One of the most frustrating features of modern jihadist insurgencies is their ability to endure and resurge, even after seeming defeats. What explains this jihadist resilience? In this paper, I present a new “boom–bust” economic theory for why jihadist groups can withstand serious losses, survive periods of decline, and then reclaim power. Using new evidence from Somalia, I demonstrate that jihadists learn how to adapt to fluctuations in their degree of territorial control, so that they can survive—and even thrive—during periods of decline. During a “boom” period, when jihadists enjoy a monopoly on force, they tax and govern as a proto-state. However, during a “bust,” when they are pushed out of power, jihadists shift their efforts to illicit business activities and insurgent warfare. When pressure abates, they again shift back to taxing and governing as a proto-state. This cyclical and long-term approach to order-making allows jihadists to adapt to changing battlefield conditions and survive serious setbacks. Jihadists establish their proto-states to varying degrees, governing in pockets and coves wherever and whenever the opportunities present themselves. They are as orderly as they can afford to be.