing that if you don’t know where you are, you are lost. If you don’t know where you are going, you probably don’t know where you are in space and time, and are bouncing around randomly. Moreover, if you don’t know where you are going, as Yogi Berra might have said, “you’ll most likely end up somewhere else.” Now consider the following Triangulation Cube.

 

In this illustration we see six points connected by three lines, representing our position with respect to each individual variable, in this case the external environmental variables. Where those lines intersect characterizes the complete interactions of the variables. If we are academics tasked with understanding the nature of contemporary international relations and/or national security strategists tasked with giving elected officials advice, and have triangulated our position in three dimensions, thereby acquiring the right perspective, if we are unhappy with our understanding of our total position and/or direction, we can then use technology to visualize a path to where we wish to go.[9] Thus, the DaVinci model allows us to understand the motion and interactions of the actors of contemporary international relations, interpret causality from the past, as well as generate Grand Strategy in the present. The position and direction of any nation and institution are visualized as locations and trajectories of Bodies in an economic, social and political or ESP Cube, and in which the core tasks of International Relations theorists and therefore grand strategists are respectively to comprehend and manipulate interactions between economic, social and political ends and means.

Because we are able to take each face of the ESP Cube and create Economic, Social and Political sub-Cubes, the model, paradigm and methodology provide the tools to generate micro-level academic analysis as well as the roadmap of tactics and operations to implement our strategy as international relations practitioners.[10] We can also use our understanding of the evolution of the macroscopic variables to position ourselves properly with respect to changes that would otherwise lead us to places we would not wish to go. The options technology makes available to us, therefore, are quite extensive.

The second portion of the subtitle of the paper referencing a Social Capitalist Democratic Republic, reflects the fact that the nature of the social system, economic order and governmental structure generating National Security Grand Strategy matters in terms of theory and practice: Hitler, Stalin and the Japanese had different strategic options than the United States and Great Britain during WWII.[11] 

Although national security strategists on the uniformed services side or the unelected civil servant/think tank/consultant side must of course scrupulously observe the principle of elected civilian official control in Democratic Republics, and academics to properly perform their function must retain a certain detachment analytically, both International Relations academics and grand strategists must have a full vision not only of the threats or behavior of what is being defended or analyzed, but must also have a very clear visualization of what is being defended/analyzed, and how the nature of what is being defended/analyzed interacts with the external environment.

The United States and its Western and East Asian allies such as Japan, South Korea, Taiwan and Singapore, as we shall discuss below, are Democratic Republics based on Capitalism with time-varying and regionally varying degrees of Social conscience with consequently time and regionally varying degrees of politically implemented controls over the intrinsic inequalities and instabilities of capitalism.[12] This institutional framework must remain in the forefront of the work of academics and national security strategists living in and working in the American alliance system so that they correctly integrate the economic, social and political elements of national power to defend or understand such an order/system, as well as so that they understand how the nature of such a system interacts with the external environment.

Moreover, there is a Social element that is highly relevant to academic understanding and strategy generation based on the Social/ideological support for expanding the American and European economic and especially political and social system internationally and now globally that dates to the origins of the American Republic and the French Revolution.[13] This American and Western ideology is a Social variable with significant consequences for the international environment, and is one external reason for the use in the subtitle of the paper of Capitalist Social Democratic Republics.

As to the nature of what is being defended and analyzed in the American and Western case as referenced in the subtitle of the paper, when returning to the past to understand the totality of possibilities for human life in order to go forward to the future, one sees the truth of Adam Smith that capitalism has always existed in some form because of the natural tendency to of all peoples of all times to “… trade, truck or barter…” [14]when it is in one’s interest to do so. In even the most primitive tribal societies, persons possessing deerskins in abundance have traded the results of the hunt for things such as simple jewelry, even if such exchanges often served primarily social and political purposes. Even under the most extreme forms of communism, Lenin and Mao[15] found it necessary to allow for significant private production, with peasants trucking so to speak their surplus vegetables to market; even communist systems in the Cold War found it necessary and advantageous to trade with the capitalist “enemy” to varying extents. It is well known that in the most extreme of non-economic environments, prisons, systems of barter have always emerged.

Since academics and national security planning organizations therefore do not exist in a political vacuum either internally in terms of economic environments or material and ideological (Social) constraints on their resources, or externally in terms of the economic, social and political orders of the entities of whom (academics) and against whom (strategists) they must analyze and or/ plan strategy, because the latter entities have economic and social as well as politico-military features relevant to the American Alliance strategy generation process that is the core of the contemporary world system, understanding the place of capitalism in any society is vital, whether examining ourselves, adversaries or potential adversaries.[16]

Granted the universal character of some level of capitalism, however, given the natural differences of human ability, the impact of inherited wealth and status, and luck, capitalist processes in themselves have always and will always generate a hierarchy of economic well-being because capitalist processes provide outlets, incentives and rewards for natural human competitive tendencies. Because of the social and political tensions generated by the exercise of our natural human competitive tendencies, the variety of forms of capitalism that have evolved, from the ritualistic exchanges of Pacific Islanders, to the souk markets of contemporary Iran, to the formerly state owned industries of Russia and China, to the derivatives markets of the twentieth first century therefore have always had, and required, external political controls driven by social needs.[17] Conversely, we have shown that even the most communistic oriented systems have in the end found it necessary to allow for some private production, so in examining ourselves and others from an IR and national strategy point of view, it is vital to understand the full range of economic possibilities relevant for politico-military planning actions and purposes, as well as integrating the economic and social elements of national power with the politico-military elements of national power. 

The latter is particularly important for the United States and its Allies, because absent some mortal existential threat, the material resources made available to national security institutions are constrained both by American economic productivity and by social concerns over the fruits of the world economy in terms of its distribution among individuals, nations and among competing ends within nations. From and academic and practical view, American and Alliance strategies that require excessively expensive commitments will be ruled out in the long run because they must be ruled out lest the United States and its Allies politically bankrupt themselves economically, with the greatest danger being that United States might have to retrench its Alliance commitments in a disorderly fashion because American society will no longer tolerate the economic costs of an unwisely chosen world position.[18] Theories of International Relations that ignore this reality, which is the case for Realism in its most extreme form, are methodologically incorrect by underspecifying the nature of the interactions of economic, social and political variables.

Giving a practical application of this discussion with an demonstrative analysis of the Russo-Georgia affair of 2008 that leads to the visualization of the model, at the IR and/or national security grand strategic planner and/or decision maker level, it is an error to focus, as is too often and easily the case, solely on political, i.e. military concerns, for Russian or any other state or entities actions. The 2008 Russian attack on Georgia and fitful retreat will intensively engage International Relations theorists as well the American and Alliance politico-military apparatus for years to come as the question of the meaning of and what to do about a resurgent Russia becomes one of the central issues of American foreign policy as well as world politics, especially in the context of a more assertive and resource hungry China. The Russian move, however, cannot however be correctly assessed in a politico-military context alone.

In the first instance, Russia’s actions in Georgia were made possible by and driven as much by economics and the social concern of ethnicity as by Great Power Politics.[19]

Looking at the Russian Body to introduce the metaphor of the model, which we remind the reader is the Institution as a Body, the Financial Arm of Russia as the 2000’s decade comes to a close is bulging with power in contrast to the Yeltsin era because of an economic change in the global ESP environment; namely the consequences for Russian economic and therefore military power of the high price of oil. Second, a clear motive of the Russian attack was the intellectually based decision to use military force to achieve an economic aim that feeds back into Russian politico-military power. Even if the Russians fully withdraw from Georgia, the mere threat of a repeated Russian foray into Georgia and elsewhere in the Caucasus /Caspian region means that Russian concerns within Georgia and more generally within the Caspian Sea basin over Russian control of oil and gas pipelines for world exports markets likely will get a dominating hearing. This economic power in turn provides Russia with leverage to exert political sway over Europe, especially the Eastern portions of the NATO alliance.[20] This illustrates a core feature of the model, which is that at the strategic level it is vital to understand the feedbacks from economics into politics and vice versa.

Third, in terms of the Russian Body, the Market chamber of the Russian Marketing Heart has an important Social element that is important to understand in terms of the emotional motivation of recent and not-unlikely future Russian physical military actions. Because of both Tsarist and Soviet imperial/nationality policy, large numbers of ethnically Great Russians live outside the territory of the Russian Federation. Because of similar historical policy roots,[21] large numbers of non-ethnic Russians live within the Russian Federation. Russian national security policy makers will always aggressively defend perceived threats against Russians outside the boundaries of Russian territory due to fear of genocide abroad, and because of fear that Russian weakness abroad invites dissolution of the Russian state at home a la the Chechen conflict.[22] Ethnicity combined with a longstanding Russian ideology/belief (S)[23] that Russia has a special historical mission, means that social forces drive Russian actions abroad independently from economic and political concerns. Thus, analysts of international relations and generators of American and Alliance strategy towards Russia must first analyze the three core factors motivating the Russians not in isolation, or one to the exclusion of the others, but all three in their interaction.[24]

At the international system level, the Russian attack on Georgia can be understood in terms of the cycles of power of individual actors and their interactions with each other within the global ESP environment. In 1991, the United States was at a peculiarly powerful moment economically, politically and socially, while the nascent Russian Body was at the opposite phase of all three cycles. Economically, the United States even coming out of recession had significantly restructured in response to European and Japanese competition of the Seventies and Eighties, while the nascent Russian economy was in collapse. More generally, the global move towards capitalism as represented in Deng’s reforms in China, Thatcher in England and the 1991 IMF restructuring of India meant that the nascent Russian free market economy was emerging into a globalizing order for which communism was poor preparation.

In terms of ideas (S), the End of History argument seemed to bode that Western economic, social and political systems, and quite probably even more specifically the American ESP system, would dominate the planet forever, while Russia searched for meaning after communism in the midst of a collapse of social norms reflected by an unprecedented fall in male life expectancy.

At the system level, politically, the Gulf War seemed to promise an eternal Pax Americana, and which in conjunction fit with the social ideology of a special American global mission. Where most commentators, academics and policy makers erred was in assuming that such a situation would last forever, even taking steps that increased the probability of an aggressive physical Russian response based on the emotion of fear, steps such as attempting to place NATO on Russia’s borders, instead of Finlandization. Although Vladimir Putin, by name, family background, career, and actions is increasingly resembling Stalin, to a certain extent the West contributed to his rise by dancing on Russia’s grave too early and too gleefully. If the long cycles of history had been considered, more circumspect American policy might have mitigated the ultimate Russian reaction.

The purpose of the above discussion of the recent direction of Russia was to demonstrate that International Relations and National Security are not just military in character, but also economic and social in character, and most importantly are ESP interactive in character, and must be viewed with the appropriate depth, breadth and scope in order to analyze or plan strategy accordingly. As a final note highly relevant for going forward with American strategy viz Russia that follows from this example, Alexander Solzhenitsyn, Oswald Spengler and most recently Samuel Huntington among others have argued, we think very persuasively, that culturally, Russia is not an integral part of the West, but a semi-autonomous descendant of Byzantium.[25] To reiterate a point implicit in an above paragraph, those who argued like Fukuyama, and more recently Friedman, that the world system of the twenty first century would be characterized by the absolute primacy of American style global capitalist democracy in the wake of the American “victory” in the Cold War would increasingly seem to resemble Norman Angel in The Great Illusion, who made a similar Liberal International Relations argument in 1910, right before WWI.[26]Huntington goes too far in the other direction, as the real direction is as it always has been, driven by the interaction of economics, sociology, and politics, reflecting respectively the nature of human beings at the micro level, who are intellectual, emotional and physical in character.

Concluding our introduction of the DaVinci model, methodology and paradigm as applied to the field of International Relations, National Security, and Grand Strategy, it is a grave methodological error for academics, and a dangerously narrow pattern of thought and action for policy makers and strategists, to interpret and/or act on the basis of an underspecified vision of the global, international, and national/American order, and instead vital for both the academy and policy makers to understand the interactions of economic, sociological and political phenomenon in order to maximize understanding as well as acquire the knowledge requisite to the achievement of correctly specified American and more generally capitalist social democratic internal and external goals. The Da Vinci model, methodology and paradigm are designed to deal precisely with such complex interactions in order to allow for excellence in understanding, strategy, tactics and operations.

In keeping with the classically grounded wisdom of the model, and in which the model’s explanation of economics shares much with a careful reading of Adam Smith, the question of capitalism for international relations academics and grand strategists is not if, but to what degree of capitalism[27] within the United States and abroad, and with what internal and external political and social controls on the operation of human beings naturally grounded capitalistic tendencies necessary for visualizing the national, international, and global order necessary to achieve superior American and Alliance economic performance, social stability and political order within a context of an international and global order that recognizes limits on the extent to which the external order is malleable to American will.

We emphasize here that this is a capitalist manifesto, neither communistic, socialistic nor libertarian. The DaVinci model is grounded in the fact that all institutions are created by human beings, which function best when in correct relationship to human nature. As it is in human nature to care first about oneself, this is a capitalist tract. At the same time, this work rejects the implied libertarianism of much of mainstream or conventional economics, as well rejecting the emphasis of business school curricula on shareholder interests driven to a significant extent by the quantitative mindset.

