Saturday, October 11, 2008

Steps to Restoring Confidence in the America’s Corporate Economy

The biggest single revelation from the Wall Street crash was how quickly the previously unimaginable sum of a trillion dollars could be squandered. Second only to that reality was this equally troubling thought: How are we preparing future leaders to become the CEO’s on whom the nation’s prosperity ultimately depends?

After Enron, I wrote a mostly overlooked book called Business As War that analyzed this issue. Undaunted, business school faculties added a plethora of dreary ethics courses, placing great weight on codes of conduct and protecting whistle-blowers. But if you watched the waves of disgraced executives testifying before Congress this week, it seemed as if the American CEO had received rigorous training only in the techniques of personal survival, evasion and escape. Business faculties as well as their students might have been more edified by the example of firing squads rather than the ritual tut-tutting of congressional hearings. (We might still get around to executions if things don’t improve.)
The primary reaction to Enron was the naïve assumption that enough legislation (Sarbanes-Oxley) could be passed and enough regulations (federal, state and local) written to eliminate the worst corporate excesses. We mostly succeeded in guaranteeing full employment for the legions of accountants who are now obliged – at the risk of severe penalties – to wade through the ledgers at truly impressive billing rates. With illusions being stripped away by the hour, do we now need even more laws and regulations? Or can we imagine something truly outrageous: a revolution in how we train future business leaders. Its jumping-off points include:
  1. Prize (and evaluate) character rather than just teaching "Ethics." The late Nobel laureate Milton Friedman famously said that “I don’t think there is such a thing as business ethics. A business can’t have ethics any more than building can have ethics.” B-school faculties, fixated on teaching the alleged science of economics, naturally tended to agree. They compromised by settling on least-common-denominator “situational ethics,” avoiding the much tougher issues on which character is evaluated and built. Overlooked were the moral absolutes taught at places like West Point, a public institution which demands that cadets not lie, cheat, steal or tolerate those who do. (Should they run afoul of the honor code, former cadets can later apply to business schools.)
  2. Select and train a new generation of "servant leaders." This is not an argument for producing more social workers, community organizers or even a kinder and gentler cadre of CEOs. We simply need to identify a talent-pool of future executives capable of subordinating their own egos and compensation to the larger interests of their corporations, employees and investors. According to MSNBC, more money was spent last year on Wall Street bonuses than on the entire foreign aid budget of the United States. Can you spell C-O-R-R-U-P-T? But with such naked excess and unbridled selfishness reigning as institutional norms, is it any wonder that malfeasance and incompetence soon follow?
  3. Teach the new skill-sets of 21st century business. I teach at UTSA – the University of Texas, San Antonio – one of the few places where future business leaders practice dialogue techniques for harvesting bottom-up knowledge from overwhelmingly top-down cultures. Last semester I even taught an experimental course in business intelligence. (While hardly standard MBA fare, such topics are carefully studied by the same countries now holding our debts.) But the core ideas are these: Leaders need to create new ways to exploit information while eliminating useless layering between the people who really know (on the bottom) and those who only think they know (the overpaid ones on top).
  4. The reigning ideas about leadership are dead wrong. This semester, I'm trashing the existing textbook lessons on "business leadership," simply because they use far too many words to convey the academic-sociological theories masquerading as truth. In their place: One Bullet Away, Nathaniel Fink’s memoir of highly-networked, small-unit leadership. (If you caught Generation Kill recently on HBO, then you saw Fink's unit.) His Marines – incredibly profane and hemorrhaging political incorrectness – could hardly distinguish spread sheets from toilet paper. But in their commitment to the mission and to each other, they put their lives on the line without the slightest hesitation.
Want to restore confidence in our corporations – from the foreman to the Board of Directors? Want to educate – really educate - the people we allow to lead such institutions? Then join me and let’s begin this revolution – right here and right now!

Spencer interviews Geert Wilders, Part 4

from Jihad Watch

Here is the fourth segment of my (Robert Spencer) conversation with the fearless and insightful defender of free speech, Dutch politician Geert Wilders. Part 1 is here, part 2 is here, and part 3 here.

Red Alert: The G-7 -- Geopolitics, Politics and the Financial Crisis

by www.stratfor.com


The finance ministers of the G-7 countries are meeting in Washington. The first announcements on the meetings will come this weekend. It is not too extreme to say that the outcome of these meetings could redefine how the financial markets work, certainly for months and perhaps for a generation. The Americans are arguing that the regime of intervention and bailouts be allowed to continue. Others, like the British, are arguing for what in effect would be the nationalization of financial markets on a global scale. It is not clear what will be decided, but it is clear that this meeting matters.

The meetings will extend through the weekend to include members of the G-20 countries, which together account for about 90 percent of the global economy. This meeting was called because previous steps have not freed up lending between financial institutions, and the financial problem has increasingly become an economic one, affecting production and consumption in the global economy. The political leadership of these countries is under extreme pressure from the public to do something to solve — or at least alleviate — the problem.

Underlying this political pressure is a sense that the financial class, people who run global financial institutions, have failed to behave responsibly and effectively, and have therefore lost their legitimacy. The expectation, reasonable or not, is that the political system will now supplant these managers and impose at least a temporary solution. The finance ministers therefore have a political mandate, almost global in scope, to act decisively. The question is what they will do?

That question then divides further into two parts. The first is whether they will try to craft a single, global, integrated solution. The second is the degree to which they will take control of the financial system — and inter-financial institution lending in particular. (A primary reason for the credit crunch is that banks are currently afraid to lend — even to each other.) Thus far, attempts at solutions on the whole have been national rather than international. In addition, they have been built around incentivizing certain action and increasing the available money in the system.

