The Committee of Public Safety

Another article celebrating the death of the Efficient Market Hypothesis, the incredible belief that markets are either omniscient (the strong form of the EMH) or relatively omniscient (the weak form). The end of EMH was one of the questions this blog raised back in early October as this crisis was gathering steam. Nice to see people catching up.

The Times also links to an article listing the 10 people most responsible for the current economic crisis. At least two people are missing: Helicopter Ben and Eugene Fama, who bequeathed the EMH to the world. The creators of modern portfolio theory also deserve honorable mention, since they and their followers naive application of math to human complexity did so much to blind market participants to the disaster enveloping them.

Python now has the tools necessary to take over the world.

The conservative plan:

1. Have the FDIC absorb Citibank, JPMorgan, Wells Fargo, and Bank of America.
2. Break them apart.
3. Wipe out the shareholders.
4. Depose management.
5. Distribute their assets to the strongest regional banks.
6. Profit!!!

In honor of the Triumph of the Quants, here’s a quant theory of politics (called the theory of the selectorate) cooked up by Bruce Bueno de Mesquita and company (slides are here):

1. Defining the Terms:

• The selectorate is the group of people who have a say in selecting the leader.
• The winning coalition is the subset of selectorate members whose support the leader needs to stay in office.
• Those who are not part of the selectorate are disenfranchised.

2. Exploring Political Systems:

• Political systems throughout history can be classified by the size of their winning coalitions and selectorates (sometimes known as “universal political institutions”).
• We can say that a political system has a large or small winning coalition (W or w), and a large or small selectorate (S or s).
  • This produces three possible types of political systems: sw, SW, and Sw.
  • sW is not possible, as we’ll see in a moment.

3. Small s, Small w:

sw

• Only a small group of people participate in selecting the leader (L). The leader only requires a fraction of these to stay in power.
  • This describes monarchies and many military governments.
• sW is not possible because w must be a subgroup of s.

4. Large S, Large W:

SW

• In a SW system, most of the population is eligible to help pick the leader. The leader needs the
  support of a large fraction of the selectorate, usually about half, to retain power.
  • This describes modern democracies.

5. Large S, Small w:

Sw

• In Sw systems, most of the population is legally eligible to help select the leader, but the leader only requires a very small fraction of the selectorate to stay in office.
  • This describes many rigged-election autocracies like dictatorships and communist governments.

6. Staying in Power:

• Leaders have two tools they can use to please their supporters and remain in power.
  • Private goods are possessed by and benefit only one individual.
    • These could be objects like land or bribes, or privileges like monopoly rights.
  • Public goods benefit everyone in society: They are nonrival and nonexcludable.
    • Nonrival: Once a good has been produced, each person can benefit from it without diminishing anyone else’s enjoyment.
    • Nonexcludable: Once the good has been created, it is impossible to prevent people from gaining access to it.
    • The most common public goods are good public policy, along with things like roads and bridges.

7. Tools and Systems:

• When a leader has a small winning coalition (w), he has incentives to use private goods to please these supporters.
  • Public goods would benefit more people than necessary. Spending the same amount of resources–or often even fewer–on private goods would satisfy the w members, leaving more resources for the leader’s personal use.

8. Tools and Systems II:

• When a leader has a large winning coalition (W), she has incentives to use public goods to please
  these supporters.
  • To provide each of the many members of W with enough private goods to ensure his/her loyalty would be very expensive. Instead, public goods provide a much more efficient way to disperse benefits over a large population.
  • W system leaders do use some semiprivate goods, like government contracts, but most benefits are from targeted public goods like road building and government programs.

9. Incentives for Winning Coalition Members:

• Deposing a leader requires at least one member of w/W to defect to a challenger.
• A member will defect if the challenger can credibly promise him or her more benefits than the
  w/W member currently receives.
• However, since s < w, the challenger may be able to gather enough supporters to form a new w/W
  without the defector’s participation.
  • The defector will be expensive to keep satisfied in w.

10. Why Defect?:

• EU(defection) > U(current benefits) requires either:
  • a large increase in the value of benefits (public plus private goods), or
  • a smaller increase in value with a very high probability of being in w/W.

11. Who Wants What?

• The risks, costs and benefits involved in defecting suggests that different groups–L, w/W, s/S, and D–have different preferences over the size of s and w.

