Quote of the Day

Everyone prefers to believe rather than to judge. One never judges but always believes regarding the things which are vital. Error transmitted from hand to hand always turns us to and fro and throws us down headlong, and we perish through following examples taken from others. We shall be cured if we were but to secede from the crowd. As it is, however, the people, the defender of its own evil, stands firm against reason.

—Seneca, cited by Leo Strauss in his Thoughts on Machiavelli, pg. 126

(My apologies for not posting recently. This page was flagged as a possible spam-blog by Blogger, and I was prevented from posting for over a week until the issue was resolved. But, I'm back now…)

A Step Towards Decentralized Logistics

Longtime readers of this blog may remember that I am interested in the concept of a decentralized, flexible military that follows the model proposed by Arquilla and Ronfeldt in their work, Swarming and the Future of Conflict. Briefly put, they propose that the current hierarchical structure of the military be replaced with one where troops are organized in autonomous units of about 200 men, which would then coordinate their actions laterally with each other. In this way, they would gain flexibility and speed, compared to the present system in which information must be passed up a long hierarchy, and then orders are passed back down. Often this process can take days, during which time the information becomes stale. Col. Thomas Hammes reiterates the problems with the military's current structure in his book, The Sling and the Stone, and also advocates a more flexible, decentralized military.

There are several practical problems that must be solved before a decentralized national military is possible (completely aside from the furious opposition to such a system from the entrenched military bureaucracy). One of the largest problems is developing a system of logistics that can complement autonomous action by many small units.

The category of "logistics" encompasses several related but distinct problems. First is making the process of peacetime procurement decentralized. Second is ensuring replenishment and resupply to autonomous units during a deployment, especially during a combat situation. Third is managing the demands of autonomous units on scarce shared resources, such as close air support or satellite overwatch. (Not being a soldier, I cannot say whether there are additional problems within the broad logistical heading.)

I would like to propose a solution to the first problem, peacetime procurement. Under the present system, procurement is largely accomplished on the national level: the Pentagon requests funding for specific needs from Congress, which is sometimes granted, and then signs gigantic procurement contracts with various suppliers. The Pentagon then distributes the equipment internally to the troops who are slated to receive it. Troops have very little say in the equipment they are issued, and in many cases are actually forbidden from buying equipment on their own. The ongoing saga of Dragon Skin body armor is a case in point; confirmed to be better quality than the Army's Interceptor vests, it has nevertheless not yet been approved for military procurement. Soldiers have even been ordered not to buy it on their own.

The problems with the procurement process have been dramatized in the last week by Daniel Henniger's WSJ column on the deployment of the Snake Eater fingerprinting system. Soldiers, private contractors, a nonprofit, and a blogger cooperated outside of official channels to produce a device in a single month, that the military had failed to create in over three years.

Meanwhile, the centralized procurement process is incredibly opaque, and renowned for its wastefulness and episodes of corruption. In part this is due to its sheer size; even while audits routinely point out examples of waste or fraud, the system is simply too big to reform easily.

There is a way to dramatically improve the peacetime procurement process, and render it more transparent and flexible at the same time, by decentralizing it. The trick is to do so without losing the real economies of scale that can be achieved with large purchases.

My inspiration for this is the concept of a "group-buy," in which a seller and many buyers coordinate the purchase of a single type of good, allowing the seller to offer each buyer a lower price than he could offer on an individual basis. (There are many, many group-buys being organized over the internet at any given time; here is an academic paper on modeling the group-buy process.)

Assume the existence of battalion-sized autonomous units of the type discussed by Arquilla and Ronfeldt, although this is not strictly necessary. Rather than Congress allocating funds to the Pentagon, which would then purchase and distribute equipment, I propose that each battalion have its own allocation of funding, set according to the type of unit. (A tank battalion is more expensive to run than an infantry battalion, for example.) The unit could then spend the money on any purchases it felt were necessary, from any supplier, civilian or defense-related. Most equipment would still need to be standardized, but the timing of purchases could be according to the unit's needs.

