One way for terrorists to win is if they murder so many people and cause so much disruption (or so much terror) that we are forced to come to an accommodation with them - changing our foreign policy, say, surrendering control of certain countries to the leaders of the terrorists, making special allowance for the operation and flourishing of organisations backed by the terrorists within our own countries.
But another way for the terrorists to win is if we respond to terrorism by turning ourselves into them or into what they want us to be; if we give up our goals and values and way of being. Tony Blair used to give excellent expression to this point (though, alas, in this as in so much, his actions did not always match his rhetoric). Barack Obama has begun to do so recently.
The terrorists hate our freedom, the license our society grants to people to be immoral. They despise as weakness our liberal principles limiting the extent to which governments can interfere with ordinary citizens unless good cause is offered. They impugne as cowardice the limitations we aspire to place upon ourselves and our actions, refusing to authorize torture or murder in our cause, and condemn us as hypocrites when, inevitably, discipline is not perfect, targeting is not exact, and intelligence is not accurate, and our soldiers do treat captives dishonourably, our weapons do kill innocent people, and our allegations about the misconduct of our enemies do turn out to be false.
And about all these things they laugh at our pomposity, as we make the absurd claim that we are the good guys and they are the bad.
We are beaten if we surrender on these points. If we say: "The terrorists have no compunction about murdering our people, so we should have no compunction about torturing them" the terrorists win a battle. If we say: "We know that most of the terrorists come from particular races and are Muslim, so all such people should be subject to additional checks to get on planes or attend football matches or enter the Houses of Parliament", the terrorists win a battle. If we say: "Why should terrorists get trials?" the terrorists win a battle. If we give up on the struggle to be the good guys, then we lose the war altogether.
Some people argue that we make our lives more dangerous through security crackdowns by encouraging more people to become terrorists. There is a point here, but I suspect that, in fact, security crackdowns would make us safer. If you are really prepared to be tough enough, it does have an effect (remember the fall in crime in Iran once the maiming of thieves was introduced). The correct ambition is not to minimize risk. Conservatives have come to recognise this when it comes to school away days and other health-and-safety rules. The issue is what we give up in order to reduce risk - of course, it is not improper to have some measures that mitigate or limit risk, but there is a tradeoff between reducing risk and what one gives up in doing so. And giving up on prohibitions on torture, on racial and religious discrimination by the state, on due process in trials - giving up on these things is giving up on almost everything that really counts.