By Doug Casey, founder, Casey Research
The concept of phyles originated with the sci-fi writer Neal Stephenson, in his seminal book The Diamond Age. I’ve always been a big fan of quality science fiction. I’m not sure why it’s true, but there’s no question sci-fi has been a vastly better predictor of both social and technological trends than absolutely anything else.
The book, set mostly in China in the near-term future, posits that while states still exist, they’ve been overwhelmed in importance by the formation of phyles. Phyles are groups of people that get together with others, bound by whatever is important to them. Maybe it will be their race, religion, or culture. Maybe their occupation or hobby. Maybe their world view or what they want to accomplish in life. Maybe it’s a fairly short-term objective. There are thousands—millions—of possibilities.
The key is that a phyle might provide much more than a fraternal or beneficial organization (like Rotary or Lions) does. I take the concept quite seriously in my daily life. It’s one reason I don’t believe in organized charity. Phyles might provide insurance services very effectively, since a like-minded group—held together by peer pressure and social approbation—eliminates a lot of moral risk. It might very well offer protection services; a criminal might readily take out a citizen “protected” by a state, but they’ll think twice before attacking members of the Mafia.
People are social. They’ll inevitably organize themselves into groups for all the reasons you can imagine. In the past, technology only allowed people to organize themselves by geography—they had to be in the same area. That’s been changing, especially over the last century, with the emergence of the train, the car, and especially the airplane. The same with communication. The telephone and television were huge leaps, but the Internet is the catalytic breakthrough. It’s now possible for people to reach out all over the world to find others that are their actual countrymen, not just some moron that shares a piece of government ID with them.
As things develop, people will find out—or create places—where their loyalties lie. The nation-state has mostly been an inefficient, counterproductive, and expensive nuisance; it’s rapidly becoming completely insufferable. And dangerous; the people living off the state (which is to say acting as parasites upon their “fellow citizens”) are going to resist having their rice bowls broken. Undoubtedly they’ll use the coercive powers of the state to try to maintain the status quo. The military and the police (whose loyalties are first to their coworkers, then to their employer, and only then to those whom they’re supposed to “serve and protect”) will be out in force wearing riot gear.
If the last major change in social structure was catalyzed by the printing press, it’s pretty easy to see how the Internet serves that function today. But what will facilitate it, the way gunpowder did? My bet is on some type of nanotechnology.
I’ve long been a fan of nanotech as a world changer. Technology has always been the friend of freedom and the common man. Sure, the powers of suppression usually get first access to it and always try to monopolize it and use it to keep the “masses” under control, but in the end the cat always gets out of the bag. Even though the state is using an intimidating variety of technologies to keep its subjects under control, technology is evolving much faster and spreading much more broadly, to the benefit of people in general. The end of the state will be precipitated by the Nanotech Revolution. In the years to come, nanotech will, in many ways, be an analog of gunpowder. But thousands of times more potent.
It will do a number of things to totally overturn the current world social order. It will, among many other things, show that (at a minimum) the state no longer serves a useful purpose. And will act as the means to facilitate treason… simply because it’s logical, if nothing else.
But I’m jumping just slightly ahead of the story. Nanotech is going to become the major force in the world over the next generation. But you’re not going to have to wait nearly that long for all this stuff to start happening.
Let me draw your attention to two important things that are just starting to happen, right now, that are going to lead to a New World Order. But not at all like the one envisioned by Bush and Kissinger.
I’m not going to spend a lot of time on this. If you’ve been reading our publications for any length of time and don’t think we’re in for something unprecedented, then we haven’t been nearly as clear—and alarmist—as we meant to be. Economic collapse doesn’t mean the world is going to come to an end; it just means there’s going to be a major change in who owns what and how things are produced and consumed. Our main focus is to suggest investments that should not only weather the building hurricane but allow you to profit from it.
The purpose of articles like this one is to try to put all that in context. One thing that’s going to militate towards the creation of phyles is the breakdown of the ability of governments to provide the services that people expect from them. At the same time that they’re extracting hugely more in taxes, they’ll be beset by inflation, economic depression, financial chaos, and regulatory havoc. People will increasingly realize the state isn’t a cornucopia that can solve their problems but is, in fact, actually the main cause of their problems. They’ll start withdrawing loyalty from it.
