Last month the Nobel Committee did something completely useless: It awarded its Peace Prize to Kofi Annan and the United Nations. Was it the UN's anti-racism conference—with its agenda formulated largely in Tehran—that won over the committee? Or perhaps Annan's personal accomplishments—for instance his role, as head of UN peacekeeping in 1995, in pulling blue helmets out of Srebrenica so the Serbs could rape and murder the city's residents without international interference?

The Nobel Peace Prize has value only when it embarrasses a government by focusing attention on some ugly pocket of repression it would like the world to ignore. Desmond Tutu's Peace Prize in 1984 helped fuel the global anti-apartheid movement. Aung San Suu Kyi's in 1991 made Myanmar a human rights cause celebre. Carlos Filipe Ximenes Belo and Jose Ramos-Horta's in 1996 made it harder for Indonesia to cover up its brutality in East Timor. And the Nobel Committee could have embarrassed exactly the right government this year had it chosen jailed Egyptian academic Saad Eddin Ibrahim.

Ibrahim, an internationally respected sociologist, was sentenced to seven years in prison this May on a number of trumped up charges that amount to this: He challenged Hosni Mubarak to hold free elections, respect Egypt's Coptic Christian minority, and make real peace with Israel. He is exactly the kind of person Arab governments want the world to ignore—because he exposes just how vicious and corrupt they really are. And he is exactly the kind of person the world—and particularly the U.S.—needs to champion if we want to win the war on terrorism.

The United States today faces the same dilemma it faced over and over during the cold war. Some of our supposed allies in the war against terrorism—Egypt, Saudi Arabia, Pakistan—violate the very democratic principles we are fighting to defend. But the fundamentalists they repress are even more illiberal and certainly more hostile to the United States. So, as with cold war autocracies like Chile and the Philippines, the United States must now decide whether to back pro-Western Muslim tyrannies—and thus earn their people's wrath—or push democracy and gamble that it will produce more stable, and more honorable, allies in the long run.

Right now we are emphatically doing the former. No senior U.S. official has publicly mentioned Ibrahim's case, and Mubarak's government boasts that September 11 has vindicated its grizzly crackdown on political dissent. "After these horrible crimes committed in New York and Virginia," said Egyptian Prime Minister Atef Abeid, "maybe Western countries should begin to think of Egypt's own fight [against] terror as their new model."

Egypt's "fight against terror" consists of special military courts, routine torture, the imprisonment of opposition politicians, and an emergency law that has been in place since 1981. And, in some ways, it has worked. Islamist terrorism has decreased sharply since the mid-1990s (although partly through export to Afghanistan and the West). Most of Egypt's remaining Osama bin Ladens are in jail.

The problem is that's where Ibrahim is as well. It was Egypt's emergency law, which the government justifies as a weapon against fundamentalists, that put him behind bars before charges were even filed. A 1992 law, passed to prevent foreign Islamists from funneling money into the country, allowed the government to prosecute Ibrahim for receiving a grant from the European Union. And at trial he sat in the same kind of public cage that confined the fundamentalist assassins of Anwar Sadat.

What Ibrahim's plight makes clear is that when a government abandons the rule of law in its fight against fundamentalists, it usually abandons it altogether. So while it's true that Egypt's crackdown has crippled Islamic terrorism, it has also crippled Egypt's civil society. In the wake of Ibrahim's arrest, some local NGOs, which had relied on foreign funding, have shut down. And as a result there was no effective independent monitoring of last year's parliamentary elections. Under the emergency law, the government has also detained labor activists critical of working conditions at state-owned companies. As Fouad Ajami has written, "The terror had given Mubarak a splendid alibi and an escape from the demands put forth by segments of the middle class and its organizations in the professional syndicates—the lawyers, the engineers, and the journalists—for a measure of political participation." And, of course, the lack of political participation means greater corruption, which means greater poverty, which plays into the Islamists' hands.

The "fight against terror" has devastated Egyptian civil society in another way as well. To compensate for the lack of political freedom, Mubarak has given fundamentalists unprecedented control over Egypt's educational system and cultural life. Books considered offensive to Islam are banned and their authors arrested. This July, 52 alleged homosexuals were put on trial for "contempt for religion." Entire schools have banned the Egyptian flag and national anthem as symbols of secularism. Saudi Arabia has done something similar, handing over its schools to militant clerics in an effort to buy them off. To preserve themselves today the regimes are sowing the seeds of a theocratic future.

In other words, Hosni Mubarak is destroying Egypt in order to save it. And the United States is blithely playing along. But there is another way—more dangerous in the short run, perhaps, but safer over the long haul: It is Saad Ibrahim's way. Ibrahim is a liberal and a secularist—just the kind of person that Egypt's Islamists have targeted for assassination. And yet, after intensively studying the fundamentalists, he says Egypt should respect their rights—jailing only those who advocate violence and allowing more moderate Islamists to participate freely in politics, in the hope that the democratic process will wean them from their more bloodthirsty brethren.

What Ibrahim believes, and Mubarak does not, is that liberal democracy—if given a chance—will prove more attractive to Egypt's suffering, embittered people than the confinement of sharia and the fantasy of jihad. And the real question for the United States as it enters this new era is whether we believe that too. Even before September 11, intellectuals and politicians called America's post-cold-war campaign for democracy a hubristic delusion. During the second presidential debate, George W. Bush explained, "I just don't think it's the role of the United States to walk into a country and say, ‘We do it this way, so should you.'" The Muslim world, in particular, was deemed culturally incapable of democracy. Just not up to it. Guys like Mubarak, the right-wing relativists argued, with an air of resignation, are the best they can do.

After September 11 those arguments really matter—they define the moral framework within which America goes to war. Is our alternative to Osama bin Laden Hosni Mubarak, or is it Saad Eddin Ibrahim? And if it's the former, does anyone seriously think we can win?