So far, this hasn’t worked. The first problem is that financial institutions have not increased interbank lending significantly because they are concerned about the unknowns in the borrower’s balance sheet, and about the borrowers’ ability to repay the loans. With even large institutions failing, the fear is that other institutions will fail, but since the identity of the ones that will fail is unknown, lending on any terms — with or without government money — is imprudent. There is more lending to non-financial corporations than to financial ones because fewer unknowns are involved. Therefore, in the United States, infusions and promises of infusion of funds have not solved the basic problem: the uncertain solvency of the borrower.

The second problem is the international character of the crisis. An example from the Icelandic meltdown is relevant. The government of Iceland promised to repay Icelandic depositors in the island country’s failed banks. They did not extend the guarantee to non-Icelandic depositors. Partly they simply didn’t have the cash, but partly the view has been that taking care of one’s own takes priority. Countries do not want to bail out foreigners, and different governments do not want to assume the liabilities of other nations. The nature of political solutions is always that politicians respond to their own constituencies, not to people who can’t vote for them.

This weekend some basic decisions have to be made. The first is whether to give the bailouts time to work, to increase the packages or to accept that they have failed and move to the next step. The next step is for governments and central banks to take over decision making from financial institutions, and cause them to lend. This can be done in one of two ways. The first is to guarantee the loans made between financial institutions so that solvency is not an issue and risk is eliminated. The second is to directly take over the lending process, with the state dictating how much is lent to whom. In a real sense, the distinction between the two is not as significant as it appears. The market is abolished and wealth is distributed through mechanisms created by the state, with risk eliminated from the system, or more precisely, transferred from the lender to the taxing authority of the state.

The more complex issue is how to manage this on an international scale. For example, American banks lend to European banks. If the United States comes up with a plan which guarantees loans to U.S. banks but not European banks, and Europeans lend to Europe and not the United States, the integration of the global economy will very quickly shatter, leading to significant limitations on international trade, currency convertibility and so on. You will nationalize economies that can’t stand being purely national.

At the same time, there is no global mechanism for managing radical solutions. In taking over lending or guarantees, the administrative structure is everything. Managing the interbank-lending of the global economy is something for which there is no institution. And even with coordination, finance ministries and central banks would find it difficult to bear the burden — not to mention managing the system’s Herculean size and labyrinthine complexity. But if the G-7 in effect nationalize global financial systems and do it without international understandings and coordination, the consequences will be immediate and serious.

The G-7 is looking hard for a solution that will not require this level of intrusion, both because they don’t want to abolish markets even temporarily, and more important, because they have no idea how to manage this on a global scale. They very much want to have the problem solved with liquidity injections and bailouts. Their inclination is to give the current regime some more time. The problem is that the global equity markets are destroying value at extremely high rates and declines are approaching historic levels.

In other words, a crisis in the financial system is becoming an economic problem — and that means public pressure will surge, not decline. Therefore, it is plausible that they might choose to ask for what FDR did in 1933, a bank holiday, which in this case would be the suspension of trading on equity markets globally for several days while administrative solutions are reached. We have no information whatsoever that they are thinking of this, but in starting to grapple with a problem of this magnitude — and searching for solutions on this scale — it is totally understandable that they might like to buy some time.

It is not clear what they will decide. Fundamental issues to watch for are whether they move from manipulating markets through government intrusions that leave the markets fundamentally free, or do they abandon free markets at least temporarily.

Another such issue is whether they can find a way to do this globally or whether it will be done nationally. If they do go international and suspending markets, the question is how they will unwind this situation. It will be easier to start this than to end it and state-controlled markets are usually not very attractive in the long run. But then again, neither is where we are now.

Economic Terrorism Underway?

(Compiler's note: Certainly another must read item. rca)


By Robert Anderson

This morning (10/11/08) I was listening to FoxNews and Neil Cavuto interviewing Governor Huckabee regarding today’s economic crisis. Gov. Huckabee indicated that he had it from a good source that for the last twelve days something is being observed that had never been seen before in our markets.

Major activity is occurring about 30 minutes before the close of the American stock market. There is said to be a 9-fold increase of trading – again something that has not been noted before with this timing.

The market thus ends the day in a major down-swing. This situation is fodder for the press to speak again about how bad thing are at the moment. By morning in the U.S. the Asian & European markets have reacted and gone down. This sets up the U.S. market then to go down again when it opens -- and the cycle repeats

This appears to be being done via computers. Gov. Huckabee believes a major investigation needs to be made into this situation. In my opinion, what we may be seeing here is what some would call a “cultural jihad” or “economic jihad” in action.

Economic Terrorism:

(Compiler's note: Must read This is a real homeland security issue. rca)

The Radical Muslim War Against the Western Tax Base

This article was published in the July 2005 volume of the SWJ Magazine.

INTRODUCTION: This paper outlines a theory concerning why Muslim terrorists attacked the World Trade Towers on Sept. 11, 2001, bombed London’s subway during the G-8 economic summit on July 7th, and detonated blasts in an Egyptian resort on 23rd July. The reason for these attacks was to create ‘Economic Terrorism.’ Economic Terrorism is defined here as the attempt to assault and destroy a foe through decimation of the enemy’s tax base via rank economic sabotage. Such attacks on economic infrastructures lower net tax yield, thereby shrinking the capital pool for military spending. There is historical warrant for the belligerent use of strategic economic destruction. This is detailed in an iconoclastic book on the Roman Empire’s demise, by peerless Orientalist Henri Pirenne, called ‘Charlemagne and Muhammad’ (1943). This work challenged Gibbon’s thesis that Germanic barbarian assaults doomed Rome, posited in the Decline and Fall of the Roman Empire (1776). As we shall see, ‘Economic Terrorism’ is the most potent weapon for Muslim radicals can deploy in their siege against the West. There is hard evidence Islamicists employed Economic Terrorism on Sept. 11 to mangle the US economy, which vicariously damaged the tax base. By extension, this was meant to prune U.S ability to pursue aggressive foreign policy, mount defense and wage war. Radical Islam has long reacted with ambivalence and rage towards capitalism.[1] Framing this debate is a larger ideological struggle, pitting ‘atheistic’ Western capitalistic economics against the Islamic idee fixe – the formulaic Muslim theocracy. Accordingly, a famous radical Muslim intellectual felt that, “…democracy is a form of idol worship. So, too…capitalism, which is…is a form of idolatry.”[2] We now know Al Qaeda was fixated on casing New York financial institutions for years before they attacked. If Islamic terrorists further pursue Economic Terrorism without an organized Western response, the impact upon economy and tax-derived defense will be massive. Also, such attacks won’t be isolated,[3] but recurrent -- given the small cost of assaults and massive potential reward. Therefore, we must study Economic Terrorism and prepare an answer. Ultimately, as the poor and overmatched Islamic terrorists pursue their struggle against the West, they realize this is the best ‘small war’ strategy of all.

