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Doctrinal Insights: Command Economies – Understanding Sustainable Economic Incentives at the Tactical Level
Jonathan K Shaffner and David A. Anderson, 10/1/2011


From military governors charged with reconstructing the south after the United States Civil War, the rebuilding of Europe and Japan after World War II, to the present day operations in Iraq and Afghanistan, tactical commanders on modern battlefields end up working as jacks-of-all-trades. Current army core concepts recognize the need to balance offensive, defensive and stability/reconstruction operations in foreign theaters and consider operations in each context during planning and execution.[1] National Security Presidential Directive 44 directs the Department of State to coordinate and lead the conduct of integrated reconstruction and stabilization regardless of the security situation.[2] The Department of State created this document in cooperation with the Department of Defense Directive 3000.05, which was later overridden by the less prescriptive Department of Defense Instruction 3000.05, covering military actions in support of stability and reconstruction. While these documents prescribe a cooperative relationship in stability operations led by the Department of State, the army’s task to support reconstruction and stability does not translate very effectively to the tactical level.

US military doctrine, while recognizing the importance of promoting economic activity, does not provide tactical commanders with a method to build understanding beyond that of broad considerations. A recent publication contracted through the RAND Corporation to fill identified gaps in these publications provides more substance to a commander’s concerns of the economy and an initial understanding of how his influence can disrupt local economic activities. However, this document fails to provide tactical level commanders the necessary insight to properly assess, in order to positively influence, the economy in their operational environment. In other words, these publications principally cover the “what” of a local economy not the “how” or “why.” Therefore, leaving it largely to the commander’s intuition or influence of other governmental or non-governmental agencies whose presence at the tactical level is often non-existent, or very limited.

The purpose of this paper is to present an approach to help fill this gap. By applying a synthesized iterative systems model approach and the principles of a socio-cultural system developed by Jamshid Gharajedaghi, a commander’s effort to build an understanding of the economic environment he is operating within will be greatly improved. This enhanced understanding will empower commanders to better perform their stability and reconstruction task to “Provide Support to Economic and Infrastructure Development”.[3] This paper offers several case studies to illustrate their potential application.

Gharajedaghi and the Socio-Cultural System

Economic, social, cultural and political considerations are frequently mentioned collectively across army doctrine and other agency publications. The interrelatedness of these societal factors creates the contextual lens through which a commander must view his operating area to ensure sustainable success. The sheer complexity inherent in these multi-dimensional relationships and the potential size of the system they create does not lend itself to modeling with a catchy acronym. However, an iterative method of understanding a socio-cultural system as proposed by Jamshid Gharajedaghi offers a process that works within an ill-structured environment. Through building an understanding of the existing system, tactical commanders will develop the capability to better influence their local economies positively and identify potential negative effects of initiatives derived from senior leaders.

Gharajedaghi describes a socio-cultural system as “a voluntary association of purposeful members who themselves manifest a choice of both ends and means.”[4] Critical in understanding a socio-cultural system is that it has a purpose or it does something. A socio-cultural system is part of a larger purposeful whole just as an economic system joins with a legal system and other systems to create a social system. Common objectives and accepted ways of meeting them create the bounds that hold the members of these systems together. The culture in which the system exists dictates the arrangement with other systems to create the cohesive and recognizable whole.[5] Without this common purpose or objective, a system will fall into disarray.

Five principles interact to define the essential characteristics of a socio-cultural system and provide grounds for assumptions of future behavior of the entity. These principles are openness, purposefulness, multi-dimensionality, emergent property and counter-intuitiveness. The principles as defined in the following paragraphs form the basis for constructing and mapping an operating environment, specifically the economic component, and include considerations that are essential in understanding the iterative learning cycle.

Openness means that an observer can only understand the behaviors of a system in the context of the environment in which it operates. Knowledge of the contextual variables in an environment provides investigators both predictive ability and removes other limitations in understanding the behavior of a system. Current army doctrine provides many considerations which can assist a commander in building this sort of understanding. To control a system an actor must produce an action that is necessary and sufficient to lead to a desired outcome, but often these actions lack the necessary degree of force required to achieve the desired change.[6] However, as knowledge of the system increases, the ability to influence specific variables and outcomes also increases. An actor can then provide the force to influence these variables, in the form of people, entities and relationships, which become the transactional environment. This transactional environment grows to include all the potential actors of a system as each learns to influence and then attempts to control certain aspects of the system. A by-product of the influenced-influencer relationship is that the influenced entities become less predictable and stable as outside forces provide significant input to their actions and patterns.[7] In other words, the application of more control removes the importance of existing contextual considerations and creates a less resilient system.

