Smoke raises behind an Islamic State flag after Iraqi security forces and Shiite fighters took control of Saadiya from Islamist State militants

ISIS has probably been the subject of more wishful thinking in the West than any other foreign policy challenge since the Cold War. Some of the thinking has been useful, much of it is mere stupidity masquerading as policy discussion. One of the best reviews of how to beat ISIS appears in POLITICO. Unwittingly, it also makes the case for why the best approach can’t work.

Deciding how we think about ISIL is critical to deciding how to fight it. President Obama said he plans to stay the course by intensifying his current policy, which you might call containment plus: contain the group’s expansion in Syria and Iraq, and hasten its demise with steady air strikes and support to regional allies. His critics, meanwhile, call for a range of options, from allowing local forces to defeat the group, to easing the rules of engagement for airstrikes, to deploying U.S. special forces, to a large-scale campaign using 20,000 or more U.S. troops in direct combat ground roles.

Which is right? The answer depends at least in part on what kind of an enemy we think ISIL really is. Is it a tremendously well-resourced terrorist group that controls substantial territory, which it uses to plan attacks, vet operatives and manage a complex financial network? Or is it a fledgling nation-state that sponsors terrorist attacks? If we view ISIL as the former, then containment seems like an odd strategy, since even if contained it could continue to support terrorist attacks. But if we view it as a state, then it looks very different: a desperately poor nation trying to fight a three-front war—Iraq to the East, the Kurds to the North and Syria and other insurgents to the West.

Taken together, this evidence suggests to us that ISIL is most usefully thought of as a state. Not a state with recognized borders, but an entity that needs to control territory in order to sustain its message, validate its propaganda and maintain much of its capacity. And if it’s is a state, then the good news is that it’s an extremely weak one: geographically vulnerable, with an unsustainable resource base and a grave problem with its population. As we decide how to confront it, there are three crucial points to understand.

And I think that is mostly correct. In a way, ISIS is a reaction to the observed failure of al-Qaeda — and I would argue the comparison of the failure of al-Qaeda to the success of Saudi Arabia, which is merely ISIS with better grooming and table manners. Al-Qaeda was a transnational movement but without a geographic base it could effectively control it was always at a disadvantage. ISIS is trying to rectify this situation by carving out a Sunni statelet. And, either knowingly or surreptitiously, it has hit a sweet spot where there is virtually no one who want the ISIS state to disappear. Let’s review the bidding:

Syria and ISIS cooperate against the less-radical-but-just-as-Islamic US supported rebels in Syria. This makes a reconciliation impossible and gives Assad a firmer grip on the more highly populated parts of Syria he controls.

The Russians like ISIS because it gives them a reason to be seen supporting their ally, Assad. Note that even after ISIS dropped that Russian airliner in the Sinai, Russia is still flying strikes mostly against the US supported rebels.

The Iranians like ISIS because it gives them a reason to be in Syria and extend their influence in Iraq.

The Kurds like ISIS because it is keeping the Iraqis pinned down and their long game is Kurdish independence.

This line up will be important going forward.

The three crucial points the article brings out are:


The first thing to recognize about ISIL is that it has an intractable funding problem.

So ISIL is left with what has been revealed as its main funding source: extorting funds from the population under its control. This is standard practice for rebel groups, showing up with guns at roadblocks and businesses and demanding payment or confiscating goods. But extortion, too, is unsustainable as the most productive residents flee, taking their capital with them (both human and physical), inflation erodes the value of taxes that are collected and people exposed to excessive taxation stop investing in productive activities.


It’s not surprising, if you think about it: Governance is poor, rights are not protected and the rules change constantly. There are many accounts of the group forcing people to stay, and there are significant tensions between local fighters and foreigners who receive preferential treatment. The result, for ISIL as a state, is a damagingly large human capital drain.

Now, obviously the group is calling people to the cause. But the people attracted by ISIL’s global recruiting drive amount to an army of fighters—low-skilled ideologues, for the most part, rather than the engineers, administrators and entrepreneurs that an economy would require to thrive, at least to judge from published reports.