12. Winning Coalition:

• Members of w/W prefer to get the most benefits possible. However, they realize they are always at risk of being removed from w if they become ‘too expensive’ for the leader (or challenger) to keep. So, they prefer systems that maximize their probability of remaining in w or W.  This means they prefer systems where the ratio of w to s is high. Most of the members of s are required for any w. In a w system, this means they want a w that is nearly as large as s, and s is kept as small as possible. In a W system, the winning coalition wants an electoral system that requires majorities instead of pluralities (something like a proportional representation parliamentary system instead of a first-past-the-post presidential system).

13. Selectorate:

• The members of the selectorate prefer s to stay small. This limits the number of people from whom the leader can pick. The selectorate prefers W to be as large as possible. This maximizes their chances of being in W.

14. Leader:

• The leader prefers a Sw system. With a lot of people to pick from in s, she can pick the few with the smallest costs.  This leaves the largest possible amount of private-goods-funding for her to keep for herself. As the ratio of w to s gets smaller, the leader can offer members of w less and still retain their loyalty. If approached by a challenger, the w members must evaluate EU(defect). With a Sw system, the w member has a very low probability of being essential in the challenger’s w, so the challenger must credibly offer extraordinary benefits to get the w member to defect.

15. Disenfranchised:

• The disenfranchised receive only public goods, which are not usually targeted at them. Only if they become members of s will they get more benefits. Their public goods benefits will increase, and they also will have some probability of being in w and receiving more (public or private) benefits from that. Right now their probability of being in s is 0. To improve this, they would prefer that the size of the selectorate expand, preferably to S. The disenfranchised also prefer that the winning coalition expand to W. This maximizes their probability of getting benefits. This is why mass publics in autocracies want democratization.

Bueno de Mesquita expands on this in two books. These slides are from Principles of International Politics: People’s Power, Preferences, And Perceptions. A more popular presentation of the selectorate theory is presented in The Logic of Political Survival.

• Seen at MountainRunner: Differences between Eastern and Western culture
• Is the Universe a hologram? Choose your pill.

David Foster of Photon Courier and ChicagoBoyz linked to some interesting posts in his comments on my post
Clausewitz, On War, Book 2: The Oblique Order, the Road Not Taken, and the Black Swan, part of the Clausewitz Roundtable over at ChicagoBoyz.

Clausewitz wrote the following statement in Book 2 of On War:

“Method“…is a constantly recurring procedure that has been selected from several possibilities. It becomes routine when action is prescribed by method rather than general principles or individual regulation. It must necessarily be assumed that all cases to which such a routine is applied will be essentially alike. Since they will not be entirely so, it is important that it be true of at least as many as possible. In other words, methodological procedure should be designed to meed the probable cases. Routine is not based on definite individual premises, but rather on the average probability of analogous cases. Its aim is to postulate an average truth, which when applied evenly and constantly, will soon acquire some of the nature of a mechanical skill, which eventually does the right thing almost automatically.

Foster, reviewing The Logic of Failure by Dietrich Doerner, provides an interesting link to Clausewitz in the work of Dr. Doernor:

In the fire simulation, the subject plays the part of a fire chief who is dealing with forest fires. He has 12 brigades at his command, and can deploy them at will. The brigades can also be given limited autonomy to make their own decisions.

The subjects who fail at this game, Doerner finds, are those who apply rigid, context-insensitive rules…such as “always keep the units widely deployed” or “always keep the units concentrated” rather than making these decisions flexibly. He identifies “methodism,” which he defines as “the unthinking application of a sequence of actions we have once learned,” as a key threat to effective decision-making. (The term is borrowed from the great military writer Clausewitz.) Similar results are obtained in another simulation, in which the subject is put in charge of making production decisions in a clothing factory. In this case, the subjects are asked to think out loud as they develop their strategies. The unsuccessful ones tend to use unqualified expressions: constantly, every time, without exception, absolutely, etc…while the successful “factory managers” tend toward qualified expressions: now and then, in general, specifically, perhaps,…

In a similar vein, Foster has this interesting post Managment Education and the Role of Technique:

Henry Mintzberg (McGill University) muses about the role of technique in business education and in business itself. “A technique might be defined as something that can be used in place of a brain,” he writes, and continues;

MBA programs tend to attract pragmatic people in a hurry: they want the means to leap past others with experience. Techniques–so-called tools–seem to offer that, so this is what many such students demand, and what many of the courses offer; whether portfolio models for financial resources, competitive analyses for strategic resources, or empowerment techniques for human resources. Offer enough of this, and you end up with schools of business technology.

and

Technique applied with nuance by people immersed in a situation can be very powerful. But technique taught generically, out of context, encourages that “rule of the tool”: Give a little boy a hammer and everything looks like a nail. MBA programs have given their graduates so many hammers that many organizations now look like smashed-up beds of nails.

and

Managers can certainly use a toolbox full of useful techniques–but only if they appreciate when to use each. As the chief executive of a pharmaceutical company told a group of MBA students, “My problem is that when I face a problem, I don’t know what class I’m in.”

