Intelligence Crisis

he old and new worlds of intelligence met on Sept. 11 when terrorists attacked the World Trade Center and the Pentagon. The old world was dominated by a single target, the Soviet Union, and a few consumers, most of them political and military officials of the U.S. government. Information was in short supply, and most of what the intelligence community had, it owned, having produced it with its own special sources-espionage or spy satellites. The intelligence world regarded that information as reliable. In the new world, intelligence has many targets, not one; many consumers, not just a few; and vast amounts of information, much of which is neither owned by intelligence nor regarded as reliable-for example, that stew of fact, fiction and disinformation known as the Web.

Sept. 11 drove home the fact that terrorism is an old world problem but in new world circumstances. The new world is much more open than the old, but terrorists are not part of that openness. They do not advertise their plans, so intelligence's special sources are still important-espionage, or human intelligence (HUMINT), intercepted communications or other signals (SIGINT), and photos or other images (IMINT). Yet even to grapple with old world terrorism, methods from the old world need to be reshaped by the circumstances of the new. The CIA needs to conduct espionage, for instance, in a very new way-outside the official cover of embassies, more patiently and in a more targeted fashion. Even then, it will be hard-pressed to penetrate terrorist cells in South Asia or the Middle East. It will need friends or allies, not all of which will be states, and it will need to share with them in ways that do not have much precedent. Those sharers will be partners and sources and customers of the intelligence community.

We still have no words to describe the "post-Cold War world." The terrorist attacks are a too-vivid reminder that dangerous threats remain. But those threats are not in a class with the Soviet Union. They are snakes, not the Soviet dragon, to use the phrase of former Director of Central Intelligence R. James Woolsey. In military terms, the United States is indeed the sole superpower; only it has the whole panoply of military instruments and the capacity both to combine arms in complex joint operations and to project those operations over long distances. It will remain so for the foreseeable future; indeed, in some terms its lead is lengthening.

American military predominance gives rise to a paradox: Because the United States is so predominant in conventional war, it is not likely to fight another one. Only a fool, or a desperate man, would repeat Saddam Hussein's mistake by taking on the United States where it is strong. Future foes will try to find where the United States is weak. They will not confront American power symmetrically. Rather, they will reach for asymmetric strategies and tactics, in which weapons of mass destruction, especially chemical and biological weapons, will loom large. Future regional conflicts will be fought under the shadow of such weapons, and thus must be planned under that shadow. Would-be foes will train such weapons on U.S. forces where they mass, or against the long lines of communication over which the United States must move forces, or against vulnerable allies or bases the United States needs.

In contrast to military might, political and economic power will be more dispersed.

Most of the major powers of the future will be large, rich and relatively homogenous. The list is almost certain to include the United States, Japan and Europe; Russia or China may be on it as well.

At a third level, global processes are undermining the hegemony of the nation-state, which has been the dominant fact of international politics since the Treaty of Westphalia in 1648. Those processes include:

• Economic globalization. Economic trends both integrate and disintegrate. They integrate in that national borders and distances matter less. At the same time, though, in a world where people's skills are really the only national endowment that matters, countries that opt out of the global economy and people with fewer skills are left behind. Economics integrates only those who can be integrated. Thus, the gap between the haves and have-nots-a disintegrating force-is growing, not just between rich and poor nations but also within nations, including the rich ones.
• Communications revolution. The information revolution is the key enabler of economic globalization. It was the information revolution that undid the Soviet Union; planning and brute force could produce roads and dams but could not induce innovation in computer chips. It is continuing to undermine the ability of governments to control information. A generation ago it was feared that computers would abet dictators; Big Brother seemed closer at hand. Now, the opposite seems true.
• Rising belief in the nonmaterial. People seek to differentiate "us" from "them" in religion, ethnicity or other ways. In that sense, what drove the tragedy of the former Yugoslavia and the revival of Islam that is visible around the world-horribly in the case of the terrorists -look like two sides of the same coin, and what motivates the American militias does not seem very different. Perhaps partly in alienation from processes of global integration, peoples seek some form of transcendental association.
• Changing demographics. Over time, enormous disparities in growth rates between the Northern and Southern hemispheres will sharpen emigration pressures. They will also create youth "bulges"-that is, cohorts, especially of young men, much too large to be integrated into the job force. Those bulges may be sources of dissatisfaction, and so of instability, in such key developing countries as Egypt, Pakistan and Turkey, and they can be sources of recruits for terrorism as well.
• Environmental concerns. Like demographic shifts, these are chronic, not acute: From one year to the next an environmental indicator may simply worsen gradually, almost imperceptibly, then come to a sharp crisis once some tipping-point is reached. Imagine what two nuclear meltdowns-two Chernobyls-within a year would do to the international agenda.

