October 30, 2005
by Jeff Elkins
Interesting details are emerging regarding a wartime tiff between General Wesley Clark, former NATO Supreme Allied Commander and General Sir Michael Jackson of Britain, former commander of NATO “peacekeeping” forces in Kosovo.
The criminal NATO bombing campaign had finally ceased and Serbian military forces had agreed to withdraw from the province of Kosovo. General Jackson was preparing to move troops under his command into Kosovo from their base in Macedonia. The operation was due to begin on June 12th, 1999. However, unbeknownst to NATO, a Russian fly was about to spoil the Allied ointment.
A token force of 200 Bosnian-based Russian troops entered Kosovo from the north and occupied the Pristina airport, laying the groundwork for airborne reinforcements from Moscow – and red-faced embarrassment for General Clark, Madeleine Albright and then-President, William Jefferson Clinton.
Stunned and angered by the Muscovite maneuver, General Clark requested and received clearance from the Pentagon to prevent the Russians from solidifying their control of the Pristina airport. A mere 200 troops were nothing a handful of ragtag Russians could be easily overcome, but reinforcements from Moscow were totally unacceptable and could drastically change the Kosovo equation. Clark was prepared to prevent their arrival by any means necessary, even risking open war with Russia.
Supreme Allied Commander Clark swiftly developed a plan utilizing Apache helicopters and troops under the command of General Jackson to put paid to the Russian’s insolent interference in the Allied war. However, a minor problem occurred: General Sir Michael Jackson told General Clark to bugger off!
As revealed in Clark’s new book Waging Modern War, a heated exchange developed between the two NATO leaders. Meeting in Jackson’s headquarters, located in an abandoned shoe factory in Macedonia, Jackson flatly refused to obey Clark’s orders. His mission was twofold, said Jackson: peacekeeping and resettlement of Kosovarian refugees, not waging war against Russian troops.
According to General Clark, General Jackson was “angry and upset”, and the meeting was a “rapid-fire exchange and became too personal.”
Jackson: “Sir, I’m not taking any more orders from Washington,”
Clark: “Mike, these aren’t Washington’s orders, they’re coming from me.”
Jackson: “By whose authority?”
Clark: “By my authority as Supreme Allied Commander Europe.”
Jackson: “You don’t have that authority.”
Clark: “I do have that authority. I have the Secretary-General behind me on this.”
Jackson: “Sir, I’m not starting World War Three for you.”
Clark: “Mike, I’m not asking you to start World War Three. I’m asking you to block the runways so that we don’t have to face an issue that could produce a crisis.”
Jackson: “Sir, I’m a three-star general, you can’t give me orders like this.”
Clark: “Mike, I’m a four-star general, and I can tell you these things.”
Stung by Jackson’s mutiny, General Clark telephoned General Sir Charles Guthrie, Britain’s Chief of Defense, who seconded his subordinates refusal to risk war with the Russian bear. Up the diplomatic ladder it went, eventually “resolved” by what was essentially a slap to Clark’s already embarrassed face; British and French troops were put on so-called “high alert.” No Apache helicopters or Allied troops were deployed for a possibly disastrous confrontation with the Russians and Moscow now had a seat at the high stakes Serbian poker game.
And so it goes.
According to former Secretary of State Madeleine Albright, the United States has an “inescapable responsibility to build a peaceful world and to terminate the abominable injustices and conditions that still plague civilization.”
To accomplish this, the corrupt Clinton regime launched a brutal 78 day bombing campaign followed by the subsequent occupation of Kosovo; pitting mighty NATO against tiny Serbia, a country that posed no threat whatsoever to the supposedly defensive alliance formed to protect Europe from Russian tanks.
Unknown to us at the time, the commander of NATO was willing to launch an attack that could bring about the very conflict that his organization was founded to prevent: Armed conflict between East and West.
Quoting Sir Roger L’Estrange’s translation of Aesop’s fable, A Wolf and a Fox:
‘Tis with Sharpers as ’tis with Pikes, they prey upon their own kind; and ’tis a pleasant Scene enough, when Thieves fall out among themselves, to see the cutting of one Diamond with another.”
Pleasant scene? When carried out on a global scale, it’s anything but. We were fortunate that in this particular falling out General Sir Michael Jackson had intestinal fortitude enough to tell Wesley Clark to go to hell; our luck continued to hold when Jackson’s superiors backed him up.
But as any gambler can tell you, good luck eventually runs out.
May 28, 2001
October 23, 2005
CVVs, CVV2s, CVCs, and Indent CVCs are 3-digit Card Verification Values or Card Verification Codes that are all calculated using the same CVV algorithm. These values are required by payment systems such as Visa and MasterCard to authenticate their credit or debit cards. Different names are used to refer to the values depending on the particular payment system, the location of the value on the card, and the parameters passed to the CVV algorithm.
To calculate a 3-digit CVV, the CVV algorithm requires a Primary Account Number (PAN), a 4-digit Expiration Date, a 3-digit Service Code, and a pair of DES keys (CVKs).
