Purpose of Counter-Terrorism

Cost-benefit analysis of counter-terrorism, based on some notional estimate of lives saved, is problematic for three reasons.

Firstly, any estimate of lives saved is completely arbitrary. There doesn't seem to be any reliable method for predicting the number of lives lost to terrorism under any given starting conditions.

Secondly, even with implausibly large estimates, the numbers simply don't add up. The amounts spent on frustrating the intentions of terrorists are far greater (per notional life saved) than the amounts spent on other live-saving measures. (Thousands of people die in road accidents every year, and we don't see governments spending similar amounts on road safety.)

Thirdly, most of the money spent on counter-terrorism protects specific targets against specific tactics. So if the terrorists are smart enough to switch tactics or find alternative targets, the investment in counter-terrorism is largely wasted.

In order to justify spending more (proportionately) on counter-terrorism than on road safety or public health, you have to argue that there is a qualitative difference between terrorism and other causes of death.

Note also that the cost of counter-terrorism is not just borne by governments and other organizations (buying scanning equipment for airports, employing people to operate the equipment) but also by ordinary people. Bruce Schneier points out that 760 million US passengers wasting 30 minutes per trip in security checks amounts to 43,000 person-years, equivalent to 620 lives wasted annually. (But we shouldn't take this too seriously, he avers. "This kind of thing is why most ROI models you get from security vendors are nonsense".) (Click here for more of Bruce's posts on cost-benefit analysis and security.)

Cost-benefit analysis may be a good idea (presumably better than scattering money at random) but is clearly not the whole story.

Some say that the purpose of terrorism is not (just) to kill people, but to disrupt the political process. In which case the purpose of counter-terrorism is not (just) to protect lives but to protect the political process. So that must be what the politicians are spending our money on.

After Hurricane Katrina, Richard Posner of the Chicago Law School suggested that the rebuilding (or not) of New Orleans should consider the potential vulnerability of the rebuilt city to specific terrorist attacks. Now this kind of argument is interesting for two reasons.

Firstly, it greatly extends the scope of the cost-benefit analysis - we might find ourselves spending much more on the rebuilding, or rebuilding elsewhere, purely to avoid the terrorism risk.

Secondly because it suggests that major political decisions (rebuilding New Orleans) are influenced by the possibility of terrorism. To what extent does this represent a rational response to a real threat, and to what extent does it imply a society driven by fear? Shall we completely abandon large cities and mass transportation? Shall we organize ourselves into small communities, not worth attacking? Have we therefore failed after all to protect the political process from terrorism?