Purposefulness provides an understanding of why actors in a system perform certain actions.[8] The understanding of why an actor performs an action has basis in the culture, emotions and rationality of the entity. The actor makes a rational choice out of self-interest, an emotional choice out of perceptions of beauty or excitement and cultural choices from a base in the collective norms of the group. These concepts compliment or even provide category for many of the considerations recommended in army field manuals.[9]

Multidimensionality is the ability to determine complimentary relations in a dichotomy and create a viable whole out of unviable parts.[10] An actor’s investigation of a culture’s seeming dichotomies often results in a realization that these opposing tendencies are not mutually exclusive and ideas a group views as opposites are not actually on such a spectrum. Tendencies that a population generally holds as dichotomies can interact and integrate to form new situations. Similarly, if two variables show a relationship, there is likely some point where that relationship either ceases or becomes opposite depending on the emphasis and points of distinction. Points of distinction signify where the seemingly dependent variable is qualitatively affected rather than in the quantitative relationship it was party to until the distinctive point.[11] As an example, hostilities between two forces may continue to escalate until one side capitulates or integrates leading to a more political interaction. Plurality is an important sub-principle to multidimensionality in that it demonstrates that a single system may have multiple functions, purposes and governing processes. This leads to the possibility of a plurality of function where a system performs several implicit and explicit functions, structures where the actors in a system can form many different groups or relationships, and processes where several routes lead to a common final state or even where a single route may lead to several final states. The existence of plurality should cause commanders to question the “that is how we did it last time” mantra and search for the deeper cause and effect relationships in their operating environment.

Emergent properties are those without causal explanations, one cannot describe them as a function of a part or several parts of a system, but rather it is the interaction of relatively small interrelated variables that creates these properties. [12] While the manifestation of a property is observable, an attempt to measure it is problematic. Observable actions that may be at times part of the concert that demonstrates emergent properties are not in themselves always critical to this property. These properties can exist in the form of accidents, or by products, but are not easily replicated or investigated due to their seeming unintentional creation. The atmospheric input to snowflake formation is a natural example of emergence. Nationalism’s emergence in societies around the world is an excellent social example of this tendency.[13]

Counter intuitiveness is a key concept for military planners and commanders since it seemingly flies in the face of the intuition that leaders hold dear. In this case, counter intuitiveness is when a set of actions believed to lead to one end state actually lead to an opposite end state.[14] Economists often find counterintuitive answers to their experiments. Social programs meant to help individuals rejoin productive society often foster abusers who only work to stay on the system just as improperly apportioned economic aid can create a reliance on an artificial supply. Cause and effect in these cases are delayed, circular or delinked in time and space making long-term results a factor of long range effects of several immediate actions. In these cases an outside economic input into a society has an indeterminate half-life and can manifest itself in a multitude of potential downstream outputs.

These principles provide the basis for further construction of a systemic understanding of an operating environment. By keeping these principles as a foundation for study of an operating environment, commanders and their staffs will create a deeper and more thorough understanding of the economic system in their area.

Pecuniary Externalities

The existence of externalities is an economic consideration that is essential to further understand Gharajedaghi’s principles of emergence and counter intuitiveness. Externalities are outcomes of an economic activity that are generally described as indirect effects on portions of the environment not involved in a transaction.[15] These effects are generally non-price related and do not transmit through the same system as the transaction that created them, for example the effect of pollution on the environment surrounding a production facility or congestion from commercial traffic on a highway. These have a direct relation to military operations, increased traffic control, changed local rituals and other side effects are common in military operations and occupations. These are non-pecuniary externalities, as in they do not directly affect prices. However, a main consideration for military operations should be pecuniary externalities. These externalities are where commercial exchanges produce indirect interdependence and affect prices outside of those entities performing a transaction.[16] The direct military example of a pecuniary externality is where the arrival of a military force willing to pay a local premium for products and services drives the price of such items above where locals can afford them although there may be sufficient supply to service both customer’s needs.

