The spate of `Islamist’ violence recently perpetrated by individual people is a puzzle for mainstream economics. In the world of rational agents intent on maximizing their wealth, the destruction of human or material resources is only sensible when that destruction provides a direct competitive advantage. Why then would Homo Economicus walk into an office, market, or cafe, and start destroying the productive resources belonging to economic entities that are not in economic competition with him? Because this behaviour just doesn’t square with mainstream economic models, economists have not taken it upon themselves to explain it.
Yet there are direct economic effects of this destructive behaviour (e.g., loss of valuable human capital, inventories, and so on), and also the effects created by a loss of security: economic activity in the affected regions may temporarily wane or at least shift in terms of industry mix (more personal bodyguards, less tourism to national icons). Drawing a box around public destruction of this sort and saying `economists don’t get this!’ will only limit the ability of economics to accomplish its core mission of helping societies move to their highest-welfare frontier. The more human behaviour we claim flummoxes us, the more we are at the mercy of our models being trumped by `exogenous shocks’ – the economists’ version of the doctor’s `idiopathic condition’ (`I don’t know what’s wrong with you, but clearly it’s something!’).
What then is happening? The people who have engaged in this violence are not stealing resources or killing competitors. They seem motivated by a desire to protect something very different than their personal livelihood. `Defending the Prophet’, `punishing <entity X> for its insults against <entity Y>’, and similar abstract ideas are typically claimed as at least proximate motivations, despite the fact that the extremism of the destruction wrought is of the sort typically observed in developed societies only in situations where one’s own personal safety is in grave danger and there is no recourse but to violence.
The first step in understanding this is to understand that in the mind of the perpetrator, he IS the abstraction. Let’s take the motivation of `defending the Prophet’ as an example. A person claims that he engages in the destruction of human and material resources in order to defend the honour of someone who is long-dead and thus certainly not in a position to repay the favour, even if we accept the premise that the entity for whom the act is committed would perceive it as a favour. The perpetrator of violence is devoted strongly enough to whatever it is that this long-dead entity represents in his mind (e.g., `the honour of Islam’) that he will kill someone whom he has perceived to have insulted the entity. He is what we would call `loyal’ to this entity – just as a soldier in a national army is motivated to kill on the battlefield because of his loyalty to the abstract concept of `his country’ and everything that his country stands for in his mind. In his mind, his self includes the entity: hence, a threat to the entity is a threat to the self.
Now, plenty of us regular Joes living in today’s peaceful nation states hold entities in our minds with which we similarly identify, and to which we are similarly devoted. For me, what my children represent in my mind best fits this description. If someone came to my house and posed a clear and present danger to the physical welfare of my children, then I would certainly fight him and if necessary kill him. But if someone drew a cartoon making fun of my children, said very rude things about them to their faces, or even publicly humiliated them, then would I quietly obtain an assault rifle and put a bullet in him? No. And why not? For two reasons.
First, no one in a position of power over me would condone or encourage such an act. It would be considered by all groups to which I belong to be shameful, weak, and altogether unacceptable. If I murdered someone in cold blood, I would lose my professional status, my networks, and my personal friends: I would become a pariah. It would just be super-dumb from the perspective of my own personal advancement.
Second, my identification with and hence devotion to other abstractions is more powerful in my mind than my devotion to protecting my children from humiliation. Those other abstractions—things like peace, tolerance, love, and understanding—would be directly insulted by murder. As a result, by murdering someone in retaliation for ridiculing something I hold precious, I would lose respect for myself. Balancing my devotion to protecting my children from humiliation against my devotion to these abstractions, there is simply no contest. Any child of mine, I would tell myself, should be strong enough to withstand, learn from, and ultimately prove wrong any insults or other rude behaviour. I would of course comfort and staunchly support an insulted child, but taking lives because of a non-violent insult? It would simply never cross my mind.
I venture that the previous few paragraphs resonate with most readers who have been raised in the developed world by peaceful, reasonably well-off parents and who are lucky enough today to enjoy status and friendships that they value. How is the internal world of the terrorist different?
First, he is encouraged in his destructive act by others who lead him to believe that his own status will rise when he commits the act. This means he sees the act as a way to advance himself personally. Unlike me, he either does not have, or does not value as highly as I do, personal respect from peace-loving groups. Hence he does not internally perceive that he has (as much of) this respect to lose.
