Terrorism as a business

Economist and terrorism expert Loretta Napoleoni researched terrorist groups and found most of what they do is raise money.

She also discovered
that the life of a terrorist was not ruled by politics or ideology, but by economics. They were constantly searching for cash. Terrorism, she explains, is actually a very expensive business — arms, vehicles, explosives. If you live underground, it’s very hard to produce this amount of money. Most people were extremely reluctant to talk about politics, because they had no ideas. The ideology is decided by leadership of a terrorist organization, all the others do is search for money.

She posits the US war of terror was so expensive that the government dropped interest rates after 9/11 to 1.2% to make bonds competitive, and that this cheap money climate directly led to subprime. Maybe. Many other factors were in play here too.

But her observations on terrorism mainly being a business that inevitably hooks up with other like-minded entities certainly seems true enough. Thus, the leader of such groups have reasons far beyond ideology to continue being terrorists – because they may be paying themselves well to do so.

Global Guerrillas has more.

One comment

  1. Low Fed rates certainly contributed to subprime, since mortgage rates went up as the inflationary policies of the Fed threatened bank income. (See http://asymptoticlife.com/2007/10/17/inflation-or-recession–yes.aspx and http://asymptoticlife.com/2008/03/19/how-the-fed-just-raised-mortgage-rates.aspx.) This is an interesting perspective on why the Fed dropped rates so low for so long.

    From Sri Lanka, the LTTE ran a global empire of transportation-related businesses to finance their operations: shipping, weapons sales, drug smuggling. (In 2000, I had dinner with a man responsible for smuggling heroin into Los Angeles by way of Canada.) I wonder who controls these lucrative businesses now?

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