Iterative Model

“Iteration is the key for understanding complexity.”[17] Developing an understanding of the interrelated variables of a complex system requires an iterative inquiry. In this situation, an entity applies simple rules to change systems, functions and processes and then examines the validity of these change assumptions in the behavior of the elements in a defined system. This repeated testing results in a method that builds until the entity conducting the tests can examine their own theories by influencing the systems’ functions, context, structure and processes, see Figure 1, below. The basic function of a system is to produce contributive outputs to its environment. The structure is the framework within which it produces its contribution while the process is how the system produces a change in its environment. The context of the system is the considerations of the environment that the system cannot influence.[18] The iterative model forces its user to build an understanding of the system and how it connects to its environment in scale and scope. This leads to a greater understanding of the components within a system, their interaction, potential boundaries, and purpose. Keeping the principles of systems in mind, and thus knowing that total knowledge is likely unattainable, this deeper understanding will allow the entity who conducted the iterative process to more easily influence and interact with the targeted system in a way that pushes it towards a desired end state.

Figure 1. Iterative process of inquiry for understanding complexity[19]

The output or tracking methodology used to define an economy must contain as many considerations as possible, their linkages to other nodes and the nature of these linkages. This approach supports systems methodology and provides a relatively easy to understand graphical interpretation of the system. This construct provides a more manageable frame for educating necessary personnel and should ease the turnover of the system to incoming units or portions thereof to other agencies for continued improvement. Figure II offers a basic representation of “The Interconnected Operation Environment,” it does not fully define what potential nodes or linkages represent. Such a systemic representation can quickly become very complex, but various link analysis tools exist in the intelligence community to better define and study these linkages. Commanders could and should utilize these tools to represent their system as a whole, not just the adversarial portions. These charts will allow commanders to further understand that linkages between individuals, businesses, government agencies and defined groups have multiple definitions such as communication, direct contact, monetary flow, geographical considerations and a multitude of others that can span across the economic, cultural, political and social realms of interaction.[20] Imagination is the only limitation to this type of analysis and as work progresses, operators will likely identify that certain types of nodes and linkages have greater importance than others. These nodes and links will become identified drivers of the system which a tactical commander can influence with his available means, then iteratively measure the effects as the system responds to his inputs.


Figure 2. Joint Publication 5-0 page III-17 and an example of an intelligence linkage diagram.[21]

In addition to the broad context with which to look at an economic system, tactical commanders must understand the requirement for them to hand over their entire operating environment at some point to another military commander, agency or the host government. In this regard, commanders should be keen to the requirements of these agencies and entities. Field Manual 3-07 offers the USAID principles for construction in Appendix C. Commanders should use this or a similar construct to define context when building cases to capture the economic systems involving individuals, entities, capabilities and resources in their operating environment. The US military must utilize the USAID principles when developing economic plans so they are more easily passed on to other governmental agencies and the non-governmental organizations they routinely work with.

While all of the USAID principles are important and at times interdependent, a commander should keep Sustainability and Selectivity at the forefront of their efforts when determining where to spend manpower and financial incentive. A commander’s context of sustainability rests on two premises, natural resources and the political, social and economic requirements of a certain plan or program.[22] Further, a commander must consider the impacts on local resources and capabilities of each of his inputs into the local socio-cultural system especially when deciding to work for a “quick win” when the long-term sustainability of the project is in question. Each program a commander supports must eventually work without outside backing to ensure that military and other assistance personnel can leave the economy to those who are participating within it.

Finally, this systemic understanding and iterative investigation supports the tactical commander’s ability to measure the system’s response to his inputs in the form of tactical bets, initiatives or activities seeking to influence links or nodes of the various interrelated systems in his operating environment. The true value of a systemic approach is that it empowers the tactical commander to influence his environment in numerous ways and in varying degrees of emphasis, while the iterative model provides the means to test the outcomes of this influence.

Illustrative Cases in Tactical Application of the Systems Approach to Economics

The following case studies offer an illustration of the importance of tactical level understanding of the system of an economy and the potential for uninformed strategic initiatives to create undesired or unexpected effects in an area’s ground level trade. These cases are derived from situations around the world with vastly differing causes, effects, and context, but each provides a valuable example of the importance of economic considerations in long-term success. They demonstrate that the best intentions potentially have unintended consequences. Additionally, they illustrate that leaders who build a greater understanding of their economic system in the planning or early stages of a conflict, and who focus on balancing the “down the road” economic costs of quick win practices with sustainable economic incentives, will have better results. These cases provide the evidence that validates the systems-based modeling construct and the socio-cultural principles.

