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February & March 2012, No. 171, $6.00


A P u b l i c a t i o n o f t h e H o ov e r I n s t i t u t i o n
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F EBRUARY & M ARCH 2012, No. 171

3 MAKING THE HOUSING MARKET WORK AGAIN Analyzing past mistakes to build long-term policy solutions Christopher Papagianis & Arpit Gupta 23 CONSERVATIVES, LIBERALS, AND HUMAN RIGHTS Putting politics aside in search of common ground Mark P. Lagon & William F. Schulz 33 RETIREMENT AND THE SOCIAL CONTRACT Capitalism, labor, Marx; and the retirement age Ronald W. Dworkin 45 OUR LANGUISHING PUBLIC LANDS The economic and environmental benefits of decentralization Robert H. Nelson 63 THE LAWS OF WAR, ON THE GROUND How following wars rules confers legitimacy on a fighting force Joseph Patrick McGee 73 DEPORTATION BEFORE INCARCERATION Why sending criminal aliens home sooner makes sense Peter H. Schuck 85 STATE-LEVEL CYBERSECURITY The missing link in the battle against global botnets Michael J. Glennon

103 SHAWCROSS ON TERROR Peter Berkowitz on Justice and the Enemy: From the Nuremberg Trials to Khalid Sheikh Muhammad by William Shawcross 109 CRITICAL WAR THEORY Ann Marlowe on Between War and Peace: How America Ends Its Wars edited by Matthew Moten 115 THE GERMAN VIEW OF PATTON Henrik Bering on Fighting Patton: George S. Patton Jr. Through the Eyes of His Enemies by Harry Yeide 122 POWERING THE WORLD Steve Stein on The Quest: Energy, Security, and the Remaking of the Modern World by Daniel Yergin

A P u b l i c a t i o n o f t h e H o ov e r I n s t i t u t i o n
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POLI CY Review
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Making the Housing Market Work Again

By Christopher Papagianis & Arpit Gupta

rends in the housing sector have been a driving force behind the recent financial crisis and associated recession. According to the Case-Shiller/s&p Indices, housing prices fell over 30 percent from the height of the housing bubble to August 2011 across a twenty-city composite, with prices in some markets down by nearly 60 percent. This plunge in housing prices was accompanied by a wave of household defaults and foreclosures, which has led to millions of property owners losing their homes over the last three years. The foreclosure crisis hit hardest in areas that had the largest bubbles, notably parts of Arizona, California, Florida, and Nevada. The collapse of housing prices plays an important role in spurring foreclosures since underwater borrowers, who owe more on their mortgage than their home is worth, have a substantial incentive to walk away. According to CoreLogic, almost one in four borrowers were underwater as of the first quarter of 2011. Households with negative equity perceive their house to be
Christopher Papagianis is the managing director of Economics21, a research institute. He was a special assistant for domestic policy to President George W. Bush. Arpit Gupta is a Ph.D. student in finance at Columbia Universitys Graduate School of Business.
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a negative contributor to net worth, resulting both in a higher future default probability as well as lower current consumer spending. The decline in house values has also badly damaged the balance sheets of even above-water borrowers, as housing-related assets still remain the primary form of savings for many households. This link works in both directions: The wealth impacts of lower home prices weaken consumer and business spending while the weak economy in turn feeds into housing price declines. Prices have continued declining in many areas, with downward pressure exerted by the overhang of millions of properties in foreclosure. The problem of elevated foreclosures is now in its fourth year, with the initial wave of subprimerelated problems replaced by more traditional foreclosures that reflect the weak economy. In short, the presence of millions of The presence of properties in the foreclosure process represents an overhang of supply and remains a major stumbling millions of block for housing price recovery. Mortgage-related defaults and associated declines properties in in the market value of residential real estate collaterthe foreclosure al have been responsible for large losses in the financial sector, which led to the collapse of major finanprocess is a cial institutions and widespread economic losses. major stumbling The role of the housing sector as a source of sysblock for temic risk throughout the economy has made federal housing responses one of the central aspects of housing government economic policymaking during the last price recovery. several crisis years. Indeed, given the large role that the federal government plays in mortgage finance today, it would be basically impossible for policymakers to simply step aside completely. The government provides massive financial assistance to homeowners through tax deductions on mortgage interest and property taxes paid to state and local governments, and through the ongoing sponsorship of Fannie Mae and Freddie Mac. In many ways, the historical roles of the Federal Housing Administration in providing mortgage guarantees and Fannie Mae and Freddie Mac in securitization are responsible for the spread of the 30-year, fixed-rate mortgage, which is now seen as the default mortgage contract. Yet the housing crisis saw a dramatic escalation in the role played by the federal government. These new interventions can be broadly placed in two categories: First, policies aimed at boosting the demand for housing generally and thus supporting sales and prices; and second, supply-management policies assisting distressed homeowners in avoiding foreclosure. As the depth of the housing crisis demonstrates, these policies pursued by both Republican and Democratic administrations have failed to stem large-scale housing losses. In large part, this failure reflects the magnitude of the housing problem in which tens of millions of American families got into homes they could not afford. Policymakers were consistently behind the
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curve in estimating the extent of problems in housing, and were unable to tackle the core issue of excess mortgage debt, which was made worse by a precipitous fall in home prices. However, the difficulties and failures experienced by policymakers combined both tactical problems in dealing with complex issues in a crisis environment with political concerns surrounding the proper scope for federal housing policy. Policymakers faced challenging philosophical questions regarding the degree to which taxpayer money should legitimately be used to prop up the housing sector or assist families that had made speculative financial decisions. Perhaps most striking is that even with the benefit of hindsight, its not clear whether any politically feasible and effective policy could have been implemented midstream. A key political obstacle to largescale interventions to avoid foreclosures is the intrinsic unfairness involved in helping homeowners who are in houses they cannot afford when others who were potentially more responsible with their personal financial decisions are not receiving assistance. This issue of horizontal inequity makes it much easier to say that more should be done to help avoid foreclosures than come up with a policy approach that is politically feasible. Understanding the nature of these policies is important as a case study in economic policymaking in a crisis situation, and it is useful in thinking through how to better calibrate future federal housing policies.

Pre-crisis policies
hough fears of a housing bubble and bust have been around since 2002, the level of concern among policymakers picked up dramatically as foreclosure and delinquency rates rose in 2007. The lack of focus earlier in the decade was not, as is often alleged, due to some systemic lack of awareness of the housing sector. Rather, policymakers were reluctant to act earlier because they failed to understand how structural shifts in the housing market had fundamentally changed the economic landscape, which in turn made a lot of the existing housing-related data an unreliable gauge for future projections. For instance, delinquency statistics even among subprime mortgage products were quite low by historical standards. In retrospect, it is clear that homeowners were more distressed than this measure indicated at the time. The prospect of refinancing or selling a home in a booming market gave many homeowners a strong financial incentive to keep making payments. Put another way, the anticipation of future housing gains encouraged the vast majority of borrowers to stay current on their mortgages because the value of their house or housing-related investments were growing rapidly. Once refinancing opportunities ended after the Federal Reserve raised interest rates in the middle of the decade, however, subprime borrowers began to default in larger numbers.
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There were also relatively few signs, at least on the standard federal policymakers dashboard, suggesting that problems in the housing sector were widespread or would have an impact on the broader economy. For instance, an influential paper from the New York Fed in 2004 suggested that though there was a housing boom, its effects were limited to a handful of markets where demand for housing was high and the supply of new housing was scarce. House price gains in other parts of the country seemingly corresponded to changes in shifts in supply and demand. In Las Vegas and Phoenix, to pick two important and booming markets, house prices were tightly correlated with local population growth. Another survey by Boston Fed economists has stressed the uncertainty inherent in predicting future housing prices. During A narrow focus the height of the bubble, some economists emphasized the role of fundamentals, such as zoning on housing restrictions or rising housing demand. Other econoprices misses mists including Paul Krugman noted speculative trends in housing, but associated them primarily the broader with certain areas of the country where geographipicture in the cal restrictions limited construction. Finally, other economists were pessimistic about housing prices, mortgage and but many of these economists had been predicting a real estate housing bust for years. Indeed, the famous housing bust prediction in 2003 by the Economist proved markets. to be overstated. In fact, the Case-Shiller House Price Index, as of the first quarter of 2011, was only slightly lower than it was when the article came out (by about four percent). In our view, the failure of the economics profession to clearly predict a housing bust is mostly indicative of the general difficulty of any such forecasting exercise. Yet even if one thinks that providing accurate price forecasts is feasible, it is important to recognize that policymakers were simply not dealing with unambiguous information at the time. Its also worth bearing in mind that a narrow focus on housing prices misses the broader picture in the mortgage and real estate markets. Policymakers did consider the possibility of housing-related losses in the market. Their key error lay elsewhere, however: in the belief that the system held enough checks to prevent such shocks from resulting in broader systemic losses. The growth of structured mortgage products which pooled together the payments from mortgages into mortgage-backed securities that were sold to sophisticated investors promised to disperse risk and ensure that mortgage-related risks were held by the entities that were best situated to bear them. Meanwhile, the Federal Reserve had demonstrated in the aftermath of the dot-com boom that a fall in asset prices, in and of itself, could be handled through an accommodative monetary policy. The supply of credit did not need to be shut down for the entire economy in response to possible excesses in one sector or so the thinking went.
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Finally, policymakers failed to appreciate, at least initially, the nature of product changes in the mortgage market toward subprime and alternative mortgages that were frequently lent to borrowers with poor credit histories or low levels of income documentation. Most subprime mortgages were originated as hybrid mortgages, in which a comparatively low initial interest rate paid on the mortgage reset after a two- or three-year period to a higher rate. Many of these products were designed to help homeowners initially qualify for a mortgage with the expectation that they would then refinance into another mortgage once the interest-rate reset was about to occur. The short duration teaser period was partly designed to allow the borrower to develop a payment history that would ease qualification into a prime mortgage after a couple of years. This was also partially dependent on the expectation that house prices would rise to generate the equity necessary to refinance into another mortgage. In retrospect, the nature and structure of residential lending during the boom years carried a number of dangers. Many mortgage products and forms of residential lending were geared around exploiting the bubble in housing prices. These hidden problems were initially contained due to low interest rates, steadily rising housing prices, and the continuing flow of mortgage finance or credit. All of these factors enabled homeowners to continue making low monthly payments while waiting for their next refinancing opportunity (often, extracting equity in the process). Finally, the system encouraged homeowners to continue making mortgage payments in the hopes of reselling their homes later at a higher price. All three of these factors had largely stopped by 2006, at which point subprime borrowers started defaulting in larger numbers.

The crisis hits

series of factors raised the profile of housing in 2007, even as federal concerns remained limited to a handful of states or regions and to certain mortgage product types. The initial policy response was twofold: work to maintain demand for housing generally while extending assistance to some borrowers on the margin who were in the right house but had the wrong, exotic mortgage product. A brief timeline of early responses from Congress and the Departments of Treasury and Housing and Urban Development includes the following:
August 2007. fha Streamline Refinance: A program in which the Federal Housing Administration insures (but does not originate) mortgages for qualified low- and moderate-income borrowers who have less-than-perfect credit and little savings for a down payment. In general, this initiative presents borrowers with a fixed-rate government insured refinancing opportunity.
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October 2007. hope now: A private-sector alliance of mortgage industry participants was launched to encourage servicers, housing counselors, and investors to work together to help streamline the process of modifying mortgages for borrowers with adjustable-rate mortgages who can afford their current payments but will have trouble when their interest rates rise. July 2008. hope for Homeowners Act (h4h): A program that provided more accommodative underwriting standards to incentivize private lenders to refinance up to $300 billion in mortgages into new fha-guaranteed mortgages with lower loan-to-value ratios.

As Phillip Swagel has noted in his account of Bush-era decisions, policymakers noted worsening real estate conditions, but incorrectly thought that the worst of the crisis would pass as the wave of subprime-related foreclosures crested in 2008. This prediction was made on the basis of examining the historical relationship between foreclosures and economic factors such as interest rates and unemployment. However, new subprime mortgages were originated using substantially worse underwriting criteria, fundamentally changing the interaction between housing and the rest of the economy. As economists Christopher Mayer, Karen Pence, and Shane Sherlund have found, the originate-to-distribute model was associated with poorer underwriting quality of mortgages. The median subprime mortgage was originated with a loan-to-value ratio of one, meaning that the homeowner put no money down in order to purchase the home. Because such homeowners had no skin in the game, they were particularly susceptible to home price declines, which could immediately put the borrower underwater. Without the financial pain associated with losing equity in the home, borrowers are more likely to become strategic borrowers walking away from their mortgage in times of distress. Adding to strategic default concerns, many mortgages are originated without recourse, prohibiting banks from going after borrowers for the remainder of their mortgage balance in the event that housing collateral proves insufficient for full creditor recovery. In certain states, the lender may have full recourse, but the legal regime does not allow deficiency judgments to be secured without large transaction costs. Finally, a rising share of home purchases were made by investors seeking second homes, or for other speculative reasons such as hoping to capitalize on rising home prices. All of these factors made owners more likely to stop making payments on their mortgages in times of stress, particularly if they were underwater. This structural break in historic relationships would make the crisis unprecedented in magnitude. Late in 2007, as the number of homeowners facing delinquency and foreclosure grew, the federal government also initiated projects aimed at helping homeowners stay in their homes. The Hope Now Alliance, which began as an initiative between hud and Treasury in October 2007, worked to con8 Policy Review

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nect private mortgage servicers, borrowers, and counselors. The goal was to encourage private mortgage lenders and servicers to voluntarily extend mortgage modifications to borrowers, which would lower interest rates or mortgage balances and enable more homeowners to afford their mortgage payments. In practice, such modifications frequently worked only to lower the interest rates or extend the term on the mortgage. One major goal was to facilitate modification efforts among privately securitized mortgages. The legal agreements governing the servicing of mortgage pools pooling and servicing agreements frequently left servicers unclear about their ability and responsibility to pursue different types of modifications. Other programs allowed the federal government to directly refinance private- sector, adjustable-rate mortgages into government-guaranteed, fixed-rate mortgages with a lower Many mortgages interest rate. Throughout the crisis, policymakers are originated would attempt to implement various refinancing strategies through a variety of different lending without recourse, agencies. These programs universally failed to work prohibiting as advertised. Hurdles for mass refinancing programs include the fact that equity and credit require- banks from going ments (e.g., tighter underwriting standards) preventafter borrowers ed many homeowners from qualifying. In addition, many homeowners had already refinanced or other- for the remainder wise were currently paying relatively low rates, of their balances. meaning that a subsequent refinancing would not substantially lower their payments, especially after taking transaction and closing fees into account. The h4h program, though it was intended to help 400,000 homeowners through refinancings, eventually ended up completing only 23 endorsements in 2009, 207 in 2010, and 632 in 2011. After being enacted into law in 2008, the program shut its doors on September 30, 2011, having helped fewer than a thousand people. These federal responses can be classified as supply-management tools to handle the growing surge of delinquent mortgages. Additionally, policymakers took steps to manage the demand for housing by using the governments leverage over housing finance. Two of the housing gses Fannie Mac and Freddie Mae dramatically stepped up mortgage originations as the number of private securitizations slowed, while the fha grew to become one of the largest sources of new mortgage originations in the country. gse purchases and fha endorsements totaled around 30 percent of originated mortgages in 2005; a figure which increased to 50 percent by 2007, and rose even more by 2008. As of the first quarter of 2011, the U.S. government is involved with the vast majority of new mortgage originations in the country a combined share of more than 97 percent between the gses, the fha, and other smaller government agencies. These developments were not without financial costs many of
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the mortgages originated or otherwise acquired by the gses contained substantial credit risk that was ultimately paid by taxpayers after these agencies were put in conservatorship. For instance, close to fifteen percent of Fanniebacked mortgage holders from 2007 were seriously delinquent on their mortgages within three years of origination statistics that are far higher than comparable mortgages before or after this period. As with several other housing programs, the rapid growth of federal mortgage supply has gone from a temporary intervention to a more structural feature of the mortgage market. In some respects, this development is justified by ongoing difficulties in the housing market. However, it is increasingly difficult to imagine an exit strategy for many of these interventions. As long as the housing sector remains weak, there will On the housing be incentives to maintain the governments outsized supply side, the role in housing with taxpayers (particularly renters) left paying the bill. difficulties with On the housing supply side, difficulties with most mortgage-support programs became quickly apparmost of the ent. The focus on particular mortgage products or mortage-backed particular legal frictions proved insufficient to handle the scope of foreclosures. In hindsight, it seems programs that targeting such market inefficiencies did not became quickly prove to be an exhaustive solution and an excesapparent. sive focus on subprime characteristics may have prevented the government from generating more comprehensive solutions. The scope of housing problems spread to prime borrowers who faced both rapidly declining home prices (placing many more borrowers underwater) and higher levels of unemployment. As a result, more traditional or prime borrowers started to go delinquent in unprecedented numbers. A destructive cycle soon developed, as more foreclosures drove down housing prices, which drove further foreclosures. Problems in housing resulted in losses for financial firms, which also drove down the supply of credit and hurt overall economic conditions. Though the federal government frantically attempted particular innovations to tackle individual aspects of these problems, it was fundamentally unable to develop a strategy to end this destructive cycle. In particular, the Bush administration was hampered in changing the nature or scope of mortgage alleviation efforts. At the time, most modification efforts did not directly aim to tackle the issue of underwater borrowers. There is a dilemma between assisting homeowners with payment or interestrate problems borrowers who incur at least some sympathy and assisting borrowers with negative equity, which may actually be a more effective approach but involves possibly extending taxpayer funds to strategic borrowers, who have the ability, but not the desire, to continue making mortgage payments once they are underwater and their home no longer remains a good investment.
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When it came to gse-held loans, modification efforts (even those that were not subsidized) still often generated a direct loss to taxpayers. Policymakers also had to wrestle with aligning mortgage assistance programs so they were not exposed to fairness concerns by extending relief only to borrowers with private mortgages as opposed to gse-backed mortgages. Federal Flow of Funds data for the second quarter of 2011 suggests that the U.S. government backs over 58 percent of the current mortgage market through its control of mortgage finance entities like Fannie, Freddie, and the fha. In the end, the Bush administration was unwilling to devote large amounts of public funds to mortgage modification efforts aimed at lowering a borrowers mortgage principal; it recognized the inequity dilemmas with this type of assistance and that many distressed borrowers were in the wrong house, as opposed to The federal the wrong mortgage. While the federal government was willing to government was devote efforts to make mortgages more affordable in generally not 2007 and 2008, it was generally unwilling to transwilling to fer taxpayer funds from renters to homeowners, or from homeowners struggling to make payments transfer taxpayer toward those who had opted not to pay, possibly for funds from strategic reasons. When borrowers take out an outsized mortgage they cant really afford with the goal renters to of reselling it in the future, but then run into finanhomeowners. cial difficulty, it is not clear the extent to which homeowner assistance deserves public funding. A taxpayer-financed policy may help irresponsible borrowers at the expense of the more prudent borrowers who avoided onerous mortgage debt. A similar reluctance or a respect for this concern can be inferred from congressional Democrats, who designed the h4h program in a way that destined it to serve only a narrow segment of troubled borrowers. The problem is that allowing for a broader targeting would inevitably result in taxpayer dollars going to help more unsympathetic borrowers. Even private servicers face difficulty in constructing appropriate modification programs. As Boston Fed economist Paul Willen and co-authors discussed in a 2009 paper, modification efforts are hampered by the problem of cure-rates and re-default rates. Delinquent mortgages may resume payments even in the absence of a modification if homeowners are able to resume payments through their own effort. However, even a successfully modified loan may re-default. While lowering mortgage principal may raise the probability of a homeowner making payments, it also reduces the final funds received by the lender and could induce other homeowners to stop paying in the hope of obtaining a similar modification. Finally, the practice of processing and extending modifications proved to be an expensive task that was highly dependent on professionals to sift through necessary information. Lenders must balance all of these factors.
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One study on modification efforts by researchers at the Chicago Fed found that lenders failed to renegotiate 93 percent of delinquent privately securitized loans within six months, and failed to modify 90 percent of loans held on bank balance sheets. While the difference between these two figures suggests that securitization may inhibit modification to some degree, the overall rate of modifications even for loans on privately held mortgages remains quite low. Even gse-held loans are renegotiated infrequently. Among other factors, the presence of other mortgage liens has inhibited the modification process. The owner of a second lien, for example, would often have little expectation of a recovery on a deeply underwater borrower but retained the legal right to prevent a modification of the first mortgage. This presents a so-called hold-up problem under which the second lien holder would need During 2008, to be paid off, raising the cost (and administrative many analysts difficulty) of a modification. During 2008, while the foreclosure crisis was suggested quickly escalating, a number of outside analysts sugtactics that gested alternative housing resolution tactics that would have resulted in the mass write-down of debt. would have One popular proposal was creating a new chapter in resulted in the the bankruptcy code that would allow bankruptcy mass write-down judges to write-down the principal on mortgages for bankruptcy filers (cramdown). This proposal of debt. passed the Democrat-held House, but was never enacted into law. Another mass write-down proposal came from Luigi Zingales, who suggested that homeowners in zip codes which experience home price falls above 20 percent should have the right to write down the value of their mortgage by that amount, and let the lender share in a portion of the equity gains upon selling the property. These mass write-down proposals had many attractive qualities. By relieving the debt burden on borrowers, they would have encouraged borrowers to continue making payments on the mortgage, which could in turn have helped stem the tide of foreclosures, mortgage losses, and (systemic) banking problems. With a lower aggregate housing debt burden, households would experience a gain in wealth, and also be more likely to resume spending contributing to overall economic growth. Yet the Bush administration also had good reasons to oppose these proposals. Instituting a policy of mortgage cramdown during the midst of the crisis would have reduced the remaining flow of private sector mortgage finance. Cramdown would have further represented a retroactive change to the terms of contracts, potentially giving rise to rule of law concerns by creditors in other markets and fundamentally disadvantaging mortgage lenders relative to other lenders (e.g., credit cards). By renegotiating existing mortgage contracts, it was very possible that credit markets more broadly may have been pushed into further turmoil. In addition, only a few hundred
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bankruptcy judges would have been tasked with and relied upon to effectively write down the mortgages of thousands of borrowers, along with unsecured debt that may not be a contributing factor behind borrower delinquency. In short, there were legitimate concerns separate from fairness about whether this proposal could be scaled appropriately and not suffer from some of the same resource or bandwidth constraints that have plagued mortgage servicers generally over the past few years. Wider modification plans might also create moral hazard encouraging a further wave of defaults. There is some evidence that lowering the cost of default and expanding modification efforts may drive further delinquency one study found that many borrowers who were previously current started to miss mortgage payments in order to qualify for a modification program announced by Bank of If underwater America for loans originated or serviced by the subborrowers prime servicer Countrywide. The effects were particularly pronounced among borrowers who were continue to make underwater on their mortgage, suggesting that such payments they borrowers may be very responsive to programs that create a strong lower the cost of delinquency. As Luigi Zingales has suggested, there are strong social norm in moral and social factors behind household decisions. favor of When most underwater borrowers continue to make their payments, they create a strong social norm in doing so. favor of doing so, even though many borrowers could make themselves financially better off by going delinquent on their mortgages. By contrast, homeowners personally acquainted with other strategic defaulters are more likely themselves to stop making payments. Shifting social norms may be responsible for many of the defaults in the crisis, and the effect of more widespread measures of modification or cramdown on these norms would be uncertain. Even programs of mass principal write-downs face serious difficulties. A mass write-down of mortgage debt would result in enormous losses for taxpayers, given that most mortgages are held by the gses, with taxpayers holding the ultimate financial loss. Private financial institutions would also face serious losses, and for some possible insolvency, since principal reductions would force a revaluation of assets. One way to offset the lender loss on a write-down would be to try to convert the residential mortgage so that the lender would share in any future home price appreciation. While these sorts of offsets were considered (and even tried on a limited basis in h4h), the immediate reduction in asset value or principal was generally considered to be the much larger problem for prudential regulators. Nevertheless, pursuing more radical modification strategies by the private sector during the depth of the crisis would have had the advantage of pushing the administrations goals at the moment of greatest leverage. As banks were facing crisis and would soon receive federal funding (e.g., tarp), they
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would be most likely to entertain thoughts of bold modification plans. For instance, Bank of America agreed to the settlement with the states attorneys general with Countrywide in October 2008. By not pressing harder while the banks were still utilizing their tarp loans, policymakers were left with a weaker bargaining position from which to pressure banks once those loans were repaid. In the absence of such mortgage modification efforts, Congress passed the Housing and Economic Recovery Act (hera) in 2008; it paved the way for a number of piecemeal programs or attempts to patch the housing market. The bill authorized the previously discussed h4h program, while also introducing two new credit programs. On the supply side, a new Neighborhood Stabilization Program (nsp) administrated by The final months hud awarded grants to those states and territories facing a disproportionate share of foreclosures of the Bush and delinquencies; while on the demand side a tax administration credit program awarded up to $7,500 for first-time were focused on home buyers. Despite three grant rounds totaling almost $7 billion, the nsp proved to be too small stabilizing overall divided up among too many areas to have a subfinancial markets stantial impact, while the tax credit was often captured by homeowners who would have bought anyrather than way or otherwise accelerated their purchase decifocused on the sion. Even if the tax credit program shifted some home purchases forward, this came at the cost of housing issues. lowering future demand. By successively boosting temporary demand at the cost of future demand, this program served as little more than a short-term palliative while creating future problems like a fiscal headwind if an extension or additional subsidies did not follow. Ultimately, the limited scope and poor targeting of these programs did little to address fundamental problems in housing. However, the (relatively) limited fiscal outlay demanded by these programs would prove attractive to some future legislators seeking to implement additional solutions. The final months of the Bush administration were focused on stabilizing overall financial markets rather than focusing on housing. tarp was initially aimed at reviving the market for mortgage-backed securities, particularly those that were considered toxic assets. The underlying motive was that the problems in mortgage finance revolved around a lack of liquidity in this market, which could be revived through the price discovery process induced by a large round of government purchases. Yet this logic was highly questionable, as demonstrated by the numerous criticisms the plan attracted in real time. Had the government gone ahead with the plan as scheduled, taxpayers may well have lost hundreds of billions of dollars rather than recouping the vast majority of their investment. The problems in structured finance, it would turn out, had to do with the solvency of mortgage credit, an issue no government solution has managed to successfully address.
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The Obama years

hough the obama administration came in with an optimistic outlook and a strong desire to raise the level and scope of federal assistance for homeowners, it ran into the same tactical and political problems faced by the Bush administration. In terms of foreclosure alleviation efforts, the Obama administration dramatically ramped up prior efforts, using tarp funding to finance the Making Home Affordable (mha) initiative and its signature component, the Homeowner Assistance Modification Program (hamp). The program harnessed previous efforts that linked servicers with borrowers, but used taxpayer funds to incentivize certain modification efforts and further the objective of increasing mortgage affordability. While the Treasury initially estimated that the hamp could help three to four million borrowers, the program has thus far made only about 800,000 ongoing permanent modifications. With its doors open since March 2009, the program is not expected to see any significant improvement in its takeup rate, as new modifications have started to slow down. In fact, a large portion around 900,000 of hamp trial and permanent modifications have already been canceled. While Treasury initially budgeted $50 billion in tarp funds and $25 billion from Fannie Mae and Freddie Mac for a total of $75 billion for hamp, it later reduced its projected contribution for hamp to $29.91 billion. Separately, cbo estimated that as a result of lower than expected participation in the program, the total cost or spending under hamp (or for housing-related programs financed by tarp) would be more like $12 billion in total. Under hamp, fewer than 30 percent of borrowers received a principal reduction despite the fact that academic research has suggested that overall debt burdens are the primary factor driving default. The vast majority of modifications under the program simply extended the term of the loan or reduced the initial monthly interest rate (potentially increasing the total mortgage amount owed over the life of the loan). The success rate of hamp modifications has been disappointingly similar to that of other subprime modification efforts: The results are just not that great. For example, Fitch Ratings estimates that 75 percent of borrowers will ultimately default again, while Barclays projects a re-default rate of 60 percent. These figures are broadly comparable to estimates based on nonhamp subprime modifications, which are structurally similar. New York Fed economists Andrew Haughwout and Joseph Tracy have calculated the re-default rate and found that an astonishing 56 percent of modifications were back in default twelve months later. These figures are similar to those reported by Fannie Mae and Freddie Mac, which have been tasked with refinance programs.
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Ultimately, it seems that the Obama administration has come to view hamp more as a supply management tool for the housing sector rather than a plan to keep millions of struggling borrowers in their homes. For instance, in a meeting with prominent financial commentators, Treasury officials stressed the importance of hamp in preventing a rash of foreclosures at an inopportune time. Even if many borrowers who may have defaulted and faced foreclosure ultimately do fall behind on payments and lose their homes, the administration could still declare success because the banking system as a whole was able to avoid added stress during a critical period. Yet this implementation of mortgage modification as supply management is not how hamp was designed or marketed, which was as a generously funded tarp initiative. It is easy to see why taxpayers would balk at the It is easy to see prospect of spending tens of billions of dollars to why taxpayers assist banks and merely drag out the foreclosure crisis. Though there are arguments in favor of would balk at the prospect of Treasurys adjusted narrative for hamp, it is fundamentally based on the counterfactual assessment spending tens of that more foreclosures (at that time) would have destroyed the system as opposed to speeding the billions of transition in the real estate market. In the absence of dollars to assist any economic literature studying this question, it is difficult to fully evaluate the consequences of a banks and just Treasury policy that amounts, more or less, to drag out extend-and-pretend. A more cynical interpretation is that the Obama administration was trapped the crisis. between its own rhetoric and financial realities. Having criticized the Bush administration on this issue, the new president had to do more to avoid foreclosures. But the costly and unfair transfers to unsympathetic cases that would be involved in actually doing a lot more left the administration with a hamp system that gave the appearance of action but had a lower than expected cost and modest outcome. Other modification efforts also came under the mha program. Several other subprograms involved the assistance of various government and private entities in coordinating modification efforts in particular, to unemployed borrowers, those hoping to refinance into an fha mortgage, and those with second liens. Ultimately, these efforts also failed to translate into mass modification or refinancing efforts for most borrowers. As with the Bush administration, the Obama administration soon discovered the difficulty with making mass modifications and refinancing work. Faced with these challenges, the Democratic Congress decided to double down on the other supply and demand tools available to legislatures neighborhood assistance grants and taxpayer credits for home purchases. With the number of struggling households growing, legislators faced immense pressure to do something to assist homeowners, and it was often
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Making the Housing Market Work Again

easier to gather political support around ideas that had previously been embraced by Congress. The Hardest Hit Fund was established using tarp money in February 2010. As with the previous Neighborhood Stabilization Program, money was allocated to states and localities facing severe economic distress. States were allowed to spend money to assist unemployed borrowers or offer mortgage modifications. Over $4 billion was spent over three rounds of grants. Policymakers seemingly ignored the negative data surrounding prior iterations of these programs, and to this day we still lack a proper accounting of how the money appropriated for these initiatives was actually spent. Even more detrimental to taxpayers was a new round of homebuyer tax credits, which according to irs projections resulted in $24 billion in lost revenue. As with the first The real failure round, the bulk of this money perhaps as much of the Obama as $21 billion simply went to homebuyers who would have made purchases anyway. administration Yet after such disappointing results, the real failhas been its ure of the Obama administration has been a commitment to spend meaningful amounts of taxpayer commitment to resources without achieving broad-based results. For spend lots of much of 2011, media discussions of White House economic policy had largely omitted housing policy. taxpayer dollars It seems clear that the principal economic policywithout results. makers in the administration including Treasury Secretary Geithner and former nec Chair Larry Summers did not see cramdown as a viable housing strategy. It remained a talking point for the administration but not an agenda item to advance through Congress (even though both the House and Senate were controlled by Democrats in 2009 and 2010). Though many Democrats, including President Obama, came into the office on the platform of advancing mortgage cramdown, the same problems with this policy that hampered the Republicans prevented the Democrats from moving further. Yet while the Republican White House was able to argue for a limited position on taxpayer assistance from the point of view that such spending represented an illegitimate or poor use of taxpayer funds, the Democratic White House has not been limited by such concerns and has failed to deploy such funds wisely or effectively. While the market continues to track housing-related data, housing policy or the development of new ideas and approaches has largely fallen out of the national political conversation. The slight resurgence of housing finance related ideas in the second half of 2011 appears to replicate the discussion around the ineffective plans of prior years, focusing on technical changes that could boost marginal participation. In hindsight, the greatest missed opportunity for the Obama administration came through its handling of tarp funds. Major financial institutions like Bank of America, Citigroup, and Wells Fargo were allowed to exit
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Christopher Papagianis & Arpit Gupta

from tarp funding without resolving their excess mortgage debt in particular, second mortgage liens, which were frequently worth very little compared with their valuation on bank balance sheets. Despite the fact that second liens remain an impediment to household solvency and some modification efforts, banks were not (and have not been) required to mark these mortgage assets to market value. Again, a major concern for prudential regulators appears to be whether a revaluation of second liens (as with first liens and principal forgiveness) could raise solvency concerns at some institutions. Early federal policy efforts were instead focused on more discrete issues like exploding arms. As the Fed dramatically lowered interest rates, however, many homeowners with arms actually faced lower rates, which should have obviated a large part The financial of this problem. In other cases, lenders and servicers crisis can only made independent efforts to extend or maintain homeowners initial interest rates to enable them to be understood stay in their homes. In the end, it turned out that the as a part of a problems in housing could not be explained by one cycle connecting particular mortgage type. At best, policies aimed at converting arms to fixed-rate mortgages helped real estate, only on the margin, since it was later revealed that finance, and fixed-rate mortgages (both subprime and prime) other sectors of were hardly immune from the crisis. The financial crisis can only be understood as a the economy. part of a cycle connecting real estate, finance, and other sectors of the economy. Problems in the financial sector stemmed from deteriorating conditions in the housing sector, which themselves drove further economic problems, including a new wave of unemployment and foreclosures. The principle role of housing in the crises over the past several years, combined with the structural problems related to the resolution and management of real estate debt, suggests that housing and mortgage finance policy must remain a major focus of federal policymakers moving forward. Unfortunately, there are not any simple solutions to handling housingrelated problems. Through real estate policy was a major area of focus during the later years of the Bush administration and the early years of the Obama administration, neither group was able to pursue effective housing policies on a cost-efficient basis. The state of play with housing policy today presents a mess. On the one hand, the scope of the problem is just enormous. Yet literally no effective policy plans have been advanced over the past four or five years. Even with perfect hindsight, though, it is difficult to imagine how policymakers could have adequately managed the various technical and philosophical questions in real time. On the other hand, the solutions that have been offered whether on the side of managing supply (in the form of modifications or
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Making the Housing Market Work Again

refinancing) or demand (in the form of tax credits or federal mortgage underwriting expansions) have almost uniformly under-delivered and presented taxpayers with an enormous cost.