MBAs can go wrong quickly, especially when equipped with techniques and spreadsheets.

This post links to three other posts of interest. The first is The Dictatorship of Theory:

Why is theory (which would often more accurately be called meta-theory) so attractive to so many denizens of university humanities departments? To some extent, the explanation lies in simple intellectual fad-following. But I think there is a deeper reason. Becoming an alcolyte of some all-encompassing theory can spare you from the effort of learning about anything else. For example: if everything is about (for example) power relationships–all literature, all history, all science, even all mathematics–you don’t need to actually learn much about medieval poetry, or about the Second Law of thermodynamics, or about isolationism in the 1930s. You can look smugly down on those poor drudges who do study such things, while enjoying “that intellectual sweep of comprehension known only to adolescents, psychopaths and college professors” (the phrase is from Andrew Klavan’s unusual novel True Crime.)

The dictatorship of theory has reached its greatest extremes in university humanities departments, but is not limited to these. Writing 50 years ago, C S Lewis says the following about his sociologist hero in the novel That Hideous Strength:

“..his education had had the curious effect of making things that he read and wrote more real to him than the things he saw. Statistics about agricultural labourers were the substance: any real ditcher, ploughman, or farmer’s boy, was the shadow…he had a great reluctance, in his work, to ever use such words as “man” or “woman.” He preferred to write about “vocational groups,” “elements,” “classes,” and “populations”: for, in his own way, he believed as firmly as any mystic in the superior reality of the things that are not seen.”

The second post is Management Mentalities:

[Peter] Drucker writes about two old-line merchants. The first of these, called “Uncle Henry” by those who knew him, was the founder and owner of a large and successful department store. When Drucker met him, he was already in his eighties. Uncle Henry was a businessman who did things by intuition more than by formal analysis, and his own son Irving, a Harvard B-School graduate, was appalled at “the unsystematic and unscientific way the store was being run.”

Drucker remembers his conversations with Uncle Henry. “He would tell stories constantly, always to do with a late consignment of ladies’ hats, or a shipment of mismatched umbrellas, or the notions counter. His stories would drive me up the wall. But gradually I learned to listen, at least with one ear. For surprisingly enough he always leaped to a generalization from the farrago of anecdotes and stocking sizes and color promotions in lieu of markdowns for mismatched umbrellas.”

Reflecting many years later, Drucker observes: “There are lots of people with grasshopper minds who can only go from one specific to another–from stockings to buttons, for instance, or from one experiment to another–and never get to the generalization and the concept. They are to be found among scientists as often as among merchants. But I have learned that the mind of the good merchant, as also of the good artist or good scientist, works the way Uncle Henry’s mind worked. It starts out with the most specific, the most concrete, and then reaches for the generalization.”

[...]

“Fifty years or more ago the Uncle Henry’s and the Charlie Kellstadts dominated; then it was necessary for Son Irvin to emphasize systems, principles, and abstractions. There was need to balance the overly perceptual with a little conceptual discipline. I still remember the sense of liberation during those years in London when I stumbled onto the then new Symbolical Logic (which I later taught a few times), with its safeguards against tautologies and false analogies, against generalizing from isolated events, that is, from anecdotes, and its tools of semantic rigor. But now we again need the Uncle Henrys and Charlie Kellstadts. We have gone much too far toward dependence on untested quantification, toward symmetrical and purely formal models, toward argument from postulates rather than from experience, and toward moving from abstraction to abstraction without once touching the solid ground of concreteness. We are in danger of forgetting what Plato taught at the every beginning of systematic analysis and thought in the West, in two of the most beautiful and moving of his Dialogues, the Phaedrus and the Krito…They teach us that experience without the test of logic is not “rhetoric” but chitchat, and that logic without the test of experience is not “logic” but absurdity. Now we need to learn again what Charlie Kellstadt meant when he said, “How else can I see a problem in my mind’s eye?”"

The last post I, as a software engineer and history buff, found particularly appealing: Educaton for Business: Classics and Computer Science for the Aspiring Executive?:

Michael Hammer, the renowned management consultant, says this: I often recall advice once offered to me by a senior executive at a major pharmaceutical firm, an Englishman with the advantage of a traditional public school education. “All one need learn,” he said, “is Latin and computer programming–Latin for communication and programming for thinking.” He wasn’t far off

It’s very unlikely that this executive ever writes any computer programs at work, and it’s even more unlikely that he uses any Latin in his job. So why did he say what he did, and why does Hammer agree with him?