Defense suppliers would offer group-buy windows in which units would subscribe; if fifty battalions were to purchase body armor at the same time, the unit cost would be less than if a single unit were to make a purchase. But participation would be on an as-needed basis, not as dictated by Pentagon bureaucrats.

The Pentagon would still have an independent budget, for example to conduct R&D. But if there is a development project out of favor with the brass, yet eagerly anticipated by military units, they could decide to fund the project with a portion of their logistical budgets. If an entire division of troops were to chip in for a development project, it could proceed even in the face of bureaucratic or Congressional skepticism.

This system could have many benefits. First, it is much easier to audit a single battalion and enforce accountability than it is for the entire Pentagon. This would reduce corruption. Second, unit would be unlikely to buy equipment that is shown to be substandard. For example, a distributed procurement system would have adopted the Dragon Skin vest by now instead of the Interceptor. Third, units could rapidly adjust to changing mission requirements and purchase the necessary gear.

Another benefit is that incentives could be built into the money allocations. A bonus could be paid out if the unit has a high percentage of soldiers with excellent marksmanship skills, or who have completed Ranger training, or who have college degrees, or who learn critical languages. Not only would this encourage the units to continually improve themselves, it would allocate more resources to those units who are demonstrably more valuable.

I have not yet considered how such a system could work in battle conditions, where free-flowing resupply is often critical. But this is a good first step to revamping the military procurement system.

Opportunities in Doing One Thing Well

The angst continues to build over the ballooning cost of medical care in the United States. Thanks to a toxic combination of perverse legal incentives, crippling legal restrictions, and inefficient use of medical resources, health care costs have been consistently growing 2% faster than inflation for decades. (It is noteworthy that both health care and education—the other sector where prices have been rising, not falling, as time goes by—are heavily influenced by government interventions.) Aside from the inherent problems caused by rising costs, the health care issue has generated calls for the government to expand its intervention yet again.

Before we embark down that dreary road, trodden by the soles of so many others whose present misery we are apparently so keen to share, it is worth noting circumstances where medical care has gotten much cheaper and has improved in quality.

In C. K. Prahalad's book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, he lays out steps necessary for companies to effectively build a market among those who earn less than $2 a day. One of these is that companies must find "quantum jumps in price performance," reducing prices for a product not by half but by 30-100 times! He cites several examples; one of these is an Indian medical services company called Aravind Eye Care.

Aravind Eye Care specializes in a single procedure: cataract operations with inter-ocular lens. This surgery typically costs $2500 to $3000 in the United States or Europe. But Aravind charges between $50 and $300 depending on complications—when it charges at all; 40% of its patients receive their surgeries free. Yet their average cost per patient is less than $25, allowing them to make a healthy profit.

How can they get the cost of a $3000 procedure down so low? To do it, the founder of Aravind, Dr. Venkataswamy, standardized every step of the process and strove for consistency and efficiency. Their hospital facilities are designed specifically for eye care, and located in central areas, including the main hospital in Madurai; patients are screened in their villages and then transported in via an efficient system of buses. Each doctor is supported by two teams of technicians who have been trained only to do eye care; in this way, a doctor can go through 50 surgeries per day. Because they are so carefully trained and because every aspect of the procedure is systematized, "Aravind boasts of an outcome rate that is among the best in the world."

Nothing about this system is fundamentally shocking—or it should not be, at any rate. The inspiration for it was McDonald's, which can take a group of low-skilled employees and turn out hamburgers and french fries of uniform quality for very little cost, simply because the process has been so deeply understood and optimized.

Hospitals, on the other hand, have traditionally tried to do everything. For good reason; in most of human history, people could hardly have had the luxury of specializing, not when there might be a single hospital within days of travel. Even when specialists arose, they were turned to when the traditional medical system came up short. Specialists in the United States are premium assets, and command premium prices because of it. The very idea that a specialist should be cheaper than a traditional hospital is a non-sequitor.

