Since it seems to be rolling that way (and Che requested it) I'll share some of my thoughts on the issues of beheadings from a different discussion:
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I believe a modern Western society can prove to be stronger if it sticks to its convictions. If we stick to what we believe in, apply it fairly to the enemy, and eliminate him with extreme prejudice, we can keep the moral highground and be sure that we can stay the course and still maintain what we are fighting to protect at the end of the conflict.
Just because beheading people as a form of punishment is not in our modus operandi does not mean Western society is a less effective killing machine. Just as we revile their methods of suicide bombings and beheadings of civilians, they are equally reviled by our methods of dropping laser guided bombs on them from 15,000 ft or balaclava'd troops swooping in on helicopters to execute targets. It's the ability to stay the course that is the key.
So much of how societies organize to fight and apply force upon eachother is wrapped up in culture. Look at the writings of Keegan and Victor Davis Hanson to get a idea of this in the grand scheme of things. We would do well to heed that notion when we contemplate "cutting their heads off with a dirty knife".
Since culture is such a force behind the doctrine and dogma of how people fight, what does this mean to us? It gives us, as members of a Western society, our own peculiar approaches to ideas such as the individual, command relationships, application of force, surrender, treatment of the defeated (That is why we in the West seem to be the only ones who want to play by the Geneva Conventions). I remember reading an article a while back that stated that the beheading of prisoners was a psychological tactic employed at the cultural level; cultures on the Oriental/Occidental divide (ie: East/West) have always been keen to use the scimitar in the execution of justice, whether it be a head or a hand. This style of killing people is "normal" (if you could call it that) to cultures in SW Asia. We, in the West, have historically been more keen to hanging people by the neck, or using firing squads. I don't know if I'm taking this too far, and I am unsure of the root causes of these sorts of things (it's probably buried in centuries of social and psychological evolution), but I think we need to heed this phenomenon.
There is "thinking outside of the box" and then there is "refusing to recognize the box at all". The proposal to "cut their head off with a dirty knife" may seem like a measure of alternative attacks on the enemy, but I have a feeling that adapting such tactics, with all its inherent cultural baggage, may do us more harm then good. This could be real, psychological trauma to the poor guy who has to lop the head off of some terrorist, the commander who carries out the punishment, and society which bears the knowledge that it is condoning such acts of reprisal.
In essence, our society has the cultural mechanisms to deal with an AC-130 hovering over and vaporizing scores of terrorist in the middle of the night; this comes out of the way our culture has evolved in its "way of war." I don't believe we possess the same mechanisms to deal with the proposal to "cut their heads off with a dirty knife"; just as we don't possess the mechanisms to deal with strapping explosives to Pte. Bloggins and sending him into a market to immolate himself and anyone around him.
I know I've rebutted the use of this quote before, but I think it applies here:
He who fights with monsters might take care lest he thereby become a monster. And if you gaze for long into an abyss, the abyss gazes also into you.
Friedrich Nietzsche
Who we are, the monster or the fighter, is irrelevant. The important factor is that we are gazing into an abyss, aspects of the other culture which are so foreign to us, and we must remember who we are, whether it is monster or fighter.
Moreover, I believe that cultural conceptions of war determine our social outlook on "styles" of fighting. Look at the way suicide bombers are treated in the society from which the came from; they are celebrated as heros. The cultural mechanism that supports this is the enormously strong undertow of Islam; of which many of its interpretations define suicide bombing as martyrdom and entry to heaven. They are looked upon as true "warriors" of their society.
This isn't unique to Islamic cultures and sub-cultures either; just look at the Japanese Kamikaze of WWII and the ceremonial significance of their sacrifice.
Now take the laser-guided bomber. Look at the social and historical aspects of this form of fighting. Highly technological and sometimes indiscriminate. Bravery, skills to return alive, "Knights of the Air" dogfighting, Memphis Belle, the dashing aviator. These are all cultural mechanisms surrounding the form of Air War we've developed. As such, vaporizing a Hezbollah leader with a laser-guided bomb or firebombing a city may seem "cowardly" to an enemy with a culture that does not have the mechanisms to process that type of violence. Just as you won't see Western societies have icons such as manuals on suicide bombings, pictures of babies with explosive belts, and rewards for the families of martyrs; you won't see Islamic societies developing icons like Douhet, the Enola Gay, and Top Gun.
You could apply this throughout history. I bet you the Aztec's thought the Spanish cowardly for fighting from horses, engaging in ranged combat with rifles, and trying to kill instead of capture for sacrifice.
Is it relative? Sure. There is no spectrum of "effective", "just", or "better" ways of fighting. The violence we chose to wreck upon ourselves as humans is totally dependent on factors in the time and space we occupy. We simply fight the way we know best. The fact that it is what we know best doesn't make it more superior or moral then other forms. However, simply trying to graft on aspects of how others fight into our unique paradigm of warfighting may have unintended consequences. Consider it akin to introducing some new, violent species into a closed ecosystem; the consequences are often dramatic.
With regards to the carpet bombings of WWII: In the situation of Total War, which in our conception has evolved out of our Industrial-era society and politics of citizenship and nationalism, the entire populace of a society is mobilized for war. They become weapons, in a sense, and thus become legitimate targets. I have no qualms about attacks such as the Firebombings of Tokyo or Dresden in the Second World War; although their effectiveness is debatable in purely military terms, I think their are alot of other factors involved which are unique to the idea of "total war". This is why no one really complains about the bombings of cities (some revisionists like to) or the dropping of the Atomic bombs; these were justified in a total war.
However, my opinion is that we are not involved in a total war situation with Iraq or with the terrorists. Although I may lament the somewhat lackluster and intermittent support of the general population, we are in essentially a expeditionary major regional contingency. Since we are not in total war, I don't believe the flattening of Fallujah with arc-light strikes is justified (I know I've brought this up a few times before, I admit upon reflection that I was wrong) under the nature of the conflict we are in. Hammering Hiroshima and Nagasaki with total destruction saved hundreds of thousands, if not millions, of lives of our soldiers (including Canadians, who were scheduled to join) in the invasion of an island in which, culturally, the notion of driving peasants to the beaches with pitchforks was not completely unheard of. Clearly, we don't face that sort of dilemma at this point in time.
Proportionality is an important factor in our way of war.