Good Article About the Terrorist Non-Threat

From Reason:

Know thy enemy is an ancient principle of warfare. And if America had
heeded it, it might have refrained from a full-scale “war” on terrorism whose price tag is touching $2 TRILLION. That’s because the Islamist enemy it is confronting is not some hyper-power capable of inflicting existential—or even grave—harm. It is, rather, a rag-tag band of peasants whose malevolent ambitions are far beyond the capacity of their shallow talent pool to deliver.

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Posted on February 24, 2011 at 6:44 AM • 53 Comments

Comments

Jay from BKK • February 24, 2011 8:11 AM

Nothing of substance to add, just my thanks for the great find, Bruce. Forwarding it to many, many folks now.

John H • February 24, 2011 8:18 AM

Well, yes, except that $2 Trillion “cost” could also be viewed as a $2 Trillion boost to GDP.

If you ignore the terrorist “threat” you create a lot of unemployment (or looking from another perspective, 9/11 created a lot of jobs).

Danny Moules • February 24, 2011 8:33 AM

@John H

Imagine the social healthcare system + associated jobs you could make for two trillion… or meeting that aircraft carrier quota. Or all the other national projects that would both create jobs and cost lots of national dollars that people are screaming for funding for.

John H • February 24, 2011 8:47 AM

@Danny Moules I’m not supporting it; I’m just suggesting that’s how it is. I’m not American, but my perception is that the American public wouldn’t countenance projects you’ve suggested. But they’re demonstrably allowing their tax dollars to be spent on war in the Middle East; they continue to buy airline tickets that include the cost of all that extra TSA effort; they spend money (both directly and indirectly) on CCTV and armed guards.

@Jon you’ll have to explain to me where I’ve gone wrong.

clvrmnky • February 24, 2011 8:53 AM

@John H, well, for starters you have made a number of unfounded assumptions about the nature of the “jobs” created, and how that money is spent compared to the costs involved.

There is a complicated ROI that makes naive boosts in local economies caused by war-time efforts that end up being massive losses in the long run.

Winter • February 24, 2011 9:00 AM

“And if America had heeded it, it might have refrained from a full-scale “war” on terrorism whose price tag is touching $2 TRILLION.”

That is not a bug, that is a feature!

The HBGary story is full of “Scare Them” expletives. For one thing, a lot of these $2,000B landed in firms associated with high ranking politicians. Tax dollars to pay back campaign donations?

lazlo • February 24, 2011 9:10 AM

@John H: The general class of error you are making is known as the broken window fallacy (http://en.wikipedia.org/wiki/Broken_window_fallacy)

But very simply money that is spent on people doing jobs that aren’t useful is money that cannot be spent on people doing jobs that are useful. And money generally does get spent. People very seldom stuff their mattresses with cash, they either spend it on something (creating jobs for whoever they spend it on) or, if they’re being prudent, they save it… by putting it in a bank account, or some other means of generating interest, most of which end up in some way investing it in companies that use it to hire people and create jobs.

John H • February 24, 2011 9:21 AM

@lazlo @adam h – I don’t dispute any of that, and I’m not saying that the money wasted on security is a good thing.

However, our governments use GDP as a measure of the country’s prosperity, and a TSA worker contributes to that.

uk visa • February 24, 2011 9:39 AM

When you consider the opportunity cost ie spending $2 trillion on something useful; $2 trillion buys an awful lot of education/health but I guess that doesn’t feed money into the defence industries at the rate they’re used to…

Zijyfe Duufop • February 24, 2011 9:53 AM

If you think that Islamist Extremists are just a bunch of people who bit off more than they could chew, why do you suppose that we lost the war?

John H • February 24, 2011 10:05 AM

@Zijyfe Maybe because the war wasn’t conducted against said Islamic extremists, but against an almost completely unrelated group.

dob • February 24, 2011 10:07 AM

“If you think that Islamist Extremists are just a bunch of people who bit off more than they could chew, why do you suppose that we lost the war?”

