Introduction

Is there a connection between extremism and the introduction or spread of markets? Has the spread of markets around the world – what is often referred to as “globalization”– fostered or retarded extremism?

One way to begin making the connection is via the concept of “transparency.” The fall in the costs of acquiring and transmitting information and of transacting across borders generally is often said to require a global world order in which countries specialize according to comparative advantage and the international division of labor is as complete as possible. In order to facilitate this outcome, economic relations should become as transparent as possible, because greater transparency implies lower transactions costs. A larger global division of labor means an expansion of world trade, and greater transparency facilitates this expansion. Democracy, too, thrives on transparency, and dictatorship on obfuscation. Consequently, on this point of view, it is obvious that the new global world order must be governed by the most transparent systems possible, both to promote democracy and economic efficiency.

To some extent, transparency and globalization go together in that both are the result of the information revolution. Of course, transparency is not exactly the same thing as globalization. Indeed, sometimes people associated with the antiglobalization movement have been demanding “greater transparency” from organizations such as the IMF, the World Bank, and the World Trade Organization (WTO).

Introduction

Historically, suicide martyrdom has not been the most important manifestation of extremist activity. This part considers a number of other manifestations of extremism: revolution, nationalism, dictatorship, and global jihad. This chapter looks at revolutionary activity, a specter that haunted Europe after the great French Revolution of 1789 and frightened the world after the Russian Revolution.

One thing suicide martyrdom and revolution have in common is that they are both difficult to explain with standard rational choice theory. Thus, it is commonplace in the modern analysis of revolutions to say that rational choice can't explain them. The rational choice approach is identified with the line of thought initiated by Olson (1965) and applied to revolutions in detail by Tullock (1971). They focused on the free-rider problem. Because the benefits of the revolution are a public good, available to every individual whether he participates in revolutionary activity or not, and because the contribution of any one individual to making the revolution happen is usually trivial in any society of reasonable size, no rational person will decide to participate. Hence revolutions cannot occur unless some private benefit, which Olson termed “selective incentives,” can be found to motivate participation. In turn, because it is hard to imagine how these could be provided at the mass level, revolutions do not occur.

However, revolutions do occur now and then, and this poses a problem for the theory.

Summary of Propositions in the Book

In this book I have tried to understand political extremism on the assumption that the participants in extremist movements – both leaders and followers – are rational. But I added a twist to the standard rational choice approach: people are completely rational and selfish, but they are social and desire social interaction. They want solidarity, usually with a group. As these concepts are sometimes used loosely, I provided precise mathematical definitions of solidarity and related concepts like social capital in the appendix to Chapter 2 of the book.

In the first part of the book I sketched how this idea could be applied to problems such as crime, poverty, and international finance. The second part focused on using the model to explain varieties of extremist behavior in politics, such as the proclivity of leaders with extremist ideas to use violence to achieve their goals, how seemingly rational people can be led to commit suicide for a cause, and specific phenomena like nationalism, jihad, and revolution. Chapters on the great French Revolution, the explosion of nationalism under Yugoslavia under Milosevic, the phenomenon of suicide terrorism, and the rise of Islamic radicalism along with globalization illustrated these ideas.

For easy reference, I present a summary list of the main propositions in the book. Sometimes I add a brief comment as well as providing the chapter source.

Introduction

What did the regime of Slobodan Milosevic in Serbia represent? Was he “radical evil” incarnate, as Susan Sontag (1999) has suggested, or just another Balkan strongman (Djilas 1993) trying to survive? Michael Ignatieff (1999, p. 75) suggested that he “developed a new style of post–Cold War authoritarian populism” just as he had “pioneered ethnic cleansing and the use of refugees as a weapon of war” (p. 74). Of course, Milosevic lost the war with NATO. And perhaps the most appropriate label given to him nowadays is the one originally given and officially sanctioned by Louise Arbour in her capacity as the chief prosecutor for the UN tribunal in the Hague: “War criminal.”

The Milosevic episode is a typical example of one of the central dilemmas since the fall of communism: the persistence of dictatorships, or at least of highly imperfect or “ugly” democracies and the problems caused by the interaction and conflict between these regimes and the democracies. The Cold War with communism may have disappeared, but other conflicts with dictatorships have taken its place. The most obvious examples in recent years have been the former Yugoslavia and Iraq, along with the other Middle East dictatorships and the continuing possibility of conflict with China. And there is also the never-ending standoff between Fidel Castro of Cuba and the United States.