Besides the obvious CVV variations provided by different PANs and expiration dates, most card issuers will use different CVKs for different batches of cards. Cards can be grouped by bank, by ATM network, or by other means of identifying a certain group of cards. Cards in the same batch will often use the same service code. This service code to the CVV algorithmis usually non-zero. One CVV variant, now commonly called CVV2 (Visa), or Indent CVC (MasterCard), uses ‘000’ as the service code parameter to the CVV algorithm. Sometimes a card will have both a traditional CVV and a CVV2.
Another variation to the CVV algorithm can be introduced by changing the format of the expiration date. While the date is always the concatenation of the 2-digit month (MM) andlast 2 digits of the year (YY), it can be in either YYMM or MMYY formats. For instance, Visa CVV2s are usually calculated using the YYMM format.
A credit card number must be from 13 to 16 digits long. The last digit of the number is the check digit. That number is calculated from an algorithm (called the Luhn formula or MOD 10) on the other numbers. This is to spot typos when a user enters a number, and I assume was to allow detecting an error reading the magnetic stripe when a card is swiped.
The MOD 10 check does not offer security, it offers error detection. Think of it as fullfilling the same role as a CRC in software.
To calculate the check digit:
First drop the last digit from the card number (because that’s what we are trying to calculate)
Reverse the number
Multiply all the digits in odd positions (The first digit, the third digit, etc) by 2.
If any one is greater than 9 subtract 9 from it.
Sum those numbers up
Add the even numbered digits (the second, fourth, etc) to the number you got in the previous step
The check digit is the amount you need to add to that number to make a multiple of 10. So if you got 68 in the previous step the check digit would be 2. You can calculate the digit in code using checkdigit = ((sum / 10 + 1) * 10 – sum) % 10
For an example of this in practice download the code to the credit card number generator.
Credit card numbers are a special type of ISO 7812 numbers.
Political violence, terrorism, military operations other than war (MOOTW), low-intensity conflict, people’s war, revolutionary warfare, war of national liberation, guerrilla war, partisan war, warfare in the enemy’s rear, imperial policing or small wars. Whatever it is called, the principal difference between irregular and conventional war is that the latter involves adversaries more or less symmetric in equipment, training and doctrine. In an irregular war, the adversaries are asymmetric in capabilities and the weaker side, usually a sub-state group, attempts to bring about political change by organizing and fighting more effectively than its stronger adversary.
Terrorism is sometimes distinguished from irregular warfare in that irregular warfare is an attempt to bring about political change by force of arms. Terrorism does not result in political change on its own, but is undertaken to provoke a response. Terrorism differs from other forms of violence in that the acts committed are coloured by their political nature. Hijacking, remote bombing and assassination are criminal acts in a civil society, but when conducted in the name of a political cause which generates domestic or international sympathy their legal status generates more debate.
Irregular warfare is characterized by the mobilization of a significant proportion or the population to support the insurgent movement. Coups, by contrast, are not a form or irregular warfare because they are revolutions conducted by a small elite against the government.
Subverting the system
In the words of Thomas Edward Lawrence (1888-1937, better known as ‘Lawrence of Arabia’):
Granted mobility, security (in the form of denying targets to the enemy), time, and doctrine (the idea to convert every subject to friendliness), victory will rest with the insurgents, for the algebraical factors are in the end decisive, and against them perfections of means and spirit struggle quite in vain.
An irregular warfare campaign achieves success by gaining an advantage over its adversaries in the four dimensions of time, space, legitimacy, and support.
Time is the most important element required for the successful conclusion of an insurgent or terrorist campaign. In almost every successful case, campaigns are measured in decades not years. The Tamil Tiger of Eelam have been fighting for political autonomy within Sri Lanka for over 28 years. The Cuban revolution (1957-9) is notable for how fast it achieved success; few states however are as corrupt, inept, and fragile as the Batista regime was in the late 1950s.
Endless struggle without an obvious victory eventually leads to the exhaustion, collapse or withdrawal of the enemy. Time is required for an insurgent force to demonstrate its legitimacy to the local population, which builds internal and external support. Wider popular support allows the insurgents to raise a superior army.
Space allows irregulars to decide where and when to fight. Defenders against sedition cannot be everywhere at once without spreading their forces too thinly and inviting attack from locally superior guerilla forces. An advantage in space (particularly the presence of difficult terrain) will provide insurgents with safe areas and bases from which to consolidate and expand their efforts.
Insurgents can use terrain which favors the lightly armed and mobile against the heavy, slow moving and often road-bound government forces. The Afghan Mujahaddin guerrillas used mountainous terrain against Soviet forces (and are presumably doing the same against American forces at the time I write this). The Viet Cong and North Vietnamese forces used jungle and swamp areas to shelter them from US and South Vietnamese overwhelming firepower. Chechen guerrillas used buildings and narrow roads in Grozny against Russian forces.
Few insurgent or terrorist campaigns succeed without some form of support. There is only so much equipment they can manufacture or capture. They must look after their casualties and replenish their supplies. They must constantly update their intelligence on the whereabouts and activities of government forces. They have to train new recruits. Support can come from domestic (internal) and international (external) sympathizers.