Hammer argues that learning programming is a good way to develop thinking skills of a particular kind. “…computer programming is nothing but an exercise in systems thinking. Each line of software that you write will interact with each and every other line of software. Unless you develop some big-picture thinking capability, your program will never work. The marvelous thing about a cognitive capability is that it operates across domains; the thinking style that one needs to write and debug a substantial computer program is the same one needed for solving problems in a business process. Once the synapses are put in play, they’ll snap on anything.” Exposure to other kinds of engineering can also help develop these cognitive skills, in Hammer’s opinion: “The heart of an enginering education is not learning and applying equations but learning how to create large systems built from small components…once again, I am not concerned with the content of the discipline but with the cognitive style it requires and engenders. I like the old definition of education: what remains when you forget what you have been taught.”

Hammer goes on to argue that the conceptual skills developed by programming/engineering are only part of the mental set needed by today’s businesspeople; ‘They must know how to ask why…Once again, I would submit that critical thinking operates across domains. Once learned in one area it can be applied to virtually any other. To this end, I maintain there is no better preparation for our technological age than a classical education…It might seem odd to suggest that the works of Plato and Madison and Joyce prepare one for the twenty-first century, but they are constants in a world of change…Wrestling with questions of good and evil, of democracy and justice, of personal and communal responsibilities is a quest without end. But, having engaged in this struggle, one is better prepared to deal with the more mundane, but nonetheless challenging, issues of the workplace.”

Hammer’s (rather contrarian) recommendation for aspiring businesspeople is this–a double major in computer science and classics. For those who don’t find this combination particularly appealing, he suggests alternative double-major possibilities:

• electrical engineering and philosophy
• mechanical engineering and medieval history
• aeronautics and theology

[cross-posted at ChicagoBoyz]

Themes and passages scattered throughout Book 2 reminded me of themes and passages scattered throughout mad prophet Nassim Nicholas Taleb’s The Black Swan. Both Book 2 and the The Black Swan detail the ways humans fool themselves, sometimes in disproportionately disastrous ways. Both preach a critical and conservative empiricism in the face of a baffling and shifting world. Both use some of the same empirical techniques, in Clausewitz’s case two hundred years too early.

One of Taleb’s main themes is the tendency for specialists in any field to develop physics envy and attempt to reduce the horrifically complex phenomena they study to a deterministic and mechanistic model complete with grand and complex equations. This envy doesn’t lead to a higher level of truth and accuracy. It leads to a higher level of systemic self-deception and delusion. It creates financial weapons of mass destruction such as an MBA armed with a spreadsheet and the belief that manipulating rows and columns bestows the ability to prophesy. Vain dreams.

Clauswitz joins Taleb in explaining why this delusion will lead to ruin:

The essential difference is that war is not an exercise of the will directed at inanimate matter, as is the case with the mechanical arts, or at matter that is animate but passive and yielding, as is the case with the human mind and emotions in the fine arts. In war, the will is directed at an animate object that reacts. It must be obvious that the intellectual codification used in the arts and sciences is inappropriate to such an activity. At the same time it is clear that continual striving after laws analogous to those appropriate to the realm of inanimate matter was bound to lead to one mistake after another. Yet it was precisely the mechanical arts that the art of war was supposed to imitate. The fine arts were impossible to imitate, since they themselves do not yet have sufficient laws and rules of their own. So far all attempts at formulating any have been found too limited and one-sided and have been constantly been undermined and swept away by the currents of opinion, emotion and custom.

You can see Clausewitz calling out Jomini here, since Jomini tried (and failed) to reduce war to a science that followed predictable and universal principles (see Clausewitz’s picking on Jomini’s beloved interior lines for a specific example). Many died in the Civil War because of Jomini and his perverse inspiration (they may also have been killed by a second generation of warfare but rifles, Minié balls, and Napoleon guns are a poor defense against an out-of-control theory straining for relevance or killer generations). For those that disbelieve that military theory can’t kill, Clausewitz provides warnings a plenty.