In War Comes to Long An: Revolutionary Conflict in a Vietnamese Province, Jeffrey Race examines the revolutionary and counter-revolutionary forces at work in a Vietnamese province in the years leading up to full American intervention. The situation in the rural area demonstrates how battling ideologies found root in the local economy and leveraged perceptions of future comfort as a core of their efforts.

The Long An Province, southwest of Saigon, has a name that translates as “prosperous and peaceful.”[23] The fertile land and its waters, in addition to providing river passage for international shipping, contribute greatly to its agricultural bounty, further making it an exporter of rice, fish sauce and sugar cane. However, the province includes treacherous and nearly impassible terrain which provided refuge for anti-government forces and greatly complicated the politics of an otherwise agrarian culture. Revolutionaries operating in Long An surprisingly focused their messages on landowner rights and lower rents, issues that the authoritarian, Diem government, supported by the US created during its corrupt reign.[24] Diem’s land policies and nationalization of farming angered both landowners and tenant farmers. Landowners lost their land, while tenant farmers paid rents to the government every bit as high as those previously paid to the landowners. Revolutionaries further argued that the Vietnamese government’s reliance on imports from the United States demonstrated weakness and lack of sovereignty.

American operations in the area failed due to their inability to secure and incentivize their aid package. While revolutionary programs required the population’s loyalty for participation, the American focus on the macro-economic development allowed for the residents of Long An to receive aid without providing anything in return.[25] In other words, there was nothing attached to the aid distributed by US and South Vietnamese forces in the area that required recipient loyalty or provided incentives to not support the insurgency. It seemed that counter-revolutionaries were more concerned with Long An’s continued ability to produce foodstuffs rather than the region’s role as a contributor to the overall economy and security of Vietnam.

While limitations of force requirements may initially overrule economic development considerations, tactical forces must understand the consequences of blindly supporting insurgent-held areas with “no strings attached” aid. In the Long An situation the United States was directly providing food and other supplies to individuals who were likely the enemy for a undefined expected return. The Americans understood that Long An was an important agricultural center, but not realizing its history as a revolutionary stronghold was seemingly a gross oversight. The Viet Minh utilized Long An for its agricultural bounty and harsh terrain as a haven against the French in the first Indochina War only a few years before American intervention.[26]

Figure 3. Systemic representation of major outside forces on the Long An Economy

Figure 3 provides a systemic depiction of major outside influences on the Long An economy. The insurgents provided ideological influence to the economic core while the Diem government changed landowner’s rights and the United States provided aid. In return, the insurgents required shelter and food. The Diem government wanted continued food supplies and waterway transit, while the United States asked for nothing. The insurgent’s ability to ideologically match what the Long An economic players desired (a continued status-quo), was a small price to pay for food, shelter and freedom of movement the local economy provided. The Diem government further strengthened the insurgent position by its inability to physically enforce changed landowner rights laws. The United States innocently provided aid to the region without any required payback. This further demonstrated the duality of the Long An system in that it did provide agricultural export to urban Vietnam but also provided a strong safe-haven and supply center for insurgents. A tactical commander’s study of previous conflict in the region, in this case with evidence only a decade old, could have used this history to build on his understanding of the tendencies and capabilities of the region to both export rice and engage in above board economic activities while supporting revolutionaries or insurgents with food and shelter. This concept is further outlined in Chapter One of Field Manual 3-24.2 “Tactics in Counterinsurgency” as a method for understanding an Operating Environment through study of existing entities and their historic tendencies.

Further providing evidence to the iterative understanding of an operating environment is the example of Bangui, the capital city of the Central African Republic, which lies on a major land trading corridor nestled in the center of the African continent. The Central African Republic was host to a successful United Nations Peacekeeping Mission from 1997 to 2000. While the mission kept the peace, activities after their departure demonstrated the many illegal and illicit, yet somewhat essential, layers of the Bangui markets.[27] Current information combined with a USAID sponsored research project called the Bangui Market Study, exposes the complexity of these layers and provides a clear example to tactical leaders that understanding of forces at work in their operating environment can greatly assist in efforts to stabilize a region.