Our emphasis is on free and fair enterprise as to the nature of what is being defended by strategists or analyzed by academics, because the model recognizes, like Aristotle and even the supposed paragon of pure free market capitalism Adam Smith[28], that man is a social animal, and that therefore human beings have non-economic concerns as well. Such concerns are of vital importance for proper understanding and strategic management, because it is in the character of both academics and strategic management to necessarily focus on the broadest environmental questions of any institution, and it is in the nature of reality that such concerns in the international relations and national security fields are not just political, but also social and economic. A necessary task for well-functioning national security institutions, academics and strategists embedded in a capitalist order with a social conscience, is to always remember that there is a correct balance between the variety of human motivations embodied in the political controls on capitalism to serve social ends, which is to say what is most desirable is capitalism and businesses with a social conscience.

                   The Model in Full

            We now turn to the full exposition of the model for International Relations theorists and grand strategists. When creating a new foundation of thought, it is in the nature of a Renaissance to return to the past, ask the appropriate questions, visualize the answers, systematize the results, and then make a new contribution. We therefore make no excessive claim to originality, recognizing that we are in many ways synthesizing the work of geniuses past to the present. That may sound like a strange way to open the discussion of a methodology for understanding International Relations and guiding national security organizations, or any other institution, but then the intended audience of this work is far broader than the vast majority of economically, socially or politically oriented treatises. The DaVinci model is applications oriented, in order to help academics as well as national security organizations and strategists, privately owned corporations and political institutions achieve a mode of operation for excellence. The model emphatically applies not only to national security organizations, but also to any other type of economic, social or political institution, and as such constitutes a new paradigm of thought. Because the work considers the entire possible universe of economic, social and political climates, environments and atmospheres and those interactions with any institution, this paper should be useful not only for academics and national security strategists, but also corporate and non-profit strategic managers.

One of the greatest difficulties and dangers of modern life is the inevitable tendency towards specialization, a tendency driven by a misunderstanding of the appropriate response to the growing complexity of our global existence. In a complex world, it is easy to become hyper-specialized, because that is the easy short term response to the stimulus of growing complexity. However, when everyone becomes a specialist, then no one has a vision of the whole, and no one understands how the complex interaction of the parts of the whole generate the totality of what needs to be understood, a need particularly acute for effective performance, especially at the level of strategic management.

When we consider the career of Leonardo DaVinci, we also can see why we should avoid unnecessary specialization. The world would surely be a poorer place if Leonardo had not drawn on knowledge drawn from multiple disciplines. His training in the sciences and mathematics informed his work in the arts, and vice versa. In perhaps his greatest work, The Last Supper, Leonardo applied sophisticated geometrical and mathematical concepts and calculations in order to create the illusion that the space inhabited by the painting is twice as large as in fact is the case. In fact, without applying complex mathematical ideas to his artistry, Leonardo would have been unsuccessful in creating such an apparently massive work in a narrowly confined space at all. Only by fusing multiple disciplines was Leonardo able to add depth to the painting, enabling him to create what artists call perspective. Strategists must see the whole entity, not just single parts, and therefore by definition need to be multi-disciplinary in their thought.

A fundamental goal of our methodology is to provide the reader with an economic, social and political (mnemonic ESP) perspective of the cyclical evolution of the ESP environments in the context of viewing institutions as Human Bodies through cubical triangulation. This methodology enables strategic planners to structure our complex world in a comprehensive and comprehensible fashion. One of the most exciting features of the technological atmosphere that infuses the very air we breathe is that we now have the computer and graphical tools necessary to operationalize the universal genius of Leonardo on a grand scale, in terms of visualizing the position of the Body in an ESP Cube, where the Cube represents the three dimensions of the environment of any institution. More generally, the methodology of our model integrates multiple disciplines using modern visualization technology in order to provide the reader with a modus operandi for excellence in strategy, tactics and operation in the modern world. A core purpose of the model, therefore, is to combat excessive specialization and the failure to use a holistic approach with respect to ESP interactions, which clouds our visions, inhibits our best efforts, and ignores our humanity.

            This is again why the DaVinci Model is literally a call for a true Renaissance in thinking and mode of operation, a revolution that brings to life the fullest development of who we are as human beings. Traversing far beyond the realm of contemporary political-military practices, we place the model within a precisely specified framework of economic, social and political external climates, environments and atmospheres. In fact our specification of the external environments, although related to the works of a wide range of social scientists, is one of the works’ contributions to the general theory of the social sciences.

The Metaphor of the Institution as a Human Body

At the core of the model is the premise that national security institutions, and the states with which they are associated, like all human institutions, can be represented as a Human Body within an ESP Cube; hence the repeated use of Leonardo’s illustration of the human form. All institutions need to have a Mind, which is the realm of strategy, which must integrate the information conveyed by the senses about the position of the institution within the ESP Cube. Marketing is the Heart of all institutions, with Organizational and Financial Arms, and Operational Legs to execute an integrated set of activities, with a nervous system (MIS) conveying information to all the parts of the Body.

Social/Management

 

Economic/Financial

Political/Legal

MIS

Management

 

Finance

Personnel

 

Marketing

Time

Space

 

Technological Atmosphere

                               

Operations

Administration

 

Without understanding who we are as human beings, we cannot understand how the institutions we create operate either academically or as managers and strategists. At the same time, all institutions operate within economic, social and political environments, hence the term, or mnemonic, ESP to describe the external environment, which the strategic manager must comprehend and visualize as generating a position in an ESP Cube. The DaVinci methodology of cubical triangulation reduces the external environment to these three variables. In the context of our model, the dimensions of the external environment can always be reduced to three. [29] This reduction of environmental variables to three dimensions avoids oversimplification and over complication.

 The world is not flat as Thomas Friedman would have it, but, rather, is cubical.[30]

Economics   “The World is flat.”                 T. Friedman

 

Social

Economics

 

Political

          Two dimensional world

                                                     vs.

                                                                        Three dimensional world 

Mr. Friedman and the economics profession as a whole would place emphasis on only one facet of reality, whereas the components of the environment in which any national security organization, or any other institution for that matter, operates have not only economic, but also social, and political dimensions, variables which we have collectively labeled ESP.[31] We represent this interaction as a three dimensional world and an ESP Cube with associated timeline below. By ignoring the existence of social and political factors by focusing excessively on economics, Liberal IR theorists and national security strategists risk missing changes in the political operating environment and social aspirations that in conjunction can generate quite dramatic consequences for the character of world order, optimal national security, as well as non-profit or business practice.

            Conversely, the Realist tradition that always ranks highly among the dominant modes of thought in the academic realm of International Relations, as well as within national security organizations, focuses too narrowly on the external Political Variable. Following the extension of the metaphor of the Body, it is true per Musashi that “… We live in a physical world, and the things that affect us physically are more important than those that affect us emotionally or intellectually. It is one thing to browbeat someone into accepting your ideas. It is another to physically take his life.”[32] On a superficial reading this would imply Musashi is a lineal descendant in the Realist tradition of force as the ultima ratio of statecraft, but as mentioned in an earlier footnote, Musashi also counseled generous samurai treatment of the despised merchant class, because “Money must be made to pay the army.”[33] The question for an academic analyst or a national security grand strategist is per Musashi, one of balance, in this case balance of the Body within an ESP Cube that evolves over time as illustrated below.

E

S

P

E

ESP Cube

 

E S P

E

S

Timeline

P

This use of the acronym ESP of course has no mystical connotation, but serves as a highly useful mnemonic and graphical device that interfaces in a very natural way with our graphical apparatus. We note here that the timeline is constructed to illustrate mega trends in the three variables, and the interactions of these variables, that all businesses, institutions and societies as a whole are wise to understand.

We emphasize that no International Relations analyst or politico- military strategist can afford to ignore the economic environment for the reason that national power in the long run depends to an irreducible extent on wealth, which is why we focus on the Economic variable first; “Money must be made to pay the army,” lest we bankrupt ourselves in the pursuit of empire like Spain, or become a static backwater like Sparta.[34]We capitalize that variable to emphasize the mnemonic value of the ESP framework. What differs in this paper with respect to the Economic variable is a structured, applications oriented view that extends beyond the range of the typical politico-military strategists, economists and business leaders mentality to examine the macro impact of economic regulation (political), as well as effects of tax policy on the distribution of wealth and income (social) that most academically trained economists tend to ignore, or at least view in a narrow perspective, especially in their academic writing. The discipline of economics in the time of Adam Smith actually was known as political economy, the label emphasizing that any economy is embedded in a broader political, and in our case, social framework.[35] Due to the mathematical formalism necessary for a precise analysis of the notion of Smith’s Invisible Hand, the training of modern economists has acquired a very heavy emphasis on advanced mathematics.[36] While this may have proved fruitful in terms of developing the field via the division of labor, much has been lost in the process too. Modern economists tend to have a very limited understanding of the non-economic world; some, in fact, are actively hostile to the consideration of other political and social realms. Most economists inclined to consider politics and sociologists attempt to reduce all of reality to a rational choice based economics.[37] What has resulted is an academic discipline that has trained not just itself, but the broader society in which it is embedded, to conceive of the Economic dimension in an excessively narrow manner, and to fail to integrate the findings of economics with other social science disciplines, thereby resulting in a radically incomplete understanding of reality.

Additionally, by excessively ignoring the Political variable, the parallel of the economist’s argument in the field of International Relations usually referred to as Liberalism has both underspecified the environment and underestimated the impact of the role of Force and Justice, in this case respectively Political and Social concerns.

Conversely, perhaps also intimidated by the mathematical formalisms of modern economics, all too many in the Realist tradition uncritically make of the use of force as the ultimate deciding factor in International Relations. Historically, this too often has led academicians and especially the national security organizations and strategists they implicitly or explicitly train astray, leading all to fail to comprehensively specify reality and then in the realm of action fail to maximize the elements of national power, by improperly specifying to what extent is the underpinning of national power based on economics, and sociology, as well as creating an international and global order that is unnecessarily dangerous by failing to understand the interaction between national organizations and associated ESP arrangements across borders.

The DaVinci model as a call for a renaissance is a paradigm of thought and mode of operation designed to avoid errors in understanding the past, and is designed to generate strategies for the future that avoid the consequences of under estimating the complexity of reality that could still prove catastrophic in a world of nuclear armed states.

To reiterate, the external environment of national security institutions is best understood in terms of the interactions of economic, social and political variables, and in which the Body of the institution is operating within a given technological atmosphere and its associated psychology within the ESP Cube, and where there are parameters on the American ESP Cube position that it is the task of national security strategists to understand in order to defend, and which it is the job of academicians to understand.[38] In turn, the political, economic and social environments are always evolving and our position in the cube is determined by this interaction, illustrated through Cubical Triangulation.

                      The ESP Triangular Cross

                           Economic Wealth, Social Benefits & Political Dynamics

Economics

                                                         Capitalism

De-Regulation vs.     Regulation

                                                              5%Few

Concentration vs.      Expansion

                                                            35% Some

                                    Social          60% Most    Republic

Authoritarian  vs. Libertarian

Free Enterprise vs.                  Fair Enterprise

                                    Political              Economic Democracy                         

                                                            80% Many

Phi .61 The Golden Section

                                                           

Copyright 1998 A. Kendro Jr & Associates

                                                            100% All

                                                        Communism                   

The vertical dimension of economics reflects the fact that capital by its nature tends to concentrate, and so reflects the distribution of income and wealth.[39] Illustrated is a single vertical hierarchical line in the triangular Cross, representing the Economic part of ESP. The two horizontal lines of the Cross reflect the Political and Social components of ESP. The Political line reflects government policies on the regulation of the economy, and the degree of free enterprise allowed. The Social line reflects the social concerns about the distribution of income and wealth and the exercise of authority over individuals. The triangular intersection of the vertical and horizontal dimensions gives us the balance between the wealth generating dynamism of capitalism and the preservative effects of social and political concerns embedded in the regulation of that dynamism. If we have an upward movement politically, the rewards of society rain down on the few. If we have enough upward movement, social tensions increase, either pulling the cross back down, or resulting in a structural break the leads to fascism.

If we have enough of a downward movement, we have socialism or possibly communism.[40] Neither system is desirable or sustainable in the long-run. Communism we know failed. Capitalism in the past has always been subject to severe crises when left too much to its own devices, as it has too often risked a fall into fascism and war. There was a reason Western societies eventually moved away from the lassie faire capitalism of the early 1900’s, and the reason was that the capitalist system left purely alone will tend to destroy itself, i.e. The Great Depression of the 1930’s and WII. From an academic point of view, the actions of states are dependent therefore in all cases on the position and motion of any particular Body in the Cube. Furthermore, the very existence of fascism and communism was a recipe for system war via the mutual challenges to respectively the security and legitimacy of capitalist social democratic republics that either order constituted, which therefore also constituted a causal factor in generating conflict and war.

The argument is that we do not wish for a cross exactly in the middle of the Cube, which could be viewed as socialism. Some resources are scarce, and human beings are to a certain extent irrationally competitive. We live in an imperfect world. We must err on the side of some form degree of concentration of income and wealth, but not to the extent that the advocates of total free enterprise would have one believe. Rather, all things must be taken in proportion, in moderation, which is why the cross is ideally positioned above the midline, but not too much. This is why the computer graphics use the number phi (.61), The Golden Section, which preserves proportions in a unique sense, to illustrate the balance between free enterprise and fair enterprise. The best achievable is a free enterprise system that has a significant degree of social fairness.

                           Cycles

We now explicitly introduce the notion of time, and how the three ESP variables evolve and interact over time. The longer we look back in time, the more we acquire a macroscopic perspective, and the more we are able to predict mega trends of the variables in the future, and therefore act in a more effective manner.[41] The timeline below becomes an apparatus for plotting trends in core environmental variables from approximately the time of Leonardo well into the next century in order to provide the reader with the maximum historical context, and the maximum vision of the future.

