Economics of Al Qaeda

In the 9/11 issue of the New Yorker an interesting article titled “The Master Plan” outlines Al Qaeda’s and more generally radical Islamist’s ideological strategy. Towards the end the author maps out a six phase plan, as prescribed by jihad theorist Fouad Hussein. The plan begins with “the awakening” (9/11) and culminates with “total confrontation” in 2020 at which point we better be ready to experience “real terrorism”. While the threat of terrorism from any number of Muslim terrorist cells is very real, many parts of this plan seemed delusional.

Having read an article outlining the real economic effects of 9/11 two days ago, my favorite part of Hussein’s plan has to do with its intelligent economic component. In phase three (2013) Hussein predicts that “Al Qaeda will have completed its electronic capabilities, and it will be time to use them to launch electronic attacks to undermine the U.S. economy.” This statement is absurd on multiple levels, primarily since the most popular college major in the Muslim world is theology. Increasing “electronic capabilities” would suggest either an increase in Muslim expertise in the fields of mathematics and engineering or the ability to attract foreign experts in the field. Even if there is a large spike in electrical engineering and computer science enrollment in Muslim universities between now and 2013, the promise of heaven in the afterlife will not reverse the brain drain that sucks the best and brightest engineering minds in the world to Silicon Valley.

The second part of their economic plan, which coincides with the above paragraph, is to “promote the idea of using gold as the international medium of exchange, leading to the collapse of the dollar”. This statement once again highlights the deficiencies associated with having a population hyper-educated in religious studies. It doesn’t take too much digging to find a textbook about a) World War I b) the Great Depression or c) International Monetary Flows. Before modern day exchange rates were set by market forces of supply and demand, they were governed by the exchange of gold and a subsequent gold standard whereby a percentage of a country’s fiat currency was backed by solid gold. This system depended on international peace, cooperation, and willingness to support neighbors in times of need, which completely conflicts with Al Qaeda’s plan. If Al Qaeda was successful in reviving some sort of gold standard during its so called phase three, it would certainly see its demise during their purposed stage six which implies the onset of World War III.

To make matters worse, one of the economic effects of 9/11, as outlined in the previously mentioned article, was an increase in market particants’ risk aversion and a subsequent increase in safe assets such as GOLD. So, what’s the point of my drivel? If Mr. Bush and his super-rich cronies want to prevent Al Qaeda from becoming a player in the global economy they need to artificially distort the price of gold to make it unattainable as a reserve currency for the proposed Islamic caliphate. On the other hand, if Al Qaeda is serious about dabbling in world markets they should lay down their guns, creating a more stable investment climate, thus diverting cash away from gold and sending the pice back down.