In the wake of the attempted Christmas bombing of an American airliner en route to
The economic question is the optimal expenditure on preventing terrorist attacks on airlines. The question is bafflingly difficult because of the uncertainty associated with such attacks. Cost-benefit analysis of precautions is a reliable tool of economic decision making only (in general—I will suggest an exception below) when not only the cost of the precautions and the loss (cost) that will occur if the event sought to be prevented is allowed to happen can be calculated, but also the probability of the event if the precautions are not taken. For that second calculation is also necessary in order to estimate the expected loss if the precautions are not taken. If the loss if the event occurs is $x, and the probability that the event will occur unless precautions are taken to prevent it is .01, then, as a first approximation, one should spend up to $.01x to prevent the event from occurring, but not more.
But what is the incremental probability of a successful terrorist attack on an airline if the precautions instituted after the Christmas bombing attempt are withdrawn? Moreover, although that is the most difficult question, there is also uncertainty about the loss should such an attempt succeed. There are pretty good value of life estimates, which would suggest for example that an airline bombing that killed 200 people would inflict a loss of $1.4 billion (200 x $7 million). But that leaves out the terrible fear that these people would experience unless the bombing caused instant death (which it would not), plus the fear of other airline passengers and crew after the bombing, plus added time and safety costs of passengers diverted by fear to other means of transportation—other means that may be more serious, depending on how common successful terrorist attacks on aircraft become; for the death rate per mile is, at present anyway, markedly higher for automobile transportation than for air transportation. There is an instinctual fear of flying (easy to explain in terms of the ancestral environment in which the human brain developed, for in that environment heights were exceptionally dangerous), and as a result the prospect of being killed in an airline crash fills many people with particular dread; that prospect is a cost, like any other. For many people, it exceeds the expected accident cost of driving relative to flying.
But I want to focus on the uncertainty of the occurrence of a terrorist attack. Some statisticians, and some famous economists of yore such as Frank Knight and John Maynard Keynes, distinguish between calculable risk, as in my .01 example, and uncertainty, in the sense of risk that cannot be calculated with any confidence. No one can say with any real confidence what the probability of a successful attack in the next year on a
But it makes a big difference to the optimal investment in precaution whether the probability of such an attack is .0001 or .1 (as it could easily be if the attack was the first in a planned series), and whether the cost of the attack if it is successful would be $1.4 billion or $5 billion--or much more, as it could be, if one thinks that the Iraq and Afghanistan wars, which together have already cost at least $1 trillion, were a consequence of the 9/11 terrorist attacks. There is thus uncertainty in size of loss as well as in probability of loss. As a result of these dual uncertainties, the realistic expected-loss range could, on my assumptions, easily extend from $140,000 to $500 million.
How to pick a point in that range? The question may seem unanswerable, but it is not. The reason is discontinuity in the range of available precautions. Greater vigilance and more screening equipment and screeners are costly but there are sharply declining marginal returns. One might decide to place two or three guards on every international flight, but it wouldn’t make any sense to place 10 guards on every flight; the incremental benefit would be negligible. Similarly, maybe every security line in every international airport should be equipped with a body scanner, but it wouldn’t make sense to equip every security line with two body scanners. The inability of our intelligence agencies to pool information effectively will be costly to correct, but these are costs that have to be incurred anyway—to protect the nation from a range of terrorist and other threats, not just threats to airline safety.
There is probably a bias among security personnel in favor of doing more than can be justified by the kind of analysis that I have just offered: that is, a bias in favor of adopting some precautions that have little or even no efficacy in preventing attacks, such as subjecting children who have already been patted down in the security line to a second pat-down at the airline gate. The reason for the bias is bureaucratic, or in other words careerist: from the career perspective of a security officer, the worst thing that can happen is an exact repetition of a successful attack. For then no excuses, even if reasonable, for having failed to prevent the new attack will be accepted. So security agencies will tend to overinvest in preventing the repetition of previous attacks. It has been argued persuasively that the nation has overinvested in airline security since 9/11 relative to security against other attacks, for example on trains or subways, because we have thus far been spared such attacks, though other nations, notably
Excellent post, but I might quibble with the last sentence. First, airplanes are uniquely dangerous and vulnerable methods of mass transport. Unlike a ground-based system, there is no possible stationary fail-safe. Merely disabling a critical system of an aircraft can lead to its destruction and the deaths of everyone on-board. Taking control of one can result in untold amounts of damage if the vehicle, along with its vast stock of kerosene, is weaponized, as happened in the 9/11 attacks. There are just no comparable scenarios for trains.