At the heart of our macroscopic view of the environments of ESP is the notion that at any point in time, all societies can be characterized by both the hierarchical relationship and interaction of the three variables. As to the former point, at any point in time, there is a hierarchy among the variables. Looking at the global timeline, we see that in the feudal age, religion, or the Social variable, was dominant. The same relationship characterizes Iran today. In the feudal age, the Church provided legitimacy for feudal relationships of decentralized political power, the age of lords and knights, which in turn were reflected in decentralized economic relationships of localized production. We label such a society in terms of the graph SPE. What this means is that the Social variable drove the political variable which drove the economic variable in terms of causality and primacy.[42]

 

 

 

The Global ESP Timeline

Feudalism         Colonialism    Capitalism v   Socialism v Communism                Globalization E         S          P          E         S          E         P          E         S          P          S          P          P          E         E   S          P          S          P          E         P          S          P          E         E         E         E         S          P          S   P          E         E         S          P          S          E         S          P          S          P          S          E         S          P Authoritarian    Imperial        Republic     v     Fascist    vs.     Democratic               New World Order 1000    1200    1492    1600    1776    1860    1914    1930    1945    1963    1972        1988   19922001

 

Although in a paper it is obviously impossible to discuss the entire timeline, as an application of the model to the current environment, the social system in which we live, especially the United States, which is what national security strategists are tasked with defending, we call EPS because the economic variable of global capitalism is dominant, in turn driving politics, which in turn drives sociological phenomenon. Our prediction is that we are at the cusp of a change similar in scope to the Renaissance, in which the new order that emerges will be characterized by more of a balance between ESP in the United States. All academics, strategists for governments, businesses and social institutions need to be aware of this macroscopic evolution in order to adapt to this coming revolution .

For a simple economic application of this mode of thought, consider an oil company engaged in long-term planning. If the company looks merely at the Economic face of the Cube, it will be neglecting major business risks driven by the other faces of the Cube. If it were the case that the phenomenon of Global Warming were accelerating, at some point the Social face of the Cube would become highly relevant for business planning purposes, as demands for environmental protection presumably would increase rapidly. Similarly, the oil industry is highly dependent on resources provided by politically unstable countries. Any oil company that does not take the Political and Social faces of the Cube seriously is making a grave error, because it will not have triangulated its current position correctly, and will be unable to plot an appropriate course of direction.

Without visualizing the Social and Economic faces of the Cube, an oil company could find itself facing risks to the very survival of the firm. More generally, the oil industry as a whole is at more risk than is generally understood. Although oil companies pay lip service to notions of diversification into other forms of energy, in the end, the main strategy of the industry is to stay the course. The current course of the oil industry, however, is unsustainable for environmental and political reasons, because the industry as a whole has failed to understand the appropriate direction it should follow given easily understandable changes in their operating environment.

Having examined the body, the environment, and the technological atmosphere we breathe and the methodology of cubical triangulation, we now examine the psychology of human beings, with the purpose, as always, to show the full picture of the model. As to the psychological atmosphere, which we define as the state of our emotions in both an individual and collective sense, it is only through acquiring an understanding of both the nature of our emotions, and how our emotions are influenced by our interactions with both the technological atmosphere and the external environmental variables, that we can come to understand fully who we are, who we can become, and the world that we can create. Turning to the emotional part of the model, our psychology has not fully adapted to the world we are creating. At an unconscious level, we evolved to have notions of scarcity hardwired into our brain. Thus, we tend to think of life as a race for scarce resources, and create institutions that act accordingly, in turn encouraging their employees to act accordingly, thereby reinforcing the psychology of scarcity. Modern information technology, however, has very high non-material component. The resources made available on the Internet are in a very real sense limitless, yet we have not adjusted our thinking and institutions accordingly.

Consider the following Illustration, which has three faces which represent the intellectual, emotional and physical parts of our psychological state which we call IEP.[43]

                                   Intellectual

                                                                                                Biological Responses

                   Moral Attitudes                                                        Emotional

                            Physical

                                                                                        Ethical Values

Reducing our psychology to three dimensions requires a brief explanation, which is consistent with the psychological and more importantly biological literature. As human beings, it is obvious that part of our mental state is an interior dialogue characterized by varying levels of intellectual sophistication. Thus, we have the face of our psychology represented by I. This is the primate brain, land of executive function and language. At an intellectual level, we make some choices consciously, and when we make those choices our ethical values are engaged, again, at differing levels of sophistication and awareness. This is why opposite the face of I is labeled as ethics.

Human beings are more than thinking machines, contra rational choice theory however, and so our internal mental state is also characterized simultaneously by an emotional state, whether we are happy, sad, angry etc…. Our emotional state is driven by our attitudes, which is why opposite the face labeled E, for emotions, we have labeled the face A for moral attitudes. This is a reflection biologically of the mammalian complex. Within the context of our model of human psychology, our spiritual character is primarily emotional in character. This is not to denigrate religion. Although human beings have developed elaborate intellectual rationalizations of their religious beliefs, the I, in the end, religion is a question of belief, which is an emotional state, hence the placement of religion within the emotional character of our psychology. This again in no way is intended as an attack on religion, because human beings are not just thinking machines, but have emotional and physical needs as well. The fact that all known civilizations have had religions is a testimony to the need of human beings emotional need for spirituality, or meaning. What it means from an international relations point of view is that theories that dismiss ideology and religion as an understructure are grossly inaccurate, whether they are of the Realist, rational choice or Marxist variety.

            We note here that there is an important distinction between morals and ethics that is vital to our model. Intellectually, we should apply ethical criteria to our decisions, as to whether our actions are right and wrong. At the same time, we have moral reactions to our decisions based on our attitudes towards good and evil, which are usually, though not always, derived from religious socialization. Thus, when we make decisions, we have an intellectual reaction to the ethical character of our decisions, but we also have a simultaneous emotional reaction to our decisions as well the former reaction based on our attitudes. Finally, our mental state also has a physical side as well, characterized by levels of mental energy, and biological responses to our environment. Opposite the physical face of the Cube are characteristics that generate our response. We now tie together the psychological part of our model with a political application.

Because of an increasing emphasis on short-term news, driven by the demands of the Economic face of the ESP Cube, many modern national security organizations come to have a dysfunctional social psychology. Driven by brute fear of not making the instantaneous results the media is demanding, national security organizations often become infused with a psychology that is neurotic, sociopath or even psychotic. Consider the evolution of the war in Iraq. Before the war in 2002, General Shinseki recommended a force of 300,000 men years to accomplish mission of remaking the Iraqi state. Whatever the initial motive of dismissing General Shinseki’s analysis, eventually the defense of U.S. troop levels over the interval 2003-2006 and its interaction with the anti-war position/movement came to have an increasingly dysfunctional psychology that almost destroyed the achievement of U.S. objectives in Iraq. In effect, the national security establishment hunkered down and pretended that all was well until fairly late in the game, while the antiwar movement acted oblivious with respect to the potentially catastrophic consequences of failure. The effectiveness of the Surge was unsurprising, because up until that point in time, there were not enough troops in Iraq. What is stunning and revelatory of the current dysfunction in the generation of U.S. national security policy is no one talks about the issue in this way. “Maybe it was a bad idea to invade Iraq, but it is a little late for that now, and as the United States has been deeply engaged in the Iraqi economy, society and polity since the formation of the Iraqi Petroleum Company, maybe we should drop the debate about who was right and wrong initially, and focus on what makes sense in the long run before we create a catastrophe.” The atmosphere of the media in this environment was not helpful because it encouraged pit bull confrontations a la Anne Coulter versus Michael Moore rather than reasonable analysis, which is to say too much emotion and not enough intellect. An analogously dysfunctional psychology that is a serious problem in the current American ESP order can be seen in the corporate scandals a la Enron and WorldCom, driven again by Economic encouragement of a short-term mentality; could any sane person at either corporation have really believed that inventing numbers to please Wall Street’s quarterly focus could continue indefinitely? Returning to the realm of International Relations National Security, what this implies is a more systematic way of allowing for civilian strategists to call out naked emperors before it is too late. In Iraq, to paraphrase Gelb and Betts, the system ultimately may have worked, but the margin for error was unnecessarily pushed at arguably great expense economically and quite possibly in terms of American and Iraqi lives.[44]

Now consider the next Illustration, where we have taken the ESP Cube and examined the Economic face more closely, in the process creating the Capital-Labor-Resource Cube (CLR). The emphasis is on Capital, because Capitalism is driven by the Capital face of the CLR Cube, not on labor or resources. If the emphasis is on labor, we are dealing with socialism, while if the focus is on collective ownership and use of resources, we are dealing with communism. In an economic democracy and even in a dictatorship of the bourgeoisie (elite) or proletariat (masses), Capital allows one to acquire resources and labor and so is always in the dominant position within the Economic face of the ESP Cube. In the end, the leadership of any political institution requires Capital for its existence and long term survival in order to acquire resources and labor, which is why Capital is always, whatever the ideological justification of the political regime, on the top of the CLR Cube derived from the economic face of the ESP Cube. The success and power of the United States (E), Russia (P) and China (S) depends ultimately on access to capital. Capital is also characterized more precisely by the other core notions of economics: scarcity, rationality and equilibrium, as illustrated in the SER atmospheric Cube within the CLR Cube. This immediately generates the question of how we use our psychological Cube to deal with the notions of scarcity, equilibrium and rationality as it applies to the use of Capital, Labor and Resources, demonstrated in the illustration below, which is the process of applying the methodology of understanding ESP.

 

 

 

 

 

 

 

 

 

 

 

 

S

 

National

Rationality

P

Economics    CLR

                                                                                               

Capital

Scarcity

Equilibrium

Labor

Global

International

Resources

 

Economics    Cube                          SER Atmosphere Cube

Capital

National

SER Atmosphere

Scarcity

                                   

Labor

Resources

Equilibrium

Global

Intelligence

Physical

Moral Attitudes

International

Rationality

Characteristics

 

Ethical Values

Emotions

                                                The Psychological Cube

Thus, the use of economics does offer powerful insight into how the world works for the purposes of creating national security grand strategy, because it excludes a vast array of possibilities. In and of itself, however, economics fails to provide sufficiently powerful tools for understanding the choices among the possibilities remaining, which involve social and political dimensions of problems, and thereby fails to provide the correct ethical notion for society. Conversely, the Realist tradition fails by itself to prepare strategists for the external environment by excessive emphasis on the use of force.

Concluding our discussion of the ESP environment necessary for American grand strategists to understand in order to properly function in the near to long term, for the last thirty years, economics as reflected in the wealth and income distribution throughout the industrial world has grown more unequal, especially in the United States. Now economists usually attribute this increase in inequality to the increased rate of return to education, which would presumably be fair and efficient, and argue that since the bottom part of the income distribution is not earning less, or at least not substantially less, then all is well. We do not concur in that assessment. If incomes are only growing in the upper part of the income distribution, and yet everyone spends more due to social pressure, wealth will concentrate rapidly, as the bottom eighty per cent of the income distribution eventually runs through its savings. No matter how much the incomes of the happy upper twentieth percentile of the income distribution increase, it is unlikely to be the case that the increased spending of the wealthy will offset the eventual decline in spending of the remainder of the population. Beyond the ethical question of whether or not the United States really wants to evolve into a radical Latin American style income inequality, there is the simple fact that historically, when the income distribution grows as unequal as is now the case, and there has been a correction in terms of both economics and politics. As to the economic side of things, the last time we witnessed such a rise in income inequality, we eventually observed the Great Depression.[45]

On the political side of things, at some point, the rise in social tension generated by income inequality raises opportunities for politicians to propose changes in tax, spending and regulation policies that alter the income distribution, with or without an economic collapse. Furthermore, the flight of Latin Americans from the radically unequal economic regimes of their homelands, which in turn reflects the inequality of the global capitalist order, can exacerbate economic inequality in the U.S., and result in pressure to change immigration policies.

Finally, the experience with NAFTA and the slowdown in the Doha Round of the WTO and the assertiveness of China and Brazil suggests the possibility of a backlash against the current global trade regime, driven by the social pressures generated by increased income inequality. Owners of capital will clearly benefit from the anticipated evolution of NAFTA into AFTA (Often referred to as the proposed Free Trade of the Americas Area), and when we examine the global timeline, we in fact expect that to be the case. This is why European and Japanese corporations are pouring investments into Latin America. In equilibrium, however, absent changes in labor and compensation policies in Latin America, the impact of expanding NAFTA will be to further place pressure on the living standards of the bottom half of the American income distribution. Every time in the past that we have witnessed increases in income and wealth inequality, eventually there has been a social backlash. This process operates as follows. Social pressures rise because of the increase in income inequality, creating a market for politicians to advocate policy changes in order to alter the economic order. The more capital pushes to rule the world without restraint, the bigger the backlash against capitalism is likely to become. Wise capitalists know that all things should be understood in their ultimate implications and interactions, and that includes capitalism.

Turning to the Political variable, after 1989 the United States moved into the vacuum created by the collapse of Soviet power by extending the NATO alliance into Eastern Europe, made the prevention of the rise of a peer competitor in China, and eventually the democratization/extension of American institutions and power in the Islamic world the grand strategy of an America as a unipolar hegemon. Given the resurgence of Russia and the rise of China and the expense of the American venture in Iraq, in an economic environment that with the collapse of the housing bubble, ongoing retirement of the Baby Boomers (see the role of S) and the above mentioned pushback internally and externally against globalization/ the Washington Consensus/Flat Earther/End of History, wise grand strategists are likely to see the preservation of limited post Cold War I gains as the core elements of proper U.S. grand strategy moving forward. The question will likely be how to retrench modestly, not if, but how to simultaneously avoid doing so from a position of weakness that encourages attacks and maneuvers against U.S. interests.