Losing the fight against the leviathan

his review of housing policy over the past few years provides an illustration of the difficulties policymakers face trying to manage a complex economy with limited information. It also offers lessons for the future of housing policy. While several of the aforementioned housing programs have since closed shop or are in the process of being phased out, many elements of the governments approach to credit markets have become entrenched, if not permanent. Even before the housing bust, the federal government had an extensive presence in the consumer credit market including the provision of large tax benefits to those who take out mortgage debt and low interest rates maintained by the Federal Reserve. As economist Raghuram Rajan has argued in his book Fault Lines, credit support was a popular way for the federal government to help finance otherwise unsustainable household spending habits at a time when many households were starting to struggle. Yet the degree of federal involvement in this market has now grown to staggering proportions. As noted above, the federal share of the entire mortgage market is now 58 percent, a hike of thirteen percentage points since 2006. The Treasury and Federal Reserve have also drastically raised their holdings of mortgage-backed securities, now totaling over $1.1 trillion, which is more than commercial banks. Every passing month brings us closer to a future in which the government is, in effect, the entire mortgage market. Meanwhile, ongoing economic difficulties present an omnipresent rationale for further government intervention in this area. After all, what legislator is willing to oppose a credit program that will benefit his or her constituents today, at only the risk of taxpayer losses in the future (when he or she may no longer be in office)? While many of the housing responses to the crisis have been sold as temporary government programs, it is clear that their cumulative impact is a further consolidation of an already dangerous level of dependence on government-supplied credit. Hindsight reveals that the economy was perilously reliant on booming house prices for much of the 2000s. Yet rather than attempting to slowly rebalance the economy towards other productive sectors, federal housing policy has been consistently aimed at altering the supply and demand dynamics in an attempt to re-inflate the bubble. This can perhaps best be understood by tracking the policymaking pattern over the past few years, where nearly every programmatic failure has led to a subsequent discussion and push by policymakers for a new or revised program to tackle the original problem (again).
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Housing policy can really only move forward when policymakers recognize the limits of and potential fallout from a credit-dominated economy. Moving back to a capital market system that is firmly under the control of private firms should be a near universal aim. To be sure, private firms have made many mistakes as well both before and throughout this crisis. However, we believe that the evidence of recent housing policy crisis management not to mention more than $180 billion in taxpayer funds that have been injected into Fannie Mae and Freddie Mac to keep them solvent suggests that the government is unlikely to prove a better manager of capital allocation in the long term. The next thrust on housing policy will be a debate about how to establish the right legislative framework for the long-term sustainability of housing finance. While the housing market is still fragile, fundamental reforms need to happen slowly. Yet, it is important for policymakers to understand that the desired transition speed is distinct from starting the legislative debate and committing to a new future system. After all, it is only with clear rules about how the mortgage finance market will function that consumers, lenders, and other investors will be able to make the necessary decisions that will form the foundation of a broader recovery in housing.

A new mortgage compact

he fallout from the housing crisis, as well as the large and growing federal footprint in this space, almost ensures that policymakers will spend a great deal of time debating long-term reforms in the coming years. As a partial step towards addressing these issues, we propose a path to a new mortgage contract or framework. We begin by observing that the housing crisis was driven by a confluence of factors: low down payments encouraged speculation, the lack of mortgage recourse encouraged strategic behavior, while inflexible mortgage contracts prevented household debt renegotiation. Our proposal reverses all three of these factors. The first change would involve higher mortgage down payments at least 10 percent of the value for most mortgages, though 20 percent is also worth considering and could be preferable for many mortgages. Though such a policy might restrain homeownership and negatively impact the value of the existing housing stock to some degree in the near term, a requirement like this is the key to ensuring that more homeowners maintain equity in their homes in the long run. Though a prevalent assumption is that buying remains a better option than renting, new research has emphasized that this choice is not so straightforward from a financial perspective, suggesting that it may make sense to take a second look at policies that encourage home ownership generally. Loosening down payments to allow borrowers to acquire a new home really only makes sense if house prices only go up.
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Making the Housing Market Work Again

Meanwhile, ensuring widespread mortgage recourse with the possibility of cramdown of mortgage debt could present homeowners with an equitable and flexible mortgage contract. With recourse, homeowners would be liable for any underwater value of their mortgage in the event of a default, but their higher equity position at the outset would make any future underwater scenario less likely. The possibility of cramdown under bankruptcy provides a legal mechanism to renegotiate mortgage debt. The prospect of ensuring mortgage recourse alarms many commentators concerned with equity, while cramdown is opposed by those who worry about the sanctity of contracts, the rule of law, and the impact on future credit availability or the cost of credit in the future. We feel that policymakers should consider instituting both prospectively over a phased period, while generally rebalancing Time for higher government policy away from housing in the form mortgage down of fewer subsidies and higher down payment requirements. To alleviate many of the concerns payments: At with this sort of an approach, it is important that these changes get implemented simultaneously and least 10 percent over a number of years. A useful analog is that the of the value for major bankruptcy reforms that were enacted in 2005 took more than ten years to get through most mortgages, Congress. and maybe closer It is also important to recognize that many mortto 20 percent. gages are already recourse. Individual state law currently drives this issue and 23 states are already recourse in both judicial and nonjudicial foreclosure. Almost all second mortgages and home equity lines of credit are recourse as well. Expanding recourse status to the remaining mortgages would help balance the worry about persistent mortgaged debt loads against the prospect of being able to legally discharge those debts through bankruptcy. At the same time, moving to a new national standard or contract like this could help mortgage lenders and servicers apply more consistent processes. Evidence from Canada and Spain where all mortgages are recourse suggests that legal recourse can play a large role in lowering mortgage default rates even in the face of large price declines. According to one study by economists Andrea Ghent and Marianna Kudlyak, the same is true for American states with recourse status. Meanwhile, the higher cost of credit generated by cramdown would be weighed against the lower credit cost resulting from making future mortgages consistently recourse. Its worth noting that nonowner-occupied homes (e.g., second homes or vacation properties) are already eligible for cramdown. Expanding cramdown gradually to primary residences would grant households a legal mechanism for dissolving excess mortgage debts, thus potentially allowing an effective mechanism for mortgage renegotiation that could ease the process of debt deleveraging.
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Though there has been near universal frustration with housing policy over the past few years, it is important for policymakers to remember that residential real estate will continue to be an important area of the economy going forward. Despite the crisis, homeownership also remains a central part of the American dream and a key aspiration for families. It is time for policymakers to shift some of their focus and energy from devising the next near-term plan to advancing a long-term legislative framework that can make the private housing market work again.


Policy Review

Conservatives, Liberals, and Human Rights

By Mark P. Lagon & William F. Schulz

h e n t h e a m e r i c a n section of Amnesty International was first founded in the 1970s, William F. Buckley was one of its earliest supporters. The prime mover behind the American section, Ginetta Sagan, was a mentor to those of all political stripes, including, for example, Republican Congressman Dana Rohrabacher, whom no one has ever accused of being a leftist. When George W. Bush called in his second inaugural address for the United States to affirm the ultimate goal of ending tyranny in our world, he was issuing a call with which no human rights advocate could possibly disagree. The board of Freedom House, a prominent human rights organization, is rife with ex-Bush administration officials like William H. Taft IV and Paula J. Dobriansky, and with scholars like Ruth Wedgwood and Joshua Muravchik who are generally identified with the conservative end of the political spectrum.
Mark P. Lagon, a former State Department official, is the MSFS International Relations chair at Georgetown University and adjunct senior fellow at the Council on Foreign Relations. William F. Schulz is president and CEO of the Unitarian Universalist Service Committee (UUSC) and former executive director of Amnesty International USA.
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And yet, despite the political diversity these instances represent, human rights are generally identified as a left-wing cause. There are many reasons for that, perhaps foremost among them the fact that human rights standards are established largely by international instruments, beginning with the Universal Declaration of Human Rights (udhr), and enforced, to the extent to which they are enforced at all, by international institutions, such as the u n Human Rights Council. Conservatives tend to resist subsuming American sovereignty to international regimens and to be suspicious of international institutions, in part because they include some member states lacking consent of the governed and basic liberties.1 As a consequence, the United States has ratified fewer key human rights treaties than the other g20 nations and, when it has ratified them, has tended Human rights to attach reservations asserting the preeminent authority of the U.S. Constitution.2 are generally Moreover, human rights have come to be associidentified as a ated with a number of causes notably opposition left-wing cause, to the death penalty; the closure of the prison camp largely because at Guantnamo Bay; and the assertion of a right to health care that, justifiably or not, are considered human rights liberal causes in American political terms. The fact that conservatives have played a prominent role in standards are other landmark human rights struggles such as established the promotion of religious freedom; an end to the second Sudanese Civil War in 2005; and the camglobally. paign to end human trafficking has failed to redress the perception that human rights advocates, with the exception perhaps of a handful of neoconservatives, are ineluctably drawn from the left. As human rights figures identified with different parts of the political arc, we regret this bias because it does damage to the human rights cause. Michael Ignatieff has called human rights the lingua franca of global moral thought, but moral thought is not the exclusive province of any one political position. Just as the standing of human rights claims declines if those claims are thought to be no more than the product of Western ideology or a so-called imperialist agenda, so too the power of human rights to influence U.S. foreign and domestic policies is diminished if human rights are perceived to be the concern of only one segment of the political community. When, on the contrary, a group of respected military leaders speak out against torture or former Bush Solicitor General Ted Olson pleads the case for marriage equality, stereotypes of what human rights advocates look like are constructively confounded. When conservative Republican Alberto
1. See, e.g., the address by Senator Jesse Helms before the United Nations Security Council on January 20, 2000. 2. William F. Schulz The Power of Justice: Applying International Human Rights Standards to American Domestic Practices, (Center for American Progress, June 2009).


Policy Review

Conservatives, Liberals, and Human Rights

Mora resigned as counsel general of the Department of the Navy over detainee policy, he did not suddenly become a liberal. The truth is that human rights champions do not come in one size that fits all, nor do they agree with one another on all issues. The late Democratic Congressman Tom Lantos, whose support for human rights was so widely recognized that the Human Rights Commission of the U.S. House of Representatives is named for him, could become irate at criticism of the United States by human rights organizations for its use of the death penalty.3 Clearly, there are many permutations to the positions broadly characterized here as liberal and conservative, and we are under no illusions that the fundamental tension between the claims and norms of international institutions and those of a powerful sovereign state like the United States can be easily resolved. To the extent that international human rights standards are at odds with current American jurisprudence or practice, as with the death penalty, or that participation in international institutions requires some compromise of American singularity, as it would with the International Criminal Court, there may long be conflict. Given that human rights are premised upon universality, which many on both left and right believe to be grounded in natural law, it hardly seems too much to hope that advancement of something as fundamental to our humanity might transcend political boundaries. And given that civil and political rights, long defended by the left, are predicated in large measure upon protecting liberty that is, protecting the individual against an overbearing state, which is a bedrock principle of conservative political thought human rights are hardly alien to the sensibilities found on the right. Where the two political perspectives come into conflict, then, is often less over philosophical first principles than it is around the practical application of those principles to tough real-life conundrums. We turn to five key conundrums of this sort and corresponding suggestions for resolving them in ways that at least some who identify as liberal or conservative may consider common ground.

Security and liberty

erhaps no issue has more robustly divided left and right, at least since 9/11, than the challenge of finding the right balance between security and liberty. Without re-litigating, so to speak, highly contentious decisions of the Bush administration, it is fair to say that it erred on the side of security to an extent that the Supreme Court in its historic 2004 decisions in Rasul v. Bush and Hamdi v. Rumsfeld, for example, ultimately regarded as too great. Vice President Cheneys impassioned defense of waterboarding continues to draw rebuke from notable
3. An observation based upon several conversations between Lantos and William F. Schulz.

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Republicans such as the partys 2008 presidential nominee, John McCain, who as recently as May 2011 condemned such enhanced interrogation techniques as indisputably torture and disavowed the notion that their use had led to the discovery of Osama Bin Laden. At the same time, critics of the Bush counterterrorism policies have sometimes acted as if the solution to dealing with terrorism suspects was easy and self-evident. But the Obama administration has found it far harder to close gitmo than it had originally imagined and has reaffirmed indefinite detention for some prisoners and the use of military tribunals rather than civilian courts for others. The dilemma derives in part from a contradiction inherent in the Universal Declaration of Human Rights itself and There is no the pliability of certain human rights concepts. Article 3 of the udhr guarantees the right to life, international liberty and security of person. This means that terdefinition of rorist attacks are themselves profound violations of terrorism, and human rights and governments have every obligation to prevent them. But enforcement of the right the Geneva to security of person can easily come into conflict Conventions with other rights articulated in the udhr, such as those to a public trial (Article 11), depending were not upon the definition of public. designed for The International Covenant on Civil and Political Rights (iccpr), to which the United States is a nonstate actors. state-party, provides that some rights, including the right not to be tortured or subjected to cruel, inhuman, or degrading treatment, are nonderogable. It allows for others, however, including rights surrounding criminal prosecution, to be temporarily revoked or suspended in time of public emergency which threatens the life of the nation but only to the extent strictly required by the exigencies of the situation hardly concepts that lend themselves to strict precision and, indeed, ones that provide governments potential carte blanche to do as they please. On top of all of which there is still no internationally accepted definition of terrorism, and the Geneva Conventions, which control for the treatment of prisoners in time of war, were designed primarily to address the behavior of states rather than nonstate actors. What left and right ought readily to agree upon, therefore, is that, while there is no place for torture or cruel, inhuman, or degrading treatment of prisoners under any circumstances, other elements of international law designed to control state actions in response to the targeting of civilians for political or religious purposes are far more ambiguous. Was the U.S.s killing of Anwar al-Awlaki, a U.S. citizen in Yemen regarded as a terrorist leader, for instance, an example of an extrajudicial execution, as some civil libertarians claim, or was it a legitimate battlefield kill? The answer turns on interpretations of the laws of war laws that are ill-equipped in some measure
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to address a world in which the very definition of war itself is subject to debate. With the secretary of defense calling the defeat of al-Qaeda within reach, now may be the most opportune time to consider international review of those laws. Since it is not acceptable to hold a terrorism suspect indefinitely without trial or to release an avowed terrorist into the general population without restraints, we require a third alternative. It is in the interests of both liberals and conservatives to work together to find one.

Accountable autocracies
ver since jeane Kirkpatrick tried to distinguish between authoritarian and totalitarian governments in her 1979 Commentary essay Dictatorships and Double Standards, left and right have been arguing about when national interests trump accountability for human rights abuses. Kirkpatricks contention was that authoritarian regimes are more susceptible to gradual reform, and that tenet provided the rationale for the Reagan administrations alliances with dictatorships in Guatemala, the Philippines, and Argentina. Liberals criticized those alliances and berated the notion that they were in our national interest, and in fact the Reagan administration ultimately shifted from praising Marcos in the Philippines to urging him to leave power, as it also urged South Korea, Taiwan, and Chile to democratize. But Reagan was neither the first nor last president to align the U.S. with countries whose values hardly reflect those embodied in the U.S. Constitution. All presidents have benignly toasted their Chinese counterparts, despite Chinas unrelenting record of human rights violations, and the U.S.s cooperation with Middle Eastern despots, including at one time both Saddam Hussein and Muammar el-Qaddafi, has often proven embarrassing. Two realities vie for preeminence. On the one hand, human rights are but one of many factors that any president must take into consideration in foreign relations. Military security and economic interests, to take the most obvious, may sometimes trump them. But it is also the case that suborning dictators has almost always proven self-defeating in the long run, and support for human rights has proven far more congruent with the national interest than realpolitikers have thought. As such, it can be far wiser for the U.S., if it is to make ad hoc alliances with repressive regimes, to do so honestly, citing interest-based justifications and voicing support for liberalization, rather than the current practice of calculating military and economic interests with little regard to human rights practices and only later tacking on an expression of concern about an allys human rights record. How different would the U.S.s reputation on the street in the Middle East be today had the Obama administration not waffled so dramatically in the early stages of the revolutions in Tunisia and Egypt and, even better, had the United States made clear years ago that our support for the Mubarak regime, for example, was a marriage of convenience? In other words, that
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we were prepared to advance that alliance for strategic reasons, as we do still with Saudi Arabia, but that the regimes values were radically at odds with ours; that there were certain red lines beyond which the regime could not go in its treatment of its citizens if it wished to retain our friendship; that we were supportive of those indigenous leaders who sought nonviolent, democratic change; and that we would help advance that change in every peaceful way we could. No doubt many Egyptian activists would still be mistrustful of the U.S., but perhaps less so, and in any case we would be in a far stronger position to argue our human rights bona fides than we are today. And what would that mean about accountability for crimes when the regime fell, or in the far more tricky context in which a despot seeks assurances of safe passage in return for his departure? The notion that human rights offenders ought always to be held accountable for their crimes is obviously an appealing one and one that human rights organizations generally insist upon as a matter of course. (Kathryn Sikkink marshals the best evidence for the notion offered to date in her book The Justice Cascade.) But just as domestic prosecutors often plea bargain a defendant out of a maximum sentence in the interests of some greater community good, so autocratic rulers may sometimes justifiably be offered retirement as an incentive to their leaving power. This should never be the case, however, with those accused of genocide, war crimes, or crimes against humanity, such as President al-Bashir of Sudan, and, as international justice mechanisms like the International Criminal Court are more legitimized (both in the U.S. and around the world), the last word about such high-order affronts to all humankind will increasingly fall to multilateral courts. Until that happens, we will need to rely on a bias in favor of accountability tempered by the recognition that those most directly affected by events on the ground, including victims and their advocates, will need to be the ones to decide the right balance between reconciliation and justice. In the meantime perhaps both left and right can agree that crawling into bed with human rights violators is always a nasty proposition, one that ought to be resisted as fervently as possible, and that if in exceptional circumstances we do it, we do it with our eyes wide open, owning up to our decision, and looking for every opportunity to crawl out as soon as possible.

Democracy and human rights

nherent in the previous discussion of how the U.S. should relate to repressive regimes is the assumption that we ought to support the advancement of democracy around the world. But because the Freedom Agenda is closely identified with George W. Bush and because it appears to have been one rationale for the use of force in Iraq, the human
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Conservatives, Liberals, and Human Rights

rights left has been reluctant in recent years to embrace democracy promotion as a legitimate sibling cause. In fact, this reticence long predates the George W. Bush administration. For many years Amnesty International claimed that it favored no particular form of government only governments of whatever stripe that support human rights. And human rights leaders have repeatedly and correctly pointed out that democracy was no guarantee of respect for human rights, as witness the U.S.s own failings over the years, notably regarding equal access to justice for African Americans. The truth is, however, that democracy is almost inevitably a necessary, if not sufficient, requirement for the protection of human rights and, though it can certainly not be imposed on a people who are not inclined to embrace it, the world is a far better place and human rights far more healthy for its spread. Human rights cannot be enforced without accountability, and accountability is impossible without such fixtures of democracy as free elections, a free press, an independent judiciary, and fidelity to the rule of law. If the upheavals in the Middle East have proven anything, they have proven that democracy is a more appealing vision than either terrorism or the most economically prosperous state-controlled system. It has been noted that the protestors in Tunisia and Egypt have dealt enormous blows to both al-Qaeda and China, the first by demonstrating that sclerotic governments can be overthrown without violence and the second by demanding the very thing that is most conspicuously missing from the Chinese political system: freedom. And even if what follows is at first a less far-reaching democracy with less respect for women or religious minorities than many of us would wish, the vision of that democratic, human-rights-respecting genie will never be forced back into the bottle; it will fester until it finally thrives fully. Left and right ought to be able to agree: Democracy promotion is important to the struggle for human rights and the two ought to be proudly pursued together.

Religious freedom and religious conflict

rlando figes, the most recent chronicler of the Crimean War, says that that war opened up the Muslim world of the Ottoman Empire to Western armies and sparked an Islamic reaction against the West which continues to this day. He goes on to observe that If the Balkan wars of the 1990s and the rise of militant Islam have taught us anything, it is surely that religion plays a vital role in fueling wars.4 And it has done that since long before the Crusades. But if former Secretary of State Madeleine Albright is to be believed, American diplomats have long been nave about the role of religion in for4. Quoted in Gary J. Bass, For God and Nation, New York Times Book Review (July 10, 2011). .

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Mark P. Lagon & William F. Schulz

eign affairs or even downright hostile to its consideration. As Albright told the NewsHours Ray Suarez, When there was a serious [international] issue to either be studied or make some decisions about, people would say, Well, this is complicated enough. Lets not bring God and religion into it.5 In a little noticed internal debate in 2004, Secretary of State Condoleezza Rice restrained U.S. Ambassador to the un John Danforth (a former senator and Episcopal priest) from placing a major focus on religious understanding at the un Security Council, probably making his tenure in that job all the more brief.6 Perhaps all this is one reason that the human rights left initially reacted with considerable skepticism when in 1997 the Christian evangelical community began organizing around legislation to create a special office in the State Department to monitor religious persecution. Would such an office be privileging one human rights violation or, even worse, one religion (Christianity) over others?7 Eventually the position of U.S. ambassador for international religious freedom, along with a bipartisan commission, was established with the understanding that it would make recommendations regarding all instances of persecution. But even at that, the Obama administration took more than two years just to nominate a candidate for the ambassadorship, Susan Johnson Cook, who was finally confirmed in April 2011 hardly an indication that religious freedom is a top priority. One does not need to believe that religious freedom is the first freedom, in the sense of the most important, as its ardent supporters frequently claim, to agree that it holds a respected place in the panoply of recognized rights.8 It is intertwined with other fundamental freedoms, as aptly captured by the broad label freedom of conscience. Article 18 of the udhr asserts that Everyone has the right to freedom of . . . religion, including freedom to change his religion . . . and . . . to manifest his religion . . . in teaching, practice, worship and observance. The frequent violation of the rights of religious minorities, be they Jehovahs Witnesses in Eritrea, Bahai in Iran, Jews in Venezuela, the Muslim Masalit in Sudan, Ahmadi Muslims in Pakistan, or others anywhere else, ought to be a cause that claims the support of both left and right. Similarly, the actions of the un Human Rights Council to curb free speech under the guise of combatting defamation of religion from 2007 to 2010 are ones that both liberals and conservatives can abhor.
5. Available at (accessed January 4, 2012). 6. Observed by Mark P. Lagon during his work as deputy assistant secretary of state for international organization affairs. 7. For a description of these conflicts, see T. Jeremy Gunn, A Preliminary Response to Criticisms of the International Religious Freedom Act of 1998, Brigham Young University Law Review (2000). 8. Religious freedom is referred to as the first freedom because it is the first right enumerated in the American Bill of Rights. But, inasmuch as human rights are established by action of the international community, that placement carries no implication of primacy.


Policy Review

Conservatives, Liberals, and Human Rights

Is Islam compatible with democracy? The case of Indonesia, the country with the largest population of Muslims and a demonstrable, if sometimes messy, adherence to democracy, proves that it is, and the recent elections in Tunisia appear to confirm that conviction. But there is no question that some forms of Islam are antagonistic to religious freedom and other human rights strictures as well. It is too early to know whether the enthusiasm for democracy and human rights manifest in the recent Middle East revolutions will survive into maturity, though it is a pretty safe bet that whatever follows will not mimic the American model of strict separation between church (mosque) and state. But such a rigid separation is not necessarily indispensable for respect for human rights to occur. It is probably too much to expect young democracies steeped in religious traditions to check those traditions at the governance door, any more than the United States did in its early days an issue that is still alive for some, as evidenced by the continuing debate about whether ours is a Christian nation. What is important is that, whatever form those new governments take, even if their laws are based upon traditional religious norms, they provide checks and balances that offer a meaningful measure of protection for religious minorities or minority points of view. Anything less will not only lead to human rights violations but social instability and conflict as well. Upon that surely both liberals and conservatives can agree.

Civil and political vs. social and economic rights

onservatives have traditionally blanched at social and economic rights. Part of their distaste has been prompted by the invocation of those rights as a pretext for repression on the part of regimes hostile to civil and political rights. At the same time, the conflation of social and economic rights with socialism or government control is a misnomer. The recognition of social and economic rights does not require a particular type of government or economic system, nor are those rights incompatible with capitalism. How those rights are realized may take any number of different forms. Liberals in turn have been reluctant to tie fulfillment of social and economic rights to improvements in civil and political ones, such as through the Millennium Challenge Corporation this despite the mantra to which the human rights left subscribes that both sets of rights are indivisible and the evidence, China notwithstanding, that in the long run, failure to protect civil and political rights can easily undermine progress toward the realization of social and economic ones. Liberals have also failed to acknowledge sufficiently the extent to which a program such as pepfar, initiated by George
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Mark P. Lagon & William F. Schulz

W. Bush, represented a significant advance not just in the fight against aids but for social and economic rights as well. Both sides need to rethink their posture toward such rights. Conservatives need to recognize that not only is their pursuit fully consistent with U.S. national interests (since when, after all, have widespread penury and disease ever advanced American interests?) but that many of the goals the right champions require protection of both sets of rights. Human trafficking, for example, is the child of both poverty and the absence of legal protections for marginalized groups like women, minorities, and migrants.9 At the same time, liberals need to acknowledge the demonstrable connection between good governance, an independent judiciary, a free press and other markers of civil and political rights, on the one hand, and the successful realization of social and economic rights on the other. undps Arab Development Reports, for example, have conclusively demonstrated the connection between respect for the rights of women and improvements in education, health care, and economic development. It is not just that democracy and respect for human rights prevent such violations of social and economic rights as human-induced famines, as Amartya Sen has so famously demonstrated; it is that they are a key factor in the reduction of poverty, illiteracy, homelessness and disease themselves. The stakes in the struggle to meet basic social and economic needs sufficient to realize full human dignity are too great to allow them to be undermined by ideological rigidities from any quarter.

Common ground
o doubt there are numerous other areas where common ground can be found on human rights between at least some on both the left and right. Damaging as they can be to rights at times, for example, militaries can play a critical role in their protection. As the recent intervention in Libya has demonstrated, support of such military action crosses political lines (as does opposition). The suggestions offered here are likely to evoke dissent on both sides of the political equation. But a more unified human rights movement, even if only imperfectly sewn together, will be a far stronger force than we have today. What we need in the struggle for human rights is not dogmatism but policies that are as resilient and creative as the principles they seek to advance.

9. See Mark P. Lagon, Trafficking and Human Dignity, Policy Review152 (December 2008 & January 2009); and Gary Haugen and Victor Boutros, And Justice for All, Foreign Affairs 89:3 (MayJune 2010).


Policy Review

Retirement and the Social Contract

By Ronald W. Dworkin

wenty years ago, I asked a friends father why he never bought any new clothes. The man replied, If I did that, Id have to work that much longer at a job I hate. True to form, my friends father scrimped and saved on a workingclass salary, and retired in his fifties. Once unheard of, the goal of early retirement is now ubiquitous across the income range. Indeed, the public employees pension system makes news not just because it risks insolvency, but because people working in the private sector are shocked to discover that public employees have a better chance at early retirement than they do. The numbers confirm the trend. From 1960 to 1990, the percentage of 62-year-old men in the U.S. labor force dropped from 75 to 55; among 58year-old men from 83 to 72; and among 55-year-old men from 86 to 80. A similar trend has occurred among women. More telling is the change in peoples goals. In 1941, three percent of American men preferred leisure to work; by 1982, that number had shot up to 48 percent.1

Ronald W. Dworkin, M.D., Ph.D., teaches political philosophy in the George Washington University Honors Program.
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Europeans show a similar trend. True, the American experience may be reversing now because of the economic downturn. People will have to work longer. But this fact makes news precisely because it goes against peoples expectations. Indeed, a story is unfolding in the West about the future of capitalism, one with two main characters, Karl Marx and medical science. Marx believed capitalisms days were numbered. He might have been right, had medical science not been there to rescue it.

Income inequality is not the issue

o understand how medicine solved the crisis of capitalism, one must first understand the nature of that crisis, which means understanding Marx. Economic conservatives oppose Marx because they believe he preached income equality. Economic liberals believe the same thing about Marx, which makes them more sympathetic to him. Indeed, many self-described Marxists justify their monikers by supporting total wealth redistribution, thinking they follow in the prophets footsteps by doing so. Both parties are wrong. Marxs primary goal was not income redistribution but an end to alienation and the division of labor. According to Marx, man is a producer. He wants to produce. In the process he wants to complete himself as a human being. Capitalism, according to Marx, frustrates this longing. Occupational specialization (or the division of labor) condemns a worker to slogging away at one task while ignoring the other facets of his or her being. For over a century liberals and socialists have condemned the income inequality arising from capitalism while pushing wealth redistribution as the corrective. Yet simply changing the capitalist mode of distribution while preserving the capitalist mode of production would have been unacceptable to Marx. Indeed, Marx scoffed at such efforts, since, despite having a little extra spending money, the poor person would remain stifled, or estranged from himself. Capitalism has built enormous wealth over the past two centuries. It continues to do so. The weakness of liberal political parties, including todays Democratic Party, remains their inability to generate economic growth. Because conservatives assume Marx is all about income inequality, and because liberals put their stamp of approval on this assumption, conservatives think they can ignore both Marx and the liberals, since economic growth trumps income inequality. To some degree this is true. But to keep capitalism viable, conservatives must also consider the alienation problem that Marx raised, which people across the ideological spectrum have forgotten.
1. Dora Costa, The Evolution of Retirement, American Economic Review 88:2 (1998). .