Internal support is essential to the survival of an uprising. Ernesto ‘Che’ Guevara (1928-1967) failed to ferment revolt in Bolivia (a struggle in which led him to his death) mainly because the local communist party was hostile to outside interference and the peasants were indifferent to his message. Mao Zedong (1893-1976) described the guerilla as the ‘fish’ that swam in the ‘sea’ of popular support. Without the sea the fish will die.
External support can be material, in the form of money, weapons, training or cross-border sanctuaries. External support can also be moral, in the form of political recognition and lobbying. States usually harbor or support terrorist groups for reasons of political expediency and to suit policy goals, as opposed to genuine sympathy for the cause espoused by the insurgents. External states will support insurgents if they seem them as fighting a proxy war on their behalf; the United States and the Soviet Union fought each other in Afghanistan and Vietnam with one side supporting a proxy. Supporting irregulars allows two powerful states to wage a limited war for limited purposes without the risk of nuclear war or conventional escalation.
The moral superiority of the guerrillas is a cornerstone of all irregular and terrorist theory. Insurgents derive supports from the people and they often cultivate their relationship with them. Mao outlined a ‘code of conduct’ for the guerrillas. Che Guevara insisted that the peasants understand that the guerrillas were as much social reformers as they were protectors of the people.
Peasants who co-operate with insurgents often face harsh retaliation from the government, but this often drives people into the arms of the insurgents by legitimizing their cause. Government brutality also allows insurgents to act as the avengers of the people. Insurgents themselves often behave like government troops towards elements of the local population displaying an unwillingness to help; Mao remarked that acts of terror may be necessary to convince the population of the occupational hazards of working for the government and to show that the government no longer protects them.
The most powerful method of legitimizing a struggle is to link military operations with a justifiable political end. Causes vary but self-determination has been the most pervasive and successful. The UN Charter and the UN High Commission for Human Rights both affirm peoples right of self-determination, which made it difficult for nations such as Great Britain, France, the Netherlands, and Portugal to retain possession of their overseas colonies in the face of native insurgents claiming the right to self-governance.
Protecting the system
The three dimensions of counter-insurgency and counter-terrorism are location, isolation and eradication.
The most important part of any counter-insurgency or counter-terrorism campaign is recognizing that the threat exists. The earlier the government detects and reacts to an insurgency the greater its chance of success. The problem is distinguishing between lawful and unlawful forms of discontent, and reacting at exactly the right time. Restricting guaranteed rights and freedoms every time a bomb is detonated will undermine the legitimacy of the government. Waiting too long to uphold the rule of law, however, will give the insurgents or terrorists the time to build a robust organizational infrastructure that will be much harder to defeat.
Upholding the rule of law is crucial if states are to preserve the legitimacy of their cause and maintain the moral high ground over insurgents or terrorists. Methods to gather intelligence and counter terrorism must be as unobtrusive as possible.
Once an irregular threat has been identified various civil and military agencies must localize the it while co-ordinating their efforts. The must identify safe houses, group members, and sources of supply. This can be a daunting task given the small size, stealth and secrecy of subversive organizations.
Once identified insurgents and terrorists must be isolated from their bases of support. They must be isolated physically from internal support by either moving local population into easier to defend areas (‘strategic hamlets’ in the Vietnam conflict), or more usually by curfews, prohibited areas, aggressive patrolling and ‘cordon and search’ operations. These measure seek to limit the mobility and range of the insurgents. They must also be isolated from their external sources of supply by a combination of diplomatic pressure and military measures (wire barriers, guard houses and patrols were used in the Algeria 1954-62 conflict).
Equally important as physical isolation, the most powerful asset of the insurgents, their political message, must be defused. Widely held grievances that foster a potent source of recruitment and support must be mitigated by the government. The onus if on representatives of the state to prove that they are morally superior to the guerrillas and terrorists and will provide for the needs of their citizens, including responding to the sources of disgruntlement that led to armed insurrection in the first place. The local population’s ‘hearts and minds’ must be won and citizens convinced that the state’s fight is their fight.
Eradication involves the physical destruction of the insurgents or terrorists. The priority here is destroying the insurgents safe havens. The necessary ratio of government forces to irregulars is often cited as 10:1, with particular emphasis on the use of specialized units such as special forces units (which are the closest military unit to an insurgent force, a role in which they often operate behind enemy lines).
Passive ways to eradicate insurgents include promises of amnesty (the South Vietnam ‘Open Arms’ program), cash incentives for weapons and information, and engaging and supporting the moderate factions of the insurgency in an attempt to convince them to start talking and stop fighting.
Strong political will on the part of a government is require to defeat an insurgency. It is a gradual process of attrition that takes a significant investment in time and resources. If the underlying causes of discontent are not also resolved the struggle often resurfaces later in a different form.
The term sea power covers the control of international trade and commerce, the operation of navies in war, and the use of navies as instruments of diplomacy, deterrence, and political influence in peacetime. The importance of a navy rests on its ability to affect events on land and to control use of the sea. Armies control territory, whereas navies control access; to territory, international movement, and trade.
