In Terror and Liberalism, Berman suggests that the appeal of totalitarian movements emanated from liberalism's apparent failure in the aftermath of the First World War. Movements like Fascism, Nazism, Falangism, and Communism all share, according to Berman, two essential similarities. Firstly, they envision themselves as a force being attacked by barbarians who can only be defended by the internal purification of the movement. Berman sees the Communist striving for ideological purity, the Falangist pursuit of religious purity, and the Nazi pursuit of racial purity as being related efforts in this regard. Together with this purifying impulse, Berman argues that these totalitarian movements share a similar nihilist strand.

Berman then tries to trace these commonalities between the various totalitarian ideologies into the modern Islamic world. He splits Islamic thought into two broad categories: Pan-Arabism and Islamic fundamentalism. Pan-Arabist movements like the Ba'ath Party, he suggests, were influenced by traditional European totalitarian thought. In the Islamic fundamentalist movement, Berman sees the re-emergence of the nihilist strand in the form of suicide bombings and the celebration of martyrdom.

In July 2010, Berman wrote in the Wall Street Journal that "Islamism is a modern, instead of an ancient, political tendency, which arose in a spirit of fraternal harmony with the fascists of Europe in the 1930s and '40s."

Several intellectuals have cited Berman's influence on their thinking. British writer, Nick Cohen, in his switch to support for the wider war on terror, cited Terror and Liberalism as a major influence:

This approach has not been without its critics. Anatol Lieven of the New America Foundation has pejoratively labeled Berman a "liberal hawk" and attacks him for "[promoting] and [justifying] the most dangerous aspect of the Bush Administration's approach to the war on terrorism: the lumping together of radically different elements in the Muslim world into one homogeneous enemy camp."

Berman argues that the 2001 invasion of Afghanistan and the 2003 invasion of Iraq were justified by the doctrine of "liberal interventionism": intervention to safeguard and promote liberal democratic freedoms. Berman has defended the Iraq war as "a logical place to begin" the "war on terrorism". In 2004, he wrote in Dissent, "If only people like you would wake up, you would see that war against the radical Islamist and Baathist movements, in Afghanistan exactly as in Iraq, is war against fascism." While critical of the Bush administration's justification of the Iraq war on the grounds of weapons of mass destruction, he warned "[Saddam's] weapons programs are not a fiction." In 2003, addressing criticism of George Bush's articulation of the reasons for going to war, he urged liberals, "And a cold analysis, I believe, ought to lead liberals and people on the left to support the effort to overthrow Saddam, and to push for a genuine campaign to establish a liberal society in Iraq and elsewhere, in countries that have fallen into the totalitarian trough." Over concerns that the Iraq war would mean breaching international law, Berman wrote, "We have had to choose between supporting the war, or opposing it...supporting the war in the name of antifascism, or opposing it in the name of some kind of concept of international law. Antifascism without international law; or international law without antifascism. A miserable choice...but one does have to choose, unfortunately."

Reflecting on the Iraq war in 2007, Berman wrote in the New York Review of Books

"I approved on principle the overthrow of Saddam. I never did approve of Bush's way of going about it. In the run-up to the war, I became, on practical grounds, ever more fearful that, in his blindness to liberal principles, Bush was leading us over a cliffIt is true and it is a matter of satisfaction to me that, in the years since then, I have not made a career of saying 'I told you so.'"

Speaking of Israel in an interview, Berman commented on "anti-Zionism, the true origin of which is anti-Semitism, the assumption that the Jews are the center of the world and therefore the center of the world's evil."

Berman's A Tale of Two Utopias and Power and the Idealists are the first two parts of a history of the so-called Generation of 1968 (of which he was a member). He argues that packaged together with the liberal ideals in this movement were decidedly disturbing elements. Joschka Fischer, for example, the 1968 activist who would later become a leading figure in the German Green Party and Foreign Minister, decided that there was in fact the presence of anti-Semitic impulses in this movement when he saw the Revolutionary Cells participate in the Entebbe hijacking. The hijackers split the passengers by ethnicity, with Jews on the one side and non-Jews on the other, with the intention to kill all of the former.

Also, Berman tracks major figures like Bernard Kouchner ... the later founder of Doctors Without Borders ... a member of the 1968 Generation who would later marry active improvement of human rights to established political goals.

At the close of the book, Berman considers the effect of the war in Iraq on these graduates of '68. He suggests that the war split the movement greatly, with many now deeply aware of the dramatic excesses of the regime of Saddam Hussein, as well as the potential negative consequences if such a dictator remained in power. Nonetheless, they were deeply concerned by the arguments offered by the Bush Administration.

In 1986, when Michael Moore became the editor of Mother Jones, after four months Moore was fired for refusing to print an article by Berman that was critical of the Sandinista human rights record in Nicaragua. Moore stated that he would not run the article because he believed it to be wildly inaccurate. "The article was flatly wrong and the worst kind of patronizing bullshit. You would scarcely know from it that the United States had been at war with Nicaragua for the last five years". Berman described Moore as a "very ideological guy and not a very well-educated guy" when asked about the incident. Moore sued for wrongful dismissal, and settled out of court for $58,000, providing him with seed money for his first film, Roger & Me.