Can Bitcoin thrive without China? 

Bitcoin started the month of September trading at an all-time high of $4,950. By implementing Segregated Witness, or SegWit, Bitcoin allowed more transactions to take place and signaled confidence that Bitcoin would scale. On September 4, the Chinese central bank banned trading in initial coin offerings (ICOs), leading to rumors that China was considering banning Bitcoin trading altogether. Those rumors were confirmed on September 14, and Bitcoin exchanges operating in China were told to cease trading for now. This article explores what happened next, and what the future of Bitcoin is without its largest mining pools...

CISAC co-director Amy Zegart wrote the following essay in the Oct. 25 online edition of The Atlantic:

Pity the professionals. In the past month, President Trump has sideswiped certification of the Iran nuclear deal, sandbagged his own secretary of state’s diplomatic efforts with North Korea, and even provoked the ever-careful Senate Foreign Relations Committee Chairman, Bob Corker, to uncork his deepest fears in a series of bombshell interviews. “The volatility, is you know, to anyone who has been around, is to a degree alarming,” Corker told the Times earlier this month, revealing that many in the administration were working overtime to keep the president from “the path to World War III.” He doubled down on those comments a few weeks later, declaring that Trump, among other things, was “taking us on a path to combat” with North Korea and should “leave it to the professionals for a while.”

The professionals sure have their hands full. So far, the Trump Doctrine in foreign policy appears to consist of three elements: baiting adversaries, rattling allies, and scaring the crap out of Congress. The administration has injected strategic instability into world politics, undermining alliances and institutions, hastening bad trends, and igniting festering crises across the globe. “America first” looks increasingly like “America alone.” The indispensable nation is becoming the unreliable one. Even without a nuclear disaster, the damage inflicted by the Trump presidency won’t be undone for years, if ever.

But it’s also important to understand that today’s foreign-policy challenges— whether it’s Iran’s hegemonic ambitions in the Middle East, North Korea’s breakneck nuclear breakout, China’s rise, Russia’s nihilism, Europe’s populism and fragmentation, Syria’s civil war, or transnational terrorism and cyber threats—did not start with Trump. This is the most challenging foreign-policy environment any White House has confronted in modern history.

Three swirling complexities explain why.

Threat complexity

Take a look at any of the annual threat assessments issued by the Director of National Intelligence over the past few years. They will make your head spin. They are filled with rising states, declining states, weak states, rogue states, terrorists, hackers, and more. Bad actors don’t just threaten physical space these days. Adversaries are working on ways to cripple America in cyberspace and even outer space—by compromising all those satellite systems on which its digital society depends. In this threat landscape, the number, identity, magnitude, and velocity of dangers facing America are all wildly uncertain. Exactly how many principal adversaries does the United States have? Who are they and what do they want? What could they do to us? How are these threats changing and how can we keep up without spending ourselves into oblivion or leaving ourselves vulnerable to other nasty surprises? These are fundamental questions. There are no consensus answers. Uncertainty is what fuels America’s foreign-policy anxieties today.

The Cold War was different. Then, certainty was what fueled American foreign-policy anxieties. It was clear to all that the U.S. faced a single principal adversary. The Soviet Union had territory on a map and soldiers in uniforms. Thanks to U.S. intelligence, Soviet intentions and capabilities were fairly well understood. The threat landscape was deadly but slower-moving: Communists never met a five-year plan they didn’t like. And while superpower nuclear dangers were terrifying, they were also constraining in a helpful but insane sort of way. In 1961, President Kennedy invoked the specter of a “nuclear sword of Damocles, hanging by the slenderest of threads” over the earth. Every American foreign-policy decision had to consider the question: What would Moscow think of that? Today, the nuclear sword of Damocles is still hanging—indeed, China, India, Pakistan, and North Korea have all successfully tested nuclear devices since 1961—but no singular threat guides U.S. foreign policy as the Soviet Union once did.

