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Two sides of the Coin

As Barack Obama and Gordon Brown prepare to invest extra troops in the latest attempt to defeat the

"Strategy without tactics is the slow road to victory," wrote Sun Tzu in The Art of War, "but tactics without strategy is the noise before defeat." Stanley McChrystal, the top US military commander in Afghanistan, would do well to heed the words of the ancient Chinese general.

McChrystal is a lead member of the counter-insurgency (or "Coin") brigade that now dominates the US national security establishment. Coin theory emphasises a "population-centric" over an "enemy-centric" approach. It disinters the language of "clear, hold and build", resonant of the Vietnam era, and describes soldiers and marines as "nation-builders as well as warriors" (to borrow a phrase from the US army's much-lauded 2006 counter-insurgency field manual, co-authored by the celebrated General David Petraeus). Coin is predicated on the idea that it is possible to win supporters for an insurgency by providing security and basic services, and ensuring the presence of a strong, legitimate government.

Or, as McChrystal put it, in a memo to President Barack Obama leaked in September: "This new strategy must . . . be properly resourced and executed through an integrated civilian-military counter-insurgency campaign that earns the support of the Afghan people and provides them with a secure environment." Without extra troops, said McChrystal, the mission "will likely result in failure".

Critics of the new focus on counter-insurgency theory claim it is a tactical gimmick that enables policymakers to avoid thinking long and hard about what the endgame in Afghan­istan will actually look like. It is not a recipe for winning the war in the long run, they say; it is only for avoiding defeat in the short run.

“Coin doctrine is, at best, a collection of tactics that may or may not apply to a given situation," says Celeste Ward, a former deputy assistant secretary of defence under George W Bush. "But because of the absence of real discussion about US strategy and priorities, Coin has been elevated to the status of a strategy."

Coin's popularity, Ward told me, is that it "offers a framework that is palatable to people from very different political points of view: there is a unity of vision among both neocons and traditional Democrats". The former are excited by its emphasis on more troops, the latter by its focus on winning "hearts and minds" and "nation-building". It is for this reason, she says, that in Washington, DC today "counter-insurgency is king".

The proponents of Coin - or "Coinistas", as they have come to be known - point to the success of the 2007 US military "surge" in troop numbers in Iraq under the leadership of General David Petraeus, which they credit with reducing the levels of violence and insurgency across the country.

It is this "surge narrative" that has emboldened the Coinistas, but traditionalists, such as Colonel Gian Gentile, director of the military history programme at the US Military Academy at West Point, remain unconvinced.

The dramatic drop in violence in Iraq was the result of "a decision by senior American leaders in 2007 to pay large amounts of money to Sunni insurgents to stop attacking Americans and join the fight against al-Qaeda", says Gentile, who remains an outspoken critic of Coin despite being an active-duty officer. "Coupled with this was the decision by the Shia militia leader Moqtada al-Sadr to refrain from attacking coalition forces."

Gentile, who commanded a cavalry squad­ron in west Baghdad before the surge, says his "fundamental mission was to protect the people" and the "overall methods that the US army employed at the small-unit level where [he] operated were no different from the so-called new counter-insurgency methods used today".

Aside from the Iraq surge, Coinistas also point to earlier examples from history where counter-insurgency methods seem to have succeeded - in particular, the British colonial experience in Malaya (now Malaysia) between 1948 and 1960.

“Malaya is the 'gold standard' for Coin," says the historian Michael Vlahos, a member of the national security assessment team at Johns Hopkins University. But, he argues, this is a mistaken view: the Chinese Communist insurgents were a tiny and unpopular outside movement removed from the population, the British had a close and credible relationship with the ruling princes, and the local people were politically passive. And, it should be noted, it still took the British a dozen years to prevail.

None of those favourable conditions holds in Afghanistan, where the war has now entered its ninth year. The Taliban represent a huge section of the Pashtuns, the country's largest ethnic grouping, who are largely unrepresented in the political and military establishment of the "new" Afghanistan; and neither America nor Britain is considered a friendly nation.

The Pashtuns are among the most fiercely tribalised and nationalist peoples in the world, united only against a foreign invader. The thread running through almost all insurgencies is opposition to foreigners. Sending more and more troops increases the size of the foreign footprint in Afghanistan, undermining the legitimacy of the host government. As even the US defence secretary, Robert Gates, has worried in the not-so-distant past: "Too many forces could look a lot like an occupation."

A numbers game

The Coin theory of "clear, hold and build" is manpower-intensive, relying on an increased number of counter-insurgents to maintain widespread law and order. The field manual emphasises the importance of "troop density", or the ratio of security forces to inhabitants: "20 counter-insurgents per 1,000 residents [or 1:50] is often considered the minimum troop density required for effective Coin operations".

The CIA estimates Afghanistan's population, as of July 2009, to be roughly 28.4 million. Thus, going by the 1:50 ratio, the size of the US-led coalition force would need to be approximately 568,000 troops.

The US military commitment to Afghan­istan stands at 68,000 troops. There are about 38,000 non-US troops in Nato's International Security Assistance Force (Isaf) also deployed in the country, including 9,000 from the UK. The expected US troop surge of up to 40,000 - the number McChrystal is said to be demanding - would take the total to only 146,000, or just over 400,000 troops short of the number needed to satisfy Coin's own textbook definition of "minimum troop density".