The Central African Republic’s neighbors, Sudan, Chad and the now broken Congo, were responsible for some of the most heinous acts of human slaughter in recent times and set the stage for the unstable region. While the Central African Republic’s internal strife may pale in comparison to Darfur its north and south rift only complicates the problems posed by refugees and influences that flowed from conflict areas. Bangui’s relatively stable economic and security situation provides a rich environment for conflict influenced socio-cultural study and the potential application of tactical combat efforts for stability operations.

USAID, in cooperation with the Department of State and Africare, conducted the Bangui Market Study in 1989 and 1990, before major conflict gripped the region. The effort also had the full support of the Bangui municipal government and included several short, quick turnaround studies, covering a variety of topics such as local supply chains, urban transport, municipal services, taxation and market controls.[28] In this study, the term market represents an activity and location that the municipal government taxes, complicating this simple definition and the study’s ability to capture the whole of Bangui’s market activity were several spontaneous markets, door-to-door sellers, home-based businesses and sellers who roamed between markets.[29]

Further complicating the market’s definition was the existence of a broad informal marketplace that the author defined as lacking a formal accounting system.[30] The city hosted an informal marketplace for a myriad of goods and services dominated by retail offerings in foodstuffs and supported by food service and hospitality services. The vendors of these informal and formal offerings were a broad range of entities from large wholesalers to husband sponsored wife vendors who took their allowance and parlayed it by turning a profit on sales of produce.

The commercial credit market favored established businesses or those with high levels of collateral. The banking market was risk-adverse and bankers had little interest in lending to the market vendors.[31] While loan sharks were present, their 50% monthly rates did not allow for small companies to grow. With a demonstrated lack of available growth funding, the study most directly linked the government’s payment of salaries and contracted labor to the health of the marketplace.[32] The revenue moving around the city seemed to flow out of the government spending which was likely due to Bangui’s status as a trading town with a service-based economy and little manufacturing activity.

Given that there was little formal credit offered to support trading in the Bangui markets, the system relied on another method of credit known as “credit in kind”. Moslem traders were the most prevalent and successful at utilizing “credit in kind” where a distributor lent produce or manufactured items to sellers for an agreed upon future payment. Similar to consignment, this practice supported trade in markets as vast as cattle to diamonds and gold. This “credit in kind” activity was difficult to capture in a study, but the practice did tie the members of the supply chain together and to the local area due to the vested financial interest of all parties in the success of the marketplace.[33]

Key to this case is that the source of finances and market success was not necessarily due to a formal lending institution or operation, but rather heavily reliant on the timeliness of the municipality’s payroll and contracting activities combined with intuitive lending practices of vendors and their suppliers. These practices allowed for the markets to function effectively by filling the consumer’s needs while allowing merchants and suppliers to turn a profit. The local government in turn regulated and received taxes from these formal markets and while they may lose potential tax revenues to informal activities, the formal activities seemingly provided the government the funds necessary to deliver services to the population. In the case of the Central African States, a conflict between the nation’s Moslem and non-Moslem populations occurred shortly after the conclusion of the study and clearly demonstrated how the disruption of essential market drivers would damage the market as a whole. This catastrophic event undermined the flow of produce to the markets which was driven by the informal “credit in kind” practice most effectively used by the Moslem population. Further, the conflict impeded municipal payments thus taking away the market’s main source of cash inflow.[34] These two factors caused the markets to shrink by over 40 percent and created hardship in the urban community.[35]

Figure 4. Systemic representation of the local Bangui market

Figure 4 depicts the two main market-driving forces as identified by USAID studies of the Bangui marketplace. When religious and ethnic strife came to the area, this simple picture provides a strong message to potential forces at work on the ground. The removal of timely government payment for services and the disruption in the flow of goods to market will create localized economic chaos. In response, focusing on the identified market drivers would lead forces and organizations to repair infrastructure necessary to support the government’s payment capability. It would also emphasize the reconciliation of market players in order to quickly restore the economic future for Bangui. A copy of the Bangui market study would advance the ground tactical commander’s initial understanding of the situation on the ground in Bangui, allowing him to quickly identify and address potential issues that block the flow of goods and services in the city beyond immediate security concerns. A tactical commander could establish a relationship with those who were the stalwarts of the markets before conflict and work to provide the necessary security to eventually return the businesses to normalcy. An iterative approach beginning from the findings of the Bangui market study would likely bear sustainable fruit more quickly than efforts that disregarded or were unaware of its existence.

