Posted by: Dr Churchill | September 20, 2016

Economics of Islamic Terrorism

The estimated number of deaths from terrorism worldwide rose from 3,329 in 2000 to more than 9,798 in 2001, the year of 9/11, to 32,685 in 2014, and all the way to 89,500 (estimate) in 2016. Clearly a rather steep increase in human carnage in such a short period of time.

The direct Economic Impact of 9/11 on Wall Street equities alone, was upward of $ 3 Trillion US dollars. Compounded with the Economic Impact of the 9/11 worldwide and resultant actions — we have more than $ 23 Trillion in total lost equity worldwide from that one horrid day.

If we were to add the impact of Terrorism worldwide in Economic Loss over the last fifteen years — we could easily surpass the total of the World’s annual GDP of the year 2015. that is stunning.

Surely the 3 thousand people killed in 9/11 on the world trade centre cannot be brought back by any measure of cost but the fact that now Americans can sue Saudi Arabia for damages (the financier of the Terrorists and the country that supplied these bombers) is a small measure of relief. Fifteen years too late, but the wheels of Justice work slowly in the extreme.

And the cost of this Terror Act and so many others will have to be estimated now in actions brought before the US courts. Yet since the fifteenth anniversary of 9/11 passed with a great deal of hand-wringing over all the people who want to kill Americans for their own religious grievances — we are especially worried in the apparent rise of terrorists whose origins seem far from fanatical, but certainly religious and ideological in a cold calculated and almost scientific way.

These terrorists are not the usually desperate, poor, or uneducated people from the Middle East. A surprisingly large share of them have college and even graduate degrees. Increasingly, they seem to be from Britain, like the shoe bomber Richard C. Reid and most of the suspects in the London Underground bombings and the liquid explosives plot, in the United Kingdom, and in the United States, were children of hard working yet religious parents who immigrated from the lands of the recent conflicts — places like Afghanistan, Iraq, Syria etc.

And we also have found that the Economic support mechanisms of the Terrorist Networks, almost always involve some so called Islamic charitable organisations, that are invariably masquerading as Mosques, Meddreses, and Poverty Alleviation Charities for Muslims, and are spread widely cross the United States, Great Britain and the Western European countries. And some of them have direct and open ties to the Wahabbi extremists who are the dominant religion of Saudi Arabia, and even some others are part of the opaque networks of the Secret Saudi Intelligence networks, or the State Intelligence Network of Pakistan, Iran, and Turkey.

This is what we have to address: The Economic inflow and outflow of Islamic Terrorism, and the sophisticated economic networks that facilitate the recruitment of capable and educated people to execute their Acts of Evil in order to spread fear in our Communities.

This is the most important issue facing the World today and the next President of the United States will have to deal with it headlong. With daily occurrence of Islamic Terrorism in these United States, through bombings, mass shoutings, and has killings — this has become the issue of the day for the people of this country and rightly so.

We just have to look at the facts unflinchingly and then engage with the people to bring about a consensus for Action. The talk about going to war against Islamic Terrorism worldwide is heady and rousing, but the reality is that we should first wage an Economic War against the Islamic sponsors of Islamic Terrorism and then go after their economically asphyxiated Terror Networks, cells, and fanatical community that spawns them.

This is the only way that we can win…

Because the serpent of Islamic Terrorism has laid it’s eggs deep within our own advanced and secular Societies and has caused deep Terror inside our own western communities, and that one issue has left the public pondering this question: “Why are some educated people from Western countries so prone to fanaticism?”

Before trying to answer that question, though, some economists argue that we need to think about what makes a successful terrorist and they warn against extrapolating from the terrorists we catch. It is a problem economists typically refer to as “selection bias.”

In their new study, “Attack Assignments in Terror Organizations and the Productivity of Suicide Bombers,” two economists, Efraim Benmelech of Harvard University and Claude Berrebi of the RAND Corporation, set out to analyze the productivity of terrorists in the same way they might analyze the auto industry. …

They gathered data on Palestinian suicide bombers in Israel from 2000 to 2005 and found that for terrorists, just like for regular workers, experience and education improve productivity. Suicide bombers who are older — in their late 20’s and early 30’s — and better educated are less likely to be caught on their missions and are more likely to kill large numbers of people at bigger, more difficult targets… Experience and education also affect the chances of being caught. Every additional year of age reduces the chance by 12 percent. Having more than a high school education cuts the chance by more than half. …

The research suggests … that there may be a reason that the average age of the 9/11 hijackers … was close to 26 and that the supposed leader, Mohammed Atta, was 33 with a graduate degree. As Professor Benmelech put it in an interview: “It’s clear that there are some terrorist missions that require a certain level of skill to accomplish. The older terrorists with better educations seem to be less likely to fail them. Perhaps it is not surprising, then, that terrorist organizers assign them to these more difficult missions.”

Among Palestinian suicide bombers, the older and better-educated bombers are assigned to targets in bigger cities where they can potentially kill greater numbers of people. That same idea means that the terrorists assigned to attack the United States are probably different from the typical terrorist. They will be drawn from people whose skills make them better at evading security.