Organizational complexity

As threats have grown more complex, organizational arrangements to deal with them have, too. Coordinating Soviet policy was one thing. Developing coherent U.S. foreign policy in the face of so much uncertainty across so many issues is quite another. Little wonder special advisers, envoys, commissions, boards, initiatives, czars, and new agencies have been growing like mushrooms. This may not sound so bad. But it is. Every new agency or czar or special arrangement says, “the regular process here ain’t working.” The crux of the problem is that bureaucracies are notoriously hard to kill or change. Ronald Reagan famously quipped that bureaucracy is the closest thing to immortal life on earth. Whenever a crisis hits, the natural response is to add a new organization and stir. But if today’s chief challenge is developing coherent, coordinated policy in the face of complexity, creating more organizations to coordinate doesn’t get you very far. Over time, the whole bureaucratic universe just keeps growing bigger, filled with obsolete organizations alongside new organizations; fragmented jurisdictions, overlapping jurisdictions, and unclear jurisdictions; and silos so specialized that nobody can see across all the key issues easily.

Cognitive complexity

Humans are not superhuman. Research finds that most people can remember at most seven items at a time, fewer as they grow older. Even the biggest brains have limits. In 2001, Peter Pronovost of Johns Hopkins noticed that highly trained medical teams at the university’s medical center were screwing up insertions of central line catheters, causing infections in critically ill patients at alarming rates. Why? Because they often forgot one of just five simple steps (like washing their hands) before starting the procedure. (Pronovost instituted a checklist that has since become widely used and is credited with saving thousands of lives.)

In foreign policy, too, the stakes are high and humans are frequently overloaded by complexity, resulting in catastrophic errors that nobody ever intended. One of the chief findings of the 9/11 Commission, for example, was that many inside the FBI simply didn’t know or couldn’t remember all the legal requirements and rules for sharing intelligence and law-enforcement information. Even the Bureau’s own 1995 guidelines were “almost immediately misunderstood and misapplied,” the commission concluded. As a result, clues to the terror plot emerged weeks before 9/11 but were marooned in different parts of the bureaucracy.

In 1935, an advanced bomber nicknamed “the Flying Fortress” crashed during a test flight. The Army Air Corps investigation found that the machine worked fine. The problem was the human. The airplane was so sophisticated, flying required the pilot to remember too many things, and he forgot one of them: unlocking the rudder and elevator controls during takeoff. It was “too much airplane for one man to fly,” one reporter later wrote. That crash sparked the invention of pilot checklists which have been used for nearly a century, transforming global aviation.

U.S. foreign policy is becoming too much airplane for one person to fly. “The professionals” surrounding Trump—Secretaries James Mattis and Rex Tillerson, Chief of Staff John Kelly, National-Security Adviser H.R. McMaster, and others—are trying to keep the whole thing from crashing with a pilot who has never flown before. Let’s hope they can.

America’s approach to the world is a complicated mess, for reasons that predate the current president.

Amy Zegart is co-director of the Center for International Security and Cooperation and professor of political science, by courtesy. She is also the Davies Family Senior Fellow at the Hoover Institution and directs the Cyber Policy Program. She wrote this essay as a contributing editor to The Atlantic.

There are 30 civil wars underway around the globe, where civilians are dealing with death and destruction as well as public health emergencies exacerbated by the deadly march of conflict.

Yemen is battling an unprecedented cholera outbreak which has killed more than 2,150 people this year, with another 700,000 suspected cases of the water-borne disease. The government and a rival faction have been fighting for control of the country, taking 10,000 lives since 2015.

Some 17 children in Syria have been paralyzed from a confirmed polio outbreak in northeastern districts, with 48 cases reported in a country that had not had a case of polio since 1999. The cases are concentrated in areas controlled by opponents of President Bashar al-Assad.

And in the Democratic Republic of Congo — where the civil war officially ended years ago, but thousands of people still suffer from recurrent uprisings and scant infrastructure — a yellow fever outbreak was met last year with a lack of vaccines. The WHO was forced to give inoculations containing a fifth of the normal dose, providing protection for only one year.

And yet today, of the nearly 200 countries on this planet, only six nations — three rich ones and three poor ones — have taken steps to evaluate their ability to withstand a global pandemic.