Policy Review

Retirement and the Social Contract

Marx once said: The worker is at home when hes not working. Only at home can a worker be a complete person and explore the different facets of his or her being, he argued. The West exploited the loophole Marx gave it, avoiding social unrest by creating the welfare state and giving workers more time at home. The trend began in the 19th century with eight-hour workdays and weekends off; it continues to this day with family leave for child rearing. But it was medical science that sealed Marxisms fate. In 1900, average life expectancy in the U.S. was 47. Today, it is 79. Thanks to better medicine, people retiring in their late fifties and early sixties can hope to live another twenty years, at home, escaping the division of labor. No leftist politician has come close to medicines record in rescuing humanity. The West This outcome was not the result of any concerted plan. When Social Security was passed in 1935, life exploited the expectancy was only 62 three years less than loophole Marx when the benefit kicked in. In addition, the benefit was too small for most people to live on. When gave it, avoiding Medicare was passed in 1965, life expectancy was social unrest by 70; thus, recipients were expected, on average, to creating the receive benefits for only five years. The original intention behind these two pieces of legislation was welfare state. not to help people escape the division of labor for twenty years, but to make life just a little less hard. However, as medical science pushed life expectancy higher, not by curing people so much as by making it possible for people to live longer with chronic disease, a tidal change occurred. I say a tidal change as opposed to any crashing wave. Waves are obvious and everyone notices them. Debates over tax rates are crashing waves. So are debates over free trade. But the mass breakout from the division of labor went almost unnoticed. Medicine gradually lengthened life; the eligible age for receiving Social Security and Medicare barely changed; Social Security and Medicare benefits gradually increased; and the problem of alienation and the division of labor faded. Average citizens and even a few policy makers missed the event. Increases in pension and health benefits for government employees also went unnoticed. In the past, average citizens fixated on government employee salaries, with those in the private sector comparing their annual earnings with those in the public sector. The unions understood this, which is one reason they focused more on increasing retirement benefits rather than wages to fly under radar. As a physician in training during the 1980s, for example, I and other residents compared doctors pay in the public and private sectors; we didnt even thinking of factoring in pension and health benefits. The private sector won hands down, making going into private practice a no-brainer. I observed similar behavior among prospective teachers. Public schools were often more attractive, but largely because
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they paid more in salary. The pension issue rarely came up. Indeed, at the time, it seemed almost unmanly for a 22-year-old to fuss over pension benefits. Increasingly, people have a new outlook. They pin their hopes on the last twenty to 30 years of life after retiring. Todays 22-year-olds are acutely conscious of pension benefits. Middle-aged people obsess about the issue. Across the different job categories I often hear people whisper: Whats your number? meaning, how much money do you think you need to save in order to quit. Such money is sometimes called Fk you money, which is layman-speak for escaping the division of labor. These middle-aged people also obsess about their health benefits, for if life is geared towards its last 30 years, then people have to stay healthy to enjoy them. Retirees in the U.S. often get what theyve been promised. An enormous travel industry exists to take them places. Stifled artists, musicians, writers, and philosophers people who lacked the chance to express the creative facets of their personalities during their working lives can pursue higher education. Curiously, some parents can even enjoy parenting for the first time. As one formerly harried, now retired, professional explained to me, he missed watching his children grow up because he was always working; now that hes retired he can watch his grandchildren grow up.

A new social contract

was already a practicing physician when I began graduate school in political science. One day, a professor of mine yelled at me: Why should doctors make so much money?! It seemed unfair to him. Apparently, a Ph.D. is not an antidote to envy. Since the age of Aristotle, philosophers have tried to devise a social contract that would contain the problem of envy. Democratic capitalism has based its contract on the doctrine of formal equality. In the economic sphere some people will be richer than others, which necessarily leads to an unequal distribution of goods, but everyone has the same right to vote, to run for office, and to express his or her point of view. Still, economic inequality excites envy, as distributing goods on the basis of class seems unfair. A revision of the social contract took place during the middle of the 20th century, with liberal reformers speaking of equality of opportunity. Government leveled the playing field with subsidies, meanstested benefit programs, and new regulations, to neutralize the advantages of class. What arose was a system that distributed goods a bit more on the basis of merit. Yet this scheme also seemed unfair, since nature endows some people with more merit than others. Some people are born with more intelligence or athletic ability; these are random blessings. With neither money nor merit, some people have less chance at the good life, arousing considerable resentment.
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Retirement and the Social Contract

Medical progress solved this problem, just as it solved the problem of the division of labor. Indeed, the two solutions are related. With increased longevity, enjoying the good life need no longer turn on money or merit; instead, it turns on staying healthy, which most people have a shot at doing. If retirement comes early enough, a person can escape the division of labor; along with modest pension and health benefits, and time left to live (another vital commodity provided for by medicine), the person can also enjoy the good life. Although not a guarantee, this is medicines reasonable hope. By structuring the social contract such that the good life is back-loaded, coming during a persons retirement years, the problem posed by class and merit fades. Much of longevity turns on genes and chance. Rich people can die young. Even smart Since the age and athletic people can die young. Poor, dumb, and of Aristotle, untalented people have the same shot at longevity as rich and talented people, especially with medicine to philosophers have help. If the good life turns on escaping the division tried to devise a of labor at age 55 and living another 30 years, as social contract opposed to having the wealth and talent to get those goods early in life, then poor and untalented people that would have a chance at the good life. No reason to be envicontain the ous. All one has to do is survive. The new social contract has an inherent stability problem of envy. that the other contracts lacked. Under the old contracts, many have-nots knew they were destined to remain have-nots while still in their twenties. Filled with resentment, these people caused trouble, in some cases revolution. Under the new system, young have-nots have a reasonable chance of becoming haves; all they have to do is make it to age 55, when the benefits kick in. The new social contract tracks medicines other influences on how we view life. Sociology looks at the life of an individual person as a series of social and emotional phases. For example, adulthood is broken down into several phases, including romance and building a career. Medicine, on the other hand, views the lifes arc of an individual as one long process called aging. People lose one percent of their brain function every year after age 30. Other organ systems exhibit similar decline. In medicine, adulthood is interpreted biologically rather than sociologically or psychologically. The social sciences have increasingly assimilated medicines approach to the lifecycle, as books on aging sit next to books on adulthood in college libraries. A relevant application of the new thinking can be found in a recent and controversial Lancet article.2 Determining who under a system of medical rationing should get priority, the authors conclude that those with the most
2. Govind Persad, Alan Wertheimer, and Ezekiel Emanuel, Principles for allocation of scarce medical interventions, Lancet 373 (Jan 31, 2009).

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potential for quality of life should take precedence, with quality of life turning on three simple variables: age, life expectancy, and level of infirmity. The more subtle elements are removed from consideration. Quality of life turns on biology. As with the new social contract, class and merit are eliminated from the equation. Indeed, Ezekiel Emanuel, one of the articles authors, emphasizes this as a major advantage of the rationing plan. The old variables that went into determining the distribution of goods, and that aroused resentment class, merit, race, and gender are replaced with biological variables that even a poor, dumb, and untalented person can excel at. When a human beings life quality is judged solely according to scientific markers, such as age, weight, and the ability to ambulate, the result is a lottery system of justice that traditional have-nots can live with, for now they have a lottery ticket. The terms of the new social contract are simple: The longer one lives, the more happiness one gets, because the goods in life are back-loaded. Yet wont people resent it if they find themselves too sick to enjoy retirement? What if they lose out under the new rationing plan because they have a chronic disease? Medicine has a solution to this problem. It has contributed to the rise of a healthy lifestyle ideology that justifies and explains disease, thereby deflecting peoples anger. Popular medicine tells people that they have only themselves to blame if they fall ill and miss out during old age, because of their bad lifestyle habits. Do you drink alcohol, overeat, or under-exercise? If so, you only have yourself to blame for losing out; you didnt play by the rules; its your fault that you didnt live long enough to reap the benefits of the social contract. Although the link between bad lifestyle habits and disease is often more association rather than direct causation, and therefore not scientifically justified, laypeople make the leap in their minds nonetheless, and doctors rarely disabuse them of their prejudices. Thus, in one fell swoop, medical science not only neutralizes the resentment of the have-nots, by making them feel responsible for their plight, but also helps to circumvent social unrest, since, by the time the have-nots realize they are have-nots, theyre too sick to revolt or just plain dead.

Deforming consciousness
f, as marx wrote, revolutions happen because man is a frustrated producer, then how has the capitalist West forestalled a revolt? Some Marxists argue that the West purposely changed man from a producer into a consumer, thereby deforming class consciousness. People will tolerate living stifled lives, the Marxists argue, if they can buy baubles to entertain themselves with. Indeed, the more people fuss over the differences
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Retirement and the Social Contract

between product labels, the better it is for capitalism, bemoan some Marxists. Even if this were true, the era of obsessive consumption may be coming to an end. Many Americans are in debt. With persistent inflation, chronic high unemployment, and stagnant wages, consumption may not return to its earlier levels. Indeed, economists recognize consumption as having been one of the four major drivers of American economic growth over the last 50 years, along with investment, exports, and government intervention. Their plans for Americas economic future typically factor in consumptions decline. Without a culture of consumption to deform class consciousness, how will the capitalist West forestall a revolt among people still mired in the division of labor, years away from retirement? After all, as Marx predicted, the division of labor has grown The era of more intense in the U.S. as capitalism has advanced. Americans work longer hours than ever before. At obsessive the same time, they want to be complete human consumption beings. A classic example is the single mother who works ten hours a day, but who also desires to be a may be coming good parent, and perhaps have a romantic life too. to an end. Many Working and having no life is stressful, yet so also Americans are is working and trying to have a life. Medicine has a solution to this problem, and it is in debt. a solution that both Marxists and conservatives detest, albeit for different reasons: psychoactive medication. Stress, the juggling of too many balls at once, the job worries, and the I cant sleep; Ive got too many things on my mind all popular code phrases that capture everyday American life before retirement are increasingly managed with psychoactive medication. Prescription trends dont lie. In the U.S., the rate of antidepressant treatment has increased from roughly six percent in 1996 to over ten percent in 2005, or from thirteen million to 27 million people.3 An additional five percent of Americans are on anti-anxiety drugs, such as Valium and Librium. At least fifteen percent of Americans are on mood-modifying drugs; some studies put it closer to twenty percent. In addition, 60 million Americans suffer from insomnia. A quarter of all Americans use a sleeping pill or sleep aid at night.4 Finally, 90 million Americans reportedly suffer from chronic pain, with eight million of these people under treatment, often with psychoactive drugs such as narcotics and antidepressants, in part to manage the chronic pain, but also to manage the stress and unhappiness in life that exacerbate that pain. Many Americans on psychoactive medication fit the official criteria for
3. Mark Olfson and Steven C. Marcus, National patterns in antidepressant medical treatment, Archives of General Psychiatry 66:8 (2009). 4. Robin Lloyd, Sleep Deprivation: The Great American Myth, Live Science (March 23, 2006).

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clinical depression, anxiety, or some other psychiatric disorder, but many Americans also do not. A broad continuum in American medicine stretches from true mental illness to everyday life trouble the kind of trouble that a stressed out person might suffer, working ten hours a day, worrying about job security while also unhappy with work, and trying to find time for oneself. That the majority of people on antidepressants do not suffer from true clinical depression has been well documented.5 In addition to psychoactive medication, there is the parallel world of psychotherapy to help ease peoples stress and unhappiness, in which 30 percent of Americans now participate. The distribution patterns of psychoactive drug use support my picture of an overworked and alienated population dreaming of retirement and their escape from the division of labor. In the U.S., the The patterns of most commonly prescribed drugs in the age 20 to 59 category are antidepressants, with analgesics psychoactive running a close second. In some studies, antidepresdrug use support sant use peaks in the fifties. These people are working. In the age 60 and over category, however, the a picture of an overworked and most commonly prescribed drugs are cholesterollowering medications.6 Retirement, it seems, is good alienated for ones mental health. Its not just that seniors are taking plenty of antipopulation depressants, but taking even more cholesterol-lowerdreaming of ing drugs. The rate of antidepressant use in depressed seniors is similar to that in depressed midretirement. dle-aged Americans, but the prevalence of depression among middle-aged Americans is much greater. For example, the rate of dysthymia, or chronic low-level depression, increases dramatically among adult Americans starting in the early thirties, peaking in the age 45 to 59 age group, only to fall precipitously after age 60.7 Indeed, seniors have the lowest incidence of dysthymia among all age groups. Major depression exhibits a similar trend, with the incidence greatest among women age 18 to 45. Similar trends exist for anxiety disorders, with a peak incidence somewhere between early adulthood and middle age.8 Especially telling is the increased rate of prescription therapy for young adults with depression. Despite the fact that most American seniors have health insurance in the form of Medicare, and therefore access to doctors and prescription drugs, their rate of antidepressant prescription in cases of self-reported depression has decreased over the last decade, while young adults, who make up a large portion of the uninsured, and for whom getting
5. See Ronald W. Dworkin, Artificial Happiness (Basic Books, 2006). .

6. gu Qiuping, et al., Prescription Drug Use Continues to Increase, nchs Data Brief 42 (September 2010). 7. Dysthymic Disorder Among Adults, available at (accessed January 5, 2012). 8. Lee N. Robins and Darrel A. Regier, eds., Psychiatric Disorders in America (Free Press, 1991).


Policy Review

Retirement and the Social Contract

care is often no easy thing, are the only age group to show an increasing rate of antidepressant prescriptions for self-reported depression.9 That young adults exhibit this trend despite the hurdles put before them suggests a serious mental health issue. Insomnia reveals a similar trend. One study has shown the younger the population, the greater the relative increase in the use of sleep aids over the last decade. From 1998 to 2006, the use of sleep aids in the U.S. increased 50 percent in the general population; among 25- to 34-year-olds it doubled; among 18- to 23-year-olds it tripled.10 These statistics mirror observations of everyday life in America. Many young and middle-aged adults drag themselves to work, follow rules and regulations, worry much of the day, and then go home, where they have just enough energy to drink a beer and watch television, or search on the web under retirement planning to partake of a little dreaming. Young and middle-aged women, in particular, feel the division of labor, torn as they are between their need to work and their desire to be with their families. Many conservatives dislike the trend toward an increased reliance on psychoactive drugs. They believe these drugs are a substitute for character, and prevent the building of character. Marxists distrust psychoactive drugs for the same reason they distrust religion; they see them as an opiate for the masses. Strange bedfellows. The former support capitalism; the latter hate it; and yet both distrust a major means by which capitalism today sustains itself.

The future of capitalism

believe in capitalism. Many of this journals readers do, too. Then why am I writing as if we can learn something from Marx? The fact that such a question is certain to be asked is in itself indicative of weakness typically more rooted in left-wing thinking. The intelligent conservative does not ask to be given reasons why he should read Marx and the Marxists. He reads them because they are important, and because they are on the other side. He learns from them and is sometime warned by them. The intelligent conservative makes use of Marxist insights, but for his own purposes. He learns from his adversaries about the strengths and weakness of his own position and of theirs. The leftist, on the other hand though with some notable exceptions has a strong tendency to neglect his adversaries and to dismiss even their
9. Jeffrey Harman, Mark Edlund, and John Fortney, Trends in Antidepressant Utilization from 2001 to 2004, Psychiatric Services 60:5 (May 2009). 10. Allison Russo, et al., Prescription Sleep Aid Use in Young Adults, report prepared by ThomsonReuters (October 2008).

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most influential writings. Although conservatives should and do read Marx and Foucault, leftists often think they have nothing to learn from Tocqueville and Burke. Indeed, they often greet these writers with a sneer, which is why they consistently misunderstand and underestimate the forces opposed to them. Marx is important to study because the medical solution to the problem of alienation and the division of labor is showing signs of unraveling at the very moment that problem is intensifying. Many Americans today work long hours. The eight-hour workday is rare. Many Americans also work weekends. Spouses typically work. Indeed, people now spend so much time at work that they sometimes have work spouses. The U.S. has Moreover, the division of labor is intensifying, causing work in some fields to become less rewardlargely been ing. The change in the professions is particularly spared labor troubling, as revolutions begin not in the peasant and working classes, but typically in the professional unrest in this quarter, primarily and technical class. The U.S. has largely been spared labor unrest in this quarter, primarily because the because the professions have been walled off from capitalism. professions have For much of the 20th century, the medical, legal, and academic professions, for example, were small been walled off islands of feudalism in a capitalist sea. Doctors, from capitalism lawyers, and professors organized themselves; their pay structure resisted the laws of supply and demand; their work was varied and interesting, and came with a high degree of autonomy and self-supervision; their work gave them an opportunity to be creative and express the different facets of their personalities. This is less the case now. A doctor who once could enjoy talking to patients at length now focuses on performing one procedure well, every day, to make a living. The division of labor in medicine is extreme. In addition, less than one-third of American doctors now go into private practice.11 Most physicians work for a salary in a traditional business structure where they can be hired and fired, as workers in the conventional capitalist economy are. A lawyer who once had the luxury of exploring different projects now may spend an entire career on asbestos litigation, thereby facing the same extreme division of labor as doctors do. The legal profession has created a new and growing proletarian tier, as lawyers unable to find regular jobs increasingly work as coders, where a lawyer stares at a computer screen eight hours a day, checking off on documents that flash by.12 He or she is
11. Physician Employment Trends Will Force Payers, Hospitals and Vendors to Revise Business Strategies, According to Accenture Survey, Accenture press release (June 13, 2011). 12. Vanessa OConnell, The Rise of the Temp Lawyer, Wall Street Journal (June 15, 2011).


Policy Review

Retirement and the Social Contract

not much more than a glorified assembly-line worker although with aspirations and expectations of being much more. The academy has also added a proletarian tier, as the majority of professors in the U.S. are now adjuncts, or teach course per contract. These professors are paid an academic version of minimum wage; their responsibility is to teach, not to act on their creative inclinations in research. They, too, in their own way, are assembly-line workers but again, with aspirations and expectations of being much more. In todays America, there is increasingly only capital and labor. The professions, the government job all the old sinecures that let people avoid capitalism even while praising it are either being eliminated or brought under the umbrella of capitalism. Two centuries ago, in the age of Webers With work Protestant capitalist and Tocquevilles individualist, hours lengthening this might have been less of a concern, since the culand the division ture then emphasized working more than the nature of any particular work. As Tocqueville notes, all jobs of labor growing, were considered equally honorable in 19th-century peoples hope America, so long as the job was legal and the profit was large; few people spoke of career fulfillment for salvation and the need to express ones individuality through lies in early work. This gave all jobs an air of resemblance. Today, Americans have different expectations. They retirement. dont want to just labor. They want to labor in interesting ways. A job that avoids the division of labor is highly prized. With work hours lengthening among the employed, and the division of labor intensifying, peoples great hope for salvation lies in early retirement hence, the drive to retire in ones fifties or early sixties. But the economic downturn makes this harder to do. Almost dialectically, medicine has solved the problem of alienation and the division of labor by increasing longevity, but has also sown the seeds of that solutions demise, for society cannot pay for the very pensions and health benefits that the new longevity demands. Granted that one can learn from Marx, without agreeing with his main argument, what is it that one can learn? It is that people can live with income inequality, and, indeed, many kinds of inequality, but they cant live knowing that their life will forever be drudgery. On the major budget issue of the day how to reform entitlements policy makers face a choice between keeping the age of eligibility the same while means-testing benefits, or raising the age of eligibility while keeping benefits available to all, as they are now. Given the central role of retirement in Western society today as a means to escape the division of labor and to preserve social peace, every effort should be made to keep the age of eligibility the same, even if it requires means-testing benefits. The stimulus of American life has always been money. American technique grew up and developed so that money might be made faster.
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Everything that brings in money develops, and everything that does not bring money degenerates and wilts away. On this principle America has raised itself to a high degree of welfare, leaving most of the world far behind. Yet the country is now facing its own reductio ad absurdum. It has everything needed for material contentment, yet it has come to pass that much of its population lives in a state of unrest. People fear they will have to choose between the basic good things in life work, love, raising children, and self-development in the future. They look to retirement as their one chance in life at having it all. They want those last 30 years. They need those last 30 years. In the future, the stimulus of America will not be money but time.


Policy Review

Our Languishing Public Lands

By Robert H. Nelson

side from the original 13 states on the Eastern seaboard, most of the land in the United States at one time belonged to the federal government a result of the Louisiana Purchase, the MexicanAmerican War, and other important events in American history. Federal policies for these lands such as the Homestead Act, the railroad land grants, and the land allocations to American Indians were among the most significant American government actions of the 19th century. The overriding policy goal was to transfer the lands out of federal ownership to private owners and to the states, both of whom received hundreds of millions of acres in total. Transferring the lands to new ownership was seen as a first step in putting them to productive use as part of the essential task of building a new nation.

Robert H. Nelson is a professor of environmental policy in the School of Public Policy of the University of Maryland and a senior fellow of the Independent Institute. He is the author of A Burning Issue: A Case for Abolishing the U.S. Forest Service and, most recently, The New Holy Wars: Economic Religion versus Environmental Religion in Contemporary America. From 1975 to 1993, he served as a senior economist in the office of the secretary of the Interior, where he worked principally on public land matters.
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After this 19th-century era of disposal, the federal government shifted to a policy of retention of the lands in federal ownership around the beginning of the 20th century. It was a reflection of basic new political and economic ideas emerging in the United States during the progressive era. The progressive gospel of efficiency preached that scientific management could better serve the nations needs than the chaotic, trial-and-error processes of the free market. In much of the American economy, large American business corporations were in fact substituting internal private planning and administration for the old decentralized market processes. The progressives, however, were unwilling to transfer the federal lands to such large and concentrated private ownerships. Instead, they sought the scientific management of the lands through the creation of new public agencies The progressives with their own comprehensive internal planning and administration. The result was the establishment of were unwilling the Bureau of Reclamation in 1902, the first federal wildlife refuge in 1903, the U.S. Forest Service in to transfer the 1905, and the National Park Service in 1916. federal lands Democratic socialists advocated similar policies in Europe at the same time, if with less deference given to large and to the need for ultimate democratic control. concentrated Vast areas of federal lands are still present today in the West as the legacy of these progressive-era private developments (the Bureau of Land Management, ownerships. the other federal agency with major land management responsibilities, was not created until 1946, although still as a deferred application of the same progressive principles). Total federal ownership today covers about 50 percent of the land area of the American West. The state of California, remarkably enough, is 45 percent federal land. The lands managed by the Forest Service and the Bureau of Land Management are commonly known as the public lands. Like a number of other applications of progressive ideas (regulation of interstate commerce, for example, by the Interstate Commerce Commission), the public lands have failed the test of time. Management of the lands has been neither scientific nor efficient. The old progressive mission of scientific management has been strongly challenged and indeed sometimes altogether displaced by new ideas advanced by the environmental movement. Yet, the original progressive institutional forms dating back 100 years remain with us little altered. The result is an antiquated and costly system of public land management that is unsure of either its goals or methods. There is now approaching a consensus among informed observers that public land management wastes large amounts of money while mainly serving the private interests and other narrow groups that benefit from the lands. After an initial century of disposal of the lands, and then a second century of federal land retention and direct management, it is time for a new era that
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will redefine the history of these lands for the 21st century. This will require challenges to longstanding institutions and basic assumptions; such changes are always difficult in government. Long periods may go by in which little of real significance happens. It is difficult if not impossible to predict when the workings of glacial forces may suddenly break loose. It is at least a possibility, however, that the current fiscal crisis will prove to be a precipitating event in finally driving a basic rethinking and reorganization of the public lands in the West. Indeed, the public lands will be a good test case of national fiscal resolve. The public lands offer a leading candidate for government cost cutting.

Public land waste

ust by themselves, the national forests, managed by the U.S. Forest Service in the U.S. Agriculture Department, are 40 percent of the land in Idaho. In Nevada, the federal Bureau of Land Management (blm) in the Interior Department manages an even larger portion of the State: 68 percent of the total land area. Truth be told, most of rural Nevada is still as much a federal territory as an independent unit under state governance. On these public lands, the most important decisions typically concern matters such as the number of cows that will be allowed to graze, building of local roads, levels of timber harvests, leasing of land for oil and gas drilling, building and maintaining hiking trails, prevention and fighting of forest fires, determining areas that will be available to off-road recreational vehicles, and other such routine land management details. Outside the West, such matters are either private or are state and local responsibilities paid for by state and local governments. In the rural West, the federal government often pays and also decides. Although the progressives elevated expert planning and management and the attainment of maximum efficiency to their highest goals, 100 years of public land history have shown that the public lands have seldom been managed either expertly or efficiently. Rather, they have been managed mainly in response to strong political pressures. Under political management and despite the possession of hundreds of millions of acres of land, and large oil and gas, coal, and other valuable mineral assets the lands proved to be a money-loser for the federal government. The environmental results have not been much better. In 2005, for example, the Government Accountability Office (gao) released a detailed study of the 2004 revenues and costs of livestock grazing on public lands, the most common use of these lands. The blm authorizes grazing on 138 million acres of public land allotments to specific ranchers, covering about six percent of the total land area of the United States. It is testimony to the arid character of most public lands in many areas, virFebruary & March 2012 47

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tual desert that such a low-revenue activity as livestock grazing historically has been their most economically valuable use. In 2004, according to the gao, the blm spent $58 million nationwide on the management of livestock grazing, while collecting a mere $12 million in grazing fees from the rancher users. The gao estimate of costs, moreover, probably is grossly understated. In many areas of the rural West managed by the blm, the principal federal concern is to resolve issues generated by conflicts between livestock grazing and other uses. Absent the cattle and sheep on the blm lands, a major part of the total blm budget of $1.1 billion might well be unnecessary. Indeed, if all the complications of the livestock presence did not exist, the states would be well positioned to replace the blm in managing hunting, hiking, fishing and other recreational uses Historically, of the lands. Other than minerals and energy manthe most agement (which are a small part of the total blm budget, and might themselves also be turned over to important use the states), there would be little remaining need for of the national the blm. According to the 2005 gao calculations, the forests has been losses on Forest Service lands were even greater; not grazing but grazing management cost $ 7 4 million on the timber national forests in 2004, overwhelming the minimal fee collections of $5.7 million. Part of the reaharvesting. son for the small revenues on both blm and Forest Service land is the very low fee charged equal in 2004 to $1.43 for each month a cow (often with a calf) spent grazing on the public lands (officially an animal unit month, or aum). By comparison, although it is often alleged that the states are more in the thrall of private interests than the federal government, most western states charged considerably more for grazing on the substantial areas of their own state-owned lands. At the low end, Arizona, for example, charged $2.23 per aum in 2004 while Oregon charged $4.32 and Montana collected a variable market-based fee with a set minimum of $5.48. Even the collection of the full market value of federal grazing admittedly would still fall well short of the high federal costs of grazing management. On the national forests, rather than grazing, the most important use historically has been timber harvesting. But the story there is much the same: government costs much greater than revenues for uses that are privately profitable to others. The Forest Service does not make it easy to compare revenues and costs by program area. In 2001, however, the Forest Service released an unusually detailed and revealing financial analysis of its timber management program for the year 1998, a year fairly typical of the 1990s and 2000s. Overall timber sale revenues in 1998 were $546 million, again well below the Forest Service administrative costs of $671 million for the timber program. From the perspective of the federal government alone, the
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losses were actually much larger because it was required by law to transfer $213 million of timber sale revenues to state and local governments (while still absorbing all the costs). The aggregate figures, moreover, mask large regional differences. Region 3 of the Forest Service, covering New Mexico and Arizona, spent $22 million in 1998 in order to sell 94 million board feet of timber, obtaining a mere $4.9 million in timber sale revenues. In Region 4, which includes Utah, Nevada, and parts of Idaho and Wyoming, selling 170 million board feet of timber cost $37.9 million, significantly greater than the sale revenues of $22.8 million. If to little avail, economists argued for decades that the Forest Service should abandon the many such below-cost sales in its timber program.

From economic to ecological goals

he volume of timber sales on the national forests did in fact fall sharply in the 1990s. From 1960 to 1990, total Forest Service timber sales were routinely in the range of ten billion to twelve billion board feet per year, depending on the state of the economy and other demand factors. At the high point, this was around twenty percent of the total softwood timber harvest (the most desirable lumber) in the United States. By 1995, however, sales had plummeted to less than three billion board feet, a level where they have remained since. But the reasons had little to do with the unfavorable economics of so many timber sales. In the 1990s the Forest Service abandoned its historic goal to maximize the multiple-use value of the national forests as sustainable over the long run. Instead of the historic practice of multiple use and sustained yield management, the new guiding principle of the Forest Service became ecosystem management. As the federal Interagency Ecosystem Management Task Force explained the new thinking in 1995, it meant that as a matter of policy, the federal government should provide leadership in and cooperate with activities that foster the ecosystem approach to natural resources management, regulation and assistance. The new goal of the federal government should be to restore and sustain the health, productivity, and biological diversity of ecosystems, including prominently those found on the public lands. Thus, rather than traditional economic and utilitarian purposes based on advancing a host of specific uses, the national forests should be managed by the Forests Service for wider ecological objectives. The national forests, according to the new official doctrine, should reach a sustainable or healthy natural ecological state. National forest and other ecologies, as environmentalists increasingly argued, had an intrinsic worth that transcended any traditional economic calculations. An ecology was valuable for its own sake, not because it advanced the economic interests of the nation.
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The Forest Service today thus no longer justifies its timber management and other land use decisions by ordinary economic criteria. It is enough that progress is being made towards the desirable natural ecological end state of the forests. It has admittedly proven difficult to say precisely what constitutes a natural forest condition (or even that nature unaltered by human actions actually tends towards any such natural equilibrium at all). In administrative practice, natural has most often meant the historic ecological conditions that existed prior to the impacts of European settlement the ecological state of the second half of the 19th century for most of the rural public land West. In the 1990s Forest Service researchers began poring over old photographs and otherwise seeking to determine the ecological state of that time as precisely as possible, thus hoping to set a benchmark for future national forest management. Not surprisingly, the Forest Services decision to abandon its historic economic objectives under multiple use management has led to corresponding declines in economic benefits achieved, as shown by the Forest Services own calculations. The 2001 Forest Service financial analysis described above also detailed the trends during the 1990s in the economic present net value (pnv) derived from all national forest outputs. As the Forest Service reported, the all resources pnv for the whole national forest system covering all the forms of use fell from more than one billion dollars in total values realized in 1991 to about $300 million in 1998. Most of this sharp economic decline was due to the precipitous drop in timber program pnv, but the abandonment of former timber sale activities did not yield any new gains in the pnv of recreation or other uses to balance things out. Ecosystem goals, however vaguely defined, increasingly were the ends in themselves and the (lesser) economic outcome was a mere byproduct of the more important new ecological objectives.

The northern spotted owl

he defining moment in the transition from an economic to an ecological management purpose for the national forests was 1990. In that year, the northern spotted owl was listed as a threatened species under the Endangered Species Act. Teams of biologists from the Forest Service, blm, Fish and Wildlife Service, and other agencies were assembled to develop a recovery plan for the spotted owl and its federal forest habitat in the Pacific Northwest. Under the provisions of the Endangered Species Act, any losses of revenues from timber harvesting in the Pacific Northwest the one region where the Forest Service had long profitably sold large volumes of timber could not enter into recovery plan calculations. After the owl recovery plan was adopted, federal timber harvests in the Pacific Northwest plummeted to about twenty percent of their former levels.
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On the signature Gifford Pinchot national forest in Washington State, named after the founder of the Forest Service, average timber sales in the 1980s had been more than 300 million board feet per year. By 1991, they had fallen to 110 million board feet, and then to virtually nothing in the next two years twenty million board feet in 1992, and fifteen million board feet in 1993. As a result of the spotted owl episode, total losses in future timber sale revenues to the federal government over the long run were in the range of $20 billion. Few national taxpayers, admittedly, were aware of the size of the financial contributions they were making for spotted owl recovery and Pacific Northwest virgin forest preservation. The message of the spotted owl episode was clear; for large areas of the national forests, sustaining and restoring an ecological system Because of the to protect the owl and other forms of biodiversity would now trump any historic multiple use goals of spotted owl, total the national forests. This message was then soon losses in future heard well beyond the Pacific Northwest, as Forest timber revenues Service timber sales soon fell off a cliff throughout other regions of the national forest system as well over the long (although they did continue at a high level in the run were in the South, the one region that was still making money from its timber sales). range of It was not only the federal government whose rev$20 billion. enues were affected. Traditionally, the federal government has transferred 25 percent of the gross timber sale revenues to the states where the sales occurred. The states then transferred the funds to the specific local counties for support of schools and other purposes. The drastic falloff in timber sales in the 1990s thus threatened the counties with large losses in federal transfers of timber revenues. But this would have violated the historic working relationship in which the federal government either delivers directly or provides much of the funding for many types of government services in the rural West. Finding this unacceptable, Congress therefore provided in 1993 for direct federal payments from the Treasury to make up for the losses in local county timber revenues in Oregon, Washington, and northern California, as attributable to the spotted owl. It extended this program in 2000 to all states and counties that historically had received federal timber payments but were now experiencing sharp reductions. In 2010, federal payments to mostly rural western counties for this purpose totaled $389.7 million, including $108.2 million in Oregon and $30.1 million in Idaho. As an ultimate irony, the spotted owl has fared poorly under its 1990s recovery plan, continuing to decline in population over much of its range. The biologists who developed the owl recovery plan gave little thought to the recent arrival of barred owls in the Pacific Northwest, these owls having migrated from their historic habitats in the East. Barred owls are bigger,
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have more flexible diets, and otherwise tend to prevail in any evolutionary struggle with spotted owls. Ecology no less than economics witness the great recession of 2008 to 2010 is subject to major unexpected and unplanned events, greatly complicating planning for any longer run periods. Since the early 1 9 9 0 s, barred owls have proliferated in the Pacific Northwest, often to the significant detriment of existing spotted owl populations occupying the same areas. Desperate to save the spotted owl, biologists and other forest managers have even been contemplating extermination campaigns against barred owls, however much this might conflict with the wider ecological goal of achieving a natural forest outcome. In the end, the many timber mills that went out of business and the thousands of forestry workers who lost their jobs in the Pacific Northwest in the 1990s might turn out to have made their sacrifice for no spotted owl benefit at all (although admittedly some remaining Pacific Northwest never cut forests were preserved, if perhaps offering little actual benefit to the spotted owl).