It’s unclear to which war you’re referring. If you’re referring to either of the wars in Afghanistan and Iraq, you must be aware that Islamist extremists, specifically the Al Qaeda brand, plays a relatively minor role in both conflicts. Both can be more accurately characterized as insurgent campaigns against an occupying army, on which there are reams of historical evidence demonstrating the profound advantages of possessing the home field.

If you’re referring to the War on Terror, to the extent that we ever seriously prosecuted such facile nonsense, you can’t win a war against a tactic; it makes absolutely no sense.

christopher • February 24, 2011 11:00 AM

Q: How many pensions does $2T fund?
A: All of them, including SS

Q: Why didn’t the money go to those funds?
A: Because the top one-tenth of one percent of the US population did not want it to go there.

EH • February 24, 2011 11:01 AM

John H: The One True Scotsman comes to mind.

But yeah, imagine if the US educational system had received just $1 trillion over the past 10 years. I bet you can’t.

Curby • February 24, 2011 11:02 AM

Great article, but this stood out to me:

“America spends more on intelligence than the rest of the world put together.”

That isn’t in itself a bad thing, right? To begin with, America probably spends more on a lot of things than the rest of the world put together … we’re a spendy bunch. So we can make the statement a little less sensationalist by saying “We spend a lot on intelligence.”

So what about that spending focus? I believe Bruce has said and written on multiple occasions that better intelligence is the best defense against many security threats, incl. terrorism.

Spending more isn’t the same as doing better, but the overall focus on intelligence gathering and analysis seems to be a reasonable goal. If done properly, it’s less security theater and more actual security improvement.

I get the feeling that the writer wanted that sentence to sound like a damning indictment of homeland security spending, but is it? IMO the problem isn’t that we’re spending money on intelligence, but rather we’re still not doing intelligence as well as we could. But it’s difficult to improve when you don’t spend at least some resources on the problem.

moo • February 24, 2011 11:29 AM

@John H

Ahh yes, the “broken window” theory of economics. While its undeniable that the $2 trillion spent on the War on Terror(tm) has kept lots of people employed, it would have been more useful to spend the same amount on other things (such as education, health care, infrastructure improvements, etc.) — things that have more lasting benefits.

Snarki, child of Loki • February 24, 2011 11:34 AM

@moo

And some uses of money cause harm to the overall economy.

Set aside “doing good” with the $2T. Just making a big bonfire of cash would serve the economy better.

phred14 • February 24, 2011 12:07 PM

@christopher

I came to realize this years ago, courtesy of Brad Pitt, of all people. He was on TV and made the remark, “Think of the good things we could do with all of that money if we weren’t fighting the war in Iraq.” At that point I realized part of WHY we were fighting in Iraq – to make sure that the money wasn’t used for “liberal-inspired good things.” Of course there are other reasons for the war in Iraq, without commenting on the merit of any of them, but I also believe that one reason was to tie up the money.

Rookie • February 24, 2011 12:59 PM

@ EH “…imagine if the US educational system had received just $1 trillion over the past 10 years. I bet you can’t.”

Sure you can. In the past 10 years the US spent about 4 trillion dollars on k-12 public education. It’s a fallacy suggesting that the main thing public education needs is more money.

Anyhow, on topic, the wisdom of spending 2 trillion on fighting terrorism, in whatever arena, depends on how you count the benefits.

MarkH • February 24, 2011 1:35 PM

@John H:

Economists I respect subscribe to the notion that spending stimulates the economy, no matter what the money is spent on.

But (A) the US economy didn’t need stimulus during most of the time this vast sum was being BORROWED (the spending was not balanced by taxation), and (B) an awful lot of the money was spent outside the US, where the economy being stimulated was definitely not America’s.

Richard Steven Hack • February 24, 2011 1:43 PM

Anyone who needs $2 trillion to do ANYTHING short of a major scientific breakthrough or ending world hunger is so incompetent they need to be broken down to McDonald’s janitor – not even counter clerk.