Second, the other abstractions with which I strongly identify, and which pull my behaviour away from violence, are not ones with which he identifies as strongly. The perpetrator’s devotion to `the honour of The Prophet’ and what this represents in his mind is simply stronger than his devotion to `peace’ or `tolerance’. The natural explanation for this is that he was not conditioned in the way most people in the developed world are as children. While in my childhood I was told repeatedly by parents, teachers, and other figures of authority that killing people was unconditionally wrong, he may have somehow escaped that strong conditioning and built his identity at least partly using the building blocks of other abstractions, such as honour or domination, for example. Alternatively, he may have grown up with a weak sense of self, not being encouraged to identify with powerful peaceful abstractions, making him the easy prey when a young adult of any group that understands how conditioning works. This could be seen as a failure of parenting, and/or a failure of the state in which he was raised to infuse his education with the peaceful values that are conducive to economic prosperity. Events like the march yesterday in Paris, however, are prime evidence of the depth of identification with peaceful values that is present in the hearts of people in modern developed countries – and hence of the broad success of modern conditioning efforts.
The internal world of the terrorist, like the internal world of most of us, is hence driven by his identification with abstractions. This world is built through socially-mediated encouragement towards that identification. Our remarkable ability to abstract, and then to identify with the abstractions we conjure such that they expand our sense of who we are and strongly influence our behavior, is something uniquely human. We owe to it the wild success of our nation states, and even the basic ability to imagine and plan for our future economic activities, so it is fundamental to the workings of our modern economies. It is also a trait that enables the de-railing of people who escape modern conditioning systems and can subsequently become instruments of terror.
Some argue that even if one of these `Islamist terrorists’ had been under the influence of violence-promoting entities for some time, he should `wake up’ and censor himself once he realizes what he is being asked to do. As we know from the stories of Nazi camp soldiers, however, this is not easy. In the face of a powerful group telling him that killing will be rewarded – a group that has strongly encouraged him to identify with an abstraction, and then fed him the story that that abstraction has been damaged by people whom he holds the power to kill – and with weak pre-existing personal commitment to peaceful abstractions that might counter that message, the young man is a sitting duck. There but for his conditioning goes my own son.
The upshot for economists? Our definition of individual rationality is implicitly conditional upon the prior conditioning of the individual in question. Not only cold material realities, but the abstractions we identify with internally, exert a powerful influence on our economically-relevant actions.
Core Economics 
Gigi
I am not sure if this post advances our understanding of the world through an economics lens. To be useful you have to start with a set of economics propositions, such as utility maximisation, rational agents, etc, or more likely propositions relating to multi period problems, bargaining, transaction costs and the like to see you you can establish some set of testable hypotheses.
Rather what your post does is to cloak pop psychology in language that has a vague economic ring to it… This has no predictive capacity and consequently isn’t really much help, esp as your objective appeared to be to bring economic understanding to terrorism, which I admit is a very ambitious task
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David,
The main idea of this post in economic language is that individuals’ internal identification with abstractions informs both their objective function and their constraints, as they perceive them, and that this internal identification is the product of a social conditioning process that strengthens and molds weak individuals over time.
While i don’t see blogs as the right place to communicate fully worked-out economic theories, if you are interested in a more fully worked-out economic theory that builds on the ideas in this post and discusses falsifiable predictions that arise from them, have a look at the book here:
http://www.amazon.com/Economic-Theory-Greed-Groups-Networks/dp/1107678943.
gigi
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It seems to me you missed one big explanation: the 72 virgins. Or if you like – eternal bliss in heaven. This sounds like a pretty strong motivator to me.
One minor point: Economists usually refer to abstract actors as “she”. I noticed that you referred to the terrorist as “he.”
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Chris,
I’m so glad you brought up the virgins business. Let me ask you: if someone told you that you could have access to 72 virgins for your personal enjoyment tomorrow, here and now in the real world (so no need to discount), on the sole condition that you publicly murder someone today, would you do it? Perhaps, like Robin Williams, you’re not so keen on virgins per se. What if you were offered eternal bliss in heaven, whatever that means to you, on the sole condition that you publicly murder someone today – then would you do it?
The virgins business is in my view just another weapon wielded by the group in the process of conditioning a recruit and thereby making him incorporate its abstractions into his identity. Most of the people who have perpetrated the type of violence described herein are young men who one might expect based solely on their age and gender would be particularly vulnerable to the promise of getting a big sexual return for service to the group. Yet the terrorist does not attempt to verify this promise of virgins, and the fact that the promise cannot be authenticated does not appear to matter. This should immediately tell you that we are not dealing with a situation of careful material calculation by a young man. We are dealing with the behavioral implications of loyalty to an abstraction, where that abstraction does not even need to exist in order to be motivating for him once it is adopted into his identity – which occurs first through making the recruit believe that the abstraction has something valuable to offer him.