As originally stated, the purpose of the presentation of the model and paradigm in this paper is to provide an integrated framework for analyzing institutions within the economic, social and political world, and such institutions interactions with their environments in sufficient depth, breadth and scope in order to integrate not just economic, but also social and political factors into strategic management thought, plans and actions. Once again, the subtitle of this paper of this paper, A Capitalist Social Republic, was chosen to emphasize that this is a capitalist tract, but one that correctly places capitalism within a broader social and political framework, in the process providing a new mode of thought, hence one of the reasons for the use of Leonardo.

Concluding our overview of the model, its methodology, and metaphor which are a new paradigm in strategic thinking, we have used Leonardo’s famous illustration of man as the metaphor of the institution as a human body, operating in an economic, social and political Cube with an atmosphere composed of technology, and our emotional state representing the appropriate psychology, because only by fully understanding our humanity and our interactions with our various environments through cubical triangulation can we intelligently proceed to create institutions that represent what Lincoln called the “better angels of our nature.”

The DaVinci Model

The DaVinci Metaphor  The Human Mind, Body& Soul

The DaVinci Methodology  Cubical Triangulation

 

 

Technological      Atmosphere

Marketing- The Heart

                                                                                                                  

Direction & Movement- The Legs

Reaches & Constraints- The Arms

Organizational Arm Human Resources Structure Compensation

Financial Arm Balance Sheet Income Statement Cash Flows

Distribution

Products

Markets

                                        

Operating Policies

Operating Processes

                                                               

Knees sJoints

                                                                                                                                                                    

Ankles

Administrative Procedures

 

 

E S P

E

S

Economic, Social & Political Timeline

P

Most of the media coverage of the AIG bailout focuses on the payment of rather large bonuses to AIG executives.

Now, I will say that on the surface  it is a not unreasonable source of anger to pay several billion dollars in tax money for bonuses to those running a company whose mistakes have already cost the taxpayers $170 billion.

Perhaps the executives of AIG do not remember the fate of Marie Antoinette, and the rather, shall we say, sharp, public reaction to her excesses.

Personally, if it was my call, and the fate of the world's economic and political systems were not in the balance, I would say,"Lamposts, or Madascar, cake free of charge."

Nonetheless, in order to get at the real scandal, one must see the difference between several billion, and $170 billion: follow the money, and count the zeros.

Now although, as that wonderful wag the late Sen. Everette Dirksen once said in describing federal fiscal follies,"A billion here, a billion there, and pretty soon, you are talking real money," nonetheless, the mainstream media has missed the real story of the scandal, which I would argue, is no accident.

The real scandal in the AIG bailot, beyond a regulatory failure discussed briefly, is the role of Goldman Sachs in this debacle, as is hinted at in the title.

As Deep Throat told Woodward and Bernstein in Watergate days, the key to understanding the real scandal is " to follow the money," in this case the money flowing to Goldman Sachs directly, and, one suspects, indirectly to its clients and minions overseas.

AIG went bankrupt in fall 2008, and has been hemorrhaging money since then to the tune, remember taxpayers, of $170 billion, because of its losses on financial instruments known as Credit Default Swaps (CDS in Wall Street lingo).

For those who do not know, a Credit Default Swap (CDS) is an insurance policy for investments.

Now as the side note as was hinted at in the introduction, this crisis would not have become as severe as it has if regulators had treated Credit Default Swaps properly as insurance policies, because then actuaries would have had to guarantee that the policy premiums and reserves were sufficient to cover the potential losses of the policies.

For those who do not know, actuaries, who are actually smarter than Wall Street finance "geniuses" on average, are professionals who complete a self-study program equivalent to the Master's and Ph.D. level, maybe even harder, and are professionals who have developed very respected methods for asessing risk.

If actuaries had been the ones evaluating AIG's insurance premiums for their Credit Default Swap business line, the business would have been shut down instantly as being the equivalent of a fly-by night operator under-collecting premiums in an unsustainable fashion, and that furthermore was insufficiently capitalized to absorb the losses potentially embedded in their product line, and because of both, woud have rightly concluded that AIG was therefore endangering the stability of the entire insurance system.

So when we follow the money, the first scandal is a regulatory one, of why Credit Default Swaps were allowed to be treated as financial, rather than insurance products, and note, the failure to regulate properly has cost taxpayers $170 billion due to AIG alone.

Go see who made that happen, and let them chose between lamposts and Madagascar, with complementary cake.

I bet you find a Goldman hand in this.

By my estimate, because of this basic regulatory failure, the total amount globally that will probably be eaten by taxpayers somewhere will probably come to the high trillions of dollars, if not tens of trillions, given the $55 trillion notional in credit default swap exposure.

When we follow the money, the real scandal though comes when we examine Goldman Sachs, and its role in the crisis.

For those who do not know, Goldman Sachs is probably the single most powerful financial firm in the world.

This frightens me writing this somewhat; they do not play nice.

Its former employees infect, I mean inhabit, the U.S. government at the highest levels on a permanent basis; Treasury Secretaries Rubin, Paulson, Geithner have all logged time there, or served, as in Geithner's case, under people who worked there; nice club, if you get admitted.

Goldman, as this Whore of Babylon is known on Wall Street, was one of the biggest originators of Collateralized Mortgage Obligations and especially collateralized Debt Obligations (CMO and CDO respectively).

So what is the real scandal?

On the one hand, Goldman was making money hand over fist creating/securitizing CDO's and CMO's, telling, in effect, grandmother's seeking safe yields on their CD's, oh, these investments are safe, very safe.

The Whores of the "Rating Agencies" say so.

On the other hand, Goldman had hedge funds, and one suspects, might very well have been advising foreign clients to act in a similar manner, which could be invesitgated, that were shorting the same CDO's and CMO's as if it were the Financial End of Times for the products being created by the Whore of Babylon by buying Credit Default Swaps from... AIG.

Some analysts might conclude that Goldman was commiting a fraud on AIG and investors, knowingly creating financial instruments far more risky than they were letting on to, with AIG to pick up the tab until they went bankrupt, like Goldman rivals Bear Sterns and Lehman's, who died from the same creations of the Goldman Whore of Babylon, and then using Goldman's political power, because of their infection, I mean influence over, the "American" government to rape the American people one last time by getting the "American" government to bail out AIG to pay back Goldman.

Now that would be a nice trick, to kill off your competitors, and have the taxpayers foot the bill, and the have the Lapdogs in the "Mainstream Media/Ministry of Truth" under the thumb of the Whore of Babylon get people to focus on AIG bonuses, instead of the real crimes.

If that is what is happened, which seems pretty obvious to this analyst, I say, let Goldman chose:

"Lamposts or Madagascar, with cake of course, complementary."

Dow 4500.

Now that is a hard to swallow number.

But, if you use the Fibonacci sequence to assess market highs and lows, and 1 times the market peak is the intrinsic market bubble value, because markets always run ahead and so the peak is always a bubble, and .8 times the peak is reality, and then .61 is a level one dislocation like a real recession, and the action around Dow 8300 was fascinating to watch at the .61 level, and .5 is a deep recession, that is Dow 7100, and we may have just crashed through that one, and .39 times peak is a depression magnitude like event, then, you get Dow 5400 as the bottom, if this is a Depression intensity event in some sense, even though I see more of a hyper-pression (loss of price stability and a new currency as the solution) for reasons discussed elsewhere.

Even though Dow 10,000 is the reality low, if one were to wait a long time potentially, using the Fibonacci sequence method, we just have to level cross first to get there, to test the psychology of the market in terms of, "Is this over yet?"

Are stocks cheap, or is there more pain. This is by the way Efficient Market Hypothesis consistent, because in the end, what is going on is that investors are assessing collectively if there are more people on each side of the level that think stocks or cheap, or have farther to go.

We have one more level to go by this analysis, unless stocks move up soon.

Looked at another way, which incorporates history and political science, I see Dow 4500 as the ultimate low.

Such a cratering of a stock market is not of course unprecedented; the Nikkei hit 40,000 in 1989 and remains at 7800 or so now, even holding for the long-run.

The Nikkei is also the warning as to what is really going on now, by the analysis that incoprorates history and political science.

Note the date: 1989, with Japan still a core ally in the end game of the Cold War.

Remember 1987 and the Market Crash?

Curious synchronicity with Japan, or maybe causality.

I vote for the latter, as I explain below.

When people write about this moment in 100 years, it is my belief that at the macro level, they will say that the period of 1987-2007 was the Peace of Reagan, like the Peace of Nicias in the Peloponnesian War, which lasted for ten years, sort of, just like the Cold War never really ended, it just went to the intelligence services for a while. Which, by the way, is what happened in the Peloponnesian War.

By this analysis, the Cold War is about to be back in a big, big way.

Go back to 1987.

In 1987, you had two punch drunk societies, Ali versus Frazier in the Thrilla in Manilla, which are now called the United States and the Soviet Union.

Of course in the death match that is world politics, there are no judging errors as in Manilla, no offense Ali, but Frazier forced all the action, but rather errors of one party quitting too early or swinging too wildly.

By this analysis, the Russians quit too early in 1989, or were actually really just hibernating adn re-shaping their governing structures around outright Russian nationalist lines, and W. later swung too wildly and too early like Foreman in the Rumble in the Jungle, and we know how that ended in the later rounds.

In 1987 Reagan had pushed the United States to the edge of a national bankruptcy in order to defeat communism; I have no problem with that, because the first function of government is to preserve life, and the Soviet/Russian nuclear arsenal endangers  a lot of American lives every day.

That is by the way why I am all about missile defense: if the Russians say tear down our walls/ missile defenses, like the Spartans kept on asking the Athenians to tear down their walls because it "Hurt their Spartan feelings that the Athenians didn't trust them" the correct response is, as usual,

F U and the horse you rode in on, Ronnie style.

The defeat of communism was a closer run thing than many remember, however, and it required the use of monetary policy instruments that inflated asset prices beyond their equilibrium values; there is a reason for the Nikkei and Dow moving together in the late 1980's, and global markets are moving together now, because they are a part of the same instrument of state power to a significant extent independent of being economic institutions.

In 1987, the United States had massive external current account deficits and internal budget deficits, just like now.

In 1987 however, you could use the Greenspan Put to mask the problem by reflating asset prices, which would keep the economy moving enough to raise the taxes to keep the United States in the Great Game, especially with Japanese support. 

For the twenty two years since then, the Federal Reserve System "helped" Americans avoid hard choices about Empire and Entitlements.

That chicken has come home to roost now, however, and the proof is that Russia is back, stalking us all over the planet and in space, that satellite "collision" was no more of an "accident" than the French "bumping into" the British sub in the "MIDDLE OF THE ATLANTIC, REALLY?, and the Baby Boomers are trying to retire.

Sorry, but demography, inter-temproral economics and geography and reading between the lines of the "N.Y. Times/Pravda" are what they are, and they tell you this analysis is the right one.

Russia is back now, and meaner than in 1987  too, because they have their own really bad demographic problems now, their society is actually drinking itself to death, but they still have lots of nukes and oil and gas and fixed and rotary wing aircraft and tanks and an Army of Russians that, whatever their drinking issues, have to a man been real tough historically speaking, ask Napoleon and Hitler, and all of which are in the control of a man with a plan named Vladimir Vladimirovich Putin who could care less about anything than power right here, right now.

Sorry Vladimir, but radiation poisoning Antonin Litvinenko? That I just couldn't let go of; it says something about your mentality.

Hey, Vladimir, what is wrong with a bullet in the back of the head, and a watery grave afterwards? That is the old school.

But it digress.

I personally think the press is going to wait to tell us the truth about the real state of the world only when Mr. Putin's fangs have taken some deep chunks out of us, which he is about to commence delivering by my analysis.

But back to the main event, Frazier and Ali, and we want Frazier to win the late rounds on a Knockout, because it looked good in the short run but... .

Dow 4500. There was a big run-up  in 1987, and if you go back to the base of the 1980's, and say 6 per cent return on top of inflation, a bottom of 4500 is reasonable, even if the intrinsic value is actually 8- 10,000, which is .8 of the last peak.

History though, to me, says that a bottom closer to the 4500 range makes sense, that and the fact that I saw a license plate the other day that said Dow 4564 when I was drinving around thinking about the Dow, and because more fundamentally, I have had the distinct sensation of having awoken from a dream spun for the last twenty years by the American capitalist classes and the politicians and media hacks they bought, AND spun by the Russian Intelligence services for different reasons, and that both are coming to an end, and lately have had an irrestible urge now to point out a Bear I see on the prowl with the kind of hair standing feeling of:

 "Ah, hey guys, forget the terrorists, the Bear actually feeds them anyway. He always did, because the Bear likes to play Great Power politics the old school way. The Bear is back, in a big way, and we are not looking at him enough, actually he is the real story always, and he was just hibernating, and he looks really, really hungry, and as usual has big nuclear fangs and big conventionally armed claws, and is drooling at the chance of taking as big a chunk out of us as possible and if he could he is a Bear and would actually like to make us a meal. Danger Will Robinson."

And that would be DOW 4500.

For those who have not had the pleasure, I highly recommend John Boyd, both his essay Destruction and Creation, as well as his slide show on military history.

Boyd was an authentic American genius, and hero, whose writings captures/explains the current moment perfectly.