WHAT IS ECONOMIC TERRORISM: Let’s here better define ‘economic terrorism.’ First, according to Webster’s, terrorism is: “The state of being terrorized or the act of terrorizing; the use of intimidation to attain one’s goals, or to advance one’s causes.”[4] So, ‘Economic Terrorism’ is the act by any group or state for the sole and illegal purpose of creating economic chaos and collapse as a means of destroying the attendant society, for military, social, political, or religious purposes. This definition is meant to ameliorate certain potential problems in definition. Certainly, Economic Terrorism goes well beyond any simple boycott, embargo, tariff, or trade war between two countries. This would not merely be a case where one country cried ‘foul’ over another’s unfair or even illegal commercial activities. Such actions would have to be shown to be the result of an outright attempt through some malign person or group to create economic chaos meant to undermine the ability of a country to mount a defense or even exist. Some might ask if, for example, perhaps the U.S. could be guilty of Economic Terrorism in its embargo and boycott of Cuba because, after all, our activities badly damaged Cuba’s ability to exist. The simple answer to this is -- No, because America had principled and arguably just reasons for embargoing Cuba that are based upon respect for human rights found nowhere in Marxist countries.

CLASH OF WORLDVIEWS: But, arguendo -- who decides the standard should a dispute erupt between two countries, at say – the United Nations? Radical Islam and the West diverge upon the Western doctrines of freedom and human rights that form the foundation for international law. Therefore, in the name of human rights and freedom, we must insist that whatever country is trying to practice those humanistic doctrines must be favored versus those in opposition, because to not follow this logic is to buy into the terrorist’s insistence to reject human rights, dignity and freedom. The goals of Economic Terrorism are therefore summed as threefold: First, actual attacks upon capitalist citadels meant to inflict maximum real damage. Second, to produce a shockwave of hopelessness and fear meant to remove from businessmen and consumers ease and confidence while conducting or contemplating trade. Third, to inflict such damage upon the money holding and capitalistic organs of society that tax receipts no longer cover any but the most basic expenditures. After this point such a society will become from a practical military sense – de-clawed and toothless.

STRIKE AGAINST CAPITALISM: So, the Sept. 11 terrorists specifically targeted American, and now European capitalism. But, let’s ask specifically -- Why? For several reasons, the first being pragmatic, the second ideological. First, as a doctrine of war, damaging the industrial and economic infrastructure of your opponent means limiting their ability to attack and defend. Hence, such was executed during U.S. General Sherman’s ‘March to the Sea’ in the Civil War, and also employed in the strategic bombing of Dresden, Germany during WW II. Both came as classic examples of economic destruction as a component of ‘Total War.’ But there is also an ideological component of Islamicists opposing capitalism that must be reckoned. The free market philosophy of capitalism generally opposes the theocratic Muslim concept of the perfect Islamic state, where all human decisions are pre-formatted. It is unsurprising then that Sayyid Qutb, a highly influential modern Islamic Intellectual referred to as “the brains behind bin Laden[5]" wrote a book called The Battle between Islam and Capitalism. [6] Of course, a preemptive act of sabotage would appeal to terrorists for predictable reasons. For one, it would be an audacious way to land an unguarded strategic blow. Therefore, the impact would be magnified, both psychologically and in fact. It was also an inexpensive way to hurt a rich country, and perhaps the best way for poor, unarmed terrorists to take on a superpower. Further, we know the Sept. 11 terrorists specifically concentrated on economic targets. This news was announced when the Washington Post wrote of an intelligence coup gleaned from a captured computer in the aftermath of a failed assassination against Pakistani President Musharraf. The captured materials tell of Al Qaeda’s American, pre-9-11 surveillance, the Post remarking, “Perhaps the most important break from Khan's arrest was the discovery of a laptop and computer disks containing scouting reports and hundreds of photographs of financial institutions in the United States -- targets that officials said were exhaustively surveilled by al Qaeda in 2000 and 2001.[7]

RADICAL MUSLIM GOAL: The current U.S. administration’s claim that the Islamicist attack upon America are a ‘rejection of Western values’ finds merit here. On September 20, 2001, President Bush asked rhetorically -- “"Why do they hate us?"…They hate our freedoms: our freedom of religion, our freedom of speech, our freedom to vote…,” etc. This approach sagely sidesteps tendentious (and to Westerners -- inexplicable) terrorist religious motivations, instead focusing upon the main Muslim terrorist goal. This goal is the economic ruination of Western economies, and thereby their military and societal expressions. It was the Islamic terrorist’s studied intent to cripple America via a brutal attack on the heart of American economic infrastructure and international capitalism. This was symbolically raised against the World Trade Towers. The notion of the military value of such attacks was foreshadowed by Professor Henri Pirenne’s description of the terminal collapse of the Roman Empire being precipitated not, as commonly claimed, by the inexorable onslaught of Germanic tribes. Instead, Pirenne believed it was the asphyxiating impact of the Muslim Saracens in the guise of insatiable pirates driving a stake into the heart of Christendom, thereby precipitating the “Middle Ages” period of European decline. Pirenne believed Muslim pirates attacked so many ships, trading posts and caravans around the Mediterranean that commerce around that body of water literally evaporated, as traders and caravan organizers found the risks of continuing too great. So literally, Rome collapsed as she lost her trading centers and routes, then the attendant tax base.