Few revenues and high costs

n 2010, reflecting its new ecosystem management orientation, the Forest Service collected only $109 million from timber sales of 2.1 billion board feet, a volume of sales at least 80 percent reduced from 1980s levels. Minerals have now become the leading source of revenue from the national forests, generating $610 million in 2010 although $500 million of that was actually collected by the Department of the Interior, the agency officially responsible for administering mineral leasing on the national forests. Reflecting the usual politics of public lands, around half of the federal mineral revenue is then transferred to the western states themselves, while the federal government still bears all the costs. Total federal revenues from all sources in the national forests in 2010 were $953 million. This compares with total Forest Service spending in 2010 of $6.1 billion, including around five billion dollars for direct management, fire prevention and suppression, and other national forest related activities (in other areas of its activity, the Forest Service also conducts basic forestry research, aids private and state forest owners around the United States, and undertakes other actions not directly related to the management of the national forests, all this costing about $1 billion). That is to say, the ultimate net cost of national forest management borne by American taxpayers in 2010 was around $4 billion this on lands representing nearly ten percent of the land area of the United States and often containing valuable natural resources. These large deficits are being incurred at a time when worldwide demands for minerals, agricultural products, and other commodities has been soaring, driving up resource prices and in other places filling the coffers of nation states that are rich in natural resources.
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It might seem logical that Forest Service employment and spending would have declined correspondingly, as it shifted from serving timber harvesting and other traditional uses to the new ecosystem goals. In the long run, according to the tenets of ecosystem management, a natural ecology should function with a minimum of human impact that is virtually the definition of what it means to be natural. Ecosystem management may therefore require expensive short term actions to restore ecologies to a former natural condition but should work in the long run to minimize future human acts of management themselves and the associated government expenses. But this of course would be nave. It is seemingly an iron law of bureaucracy that it can expand but never contract. The Forest Service, moreover, was never all that enthusiastic itself about ecosystem management. To some extent it was dragged kicking and screaming. Going back to Gifford Pinchot, the historic agency culture had formally valued scientific and economic efficiency above all (admittedly greatly compromised in practice by political necessity). It was instead federal judges and outside politicians, encouraged by environmental activists, who imposed the spotted owl recovery plan on the Forest Service in the Pacific Northwest and all that followed in its path elsewhere in the national forests as well. Thus, even as it has officially endorsed a new agency way of thinking that seeks to deliberately minimize human management actions, Forest Service personnel numbers and total spending have not fallen at all. The Forest Service had 35,000 permanent employees in 2010, more than the 33,000 it had in 1990. Total spending specifically for national forest management purposes remained steady around $1.5 billion throughout the 1980s, about the same level as it is today. But total Forest Service spending soared from levels of around $3 billion per year during the 1980s to more than $6 billion in 2010.

The Fire Service

large part of the explanation for the higher Forest Service budget is the greatly increased spending for forest fire prevention and suppression. Ecosystem management may have been the new official management philosophy but some wags have recently suggested that the Forest Service should now be renamed the Fire Service. Instead of minimizing human impacts as sought by ecosystem management, the emphasis shifted from timber harvesting to firefighting. (Such is the law of unintended consequences, one much in evidence throughout the 200-year history of the public lands. The government in the 19th century had planned to sell the public lands to capture large revenues, but legions of illegal squatters defeated that goal and the government finally gave up and legalized squatting with the Homestead Act of 1862.)
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The growing fire hazards are not a matter simply of increased drought or other bad luck in recent years. Instead, they have also resulted from misconceived past and current Forest Service policies. Over many decades of fire suppression (recall Smoky Bear), the Forest Service actively prevented lighter and more frequent natural fires that historically had worked in many western forests to remove the flammable understory of the forest (while such fires did little harm to the much larger and more mature trees). Without the historic cleansing role of low-level fire, wood stocks on the forests increased rapidly. Then, timber harvesting, another leading means historically of removing wood from the forests, was drastically curtailed. The resulting buildup of excess fuels in many western natural forests created a new severely fire prone condition that the gao in 1998 As is increasingly reported was posing catastrophic fire threats over recognized, the much of the rural West. Forest fires were indeed burning more frequently historical fire and with much greater intensity. Levels of Forest Service spending for fire-related purposes escalated suppression from thirteen percent of the total budget in 1990 to policies of the 2 1 percent in 2 0 0 0 and then to 4 5 percent in Forest Service 2008. Because there was now so much wood fuel an altogether unnatural condition by historic stanhad not a few dards the fires often burned with unprecedented negative intensities that consumed all the trees present at the site and every other form of vegetation, thus virtualconsequences. ly baking the soil and limiting the capacity for future replacement stands of trees to regenerate as well as leaving bare land unprotected against rapid runoff of large sediment volumes into nearby rivers and streams. In 2010, forest fire related spending by the Forest Service was more than $2.1 billion, the great majority in the American West. The Forest Service had discovered a new purpose to sustain its personnel numbers and budget protecting the West from the newly threatening consequences of its own historic forest fire and timber program mismanagement. As is increasingly recognized, the historical fire suppression policies of the Forest Service had other large negative ecological consequences. One of the most attractive western forest species is the whitebark pine, which somehow manages to survive at the highest mountain elevations, sometimes living to more than 1,000 years of age. Whitebark pines have been suffering greatly in recent years from warmer temperatures and attacks of blister rust and mountain pine beetles. As a 2011 environmental report indicated, another important factor was that the U.S. Forest Service and other agencies carried out another policy that was bad for whitebarks the aggressive suppression of wildfires beginning in the early 1900s. Whitebark pines evolved to be somewhat fire-resistant and able to colonize burned areas, so the war on wildfires effectively limited the amount of ground where they could spread and allowed competing species of trees to invade their stands.
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A dysfunctional system
dmittedly, the large economic and environmental failures on the national forests were not altogether the fault of the Forest Service. Even if it had wanted to, it probably would have been unable to address adequately the growing fire problem. An unwieldy system of environmental and land use planning mandated by Congress in the 1970s, a proliferation of law suits and resulting judicial oversight of management and policy decisions, increased congressional and White House direct political intervention, and other factors have created a dysfunctional federal decision making process for the national forests. As early as 1997, whatever the high aspirations of ecosystem management (or perhaps partly because of the policy and management confusions relating to these aspirations), the gao was reporting that the Forest Services decision making process is broken. An Idaho state task force in 1998 found that federal land management in the state (with the Forest Service the largest federal land owner there) was characterized by uncertain decision making, destabilization of resource dependent communities, and deterioration in environmental quality. An advisory Committee of Scientists assembled by the Forest Service itself declared in 1999 that the agency has a planning process that has been both divisive and disillusioning for all involved, including many of those seeking to advance environmental goals. In 2002 the Forest Service lamented its own fate in an internal study, The Process Predicament, noting that it was beset by a costly procedural quagmire in which perhaps 40 percent of the direct work at the individual national forest level was now taken up in planning and assessment paperwork activities which in the end often led nowhere. The overall result, as the agency characterized its own circumstances, was that unfortunately, the Forest Service operates within a statutory, regulatory, and administrative framework that has kept the agency from affectively addressing rapid declines in forest health, including, as noted above, the development of potentially explosive wood fuel buildups on many western national forests. If restoring an ecology requires effective planning and skillful implementation, this environmental goal is just as likely to be a casualty of the 2000s unmanageable Forest Service.

The benefits of federal dependence

espite repeated forest Service appeals to Congress for relief from its procedural quagmire, none was forthcoming. The Forest Service was of course not alone in confronting a failing

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national political system in recent years. As one upside, however, all this walking in place meant plenty of Forest Service jobs and funding for good paying work in attractive rural communities throughout the West. It was not only the Forest Service employees who could be thankful; the rural West as a whole benefitted significantly in economic if not environmental terms from the large secondary impacts of the major infusions of federal firefighting and other funds. Taxpayers from other parts of the nation were principally responsible for providing the necessary revenues to support the rural West. All this was admittedly the latest installment in a longstanding western history. Since the federal government decided 100 years ago in the progressive era to maintain a permanent dominant presence in the rural West, the region has often complained bitterly of federal mismanagement. But federal management has also meant federal money, and lots of it. When push came to shove, the West has always chosen the money over steps to break free from federal control. More than 50 years ago Bernard DeVoto uttered perhaps the truest statement ever made with respect to the public lands and the rural West; the actual western view of the place of the federal government, DeVoto explained, is: Go away and give us more money. The large inflows of federal funds to the rural West come at a price, however. The politics of decision making at the national level give a greater voice to environmental groups and others outside the region. Periodically, western resentments over the lack of full state and local control have built up, leading to populist explosions such as the Sagebrush Rebellion of the late 1970s that demanded a transfer of the public lands to state ownership the Carter administration had been particularly tone deaf to rural western concerns. Candidate Ronald Reagan in 1980 endorsed the demands of the rebels. When the Reagan administration entered office, however, the western leadership, then predominantly Republican, and following the DeVoto dictum, politely declined any interest in actually receiving a transfer to state ownership of the lands. It would cost too much. With the Reagan administration now in power, and with Republicans dominating western Congressional delegations, business as usual the federal government heavily subsidizing the traditional rural West did in fact return to the public lands. Indeed, the electoral makeup of the Senate gives the rural West a virtual permanent constitutional lock on disproportionate amounts of federal money. Despite their frequent free market rhetoric, moreover, it is usually Republicans who deliver the goods. As an almost completely rural state, Wyoming has 544,000 people and two Republican senators. The two Democratic senators from California represent 68 times as many people per capita. With 698,000 residents, Alaska did elect a Democratic senator in 2008, but he was the first in 28 years. Although Montana with 975,000 people has a more mixed voting record, another western state with a small population of 1.5 million, Idaho, has a recent history of two Republican
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senators. Utah has not had a Democratic Senator since 1977. The seven most rural western states have fourteen percent of the total votes in the Senate and just 3.7 percent of the total U.S. population. This translates into real dollars for the West. According to detailed calculations made by the Tax Foundation for 2005, New Mexico and Alaska received $2.03 and $1.84, respectively, in federal spending for every dollar sent to Washington in federal taxes and other revenues, ranking them first and third nationally in this respect. Arizona, Idaho, Montana, Utah, and Wyoming all received more federal money than they contributed to federal revenues. Among regions, the South again a heavily Republican area did best in capturing federal money, with four states (Mississippi, Louisiana, Alabama, and Virginia) in the top ten. No leading blue state made it into the top ten in 2 0 0 5 . Indeed, New York, Connecticut, Minnesota, California, Illinois, and New Jersey ranked in the bottom ten in terms of a favorable federal spending/federal revenues ratio. New York and California received only $0.79 and $0.78 in federal spending dollars, respectively, for every federal revenue dollar sent to Washington in 2005. The Republican Party has a dirty little secret: It does better than the Democratic Party in the competition for federal pork. The farm states North Dakota and South Dakota also ranked in the top ten states in terms of their federal spending/federal revenue ratio are leading symbols of a wider Republican political schizophrenia. The farm states commonly elect free market Republicans who specialize in Congress in perpetuating a U.S. system of agricultural socialism. The high levels of spending for the public lands in the rural West are the equivalent in that region of the large federal farm subsidy programs for the Midwest states. The newly elected Tea Partiers and many other Republicans in Congress have recently said that they want to change all this, even including proposals to curb farm subsidies. The Republican Party, they say, should finally practice what it preaches, even if it may sometimes be at the expense of historic pork barrel benefits to Republican constituencies themselves. Like the farm belt, the public lands in the rural West will be a good test case of this asserted new Republican commitment to high principle.

Mounting pressures for change

here might admittedly be a surprising breadth of bipartisan support for such major public land change. Given the follies of public land management in recent years, western leaders of all political stripes have increasingly been wondering whether all the federal money is still actually worth the price that has to be paid. Daniel Kemmis is the former Democratic Party speaker and minority leader of the Montana House and mayor of Missoula. Also a Harvard graduate and prolific author he might be described as a Daniel Patrick Moynihan of the West

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Kemmis wrote in 2007 that our public lands, the vast majority of which are in the eleven western states and Alaska, are burdened by a steadily more outdated regulatory and governing framework. Kemmis spoke for more and more westerners in declaring that they often experience the public land system as a frustrating, alienating bureaucratic paternalism. Even if some financial sacrifice perhaps was required, the West should unite behind an agenda of ecologically responsible devolution of authority that would transfer responsibility for public lands to western institutions grounded in actual local western democratic control. Among the leading national commentators on the public lands, there is surprising agreement. Professor Sally Fairfax of the University of California, Berkeley, Americas foremost political scientist in Ranchers cannot studying the public lands, observes that the creation of the national forests established a relationship simply be between the national government and the western states that is usefully described as colonial. The evicted from current management practices of the U.S. Forest their old Service are so maladapted . . . to current social and political realities, reflecting the past influence of allotments on explicitly anti-local ideas of centralized, top-down the public lands management inherited from the progressive era, to make way for that she suggests a radical public land system reornew and higher ganization will be necessary. Roger Sedjo is the longtime director of the forest bidders. economics program at Resources for the Future in Washington, D.C., a leading natural resource and environmental think tank. He finds that local users of national forest lands are highly disenchanted and discouraged . . . Nobody is happy with the Forest Service. He suggests that it may be time to think the unthinkable, to seriously debate whether the federal land management problems of the 21st century may not require the creation of new, streamlined, integrated organizations or perhaps even the application of new and different types of institutions to replace the outmoded agencies of the past century. Such radical steps would have been politically impossible until at least recently. But the federal government today, if anything, is in even worse long-run financial shape than state and local governments (its credit card borrowing habits, denied to the states, cannot go on indefinitely). Public confidence in federal governing capacities continues to fade. A wide range of observers now proclaim that Washington must change its fundamental ways of doing business. Nevertheless, while their core skepticism about the corrupt ways of national politics in Washington is refreshing, the proponents of large budget cuts and major institutional change in governance at the federal level often lack the detailed knowledge to convert their populist zeal into realistic concrete plans for change.
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A plan
first thought might be simply to sell off much of the public lands and apply the large sale revenues (potentially hundreds of billions of dollars) to reducing the national debt as a business corporation might sell off its money losing divisions. At one time, that might have been a good idea. But too many years have now passed, creating implicit historic entitlements that will have to be recognized. Ranchers, for example, cannot simply be evicted from their historic allotments formally established in the 1930s following the enactment of the Taylor Grazing Act to make way for new higher bidders. In matters of property rights, possession is a first principle. It is not only ranchers but hunters, hikers, and many other types of recreational users who have had open access to the public lands for many decades and perceive this access as a matter of right that cannot simply be abrogated by federal government fiat. Any plan that would result in the dispossession of ranchers, recreationists and other rural westerners of their de facto rights would be a political non-starter. On public lands, rather than privatization, two goals should be paramount. The first is to raise greater revenues from and to reduce sharply the bloated costs of the current federal management of the public lands, thus contributing to the resolution of the nations fiscal problems. Second, this must be done in a way that effectively promotes national economic and environmental goals and also meets basic standards of fairness to historic users and other involved parties such as national taxpayers. Consider how these principles might be advanced on the vast areas of the rural West that historically have been used for public land livestock grazing. Ranchers should first be freed of government routine micromanagement of their livestock operations. Instead of the current ten-year permits, they should be issued 30-year forage leases for use of the grazing land forage. As is presently the case, ordinary recreational users such as hikers and cross country skiers would continue to have open access to the lands subject to their not doing any harm to the grazers. The responsibility for regulating more intrusive uses such as hunting and off-road vehicle use would be turned over to the states. Energy and other minerals management would also become a state responsibility, with the federal government and the states splitting equally any royalties obtained and other minerals revenues (the federal government, as still the ultimate owner, would set the required royalty). The longer tenure would create a greater private incentive for the ranchers to manage the grazing forage resource for long-term sustainability. States and private conservation groups could work with ranchers to promote nonlivestock uses of rangeland forage. In addition, government would establish overall environmental performance standards that ranchers would have to satisfy, with evaluations, say, every five years. Unlike current grazing perFebruary & March 2012 59

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mits, the new 30-year forage leases would be saleable and transferrable to any nonranching party such as a hunting club, environmental organization, wilderness society, bird watching organization, or whatever. Once such an organization held a lease, it would be free to manage the forage resource for its own purposes. The government itself could also purchase forage leases in willing buyer/willing seller transactions, in order to advance other public aims. If it wanted to lease public land for a new solar energy facility, for example, the government or the solar company would have to buy out the relevant forage leases. In short, there would no longer be public livestock grazing lands but the lands would become private forage control areas with the control over forage use now a saleable right in the market. The public lands With these changes, the time consuming, cumbersome, and costly environmental review, land-use have been left to planning and other micro-level administrative funcfunction without tions of the blm and Forest Service relating to livestock grazing would no longer be necessary, saving a clear purpose the federal government hundreds of millions of dollars in lower administrative costs. or sense of The federal forests are a different case. Because direction, federal timber has been sold historically to the highmirroring the est bidder, there is no one identifiable private party nations general with any real historic basis to assert a right to the timber in any particular area of federal forest. Local policy gridlock. counties, however, by law receive 25 percent of the gross revenues from Forest Service timber sales and 50 percent of the gross revenues from blm timber sales on the 0&c lands in western Oregon, the only federal lands with valuable timber managed by the blm. One might thus say that the counties have had the leading ownership rights to federal forest lands. In light of this, federal forests could be reorganized as follows. First, the lands would have to be classified into three categories: 1) forest lands of significant national environmental and recreational interest; 2) lands of significant state and local environmental and recreational interest; and 3) lands of exceptional timber value that in other respects are ordinary federal forests. Three alternative ownership and management regimes would reflect these differences. The nationally significant lands would remain in the federal land system, but transferred to the National Park Service or the Fish and Wildlife Service. The federal forest lands of significant state and local recreational interest would be transferred to the local counties as the new owners. As a means of implementation, local public timber corporations might be formed and the counties given all or the majority of the controlling ownership rights in these corporations (including the rights to their share of dividends). The corporations would be established in a manner to give them considerable insu60 Policy Review

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lation from short run interventions of state and local politics. For example, they might be given a formal trust status with the net revenues formally dedicated to schools or other public purposes as federal lands transferred to the states in earlier eras commonly were managed by assigned school trustees. Otherwise ordinary lands of exceptional timber value would be privatized, either by means of a direct forest land auction or an initial public offering of stock in new private forest corporations. As simply a rough guess, perhaps twenty percent of the federal forests lands might fall in the national lands category (1) above, 60 percent in the state and local lands category (2), and 20 percent in the privatization category (3). On both federal grazing and forest lands, under this plan the blm and the Forest Service the managers of the public lands would no longer exist in their present forms. Their current administrative resources would be reassigned within the federal system or newly hired outside this system to fit the new public and private organizations that would emerge. The BLM and Forest Service together now spend about $5 billion per year on public land management. If the political system is willing, some significant part of this current level of federal spending could be saved. Both the economic and environmental final results would also likely be much improved. or the first century of federal land management, the nationally accepted goal was to dispose of the lands to new state and private owners. For the second century, the national goal was to apply scientific and administrative expertise to the management of newly created public land agencies in a manner to maximize the net economic benefits to the nation over the long run. As a third century begins, there is no similar national consensus. The public land agencies have recently adopted a new goal under the rubric of ecosystem management, but the true meaning and the management implications of ecosystem management remain elusive. The public lands thus have been left to function without a clear purpose or sense of direction mirroring policy confusions and a state of gridlock seen more broadly over much of the federal domain in Washington and elsewhere. Unlike some areas of federal activity such as national defense, there is nothing intrinsically national in scope in the majority of management responsibilities of the public land agencies. Indeed, much of what they do is more closely parallel to historically state and local government roles in the United States such as zoning, road construction and maintenance, and firefighting. In the current political environment, the attempt to impose one set of national values and management methods on a domain as diverse as the public land in the rural West has yielded agency dysfunction. The public lands today incur large federal costs while falling well short of achieving their potential economic and environmental benefits for the nation. The solution is to be found in first identifying those areas of the public lands which are capable of yielding a national consensus as to their manageFebruary & March 2012 61

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ment purpose likely to be the most environmentally attractive parts of the public lands, such as wilderness areas. The operative goals on the remaining, less nationally significant lands should be decentralization and privatization. Where the circumstances of the lands allow for a workable system of private property rights (both the main benefits and the main costs can be assigned to the same private party), the lands should be privatized (or transferred to long-term private leases). Where the circumstances of the land involve more beneficiaries and larger transaction costs of group decision making, some new collective governing instruments will be required. In some cases, private collective ownerships the rise of private community associations in recent years may offer a model may be feasible. Perhaps more often, the lands will have to remain in the public sector, but their management should be decentralized to new lower-level units of governance where broad agreement on goals is more likely and where effective management purposes and methods can thus more easily win acceptance. In the public sector, the newly decentralized units of land governance might be a state, a county, a municipality, or limited segments of such. In some cases a brand new government unit might be created specifically for public land purposes such as a form of public corporation. The final details will have to emerge from the normal give and take of politics. But let the discussions begin.


Policy Review

The Laws of War, on the Ground

By Joseph Patrick McGee

rom october 2007 to November 2008, I served as the commander of Task Force No Slack, a unit of 1,000 soldiers that operated in and around Samarra, Iraq, a predominantly Sunni city about 60 miles north of Baghdad. During this period our forces, in conjunction with Iraqi Security Forces and a local militia called the Sons of Iraq, defeated the insurgency in the area. One clear measure of this was that, when we arrived, the enemy was launching some 135 attacks per month; when we departed, monthly attacks were down to fewer than eight. During the course of our deployment we shifted our focus from fighting the insurgency to rebuilding the local government and providing essential services to the roughly 250,000 Iraqis who lived in our area. As a result of my experiences in Samarra, I gained a profound respect for the laws of war and how they can be powerful in increasing the effectiveness of a counterinsurgent force. First, I need to set the stage. In 2007, Samarra remained one of the most restive and lawless areas in Iraq. The effects of the Surge of 2007 had largely been negative for Samarra. Although the Surge increased security within Baghdad, insurgents and terrorists fled to outlying areas, and Samarra,
Joseph Patrick (JP) McGee is a colonel in the U.S. Army and was a 20102011 national security affairs fellow at the Hoover Institution. He currently commands the 1st Brigade Combat Team of the 101st Airborne Division (Air Assault) at Fort Campbell, Kentucky.
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which had never been fully pacified, was one of their favorite destinations. Thus, in the summer of 2007, the security situation within Samarra disintegrated. The police force was decimated by a car bombing that killed the police chief and cowed all other police officers into remaining at home. An organization called the Islamic State of Iraq (isi, part of larger al Qaeda in Iraq) controlled more than half of the city and virtually all the surrounding areas. In those areas it established its own style of governance. isi collected taxes, held trials, conducted public executions, and had frequent military parades to demonstrate its power over the people of the region all this occurring within one mile of a base with 200 U.S. soldiers and many more Iraqi National Police and army units. Despite the often heroic efforts of those forces, at best they slowed the tide of isis expansion, but they were unable to arrest it or roll it back. Yet as isi became larger and more powerful, it began to act arbitrarily, which hurt its strategy and undermined its support from the people. Its harsh brand of Islam was contrary to what most Iraqis believed. Its strict rules on tobacco whose use could be punished by isi agents cutting off the smokers index finger alienated many. Its public executions, which were held once a week on the same street corner, further repulsed the many Iraqis who saw their friends and neighbors executed based on rumors or hearsay. The most repugnant of all practices, however, was its kidnapping of young girls (fifteen or sixteen), driving them to camps in the desert, and forcibly marrying them to fighters (usually foreigners), which meant that those fighters could then rape the girls under the imprimatur of Sharia law. How frequently it occurred is impossible to tell. What I do know is that almost all Samarrans believed it was happening and were seething about it, especially about their inability to stop it. The Samarrans were learning that there was a much worse alternative to their government and the Americans, which was rule by al Qaeda-inspired fundamentalists.

The new guys in town

nto this complex, hyper-violent environment we arrived and set about conducting operations. We began by acknowledging that our single most important task was to understand our new environment. We believed this was absolutely critical if we were to succeed. Before we could craft a plan to roll back the insurgency, we first needed to understand both the insurgency and the entire community within which we operated. As we spent time talking to Iraqis from all walks of life, one surprising theme emerged and remained constant: Iraqis respected the Americans. In an area beset with lawlessness and violence, they viewed us as the only legitimate force. This shocked me; I had thought that in this area, long known as a hotbed of the insurgency, the local population would despise us. One major reason that the Iraqis came to see us as legitimate was our respect for the
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laws of war as practiced each day by our soldiers on patrol. This respect for the rule of law forms our ethical foundation, which defines how we conduct operations. Iraqis knew that our soldiers would not shoot indiscriminately, that we would not kidnap their men and hold them hostage, that if we manned a checkpoint we would not shake them down for cash, and that if we detained one of their sons, he would not be brutalized and tortured. The Iraqis had no such belief in either their own security services or, certainly, in the insurgents and terrorists who opposed us. The Iraqis also knew that although we had tremendous firepower at our disposal, we used it judiciously and with a high degree of precision. We did not level villages in bombing raids or shoot indiscriminately if a roadside bomb exploded nearby. The Iraqis knew we were not perfect, but they largely accepted that there was a war raging and that we were doing all we could to avoid civilian casualties. Our commitment to the rules of engagement, based on the rules of warfare, greatly contributed to the esteem in which U.S. forces were held, and it enhanced our legitimacy. What was most remarkable to me was that the foundation of this legitimacy rested on the shoulders of some very young soldiers. Our junior soldiers and noncommissioned officers symbolized our values every time they patrolled our area. Each day, these soldiers almost all under the age of 25, many under 21 dealt with life and death issues: Is that a car bomb approaching me or just an errant driver? Do I shoot or try to stop him using visual signals? Why is that man on the side of the road using his cell phone? Is he talking to his friend or is he a spotter for an ambush? Although we made mistakes, day in and out these young soldiers made such calculations hundreds of time each day and almost always showed good judgment thus minimizing civilian casualties and increasing the respect Iraqis felt for Americans. As a leader of this task force, I could say many things and make many promises but it was the actions of these young soldiers that truly established the impression that Iraqis formed of us. This respect for the rule of law and professionalism was imparted to the Iraqi Security Forces at the lowest level. We routinely conducted joint patrols with the Iraqi Security Forces, and the powerful example of a 21-year-old U.S. sergeant leading his troops professionally much impressed the younger Iraqis in the ranks. They wanted to emulate their U.S. comrades both in how they acted and how they dressed, giving rise to the amusing situation in which Iraqi soldiers and police coveted American knee pads and then promptly wore them improperly around their ankles, just like their American partners. Not all ran smoothly; sometimes our position on the conduct of operations and how to treat people ran directly counter to Iraqis views and actions. The most serious problem in this area was the treatment of detainees. American forces learned much after the disgraceful and criminal events at Abu Ghraib prison, so that throughout the U.S. Army, proper treatment of detainees was emphasized and became part of our training. In
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sharp contrast, Iraqis beat and tortured detainees all too regularly. Academics can debate what defines torture, but the acts committed by some Iraqis were brutal by any definition. Early in our deployment, we discovered detainees in the Iraqi system who had been beaten with sticks and clubs, as well as those who had had wires attached to their ears and genitals and electrical shock administered with a car battery. In each case we took control of the detainee, put him into the U.S. detention system, and filed reports to ensure that both my superiors and Iraqi leaders knew of the abuse. Although this always led to an investigation by the Iraqis, they seldom followed up with disciplinary action, meaning no substantive reprimand and thus little or no change in behavior. At my level I would meet with the Iraqi commander and voice my displeasure. There was little more that I could do, but at least the Iraqi leaders knew I disapproved of torture and was not willing to turn a blind eye to this unethical behavior.

A prison puzzle
he longer i was in the area, the more I learned and understood as did all our soldiers. One issue that came to my attention was the operation of the local prison, which was causing significant problems. As I met with Iraqis, a common complaint emerged: The Iraqi Security Forces were detaining men without filing charges and without any established legal process by which to release them from jail. Instead, these men were effectively held as part of a hostage ring run by the Iraqi Security Forces, who expected family members to pay a ransom for their release. Here is how it worked: The Iraqi Security Forces would conduct a raid on a suspected insurgent location; not finding any insurgents, they would take all men age fifteen and older and put them in jail. These men would be held in jail until the family could post a bail of $1,000 to $5,000 per detainee an impossibly high sum in a land where $300 a month was a working wage that could support a small family. As I patrolled the city I would frequently be stopped by elderly women who would slip a small piece of paper in my hand with their sons name written on it and wail, Please see if my son is still in jail and if he is okay. I dont have $5,000 to set him free and I do not know what to do. As I dug into this issue, the news became even worse: I learned that the detainees who could afford to post this ransom were usually insurgents; they were the ones with large sums of cash at their disposal. So the prison system crushed both the legitimacy of the Iraqi government and that of the U.S. forces in multiple ways: First, it detained innocent men illegally, causing the general population to grow angry and bitter. Second, it allowed the truly bad actors in the area to get out of jail rapidly. With the number of detainees running into the hundreds, you can imagine how this jail had become a cash cow for the Iraqi officers in charge of the city. It is worth noting that responsibility for running the jail was a cov66 Policy Review

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eted job, with both the National Police and the local police vying for control all in an attempt to access that revenue stream, all of which made for a tremendously destabilizing and delegitimizing influence in the area. The local Iraqis assumed that the Americans approved of this operation, owing to our inactivity against it and our close cooperation with the Iraqi Security Forces. When I learned about this jail and the negative effect it was having on our legitimacy, I met with my leaders to craft a plan to change this situation. I informed the Iraqi major general in charge of all the Iraqi Security Forces in Samarra that the jail would now be under joint U.S.-Iraqi control. He was not pleased but could not prevent it. We immediately took an inventory of all prisoners, including a medical assessment to determine their general health as well as whether any had been tortured. We then issued detainees id bracelets so we could track them. We next ensured that the each detainees release had been approved by both U.S. and Iraqi leaders. No longer would Iraqi leaders release known insurgents thanks to a hefty ransom. We then began to examine the evidence against every detainee and soon released many who were being held without charges. We instituted a system of regular medical checks for detainees as well as a twice-daily accountability check to ensure none was released without our approval. We winnowed down the detainee population, releasing those who were being held without cause. In doing so, we greatly improved living conditions for the detainees as the prison population reduced from 420 to around 150 all in a jail that was designed to hold no more than 125 prisoners. These reforms helped end the deleterious effects of the jail on our efforts in the area, but they also caused a significant amount of tension with our Iraqi counterparts. We were able to work through this tension, and, in the end, those reforms increased our legitimacy in the eyes of the people. Over time, as the Iraqi forces embraced these practices, the peoples view of the Iraqi forces legitimacy increased as well, with many attendant benefits. As we moved forward to address other issues, such as how to reconcile and bring former insurgents to our side, the goodwill engendered by our actions against the jail paid huge dividends. Months after we took control of the jail, I had a conversation with an Iraqi friend who had been a colonel in the Iraqi Army but lost his job when the Coalition Provisional Authority disbanded it in the aftermath of the U.S. invasion. He had tried to assist in forming a new Iraqi government in Samarra, working with Americans in the year immediately following the invasion. He soon became disillusioned with both the Iraqi government and the Americans, however, and decided to join the insurgency. Whether he became an active member or simply a supporter, I never knew. After he spent time with the insurgents, however, he became disillusioned with their barbarity, lack of vision, and religious fundamentalism. He then became one of the key negotiators who brokered the agreement whereby 2,000 local Iraqis, including many insurgents, came to the side of their government and
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the United States and later proved instrumental in quelling the insurgency. In all my dealings with him, he proved honest in word and deed. Over time, we developed a rapport whereby we could talk about almost anything. One day I asked him about Abu Ghraib and its impact on Iraqis. I said, I have seen the way all Iraqi forces treat their detainees. It doesnt matter if they are Army, National Police, or Sons of Iraq all of them beat and torture detainees. What you do to your own is much worse than anything that was done in Abu Ghraib by Americans to Iraqi prisoners. Where is the outrage? Where is the indignation that filled Iraqis when they saw the pictures from Abu Ghraib? Why is there such a double standard? He looked at me, shook his head knowingly, and said, My friend, you do not understand. First, you must remember that this occurred during a war and that you provided al Qaeda a great tool with your actions in Abu Ghraib and they exploited it masterfully. Second, you have to remember that you are Americans and we have different standards for you. You came to Iraq under the banner of democracy and respect for human rights. Your actions in Abu Ghraib, along with many of your other actions, demonstrated you did not believe in these values and dropped them as soon as things became difficult. Abu Ghraib convinced many of us that you were not serious about how you wanted to change Iraq or the values that you proclaimed, and it convinced many to take arms against you. For me, this story illustrates that our actions are more powerful and more important than any proclamations we make. Our respect for the rules of war, our commitment to conduct ourselves ethically in difficult situations, is absolutely vital. If we truly want to prevail in these conflicts, we must reinforce our words with actions that demonstrate we believe in them even under duress.