The contracting effort and Sons of Iraq movement in the vicinity of Taji, Iraq during 2008 demonstrates the complexity and interrelatedness between security, governance and economic stability. Additionally, this case demonstrates the iterative effects of incentives provided for one purpose, growing to disrupt regional economic and political systems. US Army Major Anthony Barbina and one of the authors of this paper were stationed at Forward Operating Base Taji with the Second Stryker Brigade of the 25th Infantry Division from late 2007 to early 2009. Major Barbina was the engineer company commander and the brigade engineer while Major Shaffner worked as the unit’s aviation officer and chief of operations. The following case is from their combined understanding of their brigade’s battle space and its personalities in relation to security, governance and economic development.

During 2008, the military contracted many local firms for infrastructure repair and improvement. However, for several years after the end of hostilities in 2003, similar contracts were not for construction, but for security. Enterprising individuals, who were often tribal leaders, were the best choice for the military to utilize in these early situations since the tribal structure was not significantly damaged by the US-led invasion against the government of Saddam Hussein. These tribal leaders had access to able-bodied individuals and influence over them while the occupying force provided funding and weapons to these ad-hoc security forces. The funds for security were generally paid directly to the tribal leaders, many of whom became Sons of Iraq contract holders which continued to receive funding from the US through 2008 until the Status of Forces Agreement established Iraqi governmental authority for security.

Several of the more influential, and thus higher paid, tribal leaders re-invested their security profits into construction equipment to meet the projected and realized need for infrastructure repair and expansion. These security contractors thus also became construction contractors. Given the uncertain security situation at different times in Iraq, the construction and security businesses seemed to be closely related and a contractor’s ability to both secure and construct a project was a reasonable and profitable integration of business.

However, as the security situation improved, the emphasis in contracting shifted from security to construction. The freshly minted contractors, newly outfitted by profits from their security endeavors, came in direct competition with previously established construction companies led not by tribal leaders but by engineers and businessmen. The conflict was immediate; the situation was such that contracts required security for the site and often for the foremen and owners. The established contractors had to look toward the security contractors, who had a growing regional political influence and legitimacy, to assist in the contracts they won. The local security providers provided the security while continuing to grow their construction capabilities. In the end, the security companies expanded to the point where they could effectively bid a combined security and construction contract and undercut established, more skilled and larger construction companies.

In this case, the military supported those capable of providing required services at the time when certain services were needed. However, either due to necessity, savvy negotiations or ignorance, the military provided the capital for these security companies to displace or disrupt the established construction market through intimidation or expansion. The sustainability of the locality’s construction market has yet to be seen, but the unintended change to the commercial environment financed by years of security contracting demonstrates the interdependence of the socio-cultural systems in the post-conflict environment of 2008 Taji, Iraq.

Figure 5. Simplified graphical representation of forces and players in the economy in vicinity of Taji, Iraq

The exhibit above depicts the economy and forces that developed in post-conflict Iraq. When compared to the economy before the conflict the tribes had less involvement in the economy and likely less influence on the central government. Local businesses, specifically in construction did not have as much competition due to a more centrally controlled economy and lack of foreign force contracting dollars. The injection of foreign force influence and contracts allowed for tribal leaders to increase and expand their regional economic and political influence and resultantly their potential to exercise power at a national level. Local businesses not directly related with tribal structures gained a new competitor as tribes grew in power, influence and capability. The debate at both the local and national level should be, how businesses and tribes translate this new level of competition once the foreign force contracts cease. The potential outcomes are a more tribal controlled local economy, tribes retreating into their historic roles or conflict between the two requiring central government interventions. Investigating this phenomenon in its natural iterations shows how the local economy was inadvertently affected through the injection of US dollars. This case strongly demonstrates the power of an iterative model and the emergent properties inherent in socio-cultural systems.


