As this article is being written, the threat of a horrific preelection terrorist assault against the United States has yet to materialize. Unfortunately, the news this summer that al Qaeda operatives have painstakingly targeted major U.S. and international financial institutions only underscores the likelihood of more attacks. Politicians, economists, and ordinary citizens rightfully worry that terrorism—beyond the tragic human costs—could derail economic growth in the United States and around the world. What also worries me, however, is the potential economic impact of antiterrorism efforts. Forget the long lines at airports. The global economy has become so dependent on the free flow of goods and people across borders that even a little additional security can have a greater impact than most might think.

Consider, for example, the likely consequence of enhanced security at shipping ports worldwide to monitor for biological or nuclear weapons material, a precaution many experts consider inevitable. Currently, only about 2 percent of all cargo reaching U.S. shores is subject to inspection. The July 2004 report of the U.S. 9/11 Commission noted that, until better technologies become available, authorities should improve methods of “identifying and tracking the high-risk containers, operators, and facilities that require added scrutiny.” But what if such added scrutiny means that the level of cargo inspected jumps to, say, 50 percent? Today’s slowest customs lines—in countries such as Japan that already use port delays as veiled forms of trade protectionism—would start to seem like express lanes, and the costs of many consumer goods would skyrocket. Worse yet, as trade in goods and the flow of people slows, so too will the breathless pace of product...