For some developments that emerge from these global processes, the old-fashioned language of threat is appropriate. That is plainly the case for terrorism. Americans learned of their vulnerability from a gruesome string of bombings-the World Trade Center in 1993, the federal building in Oklahoma City in 1995, Khobar towers Air Force housing in Saudi Arabia in 1996, the U.S. embassies in Kenya and Tanzania in 1998, the USS Cole in 2000. What was shocking about Sept. 11 was not that terrorists could do it, but that they could do it four times, simultaneously, in a coordinated campaign.

There was and remains concern that nuclear bombs, materials or know-how might spill into the hands of terrorists. The Tokyo subway gassings by the mysterious Aum Shinrikyo group demonstrated that lethal biological weapons have been-and are-within reach of almost any terrorist group. If terrorists seek killing on a vast scale, they have no reason to go to all the trouble of building atomic or radiation weapons. They could use biological ones instead. If terrorists have not used atomic or biological terror thus far, that has been because "conventional" explosives have been lethal enough for their purposes.

For downing airplanes or otherwise killing large numbers of people at once, conventional explosives are more than sufficient. Indeed, the truck bomb that destroyed the U.S. Marine barracks in Lebanon in 1983 was, at the time, the largest nonnuclear explosion the FBI had ever seen. The suicide-bomber who drove into the barracks didn't have to meet his maker to accomplish his mission; he could have achieved nearly the same result by parking the truck several hundred yards from the barracks and exploding it by remote control. And the terrorists of Sept. 11 found an elegantly horrible solution. By turning fuel-laden airplanes into flying Molotov cocktails, they saved themselves the trouble of building any bomb.

Moreover, the new terrorism seems to differ from the old in motivation. That change was hinted at with the first World Trade Center bombing in 1993. The new terrorists, unlike previous ones, are not rational in our terms. Previous terrorists could be frightful but were rational. They used terror in pursuit of political objectives. They wanted something. Thus, they had to reveal their role, opening the possibility of retaliation against them or their state sponsors. By contrast, these enemies seem to have no political objectives we can satisfy or spurn. They want revenge for acts of ours they cannot describe and that we would not recognize. They are apocalyptic. Most previous terrorists have been rational, if extreme; they have sought specific political ends. While few places are strangers to terrorism, and while yesterday's sponsors of terror may be tomorrow's targets, the United States will continue to be the target of choice for these avengers. Its sheer size and dominance of the international system will continue to make it the "Great Satan." The domestication of threats such as terrorism and crime will blur the line between intelligence and law enforcement. In one sense it is only natural that as traditional threats wane, pure intelligence should turn to new purposes, such as catching criminals. Yet that turns intelligence to purposes for which it was expressly not designed: Not only has domestic practice separated intelligence and law enforcement, lest the two together become "Big Brother," but intelligence is avowedly national, its purpose to get a leg up on other nations, while future law enforcement will be inherently cooperative. Law enforcement also blurs the other distinctions, on which American intelligence has been based, between public and private and between foreign and domestic.

The cultures of intelligence and law enforcement are worlds apart. For intelligence, the purpose is policy, and the standard is good enough to serve as a basis for making that policy. For law enforcement, the purpose is convicting criminals, and the standard is that of a court of law. Intelligence takes pains to protect sources, and so stays out of the line of evidence. Law enforcement has to trade off protecting sources with convicting criminals, and its officers need to be prepared to testify publicly. This clash of perspectives and the challenge of finding new missions will be a primary shaper of U.S. intelligence in the years ahead; the disagreements will be sharper because the history of the two main organizations, the CIA and the FBI, is one of ragged cooperation at best.

