What is Britain's national security? At a time when the country once again ponders war, the arguments used should be precise and the language clear. This is seldom the case. The division of the world into good guys and bad guys, democrats and dictators, terrorists and counter-terrorists, not only insults peaceful diplomacy and promotes war. It pollutes the domestic rule of law and civil rights.

The controversial detention of David Miranda at Heathrow earlier this month was explained by the home secretary, Theresa May, and the Commons security committee chief, Sir Malcolm Rifkind, on the grounds that Miranda was carrying material that "could aid terrorism". This mere possibility would, they said, constitute a "threat to national security".

Time and again in the course of the Iraq and Afghan wars, the threat of terrorism was used to justify draconian anti-terrorist powers in Britain. Tony Blair said the powers were needed to "defend western values". Gordon Brown told British troops in Helmand that their role was domestic, "to make Britain's streets safe from terror". Should Britain start bombing Syria, some murky agency will use this as justification to step up terrorist attacks on Britain, with a consequent twist in the ratchet of surveillance and detention by the British authorities.

Terrorism and national security are wholly distinct concepts. Terrorism involves a violent incident, a crime with usually facile political intent. It merely kills people and wrecks buildings. It acquires power only by generating an exaggerated response, and is countered by good policing and not overreacting. When the Brighton hotel was bombed in 1984, the police told Margaret Thatcher to cancel her conference and return to London. She rightly replied: "What, and let the terrorists win!"

Not even IRA terror, more systematic than anything spawned by al-Qaida, threatened national security – that is, the integrity of the British state or its institutions. To confuse terrorism with such security is to play the terrorist's game. Those who do so lack faith in the robustness of the British constitution. They are what Lenin would have called terror's "useful idiots".

In Iraq, Afghanistan, Libya and Iran, designated by western democracies as posing threats that might justify military action, the threat they posed (and still pose) was customarily described as "undermining western democracy and values". In no western state are these values remotely at risk from outside. Yet the sense of threat escalates. The enemy has become a miasma of despotism, cruelty to innocents, suppression of dissent and crises whose publicity "demands that something be done".

Projecting violence on to foreign peoples is no different from treating citizens and visitors as enemy combatants at home. The normal freedoms are suspended in the cause of "national security". Any act that can be construed as aiding terrorism is elevated to the plane of treason. The result has been devastatingly counter-productive: 9/11 won al-Qaida the instant and horrified opposition of most Muslim states, and might have doomed it for ever. That opposition was stifled by the invasions of Afghanistan and Iraq, enabling al-Qaida to recover. Subsequent conflicts have been justified, at least in London and Washington, as part of a resulting, supposedly global "war on terror".

Dozens, if not hundreds, of civilians are now being killed in drone attacks in this cause, in addition to those declared by the Pentagon or CIA as "guilty". At a different level, in Britain some 60,000 travellers have reportedly been stopped on suspicion of links to terrorism. The impact on the security of western states has been trivial. The chief change has been to render them far more vulnerable to domestic attack – witness the embattled streets of central Westminster.

I once had sympathy for the old neocon vision of a developing world that might one day be converted to "modernity" through the spread of capitalism, liberty and democracy. I disagreed with the pessimism of those such as the philosopher John Gray who saw al-Qaida and others not as primitive fanatics but as sophisticated mafiosi with a compelling hold on the Muslim imagination in a quite cultural environment.

Gray's seemed a counsel of despair. I now see how the west's reaction to events in the Muslim world plays to Gray's argument. While we may not see counter-terrorism as equal and opposite to Muslim fanaticism, many Muslims do. The west is almost starting to behave with similar fanaticism. Listening to the debate on the Snowden surveillance revelations has been like watching the American Republican primaries last year, with their chorus of demands to "bomb Iran". Blind public faith in the secret cyber-military complex parallels a blind hatred of the Muslim world. Each feeds off the other.

British foreign policy at present mimics America's in being jumpy and amoral. It reacts to the world's evils as if it is orchestrated by an army of special interests, spies, soldiers, cyber-warriors and defence contractors. All have a vested interest in paranoia towards the Muslim world, as they did against Soviet Russia. This paranoia goes far beyond democracy's ability to curb it with common sense.

In his commentary on Conrad's The Secret Agent, Kieron O'Hara pondered a modern state in which terrorist and counter-terrorist live in a swirl of threat exaggeration and self-absorption, leaving "no confidence in their moral fabric". Defenders, fixated by multitudinous threats, ignore the "cost to the society they nominally defend". They need regularly to deliver the world "a jolly good scare". Their paranoia is no aid to democracy or humanity, only nihilism.