As to hero status, Boyd was an ace in the Korean War.

Later on, he was a test pilot known as Thirty Second Boyd for his ability to allow a pilot to get on his six o'clock position, and within thirty seconds, reverse the situation to what would have been fatal to the other pilot in a real dogfight: drinks were always on Boyd.

It was during his stint at the Pentagon however, that Boyd became a hero in the highest sense, as in combating the idiocy of military bureacracies, he gradually stumbled onto a general social theory that is very important to understand now; really, really important.

As Boyd tried to demonstrate to "The Brass" that his Energy Manueverability Theory at the time was the most appropriate quantitative measure for assessing fighter aircraft, in this case against the Soviets, and that by that standard, the nascent F-15 and F-16 were being steered in the wrong direction, he gradually came to realize that as much as ninety per cent of the people working in the bowels of the Pentagon were full of garbage; especially the Top Brass.

In essence, the Top Brass liked to Kiss Fannies; no matter how many people died, or could die, in the process, as long as they got to "Walk on Water/Get the Star (s)."

Boyd concluded that all most people working in the Pentagon wanted was to be somebody, preferably with four stars, rather than do something, for which, like Boyd, you generally speaking only make Colonel.

I have met one great brigadier before, and I am half joking, but only half. Maybe only a quarter joking.

To be fair to the non-Boydian majority, a key goal of most organizations is to crush their Enemy the Human Spirit Totally, which succeeds with most people if they are there long enough, and especially if they are beaten on long enough: HR people and Administrators are real good at setting that up now.

Ninth Circle or the Wall for you guys after the Revolution. Just kidding.

I am sure as well that Boyd figured out that the same phenemenon of the Biggest Fanny Kisser/Backstabber/Bully depending on what is Good for the Moment and Mess Everyone Else Over Going the Farthest is true in the private sector as far as getting a corner office and big bonus, or in the academic world in terms of landing the prestigious tenured job based on publications that no one will read in five years at best. At best.

I have seen the cowards, I mean bullies, I mean Fanny-Lickers enough in the corporate world to get the point, and have been on the receiving end of a massive amount of academic bullying and witnessed more fannies kissed than I care to think about: may my academic enemies that have tortured me over the years, and we know who you are, die by Chinese water torture. But I digress, but only slightly. I am joking. Sort of.

To those of you who the above calling out of organizational Fanny-Licking etc... has now made you want to kill me for invalidating your meaningless death of the human spirit and race pointless existence, I apologize in advance.

I would point out in my defense that your type of person has tried to hurt me in every organization I have worked in for speaking truth to idiots, I mean the powers that be, and that more importantly, that your type of person is about to kill all sorts of  innocent people;so to heck with you and the horse you rode in on.

Nothing personal.

Returning to the main theme of the essay, the work of decorated by the Marine Corps Air Force Colonel because the fly-boys didn't get Boyd, the reason for this phenemenon of organizational entropy, Boyd came to realize, is of course the Second Law ofThermodynamics, as applied to organizations.

In essence, the Second Law tells us that closed systems must have an increase in disorder over time in the sense of energy available to do work.

In organizational life, this means that eventually, more and more effort/resources must be inputted into the system in order to deal with the external environment of the organization successfully, until even despite the best effort of the doctors/management consultants/re-inventing government planners, it dies; like life, like right now.

I know that if Boyd came back right now to address the current world's leadership, what he would say would be something like this:

"Uh, guys, I have some good news, and some bad news. I am sorry for being kind of a jerk for being backstabbed my entire career in the Pentagon, so first, the bad news. The bad news is that the systems of economic, social and political governance that you are currently operating are real long in the tooth and collapsing around your dumb selves. The fact that none of the so-called experts in the "Mainstream Expert /Fanny-licker" community is getting it right at all lately tells you this. The fact that the "Mainstream Expert/Fanny-Lickers" spend a lot of time complaining about not seeing the future clearly all of a sudden, and all at once, all at once, these are the key signals that you are witnessing a General System Failure, a Collapse, in the sense of Jared Diamond. That is the bad news.The good news is, you don't have to freak out about it, or go the way of the Mayans, just get Creative! The Destruction part is already here, so you might as well get creative, and not freak out, and especiallly not do dumb stuff from the past like start wars to distract people; you hear me Vladimir, Barrack and Hilary, Nicholas, Kim, Hu, Bibi, et al... . Cut it out, or see my world wide theory of Revolution I had the brass you knows to show the Top Brass at the height of the Cold War in the Pentagon no less to see what happens to your sorry dumb morons. Be Creative. War is not usually Creative. Do the exercise."

People like Jared Diamond in Collapse intuited this Collapse too a while ago, which is why he wrote the book probably, because he just couldn't watch the lemings, sheep, Mayans, I mean us, wander ever closer towards the cliff anymore without some kind of hint.

There is good news from Boyd, however, and a thought exercise that all the lemmings, or sheep, I mean Mayans, I mean, everyone, needs to start doing right now. In Boyd I trust, on this point.

I have my classes working on it. Promise.

Boyd's model of Creativity, which is in the essay Destruction and Creation, and in which we need a lot more Creation now, because in organizations like governments, corporations and universities there is not nearly enough of that going on right now, and so therefore they are in the process of taking the lemmings, I mean the sheep, the Mayans, well, you get the point, real close to the cliff, works like this.

As an example, create three images in your head of a ski slope, a park, and a lake.

Think about it. For real.

Then, when you have painted in the details of each image, smash the mental boundaries between the three images. Poof, all to pieces.

 That is the Destructive step, no more ski slopes or lakes, or Left and Right, so to speak for later, and just think about the pieces in front of you.

Now you are free of Left and Right, well, first ski slopes and lakes.

Guess what is one thing you can come up with from the three images? This is the Creation part.

Well, one thing is a snow-mobile, from the skis, the handlebars and seat of a bike from the park, and a motor from the lake, none of which occured together in isolation. I bet there are other modes of transportation too from those three images.

Now, for homework.

Just kidding, but feel free to run with it, even Vladimir,better than your dumb ideas with the paratroopers in Vladivostok lately; think we didn't notice that? Vladivostok? Really. Nice to play on the Korean Peninsula with that maniac, or Alaska. But we know. How about the cholera? Been there done that before with small pox and the Indians whoever pulled that stunt, so cut it out. You too Americans, France, Japan, the Zionists, cut it out all of you, and try something new instead of the usual homicidal game of three level chess on the world island that you think you have to play. For once do something really different. Please. It will be way more fun the alternative. Promise.

A simple thought experiment I leave below for the current system crisis; don't be so mentally lazy, it is not a good time for it.

Take a corporation, a government, and a university. Really picture them. Really think about them.

Then smash the mental boundaries between them, and see what we you can come up with from the pieces.

I know one of the things you could come up with would be the Holy Roman Empire, properly understood, and in which that is actually a good thing in many ways, and where I am betting  the survivors of the current course will end up anyway in some sense, and thinking about it beforehand will increase the number of survivors or avoid talk of survivors in the first place.

GET CREATIVE.

I am sure there are some of you in the audience who are thinking "Isn't she gone now? Oh no, she's back."

Well, I am used to persisting in life, having to earn basketball scholarships and such in order to pay for my education, granted at a time when it was a lot cheaper and easier to do so, meanwhile passing a wonderful time in the community college systems of this country.

So in response to Mr. Obama, I am all in favor of expanding educational opportunities; I just think that your educational background might blind you to some untapped resources, like the community college system, that are a lot cheaper, and more importantly, friendlier, than research universities in which students are too often bodies to be processed.

You have talked about change. All to the good, if you change the right things.

You talk of accountability. All to the good, if you look at the right things to hold one accountable for. What I found, missing, no offense, in your speech, was any call for more accountability from the higher education sector to which you propose sending more money.

My son is serving his country, and to be honest, the high cost of four year schools played a role.

I am concerned about rising health care costs to which I return in a moment, but that in the end most especially affects the old.

I am at least as concerned about the higher cost of higher education.

Why does it keep getting more and more expensive?

One of my duties as governor of Alaska has been to oversee the system of higher education, and I can tell you from personal experience, that it seems like there are a lot of adminstrative types sitting around in comparison to those actually teaching clases, and that before we throw more money at that system, perhaps we should make sure that it uses the resources more efficiently.

As to foreign policy, some of you in the audience laughed at me for saying I could see Russia. I know Alaska is a long way off for most of you, so being next to Russia sounds funny.

However, historically speaking Mr. Obama, the Poles and Baltic States and the Ukraine have not found it funny to live next to Russia; no one has. No offense to the Russians; it's a rough world. Poland, the Baltic States are NATO members however, who are now being threatened with tactical nuclear weapons by a former KGB operative whose employees radiation poisoned Antonin Litvinenko for having the nerve to point out the probability that the FSB blew up apartment buildings in Moscow in 1999 in order to get Mr. Putin dictatorial powers, and that Al Qaeda operative Ayman al Zawahari was in Russia for six months in 1998.

My Party does not think now is a good time to show the slightest weakness towards Mr. Putin at all, and this  talk of coming to a deal over missile defense shields in Poland is showing weakness to him. No bear baiting; we like bears, even Russian ones in Alaska, but we watch them carefully too. We have a Pipeline to protect; more on that later.

Continuing with the theme of foreign policy, you say you will save money by pulling troops from Iraq.

But is that not a false economy if it encourages ever more adventurous  moves by Russia and potentially other Great Powers?

Weakness always draws bullies, and not just Russian ones.

As to the economy, yes it is the case that the current economic situation is more trying than most people had been led to believe to be possible.

And that is exactly the problem. The Federal Reserve System and the continuing use of monetary and fiscal policy  to smooth out the inevitable bumps in the free market economy, a free market economy that you rightly point out as our great strength, in conjunction with regulatory encouragement of increasing the rate of homeownership, is the immediate cause of this collapse.

I see too much of the same in what we are doing to date. I want as Ron Paul has suggested a very serious inquiry into the role of monetary policy in this collapse along the lines of the Aldrich Commission in the wake of the Panic of 1907 that led to the creation of the Federal Reserve System, in which I think Mr. Paul should be able to make his case that if money is nothing but paper, in the end, it won't be worth much.

That leads to my last point. You talk about energy efficiency. Well and good to a point.

But it is inefficient not to use the resources of my state, especially because I beliece as does Mr. Paul that money should be backed by something, and energy wealth seems to me the main asset that is not being used by the Federal Government in this crisis, and that is not responsible stewardship of nature's bounty. There are trillions of dollars of oil in ANWR; why would we want Mr. Putin to have more of an on/off switch on the world economy than he does already by allowing the Alaskan Pipleline go dry, a Pipeline that supplies not just the United States, but also our most important ally in the Pacific, Japan. That seems dumb to me.

Finally, returning to the economy, the Baby Boomers are getting older. Their asset prices have fallen when they needed them the most.

I am all for easing the flow of credit, but the right way.

Part of the source of this crisis is the concentration of risk in the financial system. I propose that we distribute ownership shares of banks to the Social Security Trust fund and create new banks backed by the natural resource wealth of the federal governement in partnership with the private sector in which no bank will ever take on excessive risk because it is too big to fail.

I look forward to working with my party and Mr. Obama. I enjoyed running against with Senator McCain, but am of course as they say, my own woman now.

Sorry for those who don't like me, yet I hope. I am here to stay, because although I will disagree with Mr. Obama, I certainly want my Party to work with him where we can.

Thank you.

I write this in response to numerous well-thought out and well-written posts on Town Hall on Democracy and Republics etc... .

Unfortunately, I believe that these writings replicate one of the key omissions and errors of the academic literature on Democracy and Republics, in the end because they replicate the ommissions and errors of the historically significant reflections on this literature.

This historically relevant literature most especially includes an omission in Federalist Papers Number 10 and 51, and most importantly, the errors and omissions of the root sources of most of Political Science as we know it, which especially included Madison even with his grounding in English sources, which are Aristotle's The Politics ,and Plato's The Republic.

The error in question is  failing to consider the external environment in the analysis and in the construction of domestic politcal institutions; hence the title.

Thucydides, by this analysis, read properly when he was no longer only of the Party of the Few after the betrayal of the Athenian 400, was the greatest political thinker or the ancient world, and probably the greatest political thinker of all time, except for possibly Herbert Spencer, Vilfredo Pareto and Max Weber, who appear in this analysis in the obvious places about the Few versus the Many and the nature of Government and its functionality in terms of survival.

As to the analysis, Democracy is a form of government, first and foremost, although it does have economic and social corollaries within ranges

Democracy is therefore a subset of governments in general, hence the definition of government below.

The definition below is very general in character for a reason, because the highest level of generality is necessary for proper analysis, in order to avoid being too myopic, and thereby not see how the pieces of all forms of government fit together, especially the external piece, which is the primary focus of this essay.

Definition: Government: A functioning system of institutionalized controls over the use of physical violence that prevents the violent part of the world of Hobbes (Leviathan and De Cive) from being the predominant reality of daily life for the majoirty of the inhabitants who may be considered legitimate participants in the system of government in terms of said systems own rules of operation.

Life may be brutish, nasty and short in some parts of a society said to posess a government in comparison to living in an American planned community, but fear of a violent death does not constitute the main worry of an average individual, an individual who under the rules of the form of government, may be said to be legitmate participants in the operation of the government of the society being said to have a government in the sense of a system of functioning controls on the use of physical violence. 