Clausewitz provides a useful taxonomy of the differences between laws, principles, rules, regulations, directions, and methods. This is useful for drawing a line between where a piece of knowledge sets you free to adapt and when it (often unconsciously) enslaves the mind. A contention of Taleb’s is that the mind is a compressor that has to cram the vastness of the universe into the narrow confines of the human brain. The choice of compression algorithm is crucial because it determines what’s left in and what’s left out. The ultimate goal of any compressed image of the world is to transition from the slower Reflective System in the brain (what Taleb calls System 2) to the faster Automatic System (what Taleb calls System 1). Clausewitz discusses the circumstances under which this occurs:

“Method“…is a constantly recurring procedure that has been selected from several possibilities. It becomes routine when action is prescribed by method rather than general principles or individual regulation. It must necessarily be assumed that all cases to which such a routine is applied will be essentially alike. Since they will not be entirely so, it is important that it be true of at least as many as possible. In other words, methodological procedure should be desigend to meed the probable cases. Routine is not based on definite individual premises, but rather on the average probability of analogous cases. Its aim is to postulate an average truth, which when applied evenly and constantly, will soon acquire some of the nature of a mechanical skill, which eventually does the right thing almost automatically.

Taleb argues that such approaches are necessary in the land governed by the Bell Curve, Mediocristan, where probabilities are easily predicted and clear. Here, to use Taleb’s example, seeing a leopard and running away, a tactic, is usually a safe bet. Tactics is governed, in many cases, by the laws of Mediocristan:

Routine, apart from its sheer inevitability, also contains one positive advantages. Constant practice leads to brisk, precise, and reliable leadership, reducing natural friction and easing the working of the machine.

In short, routine will be more frequent and indispensible, the lower the level of action. As the level rises, its use will decrease to the point where, at the summit, it disapears completely. Consequently, it is more appropriate to tactics than strategy.

Compression becomes ever more risky at higher levels:

War, in its highest forms, is not an infinite mass of minor events, analogous despite their diversities, which can be controlled with greater or lesser effectiveness depending on the methods applied. War consists rather of single, great decisive actions, each of which needs to be handled individually. War is not like a field of wheat, which, without regard to the individual stalk, may be mown more or less efficiently depending on the quality of the scythe; it is like a stand of mature trees in which the axe has to be used judiciously according to the characteristics and development of each individual trunk.

Strategy, at the higher levels of war, lies more in the realm of Extremistan, governed by fat and long tails and large but consequential events that are almost impossible to foresee. Every action taken in Extremistan can lead to black swans, rare events that are consequential, unforseeable, and can only be moralized about afterwards.

It’s the moralizing that matters, because the lessons drawn from a black swan, internalized and compressed, in a cycle of Observe -> Orient -> Moralize -> Act, can be taken as gospel truth to following generations. If something worked once, the temptation, encapsulated in the old saw that generals always prepare for the last war, is always to do it again. The moral of the story will be internalized and rerun over and over again regardless of whether such a rerun is justified by actual conditions. War management will fall victim to a confirmation bias guided by prior experience. The situation will become what you want it to be rather than what it is. Book 2 was intended as a remedy to this natural instinct. As can be told by two world wars, Germany missed his point. The bitter end of World War I and the culminating funeral pyre of World War II are directly anticipated by Clausewitz when he uses the example of how the Prussian generals used the oblique order against Buonaparte and the French at Jena-Auerstadt, a defeat so catastrophic that the Prussian philosopher G.W.F. Hegel declared it the “end of history” 185 years before Francis Fukuyama co-opted the phrase. The moral of the Seven Years’ War loomed large. Everything they thought prior to the battle confirmed that the oblique order, devastating in the hands of Fredrick the Great, would trounce the Corsican Ogre.They soon learned otherwise.

Clausewitz also employs a pioneering use of counterfactual history:

Critical analysis is not just an evaluation of the means actually employed, but of all possible means-which first have to be formulated, that is, invented. One can, after all, not condemn a method without being able to suggest a better alternative.

Taleb refers to the roads not taken in history as “silent evidence” and refers elsewhere to the work of historian Niall_Ferguson in counterfactual history as a promising historical approach to examining silent evidence. This is Ferguson’s approach, expanded upon in his introduction to Virtual History: Alternatives and Counterfactuals:

How exactly are we to distinguish probable unrealised alternatives to the improbable ones? The most frequently raised objection to the counterfactual approach is that it depends on ‘facts which concededly never existed’. Hence, we simply lack the knowledge to answer counterfactual questions. But this is not so. The answer to the question is in fact very simple: We should consider as plausible or probable only those alternatives which we can show on the basis of contemporary evidence that contemporaries actually considered.