ATTACK UPON TAXES: One key goal of the terrorists in their Sept. 11 attack upon the World Trade Towers was to reduce tax collection. In fact, this could be argued their main goal. While this may not seem obvious at first, it almost goes without saying upon further reflection. America’s ability to be the preeminent world military power is based first upon its status as being and remaining the preeminent world economic power. It is only by maintaining this that the U.S. can afford all the many expenditures associated with a high-powered, state of the art, rapid response military. Hurting the American economy would not achieve the goals of the terrorists Muslims unless it also reduced our tax base. These fanatics were also interested in destroying the American way of life, thrilled at the idea of proving America a flaccid entity run by infidels. Yet the destruction of the tax base was their real goal. Reduced taxes means an overall trimmed budget, which yields smaller military expenditures, and in the long term it would mean a decline in American ability to put their convictions into concrete actions. Henri Pirenne claims a similar thing happened to the Roman Empire.

THE WEST, ISLAM, ECONOMICS & PIRENNE: Modern Islamic terrorists are not nearly as unschooled in Western liberal arts traditions as popular culture claims, especially in world history. In fact, many 9-11 terrorists were university educated. It is a conflict truism that the worst mistake participants make is underestimating their opponent’s abilities. Yet, in reducing the profile of terrorists Muslims to those of illiterate, fanatically religious peasants, we overlook an opportunity to understand the ideas and motives which animate them. Accordingly, this paper’s theory of the Muslim terrorist’s mindset goes like this. Given the terrorist’s Muslim pride in their great historic moments, and how famed Pirenne’s thesis became, it’s highly unlikely they didn’t know of his theory. Especially that he posited Muslim aggressions and piracy precipitated Rome’s fall. Further, it’s not relevant whether Pirenne’s Roman decline thesis is entirely correct. Instead, it’s merely helpful to explain the terrorist’s actions. This is almost certain, especially considering the last thousand years of Islamic frustration, which naturally encouraged their emphasizing Islam’s great ‘Golden Age.’ This recounting covers a period of Islamic genius fostering an Augustan epoch of unparalleled achievement in science, arts, literature, and military prowess – and lionizes figures like Saladin, who bested the Crusaders.[8] Beyond this, granting how the wide array of possible targets they had in New York alone, it is more than coincidence that the eponymously named World Trade Towers were chosen. But, for skeptic’s sake, it’s possible that the terrorists were wholly ignorant of Pirenne’s “Mohammed and Charlemagne.” Yet, even if historically ignorant, they clearly were still motivated by Economic Terrorism to attack the World Trade Towers, bomb London’s ‘Tube’ during the G-8 summit, and shatter the Egyptian Sharm el-Sheikh resort.

EFFECTS OF THE SEPTEMBER-ELEVEN TERRORIST ATTACKS: The impact upon the American economy, and by osmosis, the rest of the Western economies from the 9-11 attacks has been staggering. Entire market areas, like the airline industry, were destabilized overnight. The industries affected by the terrorist attack have been many, including travel, banking, stocks, national and international trade, and many others. The impact on the U.S. economy was certainly in the billions of dollars, and around the world many times this. This was exactly the intent of the terrorists. They knew with very limited means (and strictly speaking -- no military resources) they wouldn’t be able to do much damage to the U.S. So they decided to maximize the impact of their efforts. Had they attacked a military facility alone, even the Pentagon; or simply a symbolic target, like blowing up the Golden Gate Bridge, or leveling the Statue of Liberty, they wouldn’t have created nearly the damage they did going after the added capitalist infrastructures. To begin, they were able to make the key emotional point of terrorism, the infliction of overwhelming fear, by letting Americans know that the terrorists would make no distinction between military and non-combatants. So public or private sites, secular or religious targets, or even the most well established non-players -- killed at the terror sites -- women, children, including even other Muslims, were targets. But beyond this symbolic terrorism, the Islamic terrorists did major damage to the American economy, and by doing so, shrank our tax base. And to state the obvious, our military and defense are wholly derived from taxes.

PIRENNE’S THESIS ON THE FALL OF ROME; BACKGROUND: In 1922 the Belgian historian Henri Pirenne published a short paper, Mohomet et Charlemagne, briefly detailing his thesis that Muslim pirate activities inadvertently starved to ruin the Roman Empire by decimating trade. He followed this by writing a book, the rough draft finished on the eve of his sudden death. His son then published the book, using the same title, which appeared in 1939. The impact of this work upon the academy and larger world were nothing short of sensational. His thesis is as follows. The celebrated Roman Empire was Mediterranean in character, a mare nostrum, or for all purposes, an inland lake.[9] Trade was the lifeblood of the Empire, and it made their greatness possible.[10] Roman commerce had declined since Diocletian, but was making a comeback in the 4th century.[11] This was despite the fact the Germania was testing the strength of Rome.[12] The Germans did not hate the Romans, but actually admired and wanted to mimic them.[13] They only desired peaceful lives within the Empire, enjoying all the benefits, and their main motivation for moving inside Roman borders appears to have been the encroachment of the loathed Huns.[14] The Hun’s utter lack of civilization and even their appearance seem to have rendered their opponents spellbound in their impending charge, making them seem an encroaching invincible plague.[15] The Germans did war with the Romans, and made many sizeable conquests, but their successes were mitigated, as they were always eventually metabolized back into Romania.[16] As a whole, three preeminent aspects of the Barbarian kingdoms established within Roman territory were noticeable: absolutist kingdoms, secular government, and the instrumentality of the government appearing as fisc and treasury. These three were also the defining aspects of the Roman Empire.[17] What the Barbarians destroyed in their invasions was not Rome, but simply the absolute hegemony Rome once enjoyed. The invaders became established, but developed no innovations, being content to exist as a kind of incorporated foederati.[18] Most strikingly, Mediterranean unity was sustained, making continuing trade along the mare nostrum easy, nourishing the great mother Rome, allowing her to continue in unabated, if not somewhat modified splendor.[19]