Introduction

All of the work described in the preceding chapter, despite its obvious importance, only gives us part of the picture. All the behavior described there is demand-driven. For example, contagion effects imply that people who are involved in social interactions end up at corner equilibria. This implication is used, for example, by Becker in his (1996) model of addiction. A person enjoys a cigarette or a drug with his friends today. Tomorrow he wants to have more, partly because he had some yesterday, partly because his friends did, and he likes to do what they do. This escalates until he is addicted. But in this case, as in others, there is usually some attempt at a solution, that is to say, some attempt to form a group or structure or other form of organization or in some other way to endeavor to internalize the externality. In the case of smoking, for example, people who wish to stop may see a doctor, get Nicorette gum or the patch, or join a group to help them in this purpose, rather than just continue to hang out with their addicted friends and let the situation escalate.

With network externalities, property rights may help solve compatibility problems and investment problems in networks. For example, when there is a single owner of the network, that firm may be willing to sponsor the network by making investments in its growth that competitive hardware suppliers would not.

At the same time, these solutions seldom work perfectly.

Introduction

Extremist movements often appear mysterious, frightening, and irrational. Extremists like Osama bin Laden are said to be different from us: they are twisted, deviant, fanatical, or simply “evil.” One reason, of course, is the extraordinary destruction of which they are sometimes capable, as symbolized by the events of 9/11. Another reason is the apparently single-minded passion of their leaders. And while the leaders of these movements often appear dogmatic, perhaps even more frightening is the oft-observed fanatical loyalty of their followers.

But extremism is not new. While the means of terror used by Al Qaeda were never used before, in many respects the phenomena associated with 9/11 are not new at all. Europe in particular has a long history of extremism. Perhaps the first modern example of extremism in power was the “Terror” (the word was invented then) associated with the Jacobin ascendancy during the French Revolution. In the twentieth century, extremist movements continued to take power in Europe with the rise of fascism in Italy, Nazism in Germany, and communism in the former Soviet Union and Eastern Europe. More recently, extremist groups in Europe have remained much smaller and have never risen to power but have been important and destructive. Movements included those involving the Red Brigades on the left and Propaganda Due on the right in Italy in the 1970s, the Baader-Meinhof Gang of the 1970s in Germany, and the antiimmigration National Front of Le Pen in France, which continues today.

Basic Ideas

The starting point of this book is that to understand extremism, one has to look not only at individuals but at the interactions between them and between the individual and the group. In this chapter and the next, I consider a number of social problems, the solutions to which have traditionally vexed social scientists. The standard way of looking at these problems is individualistic. I change this by incorporating social interactions, which means incorporating the actions of others directly into the utility functions of individuals. In my view, this leads to a deeper understanding of these problems, and it sometimes changes the policy prescriptions used to deal with these phenomena. To illustrate this last point, consider some of the policy questions that have attracted attention in Canada, the United States, and the world over the past few years. Such a list might include the problem of crime, the Asian crisis of 1997–1998, and the persistence of poverty. There are, of course, other important problems such as terrorism, but we will deal with that in Chapters 4, 5, 6, and 9.

In each case, an individualistic approach leads to one set of prescriptions to solve the problem, usually involving prices. Consider the problem of crime. The standard approach in economics looks at an individual who might be contemplating a crime, and assumes he makes his decision based on the expected return (monetary or psychic) from the crime on the one hand and the probability of being caught and the size of the penalty if caught and convicted on the other.

Introduction

One interpretation of the behavior of the terrorists of 9/11 that has been commonly made is that they were motivated by religious belief. This interpretation was given credence by the evidence presented by Kanin Makiya and Hassan Mneimneh (2002), who described a manual apparently used by the hijackers, parts of which were found in the wreckage of one of the planes involved, and as well in a piece of Muhammad Atta's luggage, which, by accident, was not loaded on the plane at Logan airport. The manual consisted of instructions to the would-be martyrs that framed the act they were to undertake entirely as if it were to be done “to please God” (Makiya and Mneimneh 2002, p. 20), and there was no mention of any other motive or issue such as Palestine, Iraq, or U.S. global domination. Of course one could argue that the manuals were deliberately planted. But if the motives of the hijackers were more secular, what would be the point of planting such a manual?

In what follows I am going to assume that people such as those who carried out the 9/11 bombings are rational in the standard economic sense of that term, and ask if we can explain first why it is that rational people would adopt religious beliefs, and why and under what circumstances they might even be willing to sacrifice their lives for these beliefs. Thus this chapter explores aspects of the supply of this kind of terrorist activity.