BUSINESS
12/01/2015 07:16 pm ET Updated Dec 09, 2015

How Economic Inequality Makes Terror Attacks More Likely

A rock star economist argues the new Gilded Age is more costly than we thought.
ERIC PIERMONT via Getty Images

Economist Thomas Piketty says income inequality plays a big part in fueling radical Islamic terrorism that originates in the Middle East.

Piketty, famous for his best-selling book Capital in the 21st Century, which argues global inequality has massively widened in recent decades, wrote in French newspaper Le Monde last week that "it's obvious: terrorism feeds on the powder keg of Middle Eastern inequality, that we [the West] have largely contributed to creating." (The article was picked up by The Washington Post on Monday.)

While Piketty says "we," he points fairly directly to American foreign policy over the last three decades. He gives examples of the Gulf War and the Iraq War, both of which he says were "asymmetrical wars," with many more local casualties than Western ones, largely fought over Western oil interests.

It's not just the West, though. Piketty points out that the region's "oil monarchies," which make up less than 10 percent of the population, take in 60 percent to 70 percent of the region's GDP. (He's mostly referring to countries that make up the Arabian Peninsula and its immediate neighbors.)

Very little of the money goes to regional development, he says, and a large part of the population, including women and migrant workers, are kept in "semi-slavery."

As for the terrorism bubbling up closer to his home in Paris, Piketty points to economic austerity and a lack of opportunity for immigrants. "It is austerity which led to the rise of national self-interest and identity tensions," he writes.

What Picketty doesn't address in his column, but is definitely related to the phenomenon he is describing, is the extraordinarily high rate of youth unemployment in the Middle East. Unemployment for people ages 15 to 24 in the region is nearly 25 percent, according to the International Monetary Fund

IMF

Worse, unemployment is actually higher for people who are highly educated in the Middle East and North Africa. Total unemployment for those with a tertiary education (more than high school) is above 15 percent in Egypt, Jordan and Tunisia, according to the IMF. This, in part, is because of skill mismatch in the economy -- young people come out of school without the skills businesses are looking for, and there's little training available for them. Add to this the empirical findings over the last few years that terrorism tends to come from those with a fair amount of education.

Given all of this, should youth radicalization in the region really surprise us? 

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