Threats, But No Threateners

While law enforcement will strain the role of intelligence, the familiar concepts and language of threat, deterrence and punishment will still be relevant. For other results of global processes, however, the old language is misleading, and the old concepts do not suffice. These developments can be thought of as threats without threateners. The threat results from the cumulative effect of actions taken for other reasons, not from an intent that is purposeful and hostile. Those who burn the Amazon rain forests or try to migrate here or who spread pandemics here, or even those who smuggle drugs into the United States, do not necessarily wish Americans harm; they simply want to survive or get rich. Their self-interest becomes a threat to us.

These threats differ sharply from the Cold War's nominal threat. They are:

• Chronic and long-term, not acute and short-term. Human beings, with their adrenal systems, are optimized to deal with acute threats, like war, not with chronic problems whose causes are today but whose consequences are tomorrow or the day after. We are galvanized by the "stun effect" of dramatic developments. By contrast, the threats without threateners are like New York City bridges whose maintenance can be deferred from year to year without visible effect until, all of a sudden, they are on the verge of falling down.
• Not necessarily "zero sum" in the way traditional threats were. In war, one state's loss usually is another's gain. By contrast, action against environmental degradation can produce gains for all. But there will still be competition over who pays and how much. The cutting down of the Amazon forest is almost pure loss for most of humankind; it is not, however, for those who do the cutting.
• Not necessarily reversible. The effects of wars are reversible within a generation or two. Societies recover. Not so, perhaps, for global warming, whose effects might be permanent, or for some kinds of pandemic, which might, like AIDS, rob societies of several generations of leaders.
• Less susceptible to unilateral approaches than traditional security issues. During the Cold War, the United States made alliances and other such arrangements, in economics as well as security, but Americans still felt many of the levers of their security were in their hands. That seems less so for many of the new issues. Containing migration or environmental degradation inherently requires cooperation with other states. In that sense, the United States is coming to be less different from other nations than it was.
• Sometimes beyond the domain of government. National security during the Cold War was a government monopoly. The threat was political and military, and most of those levers were in the hands of government, particularly the federal government. That is much less so of the newer challenges, for which many of the levers are in the hands of companies or private citizens. Egypt, for example, is one of a very few countries to receive significant assistance from the U.S. government, yet in the end, whether Egypt grows fast enough so that its youth bulge does not threaten its stability depends more on the actions of private capital than government assistance.
• Unlikely to be "cheap" or as unifying as traditional security threats. The Cold War's image of the nuclear danger was both stunning and unifying; nuclear war, one student put it, would have united in death all Russians-men, women, children and the KGB. The nuclear danger was equally unifying for Americans. At the same time, for most Americans, responding to the Soviet threat meant paying taxes; their daily lives were not otherwise much affected. That is not so for many of the new dangers. For a "new old" issue such as terrorism, the critical debate ahead is how much Americans will need to change their daily lives-from how they travel, to whether they register with their local police to how often they are searched.

Power is dispersing around and through the nation-state, and the role of nation-state governments is changing. The broad shape of the international system may reflect the interactions of the major nation-states, but increasingly, the drivers of that system are elsewhere. What lies behind old threats and new is a transformation of international politics-the emergence of the market state. The transition from what might be called the "territorial state" to the market state has been going on for a century at least. That transition, however, was obscured by last century's preoccupation with particular, and particularly fearsome, territorial states-Germany, Japan and the Soviet Union. It may be muted for a time, but will not be reversed, by this century's preoccupation with terrorism's new old threat.

Critical levers, many of which used to be in the hands of government, are passing to the private sector. Each of the 10 largest companies in the world has annual total receipts larger than the gross national products of 150 of the 185 members of the United Nations, including countries such as Portugal, Israel and Malaysia. From 1983 through 1988, the ratio of public to private flows of capital to the poorer countries averaged just under 2-to-1; over the course of 1989 through 1995, the ratio switched to almost 5-to-1 in favor of private flows. Later, just before the Asian economic debacle of 1997 to 1998, it approached 10-to-1.

