New, Simple Prediction Market Tool (Predictify.com)

Prediction markets have been around for a long time and I have mentioned them here briefly before. Fundamentally, they operate like futures markets (some would say gambling establishments). In the simplest version of these systems, people essentially place bets on what the future will bring. The person who gets closest wins. In more complex systems, people can actually buy and sell the "bets".

The idea is that, if you have enough people involved, the going price will converge, over time, on the correct price. Of course, anything can be "valued" this way and probably the most famous predictive markets are the Iowa Electronic Markets. They have run a market on who will win the presidential election (among others) for a number of years and have been very successful at predicting the results. Currently you can buy futures -- i.e. contracts that will pay a dollar the day after the presidential election -- in the eventual Democratic candidate for about 60 cents and contracts for the eventual Republican candidate for about 40 cents. These prices predict, at this point, a Democratic victory because people are willing to pay more for a Democratic candidate than a Republican candidate while still only getting a dollar after the election.

The US government has played around with this idea (FutureMap was a predictive market idea that was linked to the ill-fated Total Information Awareness program which is a whole other story...) and probably still is in one form or another.

The goal of all these markets is to tap into the collective wisdom of many people to help make accurate predictions concerning the future or at least the odds that certain futures will occur. There are a number of books and papers that touch on this topic right now. The Wisdom of Crowds is one but my favorite is Gut Feelings.

That is a long preface to get to a new predictive market tool available at Predictify.com. I have used it to set up a market in oil prices that you can see here. It is an easy way to get input on discrete questions. The team at Predictify help you mold your question and make it more specific in addition to helping you identify the exact source you will use (in my case, Bloomberg.com) to identify the winners and losers. In all, it was painless and I already have over 50 "answers" to my question.

If you are interested in exploring the power of another predictive market, particularly one with a national security focus, see Strategypage.com. You can search for other predictive markets here. For general information about the prediction market industry (yes, it is an industry) follow the newly formed Prediction Market Industry Association.

Blogs Of Interest (INMM and Web 2.0)

There are two new blogs that are worth following if you are interested in the particular niche of information that they address. The Mercyhurst student chapter of the Institute of Nuclear Material Management maintains an on-going blog about nuclear proliferation, counter-proliferation and other issues here. Likewise, Chris, a student at Mercyhurst, is exploring how Web 2.0 tools could be used by the intelligence community here.

Intel Brief: Afghan Poppies Fear Not (ISN)

Luke Handley just published a well researched intel brief on the ISN concerning the future of Afghanistan's opium poppy harvest.

Open Source Intelligence: Issues For Congress (CRS)

The good people at OpenCRS have made a December 5, 2007 report on OSINT available to the public on their website. The report contains quite a bit of good background info including a summary of the debate on the value of open source to the intelligence community. According to the report, while "Intelligence professionals generally agree that open source information is useful", there are three main positions within the community with regard to the true value of open source information:

• "The first holds that policymakers simply derive less value from such information than from clandestinely-collected secrets."
• "The second view asserts that open source information should be viewed not only as an important contextual supplement to classified data, but also as a potential source of valuable intelligence, in and of itself."
  
• "Proponents of the third view adopt a “middle-ground” position, arguing that open source information probably will never provide the “smoking gun” about some issue or threat, but that it can be instrumental in helping analysts to better focus or “drive” clandestine collection activities by first identifying what is truly secret. Open sources therefore should be viewed as an analyst’s “source of first resort.”
  

Also of interest are the laundry list of current obstacles to analysts trying to using open source and the recent history of criticism of the community's failure to use open source more extensively (it is a lengthy parade of horribles...). Probably of most interest is the list of things the CRS mentions that Congress could do to help the open source movement. These include, according to the report:

• "One way is to examine specific budget areas in which spending on open source currently can be identified."
• "Another opportunity occurs when the DNI submits to congressional intelligence committees an annual report reviewing analytical products. Arguably, these annual reports should address the use of open source information. However, oversight committees could ask for additional information on open source utilization if needed."
• "...an approach that might be considered in some situations would be a request for an alternative analysis of a specified topic solely based on open sources in order to compare it with all-source analyses." (Note: I'll do it!)
  
• "Some may argue that Congress should consider an amendment to copyright law that would cover the open source efforts of intelligence agencies. Removing uncertainty of the extent of copyright would facilitate open source efforts and facilitate the widest possible use of the information by public officials."
• "Some have proposed making the Open Source Center a component of the Office of the Director of National Intelligence (ODNI) while essentially retaining its current roles and missions."
• "The advantage of placing the NOSC directly under the DNI would be to enhance the prestige of the open source discipline by raising its profile, fencing the funding, and ensuring its independence from shifting priorities within the CIA where human intelligence collection inevitably makes heavy and continuing demands on senior officials."
• "Placing the NOSC within the ODNI could also facilitate the NOSC’s ability to support law enforcement agencies and state, local, and tribal entities." (Note: Good point.)
  
• "A more radical, approach would be to establish an Open Source Agency completely outside the Intelligence Community (in addition to the existing Open Source Center). The goal would be to provide open source information not just to intelligence analysts but to all elements of the Federal Government including congressional committees." (Note: The basis for the PIA -- Public Intelligence Agency. Where do I sign up?)
  

Lessons Learned From Past Counter-Insurgency Operations (RAND)

Not sure how early in 2007 RAND published this study but it draws some useful conclusions from a comparative case study analysis of six previous COIN operations including these highlights from the summary:

• "It is important that counterinsurgents understand local dynamics so that all theaters of the conflict can be understood in context. This knowledge can help exploit cleavages and encourage competition among insurgent factions, which was done in the Philippines and, with less success, in Vietnam. In Vietnam, El Salvador, and Colombia, counterinsurgents used indigenous intermediaries with established social networks to earn the trust of the population and psychologically unhinge the insurgents."
  

• "Depending on the situation, a hands-off approach is sometimes necessary to allow the host nation to learn which methods are most effective in dealing with an insurgency, considering its own strengths and limitations."
  

• "Foreign or even host nation counterinsurgents who are not from the local area of operations should assume that they will have limited opportunities to convey their good intentions. Consequently, they may be viewed more favorably from the outset if they are perceived as contributing to progress and not to chaos."
  

• "Counterinsurgents should strive for “unity of command,” akin to the bureaucratic structure of the CORDS program in Vietnam, so that there is fusion and continuity among counterinsurgency programs."
  

• "Finally, counterinsurgents should analyze solutions in terms of long-term effectiveness, not short-term necessity."