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:
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?