People will start organizing themselves into incipient phyles (although they probably won’t call them that), using the Internet. The governments of the world will increasingly clamp down on the Net, recognizing it for the subversive medium that it is, seeing that it’s defrocking their game.
Among other things, economic distress usually leads to military action, as governments try to find an outsider to blame for their problems. The tendency is compounded by the perversely wrong-headed notion that a war can somehow cure a depression. This time around, I expect military events will play a significant part in the sea change—just as they did during the agricultural and industrial revolutions.
Like any bureaucracy, the military is completely predictable and so is again fighting the last war. Spending $400 million on a single F-22, $2 billion on a single B-2, and many billions on a single aircraft carrier is simply crazy. These technically amusing toys would have been helpful for fighting the armed forces of another nation-state—like those of the USSR, but those largely disappeared decades ago. In today’s world, with a near total shift to unconventional warfare, they’re about as valuable as cavalry.
Besides, the attack won’t come from Russia, which is on its way to demographic, economic, and political collapse anyway. Or from China. It’s clear to them they don’t need a military confrontation when it’s just a matter of time before they win through economics and demographics.
The real military threat to the U.S. (and China, Russia, and all the other nation-states) is what’s evolving in Iraq and Afghanistan. On the one hand, these wars can be viewed as a continuation of the Crusades. The average Muslim takes his religion much more seriously than the average Christian. Maybe that’s just because Islam is a simpler religion. More likely though, it’s because Muslims are much poorer and generally more backward than the West; it might be said they’re still sociologically where the West was during the Middle Ages.
Be that as it may, there are 1.3 billion of these folks, and they feel badly treated. Osama spelled out, clearly and publicly, the three reasons for the current jihad—of which the average American is totally ignorant. One, Western support of Israel. Two, the presence of Western troops in Islamic countries. Three, Western support of corrupt puppet governments throughout the Islamic world (almost all of them, but prominently including Egypt, Saudi Arabia, Pakistan, and Iraq). His views are factually correct. And the facts greatly antagonize hundreds of millions of poor Muslims, who subsequently feel they have a lot to gain, and almost nothing to lose, by fighting the infidel.
But what’s the nature of this War Against Islam, which shows every sign of heating up in Iraq and Afghanistan and spreading catastrophically to Pakistan and Iran? And beyond.
It’s not a war against another nation-state; those governments are pathetically incapable of fighting a real war. Their armies are now, and always have been, used exclusively for suppressing the population.
Because they aren’t uniformed and organized into conventional units, and because they attack only small or soft targets, the mujahidin (“terrorists” to Boobus americanus ) look like the guerrillas we saw in the 20th century. But they’re not. They aren’t fighting a war of liberation. They don’t have a central command. And they’re not actually trying to overthrow a government. Stupidly, the US government is responding by using all kinds of impressive and very expensive hi-tech devices to kill small numbers of fighters. Which is not only non-productive, it’s totally counterproductive. Every fighter who’s killed (forget about innocent wedding parties) gives rise to ten more young, motivated fighters. And these people have the highest birthrates in the world.
This isn’t like fighting the Vietnamese, where there was at least a leadership hierarchy. It’s not like fighting ants or bees, where if you kill the queen, you win. It’s more like killing cockroaches in your apartment, when they infest the entire building.
Sidebar here. I’m not using the word stupid as a pejorative, or because I can’t find a thesaurus. Nor am I using it to denote a low IQ; some people in the US government have quite high IQs. I’m using it in either of two other senses. One: as the inability to predict the consequences of actions. Two: as an unwitting tendency towards self-destruction.
Anyway, it’s stupid to focus on things like Osama’s Al-Qaeda. That organization was just a flag planted in the sand, to draw attention to the cause. The movement has long since metastasized, and there are now undoubtedly hundreds of informal little organizations, some of whom are friendly toward each other, some of whom are bitter rivals. But all of whom share a common goal. They all watch each other and learn from what the other does.
It’s like the early days of the auto business, when there were hundreds of companies. They were all innovating as rapidly as they could and all watching each other in order to profit from each other’s advances. They didn’t particularly like each other and were in true competition, but they had the same goal, and everyone immediately applied advances in technology that anyone else made. Unstoppable.
