Welcome back to my blog! This year, as in last, I will be covering economic debate on Capitol Hill.
Since all the pundits are now talking about ISIS, the radical Islamist group surging through Iraq and Syria (or Ebola), I wanted to share an interesting anti-interventionist argument based on Austrian Economics. John Tamny, writing in Forbes, downplays the threat posed by ISIS, while distancing himself from any particular policy. He argues, like many other commentators, that the insurgents will ultimately fail. Lacking any real productive economic capabilities and led by criminals, ISIS’s disorganization will breed disintegration. As a result, in his view, the potential economic harm seems overblown.
This analysis, although interesting, is off point. Tamny is likely correct in asserting that ignoring ISIS will not “doom us to eventual massacre.” However, an alternative view of the economic costs and benefits, geostrategic and moral considerations aside, may (or may not) support stronger intervention at this time. The attacks of 9/11 cost upwards of $2-3 Trillion (including the Iraq and Afghanistan Wars), although estimates vary widely. Al-Qaeda at the time was dependent on foreign governments for safe haven, and its revenue stream was largely donation based. The organization was composed of similarly corrupt radical jihadists. ISIS, on the other hand, has its own oil revenue, and controls vast swaths of land. It certainly may fracture at some point, but experience has shown fractured organizations are capable of costly attacks. If they were to succeed in attacking the U.S., any administration would be politically obligated to launch an all out assault. The direct costs and increased military spending would accumulate.
Therefore, I believe the real economic analysis to be done here is not whether ISIS can sustain itself or establish a functional state, but rather, a comparison of the cost of successfully destroying ISIS now, versus the costs of letting it fail on its own, with the risk of future attack.