The market respects neither the borders nor the icons of the traditional state. It does not care whether the worker is Filipino or American, Chinese or German, man or woman, homosexual or military veteran. If the person can do the job, he or she is rewarded, and if not, not. "Made in America" is not a label of interest to the market.

The circumstances of the market state are transforming the role of government. The government of the territorial state was a doer; students of public administration and later public policy learned that government's choice was "make, buy or regulate." For tomorrow's public managers, the choice will be "cajole, incentivize or facilitate"-a very different task. What the government will provide is its power to convene, its infrastructure, its legitimacy, perhaps, and its information-or intelligence. The shift in mind-set this will require of the intelligence community can hardly be overstated. Intelligence only slowly came to the realization that it worked for Congress as well as the U.S. executive. It will not come easily to the idea that it works with, and sometimes for, CARE and Amnesty International, not to mention Shell and Loral.

Puzzles Versus Mysteries

The changed world requires a fundamental reshaping of intelligence. Espionage, for instance, needs to be dramatically reshaped to be smaller, more tightly targeted and to operate mostly independent of American embassies abroad. And spying will also be a cooperative venture; American spy-masters seldom will be able to crack into terrorist cells, but other countries may be able to do so.

Spying is most valued for solving immediate, tactical puzzles-what is Osama bin Laden planning? These puzzles have a solution if only we had access to the information. Puzzles were intelligence's stock-in-trade during the Cold War-How many missiles does the Soviet Union have? How accurate are they? What is Iraq's order of battle? Puzzles' opposites are mysteries, questions that have no answer even in principle-Will North Korea keep its part of the nuclear bargain? Will China's Communist Party cede primacy? What will Mexico's inflation rate be this year? No one knows the answers. The mystery can only be illuminated; it cannot be solved.

Spying, however, is a target-of-opportunity enterprise. Despite what spies may hear or steal today, or be able to communicate to their American case officers today, they may not hear or see or be able to get out tomorrow. What is decisive today may be unobtainable tomorrow. Worse, the moments of crisis, when information from spies is most valuable to us, may be precisely when they are most exposed, when to communicate with them is to run the greatest risk of disclosing their connection to us.

Secrets are more valuable with regard to enduring puzzles, ones that will still matter tomorrow if they are not solved today. A foreigner's negotiating position is perishable; after today's round the U.S. negotiator will know it. By contrast, the order of battle for the Iraqi military is an enduring puzzle: Whatever we know today, another piece of the puzzle will always be welcome tomorrow. Similarly, some hints about the organization of the Hezbollah terrorist organization will be useful even if we fail to get tactical warning of today's terrorist operation. For these puzzles, spying will continue to be useful.

The required reshaping of the clandestine service goes well beyond what is imaginable in today's political climate. Indeed, today's first answer-more money-is exactly what is not required. First, espionage should be narrowed to focus on potential foes near U.S. troops deployed abroad, the governments of a small number of potentially destabilizing rogue states and closed groups that threaten to engage in terrorist activities against the United States. The cost in terms of risk of clandestine operations warrants their careful use only when the information obtained covertly would significantly enhance U.S. national security. A streamlined clandestine service would yield a greater payoff for the United States.

Second, this streamlining implies that the CIA would no longer have stations everywhere around the globe. There is merit to the counter-argument that tomorrow's untidy world makes it impossible to predict where the United States will want to act, and so some infrastructure for spying should be sustained almost everywhere. The argument is particularly strong with regard to supporting military operations. Yet recent experience suggests that where the United States dispatches troops abroad will be hard to predict with much advance warning. The only way to be prepared in advance to support American troops would be to sustain an infrastructure for spying virtually everywhere. On balance, the risk of such a far-flung presence outweighs the gain.

Third, the narrowed targeting of the clandestine service means it should focus only on those high-value secrets that cannot be collected another way. The value of those secrets can, to be sure, only be assessed in light of what is available openly. But the task for the clandestine service is obtaining critical secrets.