By comparison, the US is like GM today. It’s got a research lab that comes up with good stuff now and then, but at a huge cost. And whatever it does come up with is applied slowly, bureaucratically. It will be completely overwhelmed by what amounts to a military marketplace.
Which is another point. The mujahidin buy all their technology off the shelf. They may be poor and superstitious, but they’re not stupid in the way they’re dealing with the US. We attack them with a million-dollar (hard cost only) missile; they counterattack with a $1,000 IED. We attack them with an airstrike, using hundreds of millions of dollars of aircraft; they counterattack with a suicide bomber, at about zero cost. The US takes out one of their leaders; they attack a city like Paris and create mass hysteria.
In the near future, you’ll find these people carrying out mass and random assassinations. Blowing up power transformers. Cutting fiber-optic and electrical cables. Doing nasty things in the air-conditioning systems of high-rise buildings. Sit down and brainstorm for 15 minutes about what you’d do if you really wanted to punish The Great Satan. If you don’t scare yourself, then you don’t have much imagination. Their return on investment is almost infinite. That assures the US will go bankrupt on the path it’s currently on. They don’t need NSA supercomputers; all they need is a few laptops, cell phones, some stuff you can buy at Radio Shack, instructions on the Internet, and a few buddies who share a common goal. And none of this postulates nanotech devices, which will be created in thousands of garages in the years to come.
A determined guerrilla war is almost impossible to win, as the French found in Algeria and the Americans found in Vietnam. The reason is that if you’re fighting guerrillas, you’re almost certainly fighting the average guy in a country—which means you’ve got to kill almost everybody to win. If you’re fighting a guerrilla war, be assured you’re an outsider, and you’re on the wrong side (even if you think you’re the good guy).
An open-source guerrilla war (to use computer jargon) is a new thing and much worse from the nation-state’s point of view. For one thing, it’s truly impossible to win. That’s for the same reason the behemoth IBM had its lunch eaten first by Apple (founded by a couple of hippies in a garage), then the PC (with thousands of independents writing code, strictly on their own). It’s the nation-state fighting hundreds of what amount to phyles, whose main common denominator, at the moment, is that they’re all Islamic. But that’s going to change soon.
What’s going to happen? The US is going to lose this undeclared war catastrophically. The defeat is going to occur, in part, because it’s going to accelerate the ongoing bankruptcy of the US. The US is also going to be soundly defeated on a strictly military level. A nation-state can no more win against phyles than tribes could win against kingdoms. And nanotechnology, which will give individuals the power that only armies once had, is just in its very beginnings.
Incidentally, phyle warfare is going to spread way beyond the Muslim world. My guess is that will occur in at least two other circumstances: the unwinding of dysfunctional colonial structures in most Third World countries, and internal economic collapse in some advanced countries.
You’re going to see this all over Africa and all over the parts of the world the Europeans colonized, creating artificial nation-states by drawing arbitrary lines on maps, with no regard for who was already living there. About 100 countries in the world have absolutely no business being countries to start with. Lots of little phyles are going to spring up, not to take over the collapsing governments of Africa (which are nothing but vehicles for theft anyway) but to facilitate their destruction and replace them by something local. Or nothing.
The Europeans and Americans will call them “failed states”—an accurate description. But they’re too stupid to realize that a failed state is actually a good thing today—the next stage of what’s going to happen. Somalia provides an early indicator. Governments, with their hugely expensive capital ships, are completely incapable of preventing teenagers in dinghies from controlling a major sea lane. Worse, governments are preventing commercial ships from arming their crews so they can effectively engage the boarders. Governments are incapable of protecting merchants, only capable of preventing merchants from protecting themselves.
Phyle warfare isn’t going to be restricted to Africa, the Islamic world, and the like. It will arrive in America. All kinds of groups—outlaw bikers, skinheads, religious right types, local sovereignty enthusiasts, young Hispanics, and groups of every kind—could easily form loose networks, as opposed to tight organizations, sharing little more than dissatisfaction with the status quo.
The world has been evolving ever more rapidly as time goes by. The recent rise to legitimacy of so-called NGOs (non-governmental organizations) is another straw in the wind. I’ll bet the next change is going to be turbo-charged. And bigger than anything that we’ve seen, or read about, so far. The Greater Depression may just serve as a background for all this—just a sideshow in a much bigger circus.
Founder, Casey Research