This is a vitally important point, and one which Oakeshott seems to have overlooked. As has often been said, what we call the past was once the future; and the people of the past no more knew what the their future would be than we can know our own. All they could do was consider the likely future, the plausible outcome. It is possible that some people in the past had no interest in the future whatever. It also true that many people in the past have felt quite sure that they did know what the future would be; and that sometimes they have even got it right. But most people in the past have tended to consider more than one possible future. And although no more than one of these has come about, at the moment before it came about it was no more real (though it may now seem more probable) than the others. Now, if all history is the history of (recorded) thought, surely we must attach equal significance to all the outcomes thought about. The historian who allows his knowledge as to which of these outcomes subsequently happened to obliterate the other outcomes people regarded as plausible cannot hope to recapture the past ‘as it actually was’. For, in considering only the possibility which was actually realised, he commits an elementary teleological error. To understand how it actually was, we therefore need to understand how it actually wasn’t - but how, to contemporaries, it might have been. This is even more true when the actual outcome is one which no one expected – which was not actually thought about until it happened.

Clausewitz aspired to follow this pattern but deviates slightly in offering alternatives to various Buonapartist adventures:

[Referring to Buonaparte's pulling back before the siege of Mantua and Clausewitz's alternative] This is not the place to labor the point; we believe we have said enough to show that the possibility deserves notice. We cannot tell whether Buonaparte himself ever considered the plan. There is no trace of it in his memoirs and the rest of the published sources; none of the later critics touched upon it…There is no great merit in recalling its existence; one only has to shed the tyranny of fashion in order to think of it. One does, however, have to think of it in order to consider it and compare it with the means which Buonaparte actually employed. Whatever the result of this comparison the critic should not fail to make it.

You can scratch Clausewitz and summon forth a Modern. Of course, that could just be confirmation bias working its eternal rounds.

Max Weber observes in Politics as a Vocation:

A really radical ‘Machiavellianism,’ in the popular sense of this word, is classically represented in Indian literature, in the Kautaliya Arthashastra (long before Christ, allegedly dating from Chandragupta’s time). In contrast with this document Machiavelli’s Principe is harmless.

Since Weber, a giant of Western political science, made this observation in 1919 and, given the fashion for non-Western books on war like Sun Tzu’s Art of War, the neglect of the Arthashastra in the United States is surprising.

What is the Arthashastra? It is one of the few complete books on statecraft ever written. It is the collective wisdom of centuries of Indian thought on statecraft distilled into one handy volume. The Arthashastra covers governance, law, internal security, economics, foreign policy, diplomacy, covert operations, and war.

The book is attributed to Kautilya, also known as Chanakya or Vishnugupta. Kautilya was the mastermind behind the rise of Chandragupta Maurya, India’s first great conqueror. Kautilya, the story goes, was a professor at Takshashila University. He was thrown out of the royal court of the Nanda empire and swore revenge. He found Chandragupta along the road as a small boy, dispensing justice to other boys. After acquiring Chandragupta from his mother, Kautilya proceeded to train him in the arts of statecraft, intending to use the boy as the instrument of his vengeance. In the wake of Alexander the Great’s Indian incursion in 326 BC, Chandragupta and Kautilya destroyed both the Nanda empire and the Macedonian satraps Alexander left behind. By the time he reached the age of twenty, Chandragupta had conquered this much of India:

Start

At the end of his reign, he bequeathed these conquests to his successor:

End

Whether Kautilya himself actually wrote any part of the Arthashastra is unknown. Parts of it may date back to his lifetime but additions seem to have been grafted on to the original text as late as AD 400. Like Sun Tzu’s Art of War, the Arthashastra was probably compiled from the efforts of multiple contributors.

The Arthashastra is one of the few works of literature that places every shade of power into a single spectrum of power. The Arthashastra illustrates several points on this spectrum of power. The first four points are the four methods of dealing with conflict (a staple of early Indian political thought):

1. Conciliation: “praising the merits of someone, extolling mutual connections, talking up mutual benefits, inducing, putting yourself at the other’s disposal, and bestowing awards and honors.”
2. Placating with gifts: “relinquishing what is owed, continuing payment that is already being made, return of something received, giving something new out of one’s own wealth, permission to take something from the enemy”
3. Sowing dissension: “creating mutual suspicion between two enemies or threatening one of them”.
4. Use of force: “depriving a person of his property, liberty, or life (plunder, harassment, and death)”

The Arthashastra explicitly places these methods on the spectrum of power:

It is easier to employ a method earlier in in the order than a later one. Placating with gifts is twice as hard as conciliation, sowing dissension three times as hard, and the user of force four times.

