Around 3000 Americans have died in terrorist attacks in the last three years, most on September 11 2001.
Despite this, the risks of dying in a terrorist attack are remarkably low compared to dying in a car accident, or a domestic homicide -- equally grisly, painful, senseless ways of dying.
No matter who wins the presidential election, the American public will demand that they waste billions of dollars reducing the risk of dying in a terrorist attack even lower than it already is. Why? And is it really such a waste?
Why? Because not all deaths are created equal; and individually (and as a society) we will value lives saved (or deaths averted) at different amounts depending on how those deaths occurred.
Firstly, people will pay to reduce the uncertainty surrounding death, and terrorism really does raise the uncertainty about when and how people might die.
On a cost-benefit basis we might extend the quality and quantity of people's lives more cheaply by ploughing billions of the military budget into medical research, but it's not altogether clear that extending the lives of 85 year olds is worth more than reducing the chance that younger people will die in terrorist attacks.
That is, the 85 year olds have had a "fair innings", and terrorist attacks may disproportionately target the young.
Moreover, the 85 year olds who expire in their sleep, and the car accident victims die more or less alone, whereas terrorism of the kind that threatens the United States seems likely to kill hundreds or thousands in concentrated events.
The people who are threatened by terrorist attacks are somewhat more identifiable ex ante than people who will die in car accidents or homicides. The risks are higher in certain places (like New York and Washington), creating a powerful incentive for political action amongst the potentially affected. Car accidents distributed at random across the countryside can't create political alliances.
Finally, the problem of guarding against the risks of terrorism is a true collective action problem, with the risks not easily quantifiable and highly concentrated losses when events do occur, meaning that private responses to the problem are likely to be ineffective.
Of course, the foregoing abstracts away all the political issues that motivate the threat, but that is the point -- even absent the political/religious dimensions of the current terrorism there would be powerful political forces demanding a government solution to the problem.
Add politics, religion, money and oil, and stir ...
Posted by robe0419 at June 28, 2004 11:26 PM