Unlike the concept of land and air power which are generally defined only in military terms sea power can never quite be separated from its geo-economic purposes. Over 90 percent of international trade by weight and volume travels by water. The majority of the world’s major cities and urban population lie within 200 kilometres of a coastline.
Sea power is seen as essential to globalization. A global navy alows a nation commited to global trade to guarantee the free use of trade routes. If international trade is secure from threats to its disruption, trade can expand.
Sea control and sea denial involve struggles over the use of sea lines of communication (or commerce). These are the world’s trade routes and routes for military movement at sea. The world’s geography affords three strategic choke points: The Strait of Hormuz at the mouth of the Arabian Gulf through which much of the world’s oil supply passes; the Straits of Malacca in south-east Asia, and the Panama Canal.
The only global sea power today is the United States of America. All other sea-faring nations concentrate on being local or regional sea powers, controlling their littoral region and maintaing a small expeditionary force which can be sent to areas of strategic interest when needed.
A maritime blockade, strategic bombing or guerilla warfare are coercive techniques to achieve a particular objective. By bring about economic ruin, large scale destruction, or a campaign or terror, aggressors seek to induce their opponent to give them their objective. Land warfare, by contrast, obtains objectives by seizing them directly; it is brute force.
The First World War
The First World War was the first war to be fought since the industrial revolution. This brought huge changes in the size and firepower of armies. For example in 1812 Napoleon’s Grande Armee numbered 600 000, and each soldier had time to fire two musket bullets before an approaching unit closed to bayonet range. By 1912 the French army had 1.6 Million troops, yet was only the third largest in Europe. Each soldier could fire two hundred bullets before the attacker closed to bayonet range. Bayonet charges became suicidal and tactics had to be altered dramatically.
The Boer War (1899-1902) and the Russo-Japanese War (1904-5) had provided early experience of this new type of war, and two decisive tactics emerged almost immediately; the use of cover and concealment to reduce attackers exposure while advancing, and suppressive fire to keep the defenders heads down while the attackers were exposed.
These two tactics were difficult to execute. The first required the massed line attacks to be replaced by small groups making short dashes between areas of cover. This put more distance between leaders and led which made it hard for officers to keep their troops moving. The second required good infantry (advancing) / artillery (providing the covering fire) co-ordination. If the covering artillery barrage fell short or continued too long it would hit their own troops; if it fell long or stopped too early it wouldn’t be effective.
These problems prevented decisive victories in the early days of the First World War, and the troops rapidly became bogged down in trench warfare. Artillery could destroy trench defenses outright, and it became the dominant arm of the army. Massive preparatory artillery barrages would destroy the opposing trenches, and the infantry would simply move in, mop up the dazed survivors, and take over.
The scale of artillery bombardment was unprecedented. For example, the ten-day Allied bombardment around Messines in July 1917 dropped 1200 tons of explosives on every mile of German defenses. These attacks were successful and ground was taken, but proved much harder to hold. The week long preparatory barrages alerted the opposition as to where the attack would take place. They would mass reserves and artillery just behind the front line, and attack their own front positions as soon as they had been taken, forcing the enemy to retreat. It proved impossible to advance beyond the reach of artillery. This was called ‘war on a tether’.
Over the course of the long trench stalemate both sides eventually overcame the technical and tactical problems of a combined arms approach. They limited artillery barrages in time so as not to alert the enemy, and replaced the massed infantry charge with several small well trained units armed with portable light machine guns and grenades. The Germans developed these tactics first, using them at Caporetto on the Italian front in November 1917.
The Second World War
The inter-war period brought mechanization – tanks, trucks, aircraft and radio communications. These had all featured in the First World War, but not in any significant role. Out of 414 tanks starting at Cambrai on 8th August 1918, only 145 were running on the second day. The physical hardship and unreliable technology meant that after a day of fighting neither men nor machines were much use. Aircraft were too light to carry a payload and were mostly reserved for reconnaissance or counter-reconnaissance. Wireless sets had been too bulky and low powered.
Most Allied strategists saw the tank as key to future wars, and envisaged them as the navy of the land, operating independently. The Germans by contrast were the most conservative. They developed the Panzer division, a combined arms formation of tightly co-ordinated tanks, infantry, artillery and engineers. They combined movement, use of cover, and suppressive fire to overcome defenses in an all-arms assault.
The civil-military tension in France produced a short service unskilled conscript army unable to master the combined arms tactics developed in the last stage of the First World War. England’s class-conscious officer corps ostracized the skilled technicians they needed for in an effective mechanized army, and many of them moved on to civilian jobs. In the Soviet Union ruthless political purges stripped the army of its competent officers.
The hard lessons of 1917-18 has taught defenders to thin their troops, extend their defenses into great depth, and keep much of their force in reserve. Although this yielded ground initially it forced attackers to fight the decisive battle deep within enemy territory after an advance of thousands of yards which would of frayed their combined arms co-ordination. It also gave defenders more time to prepare for the battle. Yet at the start of the 1939 hostilities French and Russian defenses were shallow and forward focused; this made them easier for an inexperienced officer corps to command, but also easier for the German Panzer divisions to punch through.
