Buy the Book
Israel Inside
Can emancipated Israel emancipate Arabs too?
The Israel Test
By George Gilder
(Richard Vigilante Books, 296 pages, $27.95)
This latest book from one of the planet's intellectual titans of the past generation is one of his most important. Given George Gilder's astonishing range and foresight -- including family structure, welfare, the practical and moral case for enterprise capitalist wealth creation, the transformation of the computer and telecommunications industries -- this is saying a lot.
What Gilder sets out to do in his poetic prose is show how Israel's accelerating migration over the past twenty years from a socialist to a capitalist economy has transformed the Jewish state from an economic basket case to a powerhouse player in the world economy. Gilder then applies the implications of this metamorphosis to the prospects for finding a way to settle the Arab-Israeli conflict.
Israel has become such a huge driving force in computing and telecommunications that Gilder intellectually riffs off the "Intel Inside" logo that sits on the exterior case of countless millions of personal computers, and says that today's Internet and computers should be labeled "Israel Inside." Now Israel is making major moves in biotechnology, including drugs for plants used in agriculture. Symbolic of the more agile Israeli economy, one CEO noted: "The process is faster for drugs because the plants don't have lawyers."
Calling Israel the central front in the war dividing two global camps, Gilder begins his book by framing the divide:
The prime issue is not a global war of civilizations between the West and Islam or a split between Arabs and Jews….The real issue is between the rule of law and the rule of leveler egalitarianism, between creative excellence and covetous "fairness," between admiration of achievement versus envy and resentment of it….
The test can be summarized by a few questions: What is your attitude toward people who excel you in the creation of wealth or in other accomplishment? Do you aspire to that excellence, or do you seethe at it? Do you admire and celebrate exceptional achievement, or do you impugn it and seek to tear it down?
The Palestinians, needless to say, epitomize the wrong side of these juxtapositions, while Israel and America generally are on the right side. But now America must look toward Israel, whose Prime Minister exemplifies the right side of these divides, whereas the newly elected American President is on the wrong side -- despite his having been richly rewarded by the society he now wishes to turn away from its historical celebration of private capitalist enterprise.
Gilder notes the politically incorrect fact that Jews contributed to scientific progress (and artistic achievement) in vast disproportion to their minuscule number. As for Arab militancy its roots, he explains, lie in the noxious totalitarian ideologies of Marxist socialism and Nazism. Ironically, Marx's socialism also animated the early generations of Israelis. Thus Israel was for its first four decades an economic mess.
Gilder spotlights the legendary mathematician John von Neumann as first among the genius Jews who transformed mathematics, physics, game theory, information theory and many other disciplines; von Neumann was the intellectual godfather of the modern computer as it evolved over six decades. Nazi persecution drove von Neumann and a legion of great Jewish scientists out of the lands of Eastern Europe and from Germany. Gilder captures the result perfectly: the great mathematician David Hilbert, a von Neumannn mentor at Göttingen University in Germany, was asked in 1934 by Hitler's education minister, "How is mathematics in Göttingen, now that it has been freed of the Jewish influence?" Replied Hilbert: "Mathematics at Göttingen? There really is none anymore." Von Neumann, Einstein and many other Jews combined with Jews like J. Robert Oppenheimer in the West to win the race for the atomic bomb, and thus end World War II; many then were central to the West winning the Cold War. After the Berlin Wall fell, a huge wave of Russian Jewry took immense scientific talent and entrepreneurial energy out of Russia and into Israel, laying the foundation of Israel's rise to world economic ascendancy.
The prime Israeli architect of economic prosperity was Benjamin Netanyahu, who learned his economics during his education in the States and was an early supply-side tax cutter. His shining moment came in Ariel Sharon's term as prime minister. Israel's economy was still 60 percent government controlled. The Palestinian suicide bombing campaign of 2000-2002 scared off foreign investors and caused an added risk premium to be priced into Israeli bonds. Needing a guarantor, Sharon's Finance Minister, Netanyahu approached the Bush administration. President Bush and his Treasury Secretary, John Snow, agreed to have the Treasury guarantee Israel's bonds, which would reduce the risk premium and make affordable financing possible for Israel, on one condition, to which Netanyahu eagerly assented: implement broad financial and economic deregulation. The upshot was that within a few years the government share of Israel's economy plummeted by two-thirds to 20 percent, and Israeli economic growth went into racing gear.