Decisive action
ne other story brought this issue into clear focus. February 2007 was a critical month for our operations. We had been in negotiations with insurgent leaders and were on the verge of having them come over to the side of their government and the U.S. forces. A Sons of Iraq movement, which had been so effective in other parts of Iraq, was on the verge of coming forth in Samarra, something that was believed impossible by many. On the day in which we were supposed to have key Iraqi Security Force leaders meet with the nascent Sons of Iraq leaders to discuss how they would conduct operations side by side, a series of bad events occurred. In the center of Samarra, an Iraqi National Police checkpoint was attacked by insurgent small arms fire, killing one police officer. This attack inflamed the anger of the National Police. Rapidly, they gathered a battalions worth of police officers and went into the neighborhood from where they took the lethal gunfire. This neighborhood, known as Dobut 2, was a
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known insurgent stronghold, and enemy contact from this area was common. Whipped into a frenzy, the National Police proceeded to bust into houses of Dobut 2 and detain all adult males roughly every male above the age of fourteen. Many of the National Police officers shot televisions, automobiles and windows and broke furniture. Theft was rampant as families watched the police officers rip jewelry off women and stuff it into their pockets. Most ominously, these officers told the women that with their men gone they were helpless and that they would return at night for another visit, this time to rape the women. All of this went unnoticed by American forces. The platoon that was living side by side with this National Police Battalion was operating in a different part of the city and had left behind a small skeleton crew to guard their living area. The transition team that was assigned to this National Police battalion was doing business in Tikrit, far to the north. American forces became aware that something was amiss when the National Police began to return to their base and unload their male detainees in the central square of the base. As they unloaded the detainees from the trucks, np officers were standing by to butt the detainees with their ak-47s, savagely kicking and punching them as they assembled into a tight, clustered knot. More National Police gathered and continued the abuse of these detainees. The noncommissioned officer in charge of the seven Americans left on the base, Staff Sergeant Anthony Wright, noticed something was going on and went out to investigate. What he saw shocked him, and he went to the National Police and told them to stop. In their fury, the policemen refused to listen, pushing him back and threatening him with their ak-47s. Some leaders would have let the Iraqis do it their way, claiming this was an Iraqi solution to an Iraqi problem and use this excuse not to get involved. ssg Wright chose decisive action instead. First, he called his company headquarters, explained the situation, and said he needed reinforcements immediately. He then gathered up the seven Americans under his control and ordered them to put on all their gear: helmets, body armor, weapons. Next he led these fully armed Americans and placed them between the National Police and the detainees. Pointing their weapons at the National Police, he let it be known that they needed to get past him and his men if they wanted to continue to abuse their prisoners. Facing down eight angry, fully armed Americans was enough to defuse the situation completely. The National Police officers began to skulk away as more U.S. forces arrived to take control of the scene. American forces returned the detainees to their homes, and then remained stationed around the Dobut 2 neighborhood to ensure that no National Police officers returned to cause any more problems. They secured the neighborhood throughout the night. The following morning, when we sent our first dismounted patrols through Dobut 2, Iraqis came pouring out of their houses and kissed the hands of the Americans, expressing their thanks by
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presenting gifts of candy and flowers. Women wept in appreciation for the return of their sons and husbands and the role that Americans had played in ensuring the National Police did not return to rape them. In the next nine months, not a single attack against U.S. forces came from Dobut 2. More significantly, the ethical actions of Staff Sergeant Wright ensured that the Sons of Iraq movement continued to come forward. If the National Police had continued unabated, their actions would have ended the chances for the Sons of Iraq. Some of the key leaders within the Sons of Iraq had family members inside of Dobut 2, and if they had been raped and abused, these leaders would have returned to the insurgency. Without Wrights actions in stopping these abuses, it would have been impossible for the Sons of Iraq leaders to sit across the table from the leaders of the National Police. The ethical actions and strong leadership of one noncommissioned officer saved this important effort. When the situation hung by a thread, one American stepped forward and made the right ethical decision and had the strength of character to enforce his beliefs.

Virtue rewarded
or all the good that comes from following the laws of war, sometimes following these laws can be a hindrance. Invariably, information does not get divulged by detainees, bombs are not dropped on targets due to collateral damage concerns, and soldiers are slow to engage a target because they are not completely convinced the target represents a threat. It is no secret that attempting to follow the laws of war with respect to terrorist detainees has gummed up our detention system and left us with no effective way to handle a terrorist captured in foreign lands. Some will argue that following the rules of warfare slows down the reaction time of soldiers and that a preoccupation with minimizing collateral damage will place U.S. soldiers in more risk. Certainly, following the rules of warfare does slow reaction time and forces commanders to be discriminating in their use of firepower. Yet this discriminating and precise use of firepower, in the aggregate, does more good than harm even at the lowest level. A recent study by the London School of Economics has determined a strong link between U.S. actions which have caused civilian casualties in Afghanistan, and a corresponding rise in attacks against U.S. forces. Thus, choosing to be precise in the use of firepower, thereby minimizing civilian casualties, is proving to be an effective way to lower the levels of violence against our forces. This should not be hard for anyone to understand. The loss of innocent family members would place most people in a position of trying to exact some vengeance for their loss. By being precise and discriminating, we are not only protecting the innocent; we are protecting our own forces in the long term.
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Yet the negative impact of following the rule of law on our operations pales in comparison with the benefit we gain from operating in an ethically principled manner, following the laws of warfare. Many of the laws of warfare are extensions of national values we claim, and have strong ethical underpinnings. The proper treatment of detainees is deeply rooted in the concept of individual rights an American value. The laws which limit where we drop bombs and how we conduct operations all come back to a fundamental respect for a persons right to live unmolested. When we chose to follow these rules in the most dangerous of circumstances, we are showing the world that we believe in these values and are willing to make sacrifices to live them. And I believe these actions resound within the population of the countries in which we operate. Its my firm belief that the proper conduct of our forces, following the rules of war, can have a profoundly positive impact on our operations. Opponents deride following the rules, saying they tie the hands of our troops and put them at risk; to me this criticism is shortsighted. In a conflict in which the population has the decisive vote, a vote often cast based on whom they view as legitimate, the actions of U.S. soldiers can have a deep impact on which side the people choose to support, as well as domestic and international commitment. I often hear critics say that the populations of Iraq and Afghanistan will always resent and hate the presence of the United States in their countries, but this has been disproven time and again in public opinion polls in those countries. For example, a recent abc/bbc poll of 1,691 Afghans asked this question: Do you strongly support, somewhat support, somewhat oppose or strongly oppose the presence of the following groups in Afghanistan today? Sixty-three percent supported or strongly supported U.S. forces in Afghanistan, and 53 percent supported or strongly supported nato/International Security Assistance Forces in Afghanistan. Interestingly, only eleven percent of those polled supported or strongly supported the Taliban, and only seventeen percent supported/strongly supported foreign jihadi fighters. I believe the actual numbers of troops are almost insignificant; what matters is how they act and what they are doing. A thousand U.S. soldiers in Iraq, terrorizing the population through the indiscriminate application of force, would be viewed very differently than 150,000 of the same U.S. soldiers operating in a measured, controlled manner within the rules of war to make Iraq safer and more stable. Some will argue that our enemies use these rules of law against us that they understand what we can and cannot do and use this knowledge to improve their operations. Undeniably this is true; terrorists and insurgents use our rules against us, which limits our effectiveness in the short term. In the long term, however, I believe those actions are self-defeating and do much to hinder their popular support. One common example would be using mosques to harbor terrorists or hide weapons. The insurgents knew that Americans were not allowed into these locations without first having laboriously gained approval from the highest levels. So instead of sending
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American troops into mosques to carry out searches, we used the Iraqi Security Forces all of whom were presumably Muslim. Although this might have meant that in a hot pursuit, we would have to sit on our hands and wait for the Iraqi Security Forces to arrive and search frustrating to be sure it robbed the enemy of the propaganda value of having U.S. troops tromping through a mosque, appearing to desecrate it by their presence. The people of the area knew the enemy was hiding weapons and fighters in a place of worship and condemned them for such actions (making a place of worship into a place of conflict is odious in almost all religions), and the people of Iraq found this practice distasteful and ultimately selfdefeating for the insurgents. One other important benefit from ensuring that U.S. soldiers follow the rules of law and act in an ethical fashion is that it helps the troops themselves and eases their transition back into civilian society. A U.S. soldier operating overseas in places such as Afghanistan or Iraq daily carries the power of life and death over the people in those countries. Heavily armed, often scared, and frequently frustrated, a soldier can become aggressive in operating among the population. Unchecked and improperly led, a soldier can develop techniques for handling situations that, although not criminal, are improper. Soldiers may speak derisively to civilians, push or manhandle detainees, ram vehicles on the street, fire their weapons excessively to warn approaching vehicles, or, when engaged in a firefight, use their firepower indiscriminately. Soldiers and leaders could attempt to justify these actions by saying that they are in a tough situation filled with many dangers and that this is the only way to be effective. Yet most soldiers have a sharp sense of right and wrong. In the short term they can justify their overaggressive actions; in the long term they will know they acted inappropriately, which can cause serious psychological damage. Multiple combat psychologists spoke to me about the importance of instilling an ethos of restraint and respect for the local people not just because it was operationally effective but also because it made for fewer mental issues when the troops came home. They spoke to me of soldiers who had developed such a brutal manner while in Iraq that the psychologists feared they could never return to civilian society as functioning members. Ultimately, soldiers do what they are told. It is the leaders responsibility to give orders that will maximize the soldiers chances of mission success as well as his chances of emerging from combat proud of what he did and how he acted. If a leaders orders are in accordance with the laws of war, he will have done a great deal to ensure this will happen. My experiences have taught me that following the rules of warfare and instilling the importance of ethical conduct in our soldiers are critical forces in a counterinsurgency. The actions of our armed forces, often carried out by its youngest members, do much to bestow legitimacy on our presence; and this legitimacy is a critical foundation for success.


Policy Review

Deportation Before Incarceration

By Peter H. Schuck

he supreme court has now spoken. Prison overcrowding in California is not only a crisis; it is unconstitutional. The California prison system, the largest in the country and the most at risk legally, operated at almost 200 percent of rated holding capacity, with more than 160,000 inmates. A special three-judge federal court had found that these conditions, in which suicides, violence, and lack of health care and other social services were endemic, violate the Eighth Amendments cruel and unusual punishment clause and ordered the state to reduce its prison census by as many as 46,000 inmates, to only 137.5 percent of capacity. In May 2011, the Supreme Court, in a 5-4 decision (Brown v. Plata), affirmed the lower court, upholding what dissenting justices called perhaps the most radical injunction issued by a court in our Nations history, one based on a judicial travesty. The razor-thin Court majority, adopting the lower courts findings, stated that transfers of prisoners to other states or

Peter H. Schuck is the Simeon E. Baldwin Professor Emeritus of Law at Yale University.
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county jails, construction of new prisons, additional spending, and hiring of additional prison staff would not suffice to satisfy the constitutional standard. The Court did not mandate that California change its laws for example, by requiring the state to decriminalize certain illegal conduct, or to reduce the length of the minimum sentences that state law now requires its judges to impose. But the Court nevertheless went quite far. It held that population reduction a euphemism for the mass releases of inmates convicted of serious crimes must be a significant part of the remedy. Specifically, it ruled that the prison census must be reduced by 46,000 prisoners within two years. How did we get to this point? How did prison capacity become so egregiously overstretched that the Supreme Court would How did prison impose such an extreme remedy on the state? There is no dearth of explanations. Decades of tough-oncapacity get so crime politics, coupled with genuine concerns about high recidivism rates and studies showing the overstretched doubtful effectiveness of most rehabilitation prothat the Supreme grams, have led states to demand longer sentences. Many laws have made the longer sentences mandaCourt would tory, depriving the sentencing judges of discretion. impose such an California and some other states have enacted extreme remedy three-strikes laws, which have increased the number of very long sentences that courts must mete on California? out, sometimes for relatively minor crimes. The decades-long war on drugs has helped to over-populate federal and state prisons and jails, as has stepped-up enforcement against immigrants guilty of immigration-related felonies. The overcrowding problem would be much easier to solve, of course, if the significant rise in incarcerations were entirely a bad thing if they represented only costs, not benefits. But the social benefits of putting serious criminals in prison appear to be very substantial; the only real question is how large they are. Because prisoners on average would commit a large number of crimes if they were free estimates range as high as twelve a year more incarcerations for longer times are partly responsible for the unprecedented decline in crime rates that the U.S. has enjoyed in the past two decades. According to James Q. Wilson, perhaps the leading student of this phenomenon, the weight of scholarly opinion is that prison sentences do deter crime and explain much but not all of the American crime drop. Despite the Courts unequivocal mandate to reduce prison overcrowding, however, California is unlikely to come even close to meeting it in the foreseeable future. Consider the constraints on what California (and other states) can do to meet the Courts far-reaching demand: New prison construction designed to expand holding capacity is more difficult than ever due to a combination of factors. Most states are in severe fiscal crisis, which raises their costs of borrowing. Voters resist new taxes.
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Fierce nimby reactions occur among people living near proposed new prison sites. California already spends $9 billion (over seven percent of its entire budget) on corrections, the fastest-growing portion of its budget after Medicaid. California has hired more staff and rented prison space in other states but this simply spreads the problem around and is approaching its limits. Double- and even triple-celling prisoners, which the state already does, encourages violence, and politically powerful guards unions oppose it. Releasing prisoners is the most straightforward remedy for overcrowding, and where prisoners have accumulated sufficient good time credits to qualify for early parole, this is a routine policy. Not surprisingly, the Court endorsed it, along with electronic monitoring and diversion of low-risk offenders to community programs. But concerns about recidivism and particularly about violent The release of crimes by released prisoners impose severe limits prisoners is a on premature releases of convicts. Instituting more generous good time credits to allow earlier parole of reform that must those who can safely be released and monitored is reach its limit at desirable, but California is already doing so, and the point where with a felon recidivism rate of 58 percent within three years (70 percent if nonfelons are included), it those considered is surely running out of low-risk candidates for early for release pose release. This reform, then, must inevitably reach its limit at the point where those being considered for too high a risk. release pose too high a recidivism risk. The precise point at which that risk becomes socially unacceptable is of course a matter of difficult judgment. We should not be surprised that officials who must weigh the prospect of even a small number of publicized violent crimes by released prisoners will tend to be risk-averse about releasing them. Their incentives, rather, will be to resolve all doubts and exercise all discretion in favor of continued incarceration. Who can blame them? In his dissenting opinion in Brown v. Plata, Justice Samuel Alito described a court-mandated prisoner release program in Philadelphia in the 1990s:
federal courts enforced a cap on the number of inmates in the Philadelphia prison system, and thousands of inmates were set free. Although efforts were made to release only those prisoners who were least likely to commit violent crimes, that attempt was spectacularly unsuccessful. During an 18-month period, the Philadelphia police rearrested thousands of these prisoners for committing 9,732 new crimes. Those defendants were changed with 79 murders, 90 rapes, 1,113 assaults, 959 robberies, 701 burglaries, and 2,748 thefts, not to mention thousands of drug offenses.

Decriminalizing nonviolent crimes, particularly by legalizing drug possession, would reduce the prison population, and there are strong but highly
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controversial arguments in favor of doing so. But what legalization means is unclear, and its effects on prison overcrowding should not be exaggerated. According to Mark Kleiman and Jonathan Caulkins:
Contrary to widespread belief both in the United States and elsewhere, American prisons are not filled with people whose only crime was using drugs (as opposed to helping to distribute them). There are more than 1 million arrests per year in the United States for drug possession (of which a very large proportion are for possession of cannabis), but few of them result in prison time, or even jail time following a conviction. . . .The exceptional user sentenced to prison by a judge for possession alone is usually a courier carrying very large quantities, is already on probation or parole for another crime, or has a long record of non-drug crimes. Among prison inmates, those doing time for simple possession have more prior convictions for non-drug crimes than those doing time for property or violent crimes.

Shorter prison sentences are surely warranted in many cases, with little risk of weakening deterrence. As Wilson notes, When voters demand longer maximum sentences for a crime that has recently made the headlines, they sometimes ignore the fact that many people who commit that crime do not go to prison at all and those that do may often be kept in prison long after there is any chance of their repeating the crime. Still, there is a very strong case to be made for restoring the discretion over sentencing that judges traditionally enjoyed until it was restricted by legislatures that accused them of being too soft on crime. Many states face Californias problems. The fiscal stakes in relieving prison and jail overcrowding are enormous, and these stakes, more than fear of legal liability, probably drive the efforts to reduce it. Corrections spending represents a large portion of state budgets, quadrupling in just the past 20 years and now accounting for one of every fifteen state general fund discretionary dollars. Nearly 90 percent of corrections spending goes to prisons. High incarceration rates translate into high costs. One recent study claims that a reduction by one-half in the incarceration rate of nonviolent offenders would lower correctional expenditures by $16.9 billion per year and return the United States to about the same incarceration rate we had in 1993 (which was already high by historical standards). The large majority of these savings would accrue to financially-squeezed state and local governments, amounting to about one-fourth of their annual corrections budgets. As a group, state governments could save $7.6 billion, while local governments could save $7.2 billion. State corrections budgets, once largely untouchable, are now being slashed. According to one study, The budgets of at least 26 state departments of corrections have been cut for fy2010, and even those whose budgets have not been cut are reducing expenditures in certain areas . . . Each year, the decisions will become more difficult.
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ven so, politicians will find it hard to sell such reforms to a deeply skeptical, crime-fearing, and tax-weary public. As a result, severe and chronic prison overcrowding will persist, leaving California and other states with a very serious social, political, and legal problem. This stalemate, moreover, must inevitably impugn the power and perceived legitimacy of the federal courts, which seem impotent in the face of such long-standing constitutional violations. It is telling that at oral argument in Brown v. Plata, the Supreme Court justices, while rebuking the states lawyer for Californias failure to meet the constitutional standard, was unable to suggest any ideas about what else the state should do other than spend more money on prisons. Yet, in its decision, the Court conceded, as the lower court had found, that any remedy requiring significant additional spending by the state was chimerical in light of its unprecedented budgetary shortfall. In the wake of the Courts decision, the state has adopted an overcrowding reduction plan whose adequacy is already in doubt. Under this so-called Public Safety Realignment Plan, which began on October 1, 2011, the state has transferred responsibility for incarcerating and supervising the parole of low-level offenders to the counties. Those convicted of crimes defined as nonserious, nonviolent, and nonsexual will, with some exceptions, serve their sentences in county jails instead of in state prisons, for terms of up to three years. This approach is imposing immense fiscal and administrative burdens on county systems, as they are now also responsible for supervising the parole of inmates convicted of nonserious, nonviolent crimes when they are released from jail or prison under the plan. The county jails must now also house any convicts whose parole is revoked. More than 10,000 convicts have been shifted to out-of-state prisons, with presumably more to come. California also plans new in-state construction projects that will add more than 50,000 new beds. New programs are being instituted for early release of nonviolent female and medically disabled prisoners. Despite these efforts to increase capacity and reduce the inmate population, the state has almost certainly failed to meet the courts requirement that it bring the inmate population down to 167 percent of capacity by the end of 2011. Data from December 7, 2011, showed the prisons still operating at 170.7 percent of capacity, and some facilities had much greater overcrowding, with several still exceeding 190 percent of capacity. Californias counties (some of which are under their own court orders to reduce overcrowding and improve conditions) are of course bearing the brunt of these new developments and are taking extreme measures to deal with them. Riverside County, for example, plans to charge inmates $142 per night. Fresno County is no longer incarcerating those who violate their parole conditions. Other counties are releasing inmates early and while they insist that those so released are not dangerous, this is more wishful thinking than firm prediction.
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Operating under these intense legal, political, and budgetary pressures, policymakers must search desperately for other ways to reduce prison overcrowding until the necessary but politically elusive structural and policy changes can be made. Under these difficult conditions, any policy that promises to reduce overcrowding without undue risk to public safety deserves serious consideration. In what follows, I propose such a policy. Simply stated, the federal government should deport some immigrant criminals before they enter prison, not after. This would seem to be a no-brainer.

Deportation and the law

onsider this fact: in 2009, more than 25 percent of federal prisoners and a large number of state prisoners were noncitizens and have been convicted of the kinds of crimes that render them immediately deportable once their convictions are final and affirmed on appeal. (Immigration law gives them few if any defenses.) The government wants to remove most of these easily-deportable criminals; indeed, federal law already requires expedited removal at the end of their prison sentences. But the law permits such deportation only after they have served their full sentences in our prisons. Given a level of overcrowding today that may (as in California) necessitate the release of many citizen criminals before prison officials think they are safe to parole, it would obviously make sense to deport some immigrant criminals before they consume scarce prison resources that average over $45,000 per year per inmate. Doing so would immediately reduce the need for hard-pressed officials to release prisoners whom they would not otherwise release because of the recidivism risks they pose. Unfortunately, federal law poses a major obstacle to this remedy. Since 1917 long before our prisons were unconstitutionally overcrowded and before immigrants convicted of serious crimes contributed significantly to this problem the immigration statute has required that criminal immigrants complete their prison terms before they can be deported. Congress has not reconsidered this imprisonment-before-deportation policy in light of changed conditions. Indeed, Congress complicated this problem when it enacted the Prison Litigation Reform Act (plra). Although this statute was designed to limit federal courts power to order the states to undertake certain far-reaching remedies including the early release of prisoners into the community it also provided that such remedies could be justified if the court found that no less intrusive measure would effectively remedy the constitutional violation at issue in the case. In Brown v. Plata, the Supreme Court found that the California prison system was so egregiously, persistently, and unconstitutionally overcrowded that the lower courts prisoner release order was permissible even under the plras limitations on judicial remedies.
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The 1917 law requiring imprisonment before deportation was amended in the 1990s to provide for its own exception. A convicted deportable criminal can be deported earlier that is, before serving his full sentence here if he was convicted of a nonviolent offense and if an appropriate official (the attorney general or the chief of the state prison system) requests such an earlier deportation. Note, however, that this exception is limited to nonviolent criminals, precisely those who in the aggregate consume the most prison resources, and that correction officials almost never use the exception. Three factors probably explain the statutory limitation of the exception to nonviolent criminals and officials failure to invoke it: the fear of illegal reentry by recidivists, diplomatic constraints, and political factors. (Interestingly, the United Kingdom encourages early removal of immigrant criminals despite the existence The immigration of similar conditions and arguments there.) Illegal re-entry. Unfortunately, criminals counstatute requires tries of origin may well be reluctant to repatriate that criminal violent criminals or, if they do take them back, may fail to imprison them for very long, or at all. In that immigrants case, many will seek to reenter the United States illecomplete prison gally and resume their depredations against American society. Given the traditional porosity of terms before they our long borders and fecklessness of border enforce- can be deported. ment, this is a perfectly realistic concern. The magnitude of this risk of illegal reentry, however, depends, first, on the receiving countrys willingness to incarcerate the criminal for the full period of his U.S. sentence, monitor him when he is on parole, and so forth. This commitment in turn depends on the countrys diplomatic relationship with the United States and on the fiscal and other incentives that the United States can use to induce that countrys cooperation factors that I discuss below. But whatever the period of incarceration in the criminals home country, his ability to return to the United States thereafter will of course depend on the efficacy of our border enforcement and failing that, of our interior enforcement. In the past, undocumented immigrants have found it relatively easy to cross the southern border, albeit at significant cost in terms of coyote fees, risks to life and health, opportunity costs at home, and the frequent need for multiple attempts before success is finally attained. Since 2007, however, the number of illegal entries has declined substantially due to some combination of reduced job opportunities in the U.S., an enlarged and more technologically equipped Border Patrol, and several enforcement programs including criminal prosecution and prison time for previously-deported illegal entrants. If this trend continues, the likelihood of illegal reentry will be much lower than it was traditionally. Diplomacy. Another impediment to policy change is the need to deal diplomatically with the criminals country of origin. Prisoner transfer treaties
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(ptts) are international agreements that permit countries to remove a foreign-national prisoner to the prisoners country of nationality to serve out the remainder of his sentences. ptts are negotiated in the context of an international law default rule: One nations courts will not execute the penal laws of another nation. Typically, a ptt requires as a condition of the transfer: 1) the prisoners consent, 2) the receiving countrys consent, 3) a final judgment against the prisoner, and 4) dual criminality (the crime for which the individual was convicted must be a crime in both the sending and receiving countries). In many but not all of these treaties, the transfer must also have been initiated by the prisoner. In the United States, foreign national prisoners initiate applications for transfer, which are then considered by the Department of Justice. In determining whether Congress to approve the transfer, the doj considers the prismight adopt a oners likelihood of social rehabilitation and the likelihood that he will return to the United States, as new default well as other law enforcement concerns. rule: early Congress imposed the prisoners consent requirement primarily out of a concern that deportation deportation, might impose a hardship on a criminal and his famiperhaps even ly. But such solicitude is unwarranted in the combefore any mon situation where he lacks family ties here. Although Congress passed legislation in 1995 urgincarceration ing, but not requiring, the president to renegotiate has occurred. ptts to eliminate the consent requirement in ptts, it remains. In addition, the ptts require not only the consent of the sending country, receiving country, and the prisoner, but also that the prisoner initiate the request. Consent, however, is not the only impediment to quick deportation of criminals. Mexico, for example, has sometimes been unwilling or unable to verify that it was imprisoning its nationals once they were returned there; prisoners may simply be released. In addition, securing the receiving countrys consent and assuring ourselves that deportees will serve their full sentences there and will not suffer persecution or other human rights violations is sometimes difficult. Political factors. The politics surrounding efforts to reduce prison overcrowding and reduce prison costs are fierce. Taxpayers want relief from prison costs, of course, but they also fear more crime if criminals are released prematurely a possibility that Justice Alitos dissent in Brown v. Plata renders vivid. This presumably explains why California officials have had so little success in early release. At the same time, localities where prisons provide scarce government jobs, prison suppliers, prison guard unions, and other interests with a strong stake in large prison populations oppose reductions. Resolving these conflicts is exceedingly difficult, as ex-Governor Arnold Schwarzenegger discovered in California and new-Governor Andrew Cuomo is discovering in New York.
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A proposal: Earlier deportation

n some circumstances, sound immigration enforcement policy will favor having an immigrant criminal serve his entire sentence before being deported. For example, it might take that long for the United States to arrange for his actual deportation to the country of origin. The government might doubt the ability or willingness of any country to which he could be returned to keep him imprisoned for his full term, and might fear that if he is released there prematurely (or is not imprisoned at all), he would re-enter the United States illegally. It might want to keep him in our prisons so that he can be questioned about criminal activity by him or by others. Family ties, medical needs, or other humanitarian reasons might justify keeping him here, albeit under lock and key. There are surely other situations in which the government might conclude that deportation would be ill-advised. But just as surely, we will often want to deport criminals as soon as is practicable once their conviction and deportation order become final. Common examples are those guilty of violent crimes, those who are thought to pose a high risk of recidivism, those only recently arrived in the United States, those who are eager to be deported, and those without strong family ties here. Changing the imprisonment-before-deportation rule. Congress should change the law in one of two ways. First, it could repeal the current imprisonment-before-deportation rule altogether. For those criminals whom the government decides to deport, it would have broader discretion about when to initiate deportation as soon as possible, after the criminal has served his sentence, or at some point in between. Alternatively, Congress could adopt a new default rule: early deportation, perhaps even before any incarceration has occurred. Since a default rule is not mandatory, the government could still decide to imprison before deportation in any given case. Under either approach, the law should specify the important individual and community values that the official decision maker must seek to protect and balance. (Some of these values will or at least should have already been brought into play in the immigration court before the final deportation order was issued.) Individual values should include: maintaining the integrity of families in the United States, especially those with children or spouses who are U.S. citizens; the length of time the immigrant has spent in the U.S.; whether he wants to be deported or not; and other factors such as acute needs for medical treatment. Community values should include: the seriousness of the offense, with violence and harm to the U.S. community weighing heavily in favor of early deportation; the risk of recidivism; the degree of prison overcrowding in his jurisdiction; the length of time remaining in his sentence, which would affect the U.S. incarceration costs to be avoided; the receiving countrys willingness and ability to ensure that he completes his
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sentence there; the likelihood of his reentering the U.S. illegally after that country releases him; and legitimate diplomatic considerations. Congress could specify the weight to be accorded to each of these criteria or leave that instead to official discretion. Finally, the prospect of being removed against ones will to a prison abroad with harsher conditions and perhaps away from ones family might require certain administrative process before early deportation can be imposed. Renovating the PTT regime. In addition to changing the current imprisonment-before-deportation rule, Congress and the president should renovate the ptt system. They should deploy diplomatic and financial incentives to persuade the treaty partner to accept repatriation even without the prisoners consent, and to ensure that 1) the deported prisoner will actually serve the remainder of his U.S.-imposed term there, and 2) the conditions of imprisonment there meet the minimum health, safety, and other standards applicable to prisoners in the United States. In appropriate cases, the president should use his existing legal authority to arrange for the right of the U.S. to build, manage, and fund such prisons in the receiving countries. Needless to say, such diplomacy, which must proceed on a country-by-country basis, would be very challenging, and the incentives driving the receiving countrys negotiating position would doubtless be complex. Nevertheless, such a program could be immensely cost-effective for the U.S. and could be made attractive to the receiving country as well, depending on the value of the subsidies and other benefits that the U.S. would transfer to the receiving country along with the prisoner. Even if such a program proved infeasible, however, my proposal to replace the traditional imprisonment-before-deportation rule with an administrative process to rationalize and support early deportation should be far superior to the status quo for those cases in which transfers pursuant to a ptt can indeed be effectuated. The criteria for deciding for or against early deportation would enable the government to consider the social risks of doing so primarily the risks that the transferee state would not incarcerate him for the prescribed period or under humane conditions, and that he would reenter the U.S. illegally after release by that state. In those events, the U.S. might still deport him early if the criteria militated in favor of such a decision. vercrowded prisons constitute a very serious social problem of many dimensions: human rights threats, violence against prisoners and guards, breakdown of order and discipline, obstacles to prisoner rehabilitation and good health, fiscal integrity, and violation of constitutional or statutory rights. Despite being under immense and growing pressures to reduce their prison populations, California, other states, and the federal government have so far been unwilling or unable to reduce their prison populations significantly without creating what they believe are undue risks to public safety. A variety of policy changes have been proposed,
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some are being tried (especially in California, under the court order), and some of these may prove to be partly successful. Even so, the problem remains and in some states may be getting worse. Early deportation of immigrant criminals would confer immense benefits on federal and state taxpayers (and on the remaining prisoners) at little or no marginal costs. To garner these fiscal advantages, however, the federal and state governments will have to work hard to dismantle the legal, political, bureaucratic, and diplomatic obstacles that have prevented early deportations. Although these governments have obviously not mustered the will to do so in the past, the situation may be changing dramatically, as extraordinary fiscal (and thus political and legal) pressures not to mention the prospect of mandated releases of large numbers of potentially dangerous criminals before officials deem it safe to do so suddenly make the previously unthinkable eminently thinkable. Even law-and-order conservatives are now supporting reforms designed to reduce corrections costs, reforms that were previously supported primarily by liberals. In hard times when difficult tradeoffs must be made, stranger things have happened. My proposal to send back criminals who are deportable (not all of them) before they enter our prisons is certainly no panacea. The criminals countries of origin may not want them back and may refuse, contrary to international law, to repatriate them. And if their countries do accept them, they may not imprison them at all, or for long, so the criminals may try to reenter the U.S. illegally. This reentry threat may explain why the federal government has not updated the 1917 law or used its exception. But no policy to reduce prison overcrowding is risk-free, and the existing ones are both flawed and plainly inadequate. Diplomacy might persuade countries of origin to incarcerate their repatriated criminals, and better border enforcement (which has recently improved) can reduce reentries. Prison officials and diplomats must try anything that the law permits and that promises to reduce overcrowding without endangering public safety. Accelerating the deportation of criminals who will almost certainly be deported eventually will not solve the overcrowding problem, but it will surely help.

