1. Liberalism in a Post-9/11 World Peter J. Boettke 2004 Hayek Visiting Fellow London School of Economics

2. Terrorism Strikes a Nerve in Western Society Use of modern technology to inflict harm – turn our instruments of progress into weapons of destruction Use of civilians (e.g., passengers) and the targeting of civilians and symbols of modern society Suicide missions by individuals who blended easily within modern society and who had significant opportunity costs Helpless to stop terrorism if individuals are willing to pay the ultimate price and can strike anytime and anywhere

3. Beslan, Russia --- September 2004

4. Terrorism and Rational Deterrence Demand Quantity Price PHPH PLPL QHQH QLQL

5. Rational Responses First, increase the probability of detection. Second, increase the penalty of being caught. e.g., Walter Williams policy on cell phones

6. BUT WAIT!!! Does this make sense?

7. What if the demand curve is inelastic? Demand Quantity Price QLQL QHQH PHPH PLPL Raising the “price” of terrorism will be relatively ineffective, emphasis must be on shifting the entire demand curve in not just moving along the curve.

8. What About Liberal Values? “The great rule of conduct for us, in regard to foreign nations, is, in extending our commercial relations, to have with them as little political connexion as possible. So far as we have already formed engagements, let them be fulfilled with perfect good faith. Here let us stop. It is our true policy to steer clear of permanent alliances with any portion of the foreign world.”--- George Washington “They who would give up an essential liberty for temporary security, deserve neither liberty or security.”--- Benjamin Franklin

9. Can you defend liberalism by illiberal means? Lesser Evil thesis (e.g., Ignatieff)  Measured violence Strong Minimal State (e.g., Buchanan)  Importance of the protective state Empire thesis (e.g., Lal, Ferguson)  Importance of hegemony

10. Liberalism by Liberal Means Principled Non-Interventionism  George Washington’s farewell address  Bastiat -- "When goods don't cross borders, soldiers will.“ Free trade as a way to explore peaceful interaction Free trade as a way to bring an enemy into friendship  Cowen’s idea of cultural gains from exchange

11. A Few Additional Concerns Islam as an Ideology  Religious toleration as a core liberal value But this doesn’t mean that we cannot address troublesome issues associated with certain ideas and their impact on economic life Spontaneous Order versus Command and Control  Military Terrorist cells  E.g., cyber terrorism  Self-Help Post-9/11 responses in NYC