As a result the opening period of the Second World War was marked by a series of German ‘blitzkrieg’ victories. By 1941 the Allies re-learnt the importance of deep elastic defenses, integrated fire and movement, and combined arms, and slowly started re-gaining ground.
After the initial success of the Panzer divisions, tanks did not prove decisive. Operating alone they are loud, hard to hide, and have great difficulty seeing concealed targets. Dug-in anti-tank guns or infantry with short-range portable anti-tank weapons can wait for a tank to pass and attack its vulnerable flank and rear. Infantry were needed to act as their eyes and ears and artillery to provide high volume suppressive fire during extended operations. Tanks proved most successful in open country once defenses were breached, or for close situations were artillery fire had too high a risk of hitting friendly forces.
The 1973 Arab-Israeli war
In the 1956 and 1967 conflicts against Arab opponents, Israel’s limited mechanized forces had produced results disproportionate to their strength. This convinced senior Israeli leaders to focus almost exclusively on mechanized units, neglecting infantry and artillery. As they were to discover however, their previous successes, particularly 1967, had been mostly due to the poor performance of Egyptian troops. In the 1967-73 years Egypt taught its infantry to defend against tank charges by concealing their positions, standing fast, and hit their targets.
In October 1973 the Egyptians caught Israel off-guard, crossed the Suez canal, overwhelmed the unprepared garrison of the ‘Bar Lev Line’, advanced four kilometers into the Sinai and dug in. Israel quickly counter-attacked, impaling a series of unsupported tank charges on the Egyptian defense and losing almost three full brigades.
Faced with a failure of their pre-war tactics and almost no infantry, the Israelis improvised a combined arms style. A few tanks would move forward cautiously to draw fire from the Egyptian infantry’s portable wire-guided missiles, while other tanks in over-watch positions would look for the puff of smoke signalling the missile launch and fire on that position. Meanwhile the forward tank sought cover and maneuvered evasively. These new techniques eventually allowed the Israelis to break through Egyptian defenses, were the war was rapidly won.
The 1991 Gulf War
Between the 17th January and 28th February 1991, a US led coalition destroyed a defending Iraqi army of hundreds of thousands of soldiers, thousands of armored vehicles and tens of thousands of artillery pieces, for the loss of only 240 attackers. This represented less than one fatality in 3000 soldiers, an incredibly low coalition casualty rate.
In August 1990 Iraq invaded Kuwait. Over the next five months a US-led coalition gathered forces in Saudi Arabia, Turkey and the Persian Gulf. On the 17th January they launched a six week air campaign, rapidly gaining control of the air and destroying the air defense and large parts of Iraq’s command and control network. This gave them uncontested air supremacy for almost a month of bombing attacks. On the 24th February two divisions of US marines attacking from the center and left, and two corps on the extreme right flank, rapidly defeated the Iraqi ground forces. The war was halted on 28th February, just 42 days after it started, and only four days after the start of the ground offensive.
This unprecedented success is attributable to a combination of superior coalition technology and flawed Iraqi tactics. New information gathering, precision guidance and air defense suppression technologies were all used by the coalition for the first time or in a newly mature form, and not used by the opposition. The Iraqis tactical flaws were the usual combination of poor combined arms co-ordination, inability to integrate manoeuvre and suppressive fire, and poor exploitation of cover and concealment.
The Iraqi conscript infantry was neither skilled nor motivated and even the Republican Guard were remarkably unskilled. Fighting positions for tanks and troops were haphazardly prepared. For example many Republican Guard armored vehicles were left perched on the desert surface behind loose sand berms which offered neither concealment (they were the only prominent feature on the flat desert landscape) nor cover (piled sand cannot stop 120mm depleted uranium shells). US tanks crews, by constrast, dug fighting positions as ramps which conceal the entire vehicle below ground until the weapon is to be fired. This way they cannot be seen by thermal sights and are not vulnerable to enemy fire (even 120mm DU).
Further Iraqi tactical mistakes include counterattacks launched by armoured vehicles advancing in the open without accompanying fire support; poor marksmanship; and little regard to equipment maintenance. The were not the first to make such mistakes. The technical demands of modern war are exacting, but as technology becomes more sophisticated the consequences of such errors become greater.
The coalition attackers had all-weather, day/night thermal tank sights, stabilized 120mm guns effective on the first shot at 3 kilometres, attack helicopters with 5 kilometre range missiles, and aircraft armed with precision guided missiles and complete command of the sky. Against such weapons tactical slip-ups became very lethal very quickly to a very large number of defenders.
Since 1900 there has been a continuous, rapid growth in the reach, lethality, speed and information-gathering potential of armies. Military strategy has developed and repeatedly proved a key set of tactics: combined arms, tight integration of movement and suppressive fire, aggressive use of cover and concealment, and defensive depth and reserves. Technology punishes tactical mistakes with increasing severity. Technological change in land warfare can thus be thought of as a wedge, driving apart the real military capability of armies that can, from those that cannot, implement the complex canon of orthodox modern tactics and doctrine.