Gilder details how from 1967 to 1992, when Israel governed the West Bank and Gaza, Palestinians prospered as never before. In the 20 years from the 1967 War to the launching of the first Palestinian "Intifada" (Arabic for "shaking off"), 250,000 settlers on the West Bank and Gaza built the area's first real modern infrastructure, and thus attracted ten Arabs for every Jew living there. The territories saw annual economic growth running 25 percent, far higher than socialist stagnated Israel. Arab incomes tripled, seven universities and 2,500 factories were built, and life expectancy jumped from 40 to 70. In an area widely viewed as an economic backwater under Israeli rule, 92.8 percent of the Arab population had electricity in 1986, compared to 20.5 percent in 1967. Then came the UN, the "international community" and Israel's "peace now" leaders, who gave the Mideast the Oslo Accords and placed Yasser Arafat, lifelong terrorist and mass murderer, on the throne of Arab Palestine.
The upshot: terrorism, Nazified brainwashing of children to hate Jews, massive corruption and economic immiseration. Inundated by foreign aid that fell into Arafat's palm Palestinians, Gilder writes, "became arguably the world's most twisted welfare culture of violence and demoralization….with leadership based entirely upon terrorism and hatred and international grievance-mongering."
Thus the path to peace is not the hidebound "peace process" in which Israel makes irrevocable territorial concessions in return for revocable Palestinian peace promises. It lies, rather, in Arabs being freed from terrorist leaders and anti-Semitic fantasy, instead embracing cooperation with and thus acceptance of Israel. Modern game theory explains the divide. A short-run game rewards predatory players, while productive players must use cooperation to gain vastly more over time.
History suggests strongly that Gilder is right. The two most successful Mideast peace accords were based upon Arabs moving first: accepting Israel's right to exist, then making peace. Israel is, in truth, the easiest country in the world to make peace with. All it needs is a partner for peace. But when Israel has gone first the result has been disaster:
About the Author
John C. Wohlstetter is a senior fellow at the Discovery Institute, author of The Long War Ahead and the Short War Upon Us, and founder of the issues blog Letter From the Capitol.
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KyMouse| 8.10.09 @ 8:25AM
Thank you, Mr. Wohlstetter, for this insightful article. I've often heard that Israel's early kibbutzim followed the communist model because they needed to jump-start their country in a hurry; however, I suspect that model also seemed the logical choice to Jews who came from European countries which thought communism would turn out to be progressive. I'll have to read Mr. Gilder's book to learn more about those early days.
Today, Israel is indeed a powerhouse. I've visited four times in the past decade and have been impressed by the productivity of the people, the pride they take in their products (I'm a big fan of Ahava skin products, and Teva Pharmaceutical's osteoporosis medication helps keep me healthy), and their eagerness to do much more.
Jewish people have been a great blessing to every country in which they have lived, when given a chance -- just consider the dozens of Jews who have won Nobel Prizes for medical research and other fields. Now if only the Arab world would stop hating the Jews and learn from them, for a change!
S.L. Toddard| 8.10.09 @ 10:52AM
"Israel's accelerating migration over the past twenty years from a socialist to a capitalist economy has transformed the Jewish state from an economic basket case to a powerhouse player in the world economy"
If Israel is such an economic powerhouse then is it not time to withhold Israel’s yearly $3 billion welfare check – permanently? What right do Israelis have to the money Americans earn? Especially now that Israel is considering attacking Iran against the wishes of the United States. I said it here recently and I’ll say it again:
President Obama should withhold Israel's yearly $3 billion welfare check until they learn to show respect for their benefactor. It is not seemly for an American dependency to mistrust America, especially while the hard earned dollars of American citizens are confiscated and sent to the other side of the world to pay for Israel's walls and guns. Where are all the phony “conservative” opponents of excessive confiscatory taxation when that money is sent to “a powerhouse player in the world economy" on the other side of the globe, and with whom we share scant vital interest?