As for spending a trillion on education, it depends on HOW it’s spent, not on the amount. That also applies to most other things. If you spend it intelligently, you can multiply it’s value. If you spend it the way the government usually does – by throwing money at everything and anything whether it works or not – you just piss it down a hole.

John H: You’re wrong in one other respect as well. Americans are not “demonstrably allowing” anything. Because of the way the system is set up, they have completely lost control of their government. Short of a revolution a la Libya (which, by the way, would be suppressed just as brutally in the US as it is in Libya), they have zero chance of recovering that control – assuming they ever had it in the first place. The system is rigged so that only scumbags like Obama get into office (with an alternative being another scumbag like McCain or – shudder – Palin.)

And due to the educational system being a complete disaster, it’s next to impossible to have a population which is intelligent enough to reverse that situation without violence.

It’s a Catch-22 situation. The government makes sure education sucks, the population becomes idiotic, which then votes in even worse politicians. Rinse and repeat for another generation – or maybe a couple more Presidential campaigns – and Nero will be President.

EH • February 24, 2011 2:15 PM

Education, healthcare…whatever, and I didn’t say that money was the “main” problem with schools. Tell me that a 20% raise wouldn’t help, even if you think the US public education system is for shiftless degenerates. The simple fact is that terrorism PTSD is causing problems in other parts of the US, the parts that I’ve always been told the military is there to protect.

Trichinosis USA • February 24, 2011 3:10 PM

@John H: thanks for all but coming right out and saying it: there’s only one kind of security the current American police state is interested in providing. JOB SECURITY.

Tangerine Blue • February 24, 2011 4:17 PM

@Trichinosis USA
Well put.

@phred14
As much as I love a good conspiracy, the war’s purpose couldn’t be to “tie up the money” – there is no money to tie up. We were in debt by $11 trillion, now we’re $13 trillion in the hole.

Dirk Praet • February 24, 2011 5:08 PM

It would appear that the author has been carefully reading what’s been said on the topic by many folks on this forum 😎

Although I concur with the overall conclusions, I have one remark about one of the closing sentences: “Over 5,000 American soldiers have died in Afghanistan and Iraq without on balance saving any civilian lives.” Perhaps so, but it cannot be denied that several original high-ranking AQ officers (Khalid Shaikh Mohammed, Ramsi Binalshibh, Abu Zubayda e.a.) were eventually caught, probably as a result of intelligence gathered in or extracted from operatives in Afghanistan. Their arrest effectively took out some of the few people that were able to stage big operations and thus can be argued to have contributed to saving civilian lives. Then again, this was intelligence and torture at work, and much less traditional battlefield warfare.

As for Iraq, I’ll let history be the judge of the damage, direct and indirect, caused to the US and the rest of the world by Cheney, Rumsfeld and Wolfowitz.

Muhammad Naveed Khurshid • February 24, 2011 5:13 PM

Damage had been done by Al-Qaeda already. The war is not yet over. USA and allies are internally losing the war. See, the strength of $ is weakening now. Russia, China (more nations to come) are using their own currencies for trading purposes. What will happen next? Nobody knows. Can USA change the mind of rich Arab nations who in recent months blaming USA for recent crisis in region. Mr. Cameron’s speech in Kuwait was like fire on oil rich Arab world… This confirmed a lot of things and allies of USA i.e. Britain under new critical threat after that speech.

The key is, one nation should learn from mistakes. Al-Qaeda may believe, 9/11 was inside job to create a bubble of opportunities to give benefit to handful of people. Unfortunately, the bubble was bursted damaging credibility of America…

$13 Trillion debt is nothing for those families who lost their love ones in wars. This debt will no doubt increase in coming years as economy do not work the way what is written in books or in The Economist….

What about this recent event of CIA agent who killed citizens of an Islamist country who will after 20 years become Worlds largest Islamic Country by population. Read more on http://www.guardian.co.uk/world/2011/feb/21/raymond-davis-pakistan-cia-blackwater

Brandioch Conner • February 24, 2011 5:29 PM

@Dirk Praet
“Their arrest effectively took out some of the few people that were able to stage big operations and thus can be argued to have contributed to saving civilian lives.”

