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Volume 3, Issue 37: September 17, 2001

  1. Statement on the Terrorist Attacks
  2. Counterterrorism, Inc.
  3. Did Defense Misspending Cost Americans Their Lives?
  4. Can the Arab World Liberalize?

1) Statement on the Terrorist Attacks

The Independent Institute offers condolences to all those suffering in the wake of the recent terrorist hijackings and attacks. We join the civilized world in condemning these horrific deeds. Americans seek security, but not as an end in itself. We seek security to enjoy the blessings of liberty. Attempts to “trade” liberty for security can only produce neither. Instead, we must achieve security in a manner consistent with a diverse and open society, individual liberty, and the rule of law. The peaceful spread of American ideals is our best and most enduring export. And we will win the hearts and minds of individuals the world over only if we adhere to these values—at home and abroad—with the fidelity that these values demand.

For more, see the “Statement on the Terrorist Attacks,” by David J. Theroux, founder and president of The Independent Institute.


2) Counterterrorism, Inc.

In the wake of the terror attacks on New York City and Washington, D.C., a group of investors is setting up a bounty fund of $1 billion to “wipe out” the terrorists and harboring governments responsible.

Although the approach may seem farfetched, there is ample historical precedent for the practice.

In addition to granting Congress the power to declare war, Article I, Section 8 of the U.S. Constitution also follows with an authorization to “grant Letters of Marque and Reprisal.”

As described by Professor Larry Sechrest of Sul Ross State University, letters of marque and reprisal were issued by the U.S. government in the late 18th and early-to-mid 19th centuries to so-called “privateers.” Privateering “was a method by which a citizen of one nation who had been victimized by a citizen of another nation could achieve restitution for his losses.”

Although the practice was used whether or not two countries were at war, “privateering evolved into an instrument of war.” And it became a very effective instrument for the U.S. during its early years, so much so that our nation resisted efforts by European powers to ban privateering through the Declaration of Paris in 1851.

Privateers also posted bonds to “guarantee compliance with international laws of the sea,” writes Sechrest. Consequently, rather than destroy enemy ships, privateers captured them, spared the lives of their crews, and profited from the seizures by obtaining a ransom from the ship’s owner, or selling the enemy ships at auction.

Given that letters of marque authorized private citizens to outfit armed ships to seek justice overseas, one finds it increasingly problematic to take seriously claims that the drafters of the U.S. Constitution did not also intend for these same people to have a right “to keep and bear arms.”

But more relevant to the aftermath of the September 11th terrorist attacks, those who issued letters of marque and reprisal in the 18th century were practicing smart economics by aligning the interests of victims with that of their champions.

In the face of opposition from government navies, privateering has largely fallen out of practice. Still, it’s not too difficult to imagine a group of popularly-funded modern-day privateers—armed with both state-of-the-art military technology and these congressionally-issued “letters”—undertaking a journey to a foreign land to say, “Osama bin Laden, you’ve got mail!”

See “$1 billion bounty on bin Laden.

See also “Bring on the Bounty Hunters,” and “Congress Shall Have the Power to Declare War” by Alexander Tabarrok

Also see “Privateering and National Defense: Naval Warfare for Profit” by Larry Sechrest, (PDF File) and TO SERVE AND PROTECT: Privatization and Community in Criminal Justice, by Bruce Benson.


3) Did Defense Misspending Cost Americans Their Lives?

How could it have happened? Aside from the deeper reasons of foreign policy and philosophy, why was America so vulnerable to such a devastating attack? Aren’t U.S. armed forces and intelligence agencies empowered to defend Americans on their own soil?

Sadly, the answer is yes and no. The U.S. is well-equipped to fight conventional wars against other nations, but defense spending priorities have failed to adequately address America’s greatest security risk: terrorism. It’s as though America was still preparing to fight the Cold War, argues Robert Higgs, senior research fellow at The Independent Institute, in the Fall 2000 issue of the journal he edits, THE INDEPENDENT REVIEW, in an article written before the September 11th attacks.

The problem is not that U.S. defense budget is too small. The United States, in fact, is the world leader in defense spending, accounting for about 36% of world military spending. (By comparison, the next five largest defense spenders—Japan, France, Germany, the United Kingdom, and Italy—as a group account for about 26% of world military spending.) The way that the money is spent on defense is another story.

About every 15 years, in fact, a blue-ribbon panel is created to examine misallocation, waste, fraud and abuse in defense spending. Reports are written. Suggestions are made. A few problems get solved. But even the recommendations that get implemented are no match for the new problems that arise. The fact that allocation of funds between the three armed services has not changed in decades is enough to suggest that spending has not been re-allocated to meet America’s changing security needs.

This is unfortunate but hardly surprising, given the incentives of the defense establishment. Many observers, President Dwight Eisenhower among them, have called it the “military-industrial complex” but, argues Higgs, a better description is the “military-industrial-congressional complex” because Congress plays a central role in perpetuating the status quo of defense misspending—to the detriment of U.S. security. Military brass, for example, call for base closings, but Congress often lacks the political will; and whistle-blowers testify that a high-tech weapons system is dangerously temperamental, but Congress does little to reform weapons procurement.

Writes Higgs:

“The present U.S. military establishment is overwhelmingly the most powerful the world has ever known, and it has ample capacity to defend the nation against the military forces of any present or prospective foe in the kind of wars it is dedicated to fighting.

“If an enemy should decide to wage a different kind of war, however, such as really serious terrorism, the armed forces are not configured to deal with that kind of threat.... [America’s current defense] system has no constituency for the nitty-gritty, low-tech activity that an effective antiterrorism program would call for, such as the maintenance of a massive global corps of unsavory informants on the ground; there’s no money in it for Lockheed Martin, Boeing, and the rest of the boys. But if you want to talk about a Star Wars system that stretches from here to Mars, hey, let’s talk!”

See “The Cold War Is Over, but U.S. Preparation for It Continues,” by Robert Higgs (THE INDEPENDENT REVIEW, Fall 2001).

Click here for the Independent Institute archives on defense and foreign policy.


4) Can the Arab World Liberalize?

Why have none of the twenty-two countries of the “Arab world” participated in the worldwide move toward liberalization? Is illiberalism and despotism a given in the Middle East, or are Arab states vulnerable to the spread of liberty, just as the Soviet Union and its satellites were?

According to the late Nazih Ayubi, some Arab states might move toward liberalization, if, paradoxically, they were strong enough to overcome the political and cultural forces that favor authoritarianism. How, in Ayubi’s judgement, could such forces be overcome? The Ayubi thesis is intriguing, but does it hold up to scrutiny? Such questions were always important in the Middle East. Now, more than ever, they are important questions for the West.

See “The Vulnerability of the Arab State: Reflections on the Ayubi Thesis” by Timur Kuran, professor of economics and King Faisal Professor of Islamic Thought and Culture and the University of Southern California, in THE INDEPENDENT REVIEW (Summer 1998).


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