Fourth, the reshaped clandestine service would operate from the United States and through case officers abroad operating outside embassies under nonofficial cover. Operating under official cover is paper-thin in any case; what it mostly supplies is diplomatic immunity, thus lowering the risk to a CIA spy-master should he or she be caught by local counterintelligence officials. The reshaped service's few stations abroad would mostly be limited to liaison with cooperating local intelligence and police services.

During the Cold War, when the CIA's targets were, first, Soviet officials anywhere, and second, officials and politicians from the local country, the diplomatic cocktail party circuit was not a bad place to troll for recruits. "In the Cold War, if you wanted to recruit an East German or a Pole, the vehicle for that contact was the diplomatic cocktail circuit or the tennis court. None of the guys you're interested in now are on that circuit," Robert Gates told Tim Weiner, author of "The CIA's Most Important Mission: Itself," in the New York Times Magazine (Dec. 10, 1995). Nor are terrorists or the leaders of Colombian drug cartels likely to be frequent guests on the embassy circuit.

Cracking the hardest targets, like terrorist cells, will take a very different mode of operation. As Gates put it: "You need a guy walking into Tripoli or Pyongyang who doesn't look like he just left Iowa." Yet nonofficial cover is expensive and time-consuming, and given the lack of diplomatic immunity, it is potentially dangerous. CIA officers operating out of embassies already are distracted to some degree by the need to do the embassy cover job they are supposed to have in addition to their espionage work. Other countries closer to terrorist organizations, including countries that are not friends of the United States, may have better luck.

Finally, in the future spying will focus less on collecting information than facilitating its collection by technical means. The clandestine service will gather secrets less through what its own spies hear than through the sensors those spies can put in place. It will have a particular role with respect to signals intelligence. Already, the bulk of funding for SIGINT goes for satellite-based collectors, but most of the take comes from ground stations, many of them clandestine. At the same time, while the precise details are secret, the United States probably breaks more codes by stealing code books than by breaking the codes with the National Security Agency's supercomputers and brainy mathematicians.

That will be all the more true as SIGINT will need to get closer to the signals in which it is interested. During the high Cold War, the Soviet Union sent many of its phone calls through microwave relay stations. Since private telephones were relatively few, intercepting those conversations with satellites yielded important insights into economic production and sometimes into military movements or lines of command. Now, though, with hundreds of communications bundled into fiber optic lines, there is less for satellites to intercept. If SIGINT is to intercept those signals, it will have to tap into particular communications lines in specific places. It will have to collect keystrokes straight from a personal computer, before software encrypts the message.

Market State Intelligence

The United States will face some fearsome snakes, some of which will be closed to view and so require old world methods. Yet the dominant feature of the new world is how much information is out there. Intelligence is no longer just in the secrets business, it is in the information business. The implications of the shift are dramatic. The explosion of information means that policy officials will be more, not less, reliant on information brokers. If collection is easier, selection will be harder. There will also be more brokers and more competition among them. Intelligence analysts will be one set of brokers, but others, the competition, will range from CNN, to Bloomberg and Oxford Analytic, to journalists and academics.

The more open world is blurring the distinction between collection and analysis. The best looker is not a spy-master, much less an impersonal satellite, but someone steeped in the substance at hand-in short, an analyst. Yet analysts now get rewarded for being generalists, not deep specialists, and in some areas, such as economics, intelligence cannot compete with the private sector. Analysts, though, are cheap in comparison with satellites, and hiring more people from outside, even for brief tours, would deepen the intelligence community's expertise.

In the circumstances of the high Cold War, there were powerful arguments for targeting intelligence tightly on the Soviet Union; for giving pride of place to secrets, especially those collected by satellites and other technical means; for centralizing intelligence; and for separating it from the stakes of policy agencies. None of these arguments, however, is compelling today.