Second, planes are inherently weak due to engineering constraints. I once took the Boeing tour at their large jet aircraft assembly facility in Everett, Washington. They have on display a cross-section of a 747 which looks like a giant slice cut out of a salami. Not a single ounce is wasted, and one cannot help but notice the incredible thinness of the aluminum exterior, which one can almost indent with his fingers like the skin of a soda can.
I have no doubt that a mere few grams of well-placed explosive, less than that required to be fatal to even a single human being, could easily punch a substantial hole in it - leading to at least sudden depressurization and at worst to a catastrophic failure and tearing-apart of the airframe.
Third, aircraft incidents tend to take spoil the evidence trail. A plane goes down mysteriously and it can easily take months to discover what happened, if any firm conclusion is in fact ever achieved. If a small explosion at 30,000 feet yields a mass of shrapnel spread across 100 acres of Michigan farmland, or at the bottom of Lake Erie, it can be nearly impossible to attribute the incident to a terrorist attack.
Finally, taking out airplanes is perceived as highly sensational, symbolic, and more likely to achieve massive press coverage. The ability of terrorist groups to overcome our defenses on our most highly defended mode of transport would significantly undermine our belief in our ability to secure ourselves against attack.
There are perfectly legitimate reasons to (seemingly) disproportionately focus our efforts on airline travel. Nevertheless, the point remains, that the most difficult an air attack becomes, the more attractive other forms of attack become.
Posted by: Indy | 01/28/2010 at 08:13 PM
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Posted by: Fernanda Gomez | 01/28/2010 at 11:07 PM
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Posted by: abercrombie and fitch | 01/29/2010 at 09:13 AM
Sir,
Though having enjoyed your interesting article, I have to point out several fatal errors in your assumptions.
Marginal utility of airport security increases is not just diminishing, but exactly zero as I've pointed out after 9/11 attacks (The Security Bug, etc). To my knowledge, airport security did not intercept a single trained terrorist in the past two decades. Any professional, indeed any ingenuous person can quite simply circumvent any security precautions (I've predicted the body bombs ten years ago).
Terrorist attacks on airlines are not commonplace for the reasons very different from hapless airport security. First and foremost, terrorist preparations worldwide are disrupted by massive intelligence work of British, American, German, Israeli, Saudi, and to a lesser extent - Russian and French agencies. Also, for many years airplane terrorism has been made pointless by a coordinated international policy of not allowing hijackers a safe haven of the type they previously enjoyed in Beirut, Tripoli, Entebbe, and Amman. After 9/11, America quickly moved to close the loophole that allowed terrorists to use hijacked planes to target civilian infrastructure. By now, standing orders call for shooting down the hijacked planes which come close to cities. Airplane terrorism, therefore, is largely pointless by now, and only minor cells are interested in it. Regarding the Christmas bomber, bin Laden praised his operation well afterwards just as he praises any of his ideological franchisees; it was not "an al Qaeda plot."
Terrorists are not attacking much simpler targets, either. No amount of security would preclude bombings of airport counters, hotels abroad frequented by Americans, their excursion buses, or individual tourists. Near-absence of terrorist attacks on America's soft underbelly abroad shows that airport precautions are superfluous and are mostly enacted to show the domestic government's paternalistic concern over its citizens.
Please also note that, assuming that terrorists want to strike, increased airport security does not prevent the attacks, but simply shifts them to less defended targets. In that sense, too, its marginal utility is zero.
Posted by: Obadiah Shoher | 01/29/2010 at 04:48 PM
Interesting. Just one observation, increased vigilance, observation, and imposed security by governments and the public, usually results in actions or planned actions taken by saboteurs or terrorists that much more difficult to realize. Resulting in less actions.
Remember, we are at War and will be into the foreseeable future.