And how many civilians in Iraq and Afghanistan died during the wars which lead to those captures?

Dirk Praet • February 24, 2011 5:52 PM

@ Brandioch

A lot. I’m just stating a fact I believe was not entirely correctly represented in the article. I’m not speaking out on the morality of the methods or the price at which it came. I thought I had given a clear between-the-lines hint as to where I stand on that.

Brandioch Conner • February 24, 2011 6:03 PM

@Dirk Praet
“A lot. I’m just stating a fact I believe was not entirely correctly represented in the article.”

So, the deaths of “a lot” of civilians is “saving civilian lives”?

Seems strange to me. I would have said that the techniques employed to capture those people resulted in more civilian deaths than those people had caused.

Richard Steven Hack • February 24, 2011 6:16 PM

Dirk: “Their arrest effectively took out some of the few people that were able to stage big operations and thus can be argued to have contributed to saving civilian lives. ”

It might be “argued” but the evidence is incredibly thin. And it also raises the “cost-benefit” discussion in a big way.

Right now, there is estimated to be less than 50-100 actual Al Qaeda in Afghanistan and perhaps an equivalent number in Pakistan. Based on the cost of the war, we are spending approximately a BILLION dollars for EACH surviving member of Al Qaeda.

That’s ridiculous.

And that’s not counting the civilian lives lost. And that counts unless one believes that Arab and Afghan civilian lives don’t count as much as US lives. I won’t accuse you of that based on your past posts, but the issue is real.

More importantly is the issue of how much would it have cost in dollars and lives had it been done a different way. Almost certainly both would have been massively reduced.

Not to mention that Bush intended to attack and had plans drawn up to attack Afghanistan BEFORE 9/11 – and both Iraq and Iran were the targets of the neocons well before 9/11. So the wars themselves were not justified by 9/11 because they would have occurred anyway at some point. The Iran war is still in the cards.

So, referencing the cost-benefit issue, I will repeat my standing offer: Pay me one billion dollars in advance and I will capture or kill (your choice, but dead is easier) Osama bin Laden within ninety days (assuming he’s still alive which is a huge assumption since there are at least two credible accounts of his death by different causes.) Compare that to the cost of two wars. Such a deal I offer you!

Again, if the CIA can’t find and capture bin Laden with all their resources, especially when it is KNOWN that several Pakistani ISI officers know pretty well where he is, then the only possible explanation is that they don’t want him to be found.

Pay me my billion and I’ll prove it. And I’ll make a nine hundred million dollar profit doing so.

Imperfect Citizen • February 24, 2011 6:57 PM

“It is no coincidence that a decade-long FBI search has failed to find a single genuine Al Qaeda cell in the United States.”

Yet the domestic terror program is funded by the FBI. Further, the Patriot Act allows local PDs to target/farm out watch anyone “suspicious” or different.

What about all the money spent unaccounted for/classified as part of the war on terror?

Dirk Praet • February 24, 2011 7:17 PM

@ Brandioch, Richard Steven

Guys, I’m merely playing the devil’s advocate and this is what you will hear from many people, especially government and military types. Let me rephrase it then: it can be argued that civilian lives were saved on one side at the expense of a huge death toll at other sides. I condone neither the method nor the cost, and you will never hear me say that American or European lives are worth more than Arab, Iraqi or Afghan lives. Of course there were more efficient and less costly ways to achieve the same goal.

As to OBL, Mullah Omar, Zawahiri e.a., I have previously stated on different occasions that the only reason they’re still around is that the powers that be in the west don’t want them captured because they’re much more worth to them at large than captured or dead. Those who stand to profit today from the fear mongering and the gigantic industry that has been build around it have exactly zero interest in doing so and will continue inventing new threats way after they’re gone.

It would have been nice if the author of the article had just a wee bit elaborated on this topic – as we are doing here – to make an even better case and without the risk of it being discarded as a whole by “war on terror”-supporters on grounds of oversimplification of just this single element.