“The bottom line is that despite the profound global threat of pandemics, there remains no global health mechanism to force parties to act in accordance with global health interests,” write FSI’s Paul Wise and Michele Barry in the Fall 2017 issue of Daedalus.

“There also persists inherent disincentives for countries to report an infectious outbreak early in its course,” the authors write. “The economic impact of such a report can be profound, particularly for countries heavily dependent upon tourism or international trade.”

China, for example, hesitated to report the SARS outbreak in 2002 for fear of instability during political transition and embarrassment over early mishandling of the outbreak. Reporting cases of the 2013 Ebola outbreak in West Africa were slow and the virus killed some 11,300 people in Sierra Leone, Guinea and Liberia before the epidemic was declared over in January 2016.

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“Tragic delays in raising the alarm about the Ebola outbreak in West Africa were laid at the doorstep of the affected national authorities and the regional WHO committees, which were highly concerned about the economic and social implications of reporting an outbreak,” Wise and Barry write in the journal published by the American Academy of Arts and Sciences.

The Daedalus issue, “Civil War & Global Disorder: Threats and Opportunity,” explores the

factors and influences of contemporary civil wars. The 12 essays look at the connection of intrastate strife and transnational terrorism, the limited ambitions of intervening powers, and the many direct and indirect consequences associated with weak states and civil wars.

“Wise and Barry, both medical doctors with extensive field experience in violence-prone developing countries, analyze the relationship between epidemics and intrastate warfare,” write FSI’s Karl Eikenberry and Stephen D. Krasner in their introduction to the issue that includes eight essays by Stanford University faculty.

“Their discussion is premised on the recognition that infectious pandemics can threaten the international order, and that state collapse and civil wars may elevate the risk that pandemics will break out,” they wrote.

Eikenberry and Krasner are hosting a panel discussion about the new volume of Daedalus with FSI senior scholars, including Wise and Barry, on Oct. 23. Members of the Stanford community and the public are invited and can RSVP here. Podcasts with the authors will also be available at FSI’s World Class site over the next few weeks.

Prevention, Detection and Response

Barry and Wise believe there is significant technical capacity to ensure that local infectious outbreaks are not transformed into global pandemics. But those outbreaks require some level of organized and effective governance — and political will.

Prevention, detection, and response are the keys to controlling the risk of a pandemic. Yet it’s almost impossible for these to coincide in areas of conflict.

Prevention includes solid immunization programs and efforts to reduce the risk of animal-to-human spillover associated with exposure to rodents, monkeys and bats.

Then, early detection of an infectious outbreak with pandemic potential is crucial, through a methodical surveillance structure to collect and test samples drawn from domestic and wild animals, a capacity sorely lacking in areas of conflict and weak governance.

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“Civil wars commonly disrupt traditional means of communication,” they write. “The Ebola virus outbreak in West Africa exposed glaring weaknesses in the global strategy to control pandemic outbreaks in areas with minimal public health capacity.”

New strategies that utilize satellite or other technology to link remote or insecure areas to surveillance are urgently needed, they said.

Then there is the response in countries where civil war not only makes it difficult, but politically treacherous.

In Syria, there had not been a case of polio reported since 1999. In 2013, health workers began to see children with the kind of paralysis that is associated with a highly contagious polio outbreak.

“However, the government and regional WHO office have been intensely criticized for their slow and uneven response,” the authors note, particularly the government’s resistance to mobilizing immunization efforts in areas sympathetic to opposition forces.

Pressure from international health organizations and neighbors in the region ultimately led to the reinstatement of vaccination campaigns throughout Syria.   

“The Syrian polio outbreak is an important reminder that health interventions, though technical in nature, can be transformed into political currency when certain conditions are met,” they write. “At the most basic level, the destruction or withholding of essential health capabilities can be used to coerce adversaries into political compliance, if not complete submission.”

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Strengthening Global Oversight

The only comprehensive global framework for pandemic detection and control, the authors write, is the International Health Regulations treaty, which was signed in 2005 by 196 member-nations of the World Health Organization to work together for global health security.

The IHR imposed a deadline of 2012 for all states to have in place the necessary capacities to detect, report and respond to local infectious outbreaks. But only a few parties have reported meeting these requirements, and one-third has not even begun the process. There have also been efforts to enhance state reporting of health systems capacities through voluntary assessments of countries working through the Global Health Security Agenda consortium.