Regime Competence

ISIL’s governing institutions are terrible from the perspective of economic activity: they offer poor property rights, unpredictable taxation, no investment in human capital, no credit markets or affordable insurance. Unless ISIL’s leaders have figured out a radical new way of managing production that no other country has devised, then their economy is going to produce little.

It is impossible to predict how long it will take for the state’s economy to collapse, but the collapse over time is certain. Recent reporting tells of increasingly dire conditions.

This problem has afflicted states far more legitimate than ISIL. Zimbabwe is the most obvious examples of a state that was rich before its governing institutions doomed it to stagnation and decline. States like Zimbabwe don’t vanish, in part because they’re part of a global system that values stability and ultimately props them up. ISIL has no such safety net.

The authors, I think, have the situation largely correct. ISIS is both a state and an ideology. They advocate for a strategy of containment:

In weighing whether to attack or contain the group, there’s one other consideration that hasn’t yet received enough attention: The ideological benefits of allowing it to collapse by itself. No one uses communism to rally rebels anymore (save for a few small groups in India); the collapse of communist states in the 1990s demonstrated to everyone how ineffective the ideology was at running a modern economy. As Ronald Reagan correctly saw, allowing communism to collapse of its inherent contradictions would discredit it forever.

As the Soviet Union was to communism, so ISIL is to jihadism: the purest articulation of a noxious ideology of governance, which incidentally has little connection to Islam. If we allow it to fail, then it will be clearly a failure of ISIL as an idea. The same is not true of a military defeat at the hands of Western forces.

And I believe that it would be infinitely preferable for the ISIS state to collapse under its own weight rather than for it to be militarily defeated by the West. This is not because the task would be particularly hard, it wouldn’t, but rather because if the West stomps ISIS, it will feed that Arab talent for making horrific defeats into divine martyrdom and legend. Containment is fine. But then what? For these weaknesses to have any real meaning they must be acted upon in a way calculated to collapse the ISISI state. While the authors do a great job of describing failed states, the only example they have of a collapsed state is the USSR. I would contend that example is wildly inappropriate because the ideological underpinning of communism, to the extent that even existed from the death of Lenin forward, was an economic system not a religious one and the USSR and the Warsaw Pact were undermined not because of containment (Reagan did not practice containment, he practiced “roll back” and that resulted in wars in Grenada, Central America, and Sub-Saharan Africa) but because the economic system it promised was not performing.

Why Containment Won’t Work

For this strategy of containment-leading-to-ideological-failure to work requires the state to not merely fail but to utterly collapse in a way that repudiates the underlying ideology. It is difficult to see how this happens because ISIS can easily blame any earthly failures on incompetence (by the ISIS officials responsible) or malevolence (on the part of the West). It can’t happen unless the Arab world, Turkey, and the West all agree to make ISIS own its failures. To do this the refugee flow from the ISIS state would have to be staunched because disaffected people are of no use in Paris or Hamburg. Likewise, the ISIS economy and governance must be allowed to operate. Unfortunately, this will cause a humanitarian crisis of Biblical proportions as commerce and agriculture screech to a halt and refugees overwhelm all bordering states. And then the UN and Western NGOs will step in with food and economic assistance because we don’t have the will to watch tens of thousands die of disease and starvation merely to make a point. Ultimately, we won’t defeat ISIS because we are not willing to kill as many people as it takes to do the job, whether that is via combat or by using their own incompetence.

The Future

ISIS is probably here to stay; if may even be too big to fail. No one in the area wants to be rid of it and no one out of the area has the will to act. Eventually the borders will stabilize and though skirmishes will continue the safe bet would be that a new state is created in ISIS controlled territory. So what will it look like? It could look something like Saudi Arabia because it does own a good portion of Iraq’s oil  fields. But a safer bet is that it will look very, very much like the area ruled by the Palestinian Authority. Indeed, the exact same critique the authors of this piece make of Money, People, and Regime Competence applies to the PA. Like ISIS, the PA is based on an intractable mythology. Like ISIS, the PA doesn’t really pretend to care about the quality of life of its citizens and so is immune to their complaints… not that there are many because complaining is not a great evolutionary strategy. The UN will distribute food and ISIS, taking a page from Somali warlords, will repackage the food with their own labeling. ISIS will join that great morass of failed states and then we can stop worrying about it.

Tags: ISIS Syria