Check out his new book on Taliban, Afghanistan and Pakistan's role in creating Taliban. It's by Ahmed Rashid

Taliban: Islam, oil and the new great game in Central Asia by Ahmed Rashid (JB Tauris, £12.95)

This is really two books in one, as the title indicates. In the original Great Game, in which Afghanistan was the fulcrum, Russia and Britain sought to out-smart each other in Central Asia. In the new game, the big powers are competing to control the oil and gas round the Caspian, with Afghanistan again the fulcrum. Thanks to Ahmed Rashid's analysis of the manoeuvrings of companies and governments, oil executives now have an up-to-date bible, and those interested in the new Turkic republics can get a sense of where these mysterious entities may be heading.

But Rashid's first "book" – the result of much dangerous research – deals with that mystery to which everyone currently wants a key. Whence and whither the Taliban, and who are they anyway? He begins with the obligatory piece of sado-porn – an execution in Kandahar's brand-new football stadium, watched by its embarrassed UN builders – but quickly steers us into fascinating waters. Forget comparisons with the Khmer Rouge (though they do have things in common) and with the Armed Islamic Group in Algeria (though the GIA, too, were spawned by the 1980s Afghan war). The Taliban are terrible, pathetic and eccentric, as only the most brutalised orphans can be.

As Rashid points out, the Taliban leadership is the most disabled in the world, with missing legs, eyes or fingers virtually the norm. Mullah Mohammed Omar, the Robin Hood-style figure who heads them, is as elusive as his protιgι Osama bin Laden. He has never been photographed, holds court sitting on a bed, and disburses wads of notes to commanders and plaintiffs from the two tin trunks that constitute his treasury. And he's ruthless: after the Mazar massacre he complained he had authorised only two hours of killing, not two days.

Most of the young men in Omar's army grew up in Pakistani refugee camps and acquired their skills from mujahedin fighters. As Rashid points out, they grew up with the vision of an idealised Islamic society as defined by the prophet 14 centuries ago; they knew nothing of their own country's history or clan structures. Locked into male brotherhood, they had never known the company of women.

Driven by an urge to cleanse their country's corrupted public life, they derived their take on religion from a branch of Sunni Islam called Deoband, which arose in British India as a movement to unite Muslim society. But their version is woefully debased: no historical perspective, no vision of the future – just the endless promulgation of lunatic laws.

Having no apparent interest in health, education and utilities, they leave such matters to the international aid agencies. They seem quite unbothered that their erasure of women from public life has also erased the bulk of the teaching and nursing forces and driven aid agencies staffed by women out of the country. The consequences are predictable: a Unicef survey in Kabul found that two in three children did not trust adults, had seen people blown to bits and did not themselves expect to survive.

Herat, once the city of poets and astronomers, is now the most heavily mined in the world. The Taliban's one improvement to their infrastructure – a better road system – seems designed to facilitate the only two industries now thriving: smuggling and drug running, from which they make their millions. As Rashid shows, Afghanistan's economic black hole – coupled with massive heroin exports – represents a greater international threat than its export of the Taliban-style extremism now, for example, taking root in Pakistan.

Rashid rightly places much of the blame on America for this unmitigated disaster: financing the mujahedin, then turning a blind eye to Taliban reality. He reminds us, shockingly, that until 1992 religious pluralism was the norm in much of Afghanistan. What can be done? Impose an arms embargo and demilitarise Kabul, he suggests forlornly – and hope that the Taliban splits, with a more moderate wing taking control. While the civil war goes on, that looks highly unlikely.