ISLAM, THE MEDITERRANEAN & EARLY REJECTION OF THE WEST: The Germanic versus Islamic invasions into the Mediterranean are studies in opposites. The German attacks were a long developing, pragmatically driven incremental flow into Roman territory, whereas the Muslim invaders hit like an enervating firestorm.[20] If the Muslims benefited from anything outside their dogma, it was the gift for timing (which some call ‘luck’). Every kingdom they attacked seemed already precipitously on the verge of collapse.[21] But their victories were not simply the result of sheer good fortune. Instead, especially compared to the Germans who had no real dispute with the Romans per religion,[22] the Muslims were vociferously opposed to any creed that denied Mohammed’s revelations of Allah.[23] This utter disagreement on religion meant that the Muslims would never assimilate into Romana as had the Germans. Pirenne writes, “Islam had shattered the Mediterranean unity which the Germanic invasions had left intact.”[24] Instead, they adopted all the arts, sciences, and institutions of the societies they subjugated, merely consecrating them to Allah.[25] It was the ambition of the Muslims, after the death of Mohammed in 637 A.D. to expand their kingdom, especially into the Mediterranean. This was increasingly attempted in the latter half of the 7th century. Rhodes, Crete and Sicily were nabbed.[26] Africa became a battlefield between the Byzantines and Arabs, and around 700 A.D. Muslims achieved supremacy there, establishing a headquarters at Tunis.[27] The Muslims then became enamored of continental Europe and set their sites upon it, taking Spain and Italy, and encroaching into France. While Charles Martel decisively defeated the Saracen Muslims at Tours-Poitier in 732 A.D., his grandson Charlemagne was worn out by constant battles with Muslims. The Islamic Saracens may have been driven from France, but they stayed in Spain for hundreds of years, where Charlemagne ceaselessly engaged them.[28]

ARAB PIRACY AND THE MEDITERRANEAN: If the Muslims were unsuccessful in conquering all of Europe, they managed to assert a compelling presence in the Mediterranean Sea that caused a disruption in the Empire, effectively severing its ties to the past. Pirenne calls this change, “The most essential event of European history which had occurred since the Punic Wars. It was the end of the classic tradition. It was the beginning of the Middle Ages.”[29] This event did not initially end all trading in the Mediterranean, of course, as items like spices and papyrus were initially still moved.[30] What quickly changed were the actual trade routes themselves, as the immensity of the Muslim conquests, and the capitalization of Damascus dictated a new direction of trade flow. [31] Travel over the old byways would have simply been too dangerous, given lack of protection, and the presence of many fierce pirate ships.[32] Spain was conquered in 711 A.D., and generally trade had broken down in the whole of the Western Mediterranean by the late 7th century.[33] African commerce became decimated by continual conflict.[34] Pirenne writes, “We may therefore say that after the conquest of Spain, and above all of Africa, the Western Mediterranean became a Musulman (Muslim) Lake.”[35] By the beginning of the 8th century, except for the Byzantium coast, trade had ceased in the Mediterranean, and one Arab writer even said, “The Christians could no longer float a plank at sea.”[36] Eventually, even such irreplaceable products as spice and papyrus vanished, not returning till the 12th century.[37] But even gold disappeared (returning only when spices reappeared) and loans ceased (although the Church’s position on usury also affected this).[38] What caused this loss and eventual cessation of trade? Simply that when the Muslims established Mediterranean hegemony, they focused on plundering instead of capitalism, as the merchants of the Byzantine Levant were irreplaceable compared to Muslim opportunism.[39] It appears that only the Jews continued to trade and we owe to them the continuance of any economic link between Islam and Christendom.[40]

HOLY PIRATES: But were Muslims really pro-piracy, and if so -- Why? According to the Qu’ran, the Muslims lived in warring times, and part of the motivation and reward of risking oneself to fight for Allah was keeping the material goods of the enemy, and even the enemy themselves as slaves. In chapter 8 of the Qu’ran, titled ‘The Spoils,’ Mohammed wrote “Enjoy, therefore, the good and lawful things which you have gained in war, and fear Allah.”[41] A logical reason for the rightness of taking from unbelievers is added in the same chapter when Mohammed writes, “The unbelievers expend their riches in debarring others from the path of Allah. Thus they dissipate their wealth: but they shall rue it, and in the end be overthrown. The unbelievers shall be driven into hell.”[42] One must see this from the Muslim worldview, where all people were broken down into either believers or infidels. But we also need to reckon with the Muslim motivations as part of a larger impulse to spread the word of Allah throughout the world. Mohammed writes again in chapter 8, “Make war on them (unbelievers) until idolatry is no more and Allah’s religion reigns supreme.”[43]