Yet now that travel is so easy and cheap, the reasons underpinning this system have largely vanished. Indeed, Aravind has an agreement with the British National Health Service: Britons needing eye surgery can fly to India, be put up in a hotel for a few days, go to Aravind, and fly back, all for much less money than it would take to have the surgery done domestically.

It seems to me that this sort of deep specialization should be possible for more procedures than eye surgeries. For example, one of the most common surgeries is performed on the knee, especially for those 85 and older. One imagines that this surgery will only become more common as the population ages. As it stands now, that surgery is very expensive; but what if someone were to analyze each step of the procedure, develop a streamlined process, and reduce the cost to, say, 10% of the current level? What if this procedure were carried out in a bare handful of facilities—perhaps five in the United States, placed so that you need travel only an hour by plane to get to them? And what if by having so few facilities, you could extract every efficiency and improvement possible to make the process easier, safer, and cheaper?

Now imagine if such a fundamental change in the status quo were achieved in nearly all of the most expensive procedures in medicine. Would we still have a looming problem with the cost of health care? I doubt it.

Can it be done? If they could do it in India, they can do it here. What is needed is a doctor or group of doctors with entrepreneurial drive and vision to take the first step. Perhaps Dr. Venkataswamy can give a seminar to get the process started.

Quote of the Day

The various modes of worship, which prevailed in the Roman world, were all considered by the people as equally true; by the philosopher, as equally false; and by the magistrate, as equally useful.

--Edward Gibbon, The Decline and Fall of the Roman Empire

Quote of the Day

Government is the only enterprise in the world which expands in size when its failures increase.

—Judge Janice Rodgers Brown, speaking at the University of Chicago on 20 April 2000.

The Failure of the Diplomatic Mentality

Revolutions rarely compromise; compromises are made only to further the strategic design. Negotiation, then, is undertaken for the dual purpose of gaining time to buttress a position (military, political, social, economic) and to wear down, frustrate and harass the opponent. Few, if any, essential concessions are to be expected from the revolutionary side, whose only aim is to create conditions that will preserve the unity of the strategic line and guarantee the development of a "victorious situation."

—Mao Tse-Tung Samuel Griffith, in his inroduction to Mao Tse-Tung's On Guerrilla Warfare, cited in Col. Thomas X. Hammes, The Sling and the Stone.

European-style diplomacy (which is largely the model for American diplomacy) is premised on two sides coming to a mutually tolerable agreement, involving gains and concessions, in order to avoid a larger conflict. Such an agreement is then expected to constrain the behavor of both sides going forward. A necessary precondition for such a system is that both sides must be operating in good faith; each side believes that it has achieved the most beneficial likely outcome, and therefore has an interest in protecting the stability of the agreement.

What has been overlooked is that a diplomatic agreement only has value when there are significant incentives for all parties to keep it. In Europe, the incentives had become implicit and overwhelming (i.e., breaking agreements would lead to economic consequences in an interdependent system, and sometimes war). Therefore it became possible for diplomats to neglect actively thinking about the consequences of bad faith, and to begin to ascribe an intrinsic, quasi-mystical power to the diplomatic agreement itself. That an agreement is signed (goes the unexamined, subconscious premise) guarantees that it will be followed.

The naiveté of such a premise comes to the fore when we must deal with a class of people who treat negotiations not as a way to avoid conflict, but as another tool in that conflict. The long history of diplomacy surrounding the Israeli-Palestinian war is an example of excellence: the Palestine Liberation Organization ostensibly agreed to end warfare against Israel and Jews around the world, but in practice this amounted to little more than mouthing empty platitudes of peace and toleration at black-tie functions. In exchange for this wrenching concession, the new Palestinian Authority was given administrative control over several million people, billions of dollars in international aid, large stores of weapons along with the training to use them—and most important of all, international legitimacy that served as a powerful shield against Israeli action. The PLO proceeded to use these gifts to mount a second Intifada, as well as turning a blind eye to the efforts of other terrorist groups such as Hamas and Jihad Islami.

