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The economics of religion and terrorist organisations (Part 2)

This is a continuation of the seminar by Prof. Larry Iannoccone on How to run a Terrorist Organisation—Economic perspective on the organisation—why do people join and how do they keep loyalty".

So, what are the ‘economics’ of suicide terrorists?

The ‘market’ is comprised of a small supply and a relatively larger number of demanders.

Take as an example of the supply the case of a militant religious group. If considered as a ‘company’ then:

Leaders = managers
Customers / investors = demanders
Supply (of willing people) – they are readily available (and, only a VERY small number is needed.)
Pay-off / result – out of all proportion to the investment

Why will people make the “ultimate sacrifice”? (maybe also stated as “for whom will they sacrifice?”) Answer: for those they love and respect.

Iannoccone pointed out that “the military” also knows how to motivate people to self-sacrifice, using: limited resources, social bonds and moral imperative as the glue.

    Impediments to ‘business’ success for terrorists are:
  • unusual and complex organisations / structures because of limited access to ‘markets’;
  • penetration of the organisation becomes easier, once someone is ‘inside’;
  • breakdown comes from defections and schisms;

    He pointed out the ‘secular’ sectarianism and extremism of certain organisations.
  • supernatural elements give a comparative advantage;
  • diffusion is apparent;
  • bring people into the fold, bit-by-bit;
  • pathways and networks are built up;
  • sanction (scolding, or worse) is used;

An example is those involved in the anti-abortion debate in the USA. They are essentially non-violent, indeed violence us caustic to wide acceptance for their cause. He asked us to consider the similarities and differences between these and organisations elsewhere with different stated goals.

    Iannoccone also discussed deterrence.
  • Every one of the participants must be stopped in order for deterrers to prevail;
  • criminal penalties are ineffective, even becoming bait (even and especially death);
  • making ‘it’ harder leads to greater honour when the person has success (e.g. the drug market where scarcity drives up prices, margin, and therefore reward.)

Question time expanded somewhat on several points.

People need causes.

Drop-outs CAN and DO resume normal lives.

    Any extreme group can have these characteristics.
  • Think about the acolytes of Mother Teresa of Calcutta: adherence / commitment to a charismatic leader and the legacy.
  • He similarly agreed to examples of escape systems from WW2 occupied Europe, Soviet Union, and Negros from the southern states of the USA before Civil War.

The handle ‘evil’ is unhelpful. bad and good is relative; good people can do bad things; Why?

Ecoomies of scale technology drives down scale; far-flung organisations are helpful;


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