Subversive Markets: The Economic Roots of the Iraq Insurgency

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In the four years that have passed since the 2003 invasion of Iraq, insurgent elements - both restorationist and ideological - have demonstrated a disconcerting capacity for withstanding structural and organizational change. Shifting patterns of insurgent financing during the first fifteen months of the stabilizing campaign undermined the best-laid plans of the CPA and permanently distorted domestic alliance structures. From Hussein loyalist financiers to ‘foreign fighters and couriers’ to the present reliance on a complex array of indigenous sources, the insurgency in Iraq has evolved to become self-sustaining - and possibly self-perpetuating - generating an estimated $70 million to $200 million a year from illegal ‘in house’ activities.  For those who depend on the existence of a shadow economy - be it for operational funding or livelihood - the conflict confers a perverted legitimacy on actions that in times of peace would be punishable as crimes.  Whether violence is the product of political grievance, interethnic dispute or networked security dilemmas, the back channels of subversive markets provide the lifeblood necessary to sustain it. For as long as this parasitic opportunity structure remains viable, conflict will persist not so much despite the intentions of rational people, as because of them. 

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