Holistic and systems thinking is nothing new to the operational and strategic levels of war, but such considerations are important to tactical leaders’ who have more direct contact with and immediate influence on a population that reinforces or undermines higher level efforts. Often without full translation of operational and strategic initiatives, tactical commanders work where the rubber meets the road. Their direct contact with the populous makes them a powerful force in post-conflict reconstruction, stability and counterinsurgency operations. While focusing on the economy, the case studies presented show that the economy is always tied to other aspects of a society and vice versa. For example, a strengthening economic situation will build the livelihood of the population while revenue for the government, this providing a significant pillar on which to rest a reconstructed society.

The case studies demonstrate Gharajedaghi’s principles in action. The “purpose” of each economy, common across all cases, is to provide an environment for trade to take place.[36] The principle of “openness” or the importance of context is the key to the iterative understanding. In each of the cases, social, governmental, cultural and economic considerations were drastically different. The common denominator in this understanding is that as a foreign entity becomes more involved with an existing system, they must attempt to build knowledge of the layers of the involved players’ interactions within an economy. The case in Long An best demonstrates the principle of “counter intuitiveness”. The Long An province provided both sustenance for the greater Vietnamese population and a safe-haven for insurgents. The principle of “emergence” is very common in economics due to the complexity and interrelatedness of economies and the socio-cultural systems in which they exist. Inputs in the form of incentives, coercion or other forces can ripple across a system, and without fail, effect the short and long term flow of goods and services in some manner. Such is the case with Iraqi tribal leaders emerging as powerful businessmen and politicians. The case in Bangui shows how social unrest or an attack on a segment of society can disrupt local markets whose strength emerged from practices specific to certain elements of the local society.

Perhaps the most important principle for a tactical commander to understand with regard to the economy is “multi-dimensionality”.[37] Each of these cases demonstrates the virtual chaos when an outside entity disrupts a country’s socio-cultural system or when the effects of forces inside one of the country’s existing systems overflow to take the economy hostage. In each of the cases, the local economy existed in a relatively stable form until acted upon by outside forces. The outside forces then changed an existing power structure within the society under study by empowering entities beyond their previous state. The resultant disruption of the powerbase created a new system with drivers that tactical commanders can identify if they compare the economic system prior to the conflict to its manifestations after the conflict.

A commander’s use of an iterative process to build an understanding of the system he is influencing will allow him to more productively act in his environment. A systems outlook does not predict what will happen in the future, but rather provides an opportunity to explore what would happen given a number of driving factors acting in different ways on a system.[38] Gharejedaghi’s principles provide context to how a commander should look at and what he should expect from his system. The cultural considerations from Field Manual 3-24.2 provide a start point for investigation of the existing and developing systems. This manual’s questions provide a depth of understanding that should foster an iterative investigation to the source of the answer to each question.

The real value of Gharajedaghi’s systemic analysis is that it does not constrain the commander’s actions, but only forces an attempt to reach a deeper understanding of his environment. In the two historic cases, Long An and Bangui, tactical commanders had the potential benefit of previously compiled and researched data to rely on to build their operations. In the case of Taji, if units on the ground had used Gharajedaghi’s construct, they would have likely identified the potential friction points and economic redundancies developing between the private sector and tribal structures.

In virtually any tactical situation, a commander using such a systemic concept can build an understanding of his environment, the kind of influence he has on it and potential future outcomes given how he tailors his actions. The iterative process provides a method in which to test degrees, scope and scale of inputs into a system to determine how a tactical commander’s initiatives will influence the environment. The economic portion of the socio-cultural system is an ideal application of this process because of the economy’s role in citizen’s everyday lives and the natural metrics inherent in such a system.

Possibly the most important output of this iterative, knowledge building process is the written narrative and diagram of the system. Whether to pass on to a follow-on unit, build a case for non-governmental organization involvement or attempt to influence other agency assistance, the description of the current system and the outcome of proposed attempts to influence it are crucial to a tactical level force’s ability to best utilize its influence in their operating environment. Armed with this iteratively created model, a tactical commander in stability/reconstruction or counterinsurgency operation can avoid economic problems within his operational environment.

About the Authors

Dr. David A. Anderson is a retired U.S. Marine Corps officer. He is now a professor of Strategic Studies and Odom Chair of Joint, Interagency, and Multinational Operations at the U.S. Army Command and General Staff College, Fort Leavenworth, Kansas, where he teaches strategic and operational studies, as well as economics. He is also an adjunct professor for Webster University, where he teaches various international relations courses including, International Political Economy and Globalization. He has published numerous articles on military, economics, and international relations related topics.