Although there is no judiciary or policing capability at the international level (aside from the limited actions and powers of the United Nations), there is a still an influential body of international law, respected almost all the time by almost all nations. The times when they don’t usually make the news.
A key point of procedure to bear in mind when dealing with international law, which means the law of the United Nations, is that decisions are voted upon by the fifteen members of the Security Council. To pass, a decision must have at least nine votes, including the votes of all five of the permanent members (China, France, the United Kingdom, the United States and the Soviet Union). This means the five permanent members may veto any decisions and are hence exempt from UN sanctions. This decision was taken in 1945 in San Francisco at the conference where the UN was created. Any attempt to police the behaviour of the permanent members of the Security Council would almost inevitably lead to major conflict and the destruction of the United Nations.
The composition of the Security Council permanent members and their veto powers means that the UN was largely incapacitated for the duration of the Cold War.
Day to day international law
International law ensures that day-to-day interstate relations proceed in a regular and ordered fashion. Like all good law, it is designed not to prohibit those actions which states (or individuals in a domestic setting) would normally choose to undertake, but rather to codify accepted modes of behavior; good law is facilitative, not prohibitive. It is a mechanism through which societies seek to achieve political objectives, particularly that of maintaining order.
The difficulty in setting down international law is in it being sufficiently conservative as to be of benefit to the powerful nations that will enforce it (and that would suffer limited consequences in breaking in), and sufficiently broad that most smaller states will deem it in their interest to abide by it.
States obey international law for several reasons:
- Reputation: States seek to avoid acquiring a reputation as a law breaker (‘rogue state’) as they will then find it difficult to enter into legally binding agreements with other states. They will be cut of from the interactions of world trade and diplomacy.
- Inherent value: States obey laws whose underpinning political rational is clear and which they agree with. For example rules on territorial integrity and inviolability of borders are of benefit to all nations.
- Functional value: States obey the law because its overall contribution to maintaining international order is considered to be of value.
- Interia: States become use to behaving in a fashion enshrined by law. Governing elites and bureaucracies becomes socialized into behaving in that way. Often principles of international law also feature or are incorporated into domestic law. In countries where those that formulate policy are answerable to wider public and media scrutiny policies that violate international law may be perceived as non-viable.
Even when states dis-obey international rules, they often maintain that they are acting within the law. Hitler entered Czechoslovakia in the name of self-determination; the USSR invaded Afghanistan claiming to be invited in by a newly established regime; the United States used force against the Dominican Republic claiming to be acting on behalf of the Organization of American States; and the United States attacked Iraq in 2003 claiming to be enforcing a UN resolution.
Repeated violations of international law can only undermine an order in which both the strong and the weak have a vested interest. For the former it en-shrines their dominant position although it often limits the blatantly self-interested policies they may pursue. For the weak it preserves their very existence since their survival is dependent not on defensive military capabilities but on the acquiescence of others. Given its dominant economic and military position it is remarkable not how often the Unites States of America exercises its influence on others, but how rarely.
International law and the use of force
The laws of armed conflict can be separated into jus ad bellum (the law towards war) which seeks to avert or limit the use of armed force in international relations, and jus in bello (the law in war) which governs and seeks to moderate the actual conduct of hostilities.
The jus ad bellum is founded primarily on Article 2 and Chapter VII (articles 39-51) of the United Nations charter. This insists that All Members shall settle their international disputes by peaceful means (Article 2(3)) and that All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any State (Article 2(4)). It allows for the inherent right of individual or collective self-defense (Article 51).
Many states claim that humanitarian intervention constitutes an exception to the prohibition on the use of force. However a 1973 study on humanitarian interventions found that most have occurred in situations where the humanitarian motive is at best balanced, if not outweighed, by a desire to […] reinforce socio-political and economic instruments of the status quo. Thus ‘humanitarian intervention’ is often used as cover for a breach of Article 2(4).
The jus in bello does not seek to diminish or obstruct the efficacy of fighting forces (which would be impossible), but to limit the barbarity of the conflict. Wars occur within the context of international relations, and a more ‘humanely’ conducted war will give the victor: An enemy that is less afraid of surrender, better relations with other states after the war and an easier task in the reconstruction of the disputed territory. However it should be obvious that a law of war can be no more than mitigatory in effect.
A criticism commonly leveled at the jus in bello is that in its attempt to humanise war it encourages it. This argument has a major flaw; the inherent cruelty of war does not prevent its occurrence. If this were so it is difficult to imagine how war could be contemplated after the carnage of Verdun, the Somme and Passchendaele. That war continues to occur is a reflection of the fact that rarely do those who start wars have to fight in them or otherwise become their victims. To deny humanitarian mitigation to those who find themselves engaged in combat would be cruel logic indeed.
The jus in bello is also called international humanitarian law. A division is often seen between Geneva law and Hague law. The Geneva is concerned with the protection of the victims of armed conflict. It is based primarily on the four 1949 Geneva Conventions. Hague law is concerned with the methods and means of warfare. It is based primarily on the 1899 and 1907 Hague Conventions.