The same class of behavior is on display with Iran. Iran's stated goal is the development of nuclear capability. In non-diplomatic settings, the Iranian government has openly alluded to its aim of a nuclear bomb. In pursuit of this goal, Iran has broken nearly a dozen separate agreements that the European powers painstakingly negotiated over a period of several years. These agreements have been very useful to Iran, even as they were being flouted: they often came with financial inducements, they served to keep the Western powers divided and bickering among themselves over the proper course to take—and most importantly, they bought time, lots of time.

To the serious observer whose brains have not been addled by the diplomatic fantasies so adored by most Western governments, it becomes obvious early on when an oppposing party is negotiating in bad faith. The most important early warning is when the aggressive party achieves tangible gains through negotiation, in exchange for concessions that are entirely symbolic or else of minimal importance. This pattern has been confirmed in the farcical negotiations between Israel and the PLO, between Columbia and FARC, between Pakistan and the Taliban forces of Waziristan, and (at the risk of invoking Godwin's Law) the Munich 1938 agreement with Hitler.

So then why do the assorted diplomats of the world continue to make the same errors over and over again? I have argued before that a major flaw in the structure of our government is that diplomats have a single responsibility (i.e. diplomacy) and the military has a single responsibility (i.e. warfighting) that is not called upon until the diplomats throw in the towel. We need to take an integrated view towards interactions with other governments, so that out actions are not divided into discrete categories but fall along the same continuum.

I am not necessarily advocating open war with Iran. There are easier ways to accomplish our goals. For one thing, there are indications that the Mossad has begun assassinating key Iranian scientists in their nuclear program. I find these reports entirely believable, given that Israel assassinated several ex-Nazi scientists working on Egypt's ballistic missile program in the early 1960's. And it is far more difficult to replace a scientist than it is to replace physical infrastructure. Given that, and given the recent isolation of Iran by America and our allies, it is entirely possible that the Khomeinist government of Iran could fall before they achieve nuclear capability. (There is still the issue of their continuing support for terror operations in Israel, Iraq, Saudi Arabia and elsewhere.)

But the larger point is that we need to look at our diplomatic activities with a jaundiced eye. Why on Earth should we engage in negotiations with a power operating in bad faith, if the only party that will benefit is our adversary?

*******************

UPDATE 4:31 PM: With impeccable timing, Wretchard has posted a news item from the Phillipines about a delegation of negotiators sent to talk to the Moro National Liberation Front, a supposed "peace partner," who were promptly taken hostage by a supposed "breakaway faction." Perhaps in the same sense that Black September was a "breakaway faction" of Fatah, i.e. an organizational fiction meant to provide plausible deniability.

Quote of the Day

The rich, the owners of the already operating plants, have no particular class interest in the maintenance of free competition. They are opposed to confiscation and expropriation of their fortunes, but their vested interests are rather in favor of measures preventing newcomers from challenging their position. Those fighting for free enterprise and free competition do not defend the interests of those rich today. They want a free hand left to unknown men who will be the entrepreneurs of tomorrow and whose ingenuity will make the life of coming generations more agreeable. They want the way left open to further economic improvements. They are the spokesmen of material progress.

—Ludwig von Mises, Human Action, pg. 83 (Fox & Wilkes paperback edition)

The Need for Skepticism in the Cabinet

One of the things I've been up to in my long absence from blogging has been studying up on game theory and issues of persuasion and decisionmaking, for one of my side projects. One of the tidbits I gleaned from this study is that academics agree that it is, indeed, very hard to go against a group consensus. You must fight against social penalties for perceived disloyalty, as well as the internalized doubt in your own beliefs: perhaps all these other people know something you don't? Otherwise, why would they hold a view that you see as obviously wrong?

