Moreover, any income gap between the Jewish and Arab populations of Israel is clearly attributable to the prowess of Jewish entrepreneurs and other professionals, whose emphasis on higher education and professional achievement produces similar gaps in every free country on earth with significant numbers of Jews. Jews, for example, outearn other Caucasians in the United States by an even larger margin than they outearn Arabs in Israel. This probably reflects the fact that the United States used to have a freer economy, by most standards, than Israel.
Amid all the dismal talk of lock in and privation, even the UN guru Khalidi is impelled to acknowledge that “proximity to the more advanced Jewish economy has allowed for ‘gains’ [the quotation marks are Khalidi’s] that many Palestinians living under occupation or in exile would envy.” But to the UN economist, who wants to have it every which way, the so-called economic gains mask a “degradation of social capital” [emphasis added] because successful Arabs in Israel may be lured away from the jihad. The discreetly bloodthirsty UN sage thinks that what would help more than wealth and longevity is for the “Palestinian minority” to “succeed in mobilizing itself and its full weight within the Israeli-Palestinian-Arab conflict.”
Khalidi’s gingerly attitude of suspicion toward successful Arabs in Israel who may not share his political obsessions reflects the unwillingness of the quango economic establishment to recognize the one major obvious fact that looms over all their endless data. Arabs constitute roughly 50 percent of the population of the entire Israeli-Palestinian area but contribute only 1 1 percent of its output, and that mostly in public-sector employment. Per capita income of Palestinians outside of Israel is roughly one half that of their counterparts within Israel. Following the surging growth of the Palestinian economy during the second era under Israeli auspices, these statistics on the performance of Israeli Arabs suggest that nothing would benefit Palestinian Arabs more than an Israeli takeover of the entire territory from the Jordan River to the sea.
More important than all the political, economic and legal debates, however, is the attitude toward achievement that is expressed in the literature of the Palestinian apologists. Most of it echoes the view of Arab leader Musa Alami, meeting with Ben-Gurion in 1934. When Ben-Gurion told him that Zionism “would bring a blessing to the Arabs of Palestine, and they have no good cause to oppose us” Alami replied, “I would prefer that the country remain impoverished and barren for another hundred years, until we ourselves are able to develop it on our own.” This sentiment continues today under Hamas. In 2005, when Israelis actually relinquished their advanced greenhouses and irrigation equipment in Gaza, the leaders of Hamas ordered many of these facilities destroyed. Some things never change. On April 9, 2011 the PLO’s chief representative in the U.S., Maen Areikat, told the Jewish Forward: “Palestinians are not after improving their condition of living. Our real problem is ending the occupation” — getting rid of those dastardly settlers!
This concept of economic self-sufficiency is the chief cause of poverty in the world. No one can be rich alone. Wealth is an effect of sharing and collaboration between an elite of capitalists and the insurgent new businesses rising up around them. It is an effect of the willingness of the young and less-educated or less talented to work for the educated and able. It is a by-product of apprenticeship and learning followed by entrepreneurial rivalry. The success of the Israeli economy is not an imbalance that creates invidious gaps. It is a gap — that is, an opportunity — that summons new energies and new wealth.
All capitalist advance generates imbalances and disequilibrium. Growth is an effect of the disequilibrating activities of entrepreneurs, the creative destruction unleashed by rare feats of extraordinary achievement. It is the fallacy of perfect competition and convergence that leads most of the global media and academic establishment wunderkinder to interpret as gaps and imbalances what in fact represents luminous achievement and creativity.
Emerging today is yet a fourth era for the Palestinian economy. The immediate prospects look grim. After the Gaza war of early 2009, the response of the international community was to mobilize some $4 billion in new foreign aid, including $900 million from the United States. Most of the money will tend to gravitate toward governmental institutions, increasing their relative power and discouraging the private economy of entrepreneurial energies. Dominant in Gaza and bristling with weapons, Hamas captures the bulk of these funds, regardless of how they are intended to be distributed. Hamas accepts the money as a well-earned reward for its missile attacks on Israel and will bask in their glow as the cycle of Western appeasement and Western pelf for terrorists continues.
Nonetheless, the long-term possibilities illuminated during the second era of Palestinian prosperity between 1967 and 1987 have become even more inviting with the new global ascendancy of the Israeli economy. Israel’s current administration, under the business-savvy leadership of Benjamin Netanyahu, is committed to the economics of collaboration and prosperity. When the violence abates, he is resolved to open up new opportunities for Palestinian entrepreneurship and growth.
As always, the choice remains clear between the ascent of capitalism and freedom and the economics of dependency and the politics of national socialism.
So what does this history have to do with the Worldwatch alarms about a rising threat of water exhaustion in the Middle East? A few simple statistics suggest that the Israeli settlers (and, after all, to the Palestinian Authority, all Israelis are settlers) are the solution rather than the problem in the region. Since the foundation of the state of Israel in a land that is half desert with no rain six months of the year, the population has risen tenfold. While the amount of land under cultivation has nearly tripled, agricultural production has increased 16-fold, producing some $800 million worth of Israeli farm exports in 2010. At the same time, industrial output has surged some 5 0 -fold. Meanwhile, Israeli use of water has decreased by 10 percent.
Israelis now purify and recycle some 95 percent of the nation’s sewage, including imports of sewage from the West Bank and Gaza — “They sell us sewage and we give them potable water,” said one Israeli official. Israel is pioneering ever more efficient forms of drip irrigation and gains some 50 percent of its water from world-leading desalinization plants. With an array of new hydrological innovations, Israel provides the crucial answers to the acute water crisis that afflicts the Middle East and much of the rest of the world. Just as the Israeli settlers enabled the emergence of an economy in Palestine, so they offer the prospect of saving the entire Middle East from water exhaustion and poverty after the oil boom ends.
Israel’s settlers are far less a problem than a solution to all the most acute problems of the Middle East. Progress toward peace would be expedited if the U.S. government recognized this supreme and basic fact of life in the region and understood the sources of the economy of hate.
CHAPTER FIVE
The Economics of Hate
In a great prophetic work, “A Draft of Guidelines for the Reconstruction of Austria,” written in May 1940 as a report for Otto von Hapsburg, the former archduke of Austria, economist Ludwig von Mises predicted the effects of the banishment of Jews from Austria after the Nazi annexation in 1938. By implication, he also explained the predicament of the Palestinians today.