Like any sage advice, the Arthashastra recommends using the four methods in combination and enumerates several examples:

In the case of a son, a brother, or a kinsman, the appropriate methods are conciliation and placating with gifts. In the case of citizens of a city, the people of the countryside, or the army, placating with gifts or sowing dissension among them are the right methods. In the case of neighboring princes or forest chiefs, one should use dissension or use force…In the case of allies and enemies, a combination of methods ensures success because the different methods mutually reinforce each other…Some methods are ideal in some cases and render the use of others unnecessary. For example, conciliation is adequate for dealing with the enemy’s ministers whose loyalty is uncertain, placating with gifts for traitorous ministers of the enemy, dissension in case of confederacies, and force against the powerful.

In foreign policy, the Arthashastra lists six methods on the spectrum of power:

1. “Making peace is entering into an agreement with specific conditions”.
2. “Active hostilities is waging a war“.
3. “Being indifferent to a situation is staying quiet.”
4. “Augmenting one’s own power is preparing for war“.
5. “Getting the protection of another is seeking support.”
6. “Dual policy is making peace with one king and war with another.”

The Arthashastra extensively discusses when it is time to use one method or another (and when not to) based on whether you are currently stronger or weaker than an enemy:

The would-be conqueror shall apply the six methods with the due regard to his power. He shall make peace with an equally powerful or stronger king; he shall wage war against a weaker king. [He shall not wage war against a stronger king] because he who fights against a stronger king is crushed like a foot soldier fighting an elephant. A fight with an equal brings losses to both sides, just like the destruction of two unbaked mudpots hitting each other. Like a stone striking a mudpot, a more powerful king gains decisive victory over a weaker one.

The six methods are also explicitly placed on the spectrum of power:

When the degree of progress is the same in pursuing peace and waging war, peace is to be preferred. For, in war, there are disadvantages such as losses, expenses, and absence from home. For the same reason, a policy of neither peace nor war is to be preferred to making preparations for war. As between adopting a dual policy and seeking the protection [of a stronger king], the dual policy is to be preferred. For, in adopting the dual policy, one gives importance to one’s own undertakings and, thereby, promotes one’s own interests. One that seeks the protection of another serves only the other’s interest, not his own.

For one method, war, the Arthashastra identifies at least four more points along the spectrum of power:

1. “war by counsel” is “the exercise of diplomacy; this applies mainly when a king finds himself in a weaker position and considers it unwise to engage in battle”
2. “‘[silent or undeclared] war’ is using covert methods to achieve the objective [of the war] without actually waging a battle, usually by assassinating the enemy”
3. “[concealed or secret] warfare…refers primarily to the instigation of treachery in the enemy camp”
4. “open warfare [specifies a] time and place – i.e. a set-piece battle”

Boesche argues that, in waging a “war by counsel”:

Kautilya assumed that he lived in a world of foreign relations in which one either conquered or suffered conquest. He did not say to himself, “Prepare for war, but hope for peace,” but instead, “Prepare for war, and plan to conquer.” Diplomacy was just another weapon used in the prolonged warfare that was always either occurring or being planned for…Kautilya argued that diplomacy is really a subtle act of war, a series of actions taken to weaken an enemy and gain advantages for oneself, all with an eye toward eventual conquest. A nation’s foreign policy should always consist of preliminary movements toward war: “In this way, the conqueror should establish in the rear and in front, a circle (of kings) in his own interest…And in the entire circle, he should ever station envoys and secret agents, becoming a friend of the rivals, maintaining secrecy when striking again and again. The affairs of one, who cannot maintain secrecy, …undoubtedly perish, like a broken boat in the ocean.” In Kautilya’s foreign policy, even during a time of diplomacy and negotiated peace, a king should still be “striking again and again” in secrecy.

At the other end of the spectrum, open war “is fighting at a specified time and place”. The most interesting points on the spectrum are the middle two: concealed war and silent war:

[Concealed] war is terrorizing, sudden assault, threatening in one direction while attacking in another, sudden assault without specifying time and place, attacking an enemy when he makes a mistake or is suffering a calamity, and appearing to yield in one place but attacking in another. [Silent] war is using secret agents and occult practices against the enemy.

Roger Boesch comments:

[S]ilent war is a kind of fighting that no other thinker I know of has discussed. Silent war is a kind of warfare with another kingdom in which the king and his ministers—and unknowingly, the people—all act publicly as if they were at peace with the opposing kingdom, but all the while secret agents and spies are assassinating important leaders in the other kingdom, creating divisions among key ministers and classes, and spreading propaganda and disinformation. According to Kautilya, “Open war is fighting at the place and time indicated; creating fright, sudden assault, striking when there is error or a calamity, giving way and striking in one place, are types of concealed warfare; that which concerns secret practices and instigations through secret agents is the mark of silent war.” In silent warfare, secrecy is paramount, and, from a passage quoted earlier, the king can prevail only by “maintaining secrecy when striking again and again.” This entire concept of [silent] war was apparently original with Kautilya.