This definition allows using slavery based societies like Athens and the American South pre-1861, or even the United States prior to the passage of the nineteenth amendment enfranchising women, as being pertinent to the analyis of Democratic Government, if only because all the principles of Democratic Government, indeed all government, were developed in a time period in which notions of Equality as to who was considered part of the Demos/Many were significantly different than is now the case: no throwing out babies with bathwater.

Thus, under this definition, American inner cities often teeter on the edge of not having a functioning government in many instances, but they are still governed because

a) most days one does not get shot in even the worst inner city ghetto making economic and social exclusion stressors primary on average

b) the overarching government of American society could impose total control on the use of physical violence in inner cities if it so wished by deploying more police and social workers and tax incentives to said areas. That is choice.

c) the inhabitants of such zones on average who under the current system of governance are legitmate participants in said system would prefer b to its alternative of secession and/or civil war as demonstrated in the current lack of significant armed revolutionary bands in American inner cities. Of course, nothing precludes said occupants of inner cities from so chosing should the larger society fail to deal with the myriad problems of the American inner city more efficaciously, which demonstrates the point about government or no.

Such controls on the use of physical violence in the definition of government may involve solely or almost primarily physical institutions such as police forces and armies as in a Universal Monarchy like the Roman Empire, Han China  especially in the Shih Huang Ti period, Tsarist Russia especially under Ivan IV, or the Persian and Mauryan Empires, or a modern police state like fascist Italy and Germany, currently Putin's Russia and the CCP governed China, and the recent past U.S. supported Pahlavi regime under the Shah.

We call this a militaristic system of government, or in the language of the Da Vinci Model, the P form.

Such militaristic systems of governance have of course other institutional backstops, like monarchical legitimacy or the wisdom of a communist party or the Dear Leader/Fuhrer/Savior of his Country, but the main characteristic of said governments is the threat and/or direct use of force to impose order. Such a form again is called militaristic in character.

Such institutionalized controls on the use of physical violence that are characteristic of any government may also primarily rely on social norms such as especially the Chivalric Code of Feudalism of Western Europe and its analogues in the Bushido Code of Japan, although Japan still qualifies as a militarist order from the time of the Kamakura Shogunate because of the centralization of the control on violence of the Bukufu which was not the case under the feudal order,  and note the especial imortance of the decentralized religious sanction of authority of the Holy Roman Empire under which feudalism and the Chivalric code functioned, or a theocracy like Iran and potentially Israel under the right conditions, or a true sense of social identity like class as existed under War Communism in 1919-1921.

Communism in this sense everywhere followed a natural trajectory from a social basis of revolutionary identity initially towards  the militarism of the first type of government.

The second form is called socially constructed government in character, in terms of the Da Vinci model, the S form.

Such controls on physical violence that are constitutive of any government may also involve primarily economic incentives of legally sanctioned economic losses and punishments for violations of system governance rules that include a physical enforcement component, but in which the physical violence component is not the primary means of enforcement of dispute resolution, but rather the lawsuit is the means of enforcement, as in the Commercial Societies of Western Europe and North America as said societies evolved after the English Civil War and the American Revolution; Ancient Athens, the Venetian Republic, the Roman Republic prior to the Gracci and especially Julius Caesar, and probably Carthage prior to Hannibal Barca would also fall into this typology of what we call economically constructed governments.

It is possible that Sumerian city states prior to Sargon of Akkad and the Indian civilization of the early Vedic period would qualify as well, although the evidence alas is inconclusive, and given the Indo-Aryan basis of the latter, more probably militaristic in character for the Veda period.

We call this form of government an E form in the Da Vinci Model, and for the purpose of this essay, an economically based form of government.

Moving to Democracy as a type of governement clearly falling within the economically constructed typology, we define sub-types as follows.

Definition: Democracy: A system of governance in which the Demos, the People, the Many, may be said to have the ultimate exericise of political authority in terms of control over the use of physical violence. The Many will vary in its extension in time and place, but at a minimum must constitute a significant portion of the population exclusive of women and slaves in the pre-modern period and inclusive of essentially ALL after 1900.

This compositive defintion of the Demos is standard practice in compartive politics.

We may then turn to sub-types of Democratic Government.

Sub-types of Democracy: Assembly Democracy: A type of Democratic Government in which the People, the Many, gather and vote on the majority of laws which are enforced through some means of sanctions, but in which the physical sanction is not primary, and in which the use of said sanctions is controlled through the use of the direct votes of the People though legally regular processes.

Example: Athens before the 400.

Representative/Republican Democracy: A sub- type of Democratic Government in which the People vote for Representatives who then cast votes for Laws that are binding on all, and in which under both types of Democratic Government, the use of phsyical violence is strictly controlled by Law in the sense of following well-established procedures, and that the use of physical violence is an adjunct to other sanctions, mainly economic, but also social (ostracism of a formal/Athenian  or informal/Open Salon character.). I am joking as to the latter, I hope.

Now to the crux of the matter of the ommission of all too much political thought, in which all governments must be evaluated in terms of control over the use of physical violence, which must by definition include control over the use of violence by outside states, unless the Democratic Government is a World Empire.

By definition, a Representative/Republican Democracy can span more terrirory than can an Assembly Democracy, because to have every citizen participate in the debating process over laws in the latter form would be an impossibility in terms of time beyond the numbers of minutes in a day times a reasonable length of debate: 14,400 (10x1440) is a not unreasonable upper bound for the Many to have even the possibility to be said to rule directly.

Moreover, as a practical matter, among any population a Few are better at public speaking than the Many, like our modern intellectuals who are so "dis-interestedly enthusiastic" about Assembly Democracy in the intersts of the Many, so it is therefore the case that anywhere and everywhere there is, under both Representative/Republican Democracy and Assembly Democracy, an Oligarchy/Collegium which exercises a veto on the rule of the Many, and which on average directs the political life of the Many as well.

There are usually subsets of the Few/Collegium in both forms of Democratic Government whose control over their own intrigues for power over the Many is per Thucydides actually the main issue of Poltics anywhere.

We return to that theme at the end of the discussion.

There is therefore a very definite and inescapable reason why the most perfect Assembly Democracy in history, Athens, can have its political life periodized into the lives of Themistocles, Pericles,Cleon, Alcibiades, and Demosthenes etc.. : the necessity of having public debate creates an automatic few of a certain type, namely the Great Orator, in which the modern substitution would be a good looking writer/speaker.

The question that therefore is truly relevant to evaluating the sub-types of the form of government called Democracy, which in reality is always a mixed system of rule between the Few and the Many in any case, in which in an Assembly Democracy again some Few speakers/writers constitute the Oligarchic element, and in which in a Representative Democracy there are per Federalist 10 bases for more numerous forms of Oligarchic elements of an economic, social(say religious or ethnic identity) and political (family name, imperial ideals) character, is which sub-type of Democracy is more likley to survive in an external environment of either Militarist or Socially constructed basis of governance.

The answer is clear.

If the socially constructed form of rule government constitutes the external environment,(think the Holy Roman Empire, the early Abbasaid caliphate, or a modern theocracy) then if such a government is grounded in the same culture as the Assembly Democracy, then the greater extension of the socially constructed state and the economies in the use of physical violence that this implies means almost sure incorporation of the Assembly Democracy into the Socially constructed state.

If the socially constructed government resides on a different cultural basis, then the incorportion is almost to be culturally and probably physically genocidal in character because of the economies of scale that always exist in the use of physical violence.

There was a reason the Jews were exiled by the Assyrians and the Romans, which is that because of the choice to not demographically incorporate sufficiently with surrounding populations, there were not enough Jews to resist the encroachment of militarist societies on the Jewish Kingdoms, a logic which would have applied even if the Jews had been ruled as Assembly Democracies.

It is similarly obvious which form of government survives in  contest between a territorially extensive militarized government and a small Assembly Democracy: the former. There are high start up costs to being able to fight a Great Power War, and that gives a big edge to what Madison called the Extended Republic (Democracy).

To reiterate as to the survival aspects, and therefore functionality, in terms of a form of government, in comparison of the Assembly Democracy versus a Representative/Republican Democracy, the use of military force has clear economies of scale as one moves away from zero up to in the nuclear age a very high upper bound, and so therefore the latter has superior survival traits and is to be preferred.

Given the by definition small extent of an Assembly Democracy in terms of avoiding a total demarcation between the Few and the Many, the survivability functionality is heavily weighted towards the Representative Democracy.

Athens and Carthage lost to respectively Macedon and Rome for a reason, which is that they were outmanned, and in said defeat, the rule of the People was meaningless, whether the city was burned to the ground or not.

This is also why the only states in which the Demos can be said to rule to any meaningful extent must be large, not small, states, and that even then in all but the smallest states, there will exist an oligarchy.

The alternative is to have a harmless debating society under the rule of some future Macedonians/World Empire, in which the rule of the Many is pointless, no matter how much we may dislike the Few, or to create a World Federation of Represntative Republics.

Given the contemporary cultural diversity of the planet, such a creation of a World Federation would almost surely make the First and Second World Wars look like cricket matches.

The real problem absent a Third World War for all Democracies, Republican or not, is the tendency of the Few, as was warned about by Thucydides, to take their sub-set arguments elsewhere for foreign military assistance or on self-destructive imperial adventures.

The difficulty Thucydides first identified is that beyond a certain social distance, we don't care what people think. Among the people we care about what we think, human nature being what it is, our concern is ultimately homicidal in character.

Among the Few, the only concern is competition within the Few. 

The Many to them are Sheep.

What the Few usually forget is that most of the Few are Wolves; Shepherds are rare, especially in politics, even though all governments only prosper under the rule of the Shepherd, not the wolf, in the long term.

A member of the Few can take losing to one from the Many, which will occasionally happen in any Democracy, because the Many are in effect considered sub-human; but not a loss to one among the Few.

The latter loss is so hurtful to the sense of being within the Few/Collegium and therefore one's sense of self, that as in Athens and the 400, the temptation to invite a foreign power Within the Gates, or to launch idiotic imperial ventures like the Sicilian Expedition like Alcibiades, becomes so overwhelmingly high, that what will seem on the surface like respectively are socialist or fascist cliques, but in reality are just the sort of egoisitc factions Madison warned about, destroy the Democracy, Republican or otherwise.

It is to the realm of Elite Rotation a la Pareto that one must look to preserve any Democracy, and again, the extensivity of the Republican version, per Madison Federalist 10, points to the superiority of the Republican over the Assembly Democracy, because the Few are less homogenous in character in an Extended Republic, and therefore less likely to have grudges to hold that get put before the welfare of the Many.

I write this in response to a nice post by Rick Lucke on Open Salon.

Never talk Politics and Religion; well, here goes.

In the end, it seems to me that at a minimum Deism, defined as the belief that there is a Universal Mind that gives an Intelligent Design to the Universe, in which Design is defined in the sense of internally consistent Laws of Nature, is economically, socially, politically, scientifically, both epistemologically/logically and physically, and personally necessary.

That was a mouthful.

Eptistemologically,Physically, and Scientifically necessary?

With all that other stuff? Really?

Yes.

As to science, the Scientific Project proceeds on the assumption that there are Laws to describe phenemenon that are more useful than random chance; otherwise, one would do just as well sacrificing sheep or flipping a coins in comparison to consulting a scientist as to the best course of action in a given set of circumstances, or even just predicting what is going to happen under a given set of circumstances.

Newton and Libenitz and Franklin understood this basic principle very well, which is by logical necessity a Deistic epistemology, as we shall see.

Note, this basic distinction between Theism and Atheism is a logically exclusive and mutually exhaustive categorization of epistemology.

Why is Theism and Atheism a mutually exclusive and logically exhaustive categorization?

What about Agnostics?

If one insists on bringing in Agnosticism, which is usually really one or the other, but let us relax that assumption for the sake of the Proof. Alternatively, one can assign by random chance agnostic epistemologies to either category Deist or Atheist under a Bayesian choice function that assigns a prior probability to the Investigator/Philosopher's belief that there is a God or No on the unit interval inclusive, with Theism being Probability One, and Atheism being Probability Zero, and the result as to the Probabilistic Choice over a basic epistemological dichotomy between Theism and Atheism is the same.

The Atheistic epistemology that culminated in Logical positivism got us all off track, because the logical postivist approach to epistemology argues that all scientific theories are just that, theories, subject to disconfirmation, without considering the structure of theories to one another in a very precise set theoretic sense.

Disconfirmation under logical positivism is by the process of Karl Popper, as when Einstein's Theory of Relativity is said to disconfirm Newton's Theory of Gravity when Einstein's Theory of Relativity predicted Mercury's appearance from the earth better than newton's approach  did in 1919.

We say that under logical positivism, when Einstein predicts exactly the same consequences as does the Gravitational Theory of Newton, except under a set of circumstances in which Newton's theory fails to be as accurrate as the Einstein forecast, and when in all other cases Einstein's theory is at least as accurate as Newton's, (among the relevant circumstances turns out to involve high velocities),  we can then subsume Newton's theory of gravity under Einstein as a subset or special case.

If there were inconsistencies between Einstein and Newton, so that there was not one clear dominant theory in what they forecast, then we would go looking fo a new theory that covered both cases under teh logical positivist approach.

Logical postivism thus induces a series of sets and subsets over knowledge.

The difficulty with this approach in terms of Atheism is that the Goedel Theorem, the Incomputability results of Church et al and the necessity of using the Axiom of Choice all imply that the Completion of the Power Set of the Universe in a mathematical sense, which is necessary to the scientific project, involves the existence of a decision function that is infinitely fast: Infinity.

It always comes back to the Infinite, and when one forgets about the Infintite, one makes grave epistemological errors in Finite Time.