We know relatively little about why the suspects arrested in the recent liquid explosives plot failed… Perhaps … poor educations made it easier to uncover their plan. We do know, however, that they included a large number of South Asians raised in Britain. It’s only natural that terror groups would recruit native English speakers… It does not imply that the Muslim community is a more fertile ground for terrorists in the United States, Britain, and Western Europe, than in other countries.

Think of the extreme case. One of the people arrested in the liquid explosives plot … was a woman with a baby. London newspapers have speculated that she was planning to carry her baby onto a plane with liquid explosives in his bottle. Even if true, that does not mean we should all start suspecting that women with babies are closet terrorists. That would be rather egregious selection bias. Objectively, we should be much more suspicious of other people. We see only the mother because the terrorists have an overwhelming incentive to find the one unusual terrorist who will outsmart our defenses.

And sadly, it seems that educated and intelligent terrorists are better at doing that than uneducated, fundamentalist lunatics. Oh, that it weren’t so. Like the old advertisement said, a mind is a terrible thing to waste.

Here’s another example of selection bias that might help to clarify. Suppose there two sets of people, one living in city A and the other living in city Z, and you need to recruit a group of tall people to help you in a criminal venture involving impersonating basketball teams. Suppose further that the number people, the distribution of heights, and the willingness to commit crimes is identical in each city.

Now suppose you know your way around city A much better than city Z, and it’s closer, so it’s cheaper and safer to recruit in city A than in city Z. Then your group, once formed, will only have people from city A in it but they are no more likely to be tall and criminal than people in city Z (to make it like the example above, there could be several teams formed from the group of recruits and each team would be formed and assigned to a location based upon the age and education of team members). Thus, if and when the authorities catch people from your group and discover they are all tall and all from city A (and they are likely to be young and uneducated due to the assignment), it would be wrong to then conclude that young, tall, uneducated people in city A are more inclined toward crime than young, tall, uneducated people people in city Z.

But let’s start with recovering a small measure of the damages wrought by the Islamic Terrorism through the newly opened window of the Justice System of the United states of America.



Recent research on the relationship between indices of underdevelopment and
terrorist activity underscores the difficulty in making such links. Alan Krueger and Jitka Maleckova examined available evidence on the links between poverty and education, on the one hand, and the incidence of terrorist activities on the other, and found “little direct connection between poverty or education and participation in terrorism.”

They explored data on the education and income levels of those engaged in terrorist activities, opinion polls on attitudes toward terrorism, and data on income and poverty levels in the West Bank and Gaza Strip as well as among members of Hezbollah and the Jewish Underground—that is, in populations where terrorism has grown and where organisations have practiced terrorism.

Their findings indicate that terrorism seems unrelated to economic deprivation. Indeed, Krueger and Maleckova cite evidence that participants in terrorist organizations and terrorist activities seem to possess higher education and
income status than the bulk of the populations from which they are drawn.

This, of course, was true for the terrorists who carried out the 9/11 attacks on the U. S. Indeed, Muhammad Atta, widely thought to be the leader of the 9/11 attackers, was the son of a lawyer and attended graduate school in Germany.20 Based on the evidence they evaluate, Krueger and Maleckova conclude that the absence of civil liberties, rather than economic deprivation, and the quality and content of education, rather than one’s level of educational achievement, appear more important as determinants of terrorist activity.

At the same time, it needs to be recognized that those who are accepted into
terrorist organizations and are selected for operational activities are drawn from a large pool of volunteers who tend to be from the poorest segments of their societies, a point Krueger and Maleckova recognize but apparently feel is outweighed by additional evidence. Those selected for missions are likely to be those thought to be not only the most committed, but also the most capable of handling the complexities and difficulties that might arise on an operation, and therefore have higher education and technical skills than most members.

It should not be surprising that quantitative measures of economic causation
would be weak predictors of terrorist membership and activity since it is clear, as
mentioned above, that economic deprivation does not always lead to terrorism. The
broader point is that economics is not just about discovering whether specific economic variables can be identified as the sources of studied outcomes. It is primarily about how the inter-relation between incentives and constraints shapes behavior and objectives.

In Conclusion:
Research on groups that use violence suggest a number of avenues where economic considerations of this type may be important.


Dr Pano Kroko Churchill


The Churchill Society has a Meeting to discuss this subject on October 21st in Seattle and you are welcome to participate fully.

Please RSVP right here:

Economics of Islamic Terrorism

Friday, Oct 21, 2016, 4:00 PM

Smart Building Center, Pacific Tower
1200 12th Ave. S Seattle, WA

22 Churchillians Attending

The estimated number of deaths from terrorism worldwide rose from 3,329 in 2000 to more than 9,798 in 2001, the year of 9/11, to 32,685 in 2014, and to 89,500 (estimate) in 2016.Clearly a rather steep increase in human carnage in such a short period of time.The direct Economic Impact of 9/11 on Wall Street equities alone, was upward of $ 3 Trilli…

Check out this Meetup →

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