IMPACT OF MEDITERRANEAN ISLAM: Trading as a profession eventually ceased around the Mediterranean. Pirenne writes, “One consequence of the suppression of the Oriental trade and maritime traffic was the disappearance of professional merchants in the interior of the country (Italy).”[44] Muslims did not trade with Christians, and as the impact of this set in, the power centers of the Mediterranean shifted North, especially in France.[45] To sum up the next signal events, we can briefly say that as trade centers were abandoned around the Mediterranean, the populace became increasingly impoverished, and the economy suffered, directly shrinking the tax base. The populations became more tied to land for sustenance, and returned to it,[46] abandoning urban centers, while the people eventually evolved into a feudal class, completely beholden to land owners for protection. The royal government itself took a huge hit, as Pirenne writes, “But the treasury, which was the actual basis of the royal power, began to dwindle in the course of the seventh century...”[47] The church was also devastated, Pirenne saying, “It was due, of course, to commerce. And we must agree that as commerce diminished the indirect taxes – that is, the tolls or dues (for the Church) – must have diminished in proportion.”[48] When they stopped minting gold coinage we realize that the economy was in freefall.[49] The end result of this was a creep into a human abyss, as education was too expensive for the fragile economy and with the denouement easy to auger - lawlessness reigned as the very glue of society dried and disintegrated.[50]

DESTRUCTION OF THE OLD EMPIRE: When the Mediterranean was turned into a lawless sea, trade dried up to nothing, the government shriveled, and people hunkered down as they headed into a long season of human impoverishment. This article argues that the Muslim terrorists would like to again push the West in this direction, and if they cannot completely collapse Western capitalistic representative democracy, they would like to at least wound us so badly that we can no longer express our political, economic, theological and humanistic convictions in concrete terms. In doing this they would certainly employ ‘Economic Terrorism’ as their main tool. Muslim terror cells could be called upon to assist, like those operating in countries like Afghanistan, Bali, Britain, France, Germany, Iraq, Iran, Morocco, Palestine, Philippines, Saudi Arabia, Syria, Turkey, the United States, and many others.[51]

WAS SEPTEMBER 11 ECONOMIC TERRORISM? Some will undoubtedly dismiss out of hand the notion the Muslim terrorists who destroyed the World Trade Towers were engaging in anything as sophisticated, or historically derivative as Economic Terrorism. To such folks, the terrorists were probably fairly random in choosing targets, and any big building in New York would have worked. But this simplistic analysis must be mistaken, as a careful reading of the facts will prove that they must have been trying to achieve a major economic hit. Let us recall that the terrorists spent years planning these attacks (as noted above) and so nothing about them was either random, or without good strategic reasoning behind it. Specifically: First, every target chosen by the terrorists was picked for a specific reason, combining both symbolic and practical value. Targeting the Pentagon, the titular U.S. military command center, made clear this attack was a preemptive act of war, and was also meant to destabilize the machinery of battle, limiting any response. The plane that crashed in Pennsylvania was thought on its way to the U.S. Capitol Building, or the White House, both symbolic and actual loci of top American government. Hitting either would have caused widespread fear, chaos, and panic, and if accurate enough could have decapitated the government. The third choice of the Trade Towers received the most material attention -- two planes, and so these were the most important targets, at least for use of ‘resources’. They were picked for a combination of symbolic and practical importance. As we know, they were ostensibly called the ‘World Trade Towers,’ and because of their name and location in Manhattan, N.Y., the West’s banking and economic center, and they symbolized Western capitalism. But these towers really were also very important to world trade, and many international businesses had offices there, so destroying these really would hurt international business. The terrorists Muslims believed this last fact was most crucial.

ISLAMICIST ATTACKS ON LONDON & EGYPT: The most recent assaults upon Britain and Egypt again richly illustrate Economic Terrorism, and can only be understood through that prism. The initial flurry was launched upon Britain’s ‘Tube’ subway system in an astute, multiplied, and diversely targeted salvo. First, Europe and Britain was hosting the G8 world economic summit in Scotland, a few miles down the road. It was during the day of the meetings that the bombs were detonated. This was a shot across the bow to alert Europe that capitalism itself had been placed in the docket and found wanting. But beyond this, London was wildly celebrating hours after receiving confirmation of their unexpected Olympic bid when the terror struck. This was profound psychological theatre as it deflated England’s sense of joy over receipt of the 2012 Games before it could be even celebrated. This planted several malign messages. The first was the Islamicists could attack any time they wanted, even upon the heels of the greatest moments of victory. Yet it also telegraphed that the Olympics themselves were not safe, planting 7 long years of psychological anxiety. Beyond this, the terrorists slipped a stiletto into the illusion of safety associated with London -- Europe’s banking and commerce center. Here they boldly informed the traders, marketers, business people and all others that the main mass transit thoroughfare was a ticking bomb. Also, London is always a major world destination for tourists, and every would-be traveler around the globe now realizes ‘it could have been me!’ sitting next to the bombers. But, can anyone imagine what would happen to London if broad support and trust for the London Tube collapsed? The economic effect would be utter enervation, and no doubt the bombers – if unchallenged would mount and destroy the bus system as well. Likewise, the attack of the Egyptian resort was another savvy broadside against world tourism, coming against arguably the greatest center of archeological antiquities in the world. Those attacked were visitors, and here the message is that no country can safely plan for tourism. Beyond this, one Muslim group lets another know that even they are not safe against the Jihad. Finally, it lets any Muslim country know that conspiring with the enemy West will be punished harshly.

HYPOTHETICAL ECONOMIC TERRORISM: A few theoretical examples of Economic Terrorism follow. Consider a concerted, massive, and totally debilitating Internet attack upon computer servers in a specific country upon a signal industry, like banking. This could destroy any company using that bank, or the entire economic sectors if other related banks began to topple domino-like (similar to a failing power grid). Another case might be planting a dread disease in an important farm animal, such as cattle, the public knowledge of which could plummet the entire industry into bankruptcy after the public loses their taste for beef. Simply such a rumor such as Muslim terrorists claiming to have widely planted ‘mad cow’ disease might do the trick. Another could be badly poisoning or infecting the water supply to a strategic city, such as New York in a manner so random that everyone in the city felt an overwhelming urge to leave. Or consider the sabotaging of every large car or computer chip factory in the U.S, at once? Again, contemplate a computer virus sent to the IRS that was so destructive all records were wiped out and the government had no idea who owed what? Or, perhaps starting a string of wildfires during the summer season to provide devastating results. Ponder the horror of blowing up a toy store full of kids before a busy holiday, like Christmas. Perhaps even selectively destroying high power electricity towers in remote areas would have an enormous impact. Recently someone suggested the ease of poisoning the milk supply.[52] Of course, it would be hard to improve upon simultaneously collapsing the Trade Towers, given what a nest of international businesses were there.

