If several of us got together to open a restaurant in Washington D.C., we would face no better than a 50 percent likelihood of staying in business over five years. If we were to try to sell heroin on a few corners in the city, would we somehow face better odds of success? Criminals do not escape the laws of supply and demand. Revenues must exceed costs, regardless of your business, or you go out of business. The robust business analytics market today, sometimes called “business intelligence,” allows for entrepreneurs and investors to take advantage of “big data” analytics to study the attributes of businesses. Some people run successful restaurants while many fail. Illicit organizations can also operate successfully for many years in spite of both market pressures and law enforcement and military efforts seeking to shut them down. The Sicilian Mafia, for example, has been in business for over 150 years while countless criminal enterprises have failed. Just like in the legitimate business world, “big data” will profoundly impact illicit organizations and those in intelligence, law enforcement, and the military seeking to shut them down.
Behavioral and social science provides us time-tested methodologies for discerning meaning in data. With a scientific approach, we can better understand that the economic rules governing legitimate businesses are surprisingly similar to those in the illicit marketplace. And extending this observation, we can see that, in fact, the rules of successful organized crime look strikingly similar to those of insurgency and terrorism, and other forms of organized violence. The bottom line is this: like goods and services sold in the licit economy, we see a supply and demand in markets for violence. The market for violence behaves as we would expect it to behave, and therefore we can use technology to apply and build tools to better counter organized violence.
Science of Human Decision Making
Social Science seeks to explain human behavior and interpersonal interaction, and like natural, or “hard,” sciences, social science continually evolves. Economic science, one of the social sciences, begins with a conception of fundamental human nature and the observation that individuals rely on other individuals to maximize within constraints; economics, then, is a science of human interaction. Economic science describes human behavior in terms of choice and exchange taking place within systems of incentives and constraints. Of significance, we can usually test economic theories because they relate to observable human behavior. I know a person who prefers coffee to tea in the afternoon, but not because I asked her preference—I watched her order coffee every afternoon. The economists’ toolkit applies equally in peacetime and wartime, to “good” and “bad” actors, and across all domains of human interaction. Therefore, social science applied to data on observed human behavior can advance the ability to analyze and operate in complex security environments including counter-insurgency, counter-terrorism, and counter-transnational criminal organizations.
Technology today, with smart phones, online web surfing and commerce, and social media, increases our ability to observe human behavior. Google and Target Stores, for example, build analytics based upon your observed behavior and customize advertisements directly to you. For security professionals, advanced computing environments provide unprecedented opportunities to search for, discover, observe, describe, and predict illicit activities. In particular, applying social science methods in “big data” environments has proven beneficial to analysts and operators looking to find and deter illicit activities, and this area has only begun to be exploited.
Laws of Criminal Firms
Successful restaurateurs generate revenues greater than costs. They enter into contracts with suppliers and employees. They obtain capital through banks and investors. Accountants, lawyers, and recruiters support normal business operations. Courts settle disputes, interpreting laws and contracts. And police forces provide coercive power to enforce criminal and civil rulings. Successful drug cartel leaders must also generate revenues in excess of costs. The drugs being trafficked by the kingpins represent a commodity—something to trade to create wealth and power. Similar to the legal business executive, the cartel leaders enter into voluntary agreements with suppliers and workers, and have need for bankers, accountants, lawyers, and recruiters. Key Point: Criminal organizations must find substitutes for courts and police forces for dispute resolution and enforcement. Successful criminal organizations have the ability to effectively and efficiently coerce others. The violence seen by the public and reported in the media is a byproduct of the nature of the marketplace in illicit goods—a fear of defection and requirement to use coercion outside of the legal system of the state. Looking at the economics of illicit activity, we can see why violence makes sense to the criminal—why it can support a firm’s ability to produce profits even though the violent act itself represents a cost. When describing why he will kill a rival, Michael Corleone calmly says to his hothead brother Sonny in Mario Puzzo’s The Godfather, “It’s not personal, Sonny. It’s strictly business.”