But both frameworks, Barry said in an interview, need financial and political support.

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“I see a stronger IHR with more than words — but actual money behind it in order for it to become stronger,” said Barry, noting the Global Health Security Agenda ends in 2018 and she has been asked to sit on a NAAS task force to form its next iteration. “I’m hoping we can move the needle to put money into bio-surveillance and health security, especially in conflict areas.”

Why should Americans care?

“Pathogens know no borders,” Barry said. “And with climate change, we have tremendous movement of vectors; with globalization and billions of people routinely in flight, we have tremendous health threats traveling first class and coach.”

Twenty Countries at High Risk

Meanwhile, some 20 countries are at high risk for pandemic emergence. The two Stanford professors are urgently calling for “new approaches that better integrate the technical and political challenges inherent in preventing pandemics in areas of civil war.”

Wise and Barry note that human factors, such as the expansion of populations into previously forested areas, domesticated animal production practices, food shortages, and alterations in water usage and flows, have been the primary drivers of altered ecological relationships.

So globalization with climate change brews the perfect storm.

“There is substantial evidence that climate change is reshaping ecological interactions and vector prevalence adjacent to human populations,” they said. “Enhanced trade and air transportation have increased the risk that an outbreak will spread widely. While infectious outbreaks can be due to all forms of infectious agents, including bacteria, parasites, and fungi — viruses are of the greatest pandemic concern.”

Science suggests the greatest danger of pandemic lies in tropical and subtropical regions where human and animals are most likely to interact. Most of the estimated 400 emerging infectious diseases that have been identified since 1940 have been zoonoses, or infections that have been transmitted from animals to humans. The human immunodeficiency virus (HIV), for example, is believed to have emerged from a simian host in Central Africa.

Recent analyses have suggested that the “hotspots” for emerging infectious diseases overlap substantially with areas plagued by civil conflict and political instability. 

The U.S. Agency for International Development and the Centers for Disease Control and Prevention have been working on the Emerging Pandemic Threats Program to improve local pandemic detection and response capacities by directing resources and training to countries thought to be at high risk for pandemic. However, it is not clear that this and related programs are addressing the political dynamics at the local level that will determine the essential cooperation of local communities with any imposed global health security response.

“The unpredictability of a serious infectious outbreak, the speed with which it can disseminate, and the fears of domestic political audience can together create a powerful destabilizing force,” Wise and Barry write in their conclusion. “Current discussions regarding global health governance reform have largely been preoccupied by the performance and intricate bureaucratic interaction of global health agencies. However, what may prove far more critical may be the ability of global health governance structures to recognize and engage the complex, political realities on the ground in areas plagued by civil war.”

Deep policy discussions between journalists and top Stanford scholars highlighted a recent media roundtable at the Hoover Institution.

The event drew about 30 members of the national media from a variety of print and broadcast outlets, including CNN, CBS, The New York Times, Wall Street Journal, MSNBC, The Washington Post, and Politico.  The two-day media roundtable on Oct. 15-16 was titled, “Outside the Beltway.”

Over the course of the two-day conference, participants engaged in robust discussions with Hoover Institution fellows and Freeman Spogli Institute for International Studies scholars, including former U.S. Secretary of State and Hoover and FSI senior fellow Condoleeza Rice, who kicked off the event with a foreign policy conversation.

Drones and cybersecurity, for example, were topics of conversation for Amy Zegart and Herb Lin from the Center for International Security and Cooperation (CISAC).

Drones and new warfare

Zegart said, “New technology is being used in ways never imagined ... The question is, could drones be next?”

Drones are possible “coercion tools,” more effective than people would believe, Zegart said. “We need to figure out how the logic works with coercion, in regard to states.”

How do you get others to back down without a fight? You need to issue a costly threat, she said. For example, “trip-wire” forces of more than 20,000 in South Korea represent such a credible threat to North Korea. “Low-cost is low credibility,” or “cheap talk,” on the other hand.