NEED FOR RECOGNITION & RESPONSE: But beyond all of these individual events, we ought to bear in mind several things. Ultimately, it doesn’t really matter whether these terrorists were inspired by the Saracen Muslim pirates to attack their enemies because it is abundantly clear they deployed a textbook case of Economic Terrorism. This was meant to rip the capitalistic viscera out of an unsuspecting and softly naive Western business underbelly. The main point is the Muslims terrorists were unquestionably engaging in Economic Terrorism when they attacked these different targets and will undoubtedly do so repeatedly. Why? Because it is cheap, easy, can have a staggering payback for their efforts, and is a well-established part of their historical military repertoire. And terrorists Muslims are more historically minded and motivated than virtually any other group of people in the world. The most important thing is that we understand what the Muslims tried to do at the World Trade Towers, how they attempted to repeat this during the European G-8 summit, and in Egypt and how we can be prepared for the next strike. We need to develop doctrines and laws to help us survive these coming attacks in a way that the great world empire of the Romans did not.

SUGGESTED REMEDIES: The Bush administration in concert with the U.S. Armed Forces, Justice Department, CIA and FBI, has already made substantial changes meant to detail and confront the clear and immediate danger of continued terrorism. But these need to be broadened, at least doctrinally, and we need to add serious checks to help ward off economic terrorist centered war. What can be done? There should be a national quorum of leaders of all the major business types in the U.S. meeting to discuss biggest dangers and remedies in each field. At a series of national meetings meant to dissect the industries & their typology, an outline of possible responses will be offered for the most trenchant specific possibilities for terrorism. Having done this, the group should then draft a bill outlining general and specific suggested anti-terrorism guidelines for the different industries. Specifically we must map out the exact response to the most damaging types of attacks in each industry, and then the ingenuity, will and industrial might of America must be committed to this project. This ought to include a communitarian aspect where each participant, if called upon during an emergency, agrees to forego any excessive remuneration for their fees much beyond basic costs. This in itself will do much to develop goodwill and foster esprit des corps. Needless to say, it would be wise for tax breaks to be included, also. For an example, American interstate highways are essential to U.S. industry. Yet, many of them have strategic weak areas, such as singular high mountain passes, or other spots of vulnerability, often in remote regions. Should the Islamic terrorists blast such a location in a key spot, it might normally take months to repair. But with a new anti-terrorist industry protection bill, the Army Corps of Engineers, along with construction leaders of every state would agree to unleash a lightning quick response to any such attack. The upshot being that even the worst act of anti-capitalist destruction would have a crack team trained & ready to rebuild within a matter of days, or weeks. Of course, not every attack would have such a speedy recovery, but if we organize the infrastructure already existing into theoretical units, it will be not only literally a response to Economic terrorism, but will help stabilize bond & stock markets all over the world. Ultimately, the captains of each industry will know best how to frame a responsive outline for their own fields. This is not to suggest that the government hasn’t made any plans along these lines, but plans have not been detailed nearly to the pragmatic optimum. While this might seem like more ‘red tape’ to be avoided, this reaction is extremely naïve, and ultimately horrifically naïve and shortsighted. Currently, we are experiencing a lacuna of terrorism in the United States which is a blessing that may not last. Now is the time to develop deep & infinitely well-considered long-term defensive strategies for the private sector. We need to take this time and use it to seriously examine our response to Economic Terrorism, because it is inevitable that the terrorists will return, or the ones here become active again. They have undoubtedly already hatched many plots and are waiting for them to come to fruition. For instance, imagine the aggravation and expense of having to post guards every mile along a major oil pipeline! But, conversely, how much more expensive would it be to have to repair a blown up and burning pipeline. Examples such as this abound.

WORLD ECONOMIC TERRORISM BILL: A world Economic Terrorism bill would be framed along the same lines as the American, bringing to the table experts on all of the world’s important industries, and a similar book of suggested safeguards to shield against Economic Terrorism. As we see how ripples from each attack spread from one country to another -- we must now admit that an assault against one is a battle against all. Therefore our opposition must be unified too. Important truths are waiting acknowledgment. First, we must stop buying into the argument that any of the violence is justified, and strongly oppose craven sympathy for the murderers. This only confuses the issue, aiding and abetting the attackers. Second, in refusing to condemn the terrorists for fear of reprisals we give the killers victory. Instead condemnation against future attacks must be voiced loudly. In unity there is safety. In this new, bold environment some wonderful things will occur. The peaceful yet timid will grow brave in their resistance of evil; the formerly silent will become encouraged to stand up and speak out; and the many silent Muslims who fearfully oppose the radicals will be emboldened to plot a different future for Islam.

Professor Shawn O'Connell is an Adjunct professor of Rhetoric at St Thomas University in Miami, FL. He graduated from the University of Oregon with a BS in Philosophy; and from Regent University with a joint degree -- a JD in law and an MPP in Government. He values your comments. You may contact him at hibernian1@gmail.com.

[1] For example, the website Islamic Invitation Centre, a British Muslim reference site had this, “Q: Is Islam against Capitalism? A: Yes. Capitalism is based on the concept that economics is that which examines man's needs, which are unlimited and how to satisfy these unlimited needs. The system depends upon the separation of church and state or in other words, the separation of the Creator from life's affairs. The concept of freedom plays a major role in the Capitalist ideology.” Found at: http://www.islamicinvitationcentre.com/FAQ/Economic/FAQ_Economic.html.

