Terrorism has been an infinitesimal risk so far, but on September 11, Arnold told us that he's worried nonetheless:
I understand that if you look at history, the probability of being killed by a terrorist is low. But if you had looked at history in 1925, you would have said that the probability of a capital ship being sunk by an airplane is zero. (I recall reading somewhere that Winston Churchill came rather late to the realization that the airplane altered the strategic reality at sea.) Given the way that technology has evolved, I believe that concerns over terrorism are justified.
Arnold's right, of course, that past safety does not guarantee future safety. But I just don't see that the evolution of technology has been important here. Every terrorist attack I know of in the last ten years used technology that has been available for the last fifty years. What's evolving, in my view, is willingness to use existing technology in horrific ways.
I agree with Arnold that the Bush administration is not the "single root cause for all of the evil in the world." However, I still think that the best way for Americans to reduce the risk of terrorist attacks on Americans is to imitate the Swiss by minding our own business. Or to be more blunt, the U.S. should buy peace in the Middle East and elsewhere the same way that Britain, France, Holland, Belgium, and Portugal bought peace with their colonies after World War II: leave them to their own devices. As I argue in the Public Choice terrorism symposium:
To take an example from the not too distant past, terrorism was often used by nationalist movements against European colonizers. The key terrorist dogma was that the mother country exploited the colonies; the key demand, accordingly, was independence. Sooner or later, Europeans opted for appeasement. It was too hard to persuade anti-colonialists that the terrorists’ premise was incorrect. Cheap talk failed. But precisely because the terrorists were generally wrong – the mother countries’ prosperity did not depend on colonial exploitation – it was possible to defuse their demands with cheap action. European governments eventually said, in effect: “If they want independence so badly, they can have it.”
One final thought: Suppose the most effective anti-terrorism strategy would be to continue or escalate our current course. But suppose further that after a couple of years of inconclusive struggle, the median American voter will get discouraged and vote for the "cut-and-run" candidate, leading to humiliating defeat. (That's hardly science fiction. Anyone want to give odds?) My point: Even if the first-best policy would be very aggressive, the best anti-terrorism strategy given democratic constraints could easily be Swiss.