Hybrid Organizations
My students in the graduate Security Studies program at Georgetown University in Washington, D.C. recently identified traits associated with the “success” of the Sicilian Mafia—the Cosa Nostra—over 150 years. The list of traits includes: exclusive benefits of membership; high costs of defection; effective use of the tools of violence; some support in the local population; operations in location with weak government power. These same traits apply equally to politically-motivated insurgents, as well as to transnational terrorist organizations. Insurgents might sell drugs to raise money to buy weapons and pay recruits. Drug traffickers might transport weapons for terrorists, monetizing established smuggling routes. Drug traffickers might engage in politically-motivated insurgent violence in order to expand the scope of their market. Taking this social science view of organized violence, we can see people behaving in rational and predictable ways, creating hybrid and transnational criminal organizations.
Business Intelligence for Organized Violence
Law enforcement, military, and intelligence communities need the high-end data analytics being deployed by Google, Target, and the rest of industry. For example, every day, more than two million people travel across international borders. The U.S. Department of Homeland Security, and immigration and law enforcement authorities around the world, screen and vet travelers to ensure they are not entering with the intent to do harm. Law enforcement agencies search domestically for the would-be violent felon before the violent act takes place. But identifying a terrorist among the two million travelers presents an historic challenge. What does a terrorist look like? How do you spot the perpetrator of the violent crime before the crime takes place? To overcome these challenges we need to accomplish the following steps:
- We must create hybrid law enforcement/military/intelligence authorities to address the hybrid organizations we are trying to defeat. Countering transnational criminal organizations (TCOs) requires diplomacy, intelligence, military, economic, and law enforcement capabilities.
- We must use social science and the technology of “big data” to better observe, model, and forecast illicit activities. We can never predict human behavior with the certainty of a chemist predicting a reaction in the laboratory. However, humans behave in patterns much more predictable than we want to hear. Given the right amount of prior information on an individual’s preferences and constraints, we can forecast future behaviors, with some estimated degree of accuracy.
- We must understand that criminals require some amount of support from populations outside of the core group, and therefore focusing not only on the behavior of the criminal but also the preferences and constraints of local populations will provide keys to undermining organized violence.
Dr. Gary M. Shiffman is President and CEO of Giant Oak, a data analytics company, and professor at Georgetown University in Washington, D.C.
This article was originally published in the Diplomatic Courier's November/December 2012 print edition.
a global affairs media network
Big Data Analytics and the Economics of Organized Violence
November 14, 2012
If several of us got together to open a restaurant in Washington D.C., we would face no better than a 50 percent likelihood of staying in business over five years. If we were to try to sell heroin on a few corners in the city, would we somehow face better odds of success? Criminals do not escape the laws of supply and demand. Revenues must exceed costs, regardless of your business, or you go out of business. The robust business analytics market today, sometimes called “business intelligence,” allows for entrepreneurs and investors to take advantage of “big data” analytics to study the attributes of businesses. Some people run successful restaurants while many fail. Illicit organizations can also operate successfully for many years in spite of both market pressures and law enforcement and military efforts seeking to shut them down. The Sicilian Mafia, for example, has been in business for over 150 years while countless criminal enterprises have failed. Just like in the legitimate business world, “big data” will profoundly impact illicit organizations and those in intelligence, law enforcement, and the military seeking to shut them down.
Behavioral and social science provides us time-tested methodologies for discerning meaning in data. With a scientific approach, we can better understand that the economic rules governing legitimate businesses are surprisingly similar to those in the illicit marketplace. And extending this observation, we can see that, in fact, the rules of successful organized crime look strikingly similar to those of insurgency and terrorism, and other forms of organized violence. The bottom line is this: like goods and services sold in the licit economy, we see a supply and demand in markets for violence. The market for violence behaves as we would expect it to behave, and therefore we can use technology to apply and build tools to better counter organized violence.
Science of Human Decision Making
Social Science seeks to explain human behavior and interpersonal interaction, and like natural, or “hard,” sciences, social science continually evolves. Economic science, one of the social sciences, begins with a conception of fundamental human nature and the observation that individuals rely on other individuals to maximize within constraints; economics, then, is a science of human interaction. Economic science describes human behavior in terms of choice and exchange taking place within systems of incentives and constraints. Of significance, we can usually test economic theories because they relate to observable human behavior. I know a person who prefers coffee to tea in the afternoon, but not because I asked her preference—I watched her order coffee every afternoon. The economists’ toolkit applies equally in peacetime and wartime, to “good” and “bad” actors, and across all domains of human interaction. Therefore, social science applied to data on observed human behavior can advance the ability to analyze and operate in complex security environments including counter-insurgency, counter-terrorism, and counter-transnational criminal organizations.