If Israel is earnest and chooses to strike out on her own – to, say, attack Iran against the express wishes of the United States - then I say let her spread her wings and fly from the nest, unencumbered by the many strings attached to the billions and billions of dollars Americans earn but Israel spends. Let Israel shut off that pipeline of largesse that flows ceaselessly into its coffers, shed the ragged mantle of the beggar, stand on her own two feet at last and make her own way in the world without American economic or political intervention.
Free Israel, I say!
Or, if Israel wishes to continue to bury her snout in the trough of American largesse, then she should learn her place and in act accordance with the wishes of that benefactor nation whose charity Israel has for so long taken for granted.
Alan Brooks| 8.10.09 @ 2:37PM
though Toddard is a crypto antisemite, he doesn't dislike blacks.
We wouldn't want him to be a racist.
Alan Brooks| 8.10.09 @ 3:01PM
let's liberate Palestinians by moving Israelis to Germany, and ship the Germans off to Madagascar. lush German land is so much better than dried-up third-world cesspool West Asia. Let the Arab brothers (not sisters, natch) be liberated into having the region all to themselves, so they can kill each other off one by one.
S.L. Toddard| 8.10.09 @ 3:38PM
"though Toddard is a crypto antisemite, he doesn't dislike blacks."
For a group of people (neoconservatives) who have spent so very long worshipping Israel - indeed putting Israel's interest before America's - it's odd that they haven't grasped even the most basic, fundamental truths about Israel. The first being the most obvious - that Israel is a nation state, and that Israel does not equal "the Jews". If objecting to continuing to provide billions in welfare to a "powerhouse player in the world economy" like Israel is evidence of "anti-semitism", then objecting to welfare to American blacks - our own countrymen, by the way - is surely proof positive of white supremacism.
Are you a white supremacist, Alan? Or are you pro-welfare?
"let's liberate Palestinians by moving Israelis to Germany, and ship the Germans off to Madagascar"
My god, what a confused person you are. Our economy is falling apart at the seams and yet you neoconservative types - who talk a lot of patriotism but demonstrate it rarely, if ever - are consumed by irrelevant Middle Easterners - Iraqis, Israelis, Palestinians etc. I agree with your statement that we should let the semites - Arab, Israeli and otherwise - hash out their differences themselves.
Alan Brooks| 8.10.09 @ 4:07PM
i'm a Menckenite paleo, not a neo. Oue economy isn't exactly falling apart at the 'seams'.
('seams', what a cliche). if it is falling apart at the 'seams', then why do we still have the best agriculture of any nation in all history?
But i am deeply ashamed of our pulik skool sistem that is academically mediocre at its very SEAMS.
Alan Brooks| 8.10.09 @ 4:12PM
pardon, our economy, not oue economy. it must be the influence of the French, and Oui Magazine. Those cheese-eating surrender Frogs! :-)
Jack Shattuck| 8.10.09 @ 6:23PM
Israel's $3 billion of "largesse" from the U.S. consists not of welfare, but of contracts for military supplies in a region wherein it's neighbors have launched 3 major wars against it, in addition to the latest conflicts. These contracts have requirements under federal law that these funds must be used specifically to buy these weapons directly and only from America. To withdraw this funding would thereby cut off manufacturing of innumerable jobs in the U.S. as well as threaten our best ally in the Midden East. Look before we leap, Mr. Toddard.
Alan Brooks| 8.10.09 @ 8:34PM
Toddard doesn't care, he is loaded for bear; he is looking for, no pun intended, ammunition.
Thing is, he wins, because he is picking our brains for ammo, and we're not learning anything from him-- has anyone not heard it all before?
but he is doing the right thing from his perspective, give no ammo, gain as much as you can. He'd make a great militarist.
Alan Brooks| 8.10.09 @ 8:39PM
best to just use Toddard's logic against him. if Israel doesn't equal the Jewish, then Kenya doesn't equal the blacks.