February & March 2012


State-level Cybersecurity
By Michael J. Glennon

he parade of horribles potentially set to march by a cyberattack is by now familiar: No air traffic controllers or airport check-ins; no electronically regulated rail traffic; no computer-dependent overnight deliveries of packages or mail; no paychecks for millions of workers whose employers depend on payroll software; no financial records of funds on deposit and no atms; no reliable digital records in hospitals and health centers; no electrical power, resulting in no light, no heat, no operating oil refineries or heating fuel or gasoline; no traffic signals, and no telephone or internet service or effective police protection such is the list of what could be disabled by an attack on Americas computer networks. Addressing this threat has been assumed to be the task of the federal government. But the dangers posed clearly implicate the police powers traditionally exercised by the states and the states interests are significant. As the authors of one recent study noted, states hold the most comprehensive collection of personally identifiable information about their residents, and
Michael J. Glennon is professor of International Law at the Fletcher School of Law & Diplomacy, Tufts University. This article was supported by a grant from the Hitachi Foundation and is adapted from his book, Foreign Affairs Federalism, which will be published by Oxford University Press. The author thanks Matthew Hoisington for research assistance.
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states routinely rely upon the internet to serve those residents. Health and driving records, educational and criminal records, professional licenses and tax information all are held by state governments. What role, then, might states play in promoting cybersecurity? Just how great is the threat from cyberattacks? What, indeed, is a cyberattack? How effective are federal and international safeguards? Isnt cybersecurity the proper domain of federal law and international law, rather than the states? Lets begin with the gravity of the threat. So far as we are aware, as James Lewis has pointed out, in only two incidents have actions taken in cyberspace thus far caused serious damage to critical infrastructure. Neither occurred in the United States. (The first involved the disruption of Syrian air defenses by the Israeli Air Force during the destrucWhat role might tion of a Syrian nuclear reactor. The second involved the so-called Stuxnet attacks on Iranian states play in nuclear reactors.) These operations were appropriately termed cyberattacks. They involved destrucpromoting tion or disruption of the sort associated with war; cybersecurity? they are thus regulated to a point by the international law of armed conflict. Cyber-espionage, on Just how the other hand, involves no destruction or disrupgreat is the tion but is aimed at the surreptitious extraction of data. The term cybercrime has been used broadly to threat from describe a wide range of activities, from illegal intercyberattacks? ference and illegal access to the misuse of devices and content-related offenses. Each of these terms refers as much to the perpetrators as to the act itself. Espionage conducted by other nations has been regarded as a matter for the federal government, whereas theft, the destruction of property, and related offenses committed by individuals and criminal organizations are thought to be the purview of both state and federal governments. While these distinctions provide a bit of analytic clarity, cyberattacks, cybercrimes, and cyber-espionage do not fit well into existing categories. For one thing, theyre usually not easily distinguishable from one another until well after their initiation, if then. All exploit vulnerabilities in computer networks and use similar techniques. Malware that has been downloaded surreptitiously and sits silently on a computer may be intended simply to monitor keystrokes or it may await the command of a distant operator to erase data, freeze the operating system, or participate in a botnet attack (explained below). Experts often cannot be sure whats afoot without timeconsuming and painstaking forensic analysis. Given the instantaneity of strike and counterstrike in cyberspace, this can be impractical. Further, the anonymity of cyberspace and the current state of information technology make it extremely difficult to identify transgressors and to attribute attacks. The absence of attributability severely complicates the application of any legal regime to individual acts. Finally, as with terrorist attacks, vexing issues
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of legal categorization arise. Flying an airplane into a building is an offense dealt with by state criminal law, federal criminal law, and also if the attack originates from abroad international law. So too with a cyberoperation that derails a train or zeros out a bank account. For all these reasons, the term cyber-intrusions, while simplistic, is a useful catch-all.

The intrusions spread

ll that said and legalist categories aside, theres clear cause for concern. Cyber-intrusions are growing in frequency and severity. The 2009 breach of Googles e-mail accounts was widely reported. Later that year, computer hackers succeeded in penetrating elements of the U.S. electrical grid and implanted malware that could have allowed wrongdoers to take control of at least parts of the system. After PayPal stopped processing donations for WikiLeaks in 2010, groups such as Anonymous, LulzSec, and other WikiLeaks supporters launched a botnet attack on PayPals website. Visa and MasterCard were also attacked after announcing that they would not do further business with WikiLeaks (more on this later). A 2011 cyber-intrusion into Sonys PlayStation network might have compromised credit card data, e-mail addresses, and other personal information from 77 million user accounts. The names, account numbers, and contact information of 300,000 Citigroup customers were also improperly accessed in 2011. The security firm rsa disclosed in 2011 that information integral to the security of numerous government and corporate computer networks and e-mail systems had also been extracted from its servers. These intrusions all occurred within the United States, or at least against U.S. targets. Foreign targets have been hit even harder. A 2007 botnet attack on the Estonian governments servers wrought havoc throughout the country. All major commercial banks, telcos, media outlets, and name servers the phone books of the internet felt the impact, and this affected the majority of the Estonian population, the defense minister said. This was the first time that a botnet threatened the national security of an entire nation. Georgia was the victim of a similar botnet attack in 2008. A debilitating attack occurred in 2011 against a South Korean bank. One of the most significant cyber-intrusions was revealed later that year when an American cybersecurity company reported that it had identified a single perpetrator of cyber-espionage that lasted up to five years against a wide range of governments, American corporations and even United Nations groups, and that the pattern of targets suggested the perpetrator was a government. Numerous other serious incidents have occurred, but publicly available information is incomplete. Victims of cyber-intrusions tend to be tightlipped for fear of spreading panic or exposing vulnerabilities.
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The media attention accorded attacks on these big-name targets might lead one to believe that smaller organizations are safer. They are not. As the vice president of MacAfees threat research division, Dimitri Alperovitch, recently put it, the only organizations that are exempt from [cyber-intrusions] are those that dont have anything valuable or interesting worth stealing. Smaller businesses and low-level governmental entities have fewer protections in place and represent low-hanging fruit. Cyber-intrusions against such websites have provided a treasure trove of sensitive information. In August 2011, Anonymous revealed that it had accessed over 70 mostly local law enforcement websites in the United States in retaliation for the arrests of its supporters. The information included names and reports of police tipsters, profiles of gang members, data about security training, and credit card numbers. Some county sheriffs were unaware that their websites had been hacked until they were contacted by journalists. Anonymous publicly took credit for these intrusions. Normally, however, identifying the source of an intrusion is extremely difficult. Sophisticated cyber-intrusions of the sort launched by governments are especially difficult to trace. Intrusions that dont originate from a given country can be made to appear as though they do, simply by planting a false flag in the viruss code. Even if the keyboard from which the intrusion originated can be identified, linking a perpetrator to that keyboard can be impossible (as is linking the perpetrator, if identified, to a government or other organization). Nonetheless, although many such intrusions might have been routed through the United States, what is significant for purposes of considering states cybersecurity powers is that many do originate abroad, particularly from China. That being the case, one might, quite logically, look first to international law for protection.

The shortcomings of international law

las, international law does little to thwart cyber-intrusions. For several reasons, that is not likely to change. First, its not clear that traditional rules limiting use of force are relevant to even the most severe form of cyber-intrusions cyberattacks that are intended to cause destruction and harm. The United States and its allies have long argued that the current rules limit only armed attack violence involving kinetic weaponry, not cutoffs of foreign aid, trade boycotts, travel bans, or other acts that might have the same effects as an armed attack. That interpretation is now widely accepted. Few will be persuaded if the United States and its newly vulnerable allies now reverse course and contend that its really an attacks effects that count, not the means. Second, its doubtful that new international legal rules on cyberattacks are possible. Compliance with an international agreement probably could not be
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verified, since verification requires the ability to identify transgressors. Some analysts hope that customary norms will emerge from ad hoc state practice, as they did long ago concerning diplomatic immunity and freedom of the seas. But thats not likely. Nations cyber-behavior is veiled in secrecy, which makes it extremely difficult, if not impossible, to find any dots to connect. Third, even if international rules can somehow be agreed to, its doubtful they would be effective. Recall, again, Stuxnet. The author of the Stuxnet virus that hamstrung the computer systems running Irans nuclear centrifuges has never been positively identified (though signs point to the United States and Israel). Some argue that this sort of cyberattack on a countrys critical infrastructure should be off-limits. Yet its hard to see how a ban could have any teeth. When no one knows whether rules are being honored, violators face no penalty The Convention and have no incentive to comply. The sole treaty on Cybercrime that addresses the issue of cyber-intrusions, the provides a Convention on Cybercrime, discussed later, provides a framework for law enforcement, but its provisions framework for have proven notoriously ineffective as nations have struggled to find the common ground necessary to law enforcement, keep pace with evolving threats. Moreover, the but its provisions Convention does nothing to address what many have proven commentators see as the brunt of the problem cyber-intrusions conducted by nations themselves. ineffective. Fourth, its debatable whether effective international legal limits are desirable. Despite the controversy surrounding Stuxnet, its benefits were significant. It risked none of the casualties that air strikes could have entailed. It might have been more effective. It was probably cheaper. Retaliation was less likely because the attack was anonymized. The use of a cyber-weapon might have averted full-scale war. Some propose holding states accountable for cyber-intrusions that come from within their territory, but the attribution problem would still loom large and strict liability could easily boomerang; many cyber-intrusions, again, originate within the United States. International limits on cyber-intrusions are therefore likely to remain elusive. The central obstacle to legal restraints is the internets opaqueness, which allows attackers to disguise their identities and mask the source of the attack. Given the original design of the internet, its unlikely that nations will succeed in piercing that opaqueness through technological innovation. Absent an ability to attribute responsibility for cyber-intrusions, the best defense will therefore continue to lie not in international law but in national efforts to defend against them and mitigate their effects. This is where the states can play a pivotal role. They can take firm steps to prevent cyber-intrusions, monitor malicious traffic, mandate cybersecurity measures, and mitigate the effects of such intrusions when defensive safeguards fail. Indeed, many states have already quietly tightened the slack left
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by the federal government and the international community. Whatever else they may be called, most cyber-intrusions are, after all, crimes which the states are especially well-situated to address.

The federal role

othing is more integral to the states police power than crime prevention. Ensuring the safety of their residents is the core of the states constitutional responsibilities. Statutes that prohibit and punish fraud, theft, conversion, criminal trespass, forgery, malicious destruction of property, and numerous related offenses all have long been on the states books. Cyber-intrusions cause and are intended to cause effects that fall within many of those traditional statutes. Nonetheless, it has somehow come to be assumed that cybersecurity is a federal responsibility. The White House proposed broad new protections in May 2011, but envisioned no role of any significance for state governments. Numerous legislative proposals have been introduced in Congress, but, again, an exclusive federal role is simply assumed. Private studies make the same assumption. The reasons are understandable. An interconnected and borderless internet means that most activity in cyberspace takes place without regard to state (or international) boundaries. The task of complying with multifarious state cybersecurity laws, each of which could impose varying levels of legal obligation, might easily become burdensome, complex, and costly. Then, too, dealing with threats from abroad has long been seen to be the province of the federal government. It is true that the consequences of a cyberattack that originate overseas can mirror the consequences of a military attack that employs traditional kinetic weaponry; a cyberattack can thus look more like war than crime. Thats significant on many levels, not the least of which being that the Constitution prohibits states from making war without congressional approval. Add this to the fact that federal authority has now come to reach so pervasively into the daily lives of all Americans, and it is easy to understand why few notice or even question whether whats being done by the federal government should more properly be done by the states. And so the federal government has acted up to a point. Much of applicable federal law predates the notion of cyber-intrusions and simply happens, almost coincidently, to have some relevance. Fraud by wire, radio, or television, for example, has long been a federal criminal offense. Courts have adapted these prohibitions and recognized a variety of means of communications, including facsimile, telex, modem, and internet transmissions, as constituting wire, radio, or television communication[s]. The Wiretap Act imposes criminal penalties on any person (including law enforcement personnel) who make an illegal interception or who disclose illegally inter90 Policy Review

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cepted material. A statute protecting unlawful access to stored communications protects the confidentiality, integrity, and availability of communications stored by the providers of electronic communication services. Other statutes prohibit activities that might be, but are not necessarily, carried out online, such as identity theft. On the other hand, several federal statutes are directed specifically at internet crime. One, for example, prohibits phishing (where a defendant uses fraudulent e-mails to obtain bank account numbers and passwords). The can-spam Act of 2003 provides a means of prosecuting individuals who send vast volumes of unsolicited commercial email. Easily the most important federal statute, however, is the Computer Fraud and Abuse Act. This single law addresses a number of offenses that relate specifically to computers. It A borderless makes it a felony to access classified information in internet means a computer. It makes it a misdemeanor to access financial records or credit history stored in a finanthat most cial institution. It penalizes the theft of property as activity in part of a scheme to defraud with the use of the computer. It prohibits altering, destroying, or damaging cyberspace takes data that belongs to another. All in all, at least 40 place without additional federal statutes provide grounds for prosregard to state ecuting cybercrime. Significantly, nowhere in federal law is there any clear indication that any of these or national prohibitions is intended to preempt any state law. boundaries. Three aspects of this federal statutory scheme are noteworthy. First, federal law does little to prevent cyber-intrusions. It is aimed almost exclusively at punishing conduct that has already occurred. This is partially the result of offensive asymmetries in cyberspace attackers need be successful only once, while defenses must be foolproof. But it is also a consequence of policy choices of convenience. It is much easier, bureaucratically as well as legally, for law enforcement agencies to be reactive than proactive. Preventive technology does exist, but it hasnt been implemented effectively. The federal governments Einstein 2 program, developed by the National Security Agency, is capable of alerting federal computer emergency readiness teams in real time to the presence of malicious or potentially harmful activity in federal network traffic, but thus far the use of Einstein 2 has been limited to federal networks. The next generation of the Einstein programs, Einstein 3, is designed to be employed across the civilian departments and agencies of the executive branch. The program reportedly has the ability to automatically detect and respond appropriately to cyber threats before harm is done, providing an intrusion prevention system supporting dynamic defense. Concerns over potential violations of individual privacy, however, have prevented the deployment of the Einstein programs on the public internet. Instead of confronting this problem with creative solutions, perhaps
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along the lines of the minimization procedures already written into the Foreign Intelligence Surveillance Act, the federal government has thus far left the private sector to fend for itself. Where the federal government has been interested in providing security to the private sector, its programs have been poorly constructed. Steps taken to protect critical national infrastructure, such as the Defense Industrial Base Cyber Pilot co-launched by the Department of Defense and the Department of Homeland Security in June 2011, have been limited to the sharing of threat intelligence and the know-how to employ it, but not the monitoring or interception of private-sector communications. The reasons for this hesitation are sensible. As with the Einstein programs, the specter of government surveillance of the internet raises legitimate Far from taking civil liberties concerns. Federal officials are wary of potential criticism that they have violated the Fourth place in real time, Amendment prohibition against unlawful searches federal response and seizures. Yet the results of such half-measures are familiar: States, cities, private businesses, and mechanisms individuals are left to fight their own battles. A second key aspect of the current federal statucontinue to be tory scheme is that the federal government makes no triggered by meaningful effort to engage in mitigation at least, voluntary again, with respect to nonfederal entities. States and local authorities along with businesses and private notification individuals must fend for themselves when it comes from victims. to alleviating the effects of cyberattacks and cyberintrusions. Nothing in the current federal statutory framework, for example, brings the resources of the federal government to bear when a financial institution such as MasterCard or PayPal is subject to a botnet attack, as they were when they stopped processing transactions to WikiLeaks. The National Cyberspace Security Response Group, a forum of thirteen principal agencies that coordinate intragovernmental and public/private preparedness operations to respond to and recover from large-scale cyber attacks of national significance, is too cumbersome to react quickly to the kinds of cyber-intrusions that the private sector experiences every hour. Efforts to build a stronger cyber ecosystem through the automation and convergence of best cybersecurity practices exist in theory but not in practice. Far from taking place in real time, federal response mechanisms continue to be triggered by voluntary notification from victims; the haphazard nature of federal legislation means that many entities fall through the cracks. The Federal Information Security Management Act, for instance, requires all federal entities to report incidents of data breach, but, for the private sector, different laws apply to different businesses. Health care providers, credit bureaus, and financial institutions all are subject to separate regulatory frameworks while other industries are left unregulated altogether.
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This presages the third element in the federal framework, which is the lack of a comprehensive data protection regime. By adopting the sectoral approach, federal initiatives impose varying levels of obligation across different industries and omit any mandated cybersecurity requirements for many private-sector entities. But Washingtons hopes that private-sector innovation and market incentives will emerge to fill the security gap have failed. The number of intrusions has continued to rise. The offensive asymmetry in cyberspace persists. Ideas for more aggressive protective action abound, but as its sense of insecurity mounts, Washington continues to suppose that any solution must come either from itself or through passive collaboration with private corporations, not the several states. The upshot is lots of talk about the problem, but few, if any, concrete solutions.

State laws

s a result of this juridical void, the states have been increasingly active in taking on cyber-threats. Indeed, recent multistate surveys reveal a surprising volume of computer-related legislation. Every state has enacted laws directed at protecting state governments and businesses specifically from cyber-intrusions. Much of the legislation is remarkably detailed and comprehensive. The beginnings of such legislation can be traced to the California data privacy and breach notification law of 2003. The California law requires state agencies and those conducting business in California including foreign corporations to notify a resident of California when personal information concerning that resident has been acquired by an unauthorized person. As of October 2010, 45 additional states had enacted data privacy and breach notification laws. On the issue of data security and protection (i.e., a duty to protect personal information), California has also led the way. In 2004 it enacted a law requiring companies to implement and maintain reasonable security procedures and practices to protect personal information about California residents from unauthorized access, destruction, use, modification, or disclosure. At least eight other states have now adopted similar legislation. The statutes, like the earlier, more basic data privacy and data breach notification laws, also apply to entities headquartered outside the state in question including in foreign countries. One of the most far-reaching such statutes is Massachusettss data security act, enacted in 2 0 0 9 . This is one of a number of laws enacted by Massachusetts to curb cyber-intrusions. Because its matrix is likely to be emulated by other states, the law is worth a close look, particularly with regard to its most controversial aspect extraterritorial application of mandated security programs. The actual law itself is brief. It merely directs the relevant state agency to adopt regulations to safeguard the personal information of residents of

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Massachusetts from unauthorized access. The law then requires that those regulations apply to any person that owns or licenses personal information about a resident of the Commonwealth. The regulations that have now been promulgated mandate the adoption of a written information security program by any person that owns or licenses personal information about a resident of the Commonwealth. The regulations then prescribe in guidelines what elements the security program should contain. Personal information is defined in the regulations to include the residents Social Security number, drivers license or state-issued identification number, or financial account or credit/debit card number. The text of the statute and the regulations thus make clear that the protections apply to every Massachusetts resident regardless of where that resident is located. This includes those traveling abroad who are even momentarily in contact with a covered person if that person obtains personal information about its resident. (While it extends to those who receive, maintain, process, or otherwise have access to personal information, the law does not apply to natural persons who are not engaged in commerce, or to businesses that merely swipe but dont retain credit card information so long as the data is handled in accordance with industry standards.) The plain language of the Massachusetts law therefore clearly gives it extraterritorial application not only to persons in other states of the Union but other countries as well. Concern about this was expressed by businesses during the administrative hearings prior to the adoption of the regulations. But the laws broad reach survived. Its requirements thus apply, for example, to a restaurant or hotel in Paris that maintains credit card information concerning a Massachusetts resident, since the regulations apply to any persons who own or license personal information about Massachusetts residents in connection with the provision of goods or services or in connection with employment. The requirements apply to Air France, the airline on which the resident may have traveled and whose ticket was purchased with a credit card, if that number is stored. And they apply to a small used-book store in Paris that maintains the residents credit card number for making mail-order or internet purchases. They would apply, indeed, to that book store even if the Massachusetts resident purchased a book through the internet, without ever leaving home in Massachusetts. With so long an arm, the obvious question arises: Can Massachusetts legally do such a thing?

Legal questions

number of different legal regimes address this question international law, federal constitutional law, federal statutory law, and Massachusettss own constitution. The answer is not
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simple, but the elements of the analysis go to the essence of what federalism means in the contemporary United States. Lets begin with international law, if only because the United States Supreme Court famously said in 1900 that international law is part of our law. What precisely the Court meant by that phrase has been a topic of persistent controversy. One thing that is clear is that treaties, under the Supremacy Clause, are law of the land provided they are self-executing, i.e., intended to take effect domestically without implementing legislation. Otherwise, implementing legislation is needed. Thus far only one treaty is in force to which the United States is a party that relates specifically to cyber-intrusions the Convention on Cybercrime, noted earlier. The Cybercrime Convention requires parties, among other things, to establish laws against cybercrime, to ensure that their law enforcement officials have the Thus far only one necessary procedural authorities to investigate and treaty is in force prosecute cybercrime offenses effectively, and to to which the cooperate with other parties in the fight against computer-related crime. It was negotiated in 2001 United States is a under the auspices of the Council of Europe. party that relates President Bush signed the treaty and the Senate specifically to approved it on August 3, 2006. In his letter of transmittal, the president advised the Senate that the cyber-intrusions. treaty would require no implementing legislation provided the Senate adopted the conditions that he recommended. (It did.) Already, the secretary of state had written in his letter of transmittal to the president, federal substantive criminal law provides for broad overall coverage of the illegal conduct addressed by the Convention. Importantly, for purposes of the breadth of state authority, nothing in the Convention provides for, let alone requires, the preemption of legislation by sub-national units. Any limits on state power to engage in cybersecurity that derive from international law, therefore, must come not from treaty law but from customary international law. It is customary international law that imposes limits on assertions of extraterritorial jurisdiction by both nations and subnational governmental entities within them. It does so though the concept of jurisdiction. Five different bases of jurisdiction exist under which rules may be prescribed; two are relevant to the Massachusetts data security law. These are the territorial principle and the passive personality principle. Under the territorial principle, nations can prescribe rules that apply to every person present within their own territory and to conduct that occurs within their territory. Conduct that occurs outside their territory that has effects within their territory can be regulated if those effects are substantial. Under the passive personality principle, a nation can prescribe rules applicable to conduct that takes place abroad that harms its nationals wherever they might be. The scope of this jurisdictional basis remains uncertain,
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though nations have relied upon it in criminalizing acts of terrorism directed against their citizens located abroad. Citing both principles, nations in recent years have come to assert broad authority to exercise extraterritorial jurisdiction, though not without objection that their rules reach is exorbitant. Increasingly, these rules have involved activities on the internet. In one well-known case, a French court held in 2000 that French laws prohibiting Nazi propaganda applied to the operations of Yahoo! even though its servers were not located in France, none of its personnel were present in France, and the conduct in question did not occur in France. Its anything but clear that the effects of Yahoo!s operations in France were substantial under the territorial principle, though under an expansive construction of the passive personality principle, a case could be made that some Why would it French residents suffered some measure of harm. matter whether, But, one might ask, so what? Why would it matsay, the state of ter whether the Massachusetts statute violates customary international law? Its unlikely, after all, that Massachusetts any international tribunal would penalize statute violates Massachusetts for exercising arguably exorbitant jurisdiction in mandating measures aimed to customary enhance the data security of its residents. What difinternational ference should it make to lawmakers in other states who are considering emulating Massachusettss law? approach? First, as a practical matter, retaliatory legislation is possible. Other nations might put in place similar data security laws protecting their own residents data from sloppy Massachusetts businesses or from businesses in other states of the union that have much looser laws. Those states might not be thrilled to bear the brunt of retaliation triggered by Massachusetts. The specter of principled retaliation is a relentless diplomatic taskmaster; foreign countries, too, can be made to feel the pain. Frances anti-Holocaust laws might have been strengthened in the short term by its courts rigorous enforcement actions, but in the long term the precedent may come back to haunt France as other nations rely upon the Yahoo! case in justifying their own extraterritorial cyber-protection laws. Second, as a legal matter, violation of customary international law by a state could create domestic legal problems for that state. Recall, again, the U.S. Supreme Courts observation that international law is part of our law. One theory that is widely (though not unanimously) held among legal scholars is that customary international law is part of federal common law and as such is binding domestically, absent federal legislation to the contrary. If that view is correct, under notions of federal supremacy it would be no great stretch to hold the states responsible for respecting principles of customary international law unless they were permitted by Congress to violate those principles. (It is widely agreed that, for purposes of domestic law,
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Congress has the authority to place the nation in violation of customary international law.) There appears to be no case law one way or the other on this question, though in the period following independence from Britain and prior to the advent of the Constitution, some State (they were not then states of the union but rather, at least at first, independent nations) courts did apply principles of customary international law as part of their own common law. As to Massachusettss own constitution, nothing in it prohibits Massachusetts from violating customary international law. Other state constitutions are similarly silent on the question. While states common law could conceivably incorporate customary international law, that common law would give way to enactments of the states legislatures (such as data protection laws), just as federInternational al common law gives way to subsequent federal leglaw is not islative enactments. The short of it is, therefore, that while interna- clear-cut, and no tional law is not clear-cut, no one can say authoritaone can say tively that the Massachusetts law violates customary whether the international law or that, if it does, any such violation would have imminent or substantial negative Massachusetts consequences for the state. Unless an international law violates legal prohibition is clear, nations as well as subnational actors are deemed to have freedom to act. international rules Under Massachusetts law, the data security act or if it matters. would thus survive scrutiny even if it violated customary international laws jurisdictional limits. But what of the United States Constitution? That the law is not clearly prohibited by international law does not mean that it is constitutionally permissible. Nothing in the Constitution prohibits the states from exercising extraterritorial jurisdiction. That jurisdiction might be exercised with respect to activities occurring within another state of the union or within another nation. The Constitution does impose limits on the exercise of extraterritorial jurisdiction by states, but those limits are, if anything, more relaxed than the already broad limits set out in international law. The Constitutions limits are found in the due process clause. Due process requires reasonableness in the exercise of jurisdiction: A defendant is entitled to know whether he should expect to be hauled into court in another state. This traditionally requires minimum contacts with the other state. The phrase minimum contacts has been taken to mean that a defendant must purposefully avail itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Requiring minimum contacts protects defendants against litigating in unfair and inconvenient forums and ensures that states do not exceed their jurisdictional limits. But the Supreme Court noted in 1980 that the doctrine has been relaxed substantially in recent years because our contemporary econoFebruary & March 2012 97

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my is characterized by the conduct of business transactions across both state and national borders without any physical presence. Thus the Court held four years later that the exercise of jurisdiction by California was proper in a defamation suit against a newspaper published outside the state but circulated within it. Cases concerning jurisdiction over internet activities now arise more frequently, and due process questions loom large. In one of the more insightful judicial opinions on this issue a federal district court suggested a useful way of categorizing web sites. When a defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the internet, the court said, personal jurisdiction is proper. However, when a defendants internet use involves exchanging information with a The Supreme host computer, the court must examine the level of Court has interactivity and commercial nature of the exchange in order to determine the propriety of exercising perstruck down sonal jurisdiction. The line between two categories state statutes is, unfortunately, not altogether clear. Would that intrude too Amazons website, for example, involve the knowing and repeated transmission of computer files far into the over the internet, or would it be merely exchanging information? Nor is it clear why it should matter sphere of foreign affairs. that commercial responses to a web advertisement occur by telephone rather than e-mail (or responses embedded within the website). In any event, these are the sorts of considerations that would likely prove relevant in determining whether due process requirements are upheld in the enforcement of the Massachusetts law. Absent the knowing and repeated transmission of computer files, there would appear to be no insurmountable due process problem posed by the Massachusetts law. But what of the possibility of conflict with congressional enactments? If an unavoidable clash arises between state and federal law or if federal law occupies the field, then the state law is said to be preempted by federal law, which is of course supreme. Here, however, no comprehensive federal legislation on the issue of data privacy and data security currently exists, so no issues of federal preemption arise. That Congress has not preempted the states from acting in this realm does not, however, mean that the Constitution itself is also silent. In a handful of cases the Supreme Court has held that there exists a dormant foreign affairs power that resides exclusively within the federal government even though Congress has said nothing. Pursuant to this doctrine, the Court has struck down state statutes that intrude into that sphere of foreign affairs which the Constitution entrusts solely to the president and the Congress. A state, the Court opined, may not establish its own foreign policy. The indeterminate scope of the dormant foreign affairs doctrine makes it hard to
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apply, but its enough to note that it has been invoked rarely by the Supreme Court and only with respect to state statutes that represented individual, stand-alone initiatives rather than laws enacted by multiple states directed at vindicating common policy interests. The constitutional gauntlet does not end here. The Court has also invalidated state laws under the so-called dormant foreign commerce clause. The Constitution provides that the Congress shall have Power . . . To regulate commerce with foreign Nations, and among the several States, and with the Indian tribes. The courts have found that this provision not only grants positive power to Congress but also imposes negative limits upon the states. Obviously the foreign commerce clause does not prohibit every state law that has any effect on foreign commerce. But, as is the case with the dormant foreign affairs power, Too many state the states are not permitted to act simply because, voices mean lots on a particular issue of foreign commerce, Congress of compliance has remained silent. A state statute such as Massachusettss must pass two hurdles: It must not requirements, discriminate against foreign commerce, and it must which impedes not impede the federal governments ability to speak with one voice in foreign affairs. Clearly the first rather than hurdle is overcome, since the statute treats foreign promotes commerce no differently than it treats Massachusettss own commerce; business concerns commerce. within Massachusetts and those located abroad are equally burdened. The conclusion is less clear with respect to the second hurdle, however. Its at least arguable that Congress, in choosing not to require businesses to adopt written security programs, considers it important that the United States speak with one voice. Multiple state voices mean multiple compliance requirements, which ultimately impede rather than promote commerce by making it too cumbersome for businesses to deal with persons protected by disparate regulatory schemes. Meeting different state program requirements could thus discourage foreign businesses from dealing with Americans, which could become too burdensome. Further, as discussed earlier, the danger of retaliation looms large; one reason for the one voice doctrine, the Supreme Court has suggested, is curbing the risk of retaliation against the United States for actions taken by a state. On the other hand, Congress hasnt spoken with any voice on the data protection question, let alone one voice, and its silence could be taken as approval of multifarious regulatory schemes. After all, Congress could easily preempt those schemes if it wished to do so. To whatever extent the dormant foreign commerce clause does pose a problem for the states, it could be possible for states to overcome that hurdle by, as discussed below, moving more squarely into the business of cyber-protection by becoming what the Supreme Court has regarded as market
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participants. The market participant doctrine, so-called, has its roots in the actual words of the commerce clause. The clause empowers Congress, again, to regulate Commerce with foreign Nations, and among the several States. Under the doctrine, a state is not subject to the constraints of the commerce clause when it acts as a supplier or producer of goods or services rather than as a regulator. Thus far the Supreme Court has applied the doctrine only to domestic commerce, not to foreign commerce. But it has strongly suggested that the market participant exception does apply to foreign commerce. That would make sense. In a globalized economy, interstate and foreign commerce are all but inseparable, and the market participant exception would be set to naught if the two were evaluated under substantially different constitutional criteria. Lower federal courts seem to have accepted this view. All in all, then, while the matter is not free from doubt, it cannot be said that any clear legal prohibition or restriction from any relevant body of law clearly prevents a state from enacting a statute such as Massachusettss data security law.