Drones lower the cost of coercion, Zegart said. One point is that such strikes have huge public support, as the risk of U.S. casualties are very low, according to polls – 62 percent favor such drone strikes.

Zegart said drones could shift the “relative costs” of war and are better able to sustain military action over a lengthy time frame. They also affect the “psychology of punishment.” Hovering over a target for long periods of time, decapitation strikes against regime leaders, and the constant state of “near-ambush” changes the character of war and for a military campaign to stay the course.

“Certainty of punishment is a very powerful way to change the behavior of the adversary,” moreso than “severity of punishment, said Zegart, who has affirmed these conclusions through surveys with foreign military officers. That research also showed that domestic political support for military reaction is the most popular reason for making threats credible. But a deeper dive into such issues is urged, she added.

“We’re really behind the curve in figuring out how to make military threats credible in the world,” said Zegart. “Lots of questions remain.”

Hacking, information attacks

Lin spoke about the recent Equifax data hacking, among other topics.

He said, “The harm we all feel is both tangible and intangible” in regard to such hacks. In other words, there is both material threat and a peace of mind threat, he explained.

The “Internet-of-Things” is another looming problem, Lin said. In the future, liability issues will factor into how all these devices are connected and who is responsible in case of misdeeds, he said.

In the case of health care, confidentiality is a critical societal goal, but hacking creates numerous scenarios: “Would you prefer your blood type posted online or changed in your medical records,” Lin said, explaining the different ways information misuse may affect people.

On the global security front, “cyber war” takes advantage of the flaws of information technology (IT), and “information warfare” takes advantage of the virtues of IT, he noted. Such efforts begin to level the playing field between international actors and agencies.

“You give large megaphones to small players,” Lin said.

In Russia, information warfare is actually studied as a theory of warfare. And the results show that it works – it’s easier to destroy democratic  values online than create or reinforce them, Lin said. For example, Russia’s meddling in the 2016 elect stoked political polarization in America.

One media member asked Lin how the U.S. could prevent Russia from using cyber and information warfare in upcoming U.S. elections.

Lin said, “It’s not clear to me that the U.S. government is really going to be willing to do anything,” but some public pressure may move entities like media companies to respond more effectively.

And Zegart noted, “The Russians are still here.” They are present right now in any number of settings, from social media to traditional media and in public spheres, for example, she said.

“Attacking brains” was how Zegart described Russia’s goal. For American social media companies, she suggested, “Think about battleground states” and focus on “triaging” these areas.

WWII, Russia

The media also heard presentations from Hoover's Kori Schake on defense policy; Hoover's Victor Davis Hanson on “The Second World Wars,” his new book; Hoover's Michael Auslin on the Asian century; Hoover and FSI's Michael McFaul discussed the U.S-Russia relationship; and Hoover and FSI's Larry Diamond on democracy in the world order.

McFaul spoke about the hot spots in the relationship between the U.S. and Russian governments, his time as the U.S. ambassador to Russia during the Obama administration, and his suggested approaches to today’s engagement with Russia. He noted how Russia's President Vladimir Putin has prevailed on many recent occasions against the best interests of the U.S. One instance is Syria and how complicated that issue was for foreign policy makers during his tenure.

"The objective we sought to achieve -- the end of the civil war -- our policies did not achieve," said McFaul, who urges stronger U.S. action against Russian cyber attacks on the U.S. electoral process, now and into the future.

Hanson said that people today often fail to appreciate the deadly scope of the WWII conflict. For example, he pointed out that more people died in that conflict than any in human history, with 27,000 people dying every day in WWII. It was also the first time that more civilians were killed than soldiers. Of all the six major powers involved in the conflict, Japan killed about 10 people for every person they lost.

Lessons from WWII? “Things change very quickly in a war,” Hanson said. In 1942, it looked like the Axis powers had the upper hand; the next year, the Allies were surging. Also, a country should rely on a formidable deterrence strategy to discourage would-be attackers.

Once you lose it, “deterrence is very, very hard to recapture,” Hanson said.

MEDIA CONTACTS:

Clifton B. Parker, Center for International Security and Cooperation: (650) 725-6488, cbparker@stanford.edu