Andrew • February 25, 2011 12:17 AM

@Muhammad Naveed Khurshid

Even talking to you is in a way paying too much respect. However, I hope you stick around and contribute further.

“The war is not yet over. USA and allies are internally losing the war.”

Islamic fundamentalism cannot win. Yes, America can lose, if we meekly surrender our freedoms and give up either on defending ourselves or on standing up for justice because it is too hard or too expensive. This is why some of us fear a War on Terror that lasts too long or costs too much.

We know about the oil trap. We send our sons and our daughters to fight because we know — and they go, knowing. We don’t have to lie people to their deaths (as with a majority of the hijackers on September 11th) to support an absurd jihad, or to chain them to the steering wheels of suicide trucks.

If Raymond Davis were a Pakistani, his self-defense shooting would not be an issue. If Davis had defended himself the same way on the streets of San Francisco, there would not be an issue. (http://sfappeal.com/alley/2010/08/irs-agent-shoots-alleged-mugger.php) If Davis had been a private person on the streets of Oakland, he would at most have been cited for unlawful possession of a loaded, concealed handgun.

Pakistan can either be a civilized nation and honor diplomatic immunity, or give up its right to support and respect from the rest of the world. If Pakistan wants to be a nuclear power, Pakistan needs to act like one.

What you and your ilk should fear is the day that America decides that Islamic fundamentalism is a threat worthy of our full attention. In the meantime, we will muddle along with the Army and Marine Corps at war and the rest of America at the mall, because you are so very weak and we are so very strong. So strong that we are confident that Islam can peacefully coexist with the other great religions of the world, while utterly rejecting Islamic fundamentalism.

Winter • February 25, 2011 2:03 AM

Another possibility for why the top operatives of Al Qaida are still roaming free: Rampant incompetence?

We have seen in these columns so much evidence that secrecy breeds incompetence and posturing, that I would not exclude the possibility that the different bureaus are interfering with each other’s plans and are outrun by the Pakistanis who actively protect and nurture Al Qaida.

Just see how the US Foreign Affairs reacted to Wikileaks and the ongoing Arab spring. This level of incompetence is difficult to hire. It has to be home bred and carefully nurtured.

D0R • February 25, 2011 4:55 AM

From the article:

One big disadvantage inherent in the
terrorist enterprise of course is that it
expends its best people in every
successful attack

This reminds me of the joke of the French kamikaze that was going on his 23rd mission…

Noble_Serf • February 25, 2011 8:14 AM

Any war on a tactic is doomed.

I think the best solution would have been giving any citizen of Saudi Arabia, Iran, Iraq, Afghanistan, Pakistan and Syria a 6 month tourist visa and free round trip flight cupons to the USA immediately after 9/11. They would stay with volunteer sponsor familes. At the sime time, any American citizen who wanted would be allowed to travel to any predominantly Muslim country of their choosing for a visit, and the expenses would be 100% tax deductable.

Sean • February 25, 2011 10:36 AM

Know thy enemies psychology, bug bears and boogymen, hit them hard once and watch them spend, spend, spend!

Bin Laden, son of wealthy contractor tycoons is laughing his behind off somewhere in a Pakistani village.

phred14 • February 25, 2011 1:25 PM

@Tangerine Blue

I don’t think they did it to “tie up the money” either. Personally, I think they simply wanted to go to war in Iraq, it was a bug up their collective butts. Once you want something that hard, you have to come up with reasons to make your opinion sound logically justified. Even at that, “tie up the money” wouldn’t make any public short-list the way WMDs did, but I’ll bet in some back-room somewhere it was considered a good side-effect.

The real reason… GHWB didn’t “finish the job” in Desert Storm 1, and Saddam Houssein was rubbing our noses in it. The “America Unbound” types wouldn’t take too kindly to either GHWB’s restraint or the aftermath.

