Fear and the Forest
What The Forest Passage can teach us about risk: Acquiring Identity; Back (to the) Office?; Civil Cyber; Hyper-Space; Intangible Insurance
“Here and Now” is the Forest Rebel’s motto.
- Ernst Jünger
Risk Developments this letter:
Acquiring Identity
Back (to the) Office?
Civil Cyber
Hyper-Space
Intangible Insurance
100 years of Writing and War
Writing in the wake of the horrors of World War II, an enigmatic author, soldier, entomologist and future centenarian, Ernst Jünger produced “The Forest Passage”, a call for individual rights, freedom and resistance to totalitarianism. Jünger is best known for works he completed during his juvenile years as a soldier. He was one of the most decorated German soldiers in World War I, and there can be no doubt about his courage, although there is still much debate about whether his writings glorified war or dispassionately describing war. Despite his social conservatism and hawkishness, he refused overtures by the Nazi party multiple times, and his son was arrested for subversion and assigned to a penal unit, where he was either killed in combat or executed by the SS. Still, his earlier period haunts his legacy and the question can be raised, “Why listen to this writer at all?” Before we go any further, let me be clear, I am not attempting to defend Jünger, nor put him on trial, but to simply learn from his unique experience at the center of the most important events of the 20th century. What was his approach to risk, and why did he view danger as both necessary and revitalizing? How did he manage to resist totalitarianism on multiple fronts, and what can we learn from the protean tradition that he, Alcibiades and Autolycus embody? Finally, what insights about technology did Jünger produce and how was he so prescient in his science fiction and allegorical writing?
Risk is discussed in short bursts at three different points in the book. The first time risk is mentioned is during an analysis of elections and resistance. In Jünger’s estimation, modernity transformed the ballot into a questionnaire. Totalitarian governments rely on the perception of high turnout and nearly unanimous victory, but perhaps more importantly, the implication of freedom signified by the two percent who vote against a dictator. Calling on independent thinkers to reject this false choice and make their dissatisfaction heard by means other than the ballot box, Jünger states, “The moment he decides to take the risk and abandon the realm of statistics, the senselessness of pursuits, which lie far from the origins, will become clear to him” (pg. 17). Our current obsession with quantifying, simulating and statisticalizing everything from mortgaged backed securities, to war games and daily average users runs contrary to this line of thought. Here, to risk means to gamble on some ineffable human quality of resilience, truth and individual freedom. Referring to his earlier writings on the Worker and the Unknown Soldier, representatives of labor (communism) and the military (fascism) respectively, Jünger coins a new figure, the Forest Rebel. This Forest Rebel employs art, philosophy and theology to forge a tenuous third path, between the Worker and the Unknown Soldier, “[resolving] to risk the experiment” (25).
The next time risk is discussed is during his expatiation on fear. Fear, Jünger claims is the animating force behind automatism, the phenomenon of restricting one’s own power of decision making in favor of the machine. This machine, whether a figurative institution or literal piece of technology, thrives off instilling fear, and “fear besets even those armed to the teeth — indeed, them above all” (30). Fear and danger are linked, and danger cannot be reduced without first addressing fear, but neither can fear be banished absolutely; it is part of the human condition. The acknowledgement of danger, Jünger believes, will dispel the thrall of fear. “... The probability of catastrophe diminishes in step with the individual’s victory over fear” (36). The antidote to fear is daring, and it is in these intimate moments of fear and daring that quantity becomes irrelevant. Call it the power of narrative, storytelling or constructivism, but the most powerful force against risk is creating your own reality, where the odds don’t matter.
The final mention of risk integrates the two previous themes of totalitarianism and fear through a discussion of property. Jünger is clearly not materialist (in the Marxist sense), and warns against redistribution of property, but neither does he attach too high a value to material (in the colloquial sense) property. He cautions against holding on to the trauma of being dispossessed, saying that it will lead to civil war and terrorism. This echos the theme of reciprocity and feedback loops we have discussed before. What is new is that Jünger has seen both the effects of expropriation by both fascism and communism, and he identifies that nation-states do not have a monopoly on terrorism. In fact, disaffected individuals will mimic the state’s tactical use of terror, if they identify too closely with what they view as their property. Therefore, it is not the possessions, as such, that are important, but that we possess them. This means having fewer possessions, and ideally those which are harder to expropriate, such as our words and knowledge, is crucial. Since the Forest Rebel must be daring and willing to make great sacrifices to protect their property, we can view risk as a choice, rather than an imposition. Echoing Goffman, we get the impression that only by encountering danger can one prove their character, and thus taking a calculated risk is a demonstration of the conquest of fear.