Wesley Mouch| 8.10.09 @ 10:33PM
I think we should increase our aid to Israel as an economic stimulus program for Boeing, General Dynamics, etc. Maybe they have some clunkers they can trade in & we'll discount that as a trade in. Our troops in Iraq wouldn't mind slightly used equipment, it's better than none I guess.
hell on planet earth| 8.12.09 @ 9:18PM
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Roy Roger View profile
More options Nov 28 2007, 8:03 am
Newsgroups: alt.religion.christian, soc.culture.british, soc.culture.israel, soc.culture.jewish
From: "Roy Roger"
Date: Wed, 28 Nov 2007 07:03:16 GMT
Local: Wed, Nov 28 2007 8:03 am
Subject: OVERVIEW OF THE JEWISH-OWNED FEDERAL RESERVE BANK
Reply to author | Forward | Print | Individual message | Show original | Report this message | Find messages by this author
OVERVIEW OF THE JEWISH-OWNED FEDERAL RESERVE BANK
THERE IS NOTHING "Federal" about the Federal Reserve Bank. In other words,
the Federal Reserve is not "federal" and it does not have any "reserves."
The Jewish Bankers, who are masters of deception, own the Federal Reserve
Bank, print money with interest but without any backing, and would like to
keep their "federal" banking cartel a secret.
But the House of Rothschild which owns 57% of the stock of the
privately-held Federal Reserve Bank, is alive and well in North America.
Recently, Reuters News Agency published an article announcing two new
appointees of the Rothschilds' banking interests in North America @
Rothschild Bank Names New North America Heads. And be certain that the
Rothschilds have charged their appointees to act as liaisons with their
fellow Jewish bankers who own the Federal Reserve Bank.
It was Jacob Rothschild II who in a letter to his US agents in 1863 with
regard to establishing a Central Bank in America said: "The few who
understand the system will either be so interested from its profits or so
dependant on its favors that there will be no opposition from that class.
The other class will simply have no comprehension or concern about American
monetary policy."
Here is an historical overview of the makings of the Jewish-owned Federal
Reserve Bank:
* 1791-1811: Rothschilds' First Bank of the United States
* 1816-1836: Rothschilds' Second Bank of the United States
* 1837-1862: Free Banking Era -no formal Central Bank through the efforts of
President Andrew Jackson
* 1862-1913: System of National Banks through the efforts of President
Andrew Jackson
* 1914-Current: Federal Reserve Act effects a consortium of 7 privately held
Jewish banks called the Federal Reserve Bank. The largest share holders of
the bank are the Rothschild's of London holding 57% of the stock which is
not available for public trading.
THE JEW Paul Warburg (1868-1932), came to the United States from Germany in
1902, buying into the partnership of the Jewish owned bank Kuhn, Loeb and
Co. with the financial backing of the Rothschilds.
Paul Warburg was a man with a mission, sent here by the Alfred Rothschild to
lobby for the passing of a Central Banking Law in Congress. On January 6,
1907, the New York Times published an article by Warburg, called "Defects
and Needs of Our Banking System."
In 1908, Sen. Nelson W. Aldrich, (father-in-law of John D. Rockefeller Jr),
and a Rothschild agent, proposed a bill recommending a Central Bank. A
member of Congress for 40 years, Aldrich was the most powerful man in
Congress and was the Chairman of the Senate Finance Committee.
Without going into the labyrinth of the contrivances of the Jewish Bankers
and the Jewish propaganda machine, on October 25, 1914, the formal
establishment of the Federal Reserve System was announced by Congress with
Paul Warburg and the Rothschild ally, J.P. Morgan, at its head
Pingback| 8.14.09 @ 1:01PM
The Israel Test : Ft. Hard Knox links to this page. Here’s an excerpt:
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dioner| 4.7.10 @ 8:50PM
Israel Inside is good article thanks you very much for your information
Poptropica
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messup| 7.16.10 @ 4:03PM
Capitalism has inherent failures: avarice, greed, dishonesty.
Socialism has: subjugation, genocide, power.
Israel has decided for education, religion and GOD. Lets identify those countries opting for enlightening their populace with education, instilling values of: courage, honor, charity. All mankind serves a higher ORDER.