Andrew • February 25, 2011 3:01 PM

Let’s not forget that a bunch of Reason’s writers initially supported Bush’s wars in Iraq and Afghanistan.

grumpy • February 27, 2011 3:40 AM

@Andrew, well said and correctly observed. The West (whatever that might be) has not even started to go to war yet. This is comparable to Isandlwana, not Overlord. And I have a sneaking suspicion that if someone does something very stupid to scare us, like set off a real WMD somewhere in Europe or the US, another Wannsee will be held, with or without the consent of the voters. This is my greatest fear and I pray to the Flying Spaghetti Monster that it will not happen…

Goldry Bluszo • February 27, 2011 3:42 AM

@Andrew – re diplomatic immunity, I’ve heard that the US State Dept claimed no such thing for him until after the shooting:
http://www.dawn.com/2011/02/04/govt-says-raymond-davis%E2%80%99-diplomatic-status-dubious.html

“W.House
Raymond Davis’ diplomatic status ‘dubious’: govt sources
Agencies
February 4, 2011 (4 weeks ago)

ISLAMABAD: Sources in the Pakistan government said that Raymond Davis’ diplomatic status was dubious, DawnNews reported.

They further said that the Foreign Office had not issued the ‘diplomatic card’ to Raymond Davis, a US consular employee who was arrested a week ago for shooting dead two motorcyclists in Lahore in what he said was self-defence.

Earlier on Thursday, the United States government, in a diplomatic note to the Pakistan government, admitted that not all administrative and technical staffers of embassies and consulates in Pakistan were given the diplomatic status.”

So Pakistan should grant free-lance foreign killers carte blanche? Is murderous intent proof of diplomatic immunity? Is psychopathic personal tendencies proof of diplomatic immunity?

Come on, tell me you’re not serious. Granting “diplomatic immunity” after committing murder, does nothing except tell Pakistanis that the US is hiding something. Having Americans jump knee-jerk to the defense of a proved killer, proves, if anything, that Americans are the true Fundies in this case. And the last thing we need is Fundamentalist Americanists. Pakistan’s a minor nuclear power – the US of A is a major nuclear power.

So who is the civilized nation is this incident?

bluesmoke • February 28, 2011 1:44 AM

Uhh, Muhammad… “USA and allies are internally losing the war.” Those were your very own words, they do not appear anywhere in the links you’ve given.

So please do not try to pull the wool over anyone’s eyes.

And, I subscribe 100% to Andrew’s comment.

Be careful, Muhammad, that you don’t bite off more than you can chew.

Hess • February 28, 2011 4:09 PM

Lately, I’ve been reading a series from a chemist about “things I won’t work with” in which he discusses chemicals that are so dangerous that very, very few chemists are willing to work with them in any capacity and talking about all the horrible things that can go wrong.

Let’s just say that it’s obvious that these folks don’t have any skilled chemists and for that, we should be grateful.

averros • March 1, 2011 6:43 AM

@MarkH: “Economists I respect subscribe to the notion that spending stimulates the economy, no matter what the money is spent on.”

Mark – you may want to reconsider that respect because these economists are morons (or scoundrels, make your choice).

Resources spent someplace is resources NOT spent someplace else (and it is not money which actually matters, but the real goods; printing more money simply moves the real goods from one place to another, not creating anything real).

All the monetary trickery becomes very transparent when you start looking at the real goods, and stop equating wealth with greenish paper.

So, how exactly having real resources to be taken from one people (who created them) and given to other people (who are good at wasting stuff, or they wouldn’t “need” the handouts) is going to stimulate the economy?

It’s exactly like saying that theft stimulates economy. Surely, it improves well-being of thieves – at the expense of decent citizens.

That’s exactly what “economic stimuli” of government money-spending kind do. It is as simple as that. And your “respected” economists are nothing more than propaganda division of the gang of thieves writ large. It’s all done with smoke and mirrors, yeah.

(Technically, they are guilty of “what is seen and what is not seen” logical fallacy. Read Henry Hazlitt “Economics in One Lesson” to understand how this fallacy is being used to justify pretty much any economical nonsense.)

David Schwartz • March 3, 2011 3:30 PM

Averros: Yep. If I steal $30,000 from you and use it to buy a car, all they see is my shiny new car and the profit the car company makes. They don’t consider the fact that you would have also done something with that $30,000 had I not stolen it from you.