Major Jonathan K. Shaffner is a U.S. Army Major who holds a masters of business administration from Northeastern University and is a recent graduate of the School of Advanced Military Studies. He is now on his fifth deployment in support of OIF/OEF as a planner with USFOR-A.


1. U.S. Department of Defense, U.S. Army Field Manual 3-0, The Operations Process (Washington, D.C.: U.S. Government Printing Office, February 2008), 3-1.

2. Frequently asked questions from National Security Policy Document (NSPD) 44 [Internet online] available from: http://www.crs.state.gov/index.cfm?fuseaction=public.display&shortcut=49QT [30 December, 2010].

3. U.S. Department of Defense, U.S. Army Field Manual 3-07, Stability Operations (Washington, D.C.: U.S. Government Printing Office, October 2008), 2-5.

4. Jamshid Gharajedaghi, Systems Thinking: Managing Chaos and Complexity: A Platform for Designing Business Architecture (Oxford, UK: Elsevier Science and Technology Books, 2006), 12.

5. Ibid., 13.

6. Ibid., 31.

7. Donella H. Meadows, Thinking in Systems, A Primer (White River Junction, VT: Chelsea Green Publishing, 2008), 77.

8. Gharajedaghi, 33.

9. United States Army Field Manuals 3-24 and 3-07, on counterinsurgency and stability operations, offer a myriad of economic and social considerations to a commander. However, it is important to note that some of these considerations are contradictory, even within the same manual and a thorough understanding of both manuals is necessary as a start point to describing potential initiatives.

10. Gharajedaghi, 38.

11. Ibid., 41.

12. Ibid., 46.

13. Various articles describe the “emergence” of nationalism from the American Colonies, and Revolutionary France to current situations in India and African States. In each of these cases the commonly understood idea of nationalism comes about by different means in the context of different societies and countries.

14. Gharajedaghi, 49.

15. Steven N. Darlauf and Lawrence E. Blume eds. The New Palgrave Dictionary of Economics (New York: Palgrave MacMillan, 1987), vol II.

16. Cristiano Antonelli, Pecuniary Knowledge Externalities: The Convergence of Directed Technological change and the Emergence of Innovation Systems, in Industrial and Corporate Change, Volume 17, Number 5 (Oxford, UK: Oxford University Press, 2008), 1050.

17. Jamshid Gharajedaghi, “Systems Methodology, A Holistic Language of Interaction and Design, Seeing Through Chaos and Understanding Complexities,” (2004) [Internet online]; available from http://www.acasa.upenn.edu/JGsystems.pdf [30 December 2010].

18. Ackoff, Russell L. and Jamshid Gharajedaghi, A Prologue to National Development Planning, (Westport, CT: Greenwood Press, 1986), 88.

19. Jamshid Gharajedaghi, “Holistic Language.”

20. Visit http://www.centrifugesystems.com/blogs/?p=1 for a multi-disciplinary lesson on intelligence-style link analysis and its managerial uses.

21. Commercial software produced linkage diagram from Elaman German Security Solutions, [Internet online]; available from http://www.elaman.de/speech-identifying.php [8 December 2010].

22. FM 3-07, C-3.

23. Jeffrey Race, War Comes to Long An: Revolutionary Conflict in a Vietnamese Province (Los Angeles: University of California Press, 1972), 1.

24. Ibid., 90.

25. Joseph Gregoire et al., Civil Power in Irregular Conflict (Washington D.C.: Association of the U.S. Army, 2009), 131.

26. Ibid., 1.

27. Arthur S. Westneat, “Capture of the Informal Sector: Evidence from Bangui,” in Civil Power in Irregular Conflict, ed. Joseph Gregoire et al. (Washington D.C.: Association of the U.S. Army, 2009), 181.

28. Westneat, 182.

29. Ibid., 183.

30. Ibid., 184.

31. Ibid., 187.

32. Ibid., 187.

33. Ibid., 188.

34. Ibid., 189.

35. Ibid., 187.

36. Economy is “the large set of inter-related economic production and consumption activities which aid in determining how scarce resources are allocated” [Internet online] available from http://www.investopedia.com/terms/e/economy.asp [31 December 2010].

37. Eric D. Beinhocker, Origin of Wealth, (Boston, MA: Harvard Business School Press, 2006), 54.

38. Meadows, 46.


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