As to the Physical Necessity of a Creator, no Effect without cause is a basic scientific rule, traceable to Aristotle.

Modern cosmology has run into this dead end for a long time.

If we trace things back to the Singleton set of the Universe before the Big Bang, where did that come from?

There is no testable way, in a postivistic sense, to know.

Moreover, the Universe, as must be the case for science to make sense epistemologically and physically, is governed by a strict set of constants that must be in a precise mathematical relation to one another.

The Universal Mind is a Beautiful Mind, and it can only be that way. This is why the formulae governing the universe are always so elegant, with such wonderful numbers as i, e, pi and phi being among the most important.

The dodge the aethists and agnostics in cosmology are trying to use now is to argue that there are an infinity of universes embedded in a space time continuum that fluctuates generating multiple Big Bangs in which only the orderly universes persist; survival of the fittest universe.

But then there is the infinite regress again; where did the space time continuum come from.

In the end, the Hindoos told the story best.

A Grasshopper asks his Master, " What holds the World up?"

The master replies, "An elephant."

"Master, what holds up the elephant?"

"Four turtles."

"Master, what holds up the turtles?"

"Shut up, it is turtles all the way down."

That is our existential dilemma, even as scientists, that we persue an infinite regress of subsets  but cannot get there in Finite Time.

It is also in the end, our comfort.

We as finite minds cannot, and will not know, the Completion of the Universe, which is the Univeral Mind, It is that it Is.

But we can know that it is of necessity a Beautiful Mind, and that if we work at it, we can come to closer and closer approximations, even if we never get there in Finite Time,.

We can also draw comfort from the fact that almost surely along the Way to Understand the Universal Mind, we will come to feel pleasure from its Tao, its Karma, its Telos, its cycles, which is what the Mystics and Prophets have been trying to get us to see for millenia.

As to the economic, social and political necessity of religion, left to its own devices, any economy with any ownership over economic, social and political resources (henceforth ESP), and any uncertainty over the same, will, by the Law of Large Numbers with Probability One, generate a Power Law distribution over Wealth defined in one of those terms, E, S or P.

Thus, Generalized Wealth Processes accumulate exponentially in a generalized stochastic motion. It is in the Nature of the Universe.

Unfortunately, or not, it is also a Law of Nature that human beings must measure themselves by others, if they do not have a Universal Reference standard in the Universal Mind.

Like most Laws of Nature, the Social Distance Function that so results under the generalized stochastic motion must have a metric over it, which is almost surely an inverse square law among the relevant metrics; the distance I feel from you grows by the square, other things equal, of our difference in wealth.

Thus, the universal phenemenon of keeping up with the Jones, as was noted by Veblen, is quite intense.

 Remember again at this juncture that ownership can be expanded from narrow economic notions to a more generalized, and accurate notion of control over ideas (social), or instruments of ultimately force (political), and the argument goes through the same way.

This universal competition for economic, social and political power under the fact of the exponential generalized wealth accumulation process creates the Univeral Phenemenon/Law of the Few and the Many. This is true of all human societies across all time.

The exceptions are a set of measure zero, and have not lasted long.

Because of the Inverse Square Law governing the competition under a Power Law Accumulation Process, over time, the Few feel more and more remote from the Many.

The inevitable rise in hostility, which is a form of distance in terms of envy and its inverse snobbery, must always finishe in either War, Civil War and Revolution, or a combination of all three.

In this sense, Lenin was actually right, as was more importantly and more precisely, Thorstein Veblen: The Natural Order of course includes Natural Selection, on human beings and societies too, just like Spencer argued.

Thus, for Social Peace, one must have Rules, and in the end, they must be Revealed from an Outside Reference Source, or it will be the case that either the Few or the Many write the rules to their own benefit, and over time, this will become Common Knowledge.

Without such rules, a Sub-Game Perfect Noble Lie/religion, society, by the Condorcet Theorem in its full development, would otherwise turn into a war of all against all and the inevitable rise of the singleton/dictator as was argued by  Machiavelli and the man on the horse if he lives is alwa; hence the function of religion, economically, socially and poltically. QED.

It is so patently obvious that Russia is now openly trying to displace the United States as the world's pre-eminent power without the slightest objection by the U.S. government or comment in the media, and is thereby in the process endangering the very life and future of every American, that I have been forced to the conclusion that the people of the United States are immoral cowards by and large, who would not defend themselves if there were Russian paratroopers on the front lawn of the White House, and that our political elites know this, and are going to surrender the hard fought victory of the Cold War for human freedom for the illusion that they will be left alone by Russia and the rest of the world after doing so.

Bad news, immoral cowards, we won't be left alone, because as long as the United States could come back, it would be a threat to Russian domination, so that the only thing that is is safe to do is stop Russia while we still have allies.

Just think, have you ever been the top dog who fell on hard times? Did your enemies, and especially your friends and family, show you mercy, or did they try to crush you totally in body and especially spirit? We know the answer to that question already, which is why it is never safe to let go of power once you have it.

Why the immorality part is so important to this story is because a consumerist society like the United States is bound to generate immorality and degenerate into a war of all against all over money, power and sex if left to the greedy devices of those who run it, and will eventually succumb like Athens and Carthage to a society like Russia and China later, in which private pursuits are put behind the collective interest.

Athens and Carthage were like America, and they lost to Sparta and Rome because they were soft, just like the United States is now.

Machiavelli warned of this in the Discourses, that if a society doesn't have some overriding collective purpose, it shatters pretty quickly into greed, lust and vengance, and that like it or not, the pursuit of Empire has usually been the best course.

Space exploration is the only alternative for U.S. national survival now, and that does not mean NASA, but it means outright colonization of Mars by millions, with global cooperation or not.

What does not grow, rots.

As to the enemies within the American gates who are in the process of surrendering, it is worth remembering that the commerical elites of the commercial/sea powers of Athens and and Carthage thought they would be safe surrendering too, only to find in the case of Athens that their walls were torn down (Ballistic Missile Defense) and of course in the case of Carthage that they were to be sold into slavery if not put to the sword.

The idea that we will be safer if Russia is allowed to replace us is laughable, and only put forward in the end by selfish cowards who would dishonor the American dead of the Marne, Normandy, the Hurtgen, Bastogne, Heartbreak Ridge, Hamburger Hill, Diyala Valley, and Fallujah in the vain hope that cowardice will be rewarded by a man like Vladimir Putin, a sixth degree black belt in judo.

I must take my hat off to Mr. Putin and Russian ingenuity:Friday's destruction of a U.S. military communcations satellite, the Iridium network is really mainly DOD, was brilliantly conceived and executed, and the demonstation effect is likely to be large. 

Our American Allies (e.g.Britain, Germany, Poland, Turkey, the Commonwealth, South Korea), Frenemies (e.g.Pakistan, France, Israel, Japan, Greece), and Enemies (Russia, China right now but wait and see after the excitement on the Korean Peninsula, North Korea although they are actually mainly a suicidal pawn, Iran, Venezuela) and Neutrals (Italy and now Spain will always be on the winning team) know the importance of satellites for U.S. military operations all too well.

Now some may immediately accuse me of being excessively conspiratorial in character, but consider the blowing of the Khyber Pass Bridges last week, the follow-on ejection of the United States from its Kyrgyz airbases two days later, and then a week later, a Russian military satellite happens to crash into part of the core communications link of U.S. forces in Afghanistan.

Really? Over Siberia apparently?

Really?

Is that not a curious series of unfortunate events?

All the Russians had to do was know the postion of the Iridium satellite, and the "accident" occurred over Siberia and the tracking ability of the Russians is quite well developed for such things just along different technological lines, and then send a universal signal to its COSMOS satellites to hide the fact that encoded in the message was one to the satellite in question to move just a little, a satellite which was sleeping until needed to go into the appropriate tumble, a "tumble" that could easily be made to look out of control, with course "corrections attempting to prevent an accident" that if necessary could be made to look like they "failed,"and then there would exist a continuously calculable and optimal, with respect to all the parameters of the problem including deniability, trajectory to smash into our satellite.

Nice work Vladimir, and give credit to Russian science and engineering, which by the by, is way better than Americans have been led to understand.

The whole history of mathematics is littered with Russian names, not Americans, so this would be no surprise.

This conjecture is consistent with the history of Russian weapons design approaches, which always thought that the Americans traded off too much in quantity for higher quality.

This Russian approach actually has justifcation in Lancaster's Sqaure Law as to the efficacy of numbers in generating firepower, and more importantly in terms of the long-term debilitating effects of relying on technology to avoid difficulty, especially casualties, on national will as the ultimate source of national power.

Clausewitz and Sun Tzu are smiling Vladimir Vladimirovich, and the Russians always have felt that if it were Russians using Russian weapons instead of idiot "satellite"/client states against the Ameirican armed forces that the historical U.S.-Russian weapons comparison would look way different.

In the end, that kind of thing is something you just have to know, just like at the end of the bank robbery scene of the beginning of the first Dirty Harry movie, when Clint holds the gun at the black guy on the ground, alarms going off everywhere, fire hydrant expoded and shooting water all over the place, and Harry has already blown three people away and says:

"You're probably wondering, Did he fire five shots, or six?"

"Well, this is a .44 Magnum, the most powerful handgun in the world."

"It could blow your head clean off."

"So you have to ask yourself, Do I feel lucky today?"

"Well, do you, Punk?"(Big sneer from Harry)

The guy on the ground, after Harry kicks away the shotgun he was eying carefully two seconds earlier, looks at Harry, and says "I gots to know."

Harry pulls the trigger;black guy flinches. Click. Empty. He falls backwards in the agony of defeat.

Vladimir, and the Russians, in the end, I think they gots to know.

I think somebody has to know the agony of defeat. I don't want that to be the United States.

Moreover, it would seem to this author that this conjecture is consistent with the placement of huge numbers of Rusian satellites into orbit that were called "deep space probes" at launch time, then boosted into earth orbit, in which the U.S. interpretation was that the Russians were merely trying, like all bureaucracies, to make their performance look better by hiding the failure of the deep space probes. Except that they were all military, even granting it was the Soviet Union at the time.

Instead, by this conjecture, much of the time the Russians were putting up rather expensive, but not nearly so expensive as their U.S. satellite counterparts, rocks to throw at the U.S. lines of space communications, should the need arise.

Just watch the American orbits, track them, and send your rocks into a tumble if you need to: simple, but very effective, and very, very Russian.

A simple test of this conjecture is to ask the Russians to begin to de-orbit all their dead COSMOS satellites in conjunction with the U.S. due to the obvious "problem" with space debris, and watch the excuses.

Of course, all the Great Powers are now more openly testing their anti-satellite and anti-missile capabilities as witnessed in the Chinese shootdown two years ago of one of its satellites, and the U.S. Aegis/ Arleigh Burke Cruiser shootdown of a "falling" satellite last February in response.

Let the Great Game for the High Ground of Space begin.

Furthermore, demonstrating the ability of the Russians to shoot down American satellites is consistent with the military demonstration in Georgia this summer, the probable Russian arming of the Somali pirates this fall, the increasingly obvious tilt of Pakistan towards Russia and associated events in Afghanistan etc... that the Russians are trying to overturn the verdict of 1989 by demonstrating that the United States cannot provide global order.

Thus, history did not end, the earth may be crowded and hot, but it definitely is not flat, and the United States had damn well start thinking about what it wants to do about the global order and act accordingly.

Vladimir feels lucky.

In the end, the case for the American Empire is simply that the United States has provided global stability among the Great Powers for the last sixty years.

It cost millions of dead Koreans, Vietnamese, Afghans and Congolese in the process,  so I would not underestimate the structural violence inherhent in the dynamic global political equilibrium between the United States and the Soviet Union on the Eurasian landmass during the Cold War, referred to hence as the World Island as per the work of Harold Mackinder.

The question before the world now in a time of global economic crisis is what would be the alternatives to such an American Empire on the periphery of the World Island?

The most probable, indeed I believe certain result, which is why Russia is promoting this talk lately, is a Russian Empire of the World Island, and then a mortal threat to the United States.

Remember, critics of the American Empire, there has been no Great Power War on the Eurasian landmass for sixty years; that is not a trivial accomplishment of American Power.

Other than the Long Peace of 1815-1915,  a British Peace guaranteed by a structure not dissimilar to the current world order in a very general sense, Great Power War was common on the Eurasian landmass prior to the middle of the last century.

The question is, why the current Long American Peace?

The answer is that the U.S. nuclear arsennal and massive forward deployment of troops backed by command of the sea deterred any state or coalition of states from attempting to launch a Great Power War in order to achieve their political objectives.

It is that simple.

In Western Europe during this last sixty year Great Power Peace, neither France nor Germany could seek dominance by deleting the other and crushing the United Kingdom and Poland, because they did not have the ability to do so given the large physical presence of U.S. troops to prevent Russian/Soviet dominance of Western Europe.

Note, the Russians would have dominated Western Europe without the American forces that were always the center of NATO, and the tactical and strategic weapons that made their presence on the World Island defensible.

In East Asia during the Cold War, the United States always provided Japanese protection against the intrinsic threat of the existence of China in terms of the power potential of its population.

In the long run, this American presence also provided the Chinese protection against the logical Japanese response to the threat posed by the existence of China, which would be genocidal in character.

Remember, critics of the American Empire, the Japanese Greater East Asia Co-Prosperity Sphere. Was the American Empire worse? Really?

Ask the Koreans how they liked that experience first, and how much fear that instilled in Australia, oh critics of the American Empire.

