For all its acts of barbarism and its medieval ideology, the Islamic State (also known as ISIL or DAESH) is a solid organization that has capitalized on the region's commodities. ISIS is a well-run, modern organization with rational actors at its core. Its structure is akin to that of a corporation, with guiding principles, sophisticated marketing and fundraising techniques, a supply chain, global communications, and even an annual report to stakeholders.

The Islamic State's complexity and efficiency makes sense when considering the costs of ruling ten million people. When the group invaded Syria and northern Iraq in 2014, it also took on the responsibility of managing schools, hospitals, welfare, infrastructure -- and the entire economy. They also needed to mobilize a large workforce of both skilled and unskilled laborers (or fighters, however you want to call it) to run its operation. Put simply, the organization is driven by two forces: ideology and money.

Therefore, the Pentagon and other security agencies face a monstrosity that is well-financed, complex, and efficient as it is dangerous, destabilizing, and evil.

The Money Trail

The roots of the organization extend to 2004, when it was known as the “Islamic State of Iraq.” By then, it had already embarked on fundraising by smuggling oil in Northern Iraq. In 2006, they had already collected more than $2 billion. And over the next 10 years, as the Islamic State of Iraq continued to extort businesses and invade territory, they have become to be the highly sophisticated Islamic State of Iraq and the Levant we know today,

The anatomy of the organization is similar to that of most governments and large organizations. There is an executive branch, run by Abu al-Baghdadi and his cabinets. Followed by two deputy leaders: one in Iraq and one in Syria, who preside over the governors of both countries. They in turn govern their administrative staffers who consist of financial managers, legal consultants, an operations council, and social media staffers.

Contrary to common perception, ISIS collects most of its revenue internally rather than from donors. In other words, the organization relies heavily on the products they sell or the taxes they collect from within their territory, namely in the form of taxation, extortion (stealing from banks and businesses), and sales to the black market.

ISIS has established an elaborate and efficient system of taxation, and have been able to squeeze as much as $900 million annually from the people they rule. They tax everything from livestock to bank withdrawals and follow rigid record keeping standards. For example, the group offers discounts on tariffs for merchants trading across the region even issuing receipts to truck drivers. In other words, certain members of the Islamic State are more like IRS officials than looters.

Then there’s oil, their biggest source of wealth. Last year alone, the group raised an estimated $600 million from the sale of oil, which is typically sold to local buyers at tremendous discounts. Arguably, their effectiveness in capitalizing on oil and the niche market is the largest contributes to their capacity.

In 2015, through sales of antiquities, kidnapping ransoms, remittances, and from small donations abroad (which plays a negligible role in financing ISIS), they have amassed over $2 billion.

So where does the money go? Perhaps towards attacking infidels and preparing for the apocalypse?

Well, not really. While ISIS pays large sums towards weaponry and towards planning for attacks, an organization of that magnitude also has considerable operational and administrative expenses. It pays a salary and provides benefits to its employees (in the form of bonuses to fighters with families and to high performing members). They also pay rent to some of its members, cover their medical expenses in certain instances, and have even hired lawyers to get captured members out of jail.

How to Defeat ISIS: Follow The Money

Military responses from air strikes to sending boots on the ground to Syria and Iraq seem be the be-all and end-all to conquering ISIS. While they may sound convincing on paper, counterinsurgency and military action will create negative unintended consequences in the long-run. Remember, this sort of strategy is what facilitated ISIS' growth in the first place.

To that end, the first step is for security agencies to change their perception. ISIS is not a terrorist group full of disenfranchised Sunnis. Instead, they are a multinational organization full of rational decision makers maximizing the effectiveness of their value proposition (i.e., establishing a caliphate).

Thus the best strategy -- among all alternatives -- is to contain and to sit back. In other words, ensure that they don’t expand into new territories and allow ISIS to fall under its own vulnerabilities. First, the organization is struggling with oil sales as the falling price of the commodity is putting pressure on the revenue stream. Second, in an environment where entrepreneurship is suppressed, the Islamic State could only tax so much until people's incomes dry up.

Third, and most importantly, the organization will fall under its own lack of an educated workforce. In an economy full of clerics and fighters but not engineers or economists (apologies for my bias), there will be no one to extract oil or provide for essential medical services. And overtime, the organization will lose capital and the population living under ISIS will start to question their authority.

That’s not to say that economic forces will be fully responsible for the fall of ISIS. It will also take a coalition of American, Kurdish, Russian, and Gulf fighters to contain their expansion and re-establish the legitimacy of the Iraqi and Syrian governments. But

the coalition must be prudent and willing to co-operate despite current tensions among them.

Else, the the Islamic State will sprout and multiply like a cancer: sophisticated and impossible to manage. In the face of such evil, I don't think the invisible hand will be enough.