I also note that some people who have blown themselves up recently have been little girls. I doubt they’d be motivated by the promise of virgins in the afterlife. They are affected by the same conditioning process though that the young man is – perhaps through being offered infinite candy, or teddy bears, or something else that they desperately want.
Do economists usually refer to abstract actors as “she”? I would place money on the opposite being the case in the economic literature of, say, the past 20 years.
gigi
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Gigi,
Your post covers a lot of interesting themes. However, perhaps economics also has something to say about of the gaming aspects of terrorist behaviour. I guess someone like Martin Shubik for example would frame the current outbreak of terrorism in the context of a game between on team that plays according to a set of well-known deterministic rules (e.g. natural justice, rule of law (even military law), proportionate response, etc.) and another team that plays a randomized strategy (e.g. inflict damage on the opponent at unpredictable times, in unpredictable place, and to unpredictable victims). Game theory usefully tells us that randomized strategies generally dominate deterministic strategies. It suggests that the team playing deterministic strategies is going to suffer a lot more pain before the game either changes or the game ends.
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Hi John,
A game-theoretic model similar to what you describe may be useful in understanding some of the medium-run choices of the leaders of terrorist organizations, although i do not think that the cold calculus of game theory applies to the pawns of those organizations (the people gunning down others or blowing themselves up). I do think that the leaders of terrorist organizations are unlikely to perceive the nation states of the developed world as positively as you describe, but notwithstanding that, the question remains of what these leaders see as their end game. What is all of this terrorist activity supposed to accomplish – if the model is right, then what kind of “game change” do you think is realistically envisioned by the side playing a randomized strategy?
There may be a genuine concern within some terrorist leaders for the welfare of people of their ethnicity/region, and indeed we see that to an extent in the more welfare-minded arms of some of these organizations. But i suspect much of the motivation of terrorist leaders is really about gaining status and accolades from fawning underlings – about being part of the group of big shots at the top of a hierarchy.
The leaders of the terrorist organizations themselves would not be in the positions they hold today were it not for the existence of unstable states in which citizens are insufficiently inoculated with peaceful and egalitarian values as children. So, the game you describe only occurs after the enormously important process of determining what types of players we are dealing with – and that itself is adjustable in the long run. The core question is what type of interventions will make those unstable states more like successful nation states. Then we would not have to play the game you describe at all.
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“Game theory usefully tells us that randomized strategies generally dominate deterministic strategies.” Well, that’s a daring statement. It does depend on the payoff-structure, no?
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I think the terrorism does relate to economics to certain degree. But it’s more relating to the unemployment. When a bunch of feriors who got nothing to do and nothing to think about. The easiest way is to get more stupid.
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The biggest problem for economists is perhaps economists without a historical perspective.
Economists had compelling explanations for the anti-colonial revolutionary activities coming out of the Arab world in the 1970’s including terrorism at the Munich Olympics, hijackings in Europe, the Lebanese Civil War. I don’t see why these explanations don’t apply to today’s generation of militarised Arabs. Sure ideologically they were different then than now. The dominant ideology now may make people feel uncomfortable, but has anything materially changed from the 1970’s to now aside from the destruction of Iraqi institutions and the subjugation of democracy in Egypt? The methods of violence in the 1970’s were also similar to what they are now.
A big historical question in economics to my mind involves explaining the brutality of the second European war between 1939 and 1945. And explaining the colonial zeal following the first European war of 1914-1918. But even for this, the seeming senselessness of the European genocides of other Europeans probably has an economic explanation having to do with individual maximisation.
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Rabee – the colonial activities after WWI in the main seem more like a continuation of the 19th Century – the Allies divided up the German possessions and the components of the Ottoman Empire amongst themselves (with various political arrangements like mandates etc.) – as long as Britan/France kept their own empires, the former German/Ottoman possessions weren’t going to become independent (am not completely sure of the status of Saudi Arabia and the surrounding states on the peninsular before and after then). It is possible decolonisation could have happened after WWI rather than WW2 – I don’t know the economic argument as to why it happened after WW2 and whether it could have applied earlier.
You must have a reason for excluding the War in the Pacific (and the longer running war between China and Japan) from the point above – both of which were similarly brutal in the field to what happened in Europe.
Is the argument that the declining tolerance for large casualties (which clearly happened at some point after WW2 should have happened before then)? As in the field I don’ t see what happened in Europe between 1939 and 1945 as worse than 1914 to 1918 (unless there is data demonstrating otherwise…) and European wars before then were awful too.
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