Gulbadan

Time to sound like a total self-absorbed douchebag. So I wrote this article for an online magazine run by a couple of acquaintances titled The Green Kaleidoscope. This appeared in the May 2009 edition, and you can see the original here. Some people have found it funny; others think it is offensive, nonsensical and uncalled for. :)

The other day I was attending a seminar titled “Youth radicalization in Pakistan” where the speaker mentioned in passing that there now seems to exist a sort of market for suicide bombers in the country - a market that functions like any other. Just like you would go to Ehsan Chappal Store to buy shoes, you can now buy or hire suicide bombers for your esteemed missions.

This got me thinking as to how this market functions in practice, and if textbook microeconomics can help me comprehend it. Turns out, it can. After just a few hours of incoherent thinking, I have been able to decipher how the invisible hand of free markets plays its role in this particular domain, and how the supply of and demand for suicide bombers is equilibrated to provide the optimal levels of quantity of bombings. I present my analysis below, and suggest areas of further research to improve our understanding of this recent but rapidly developing market.


What is the “price” in this case?

As we all know, every goods or services market has two elements: how much quantity will be produced and consumed (the “quantity”) and for how much will it be sold for (the “price”). While the quantity in this case is clear (the number of suicide bombers), what’s the “price”? Surely willing bombers don’t sit in the aisles of Al-Fatah with price tags on them waiting to be bought. Instead, the “price” in this case is the compensation received by families of suicide bombers for their services. These are often in lakhs of rupees, and thus we will use that as a unit of price in our analysis.


The supply of suicide bombers

1. Deriving the supply curve

Holding everything else constant, an increase in the compensation paid to families increases the number of suicide bombers willing to provide their services. This is quite rational: if you offer a broke, unemployed, hopeless soul one lakh rupees to blow himself up, he might be a bit hesitant, but he’s surely yours if you suggest two. Thus, as the level of compensation goes up, more and more potential bombers enter the market. This results in a conventional upward-sloping supply curve, as seen in the diagram below, which should be familiar to students of basic economics.


2. Shifts in the supply curve – what changes supply besides the compensation?

i) Drone attacks

No points for guessing that these kill people, and hence increase anger in the population. Also, they often leave victims’ family members and relatives with little else to do except seek retribution. This increases the supply of suicide bombers, as more enter the market, and more bombers are now available at any given compensation than before. In graphical terms, this means that the supply curve shifts to the right. An area of further research is to determine the exact, quantitative impact of drone attacks on the supply of bombers. A simple empirical study, for example, can try to tease out the causal, incremental effect of one additional drone attack on suicide bombings in Pakistan. A friend has already begun collecting data for this purpose, and hopes to get his research funded by the Jamaat-e-Islami or the Pakistan Tehreek-e-Insaaf.

ii) Changes in preferences

If I use an old Nokia phone and my best friend buys an iphone and starts using it in front of me, I will be very, very tempted to buy one as well. This is true – if I could afford an iphone, I’d ditch my crappy Nokia tomorrow. So, preferences matter, and can be changed by circumstances. This applies equally well in the market under study. If my best friend or fellow tribesman becomes a jihadi and declares that the mission in his life is to mutilate apostate Pakistani Army soldiers and go away literally in a blaze of glory, I’d be tempted to get inspired and follow suit. In technical terms, this results in an increase in the supply of suicide bombers at any given rate of compensation. The supply curve, thus, shifts rightward again.

iii) Education and reverse indoctrination

The more educated you are, the less likely you are to get inspired by half-baked theories of victimization, or get jealous of your friend’s iphone, so to speak. At least that’s the theory behind investing in education to reduce extremism. The supply curve shifts left, reducing supply at any given rate of compensation. This, though, remains unproven in practice and further research and empirical study is suggested in this area.

iv) Economic incentives and jobs

The theory is that if youngsters have jobs that provide stable incomes allowing them to lead respectable lives, they are less likely to be induced by the compensation provided by suicide bombings. If this works, the supply curve shifts to the left, reducing supply at any given rate of compensation. This theory holds merit, and I have been told that it has been tested in Iraq to get support of Sunni groups fighting American forces.


The demand for suicide bombers

1. Deriving the demand curve

Suicide bombers are demanded by those who want to use them to do, well, whatever they do. The usual suspects apply here: Tehrik-e-Taliban Pakistan (TTP) and its various local chapters, other assorted militant organizations like Lashkar-e-Toiba, Harkatul Mujahideen, Jaish-e-Mohammad etcetera, and, as some would allege, even our patriotic brethren in the intelligence and security community. These organizations reveal their preferences for suicide bombers by their willingness to pay the required compensations to families.

Given that the resources at the disposal of these organizations are not limitless (at least till now), holding everything else constant, the quantity of suicide bombers demanded is inversely related to the going rate of compensation. In simpler words, the cheaper they come, the more we want. This results in a conventional, downward-sloping demand curve for suicide bombers, essentially identical to what you would obtain for the other precious Pakistani commodity: Ehsan Chappal Store shoes.


