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Thursday 24 Aug 2017 | 09:50 | SYDNEY

The costs of overreacting to terrorism

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7 January 2011 14:54

Rodger Shanahan's post on 'econo-terrorism' focuses mainly on the more literal definition of that term — al Qaeda's attempts to damage its enemies economically by striking targets such as oil infrastructure. But Rodger also notes a more indirect form of econo-terrorism, one designed not so much to disrupt economic activity itself, but to force the West into expensive countermeasures.

By that standard, almost every terrorist episode meets the definition of econo-terrorism, since each new attack seems to provoke renewed efforts to strengthen security (even if the attack fails — this guy is why you now need to take your shoes off at airport security, and this is why you can't take liquids onboard).

Needless to say, this is extremely costly, not only in the direct sense of paying for more security guards, cameras, scanners, etc. But also in the myriad ways it slows down our economies. Then there's the opportunity cost: what productive use could have been found for the resources now used on security' It's worth quoting American scholar John Mueller at length here, noting that this paper was written in 2005, meaning the spending figures he cites would be still more jaw-dropping today:

The direct economic losses of 9/11 amounted to tens of billions of dollars, but the economic costs in the United States of the much enhanced security runs several times that. The yearly budget for the Office of Homeland Security, for example, is approaching US$50 billion per year while state and local governments spend additional billions. The costs to the tourism and airline industry have also been monumental: indeed, three years after September 2001, domestic airline flights in the United States were still 7 percent below their pre-9/11 levels, and one estimate suggests that the economy lost 1.6 million jobs in 2001 alone, mostly in the tourism industry. The United States now spends fully US$4 billion a year on airline passenger screenings alone. Moreover, safety measures carry additional consequences: economist Roger Congleton calculates that strictures effectively requiring people to spend an additional half-hour in airports cost the American economy US$15 billion per year while, in comparison, total airline profits in the 1990s never exceeded US$5.5 billion per year. The reaction to the anthrax attacks will cost the United States Post Office alone some five billion dollars--that is, one billion for every fatality inflicted by the terrorist. Various 9/11-induced restrictions on visas have constricted visits and residencies of scientists, engineers, and businesspeople so vital to the American economy, restrictions that, some predict, will dampen economic growth in a few years.

The reaction to 9/11 has even claimed more--far more--human lives than were lost in the terrorist attacks. Out of fear, many people canceled airline trips and consequently traveled more by automobile than by airline after the event, and one study has concluded that over 1000 people died in automobile accidents in 2001 alone between September 11 and December 31 because of this. If a small percentage of the 100,000-plus road deaths subsequent to 2001 occurred to people who were driving because they feared to fly, the number of Americans who have perished in overreaction to 9/11 in automobile accidents alone could well surpass the number who were killed by the terrorists on that terrible day. Moreover, the reaction to 9/11 included two wars that are yet ongoing--one in Afghanistan, the other in Iraq--neither of which would have been politically possible without 9/11. The number of Americans--civilian and military--who have died thus far in those ventures probably comes close to the number killed on September 11. Moreover, the best estimates are that the war in Iraq resulted in the deaths of 100,000 Iraqis during its first 18 months alone. This could represent more fatalities than were inflicted by all terrorism, domestic and international, over the last century.

In addition, there have been great opportunity costs: the enormous sums of money being spent to deal with this threat have in part been diverted from other, possibly more worthy, endeavors. Some of the money doubtless would have been spent on similar ventures under earlier budgets, and much of it likely has wider benefits than simply securing the country against a rather limited threat. But much of it, as well, has very likely been pulled away from programs that do much good. Thus, in an exercise in what one analyst has called "security theater," the American government after 2001 spent extravagantly and wastefully on a perishable anthrax vaccine while letting itself become undersupplied with influenza vaccine. And the country's obsessive focus on terrorism after 9/11 resulted in severe funding distortions: almost 75 percent of the appropriations for first responders went for terrorism rather than for natural disasters, and US$2 billion was made available in grants to improve preparedness for terrorism but only US$180 million for natural disasters.

As Clark Chapman and Alan Harris put it, "our nation's priorities remain radically torqued toward homeland defense and fighting terrorism at the expense of objectively greater societal needs." Or, in the words of risk analyst David Banks, "If terrorists force us to redirect resources away from sensible programs and future growth, in order to pursue unachievable but politically popular levels of domestic security, then they have won an important victory that mortgages our future.

Photo by Flickr user plugimi.

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