Technology today, with smart phones, online web surfing and commerce, and social media, increases our ability to observe human behavior. Google and Target Stores, for example, build analytics based upon your observed behavior and customize advertisements directly to you. For security professionals, advanced computing environments provide unprecedented opportunities to search for, discover, observe, describe, and predict illicit activities. In particular, applying social science methods in “big data” environments has proven beneficial to analysts and operators looking to find and deter illicit activities, and this area has only begun to be exploited.
Laws of Criminal Firms
Successful restaurateurs generate revenues greater than costs. They enter into contracts with suppliers and employees. They obtain capital through banks and investors. Accountants, lawyers, and recruiters support normal business operations. Courts settle disputes, interpreting laws and contracts. And police forces provide coercive power to enforce criminal and civil rulings. Successful drug cartel leaders must also generate revenues in excess of costs. The drugs being trafficked by the kingpins represent a commodity—something to trade to create wealth and power. Similar to the legal business executive, the cartel leaders enter into voluntary agreements with suppliers and workers, and have need for bankers, accountants, lawyers, and recruiters. Key Point: Criminal organizations must find substitutes for courts and police forces for dispute resolution and enforcement. Successful criminal organizations have the ability to effectively and efficiently coerce others. The violence seen by the public and reported in the media is a byproduct of the nature of the marketplace in illicit goods—a fear of defection and requirement to use coercion outside of the legal system of the state. Looking at the economics of illicit activity, we can see why violence makes sense to the criminal—why it can support a firm’s ability to produce profits even though the violent act itself represents a cost. When describing why he will kill a rival, Michael Corleone calmly says to his hothead brother Sonny in Mario Puzzo’s The Godfather, “It’s not personal, Sonny. It’s strictly business.”
Hybrid Organizations
My students in the graduate Security Studies program at Georgetown University in Washington, D.C. recently identified traits associated with the “success” of the Sicilian Mafia—the Cosa Nostra—over 150 years. The list of traits includes: exclusive benefits of membership; high costs of defection; effective use of the tools of violence; some support in the local population; operations in location with weak government power. These same traits apply equally to politically-motivated insurgents, as well as to transnational terrorist organizations. Insurgents might sell drugs to raise money to buy weapons and pay recruits. Drug traffickers might transport weapons for terrorists, monetizing established smuggling routes. Drug traffickers might engage in politically-motivated insurgent violence in order to expand the scope of their market. Taking this social science view of organized violence, we can see people behaving in rational and predictable ways, creating hybrid and transnational criminal organizations.
Business Intelligence for Organized Violence
Law enforcement, military, and intelligence communities need the high-end data analytics being deployed by Google, Target, and the rest of industry. For example, every day, more than two million people travel across international borders. The U.S. Department of Homeland Security, and immigration and law enforcement authorities around the world, screen and vet travelers to ensure they are not entering with the intent to do harm. Law enforcement agencies search domestically for the would-be violent felon before the violent act takes place. But identifying a terrorist among the two million travelers presents an historic challenge. What does a terrorist look like? How do you spot the perpetrator of the violent crime before the crime takes place? To overcome these challenges we need to accomplish the following steps:
- We must create hybrid law enforcement/military/intelligence authorities to address the hybrid organizations we are trying to defeat. Countering transnational criminal organizations (TCOs) requires diplomacy, intelligence, military, economic, and law enforcement capabilities.
- We must use social science and the technology of “big data” to better observe, model, and forecast illicit activities. We can never predict human behavior with the certainty of a chemist predicting a reaction in the laboratory. However, humans behave in patterns much more predictable than we want to hear. Given the right amount of prior information on an individual’s preferences and constraints, we can forecast future behaviors, with some estimated degree of accuracy.
- We must understand that criminals require some amount of support from populations outside of the core group, and therefore focusing not only on the behavior of the criminal but also the preferences and constraints of local populations will provide keys to undermining organized violence.
Dr. Gary M. Shiffman is President and CEO of Giant Oak, a data analytics company, and professor at Georgetown University in Washington, D.C.
This article was originally published in the Diplomatic Courier's November/December 2012 print edition.