Jünger was no stranger to fear and danger, having been wounded seven times during WWI. Despite his many brushes with death, he remained cautious and his tendency for equivocating only increased as he aged. For a full biography and interview, see this video. He comes off as aloof, cold and perceptive. It is clear that he is a cunning survivor with a grim sense of humor. Humor, as it turns out is a key instrument of freedom according to “The Forest Passage.” As daring is the antidote to fear, humor is the antidote to propaganda. The fool can slip past the censor and does not offer support to the dictator by endorsing the perception of free speech. It is precisely Jünger’s rejection of authority, both on the left and the right that protected him, and although he was associated with an attempted coupé (for which the conspirators were executed), he stayed far enough away to survive. His comical detachment belied keen powers of observation, and, when coupled with the heroic aura he became impervious, even as a critic of the regime.
Being at once at the center of power and an outsider, he had an ideal vantage point from which to view technological history. His novels, “The Glass Bees” and “Eumeswil” presage nanotechnology, automation, holographs, historical information databases and omniscient surveillance. In Dan Geer’s now eight year old essay, “We Are All Intelligence Officers Now” he explains surveillance capitalism and the intelligence community:
It is said that the price of anything is the foregone alternative. The price of dependence is risk. The price of total dependence is total risk.
Geer’s relationship between risk and dependence, is reminiscent of Jünger’s danger and fear. To eliminate risk, we must begin with dependence, and it is only by addressing dependencies, that is, technology on which we rely, that we can address risk. Geer ends with a plea to allow individuals to opt out of data collection, ceding the decision to those in authority. The Forest Rebel offers and alternative means of resistance.
Jünger’s detached observation of power up close and his own personal experience with the mechanization of war provided him with insights, but not interest in the use of technology. In the same year “The Forest Passage” was published, Jünger experimented with LSD and in the video interview linked above, he states a preference for psychedelics over computers. Without getting too mystical, it is worth noting Jünger’s association of the Worker and technological automation with the Titans of ancient Greek mythology. In one of the more abstruse sections of “The Forest Passage” he make the analogy between modern, urbanized society and the Titantic. He acknowledges the mixed metaphor of the forest and a ship, but then goes on to say this is not as disjunctive as it appears, referencing the Homeric Hymn of Dionysus who grew vines to ensnare and cover the pirate ship on which he had been taken hostage.
In the hymn, all the pirates jump overboard, except the helmsman, who Dionysus takes mercy upon for holding firm aboard the ship. Jünger implies that the Forest Rebel, by submitting to the danger and vanquishing fear, can eliminate risk despite the odds. There is no getting off the ship of technology, there is only drawing on inner strength to resist the chaos aboard.
Risk Developments
Acquiring Identity
Cloud identity management (IDM) darling Okta announced a $6.5B acquisition of identity provider Auth0 two weeks ago, and I didn’t have a lot to say at the time. Public markets were not very happy about the deal, so the CEO of Okta went on TV to defend the acquisition. His reasoning is basically that Okta is focused on employee IDM and Auth0 is focused on customer IDM. All of their major competitors have customer identity and access management (CIAM), and Okta is now competing for more complex deals at multinational organizations. These customers may offer their own customer portals, applications and features, so it was necessary to have a better complete solution. Besides, the revenue multiple put on Auth0 was lower than the multiple markets give Okta. And plus, Auth0 was getting ready to go public and we all know that IPO’s get a pop.
Ok, so the logic is reasonable enough, but the valuation is still eye watering. In the near term, we will see whether Auth0 customers replace legacy IDM systems with Okta and whether Okta customers add on Auth0, if they don’t already have a CIAM solution. Ripping and replacing identity systems is extremely difficult, so the lock in is very good, and the recurring revenue of winning over even a fraction of Auth0’s customers may be worthwhile. The real question, in the long run, is whether the combined suite of cloud identity services can match the flexibility and utility of traditional on-premises systems that are already moving to the cloud.