2. Shifts in the demand curve – what changes demand besides the compensation?

i) Military action against militant organizations in Pakistan

After suffering casualties in military operations, these organizations crave revenge and thus want more shock troops and suicide bombers, as they cannot really compete effectively in conventional warfare involving devilish equipment like gunship helicopters. Thus, military action increases the demand for suicide bombers, pushing the demand curve to the right – more bombers are demanded at any given compensation rate.

ii) Cultural events

Cultural events are great targets for making a statement, and so increase the demand for suicide bombers. Thus, one should expect higher demand in seasons when cultural events are in abundance. Again, the demand curve will shift towards the right to reflect that. An interesting case is that of the winter wedding season. Soon, the impact of this increased demand for suicide bombers will be felt in the wedding season, where there is an abundance of haram music, general fahashi and terribly un-Islamic levels of skin show. This is actually quite useful for the suicide bombers’ market to remain efficient, as it counters the lull in demand that is experienced in the winter months due to a let up in fighting up in the northwest. Thus, in the future the demand should remain smooth and strong throughout the year, rather than showing erratic peaks and troughs as before. As any economist will tell you, this is good news for market efficiency!

iii) Price and availability of substitute services

If rocket launchers are more easily and cheaply available, if more troops surrender to the militants due to the low morale of security forces, or if improvised explosive devices become easier to produce, then the demand for carnage is satisfied elsewhere, and there is no need to hire more suicide bombers. Thus, as conventional microeconomics will tell us, favorable prices and availability of substitute services reduces the demand for suicide bombers. This results in a shift in the demand curve to the left.


Equilibrium in the market for suicide bombers

Put the supply and demand curves together and, viola, we get the equilibrium level of quantity of suicide bombers and the rate of compensation to their families!

(Of course, actual numbers here will be of great help. This remains another area for future empirical research.)
Briefly, let us see how a typical equilibrium will look like in the market for Ehsan Chappal Store shoes, using a similar level of basic microeconomic analysis.
As you can see, the similarities are uncanny. Readers are left to draw relevant conclusions and snicker at subtle ironies, if any exist.


The role of madressahs

In this market, madressahs often act as a sort of clearinghouse, gathering the supply of suicide bombers in one centralized location and allowing consumers (the various militant organizations) to pick and choose and purchase services with relative ease. Their role is similar to stock exchanges in financial markets and shopping malls in markets for consumer goods. Without them, these militant organizations would have to track down each individual supplier, thus probably prohibitively increasing their transaction costs. Thus, in this sense the madressahs increase the efficiency of this market manifold, and their role here should be appreciated.


Some important experiments

To make our analysis more relevant to current affairs, and to allow our model to predict future outcomes, let us now conduct some pertinent experiments to see what happens to this market in certain situations.

Experiment 1: the Lal Masjid fiasco

An incident such as the Lal Masjid episode, where military action is taken against armed zealots (especially when they happen to be teenage girls) has a profound impact on the market for suicide bombers. It increases the demand for bombers by increasing the necessity for retribution and revenge that militant organizations feel. Further, it increases the supply of suicide bombers due to both the victim factor as well as a change in the preferences of local population, inciting more potential suicide bombers to enter the market. Thus, both the supply and demand curves shift to the right.

The effect on the quantity of suicide bombers is clear: it increases significantly. Whoops.

The effect on the going rate of compensation is ambiguous though, and depends on the relative size of the shifts in both demand and supply. For example, if the demand increases more than supply, the rate of compensation goes up. In the interesting case of equal increases in the magnitude of supply and demand, the equilibrating compensation rate remains the same as before, as shown in the diagram below.


Experiment 2: investment in propaganda

An increased level of anti-state, anti-imperialist, anti-U.S. or anti-insert-enemy-of-choice propaganda also affects the market. This propaganda can include the following: a higher number of Al-Qaeda videos bashing the West and propounding global jihad, an increase in anti-U.S., anti-Zionist and/or anti-India speeches by key religious figures and opinion makers especially during Friday prayer sermons, a proliferation of jihadi literature and multimedia both online and off, and, finally, more television appearances by world-famous defense strategist Zaid Hamid.

However it is done, an increase in propaganda increases the supply of suicide bombers as it alters the preferences of the suppliers, making them more amenable to serving the true and just path and shunning worldly, materialist comforts emblematic of Western cultural dominance. This results in a rightward shift of the supply curve. The impact on the market is quite clear: the quantity of suicide bombers increases, whereas the rate of compensation paid to families fall, as there is just way too much supply of bombers to get a competitive bargain for the orphaned families.

In sum, this is an important investment that the militant organizations can make, as they are the beneficiaries in the new market equilibrium. An area of further research is to conduct a cost-benefit and net present value analysis to assess how the costs of this investment are providing returns to these organizations.

Experiment 3: Balochistan declaring independence

If Balochistan declares independence, it is not expected to have any effect on the market for suicide bombers in Pakistan. No one cares enough about the Baloch for them to matter.