[2] Land of the Free, National Review Online, by Dinesh D'Souza, published on July 02, 2004, 12:30 a.m. , found at: http://www.nationalreview.com/comment/dsouza200407020030.asp; and alternatively at: http://www.papillonsartpalace.com/landof.htm .

[3] This article was originally penned before the London transportation massacre.

[4] Webster’s Dictionary 400 (1987).

[5] Land of the Free, National Review Online, by Dinesh D'Souza, published on July 02, 2004, 12:30 a.m. , found at: http://www.nationalreview.com/comment/dsouza200407020030.asp; and alternatively at: http://www.papillonsartpalace.com/landof.htm .

[6] See the interview ‘Sayyid Qutb and His Influence, Interview with Professor Ibraham Abu-Rabi,’ from the Religioscope.com website, interview occurring on November 8, 2001; and found at: http://www.religioscope.com/info/dossiers/textislamism/qutb_aburab . This book has never been translated into English. Qutb lived from 1906-1966, and died by government execution.

[7] ‘Al Qaeda Showing New Life, U.S. Surprised by Signs of Regrouping,’ By Dan Eggen and John Lancaster, Washington Post Staff Writers; Saturday, August 14, 2004; Page A01; found at:

http://www.washingtonpost.com/ac2/wp-dyn/A63897-2004Aug13?language=printer

[8] Edward Gibbon, The Decline And Fall Of The Roman Empire 2081 (1946).

[9] Henri Pirenne, Mohammed And Charlemagne 17 (trans. Bernard Miall 1939).

[10] 17.

[11] Ibid, 19.

[12] Ibid, 20.

[13] Ibid, 21-22.

[14] Ibid, 22-23.

[15] Ibid, 23.

[16] Ibid, 34-36.

[17] Ibid, 58.

[18] Ibid, 140.

[19] Ibid, 143-44.

[20] Ibid, 147-49.

[21] Ibid, 149.

[22] Edward Gibbon, The Decline And Fall Of The Roman Empire 567 (1946).

[23] Henri Pirenne, Mohammed And Charlemagne, 150 (trans. Bernard Miall 1939).

[24] Ibid,164.

[25] Ibid,149-50.

[26] Ibid,152-53.

[27] Ibid,154-55.

[28] Ibid,158-59.

[29] Ibid,164.

[30] Ibid,164.

[31] Ibid,164-65.

[32] Ibid,248-49. Writes Pirenne, “The Carolingians had no fleet, and therefore could not clear the sea of the pirates who infested it.” He added, “It will be understood that under these conditions the ports were closed to all traffic.” These were not just Muslim pirates, but any ship in the world hearing of the lawlessness promulgated within the Mediterranean could have steamed towards this enclave of theft and attempted to have plied their calling there.

[33] Ibid,165-66 Pirenes states, “The conquest of Spain in 711, and the conditions of insecurity obtaining on the coast of Provence immediately after this conquest, absolutely put an end to any possibility of sea-borne trade in the Western Mediterranean.”

[34] Ibid,165.

[35] Ibid,162.

[36] Ibid,166-67.

[37] Ibid,168-72. The Carolingian tractoriae mentions all kinds of foodstuffs, but no mention is made of any kind of spice.

[38] Ibid,173.

[39] Ibid,173-74.

[40] Ibid,174. If these newly ensconced Mediterranean Muslims did trade, it was only amongst themselves, as no record of anything else exists, and even theories of internal trading are highly speculative, as no evidence has been discovered to support such a practice.

[41] Mohammed, The Koran, (Chapter 8) 311-312 (trans. N.J. Dawood 1956).

[42] Ibid, (Chapter 8) 309.

[43] Ibid.

[44] Henri Pirenne, Mohammed And Charlemagne 173 (trans. Bernard Miall 1939).

[45] Henri Ibid,187. Pirenne writes, “It was on France that the future depended. But France, as she appeared at this moment, was very different from the France of the Merovingians. Her center of gravity was n o longer “Romania,” It had shifted towards the Germanic North, and with this new France there appeared, for the first time…But all the traditional conditions were overthrown by Islam.”

[46] Ibid,197. Pirennes says, “The urban life which had been maintained by the influence of commerce was obliterated. The Mediterranean sources of commerce, which the invasions of the 5th century had not seriously affected, were dried up now that the sea was closed.”

[47] Ibid,192.

[48] Ibid,193-94.

[49] Ibid,242. Pirenne sums up this sad state of affairs up, writing “If we consider that in the Carolingian epoch the minting of gold had ceased, that lending of money at interest was prohibited, that there was no longer a class of professional merchants, that Oriental products (papyrus, spice, silk) were no longer imported, that the circulation of money was reduced to the minimum, that laymen could no longer read or write, that the taxes were no longer organized, and that the towns were merely fortresses, we can say without hesitation that we are confronted with a civilization which had retrogressed to the purely agricultural stage; which no longer needed commerce credit, and regular exchange for the maintenance of the social fabric. We have already seen that the essential cause for this transformation was the closing of the Western Mediterranean by Islam.”

[50] Ibid. Again, Pirenne, “Now, as we have already seen, the decline of commerce must have begun about the year 650, a date which exactly corresponds with the progress of anarchy in the kingdom (France).”

[51] A place of exquisite opportunity for the Muslim radicals is Nigeria, whose antinomian views of government, peopled by so many shady characters and outright con artists makes it a nirvana of graft and unethical deeds. The mixture of illegal monies collecting in Nigeria to be washed and reused for other illegal (if not terrorist purposes) makes the place a nightmare for regulators, international business people, and strategic planners against the worldwide Muslim terror networks.

[52] From the article, Analyzing a Bioterror Attack on the Food Supply: The Case of Botulinum Toxin in Milk, by Lawrence M. Wein and Yifan Liu, published in the Proceedings of the National Academy of Sciences. This article was roundly condemned by those who felt it gave aid to the enemy.