Open war and secret war are analogous to what Sun Tzu called orthodox warfare (ch’i) and unorthodox (cheng) warfare but, as Boesche points out, the concept of silent warfare is unique to the Arthashastra. Silent warfare is analogous to the vague and shifting concept of 5GW, anticipated and improved upon by a dead Indian thinker two millenia ago.  The Arthashastra is also unique in the number of tactics it suggests for silent war. It recommends the use of courtesans, fake priests and holy men, fake merchants, disguises, poisons, assassinations, fire, and many other methods for undermining an enemy (and spying on your own population). The Arthashastra places high value on silent war:

Miraculous results can be achieved by practicing the methods of subversion…A single assassin can achieve, with weapons, fire, or poison, more than a fully mobilized army.

The task of silent warriors was to:

1. “neutralize the principal officers who, though living by service under the king, work for the enemy”
2. “keep under surveillance people of the country who are likely to fall prey to the incitements of the enemy”
3. “wage psychological warfare against the enemy”
4. “weaken the enemy”

The Arthashastra elaborates:

A wise king shall protect his people (his important chiefs and the ordinary population) against the intrigues of the enemy, irrespective of whether the persons are likely to be subverted or not. The kinds of people easily subverted by the enemy are: the angry, the greedy, the frightened, and the haughty. In his own country, spies in the guise of soothsayers, readers of omens, and astrologers shall keep a watch over those likely to be subverted and find out whether these have contacts among themselves or with enemies or with jungle chiefs. Appreciation shall be shown, by awarding honors and gifts, to those who are happy with the king [and therefore loyal]. The discontented shall be tackled by the four methods (conciliation, placating with gifts, sowing dissension, and use of force). In the enemy’s country, those who are easily subverted shall be won over with conciliation and gifts. Those who are not easily subverted shall be tackled by sowing dissension, use of force, or pointing out to them the defects of their king.

I won’t go into the Arthashastra’s use of black magic. The connection between the occult and 5GW is already too strong; any sufficiently advanced 5GW is indistinguishable from magic.

There are three English translations of the Arthashastra from the original Sanskrit:

• The 1915 translation by Rudrapatna Shamasastry
• The 1972 translation by R.P. Kangle
• The 1987 translation by L. N. Rangarajan

There are some copies of the Rangarajan translation available from U.S. booksellers. While this translation may be the most accessible, having excellent explanatory notes, maps, illustrations, it is incomplete: it only excerpts portions of the Arthashastra. The Kangle translation is the most comprehensive but there are few copies available from U.S. booksellers and ordering it from the original Indian publisher is a somewhat laborious process. The Shamasastry translation is available online but it lacks the up to date scholarship found in the Kangle translation. In contrast to this sorry state of affairs, the Art of War is available in many English translations. What the Arthashastra needs is a Ralph Sawyer type to provide both an appropriate English translation and the necessary background text for American readers. Perhaps a bundling of the Kangle translation and The First Great Political Realist: Kautilya and His Arthashastra by Roger Boesch would be a good start.

Seen on Ajaxian: openness to robots from the new whitehouse.gov:

The Bush version was ~2400 lines long:

User-agent: *
Disallow: /cgi-bin
Disallow: /search
Disallow: /query.html
Disallow: /omb/search
Disallow: /omb/query.html
Disallow: /expectmore/search
Disallow: /expectmore/query.html
Disallow: /results/search
Disallow: /results/query.html
Disallow: /earmarks/search
Disallow: /earmarks/query.html
Disallow: /help
Disallow: /360pics/text
Disallow: /911/911day/text
Disallow: /911/heroes/text
….

Obama?

User-agent: *
Disallow: /includes/

The appalling thing about the new website is that it appears to be running Windows and IIS. It would be nice if openness extended all the way down the stack to the web server and operating system. Running Microsoft anything is malpractice: it’s pricier than a LAMP stack solution, more unstable, more manpower intensive, and more vulnerable hacking attacks. This is my favorite anecdote about the risks of using Microsoft in national defense: cruiser towed back to port after systems crash.

Article by H.R. McMaster:

Thus, historian Earl Tilford argued that the only true lesson of Vietnam was that the “United States must never again become involved in a civil war in support of a nationalist cause against Communist insurgents supplied by allies with contiguous borders in a former French colony located in a tropical climate half-way around the world.”