Interestingly, when a dissenter has even a single ally, no matter how many are arrayed against him, it becomes much easier to sustain his position. The second factor noted above, that the lone dissenter tends to question his own conclusions, is mitigated by the presence of an ally who shares those conclusions. And the ally provides valuable social feedback that helps make up for the more general disapproval.

These points were going through my mind as I read Angelo M. Codevilla's review of Bob Woodward's latest book, State of Denial, in the most recent issue of the Claremont Review of Books. Woodward describes the petty politicking in the Bush Cabinet between competing centers of power, which the President was unwilling or unable to quash. Because (says Woodward) the President fostered an atmosphere in which good news was the order of the day, and in which bad news would spoil the mood, officials would often withhold bad news and try to solve the problems on their own, or else pass them off as someone else's responsibility. Most important for Cabinet officials in an environment without strong central management was to consolidate their own authority at the expense of others. Secretary Rumsfeld (says Woodward) was famous for this, fighting to preserve the autonomy of the Defense Department and avoiding collaboration with the State Department, even as observers and front-line soldiers decried the absence of State personnel.

I do not know whether Woodward's account is accurate. It would certainly explain the seemingly disjointed conduct of a government whose arms frequently work at cross-purposes in this war. And the larger phenomena of groupthink coloring decisionmaking, officials withholding crucial data from decisionmakers for fear of a bad reception, and feuding bureaucrats impeding the prosecution of policy are certainly not new in American government. Indeed, the classic case of groupthink has for a long time been the deliberations leading up to the Bay of Pigs operation under JFK.

I do not believe any president actually wants to foster such an environment in his cabinet. But as it stands, it is hard not to. Each member of the Cabinet has a tremendous amount of power over his department; no president would willingly entrust that power to someone with which he disagrees. This will lead to a certain intellectual homogeneity. Meanwhile, each member of the Cabinet is individually constrained by the imperatives of the department he represents. His information is filtered through that apparatus, and his policies are often identified with the policies of the entrenched establishment within that department. This will lead to cabinet members defending their own fiefdoms even against the greater national interest.

These two institutional factors together make a toxic brew.

Eliot Cohen, in his excellent book Supreme Command, concludes that perhaps the most crucial task of a good leader is to challenge the orthodoxies of his underlings and force people to respond more rapidly to the real world. (Ironically, Cohen's book achieved some prominence because it was on President Bush's reading list; it seems the President was not able to sufficiently profit from it.) This sort of challenge and interrogation is very difficult to do when a president must deal with groupthink in his cabinet, restricted information, and bureacratic backstabbing. What can be done?

There is a useful position in the parliamentary governments of some foreign nations (Israel is one such), called the Minister Without Portfolio. This minister has equal rank with other ministers who actually run branches of the government, yet has no executive authority (or responsibility) himself. This releases him from many institutional pressures, and allows him to speak more or less freely. Meanwhile, since the minister has no actual authority except as an official gadfly, prime ministers have more latitude in choosing ministers that they might not see eye-to-eye with.

The relative performance of parliamentary democracies is not the issue here; they are subject to their own pathologies. But the concept of a cabinet-level appointee without executive authority is ripe with possibility. It would help counteract the abovementioned corrosive factors of the Cabinet dynamic, allowing for a more healthy level of discourse and cooperation--especially if there were two Secretaries Without Portfolio, so that they could support each other if necessary. It should also be their responsibility and privilege to keep an eye on the inner workings of the various departments, to make sure that their internal politics are not allowed to damage American policy without notice.

Whatever the remedy, it is clear that the present structure of our decisionmaking bodies is badly flawed. They are frozen in a 1950's model of corporate structure, full of hierarchies and one-directional information flows, when the rest of America has moved on to more fluid, collaborative structures. But that is a larger discussion. We must fix one problem at a time, and fixing the Cabinet isn't a bad place to start.