Steps were taken in Rome in 1998 to setup an International Criminal Court, whose primary function would be the prosecution of crimes against the Geneva and Hague laws. The United States of America has indicated that it does not recognise the authority of this court, so it’s future is uncertain.
Strategy is the art of distributing and applying military means to fulfill the ends of policy
– Lidell Hart
Strategy must now be understood as nothing less than the overall plan for utilizing the capacity for armed coercion – in conjunction with economic, diplomatic, and psychological instruments of power – to support foreign policy most effectively by overt, covert, and tacit means.
– Robert Osgood
Strategy is the theory and practice of the use, and threat of use, of organized force for political purposes.
– Colin Gray
This section is sourced from Strategy in the contemporary world, An Introduction to Strategic Studies by John Baylis, James Wirtz, Eliot Cohen and Colin S. Gray. It is a book I highly recommend. Any miskates are my own.
Strategic Studies is the bridge between military means and political goals; it is a sub-field of Security Studies, itself a sub-field of International Relations which is a sub-field of Political Science. From the 50’s to the 80’s it was the dominant sub-field of International Relations.
The Berlin Wall fell in 1989, but the NATO powers had barely had time to start re-appraising their military needs when Iraq invaded Kuwait in August 1990, followed by a decade of Somalia, Rwanda, Bosnia and Kosovo, leading straight into the attack on World Trade Center, then the American invasions of Afghanistan and Iraq. The end of the Cold War has not brought peace to everyone, nor given strategic planners much more sleep.
The philosophical viewpoint of contemporary strategists is what they call Realism.
Realism is a clear recognition of the limits of reason in politics: the acceptance of the fact that political realities are power realities and that power must be countered with power; that self-interest is the primary datum in the action of all groups and nations
– Gordon Harland
Realism has a pessimistic view of human nature, subscribing to the views of Thomas Hobbes that people are
inherently destructive, selfish, competitive and aggressive, and that these destructive traits can never be eliminated. Strategists attempts to minimise the likelihood and severity of international violence, but do not believe in the possibility of permanent peace.
Strategic studies focuses on the relationships between states. Unlike domestic society, there is no authoritative government to create justice and the rule of law. Realists note that states reserve the right to use lethal force to achieve their objectives, a right that individuals living in civil society have given up to the state. Who wins in international relations does not depend on who is right according to some moral or legal ruling but purely on the balance of power.
Realists see a limited role for ‘reason’, law, morality and supra-national institutions in world politics. As there is no ‘world government’ to enforce international law, to promote a universal moral code, or even to enforce the decisions of organisations such as the United Nations, states will agree with the law, moral code or decree when it suits them and disregard it when it threatens their interests. Realists see supra-national organisations not as truly independent actors but as agents set up by states to further their national interest.
If you have read this far, you may well be thinking that the field of Strategic Studies is obsessed with conflict and force, insufficiently concerned with ethical issues, part of the problem, not the solution, and state-centric. These are the main points of criticism of Strategic Studies.
They respond by saying that yes they are interested in conflict and violence, in fact that is what they study, in the same way that computer programmers are interested in computers. They recognise that their field of study is only a sub-field of International Relations.
On the second point, they claim that they cannot let ethics interfere with their morally neutral scholarly detachment.
The third point, that strategists are part of the problem, not the solution, can be translated as: viewing military power as a legitimate instrument of policy helps to perpetuate a particular mind-set among national leaders and the public which encourages the use of force. Strategists respond that they reflect, rather than create, the reality of international relations. That most policymakers and elected officials tend to share their assumptions is because of the threats and challenges presented to them, not because of the strategists mind-set. They believe that conflict cannot be permanently avoided, but that effective strategy can mitigate it.
On that final criticism, that they are state centric, they say that they do concern themselves with intra-state conflict (Kosovo, Bosnia, Chechnya), but as the state is the main actor in world politics, that continues to be their main focus.
Commodities are anything that you can take physical delivery of, such as sugar, coffee, wheat, etc. Many have heard the story of the trader who bought a pork belly future, intending to sell the contract at a profit. He forgot about it and when the contract expired a lorry full of pigs arrived at the bank to deliver the pork bellies he had agreed to buy !
Financial commodities are bullion (gold) and energy.
London Interbank Offered Rate. The rate at which banks lend / borrow from each other. The rate depends on how long the loan is for, so it is usually quoted as 3m LIBOR (if borrowing for 3 months), 6m LIBOR, etc. If the currency is not sterling then it is quoted as well – for example 3m $ LIBOR or 6m EUR LIBOR. Investments typically have to pay more than LIBOR because otherwise we could simply lend the money to another bank at LIBOR. Hence LIBOR is a reference rate.
How easy it is to convert an asset into cash. Government bonds and equity in large companies are very liquid because there are many buyers and sellers constantly active in the market. An option on the currency of a small country or a very exotic, highly structured, bond would be illiquid because it would be hard to find someone to buy them from you.
Banks make money from:
- The bid / offer spread: The difference between what they buy something at and what they sell it for. This is the same as the buy / sell on high street foreign exchange boards.