For both China and Japan, in the long run the United States provided protection against Russian designs in East Asia, which with respect to the Chinese must, by the nature of the size of China's population, as in the Japanese case, be genocidal in character.

Turning to the South of the World Island,critics of the American Empire seem to forget that after Suez in 1956 and especially after the retreat of Britain East of Suez in 1971, the entire international capitalist economy has hinged, under the surface, on the U.S. provision of a physical guarantee that oil would freely pass out of the Middle East.

Who was the threat to said access? In the end, Russia and the homicidal chess games we have to play with them in the Middle East because they want access to the sea, like always.

The Turks and Persians would think well on that point of Russian demands for the sea,  and that they are really Allies.

The Greeks and Israelis ought to remember that betrayals go poorly with Americans in the long run, even if we understand your historical goal of respectively a return to Ionia and Eretz Israel.

In the coming days ahead, the critics of the American Empire should think about the alternatives before they blink before Russian power.

Those in Libertarian-land on the Right, and those of the "America is always wrong crowd" on the Left, have forgotten your history, which is that Russia has sought security objectives for the last five centuries that most people living near them found threatening most of the time.

I am sorry the Mogols were not nice to the Russians; the Chinese stopped using the hard childhood excuse a long, long time ago.

To be feckless now in the face of the coming Russian adventurism will not make Americans safer in the long run for the reasons alluded to below, which is not surprising because victory in the race of life goes to the bold, not the timid, in the end.

As to the reason that showing weakness before Russia now is a dangerous idea, if, as is proposed by many now, the United States were to withdraw from the Eurasian landmass, one state would likely come to dominate the Eurasian landmass/World Island: Russia.

The United States would unlikely to be safe in the long run, because under the surface other Powers eventually would seek to approach the United States to gain their liberty at some point from Russian domination, so America would be going back to the World Island in less than advantageous circumstances.

For example, as we are sitting here, it is very obvious that Putin is trying to get the French to go over to his side in Europe, and playing the Japanese and Chinese against one another in order to create a Russian dominated security environment on the World Island. He is playing the same game between the Israelis, Iranians, and Greeks, and has more up his sleeve between Pakistan and India: the Great Game.

Eventually, the French and Japanese/or Chinese etc... would remember that if Americans can be obnoxious imperialists, the Russians are worse.

This would be foreeable to the now dominant Power on the World Island, in which case if it valued said dominance as a core national identity, like Russia clearly does, then the United States would be a mortal adversary in need of subversion and destruction.

It is that simple folks.

I wish it were not so, but we don't have to worry about provoking Russia, as they are quite agressive about getting what they want: just ask the Balts and Poles what they think first before we surrender the victory of 1991, and think to of all the Korean, Vietnamese and American lives especially that victory cost.

No offense to the other Allies, is must of necessity be a long list to contain the Russians, as always.

"A wise builder dug down deep and built upon a Rock."

The real problem with the debate hitherto on the economy is that no commentators have gone deep enough and broadly into the past in order to be able to see what is happening  today in order to correctly assess our options for the future.

Until we do that, we are building our policy efforts on a foundation of quicksand.

History takes time to remember, but like Proust, it is our remembrance of things past that defines current reality.

Making matters worse, the debate has occurred in a highly polarized ideological environment in which the truths of the Left and Right get exagerated too much for the Truth to emerge.

Here is my shot.

The current economic order, the world we think we know, dates from the Roosevelt era, and especially World War II.

All orders have a lifespan; global politico-economic orders are no exception.

The Liberal Capitalist states of the West, after the collapse of the Great Depression, made an implicit deal with their populations, that although private property would be preserved for the most part, the government would henceforward take on the role of insurer of last resort for economic risk.

That system, with much regional and country variety, was definitively established after the defeat of fascism and the rise of the Soviet Union to near peer Bi-Polar Power status with the United States in the aftermath of the Second World War.

The rise of the Soivet Union, and especially the popularity of the Communist Party in France and Italy, pushed the United States into guaranteeing economic risks not only at home, but also abroad politcal and economic risks, as embodied in the Breton Woods and GATT systems, NATO and the U.S. Japan Security Agreement.

These institions and their evolutions remain the foundation of the global order: period.

Under the Breton Woods system, the United States would fix its currency to gold at $35 to the ounce, and all other countries in this order would fix to the dollar, a de facto Western"Japanese Gold Standard, but with a catch; namely that the equilibrating mechanism inherent in the Gold Standard would be violated, because all Gold reserve transactions would henceforth be between central banks, not private individuals.

This made the dollar the reserve currency of the international order. That remains the case, but is under grave risk.

Breton Woods was a governmentally managed Gold Standard, rather than the far more impersonal standard of the nineteenth century that died via state action in 1914 in the fields of Flanders, and one that would be far more vulnerable to political concerns taking precednce over long-run economic rationality.

Breton Woods companion, the GATT order, was designed to prevent the Beggar thy Neighbor Trade policies that in conjunction with the failure of the Gold Standard in the United Kingdom and the move to competitive devaluations that many analysts blamed for the spiral into WWII, with the key principle of the GATT being the Most Favored Nation Principle, one that was violated early on with the move towards a trading bloc in the nascent European Union that served the political objective of restraining Russia.

Economics is not just economics, but fused with politics and sociology.

If you don't always remember that, you make grave errors eventually.

Domestically in the West, again now inclusive of Japan, regulated corporate capitalism and the provision of social insurance with much variety as to what risks would be insured was to the order of the Post WWII day. 

Although the United States did not move nearly as openly towards such social insurance provision, the existence of the Social Security program and the creation of the Medicare and Medicaid programs illustrates the point that even so-called capitalist America has hardly lived in some perfect, or nightmarish, depending on ones ideological proclivities, capitalist system, but rather an economic order welded to social and especially political concerns.

In this vein, Keynesian fiscal policy gradually won acceptance by the 1960's as the dominant intellectual paradigm of the economics profession, although there were always dissenters a la Milton Friedman, Hayek and especially the followers of Von Mises as to especially the criticality of money.

Abroad again during this time period, the U.S. nuclear arsennal would guarantee the physical security of the West, which now again somewhat anomolously included Japan.

These American imperial expenditures gradually grew because the creation of a Soviet atomic bomb meant that the U.S. nuclear arsennal lost significant crediblity as a deterrent, meaning the United States would henceforward be required to maintain a large conventional force should it wish to remain engaged on what Mackinder called the World Island, i.e. the Afro-Eurasian landmass.

These expenditures were further escalated by the use of war by proxy tactics a la Vietnam around the peripheral areas of the World Island.

In effect, the United States and Soviet Union were fighting World War III in slow motion, which was of course often the case in the Peloponnesian War between Athens and Sparta as well, and it is worth noting, a conflict in which it seemed like the Athenians had won at one point.

Maybe they thought history had "come to an end too" with the Sparan defeat at Pylos/ spetsnatz in Afghanistan?

Returning to our core theme, throughout this history into the 1960's, American aggregate demand in terms of the defense budget was the balance wheel of the Western capitalist system, referred to by many as militarized Keynesianism.

The difficulty with this Post WWII political system was that the Western Europeans did not wish to pay for conventional and nuclear armed forces sufficiently large in character to deter the Soviet Union, that the United States did not trust its Allies, especially the Germans and Japanese especially, sufficiently to allow them to do so, and that America in the end wanted control more than Allies, like Athens and the Delian League, which is by the way the ultimate source of the ongoing Franco-American antagonism since Dienbienphu and Suez.

The chess players of the homicidal game of three level chess on the World Island have long memories, and nurse grudges, Amerique.

The eventual result was a large external imbalance in terms of dollar payments abroad for imperial expenses, which raised credibility issues about the gurantee that the U.S. dollar was actually worth 1/35 of an ounce of Gold in a free market for Gold, as was required under the Breton Woods system.

This disequilibrium feature was identified first by economist Robert Triffin in the early 1960's, reflected in the begining of ever more extreme U.S. Federal Government interventions in the market to square incommensurate domestic and external American policy goals as in the Kennedy Interest Equalization Tax, and known in general as Triffin's Paradox.

The reason to bring this up at this level of detail is that we are witnessing at root the same phenemenon right now as in the 1970's: the alteration of an imperial finance system.

That is what this crisis really is, as all imperial systems have to have financing, whether from open contributions of tribute a la Athens and the Delian League, or from the more subtle trinute of foreigners holding U.S. debt to maintain the dollar's status as a reserve currency when there is a question as to the difference between the nominal and real value of the currency/debt in question.

The Breton Woods system gradually came under speculative attack, because in the end the capital controls necessary to sustain such an economic  disequilibrium inevitably felll victim to the busy little beavers of the financial engineering world, and failed defintitively in 1971, with Nixon pulling us off the Gold Standard, thereby generating the era of pure fiat money that is now the core source of our present difficulties in conjuntion with the political and social concerns identified below.

The reason to understand this history is that the external drain on the U.S. economy is directly associated with an American national security decision to maintain a U.S. backed global physical security order over the  entire world's oceans and on the periphery of the entire World Island that the American political classes have been unable to persuade the taxpayers is sufficiently in the their interest to pay for over the years.

However, when push has come to shove so far, none of the other Great Powers has been able, the Soviet case, or willing, the European and Japanese case, to create the military arsennal capable of providing physical security in a fashion that did not seem likely to cause more harm than good; especially, since Suez in 1956 and the British retreat from East of Aden in 1971, the provision of physical security for the supply of oil at the heart of the Western and now globalized order coming under such tremendous stress at this moment.

It seemed as if all this was a moot point with the collapse of Soviet Power in 1989-1991. It was "the end of history, right." "The world is flat, right?"

That is what Norman Angell said in 1910. Lenin and Spengler were closer to the Truth; the hope going forward is no Flanders, but that is a real prospect now if we blow it.

The key point going forward is to understand that the Russians did not go away, history did not end, nor did Great Power politics end.

Returning to our narrative, after the premature challenge to the new American hegemony by Saddam Hussein was defeated in 1991, the potentially temporary era of total American dominance emerged.

Athens thought it had won at the Peace of Nicias/Reagan; the Spartans tore down their walls in the end, because states speak as they always speak, that the strong seek such terms as they can get, and the weak accept such terms as they must. I like strong.

What happens next depends on what we do next, as in unstable dynamical systems, which is what this is, small choices can have large consequences; just ask the Athenians before they almost took Syracuse early in what we now think of as a disastrous expedition.

Baghdad and Kabul used to look good too, and still can, if it is at the center of our attention, as the matter of life and death of the state that it necessarily must be.

This 1990's American hegemony was confirmed in the unwillingness of the Chinese to use force over Taiwan in 1996, by he failure of Russia to be able to protect Serbia in 1999 despite the attempt to land paratroopers in Pristina covertaly, and most importantly by the inability of the Europeans to create a true national army, and the unwillingness of the Japanese to go beyond the option value of their 1 per cent solution of a big GDP to national defense.

It is stll a bid budget though, and it is a Japanese option, because they fear China.

Under the surface however, all was not well for the American Empire during the 1990's.

Despite Bush I and Clinton's effforts, the United States was experiencing the development of an external economic imbalance generically similar to Triffin's paradox after what hopefully future historians will NOT have to call the Peace of Raegan/Nicias to be followed by an American defeat: Missile Defenses are city walls.

In the end, the potential rivals in the 1990's to the United States hegamonic status were not able to pose a credible alternative to American power, and the American political classes were unwilling to address the inter-temporal insolvency of the Social Security and Medicare programs.

In effect, whether by design or led as if by an invisible political hand of short term political interest, the political classes of the United States used the power of fiat money and the dollar's reserve currency status to prop up financial crisis after financial crisis from the Mexico episode in 1994 through LTCM and NASDAQ onwards in order to keep asset prices high enough to make Baby Boomers feel secure about their retirement and foreigners secure enough to invest in the United States, especially by purchasing Treasuries, that had the effect of reinforcing the dollar's status as world reserve currency.

That system is now under tremendous stress, because the long run disequilibrium of Entitlements is now becoming a short run disequilibrium because of the natural social cycle of Baby Boomers reaching the end of their working years in conjunction with a rapidly if temporarily advancing Russia and a China that has a CCP that has in this crisis lost the main legitmating reason for its existence, save Taiwan.

That is the combination that needs to be addressed: how to restore Social Security on an acutarially sound basis while preserving our position on the World Island, and more imporantly, its by historical standards peaceful Great Power equilibrium.

My personal preference for a stimulus package addressing the current state of the economy in proper context would have been addressing the unemployment problem among the young by increasing the size of the Army temporarily by over one million men, which is a form of job training and deterence to Russia and China, creating a new dollar on the basis of the natural resource wealth of the United States federal government as the carrot to Russia and China as well as to our Japanese and other East Asian creditor Allies, and taking all the bad American financial assets valued at a Dutch auction that cannot be sold to the private sector and putting them into the Social Security Trust Fund, and re-capitalizing U.S. banks on the basis of bonds issued on anticipated revenue from, again, the monetization of the entire natural resource wealth of the United States Federal Government, and in which the Federal Government will have to absorb the difference in the auction price and the nominal values of the securities as it re-captitalizes a new solvent banking system, but the Social Security Trust funds holds the assets until maturity thereby mitigating the real as opposed to the accounting loss, and the knowable immediate accounting loss is financed by a special issue of bonds, if necessary on the basis of a temporary forced levy through FICA to create individualized accounts, and the American people are told, look, we got here by letting things slide,and this stinks, but it sure beats the economic alternatives, and especially the Russian and Chinese political alternatives, and most especially global anarchy a la Flanders fields.

Time will tell if it is too late, I suppose.