SuperTokens, an identity startup, posted this comprehensive breakdown that made the front page on Hacker News. They cite the major incumbents as Okta, Auth0, Firebase (Google) and AWS Cognito, and while there aren’t many direct cloud competitors that have been as successful as Okta, that leaves out major players like Microsoft, Ping, ForgeRock, IBM, Sailpoint and other IDM platforms favored by enterprises. Younger companies without identity debt are likely to select solutions offered by their cloud providers such as AWS or Google, but the risk of leaving access open on various on-premises, legacy or third party systems is too great for the enterprise. As Okta continues to grow and mature from the nimble rebel it was just a few years ago, it will come to resemble the customers they aspire to capture. It will become the cloud IDM legacy provider, when SuperTokens, or some other startup, ushers in the next wave of identity, possibly as an API.
Back (to the) Office?
Banking is a relationship business, but it’s also a highly manual process business with large back offices. Throughout the pandemic, bank CEO’s have been some of the first to support getting back together in office space, but that probably means for deal teams and clients. Back office teams are mostly being moved to cheaper locals.
There is naturally some tension between the desire to foster new talent and to satisfy the new work from home lifestyle that middle management has become accustomed to. Coming back together is a risky move and as with any time corporations make risky moves, the consultants have been brought in.
Some employees may have backed themselves into a corner by moving away or buying homes. There may come a moment when they see how indispensable they really are. Many of the roles being relocated are the ones that have plenty of applicants, and the roles close to the center of power may not be full of Forest Rebels, but they are filled with protean types that affect an aura of invincibility.
Civil Cyber
The Whitehouse is taking steps to address the recent spate of hacks. The crux of the issue, intelligence agencies claim, is that Russia and China are using U.S. based infrastructure to avoid detection, since foriegn intelligence services do not have responsibility for monitoring domestic activity. More information sharing is not going to solve this problem.
The difficulty of addressing attacks by Russia and China, that emanate from inside the U.S. is that it threatens our civil society, just as terrorism attempts to undermine the moral high-ground. Terrorism, whether state or non-state sponsored, seeks to elicit a reaction to justify its actions and win political support. Likewise, hacks by China and Russia, that misuse U.S. infrastructure, seek not only to extract information, but to elicit a response from the state that will make the U.S. more like China and Russia.
On top of this, a new report claims that a quarter of all cyber threats spotted in the wild have never been seen before. While one should always view marketing claims with suspicion, it is one more data point in the, “are bugs sparse or dense?” debate. What these two stories combine to mean is that the U.S. needs to think about more than just cybersecurity, but property in general. Short of a technological solution, such as a panopticon that respects privacy, free societies are going to have to make some hard tradeoffs.
Hyper-Space
Lockheed Martin won two big missile deals this past week. First is the U.S. Airforce’s hyper-sonic space missile program for $1.5B. Second is for joint U.S. and U.K. Navies’ submarine-launched missile manufacturing. I don’t have a lot to say about either of these except that, wow missiles are expensive, and if hyper-sonic space missiles aren’t Titanic, I don’t know what is.
Intangible Insurance
While Aon and WTW continue to encounter impediments to their proposed merger, the other biggest global insurance brokerage, Marsh, is doing some rebranding after an infusion of cash from Warren Buffett. With a war chest and a streamlined logo, they’re getting ready to play David to the coming Goliath.
One interesting take on what is an otherwise blah corporate rebranding is that Marsh has a deeper perspective on intangibles than many businesses. As a the value of intangible assets has risen from just 17% in 1975 to 90% today the insurance business has taken note, offering cyber insurance, directors and officers insurance, reputation insurance and M&A transaction insurance. In fact, Berkshire’s insurance arm just hired away a top AIG specialty insurance professional.
Marsh knows this as well as anyone, and indicates such in their transactions insurance 2020 report. While insurance continues to face difficulties with global warming, the pandemic and low interest rates, the M&A boom has at least been one bright spot. Even when acquisitions cool down, as all M&A cycles surely do, insurance will have plenty of other intangibles to insure, that is, if they aren’t too busy with their own acquisition problems.
Gratitude
Big thanks to Pablo Pineche for sharing the syllabus from Peter Thiel’s seminar, “Stagnation or Progress.” The syllabus, which includes many fantastic books, culminates by assigning “The Forest Passage.”