They are watching and waiting for an oppurtune moment to strike. So we all need to keep our eyes and ears open and not fall into a sense of safety that a lull brings.
Posted by: N.E.H. | 01/29/2010 at 09:28 PM
We are not at war. The terrorists are merely criminals, and few in number, and our police and intelligence services are more than adequate to deal with the threat they pose, which is small.
The terrorists' agenda can be inferred from their actions. It is: (1) Gain ongoing publicity for their demands; (2) Hamper or destroy commerce, especially new technologies and commerce between Western countries and the Middle East; and (3) Hamper or destroy the openness of Western society, especially its cornerstone which is the presumption of innocence.
We can thwart (1) by having media refuse to report the names or agendas of terrorists. (Credit for this idea belongs to science fiction author Dean Ing, who predicted the problem in his 1970 book "Soft Targets".)
To thwart (2), I suggest a range of measures both technical and legal. On the technical side I would suggest that defense be one of the design criteria for new facilities, especially those that will be used in kinds of commerce that terrorists have attacked before. (Besides international trade centers, I'm thinking of abortion clinics, animal testing labs, operations growing genetically modified food crops, and the makers and sellers of sport utility vehicles.) On the legal side I would expand "hate crime" laws to protect all of these; or better yet, simply have the courts become willing to let juries make reasonable inferences of intent-to-bully (thus allowing the terrorists to be charged with coercion) when one of these businesses is attacked.
But goal (3) is by far the worst kind of damage the terrorists can do to our country, and it can only be thwarted if we insist on treating them as criminals and the situation as a few large but isolated crimes -- NOT some kind of ongoing emergency, and definitely not a war. Historically, when this kind of "emergency" is successfully parlayed into a permanent expansion of government power, the result has always been dictatorship. We must not go there.
I want our constitutional form of government back.
Posted by: jdgalt | 01/30/2010 at 01:33 PM
Judge Posner never fails to impress me with his wonderful books, and I envy his legal knowledge and skills. Nevertheless, I always feel a chill when his economic theory of law makes mention to the value of a human life.
But, damn, he expresses his opinions so convincingly.
Posted by: AuBricker | 01/31/2010 at 11:45 AM
Basically, I grew up following my father's ideas and ideology – a political science teacher who formidably influenced my formative years, greatly. However, oftentimes, my dad and I firmly disagree on recent past events (that have strong relevance with today).
Mr Posner is very much an extraordinarily admirable public intellectual in America. However, his passion with “economics” vis-à-vis terrorism is perhaps ill-equipped.
Mr Posner makes terrifically wobbly argument vis-à-vis global terrorism: “In the wake of the attempted Christmas bombing of an American airliner en route to Detroit, there has been a flurry of new security measures. These measures are costly, primarily in delaying the passage of passengers through airport security, but there are also the expenses of additional screening equipment, such as body scanners, and of additional security personnel, such as armed guards on flights and additional screeners in the intelligence agencies.”
Goodness, the main point/argument should be about combating/curbing terror attempts; definitely not the dubious “economic” impacts that Mr Posner argues for (no matter how “allegedly” right). Sadly, a person who I deeply admire, on this count (among other things) is making opaque arguments.
Posted by: Kiran | 02/02/2010 at 08:41 PM
Subjecting young male Muslims to heightened scrutiny at the airport is fundamentally un-American and unfair to those who are innocent. But if it is to be justified in the name of protecting the American people, those innocent individuals who pay the price should be compensated by the American people by paying them, say, $50 for each time they are taken out of line and subjected to a body search.
Posted by: jimbino | 02/06/2010 at 10:57 AM
Remember, we are at War and will be into the foreseeable future.
They are watching and waiting for an oppurtune moment to strike. So we all need to keep our eyes and ears open and not fall into a sense of safety that a lull brings.
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Posted by: hopeline | 06/18/2010 at 06:15 AM
Interesting. Just one observation, increased vigilance, observation, and imposed security by governments and the public, usually results in actions or planned actions taken by saboteurs or terrorists that much more difficult to realize. Resulting in less actions.
Remember, we are at War and will be into the foreseeable future.
They are watching and waiting for an oppurtune moment to strike. So we all need to keep our eyes and ears open and not fall into a sense of safety that a lull brings.
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