TerrorismAs an economist I have a particularly dim view of terrorism. It simply isn’t pareto efficient. The terrorist gains publicity and an awareness of their”Cause”, but at the cost of destruction to invariably innocent bystanders, who typically have no interest in this Cause. The interest thus sparked, instead of becoming powerful and persuasive in support of this cause, is likely to provoke a backlash, resulting in a worse outcome for the terrorist than had he done nothing. When nothing is better than something, you know you are onto a loser…

There is, of course, the action that defies containment: by continuously and repeatedly engaging in terrorist acts, the terrorist forces the target to succumb to his will and adjust policy accordingly. By its nature though, terrorism is usually ill focused and so the recipients of this terror are themselves disperse (this is a “good outcome” – carnage is equalised across random members of the public. It is of course, only good in a relative way…)

Okay – enough economics…so we resort to diplomacy instead. Is this a useful decision? Is it possible to negotiate with groups for whom your very value system may be subject to distrust and contempt? To negotiate with groups for whom your idea of resolution bares an extraordinarily small resemblance to theirs…? Pursue a resolution when actually their aim may include never ending attacks…

Military outcomes: now we’re talking. Let’s bomb the hell out of them! See how resilient they are after a little justice comes their way…Justice for our fallen; justice for our lost, as we avenge our anguish. Yes, this may bring some respite, even a pause in hostilities, but seldom has history shown this as the way forwards in dealing with terrorism. For every terrorist slain, several more are usually willing to step forwards.

Politics: is this all we have? is this good enough? How do we persuade ourselves that this is where we should start from – rather than return to, after a decade of insurmountable loss? A decade of conflict, an era of asymmetric war..? Nothing is ideal, nothing – all we can aim to do is make our engagement with the process as “efficient” as possible. This is what Pareto would have likely advocated…


Author: Damian Merciar

Damian Merciar is Managing Director of Merciar Business Consulting, http://www.merciar.com, a niche business economics consultancy founded in 1998. He has over twenty years experience in the areas of commercial Business Strategy. He is experienced in the transition environments of nationalized to private sector state utilities and the senior practice of commercial management, advisorial consultancy, and implementation. He has carried out policy advisory work for government ministries and been an adviser to institutional bodies proposing changes to government. He holds an MSc Economics from the University of Surrey’s leading Economics department and an MBA from the University of Kent. Also attending the leading University in the Middle East, studying International Relations and Language, for which he won a competitive international scholarship, and has a BA (Hons) in Economic History and Political Economy from the University of Portsmouth. He is currently based in London.

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