With one target and one preeminent consumer-in form the President but in fact the National Security Council, encompassing the State and Defense departments and the NSC staff-there was a certain logic to the way intelligence was, and is, organized. It was structured according to the different ways intelligence is collected-the National Security Agency for intercepting signals; SIGINT, the CIA's clandestine service, for spying; HUMINT; and so on. These "INTs," or "stovepipes" in the language of insiders, could each concentrate on the distinct contribution it could make to understanding the Soviet Union. In the process, though, those "INTs" became formidable baronies in their own right.

Now, however, the old structure just has to be wrong. No business would organize this way. Now, there are many targets and many consumers, though there are some consistent alignments among targets, customers and collectors. In these circumstances, a firm would organize by lines of business, establishing a distributed network or a loose confederation in which different parts of intelligence would endeavor to build very close links to the customers each served. The existing Director of Central Intelligence centers-for counterterrorism, counternarcotics, and the like-are suggestive models. They do organize by problem or line of policy. They primarily integrate within the world of intelligence, though they provide a focal point for connecting to policy. And the distributed network would be "virtual," not bricks and mortar, because while some problems, such as North Korea or terrorism, will be enduring, others will rise and recede quickly.

In the circumstances of an age of information, perhaps it is time for intelligence to "split the franchise" and dramatically change how it is organized. Today's tactical puzzles where secrets matter are both fewer and more varied than the Cold War's Soviet puzzles, but they are still important. For solving puzzles, analysts need to be close to the collectors of secrets. In a world of too much information, policy-makers will want to "pull" up what they need, not have information "pushed" upon them; they will want to pull up puzzle solutions when they need them, not receive a torrent of information whether they ask for it or not. Yet solving the puzzle is often important enough that getting policy officials to pay attention is not a problem.

Mysteries are more abundant now, and the franchise of framing strategic mysteries is very different from solving puzzles. Analysts need access to secrets, but their crucial partnerships are those with colleagues outside intelligence and outside government, in the academic and think-tank worlds, in nongovernmental organizations and in private business. Intelligence needs to be opened wide, not cosseted in secret compartments. This franchise is based on the recognition that intelligence's business is information, not secrets, and that its product is experts, not paper.

In a world where both structures and U.S. interests are up for grabs, policy-makers would be better served by intelligence brokers close at hand, down the hall, not out at Langley. Perhaps the CIA should be dispersed, its analytic pieces assigned to the State, Treasury and Commerce departments and elsewhere across official Washington.

The last part of the challenge for intelligence in the market state will be to reach out to new partners, especially in dealing with hard targets such as terrorism. It will mean conceiving of intelligence strategically, as a means of helping others see a set of issues the way the United States does and so facilitating the building of coalitions. While U.S. intelligence has been creative, in fact, in sharing intelligence-for instance, in U.N. peacekeeping operations-in principle, sharing has been a grudging act, letting a few trusted friends see some of the crown jewels if they had something to contribute in return. Building relationships will still be an important reason for sharing, but in the future, the partners will be much more varied-not just intelligence agencies but NGOs, not just foreign offices but foreign companies. And the sharing will be two-way, not one. In the world of the market state, a world that is not fully open everywhere but is not very closed anywhere, humanitarian NGOs will know more about many African countries than the CIA, and oil companies will be just as expert on Indonesia.

The market state ultimately will invoke the dilemma of how much intelligence can be broadened to serve shared international purposes, given its very national origins. After all, intelligence has been thought of as the way to get a leg up on other nations, not bring them into coalitions of the willing. The campaign against terrorism, for instance, will bring together the willing and the reluctant. Countries and groups that are no friends of the United States may be brought into an anti-terrorism coalition, and intelligence cooperation-including laying out the case against particular terrorists-will be part and parcel of assembling and sustaining such a coalition. In time, the coalition might give real force to an international norm against terrorism.

But in the process, virtually all the distinctions on which U.S. intelligence has been based would be strained. Intelligence and law enforcement would be forced together. Distinctions between "home" and "abroad" would be hard to sustain as terrorist networks reach across borders and even include American citizens. U.S. collaborators would run well beyond trusted friends, to those who are neither friends nor states. Finally, the intensity of cooperation required would leave the intelligence community hard-pressed not to reveal something of its capacity, if not its sources and methods.