States and botnets

h e a p pa r e n t ly u n o b s t ru c t e d path through this legal labyrinth has thus made it possible for a growing number of states to mitigate the effects of cyber-intrusions by requiring businesses to adopt data security programs and to notify customers when their personal information is accessed. Mitigation of this sort will also have a deterrent effect, as lower rewards for cyber-intruders diminish the intruders incentives. The states legislation represents an important first step in filling a gaping hole in federal law. Is there something more that the states might do? Might it be possible to leverage their unique lawmaking powers to make money as cyber-defenders? The answer may be yes. A variety of possibilities present themselves. Begin with one of the most prevalent forms of cyber-intrusion botnet attacks. Botnets are made up of vast numbers of compromised computers that have been infected with malicious code. Once they are infected the botnet computers can be remotely controlled through commands from the botmaster to operate in concert to disrupt or block internet traffic for targeted victims, harvest information, or to distribute spam, viruses, or other malicious code. Because of their versatility, botnets have been described as the Swiss Army knives of the underground economy. The attacks described above against Estonia and MasterCard, Visa, and PayPal all were botnet attacks. WikiLeaks itself has been the target of botnet attacks. Companies survive these attacks in part by successfully sequestering the malicious traffic and transferring or deflecting it into so-called sinkholes, honeypots, and darknets. Such techniques allow researchers to redirect the malicious
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traffic that comes from each client and place it in a research box of sorts, where it can be analyzed and decoded. Unfortunately, most of this takes place after the fact; the sequestration capacity, in other words, is added, ad hoc, on the fly, in response to the attacks rather than before them, in anticipation of potential vulnerability. Affected companies must also collaborate with internet service providers (isps) in order to sequester the traffic. In some cases the isps may be cooperative, while in other situations they may not be. Here, then, is one place where the states might play a more forceful and potentially profitable role, by instituting, for example, a fee-for-service arrangement that could provide a number of benefits for voluntary subscribers. Subscribers could include almost anyone, including in-state and out-of-state businesses, other states, and potentially foreign businesses and even foreign governments. Vaccine programs could be made available to subscribers (and computer hygiene made a condition of membership). An early warning system could be put in place to detect incipient botnet attacks on subscribers. Subscribers servers and computers could be disinfected of zombie malware. Unwitting owners of infected computers joining in the attack could be identified and notified. isps could be mandatorily directed by the state to block or shut down compromised computers involved in a botnet. State forensic experts could work with private security firms to attempt to determine the object of the intrusion as well as the identity of the botmasters. States might consider protecting subscribers with active defenses or electronic fences for cyberspace, possibly utilizing intrusion detection programs such as Einstein 3, the new shield being put in place by the federal government to protect its own computers. Cooperative arrangements to protect subscribers could be entered into with other stakeholders. Knowing participants in a botnet, when identified, could be prosecuted and, if necessary, extradited. And by engaging in these entrepreneurial efforts the states could qualify constitutionally as market participants, potentially exempting themselves from otherwise applicable limitations flowing from the dormant foreign commerce clause, discussed above.

Continuing to lead the way

otnets pose one form of cyber-threat; others would require different protective measures. Some will be amenable to statesponsored remedies while others will not. The point is that a space exists for imaginative, entrepreneurial thinking about potentially profitable cyberdefense by the states. States need not resign themselves to being 18th-century relics in an age of globalized commerce. Opportunities are available for creative rejuvenation. Using traditional police and regulatory powers, states can leverage their unique regulatory and law enforcement assets to succeed where the federal government and the international comFebruary & March 2012 101

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munity have failed. The result could be a race to the top as states compete with one another to provide top-notch cybersecurity for those willing to pay. This strategy has already played itself out within nato. By capitalizing on its expertise in these matters, the tiny nation of Estonia has been able to mobilize international funding to create the Cooperative Cyber Defence Centre of Excellence, a nato accredited organization, in Talinn in 2008. The Centre now provides nato with a wide range of products and services related to cybersecurity, while also serving as an intellectual hub for confronting such threats worldwide. Cyber-intrusions have caused and will continue to cause widespread harm. Their danger ought not be underestimated. But with innovative thinking on the part of state policymakers, the effect of those intrusions can be mitigated. States already have led the way with data security laws. There is no reason for them to stop here. With the right combination of far-sighted policies and technological prowess, the states might prove, even in a globalized 21st century, to be the effective dual sovereigns that the framers considered essential to preserving and enhancing the security and well-being of the American people.


Policy Review

Books Shawcross on Terror

By Peter Berkowitz
William Shawcross. Justice and the Enemy: From the Nuremberg Trials to Khalid Sheikh Muhammad. P u b l i c A f fa i rs . 2 3 5 pag e s . $26.99.

uring the fight against al-Qaeda, affiliated groups, and states supporting Islamist terrorism, progressive critics poured scorn on the Bush administration for allegedly shredding the Constitution and trampling on international law. Prominent among those progressives was then-Senator Barack Obama, who rode the train of their anger to the White House. His frequently harsh and uncompromising words suggested that the questions of law that the U.S. faced in combating jihadists who proclaimed holy war on America and waged it in violation of the international laws of war by disdaining to wear uniforms, concealing

Peter Berkowitz is the Tad and Dianne Taube Senior Fellow at the Hoover Institution, Stanford University. His writings are posted at
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their weapons, targeting civilians and civilian infrastructure, and seeking weapons of mass destruction to carry out their schemes of mayhem were susceptible of simple and straightforward answers. There is no contradiction, Senator Obama intoned and reaffirmed as president in his Inaugural Address, between our ideals and our security. No tradeoffs, no compromises, no difficult calls had to be made. The law was clear and following it faithfully not only presented no puzzles about the relation between liberty and security but enhanced both. By affirming our dedication to the rule of law even while at war we would strengthen our values, and by scrupulously safeguarding the rights of detainees we would enhance our security by depriving the terrorists of another reason to hate us. Only ignorance or malevolence, it seemed to progressives, could explain Bush administration policies that in the critics eyes shortsightedly and counterproductively put security ahead of liberty, since the struggle against Islamist terror gave rise to no hard questions of justice. The distinguished British journalist William Shawcross is of a different view. The judgment of evil is never simple he states in the opening sentence of his important contribution to the debate over how the United States can honor justice in its struggle against Islamist terror. His book, however, is not a philosophical meditation on ultimate questions. Rather he provides a probing analysis grounded in history, law, and politics of how the questions raised in the difficult international debates over the proper way to bring justice to the leadership of the Al
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Qaeda terrorist movement illustrate the ambiguity of dispensing justice in an imperfect world. Shawcross deftly surveys a decades worth of national security and law controversies, from the interrogation and trial of 9 / 1 1 mastermind Khalid Shaikh Mohammed to the proclamation by President Obama, following U.S. Navy Seals killing of Osama bin Laden, that Justice has been done. He shows that fighting evil under law involves myriad challenges to our values and our security and generates a constant flow of difficult questions about how to reconcile them. And he is firm in his assessment that since September 11 the United States has imperfectly, but to an extent that should inspire admiration and gratitude from friends of freedom and democracy around the world, advanced the cause of justice in the battle against a ruthless enemy of civilization. h aw c ro s s b r i n g s r i c h and varied experience to his undertaking. He is the author of many books, including Sideshow: Kissinger, Nixon, and the Destruction of Cambodia and the bestselling The Queen Mother. In addition, he has been a politically engaged proponent of human rights, serving as chairman of Article 19, a London-based charity and pressure group that defends the rights of free expression; board member of the International Crisis Group, an ngo committed to preventing and resolving deadly conflict; and member, from 1 9 9 5 to 2 0 0 0 , of the u n High Commissioner for Refugees Informal Advisory Group. Not least, he is the proud son of Hartley Shawcross, Britains lead prosecutor at the

Nuremberg Tribunal, in which the victorious Allies tried many of the worst Nazis for war crimes. Shawcross the son uses Nuremberg as a point of departure for understanding the dilemmas America confronts today because it shows how difficult it always is to treat properly those who commit hideous and unprecedented crimes. Initially, the Allies were divided over how to handle captured Nazis. Stalin proposed the firing squad for 50,000. Churchill envisaged summary justice for a handful of top figures. Roosevelt eventually embraced the idea of a military tribunal for the leaders because it would demonstrate respect for due process while allowing the prosecution greater flexibility than civil courts would. In May 1945, less than a month after President Roosevelts death, President Harry S Truman chose Supreme Court Justice Robert Jackson to be the chief prosecutor at the tribunal. Jackson firmly rejected any sort of show trial: You must put no man on trial before anything that is called a court under forms of judicial proceeding, if you are not willing to see him freed if not proven guilty. The results of the Nuremberg Tribunal, which opened on November 20, 1945, with 24 Nazis on trial, and concluded with the announcement of verdicts on October 1, 1946, suggest that the prosecution was indeed obliged to establish guilt. Although the Allies had it within their power to do whatever they wished with the defeated Nazis, the trials they authorized to dispense justice acquitted three defendants, sentenced seven to long terms of imprisonment, and twelve to death by hanging (in addition, one defendant committed
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suicide and another was found unfit to stand trial). In his opening remarks before the tribunal, Justice Jackson highlighted the precedent established by Nuremberg:
The wrongs which we seek to condemn and punish have been so calculated, so malignant, and so devastating that civilization cannot tolerate their being ignored, because it cannot survive their being repeated. That four great nations, flushed with victory and stung with injury, stay the hand of vengeance and voluntarily submit their captive enemies to the judgments of the law is one of the most significant tributes that Power has ever paid to Reason.

The restoration of justice under a law was a theme to which Hartley Shawcross returned in his closing remarks before the tribunal:
States may be great and powerful. Ultimately the rights of men, made as all men are made in the image of God, are fundamental . . . and so, after this ordeal to which mankind has been submitted, mankind itself struggling now to re-establish in all the countries of the world the common simple things liberty, love, understanding comes to this Court and cries, These are our laws let them prevail.

long-standing commitment in customary international law, soon to be enshrined in the 1949 Fourth Geneva, to the protection of civilians in wartime; and helped establish procedures for the prosecution and punishment of violations of the international laws of war. Shawcross is equally keen to note that in its time Nuremberg was both experimental and contested. And in our time its precedent must be thoughtfully applied. At Nuremberg, he observes, our civilization designed a vehicle to anathematize men imbued with evil. Yet evil is eternal and re-invents itself in every age. Thus, while the precedent of Nuremberg endures, the vehicles for justly combating evils new faces must be repeatedly refurbished and in some cases new vehicles must be designed and constructed. In asserting that they are both embodiments of evil, Shawcross is under no illusions about the difference in scale between the jihadists and the Nazis, and about the difference in the nature of the threat they pose. In striking contrast, however, to many of his colleagues among the transnational community of human rights advocates and activists, he is also under no illusions about the attributes that link the jihadist vision to that of the Nazis:
it too is totalitarian, and it too has anti-Semitism at its core. In the case of Al Qaeda that intransigent hatred is extended to all infidels. Just as Hitler planned a thousand year Reich, so the Islamists call for a global caliphate in which they and their laws prevail absolutely, and endlessly.

What William Shawcross characterizes as the remarkable achievement of Nuremberg extended well beyond the trials themselves. The tribunal contributed to the rehabilitation of Germany; set the stage for outlawing crimes against humanity; solidified the
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It is in significant measure because of his clear-eyed view of the gravity of the security threat the jihadists pose that Shawcross is able to illuminate the legal challenge they present. nderstanding the security threat posed by transnational Islamic terrorists begins with understanding the faith that inspires them. Shawcross calls it Islamism, which he defines as a collection of ideologies united by the belief that Islam is both a religion and a political system. Since religion and politics are intertwined in all forms of Islam it is necessary to add that Islamism is in particular characterized by commitment to violent religious war against the West. The Muslim Brotherhood, founded in Egypt in 1 9 2 8 by Hassan al-Banna and informed by the writings of its preeminent theorist, Egyptian Sayyid Qutb (19061966), has been the most influential promulgator of Islamism in the Sunni world. It is dedicated to a return to the teachings of the Prophet Muhammad, the rejection of Western politics and morality, and the creation by whatever means necessary of Islamic regimes based on strict interpretations of Sharia, or Islamic religious law. Undoubtedly, the oppression and the underdevelopment that are the bitter fruits of the authoritarian government endemic to Arab societies, indeed much of the larger Muslim world, have fueled the growth of the Islamist alternative. Shawcross reminds that the Deobandi movement of northern India and Pakistan, which enjoyed a close relationship with the Taliban, also teaches violent jihad and the need to restore an original and purified Islam. And for all

the enmity between Sunni and Shia Muslims and Arabs and Persians, the Shiite Islamic Revolution in Iran and the Islamic Republic it established have been driven by a similar determination to destroy the infidel and spread the reign of Islam. It was against the background of this toxic brew of piety and bloodlust that in 1993 Khalid Shaikh Mohammed collaborated in the attempt to blow up the World Trade Center, in 1 9 9 6 Osama bin Laden declared war on the United States, and in the late 1990s, under the protection of the Taliban in Afghanistan, the two plotted 9/11. Shawcross has no doubt that Americas prompt use of military force against al-Qaeda and the Taliban in Afghanistan was appropriate. He also recognizes that America was ill-prepared to deal with the legal challenges of waging war against transnational terrorists. But the root of the problem, he argues, was not the supposedly dastardly character of the Bush administration, but rather the condition at the time of American law and the international laws of war, which were not designed to cope with what was being called a new kind of war, involving primarily stateless actors who cared nothing for any rules of war. Indeed, the Geneva Conventions, the United Nations and other international institutions, and American law, with its sharp distinction between the laws of war and criminal law, presupposed that war involved conflict between states waged by soldiers in uniform, or civil war. Neither the international laws of war nor American domestic law had been compelled to give much attention to the handling of transnational terrorists, hybrid fighters not fitting easily
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under either body of law. Unlike traditional soldiers, Islamist terrorists do not wear uniforms, do not carry their arms openly, do not owe allegiance to a state, and, as the centerpiece of their strategy, attack civilians and civilian objects. And unlike traditional criminals, Islamist terrorists seek to destroy states. Shawcross is frank about Bush administration errors. For example, it should have cooperated better with Congress to craft new laws to govern the detention, interrogation, and prosecution of enemy combatants and should have consulted more with allies. The president should not have initially made a group status determination that all detainees captured on the battlefield in Afghanistan were unlawful enemy fighters; instead the Bush administration should have provided from the beginning the competent tribunals called for by the Geneva Conventions to determine the status of those captured on the battlefield. And although President Bush did promise that at Guantnamo Bay detainees would be treated humanely and, to the extent appropriate and consistent with military necessity, in a manner consistent with the principles of Geneva, the Bush administration should not have initially refused to apply the Geneva conventions to Guantnamo Bay detainees. At the same time, Shawcross is also at pains to point out what so many progressive critics of the Bush administration quite determinedly fail to grasp: The president had strategic reasons and legal ground for the choices he made even if in hindsight it can be seen that in several high profile matters the better arguments were on the other side of the question.
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The author does not shy away from the acrimonious disputes about interrogation, which boiled over into the demand that c i a interrogators and Bush administration lawyers be prosecuted as war criminals. Despite the opprobrium heaped far and wide on the Bush administration for what it called enhanced interrogation

Shawcross is frank about Bush administration errors. For example, it should have cooperated better with Congress to craft new laws to govern the detention, interrogation, and prosecution of enemy combatants.
sleep deprivation, slapping, slamming against walls (that were designed to be flexible to avoid physical harm), and waterboarding (used on three prisoners including Khalid Shaikh Mohammed) and what its critics insisted were open and shut cases of torture, Shawcross believes that the practices give rise to vexing issues. Indeed, he considers compelling arguments suggesting that provided that such interrogation techniques as the Bush administration authorized are not motivated by malice or used for sadistic pleasure, physicians are present to ensure safety, and it is reasonable to suppose that potentially life-saving information is at stake, enhanced interrogation may in some circumstances be the lesser of two evils.

The debate over military tribunals also has weighty considerations on both sides. Shawcross expresses sympathy for the pushback against the Bush administration determination to use not only federal courts but also military tribunals to try detainees. Those, like candidate Obama, who invoked the spirit of Nuremberg to argue that fedhe worries, in the spirit of Nuremberg, that as a result of Boumediene, decisions about handling prisoners in the struggle against Islamist terror, as Justice Scalia wrote in Boumediene in dissent, will ultimately lie with the branch [the judiciary] that knows least about the national security concerns that the subject entails. Shawcross shows that the Obama administrations conduct of operation against Islamist terrorism has been paradoxical. On the one hand, the president and Attorney General Eric Holder promised a dramatic break with the Bush administration. In January 2009, on his second full day in office, Obama signed an executive order directing the closing of the detention facility at Guantnamo Bay within a year. To great fanfare Holder announced his intention of trying Khalid Shaikh Mohammed in federal criminal court. And in its initial responses to the November 2009 massacre perpetrated by U.S. Army Major Nidal Malik Hasan at Fort Hood in Texas, underwear bomber Umar Farouk Abdulmutallabs December 2009 attempt to blow up the airliner on which he was traveling as it approached Detroit, and Faisal Shahzads attempt in May 2010 to detonate a car bomb in Times Square, the Obama administration displayed a preference for a law enforcement approach and avoided recognizing the attacks obvious Islamist dimension. On the other hand, the Obama administration has demonstrated dramatic continuities with the Bush administration. Three years after the presidents executive order, Guantnamo Bay remains open. Attorney General Holder was forced to
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Despite the presidents rhetoric, his administration has demonstrated dramatic continuities with the Bush administration. Three years after Obamas executive order closing it, Guantnamo Bay remains open.
eral criminal courts were a more appropriate venue for trying al-Qaeda fighters and cheered on the Supreme Court for requiring greater due process and more defendants rights than the Bush administration wanted were correct, Shawcross allows, up to a point. But, Shawcross hastens to add, progressives tended to ignore the considerable due process protections provided by the Bush military tribunals, which included the opportunity to appeal all the way to the Supreme Court. And Shawcross notes that the Supreme Courts 2006 Boumediene decision represented an unprecedented extension of constitutional rights to foreign born enemy combatants, certainly far beyond the due process and rights accorded Nuremberg defendants. Consequently,

reverse his decision to try Khalid Shaikh Mohammed in federal criminal court in New York City; Mohammad will instead be tried by military tribunal at Guantnamo Bay. In authorizing the killing of bin Laden, President Obama presided over the final stages of a mission conceived by his Oval Office predecessor. And in giving the order for the raid on bin Ladens safe house in Pakistan and increasing the use of drones to conduct targeted killing missions, including authorization of the successful September 2 0 1 1 attack killing American citizen and influential al-Qaeda operative Anwar al-Awlaki in Yemen, President Obama has shown his readiness to set aside the law enforcement paradigm for dealing with the Islamists and to use lethal force against, and incur civilian casualties in the pursuit of, terrorists waging war against the United States. t e p b y s t e p , Shawcrosss book brings into focus not only the legal but the moral, political, and strategic ambiguities that America has faced since 9/11 in its battle against Islamic terrorism. But concerning one profoundly important point, his book brings into focus the unambiguity of the matter:
Americas commitment and sacrifices have, since the beginning of the twentieth century, been essential to the worlds ability to resist nihilism. That is still true today. Only America has the power and the optimism to defend the world against what really are the forces of darkness.

jihadist enemies and by putting into perspective both Americas achievement and errors in the struggle against Islamist terrorism, Shawcross shows himself a true friend of freedom and democracy.

Critical War Theory

By Ann Marlowe
M a t t h e w M o t e n , e d . Between War and Peace: How America Ends Its Wars. F r e e P r e s s . 3 7 1 Pa g e s . $27.99.

ooking at war only from the soldiers perspective, says Roger Spiller in the keynote essay in this collection, would be like a physician viewing an illness only from the patients point of view. Unpacking the metaphor leads in several interesting directions. Theres Platos propensity to have Socrates use the physician as an example. Theres the notion of war as an illness, soldiers as patients, and critics as doctors. And there is the direction Spiller takes the thought: to argue that war today is limited war, a kind the soldier does not like to fight, a kind that seems like playing with his life. But Spiller summarizes, The sol-

By clarifying the dilemmas that America faces in justly defeating its

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Ann Marlowe, a visiting fellow at the Hudson Institute, blogs for World Affairs. Her biography of David Galula is available as a free download at

diers perspective might serve him well, but that is not to say it advances our knowledge of war equally well. It is rare and somewhat perilous in military circles for a theorist to say that the soldiers viewpoint is not the one that counts. And Spiller one of the founders of the Combat Studies Institute of the U.S. Army Command and General Staff College is writing here on behalf of the Army. Between War and Peace is a project of tradoc, the U.S. Armys Training and Doctrine Command, and was commissioned by then-t r a d o c Chief General Martin E. Dempsey, and edited by a West Point professor, Colonel Matthew Moten. tradoc recruits and trains American soldiers, so it is fair to infer that Between War and Peace, published January 2011 by the Free Press, represents at least a range of approved military opinion. And as Spillers essay suggests, the collection trembles most interestingly on the edge of the abyss of postmodernism. (First they came for the artists; then they came for the English professors, and now, theyve come for military theorists.) Each of the fifteen chapters here is worth reading, offering an unexpected light on wars we think we know. But many of the contributors and especially Spiller and Andrew Bacevich, who wrote the final essay go much further. They raise issues about the discipline of military history itself, and of military strategy, and what we can know as we practice these disciplines. None of the writers disappears down a conceptual rabbit hole (though I was worried for Bacevich sometimes) but each of the authors stirs up doubts and disturbing questions.

It should come as no surprise that there is ambiguity even in the aim of the collection. The ostensible topic is war termination, and you are forgiven for not knowing quite what that is. Spiller notes that in the last twenty years only two articles on war termination have been published in the professional military journals. The phrase itself appeared during the First World War a conflict notable for feeling interminable to the combatants. What is war termination? The study of how wars end, shorn of many of the assumptions of past generations, and even of their vocabulary:
Today you will search in vain for any definition of victory in American military doctrine. Exactly when the classical ideal of victory disappeared from official doctrine is an open question, but its absence invites the thought that at some time in the recent past, victory, which so long dominated military thought and practice, lost some of its official appeal.

Spiller argues that our wars have had more equivocal outcomes than most people realize. Or as one social networking sites option for describing ones personal life says, its complicated. And this, in a nutshell, is the message of Between War and Peace. This is not your fathers military history, even if the tradoc website insists, Victory Starts Here! Given the current state of affairs in Iraq and Afghanistan, a cynic might think it a very convenient message indeed. Publish a book that amplifies the ambivalence of former wars, so that todays wars appear as part of a continuum rather than unpleasantly novel
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failures or quasi-failures. But Between War and Peace (which confusingly shares a title with an unrelated 2004 collection of essays by Victor Davis Hanson) didnt come into being that way. When commissioned in the summer of 2009 it was intended as a successor to an influential 1986 collection called Americas First Battles, a fine but very straightforward book without a pomo bone in its body. In the preface to First Battles, the editors a lieutenant colonel and a brigadier general explained that the book was designed to test the assumption that it makes a great deal of difference how the U.S. Army prepares in peacetime, mobilizes for war, fights its first battle, and subsequently adapts to the exigencies of combat. The editors found significant patterns in the ten first battles described. And perhaps the Army was prescient; the years after the books publication had first battles enough Panama in 1989, the Gulf War, and American interventions in Somalia, Haiti, Bosnia, and Kosovo. But Between War and Peace has plunged into much deeper waters than First Battles. Indeed Colonel Motens preface never mentions the earlier book. He explained by email, We started the project with afb in mind, but I quickly decided to downplay the connection for a number of reasons. We dont have an agreement with the afb authors to make such a pairing. We didnt want to be artificially bound by a certain format. Finally, we have produced a book that is quite different from a f b , and I felt that it should stand on its own. Between War and Peace stands on its own, and possibly alone. General Dempsey says in his foreword that the
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book is a wholly original and important contribution to military history and theory, and he is correct. This might be the first official publication of the American Army where the chilly wind of postmodern uncertainty is not only acknowledged, but embraced. The cultural context is just a bit different. General Dempsey was interviewed on the marathon meetings held by tradoc to write the Armys new doctrine. He quoted Mark Twain rather than Lacan, but nevertheless sounded pretty literary: The difference between the almost right word and the right word is really a large matter its the difference between the lightning bug and the lightning. ts easy to divine many of the Armys preoccupations and its likely worries about the future from this volume. Many of the people involved with Between War and Peace are central to the Armys intellectual life. Dempsey is the chairman of the Joint Chiefs of Staff, and Brigadier General H.R. McMaster, a Ph.D. in history at tradoc, also involved with developing this volume, is working for his mentor General David Petraeus in Kabul. Contributor Con Crane, a West Point classmate of Petraeus, Director of the U.S. Army Military History Institute at the Army War College, was the lead author of the Armys 2006 Counterinsurgency Field Manual, commonly known as Petraeuss coin manual. Theres a uniformity of structure to most of the essays that suggests a strong editorial hand, and as we shall see, certain themes run through the collection. But there is by no means a uniformity of opinion. Like any wise old

bureaucracy, the Army hedges its bets or, perhaps, keeps its friends close and its enemies closer. Several of the essayists are known to be sharply critical of the way we have fought our recent wars. One of the most controversial contributors, Colonel Gian Gentile, writes here on the Vietnam War, but he has become famous even tions they gave little thought to how this might achieve the nations strategic objectives. One pervasive theme is the frequency with which American troops have undertaken occupation duties, including governance. When Joseph Dawson discusses General Winfield Scotts administration of a prostrate Mexico in the fall of 1847, he mentions the truism that there are seldom enough troops available during postwar occupations and describes, without editorializing, Scotts sensible and thorough efforts to keep order. Theodore Wilson writes of the American occupation of Germany as poorly planned, attacking the myth of Germany as the model for military occupations. He states that a map of security incidents in January 1 9 4 6 could easily be confused with a U.S. Central Command map of Iraq in 2006. German recidivist Werewolf insurgents killed between 3,000 and 5,000 Allied and German citizens in the months following May 1945. Several contributors find that what happens in an occupation, or afterwards, turns the wars ostensible results on their head. The Seminole Wars hero turned out not to be the U.S. colonel who finished the war but Seminole chief Osceola, whose fame lives on in many place names today. Joseph Glatthaar argues that Southern whites lost the [Civil] war but won much of the peace. Peter Maslowski takes the idea of a 3 0 0 Year War against Native Americans from an unnamed Chinese general speaking at the Command and General Staff College. The War of 1812, says Wayne Lee, helped cement the myth of American exceptionalism and . . . an imagined
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Several contributors find that what happens in an occupation, or afterwards, turns the wars ostensible results on their head. The Seminole Wars hero was not the U.S. colonel who finished the war but Seminole chief Osceola.
outside the military for his outspoken criticism of the Armys embrace of counterinsurgency. Andrew Bacevich, a retired colonel, is also known as a fierce opponent of our involvements in Iraq (where he lost an officer son) and Afghanistan. Moten teasingly writes in his introduction that his team agreed to try to avoid analyzing the problems of the past through the lens of current concerns, but adds that the reader is under no such obligation. Many contributors offer surprisingly harsh and sometimes revisionist views of American strategies. Brian McAllister Linn suggestively describes American commanders in the Philippine War of 18981902 as focusing on winning the battle and ignoring the consequences. Fixated on tactics and opera-

virtuous invincibility. This although American efforts were often startlingly inept. And Spiller suggests that historians of the future will see World Wars I and II as a single conflict, inevitable because of the less-than-complete victory sealed by the Treaty of Versailles. A second theme is the American Armys curious reluctance to develop doctrine for irregular warfare. It was always supposed to be the exception, though it looks from this collection as though it were the rule. Two of the essays deal with the Indian wars, one with the Mexican War (in the aftermath of which General Scott governed Mexico), one with the Philippine War, one with Vietnam, and one with the aftermath of the first Gulf War. Thats five wars with considerable irregular or insurgent elements out of fourteen in all. We fought some of these irregular wars in the Philippines in 1902, the Mexican War, some of the Indian wars wisely, if not according to todays laws of war. Yet no one thought to analyze our rather extensive experience for future use. And theres hardly a greater intellectual sin among the military than failing to register lessons learned. A third theme is the superiority of professional to amateur (in the time period of the book, mainly militia) soldiers and the gradual progress of the American Army from a barely unified group of militias under Washington to a fully professional, cohesive force. Theres rarely a good word to be found here about militias, which were favored by the Founding Fathers because of their fear of standing armies. We read how amateurs refuse battle, rape and plunder, and simply dont fight well. On first glance, this isnt a current issue. Maybe its ammunition stored for
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future disputes contrasting conscription versus todays volunteer force. The Armys preference for professionals in my view, a mistake has had farreaching and sometimes debatable consequences. For instance, although Afghanistan had a tradition of military conscription, after 2001 the U.S. set up the Afghan Army as a volunteer force. Ever since, weve struggled against attrition, while American boys die doing a job that is arguably the task of Afghan boys. entile told me that Spiller, the author of many books, has had a huge influence on the Armys intellectual life since the early 1980s. So it is well worth looking at Spillers six general propositions about the history of American war termination and its implications for the conduct of modern limited war: 1 . wars are defined by their limitations, with absolute and total war and total victory theoretical abstractions; their original aims are constantly revised; the aims of all sides gradually converge toward an agreement to stop fighting; this convergence is not only the result of what happens on the battlefield; the conduct of war is increasingly public; and rather than looking at decisive battles, we should look at terminal battles, those which influence how a war ends.

2. 3.


5. 6.

