The Politics of Fear: How Fighting Terrorism is Bankrupting the World and Making Us Less Safe

Editor's note: The following is an excerpt from Loretta Napoleoni's new book, Terrorism and the Economy: How the War on Terror is Bankrupting the World, with the permission of Seven Stories Press.

The Arrogance of Simpletons

The credit crunch is the latest chapter in the sad story of contemporary capitalism, a tale characterized by the arrogance and simplemindedness of its main protagonists, which became apparent while the entire world was concentrated on the threat posed by al-Qaeda. It seems absurd that an economic system powerful enough to cause revolutions and fratricidal wars, which has inspired whole generations and given life to one of the most potent ideologies of modern times, has disintegrated before our eyes because of the lies of its leaders and the lack of sophistication of its captains. The "Masters of the Universe" are really simpletons, people who have undermined the world economy for the sake of easy profits, thereby destroying the very system that supported them without even being aware of what they were doing. The politicians, too, are simpletons, making us believe that al-Qaeda was able to crush our world in order to pursue its hidden agenda when, in reality, those who were destroying it were prospering within it.

The financial sector that brought us to the credit crunch cannot, however, be defined as capitalism; Marx would be quick to point this out. It is rather a mix of political magicians, Monopoly players, and swindlers. True, authentic capitalism--that of the Industrial Revolution and the early 1900s--was an adversary worthy of respect, which exploited but neither stole nor swindled. It was also a shrewd and intelligent rival. This is the fundamental difference with the past: today those made rich by globalization are either thieves or simpletons.

However, we citizens of the global village, upon whom falls the tragic consequences of this crisis, also have behaved with arrogance and a lack of common sense. We have allowed the politicians to convince us to overextend ourselves in order to realize all our consumerist dreams: the house, the car, the vacations, the branded clothes and accessories, the high-tech gadgets, and more. This spending frenzy led us to believe that we were rich and powerful when, in reality, high finance was sucking our accounts dry and leaving us ever poorer. We acclaimed those who sold us these fantasies, the first and foremost of which was the fear of fundamentalist Islamic terrorism. How can we forget the popularity indices of Bush, Blair, Jose Maria Aznar, and Silvio Berlusconi when they incited the world to bomb Baghdad? Terrorized by the thought of losing our "place in the sun," we permitted the politics of fear to replace real politics and the act of governance to become a media event. We shouldn't be surprised when today we are called upon to pay the consequences.

The Anatomy of the Cold War

The world we live in is a labyrinth of fantasy, and politicians are the twenty-first century's greatmagicians, who sell fear and fabricate the truth. Among their greatest performances are Saddam Hussein's weapons of mass destruction (WMDs) and Iraq's professed ability to launch a nuclear warhead that could strike Europe in forty-five minutes.

Political lies are incredibly potent, all the more so because these illusions seem to be more easily digested. The initial broad consensus in the West regarding the invasion of Iraq stemmed from the a priori certainty that what politicians tell us is the truth. It is this very point that requires analysis in order to properly understand why we ended up in this economic quagmire and, above all, how we can extricate ourselves.

In the case of Iraq, it seemed remarkable that so few felt compelled to pose some serious questions. First, if Saddam really had WMDs that could actually strike London, Paris, or Brussels within forty-five minutes, why was it that the spy satellites, which buzz around the planet like wasps, could not photograph them? Why had no one been able to provide the slightest shred of evidence to incontrovertibly support this alarming allegation? Moreover, if Saddam really had those weapons, why didn't he use them when he was attacked?