- Fees: Most investments made through a bank incur a fee – the bank makes money whether the investment does or not.
- Time value of money
Over The Counter (OTC) / Exchange traded
An instrument traded OTC is negotiated directly between buyer and seller. An exchange traded instrument is bought and sold in a specific physical location where buyers and sellers meet. Most financial business used to be conducted in exchanges by open outcry (buyers and sellers stand in a circle and shout out what they are selling and buying). The traditional image of a trader in a colorful jacket shouting and waving his arms is open outcry. Nowadays computer networks mean buyers and sellers do not have to be in the same physical location, and most business is OTC.
The most popular and ‘ordinary’ flavor of ice-cream. Used to mean the simplest most common type of a financial instrument. The opposite of ‘exotic’.
A derivative is a financial contract that is based on (derived from) something else, either another financial instrument (a bond, shares, currency, etc) or a commodity (sugar, coffee, energy, etc). What the derivative is based on is called the underlying.
The three main types of derivatives are Swaps, Futures and Options.
Interest Rate Swaps
The exchange of cash flows representing interest receipts or payments on an agreed notional principal amount for an agreed period of time. Swaps are tools which allow for management of the interest basis of funds.
If you owned a property you were renting out and I had a savings account paying a fixed rate, you might want to swap your rent receipts for my interest receipts. You exchange the higher riskier rate (the rent payments which the tenants might not pay) for a lower less risky rate (the interest which the bank most probably will pay).
A company having borrowed money from a bank at a floating rate (6m LIBOR) might want to swap that for a fixed rate (6%) so that they are no longer at risk if interest rates go up. On one side they pay 6% (of the agreed notional principal) and receive 6m LIBOR, and on the other side they pay the 6m LIBOR straight out to repay their loan. They have converted a floating rate loan into a fixed rate loan.
The bank involved in the swap above would typically back it out with another swap, say paying 5.95% for 6m LIBOR. They make a profit from the .05% difference and are taking no risk with regards to interest rate changes.
The types of interest rate swap:
- Fixed / Floating: As in our example. This is the most popular type of swap. Also called a coupon or asset / liability swap.
- Basis swap: For example swapping 3m LIBOR for 6m LIBOR. Basis swaps are used a lot by mortgage companies that swap 1m for 3m (because they get mortgage repayments monthly).
- Currency swap (both fixed): Say fixed $ for fixed £.
- Currency basis swap (both floating): 3m $ LIBOR for 6m Yen LIBOR.
- Cross currency swap: Fixed £ for 3m CHF LIBOR.
A futures contract is a firm obligation to make or take delivery (or implied delivery through cash settlement) at a future date of a specific commodity at a specific price.
Futures are usually traded on an exchange (in England this is LIFFE). They are very standard. 3 month sterling interest rate futures are contracts to lend or borrow sterling for 3 months. They will have a delivery date (when the loan starts). So a June 3m £ future starts next June when one party borrows sterling from the other at the agreed rate for 3 months.
A future agreed directly with a bank is a Forward Rate Agreement (FRA). It can be tailored where there are no futures on the exchange that match our needs, or for currencies there are no futures in.
A contract in which the holder buys (at a premium) the right but not the obligation to buy or sell an agreed amount of a commodity at a predetermined price over a specified time period.
An option granting the right to buy the underlying is a call option. An option granting the right to sell the underlying is a put option.
European options can only be exercised when the option expires. American options can be exercised at any time during the life of a contract.
The underlying (what we are buying the option on) can itself be a derivative. Exchange traded options often have a futures contract as the underlying.
A warrant is a share option that is usually traded over the counter (OTC). Share options are usually traded on an exchange. The warrants are usually ‘given’ away as sweeteners on new deals but have a secondary market of their own. This asset class is nowhere near as popular as it used to be. Barings built, and probably lost, a huge fortune from Japanese warrant trading.
The derivatives market is mostly made up of derivatives based on:
- Interest rates: ( ~65% of the market). LIBOR, Bond rates, treasury bill rates, etc. The biggest derivative is the $ swap – swapping fixed rate dollars for floating rate dollars.
- Currencies: (~25%). Options and swaps on foreign exchange.
- Equity: (~5-10%). FTSE futures, Index swaps, etc.
- Commodities: (~0-5%).
(data correct as of the year 2000)
On the use of derivatives
Derivatives are used for speculation or hedging.
For speculation, derivatives give you leverage.
For example instead of buying a $10Million bond in the hope its price will go up, we can buy an option on that bond, which might only cost us $2000. The profit opportunity is almost the same (the price of the option slightly reduces our profit) but the risk is much less as the most we can lose is the option price ($2000).
For hedging, derivatives allow you to fix the price now for a trade in the future, or at least limit the rise / fall of that price.
For example an oil producer can arrange a futures contract for the sale of his oil in 1 years time. That way he knows exactly how much money he will make and can use that to invest. A UK company holding a US bond which is about to mature could buy an interest rate option to ensure the Dollar / Sterling rate did not reduce the value of its bond.
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