Spiller cautions that these propositions may seem counterintuitive to soldiers, who are trained to use over-

whelming force to eliminate a threat. Perhaps numbers three and six are the most paradoxical. The third proposition presents war as a conversation, like a symphony in which opposed themes are brought to resolution. (I also think of psychoanalysis, but that is probably a bridge too far.) Yet Spiller also harks back to the founder of Western military theory, quoting Clausewitz on war as a continuous interaction of opposites. Its usually a good bet that no matter how paradoxical a proposition a military theorist raises, Clausewitz got to it first. The sixth point is a bit confusing, but worth pursuing. Any side can fight a decisive campaign or even a succession of them and still be defeated. By contrast a terminal campaign may exercise an influence over the outcome of a war neither side intends, not does it derive from military action alone. A terminal campaign is strategically important; it plays a role in educating both sides about how much or how little their efforts can accomplish. For example, Spiller says Gettysburg was arguably a decisive battle, but the Civil War still continued for two years. The results were not sufficient to convince hundreds of thousands of soldiers and the governments that commanded them to stop fighting. The Tet Offensive, on the other hand, occurred seven years before the Vietnam Wars last battle, but exercised the greatest influence over how the war would end. The endings discussed in the book are not just of particular wars but of what Spiller terms, quoting the late military historian Russell Weigley, the

history of usable combat. Weigley wrote that back in 1973, but Spiller argues that the age of modern limited war began with the Korean War which ended in an armistice, peace still not having been declared. Today, Spiller argues, a war must be more precisely attuned to the limited objectives for which it is being fought limited objectives that must be precisely defined as well. This gets at a paradox obvious not only to American war-fighters but to the Afghan villagers who are the supposed prize in our counterinsurgency. How can it be that the U.S. has such military might yet cannot defeat the ragtag insurgent bands? Its a question of deciding what our objectives are and that is something that grows harder and harder the more sophisticated a society is. As the philosopher Stanley Cavell has argued, one of the key problems of modern art is figuring out what satisfies us. It may be that the same is true of modern war. Spiller writes, The immense military power of the United States is no guarantee that it can seize and sustain the strategic and operational initiative, and steering a war toward a desirable end is no small task even in the most favorable circumstances. And so we come to Bacevichs brilliant but maddening final essay, on the First and Second Gulf Wars. He sums up the problem as well as anyone: The Anglo-American invasion of 2 0 0 3 transformed Iraq from a crumbling dictatorship into a failed state. Why, he asks, has our involvement in Iraq proven to be so interminable? Because our policymakers first misconstrued the problem and then devised inappropriate solutions, which in turn exacerbated actual
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problems to which Washington has remained steadfastly oblivious. You dont need to agree with Bacevich I dont follow him all the way to admire the clarity of his vision and the logic of his reasoning. And you dont have to disagree with Bacevich to be frustrated by the elliptical nature of his essay and his unwillingness to admit into his discourse the possibility that he could be wrong. Bacevich argues that two assumptions have governed American policy in the Persian Gulf. The first is that stability consists in fostering a balance of power congenial to the United States. But the U.S. has tried to manage that balance, and to change the nature of Gulf states. Still, it has always assumed that the Middle East, like other parts of the world, consists of a more or less fixed number of legitimate states governed by more or less legitimate governments. The second assumption is that American activism reduces conflict and advances American interests. Bluntly, the phrase balance of power was a code word for hegemony. These two assumptions are false, Bacevich argues. Our exertions have served not to reduce but to enflame the sources of conflict. The Islamic world is different, he says, in ways that made our application of methods that worked elsewhere not only irrelevant but even counterproductive. In words that could not be more relevant as I write, Bacevich notes the refusal of the West to allow the people of the Islamic world to determine their own fate in their own way. I am less in accord with his next sentence: And that refusal contributed mightily to the rise of violent antiWestern Islamism. The Arab awakFebruary & March 2012 115

ening taking place now suggests that many Muslims know that the conversation they need to have is among themselves, not with us. These countries too are crossing the divide into the dizzying postmodern world of uncertain, fractured perceptions, and unknown desires. The Islamism of twenty years from now is unlikely to look like todays. For one thing, Islamists and Muslims in general are less likely to know what they want, what would satisfy them. Victory may prove as elusive a concept for them as for us.

The German View of Patton

By Henrik Bering
H a r ry Ye i d e . Fighting Patton: George S. Patton Jr. Through the Eyes of His Enemies. Z e n i t h P r e s s . $30.00

f the allied world War II generals, George Patton may be considered the most German. He had carefully studied the early Blitzkrieg campaigns against Poland and France and shared the conviction of the Wehrmacht commanders that that a war of movement short, sharp, and furious was the way to avoid a repetition of the endless slaughter of World War I. Always take the offensive. Never dig in, was Pattons motto. He expressed his aversion to

Henrik Bering is a writer and critic.

fixed positions in graphic fashion: After having found some slit trenches around a command post in Tunisia meant to protect it from air attacks, he asked the commanding officer, Terry Allen, to show him his, whereupon he promptly urinated into it. There. Now try to use it. To Patton, war meant destroying the Direktive, a directive, is something broader and less detailed, where the commander states what he wants to achieve but leaves it up to his men how to go about it. Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity, runs a famous Patton quote. On meddling generals, he noted, The tactics belong to battalion commanders. If generals knew less tactics, they would interfere less. The advantage of this way of operating is that it makes for speed, initiative, and flexibility, allowing the officer on the spot to adjust to the rapidly changing situation of the battlefield and to exploit sudden opportunities. But like Field Marshal Erich von Manstein, Germanys most skillful World War II commander, Patton would also carefully monitor performance. This he did by sending out his staff officers to the front line units. Often he would go and have a look-see himself. On this background, it is only natural to ask what the Germans thought of him, and how he measures up to the Wehrmachts panzer generals, which is what Yeides Fighting Patton: George S. Patton Jr. Through the Eyes of his Enemies sets out to do. As Yeide emphasizes, this not a biography but a meticulous recreation of Pattons campaigns seen from the German perspective. On the benefits of this method, Yeide quotes British military historian Basil H. Liddell Hart: It is different in one important aspect from looking at it through the opposite end of the telescope. For instead of being minimized, the picture is magnified, with startling vividness. Having been on the receiv116 Policy Review

Like Field Marshal Erich von Manstein, Germanys most skillful World War II commander, Patton would also carefully monitor performance. This he did by sending out his staff officers to the front line units.
enemys main force, not clinging to territory. His favored approach was the oblique one: Hold them by the nose and kick them in the rear, which in more polite textbook terms translates into pinning the enemy while the tanks attack his flanks. Patton saw tanks as upgraded cavalry, infinitely more powerful, whose deep penetrations could collapse enemy lines. Patton was also a keen student of translated German military literature, such as the World War I memoirs of Hans von Seeckt, the chief of staff of the German 11th Army, and Adolf von Schells Battle Leadership. According to military historian Harry Yeide, Pattons style of commanding comes close to the German concept of Auftragstaktik, or mission-type orders: In German, whereas ein Befehl is a direct order, eine

ing end, the German officers were uniquely positioned to assess Pattons effectiveness, though there are certain caveats. From the movie Patton and from the biography on which it is partly based, Ladislas Faragos Patton: Ordeal and Triumph, one is left with the impression that the German High Command spent most of its waking hours fretting about Patton and his whereabouts. According to Farago, after his campaign in Sicily, Patton was the Allied general the Germans regarded as their most dangerous adversary in the field, which led them to watch his comings and goings like rubbernecked spectators following a tennis ball at Wimbledon. The problem is, notes Yeide, that there does not appear to be an iota of fact behind this claim. Thus when Patton was under a cloud for having slapped two shellshocked soldiers in Sicily, the army sent him on the a well-publicized tour around the Mediterranean to Corsica, Malta, and Cairo: The idea was to mask the fact that the Seventh Army was being transferred from Sicily to England, but there are no indications that German intelligence attached any great significance to these visits. The notion that Patton could be used to deceive the Germans appears to have arisen from a presumption about German thinking in Washington rather than any evidence that the Germans had a particular interest in the generals activities, Yeide writes. To the Germans, he says, Patton was just one of many threats. The same applies to Pattons role as commander of the fictional U.S. 1st Army Group in Kent, designed to create the impression that the invasion
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would occur at Calais rather than Normandy. In Yeides view, Faragos assertion that the Germans concentrated on Patton as the general likely to command American forces in the invasion of France is mainly based on a misinterpretation of an entry in the German High Commands war diary and on a routine Air War Academy paper entitled Invasionsgenerale. In fact, says Yeide, in a copy distributed in February 1 9 4 4 Patton is the only senior Allied general in Britain and the Mediterranean not profiled with a brief, one paragraph summary. Bradley appears and so does Montgomery, but no Patton. Yeide does not rule out his inclusion from a later version now missing, but anyway, such papers were standard products with the all services, from which nothing much can be inferred. What is significant, however, he notes, is that the German High Command did not identify Patton as the commander of this fake U.S. 1st Army Group until well after they had fallen for the Calais ploy. So Pattons presence in Kent was not the decisive factor in the German miscalculation. The Germans did not track Pattons movements as the key to allied intentions. They never raised his name in the context of worthy strategists. Hence their intelligence efforts were much more focused on people like Montgomery and Eisenhower, because this was the level on which strategic decisions were made. Instead, says Yeide, the Germans viewed Patton in the narrow context of armored commanders, as a skillful tactical commander, i.e., an executer of the plans of others. He quotes General Gunther Blumentritt:

We regarded general Patton extremely highly as the most aggressive panzer-general of the Allies. . . His operations impressed us enormously, probably because he came closest to our own concept of the classical military commander. He even improved on Napoleons basic tenet activit, vitesse vitesse.

When interrogated in 1945, Heinz Guderian, the Wehrmachts foremost practitioner of Blitzkrieg, stated, I hear much about General Patton and he conducted a good campaign. From the standpoint of a tank specialist, I must congratulate him on his victory since he acted as I would have done had I been in his place. But according to Yeides figures, while the U.S. possessed only one armored commander above division level and only a handful of first class armor generals at division level, the Germans produced them by the bushel: Out of 266 officers with armor experience, he says, 5 5 stayed with the panzers throughout the war, most achieving the rank of General der Panzertruppe. (Moreover, The Waffen SS and the Luftwaffe had their own panzer generals.) Among this group, Patton probably would have been merely above average. What is more, notes Yeide, the Germans have a tradition of rather stringent assessment of military commanders, and it would take more than Patton s campaign in Sicily to seriously impress them. Yeide quotes Helmuth von Moltke, chief of the Prussian General Staff and the man responsible for Germanys victory in the 187071 Franco Prussian war, who, when com118

pared with Napoleon and Frederick the Great by a flatterer, declined the honor, for I have never conducted a retreat, the trickiest of all military maneuvers. Neither had George Patton. Pattons adversaries, on the other hand, had plenty of experience in this art form from Russia, where the Wehrmachts early victories had turned into a nightmare struggle against the cold and against a Russian enemy that seemed to have an inexhaustible supply of manpower and replacement tanks. Thus many of the commanders Patton was to meet in France had participated in Mansteins retaking of Kharkov, a brilliant move designed to straighten out the German line, and in the subsequent Battle of Kursk, the largest tank battle in history, which resulted in irreplaceable German losses of materiel. In short, writes Yeide, German officers were prepared psychologically for the Allied invasion of France. Coinciding with the Battle of Kursk was the Allied invasion of Sicily. The Germans considered the island undefendable and their Italian allies useless: Facing superior numbers, German forces still managed to put up a successful defensive battle, allowing them to get 6 0 , 0 0 0 men plus heavy weapons across to the mainland, thanks to relatively weak delaying forces. As Yeide notes, the German commanders were not impressed by Pattons drive to Palermo, which involved territory they had already given up. Nor were they overawed by the American performance in what he calls smash mouth fighting. As the chapter heading Sicily: Empty Glory, indicates, Yeide, like others before him, is highly critical of
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Pattons race to beat Montgomery to Messina, especially the risky and bloody amphibious operation at Brolo which proved unnecessary and can only be ascribed to Pattons thirst for personal glory. In Normandy, the Germans were again defending. On August 1, Patton, finally back in good graces after the slapping incidents, had been given command of the Third Army, and played the starring role in the American breakout at Avranches. The German forces were on the verge of being encircled, but owing to the failure of the Canadians to quickly close the Allied pincer and a furious Patton being under strict orders to stay put at Argentan, the Germans managed to slip through what became known as the Falaise Gap: The gap was only twelve miles wide, but through it some 100,000 Germans managed to escape, whereby an Armageddon was reduced to an outright disaster. As a result, those who had gotten away would regroup and be among the forces Patton would fight along the German border. All the way towards the frontier, the Americans faced delaying tactics, courtesy of General Kurt von der Chevallerie, a veteran of the fighting around Kiev. On der Chevalleries achievement, Yeide quotes Pattons assistant intelligence officer Colonel Robert Allen:
The enemys continued tactical control, despite the tremendous difficulties under which he operated, was a remarkable military feat. In the face of shattered communications, tremendous losses, constant retreating, and practically no air support, the enemy still maintained
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overall control of his tactical situation. He constantly fell back, but there was no mass collapse. At every critical point, he stubbornly defended and delayed.

In Lorraine, Pattons bloodiest campaign, he was up against some of Germanys toughest officers. Of these, Yeide singles out General Hermann Balck, who performed the kind of flexible defense he had practiced in Russia on the Chir river. Thus on the Moselle and in the siege of Metz, the Germans forced Patton, short on gas and ammunition, into practicing the type of piecemeal attack that he deplored in others, and leading Balck to speak of the poor and timid leadership of the Americans. Waffen s s Gruppenfuhrer Max Simon likewise saw the American tactics as cautious and systematic:: The tactics of the Americans were based on the idea of breaking down a wall by taking out one brick at a time, he said, adding, Had you made such attacks . . . on the eastern front, where our anti-tank guns were echeloned in depth, all your tanks would have been destroyed. Patton himself admitted, While my attack was going forward by short leaps, it was not very brilliant. According to Yeide, even Pattons logistical feats before running out of gas and his boast that as of 14 August [1944] the Third Army has advanced further and faster than any army in history, totaling some 300 miles altogether, still put him well behind General Georg-Hans Reinhardt, who at start of Operation Barbarossa covered more than 5 0 0 miles towards Leningrad, and Otto von Knobelsdorff,

who in six weeks managed 800 miles, a feat which Knobelsdorff himself termed unique in Prussian-German military history. he book clearly takes its place in the school of the Allies won the war, but the Germans had the better army, a school that includes the Israeli military historian Martin van Creveld, and the Brits Max Hastings, John Keegan, and John Ellis. This view was most starkly presented by John Ellis in Brute Force, a comprehensive assessment of the Allied effort in World War II against Germany and Japan, which, in passing, reduces Patton to some sort of a glorified traffic cop. While acknowledging Pattons ability to maneuver, Ellis characterizes his dash across northern France as well as his earlier much overrated pursuit through Sicily as more of a triumphal procession than an actual military offensive. On Pattons performance in Lorraine, Ellis gets caustic:
Here is the story of the Normandy campaign in a nutshell. Acute German shortages on the one hand, and on the other an Allied cornucopia which could provide an overwhelming level of firepower and a remorseless stream of replacements that could compensate for the grossest tactical btise. Add skilled public relations and a press hungry for heroes, and you had the circumstance so propitious that even Montgomery and Patton could seem like great commanders.

Ouch. The purpose of Elliss book was not to downplay the sacrifices made by the

American troops, but to serve as a warning to the West about getting complacent in its defense spending, instead putting its faith in the ability of some great general to save the day in a future war: By ignoring the vital question of material preponderance we do not only inflate the reputation of great commanders, but we are also in danger of encouraging absurd obsessions of innate national ability at the expense of a solid admission that the odds were stacked heavily in the Allies favor. Yeide isnt quite as reductionist as Ellis, but the more complimentary German assessment of Pattons abilities tend to be drowned out by those who stress the tremendous resources at his disposal, and by the authors own constant emphasis on Pattons luck, such as his having taken command in France after nearly seven weeks of hard fighting by the British, the Canadians, and the Americans of the First Army had worn the German army in Normandy to tatters. And a bit further on, Just as Patton strode onto the stage of the European theatre, the other fellow in Normandy was reeling backward and out of Pattons way; off balance, running out of men and equipment, and looking for a way to extricate himself from an already losing fight (italics mine). As an indication of the mood in the German high command, Yeide quotes Alfred Jodl, the German chief of staff, who in captivity confessed, The war was already lost in the West at the time of the breakthrough and the beginning of the war of movement in France. As with Ellis, this tends to reduce Patton to a mere pursuer, impressive when chasing a fleeing foe, less so when meeting determined opposition.
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Even the feat that is considered Pattons greatest achievement, turning the three Third Army divisions 9 0 degrees and heading north within 72 hours to fight the Battle of the Bulge, does not escape a slight deflation: By the time Patton gained real contact with the enemy, most Germans had concluded that the offensive was already spent. Patton once again would attack his enemy when the other fellow was switching to his back foot. Like Ellis, Yeide emphasizes that in no way does this detract from the men who sacrificed life and limb in the Allied cause. And at no point is there a hint of glorification of the German side, only a clinical assessment of its fighting abilities. Yeide scrupulously registers the crimes of people like Max Simon, who killed 10,000 civilians in Kharkov when with the Totenkopf division in Russia, and who helped massacre a further 2,000 civilians at Marzabotto, Italy. Unfortunately, Nazi war criminals could be quite effective on the battlefield. ow wo u l d t h e Patton corner respond? It is a fact that while the Germans had long prepared for war, the Roosevelt administration had to scramble to build an army in a hurry. This meant greener troops and a less experienced officer corps. It is also a fact that since the Civil War, America has relied on overwhelming firepower to win its wars. But as participants, the Germans could hardly be expected to be unbiased observers of their own defeat. At this stage of the war, Hitler was busy promoting committed Nazi officers in the belief that they would put up a more stubborn defense. Such people
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would surely have found it easier to blame their defeat on an enemy relying on raw industrial might than to acknowledge his fighting skills. One is reminded of an incident in the final days of the war when a German officer was berating the Americans for sending their tanks through buildings instead of fighting it out in the open, a bit rich coming from a representative of the Third Reichs armed forces, which had been perfectly happy to use tanks against Polish cavalry. Yeide, like Ellis, does mention that some former Wehrmacht officers later upgraded their views of Patton, which he ascribes partly to a cooling of passions, partly as an attempt to curry favor when Germany joined nato. (A number of retired Wehrmacht generals became nato consultants.) This may be so, but at least this cannot be said of Erwin Rommel, who was forced by Hitler to commit suicide in October 1944. Carlo DEstes excellent Patton biography A Genius for War quotes Rommel noting that after the initial American setback in Kasserine Pass, things had rapidly improved for them, although we had to wait until the Patton Army in France to see the most astonishing achievement in mobile warfare. Concerning Pattons thirst for glory, of which Yeide views his race with Montgomery across Sicily as a prime example, Martin Blumenson, the leading Patton specialist, sees a less suspicious motive: British Field Marshal Alexander, mistrustful of American prowess on the battlefield, had relegated Pattons forces to a secondary role, acting as shield to Montgomerys sword. This Patton was determined to change, Not so much for his personal

glory, although that was important, but rather to prove to the world that American soldiers were every bit as good as indeed better than British troops. That meant entering Messina before the Brits. On Pattons performance in France, his campaign in Lorraine was certainly no beauty but might have been avoided altogether, if he and not the plodding Omar Bradley, his former subordinate, had been in overall charge of the American forces. As both Blumenson and Carlo DEste see it, Patton would not have waffled over the Falaise Gap, and his plan, an ambitious long envelopment rather than Bradleys short hook, might have trapped and killed the German Normandy army west of the Seine. Unfortunately, as a result of the slapping incidents in Sicily, the less gifted officer was calling the shots. As to the element of luck, Patton, like Napoleon, believed that luck was an essential element in the make-up up of a great commander. But one reason Patton was lucky was due to his meticulous planning; another was his intuition. Thus Blumenson stresses his uncanny ability to be in the right spot at the right time, and his instinctive feel for when something was up, perhaps best illustrated in the days leading up to the final German offensive. His intelligence section was reporting enemy activity in the Ardennes, and Patton seems to have grasped its significance sooner than others. And as Yeide himself points out, the Third Army headquarters was the only Allied headquarter to begin planning for its eventual role in the Battle of the Bulge. We will be in a position to meet whatever happens, Patton noted. But interestingly enough, on the

main point that the Germans were the more effective soldiers, Patton would almost certainly agree (himself excluded, of course). As Yeide writes, in contrast to his public statements, his diary and letters often deplore the lack of initiative of his troops. Even during the Battle of the Bulge, he wrote, The Germans are colder and hungrier than we are, but they fight better. Yet he kept goading, pulling, and willing his troops on to victory. That is his great achievement.

Powering the World

By Steve Stein
Daniel Yergin. The Quest: Energy, Security, and the Remaking of the Modern World. Th e P e n g u i n Press. 804 pages. $37.95.

f e w days b e f o r e the official release of his new book on energy, The Quest, Daniel Yergin published a piece in the Wall Street Journal under the headline There Will be Oil. That title alludes to the 2007 movie, There Will be Blood, itself based upon Upton Sinclairs classic novel Oil. Yergin, like Sinclair, understands oils ability to stir the blood. But he is more disposed to see oils benefits. Steve Stein is a writer and financial adviser in Marin County, California. He has written several articles on energy and trade policy for Policy Review.
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The Wall Street Journal article summarizes a chapter in The Quest which asks, Is the World Running Out of Oil? and answers: No. Yergin has long disagreed with the pessimists who predict that well soon arrive at peak oil, the point at which the maximum rate of production is reached. He notes the many times since 1885 that experts have made similar predictions, only to see both production and discovery continue to grow. Yergin doesnt see the supply of oil as infinite, but he objects to the metaphor of a peak, with its suggestion that the far side will be a slippery, precipitous slope. Rather, he sees a plateau perhaps sometime around mid-century at which time a more gradual decline will begin. That belief may have determined the way The Quest is organized. The first half of the book consists of two parts: The New World of Oil and Securing the Supply. Taken together, they form a logical sequel to The Prize, Yergins Pulitzer-winning chronicle of how oil became the key economic force of the 20th century and drove much of its politics as well. The second half of the book is divided into four parts: The Electric Age, Climate and Carbon, New Energies, and the Road to the Future. Important as each topic is, The Quest still keeps oil at center stage; the chapters on recent developments in the world of petroleum are the most compelling parts of the book. The authors access to many of the principal players the bibliography lists 1 4 6 interviews adds depth and immediacy to the narrative. Yergin begins with Russia, just after the fall of the Soviet Union. The ussrs collapse closely paralleled the depletion of its hard currency. The Soviets posFebruary & March 2012 123

sessed abundant gold reserves, but during the 1980s the price of gold fell by 70 percent. However, a parallel collapse in the price of black gold interests Yergin more: One of the lasting ironies of the Soviet Union was that while the Communist system was almost synonymous with forced-pace industrialization, its economy in its final decades was so heavily dependent on vast natural resources oil and gas. The oil industry, already as inefficient as the rest of the Soviet economy, declined even further as the ussr disintegrated. Trying to restore it, Boris Yeltsins government borrowed money from wealthy oligarchs and, unable to repay the loans, sold major portions of the oil companies to them. The fortunate few who bought these companies, like Roman Abramovich and Mikhail Khodorkovsky, became among the wealthiest men in Russia. But not everyone agreed that Russias oil and gas resources, the key to its economic power, belonged in private hands. One who decidedly thought otherwise was Vladimir Putin, who succeeded Yeltsin to the presidency in 1999. He still sought the cooperation of major Western oil companies b p , Exxon-Mobil, Shell, and Conoco and at first conceded fairly generous terms to them. But Putin later told bps ceo John Browne, in 2003, an equal split never works. Abramovich saw the tide turning against privatization, sold his interest back to state-owned Gazprom and moved to England, where his estimated wealth is second only to the Queens. The more ambitious and stubborn Khodorkovsky fared less well. Hed talked to both Chevron and Exxon

about selling controlling interests in his company, intending to use some of the money to advocate making Russias government a parliamentary system, thus reducing the strength of the president. Khodorkovsky was arrested in 2005 and convicted of tax fraud. At a 2011 retrial, the sentence was extended. ferent outcomes from those of Russia, who viewed Caspian oil as its own. The local governments of these states had their own thoughts on the matter. Azerbaijan negotiated with American and other foreign oil companies to rebuild production facilities and pipelines, even as the Russians proposed a pipeline that ran mainly through their country. Eventually, a consortium of oil companies that included b p , Amoco, and Russianowned Lukoil developed a two-track strategy, with a second pipeline that closely paralleled the route of a wooden pipeline that had shipped oil for the Rothschilds and the Nobels a hundred years earlier through Georgia to ports in the Black Sea. A similar contest played out in Kazakhstan, where that government also leveraged the presence of the American oil majors Arco, Mobil, and Chevron, to fend off some of Russias demands. The redevelopment of the Caspian region has been accomplished through joint ventures of investorowned oil companies and national oil companies. As similar joint ventures between private and government-run oil companies have been repeated around the world, theyve led to ever greater economies of scale, prompting mergers among the major oil companies. In 1998, bp acquired Amoco and shortly thereafter, Arco. Then Exxon and Mobil merged. (At the conclusion of the deal, Mobils Chairman Lou Noto was asked a question about Arco, which Mobil had earlier tried to acquire for itself. He replied, Ill tell you what my mother told me that you never talk about your old flames on the day you announce your engagement.)
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In the 1 9 th century, the contest between European powers over the resources and trade routes of the Central Asian steppes came to be called, in a phrase associated with Rudyard Kipling, The Great Game.
Russias efforts to recapture control of its oil reserves extended to the former Soviet Republics of Kazakhstan, Azerbaijan, and Turkmenistan. After the Soviet Union broke up in 1991, the Russians still viewed these states as within their sphere of influence or, as they put it, their near abroad. In the 1 9 th century, the contest between European powers, especially Russia and Britain, over the resources and trade routes of the Central Asian steppes came to be called, in a phrase associated with Rudyard Kipling, The Great Game. Strobe Talbot, Bill Clintons deputy secretary of state, sought to downplay modern parallels, insisting that the notion belonged on the shelves of historical fiction. But it was no fiction that the United States and its oil companies sought very dif-

In France, Total merged with the other domestic major, elf. Finance Minister Dominique Strauss-Kahn said that allowing either French company to merge with a non-French company would have been un suicide politique. Soon, Chevron combined with Texaco, and Conoco merged with Phillips. The only major that remains a standalone is Royal Dutch Shell. Actually, all these private companies are majors only in a relative sense. Theyre also called international oil companies, in contrast to the national oil companies such as Saudi Aramco, n i o c (Iran) Gazprom (Russia), gqpc (Qatar), inoc (Iraq), pdvsa (Venezuela), and others. The smallest of these nationals has nearly ten times the oil reserves of the largest international, Exxon; even measured by annual production, only Exxon and bp rank with the nationals. As Yergin writes, the central rationale of these mergers was not about refining and marketing the downstream in the United States. It was about the global upstream exploration and production of oil and gas around the world. The national oil companies of the Middle East, which share such close identities with the states that own them, have been analyzed thoroughly in The Prize. Here Yergin takes a closer look at many that are located elsewhere. Foremost among the new Petrostates is Venezuela, where Hugo Chavezs rise to power closely paralleled the rise in the world price of oil and would likely not have occurred without it. Then there is Nigeria; the tale of how it has squandered its oil wealth and simultaneously been corrupted by it is chilling. And Iraq, whose war story Yergin partially retells here,
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shows an emphasis on oil often missing in other renditions. ow e v e r , t h e b i g g e s t changes in the international oil market have not been on the supply side, but on the demand side. Here Yergins focus shifts to China. Between 1980 and 2000, the demand for oil had risen everywhere, but the developed countries were still using two-thirds of that total. By 2010, the split between the developed and the developing world was more nearly 50-50. The pivotal year for the dramatic change in that trend line was 2004. At an opec meeting in Algiers, the consensus expectation had been for oil to continue to be about $22 to $28 a barrel. Fearing a repeat of the falling prices in the previous decade, Saudi Petroleum Minister Ali al-Naimi sought a production cut. Soon after the meeting, al-Naimi went to China and quickly saw that Chinas consumption, growing at about sixteen percent a year, wasnt about to slow down. Rather than a production cut, al-Naimi called for an increase. Chinas hunger for oil, combined with its centralized political system, led to a new kind of oil company, a hybrid that was neither the international private major like Exxon or Shell or the state-run Saudi Aramco. Chinas three big oil companies are in the business of seeking oil everywhere in the world, as are U.S. and European companies, but theyre still fundamentally state-run. The geopolitics of Chinas worldwide search for oil became more ominous when one of its companies the China National Offshore Oil Corporation, cnooc locked horns

with Chevron over the acquisition of Unocal. Chevron, with considerable backing from the U.S. government, finally prevailed, paying $17.3 billion. However, that whole incident may be less indicative of future events than is the fact that Chevron and cnooc have since teamed up to explore for oil off the Chinese coast. Although China is itself poor in oil, it has become, in Yergins words, the single most rapidly changing element in the global oil market. t this point the focus of The Quest shifts to energy security. Despite Yergins disdain for the peak-oil pessimists, he agrees that supply will be increasingly dependent on unconventional sources deepwater offshore drilling, tar sands, and shale. One chapter is also devoted to the dramatic rise in the production of natural gas from shale; Yergin notes that the same techniques horizontal drilling and hydraulic fracturing are now being applied to shale oil as well, although with nowhere near the pace of new production. For Yergin, energy security has little to do with energy independence, however the latter may be defined. He believes it is utterly unrealistic to try to develop a domestic energy supply sufficiently abundant to be decoupled from the rest of the world. Rather, security emanates from diversity of supply. (This was also how Winston Churchill saw it a hundred years ago, when he successfully advocated converting the British navy from coal to oil, despite the fact that Britain possessed lots of the former and almost none of the latter.) The West has habitually feared

over-dependency on the volatile Middle East for oil, but attempts to diversify the sources of supply have borne some fruit: Even though o p e c produces more oil than ever, its world market share is much less than it was in the 1970s. But neither the West, nor any other industrialized region, can depend on abundant supplies of oil indefinitely. Thus, Yergin proceeds to look at other forms of energy. The Quest ranges over topics as disparate as the origins of the electric age, the birth and maturity of nuclear energy, the development of a consensus both political and scientific regarding man-made global warming, the possibilities of bringing both solar and windpower to utility scale, the electric car, and the importance of conservation. Yergin provides interesting detail on all of these subjects, especially so on global warming, to which he devotes six chapters. But this broad-ranging study of the whole energy universe doesnt entirely mesh with the first half of the book. If Yergins intent is to depict the entire world of energy in an encyclopedic fashion, theres the question of proportion: Why half to oil and half to everything else? Thats like writing a book about Europe in which half the coverage is France, with the balance split among the rest of the continent. Only Francophiles would be pleased. Perhaps this is a mere quibble, but it raises a more serious problem. Yergin does subscribe to a scenario in which oil will become significantly scarcer. He suggests there are other forms of energy which, in the meantime, will have ample opportunity to scale up or, in the case of coal, possibly to become cleaner by means of carbon sequesPolicy Review

tration. But that still leaves a key question mostly unanswered: How will any of these energy sources work as transportation fuel, which is, after all, oils primary use? Yergin certainly doesnt believe that the gap can be filled by means of biofuel. After cursorily reviewing corn, sugar, switchgrass, and algae as fuel feedstocks, he points to the possibility of a breathtaking . . . future in which hydrocarbons give way, increasingly, to carbohydrates and other biological sources of energy. That optimistic scenario is ascribed to Steven Koonin, a former bp chief scientist and currently an undersecretary at the Department of Energy. But how much of the global motor fuel demand does Koonin say could eventually be provided by biofuels in an environmentally responsible manner? Only twenty percent. There is also the fuel cell, and The Quest devotes several paragraphs to this possibility, but without much conviction that the device will be a viable alternative. Natural gas vehicles, on the other hand, are certainly feasible in a few countries theyre already a major part of the fleet. But natural gas is still oils first cousin, and more of a tactical than a strategic departure from gasoline. Which brings Yergin to what he calls The Great Electric Car Experiment. In the last 30 years, theres been significant progress in batteries ability to store energy. The lithium battery was actually pioneered in Exxons laboratories in the 1970s, when the rising price of oil looked unstoppable. Although Exxon lost interest in the automotive possibilities as soon as oil prices began to retreat, almost every major automobile company is now in the game.
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The improvements in battery efficiency along with further developments of other alternatives to gasoline powered vehicles have led Yergin to write that oils almost total domination over transportation will either be whittled away or more drastically reduced. But does Yergin see the evidence for this, or is he just optimistically saying that

There is also the fuel cell, and The Quest devotes several paragraphs to this possibility, but without much conviction that the device will be a viable alternative. Natural gas vehicles, though, are certainly feasible.
somehow the necessary breakthroughs will yet occur? In The Prize it was sufficient to concentrate on history and on the present. But a book called The Quest, with the subtitle Energy, Security, and the Remaking of the Modern World, could have been more forward-looking. Yergin clearly addresses the efficiency limits of the lithium-ion battery but barely hints at possible further improvements in battery technology, even those that appear reasonably near at hand. For example, he might have explored or at least acknowledged the current research at the Massachusetts Institute of Technology, where work is proceeding on semi-solid flow technology. If successful, this process will result in commercially useful batteries with a much higher energy density than

lithium-ion; (because of mits location, the technology has been nicknamed Cambridge Crude). Research with similar aims is underway at Stanford, the University of Michigan, and universities and technology clusters throughout the country. To be sure, some of this r&d will need government funding and perhaps other subsidies well into the production stage. Daniel Yergin, with his prestige and authority in energy matters, might be just the person to write a follow-up volume exploring which technologies should or should not be candidates for such funding, and how we might remove enough of the parochial politics from the process to prevent the kind of feckless giveaways that have become so common in the alternative energy field. Meanwhile, the book that he has written, The Quest, is a valuable contribution and provides keen insight into the contemporary world of energy.

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