Ilana Mercer, August 13, 2003

Admittedly, there is a lot about the Israeli side of the Palestinian-Israeli dispute to be critical of. For one, demolishing the homes of a terrorist’s family isn’t just or prudent. But it’s hard to make sense of a perspective that sees everything Israel does as arch-evil, as is the case with those libertarians who religiously and robotically depict Israel as the devil incarnate.


So, how about it? Is Israel always wrong? Is there nothing redeeming about a people that revived a desolate land and a long-dead biblical language just over 100 years ago? Can nothing good be said about the thriving cities that have sprung up on what was, only a century ago, swampland and desert?

Evidently not.


True, Israel‘s founding fathers were socialists (although there’s something to be said for voluntary forms of socialism like the kibbutz, in contrast to politically imposed socialism). Born of a collectivist political philosophy, Israel has been progressing, albeit slowly, toward greater economic freedom. Trade liberalization, financial market reforms, increased privatization and decreased regulation have been part of this historical retreat from socialism. But the steady abolition of state subsidies and the enhancement of competition supported by Sharon‘s Thatcherite Finance Minister (Bibi Netanyahu) cannot easily offset the effects of endemic violence. Coupled with the slowdown in the U.S. economy, terrorism is one of the main reasons for the slump in the Israeli economy.


Although Israel‘s economy is by no means ideal, it is not much different from Western Europe‘s Third-Way, mixed economies. Still, many libertarians find Israel particularly repugnant. With a respectable per capita GDP of roughly $18,440, compared to the Palestinian Authority’s $1,000, Israel apparently has nothing to recommend her.


The PA, on the other hand, with no economy, no free speech and press, no independent courts, no sound contract laws, and no individual—including property—rights, wins the sympathies of legions of freedom lovers hands down. That hundreds of millions of dollars in foreign aid have done nothing to change this bleak reality bothers anti-Israel libertarians only in so far as to point out that Israel is to blame.


If this seems a little harsh, it is to be expected—irrational hatred is harsh.


Consider the Israeli fence now inspiring hyperbolic hysteria among libertarians. What can a leadership do to stop its people from being blown up in the streets as they go about their daily lives? (That is, besides following the libertarian prescription propounded by Stephen P. Halbrook in “The Alienation of a Homeland: How Palestine Became Israel,” and turn Israel into a multicultural potage with a Right of Return for any self-styled, United Nations Relief and Works Agency-sponsored “Palestinian” agitator.)


If you are the United States of America, you commit to frisking old ladies on airplanes and reducing far-away, unrelated nations to rubble. At the same time, you leave your own borders as porous as possible, while working to disarm and dispossess your people.

That’s the American way.


Israel has a different idea. She defends her own turf aggressively. In a last-ditch attempt to physically stop attacks on its civilian population—terrorists have killed more than 800 Israelis in the past three years, and maimed and injured nearly 6,000—Israel began erecting a security fence along the West Bank, from where most terror attacks inside Israel proper are launched.


Yet a mechanical barrier is construed by one libertarian writer, Justin Raimondo, as “an act of aggression…a land grab of huge proportions…” What most reasonable people would view as a desperate defensive measure is to Raimondo a symbol of Israeli sadism.

The comparisons between the Israeli fence and the wall between East and West Berlin are theatrically invoked: “Mr. Sharon, tear down that wall,” rings Raimondo’s cleverly adapted Reagan classic. (An equally plaintive plea from Israelis went unheard. So I’ll make it for them: “Mahmoud Abbas, alias Abu Mazen, aka Yasser Arafat, stop blowing up Israelis.”)


Raimondo thereafter follows with an idealized description (omitting opportunity costs) of the wonders the wall can’t thwart: “Markets conquer all; they leap over walls, over oceans, to create the most complex, interconnected, international division of labor possible …”


I too love free markets. But open borders are not a prerequisite for free trade. People can trade goods very well without trading places. Moreover, and forgive me for chuckling, but the hate so many libertarians have for Israel leads them to periodically forget that her comparative and competitive advantage is in knowledge-based hi-tech industries. Israel‘s natural trading partners are the U.S. and the European Union. With all due respect, Israel needs the economic powerhouse that is the PA like China needs trade with a tribe of rain-forest-dwelling pygmies. The theory of free trade, which is always a positive-sum game, ought not to be compared with the dubious “benefits” of the unfettered movement of people across borders (especially ones with bombs strapped beneath their clothing).


Notwithstanding that libertarians, very plainly, believe that the Palestinians have a universal right to Israeli labor markets, it’s worth noting that just as the U.S. can do without the hordes of Mexicans streaming across the borders, so too can Israel do without Palestinian cheap labor if the dangers of an open border exceed the benefits. If Israel (and the U.S. for that matter) eliminated her socialistic minimum-wage laws, which prohibit agriculture from hiring Israelis at a true market price, namely below minimum wage, Israelis—Jews and Arabs alike—would do farm work.


Indeed, irrational hatred for “an isolated Sparta, bristling with weaponry and little else” even prompts libertarians to forget their welfare economics. Without American aid, Raimondo menacingly warns, Israel will cease to exist.

Come again?


First off, aid is just a fraction of Israeli GDP, so the point is laughable. More significantly, foreign aid, like welfare, exacerbates the problems it is supposed to ameliorate. As a government-to-government transfer, foreign aid serves to entrench and grow the bureaucracy and the public sector in general at the expense of the taxpayer and the private productive economy.


An ardent defender of the free market ought to know that American aid, if anything, retards Israel‘s progress. Cut Israel loose—it’ll be for the best. In the absence of U.S. loans and cash grants, she would be forced to economize. Capital, including the billions in private donor dollars, will be channeled to its best use and will flow to where it is most productive.


Unlike her neighbors, Israel has what Peter Bauer, author of the seminal Dissent on Development, called “the faculties, attitudes and institutions favorable to material progress.” Without foreign aid, she would gallop toward a freer economy.


I understand that libertarians like Sheldon Richman (and the Holocaust-denying Institute for Historical Review*) believe, mistakenly, that all “the land” belongs to the Arabs.†


And no doubt, American libertarians do speak with the authority that comes from having the finest fathers a nation could wish for. How then can Israel‘s humble, evidently uninspiring, ideological beginnings compare (cynicism alert) with founders who fought for their freedom and their land?


But let me ask my fellow libertarians this: When last did an American man fight honorably for his land, his home, his women, and his children? The men of the South circa 1861? I thought so.


As much as libertarians hate them, Israelis, at least, defend what they perceive to be their land, their homes, and their freedoms.



* Mr. Richman took umbrage at my deployment of a perfectly legitimate literary device to illustrate his extremist position on Israel, claiming that other than to smear him and call him a Holocaust denier, there was no reason to invoke the IHR. However, I said that Mr Richman’s views on the “land,” not the Holocaust, conjure theirs. In retrospect, I should have also listed the Aztlan “freedom fighters,” Islamists, and radical leftists. These groups would also warm to Mr. Richman’s position on the land of Israel. Would he then still have gone on to complain that I had labeled him an Islamist, a radical leftist, or a “La Raza” liberationist? I somehow doubt it. All the same, I note Mr. Richman’s objection but I still think the same.

“In candid moments,” wrote Mr. Richman in “Cant and the Middle East,” “Israeli military leaders acknowledged that the land belonged to the Arabs.”



August 13, 2003

CATEGORIES: Economy, Foreign Aid, Israel, Libertarianism, Palestinians

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