The currency of fear

I recently mentioned some commentary on an article from Foreign Affairs called “Clear and Present Safety: The United States is More Secure Than Washington Thinks“. I finally got a chance to read the source and recommend giving it a go over. While not breaking much new ground, any effort to highlight numerous ways in which our current public discourse seems designed to always ratchet up estimates of threat and danger without any incentive to reduce those levels should always be welcome.

The authors do highlight some pretty interesting facts that I hadn’t seen before:

A 2009 survey conducted by the Pew Research Center for the People and the Press found that 69 percent of members of the Council on Foreign Relations believed that for the United States at that moment, the world was either as dangerous as or more dangerous than it was during the Cold War.

Things like this make me more inclined to give my fellow citizens a break when I hear they can’t identify Mexico on a map or which century WWII was fought in. The world is more dangerous for the U.S. now than during the Cold War? Really? I’m sorry but 9/11 was no Cuban Missile Crises. The underwear bomber doesn’t compare to hundreds of thousands of Chinese troops swarming over the border into Korea. And what else? The Chinese economic juggernaut? Anonymous? Loose nukes? Mexican drug cartels? Iran?


How soon we forget that the two superpowers had hundreds of thousands of troops facing each other in Europe as well as thousands of nuclear weapons ready to go at a moments notice. There was quite a bit of concern that even if both sides didn’t want to turn the world into a radioactive cinder that mutual suspicion and communication breakdowns could lead to the same result. As Zenko and Cohen write:

The United States faces no plausible existential threats, no great-power rival, and no near-term competition for the role of global hegemon. The U.S. military is the world’s most powerful, and even in the middle of a sustained downturn, the U.S. economy remains among one of the world’s most vibrant and adaptive. Although the United States faces a host of international challenges, they pose little risk to the overwhelming majority of American citizens and can be managed with existing diplomatic, economic, and, to a much lesser extent, military tools.

Our current public discourse (and policy in many cases) isn’t just oriented to a ‘glass is half empty’ outlook. It’s got a ‘Oh my god, the glass is half empty…and there’s a huge freaking nazi/zombie shark in it that’s going to eat me…and give my family syphilis!’ Potential threats are seen as certainties…plans which require cracker jack planning, timing and ungodly amounts of luck are seen as routine, possible…probable.

I’m not thrilled with all the points of the article and the conceit of responding to a 99% world instead of the 1% world, while intending to address Dick Cheney’s ‘1% Solution’ idea, evokes current political fadishness that I find distracting. Still, this article deserves far more attention than it’s likely to get.

I found this whole issue relevant as I recently began participating in an experiment examining the value of using prediction markets for intelligence analysis. I can’t give too many details because I think I remember clicking through some sort of privacy statement, but who reads that stuff? In any case it’s just a pilot program with no bearing on actual policy or decisions and what I have to talk about won’t violate any conditions…whatever they might be.

The experiment invited a number of people to participate by first submitting questions dealing with homeland security/criminal issues. So, it might be something like (totally ficticious questions here) ‘By May 2012, there will be a dirty bomb detonation in an American city.’ Questions were then reviewed and edited by the project organizers and then fed out to the group. The group then bids on the probability such an event will (or will not) occur. This experiment ends on July first and all questions expire then or earlier. At that point, the organizers can tally the profits or losses of everyone’s account to see a) who was most accurate and how that came to be and b) if there’s anything to this ‘wisdom of crowds’ thing.

There were approximately ten questions chosen and here’s where I have attempted to game the system. I suspect that most participants are involved in the law enforcement/homeland security/national defense industrial complex. I base this, in part, because the questions were submitted by the participants and I didn’t see any questions suggesting a peaceful outcome (‘There will be no significant terrorist activity in the continental U.S. by July 1’). That being the case, I’m assuming most will buy into the notion that the world is a very threatening place and that they will be likely to bet accordingly.

I, on the other hand, think there’s money (well, virtual money anyway) to be made by taking the counter position. Since the experiment ends in four months, I’m betting (across the board) that we won’t see any terrorist attacks, spectacular criminal events, etc. (at least of the type proposed in the questions). In the event I’m wrong in one area I find the likelihood of two (or more) spectacular events (related or not) occurring in such a brief time period to be nearly impossible which means I should be profitable in the remaining areas.

Now, my level of confidence in each question varied, resulting in me making larger or smaller ‘short sales’ in each proposal. As I proceed I’ll share my results (in general terms) as well as how I’ve done in comparison to my cohort. Thus far (although this is pretty meaningless and I give it mostly as a ‘baseline’) I’m ranked #8 out of 40 participants in terms of ‘cash value’ which looks to be the metric of success. The first real test will be in April when a couple of the questions expire and I either win big and the world keeps on keepin’ on or some people have a very bad week. Stay tuned.


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