The Coinistas, however, claim that their ratio allows for the host nation's military and police forces to be included in the total figure.Would this make a difference? Even adding in the 97,000 Afghan police officers and the 100,000-odd Afghan soldiers leaves the Nato-led force more than 200,000 counter-insurgents short of the "minimum".

Furthermore, the Afghan National Army is plagued by desertion: 10,000 recruits have disappeared in recent months. Soldiers are under-equipped and underpaid; some 15 per cent of them are thought to be drug addicts. Dominated by Tajik troops from the north of the country, the "national" army has little or no credibility in the southern, Pashtun areas of Afghanistan, where the Taliban mainly operate, and from where they draw ethnic support.

Meanwhile, the Afghan police, one member of whom shot dead five British soldiers on 3 November, are prone to infiltration and corruption and lack proper training. They have lost roughly 1,500 staff to insurgent violence this year and around 10,000 policemen are absent without leave.

“The Afghan army is useless and the police are corrupt," says Dan Plesch, director of the Centre for International Studies and Diplomacy at the School of Oriental and African Studies. "So what does McChrystal propose? More useless troops and corrupt police. It's a counter-intuitive solution."

According to Plesch, there is a yawning gap between Coin theory and practice. "It's all fine on paper, but that doesn't translate into success on the ground," he told me. "You're still the foreign infidel with big boots on. You are still bombing, shooting and occupying."

But Coinistas are nothing if not optimistic, or even triumphalist. "Coin theorists tend to imply a kind of determinism: if Coin precepts are followed, the campaign can be successful," says Ward. Or, in the words of Vlahos: "Do this and then this, and at the right moment add this ingredient and . . . you win."

“For all its claims to novelty and modernity, Coin is eerily reminiscent of [the Napoleonic military thinker] Jomini at his worst - a list of prescriptive doctrines that claim to be valid for all times and places," says Colonel Douglas Macgregor, the retired senior military officer who commanded US cavalry troops during the first Gulf war.Macgregor, like Gentile, is critical of this latest plea from hawks to deploy US military force for utopian political ends. "We cannot 'fix' Afghanistan with military power, nor can we shape the destiny of hundreds of millions of Muslims living in the region. Only the people who live there can do that, because nations are built from within, not from without."

Taliban red herring

As a young officer in the Gurkhas, John Mackinlay experienced a conventional Maoist-style insurgency at first hand in the rainforests of North Borneo during the 1960s. But, as he argues in his new book, The Insurgent Archipelago, such experiences are of no use to modern counter-insurgents confronted with the threat of post-Maoist, globalised attacks. "Malaya is so long ago that it is not relevant," he told me.

“The Americans think they can take their fire extinguisher and go abroad to squirt some water, put out the blaze and go home," says Mackinlay, who teaches in the war studies department at King's College, London. "That's bollocks." The Taliban insurgency, he argues, is a red herring and sending more troops is a distraction. What matters, he says, is the al-Qaeda insurgency across the globe. Mackinlay distinguishes between what he calls an "expeditionary campaign" against insurgents in Afghanistan and the "domestic campaign" against extremists in the UK. His criticism of the obsession with Coin is that the domestic campaign should have "primacy" and that "the expeditionary campaign is antithetical to the domestic campaign, because it pisses off your average Muslim punter in Bolton".

The Taliban have no known interest in attacking mainland Britain (or America). Of the 15 major terror plots that UK security agencies have successfully prevented since 11 September 2001, none has been linked to Afghanistan. Of the 90 or so Islamists imprisoned in Britain on terrorism offences, not a single one hails from Helmand. On the contrary, Mackinlay tells me, "Afghanistan is the recruiting sergeant for what is happening in the UK."

As centre-left governments in the US and UK prepare to commit additional troops to the Afghan war effort, his words seem to go unheard. The Ministry of Defence plans to deploy 500 further British troops to the killing fields
of Helmand and seems to have signed up fully to America's Coin approach, even publishing the first UK counter-insurgency manual in eight years.

One retired British colonel who served in Iraq and Afghanistan is aghast. "It doesn't matter whether you send 500 troops or 5,000 troops," he says. "What is the point when there is no endgame and no exit strategy?"

Coin has become an oversimplified and superficial doctrine for fighting foreign battles, one that makes war a more attractive, easy and likely option, but is also enormously burdensome in troops and money. Nonetheless, such doctrines are seductive: Bill Clinton had liberal interventionism in Kosovo, George Bush fell back on neoconservatism over Iraq, and Barack Obama is on the verge of opting for Coin in Afghanistan.

Coin will not provide a silver - or even a lead - bullet in Afghanistan. And, even if its critics such as Gentile, Ward and Plesch are wrong, the counter-insurgency tactics of Petraeus and McChrystal in Kabul and Kandahar will do little to win hearts and minds here at home, or in the disaffected and alienated Muslim communities across Europe. It is this strategic truth that the Coinistas avoid at their peril.

John Mackinlay's "The Insurgent Archipelago" is published by C Hurst & Co (£20)
Mehdi Hasan is senior editor (politics) at the New Statesman
. Read his blog Dissident Voice

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 30 November 2009 issue of the New Statesman, Left Hanging

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

***

In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt