Chocolate and Gold Coins

Friday, July 15, 2005

A Market For Detecting Terrorists

I suppose I have terrorism on the brain this week and I promise that I will move on to other subjects next week, but this problem interested me: how does a society efficiently weed out potential terrorists from the honest visitors. The recent London bombers were likely homegrown, but terrorism will soon die if they have to recruit from free countries, so guarding the borders is still each nation’s best prevention technique.

However, my family and millions of other American families have relatives living in other countries, and we don’t like the fact that it is now such a pain to acquire the necessary visas to travel. Sure, we all have to do our part to prevent terrorism, but in my family’s case, would any rational person think that my wife’s parents who are in 70’s, are not Muslim, and have no blots on their records pose any serious threat? An inefficient method of detecting potential terrorists will impose two costs on Americans: it will greatly inconvenience Americans who want their extended families to visit and perhaps immigrate, or it will let in real terrorists, or (most likely) both.

Can we use markets to detect terrorists? Insurance markets are very efficient at preventing certain types of people from driving, for example. They can tell which people are the most likely people to cause accidents, and charge them more, and this can serve to exclude certain people who are at high risk to cause accidents from driving at all. Can a similar system weed out terrorists?

Suppose that the U.S. State Department (which determines who can travel to the U.S.) decides that as a safety precaution, all visas require an insurance contract. The insurance contract will pay a large penalty (perhaps $10 million) for every murderous act of terrorism the visitor commits if convicted or otherwise established in court. So if a terrorist commits a mass murder involving 100 people, the insurance company is out $1 billion. This gives the insurance company a powerful incentive to determine if a tourist is really a potential terrorist.

On the other hand, the insurance companies would quickly determine that they could make easy money from people who are essentially harmless. If they charge $100 to your grandma from India, they’re getting almost $100 in pure profit. Competition will drive down these premiums quickly and your grandma will pay only a few dollars.

The nice thing about this system is it can quickly exploit the Islamic terrorist Achilles heel: they’re no good at lying. The insurance companies will use polygraph tests on anyone who is even remotely suspicious. Of course, the tourist could choose not to take it, but he or she would have to pay more, and so he or she would probably agree to take the test (the results cannot be used to convict anyone of anything). They’ll ask: “Do you think Osama bin Laden is evil?” A potential terrorist will likely stumble at that question.

This method would make the process of getting a visa quick and painless for anyone honest and painful for the potential terrorist – as it should be.


  • I was thinking about this post for sometime...

    The indoctrinated terrorists have a real strong desire to succeed in their mission. If they can learn to pilot an aircraft (as they did for the 9/11 attacks), do you think it will be difficult for them to train themselves to hoodwink a lie-detector?

    To use a cliche, where there is a will, there is a way. They seem to have tremendous amounts of will.

    By Anonymous Anonymous, at 10:32 PM  

  • Hi Vikram
    I should have made this more clear: the lie detector is only for the high risk groups, people who fit the terrorist profile: young, male, from a high risk country like Saudi Arabia or Pakistan. The U.S. isn't really too concerned that this demographic avoids the U.S. for a holiday.

    Srikanth: That's a valid point, but I think the insurance company would do a pretty good job of screening people. Once you find one person who fails the lie detector, Instantly all of their buddies are suspect.

    By Blogger Michael Higgins, at 9:25 AM  

  • Came to your blog thro Indiauncut

    This is a fantastic idea in principle.
    One has to think thro the inevtiable gotchas that people will raise but its a concept worth exploring

    Pity it won't work with people who are already in. Like the folks who attacked London.


    By Anonymous Anonymous, at 2:27 AM  

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