For those who think that borrowed/printed money is somehow different or can do magic, I would just ask them why counterfeiting is illegal. After all, a counterfeiter spends the money he prints, right? That benefits all the people he buys from and stimulates the economy. There’s got to be a harm somewhere that outweighs that benefit, right? (And it’s not particularly hard to find.)

Clive Robinson • March 3, 2011 6:13 PM

@ Averros, David Schwarts,

With regards “you spend, I spend”.

First of the problem with the idea is spending not lending. You as a theif might chose to spend “my money” (and probably would 😉 Me I might chose to “lend my money” not spend it.

Now there are various ways I could lend my money but if I put a dollar out on over night lending at 1% / night compound then in around six years I’m (on paper) going to be a very wealthy person (1.01^2200~=3billion).

Now arguably I personaly have not done any “real work” and thus not created any “real wealth” only “monetary wealth” or as we might prefer to call it “inflation”, which is in effect “the value added product” of the banking industry.

However there is another aspect to “you spend, I spend/lend” that people don’t tend to think about, there is a (not incorect assumption) that “profit goes in the shareholder pocket” and does not get “reinvested in the company”. This not entirely true as sometimes to make more profit you actually have to make more “goods” which usually requires investment. The problem then becomes do I invest “profit” or do I invest by “borrowing”. If I invest what would have been profit I don’t pay tax on the profit, likewise If I borrow money I have to repay interest which would otherwise have been profit. Either way I am a tax avoider. The argument is generaly somewhere somebody pays tax, only these days they don’t with various financial scams through tax havens etc.

The think about the various financial scams aligns it’s self with “imports” and “exports” and where a sale is actually made. For instance in the UK there is a tax loop hole whereby those importing items of less than 20GBP don’t have to pay import duty nor does the purchasor have to pay VAT. This is a concession to flower growers in the Channel Islands which are kind of part of the UK but not part of the UK. Well the likes of Tescos (major retailer” “exports large amounts of CD/DVD’s etc to the channel ilands and get the VAT back as well as any import duty paid on them, then deliver them back from the channel islands directly to a customers address (mail order) and thus can charge less than a UK retailer who has had to both pay importation tax and charge the customer VAT…. Thus a nice littler erner for Tescos, and a cause of lost jobs in Uk Retail.

Now all employees no matter how outwardly dumb or stupid would not be employed unless they provided a usefful function to the businiess. They might just be little cogs in the machine but they are the right cogs. Also unlike the accountants think they are not instantly replacable with another “dumb cog”, they have learned about the business and in many casess they have developed unseen rules that help the company in various ways wand and above the notion of them being a replacable cog. That is nearly all employees hold some of the businesses “Intelectual property” in their heads. The more “real good” industrial manufacturing the company does the more valuable the IP per worker tends to be.

The problem is acountants “outsource” to the lowest bidder and in the process thus unseen rules and IP become lost or given to a “partner who will now exploit the loss of the IP to their best interest not to that of the business who outsourced it…

this quickly becomes a skills gap especially if he businesses give away the IP abroad.

Now the thing about skills gaps is they cripple the home industry and make them overly reliant of forign suppliers. This could be seen in both the US and UK where we alowed Japanese colour CRT production to undercut our own domestic production and we lost not only the skills we had we lost the ability to even compeate in that market again…

Much as I’m against the various forms of financial easing I am very much more aware that we should be investing in retaining the IP that enable us to compeate as a net exporter not a reliant and controled importer with a shatered and unrecoverable home industry.

At the end of the day “real wealth” is created by adding “real value” to a product such that it’s utility is significantly more than the sum of it’s parts. It takes considerable skill to ad this “real value” and you lose it by outsourcing for very short term profit…

You have to consider also that if you outsource your workers IP you also destroy the ability of these people to buy your products so in the long term taking “short term profit” is killing the west, and the chances are we won’t survive because those who we have outsourced to now own us and dictate what we get and how…

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