Book Review: "The Israel Test" by George Gilder

Das Capital

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The Israel Test
By George Gilder
Richard Vigilante Books, New York
255 pages. $27.95

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George Gilder's short, breezy, and passionately argued polemic might have been better titled "They Are Envious," or, "Netanyahu, Savior of Israel," or, The REAL Case for Israel," or, simply, "Jews are Smarter."



Gilder argues that Israel's fate, capitalism's prospects, and the ideal of liberty are interwoven. His immoderate tone will be off-putting -- at least initially -- to readers who are not enamored with capitalism in these times. His argument that Jews are inherently smarter than others will make even some members of the tribe squirm. His rapturous description of Israel's high-tech sector will irritate thousands of recently laid-off workers (especially native English-speaking technical writers whose work has been subcontracted to south Asia ). And his fawning tribute to Benjamin Netanyahu for rescuing Israel's economy in the 1990s will make those familiar with the Jewish state's transition from socialist corporatism to laissez-faire capitalism wonder why Gilder seems clueless about the critical role Shimon Peres played in this transition years earlier.



But to say this book is merely "red meat" for the high-IQ, anti-egalitarian, religious true-believers, not-one-inch, and venture capitalist crowd, does not really do it justice.



For once you get past the overbearing smugness of a writer who on the face of it abhors nuance, it turns out that there are long stretches of edifying and proleptic argument in The Israel Test. It's as if Gilder started out wanting to tell it like (he thinks) it is, and along the way decided that the messy business of trying to win over those who come to the book with a different viewpoint was worth the effort.



WERE GILDER Jewish, I'd describe him as Marx's living antithesis.

Where Marx was a self-hating Jew, Gilder is a "Judeophile." Indeed, he defines hatred of capitalism as a form of anti-Semitism, since Judaism provides a moral framework for capitalist activity. When Gilder says "Jews lead all other American groups in per-capita income," he plainly means this as a compliment. And he is convincing when he posits that "The success or failure of Jews in a given country is the best index of its freedoms."



Gilder sees Israel as one of the "world's leading capitalist powers" and presents a sort of domino theory: "If Israel is destroyed, capitalist Europe will likely die as well, and America , as the epitome of productive and creative capitalism spurred by Jews, will be in jeopardy." So in essence, "the Israel test" amounts to the degree of commitment the West is prepared to make for Israel 's survival and the extent it is willing to correctly identify and protect its own interests.



Even champions of Israel , he complains, too often make "the case for Israel " by "defending" Israeli policies based on mitigating circumstances. Not Gilder; because he believes Israel is hated not for what it does but for the virtues of the Jews. The Jews have been hated for their intellectual and entrepreneurial accomplishments since pagan times. He says outright: "The source of anti-Semitism is Jewish superiority and excellence." Part of the book seeks to prove this thesis by citing chapter and verse the extraordinary contributions of Jews to science and mathematics. There are fascinating sketches of brilliant minds, among them John von Neumann, without whose work on algorithms computers as we know them would not be.



GILDER'S BOOK is also an excellent primer against the Palestinian Arab cause.

Their self-induced dependency on foreign aid, exacerbated by the intervention of international aid groups, has "transformed the Palestinians into a ghetto of violent male gangs and welfare queens." Such over-the-top language actually camouflages an otherwise convincing argument.



As proof Gilder cites Musa Alami telling David Ben-Gurion in 1934: "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" than make common cause with the Zionists. Sure enough, between 1967 and 1987 – prior to the first intifada – the West Bank was "one of the most dynamic economies on earth."

True to Alami's sentiments, the Palestinians threw it all away by launching the first intifada in 1988. Then in the wake of the 1993 Oslo accords, their economy began thrived again. Hundreds of thousands of West Bank and Gaza Palestinians were employed within the Green Line; Nablus license plates could be seen on the streets of Tel Aviv. And still, in 2000, having rejected Ehud Barak's overly generous terms for a state, the Palestinian leadership launched the second intifada and again drove their people into a crater of violence and economic depression. It was all done out of irrational hatred. Gilder says "capitalism requires peace" and the Palestinians want neither.


THE strongest case conservatives have over liberals, in my view, is in how they understand human nature. Gilder quotes the physicist Eugene Wigner: "It is just as foolish to complain that people are selfish and treacherous as it is to complain that the magnetic field does not increase unless the electric field has a curl. Both are laws of nature." Gilder believes not just in the laws of nature but something greater: "The universe rests on a logical coherence that cannot be proven but to which men must commit if they are to create."



His enthusiasm for Israeli high-tech is explained by his first-hand knowledge of its key players and most intriguing innovations, the result of his being a "practicing venture capitalist." Gilder offers absorbing sketches of the people -- not a few of them immigrants from the United States -- behind the country's high-tech success.


"THE great irony of Israel ," writes Gilder, "is that for much of its short history it has failed the Israel test," meaning the Jewish state was mired in socialism.



It is certainly true that until 1977, when Likud wrested power away from it, the country was solidly in the grip of the Labor Party which was then social democratic in orientation and had used the state and the Histadrut to wield near-total power. It would take years to reconfigure the Israeli economy. In 1985, inflation ran at 450 percent a year. That's when the national unity government headed by Labor's Shimon Peres and Likud's Yitzhak Shamir adopted tough anti-inflationary measures, reduced taxes, and fundamentally liberalized the economy. I think it is a bit churlish of Gilder not to give Peres his due. By the time Netanyahu came into power in 1996 and promoted supply-side economics, the edifice of the old socialist-oriented economy had largely been consigned to the dustbin of history.



Moreover, as Israel moved from Labor-dominated corporatism to capitalism, and as state-owned companies were privatized, power shifted from the Labor Party/Histadrut/state troika, to a constellation of oligarchs who today hold sway over the economy. This is a far cry from genuine capitalist competition, I think.



THEIsrael Test contains an excellent chapter that deconstructs the certainties of the Left. (In Israel , "left" refers generally to security matters; many on the left are solidly bourgeoisie.)



Gilder visits with (or reads) a range of post-Zionists and leftists among them Ehud Olmert's draft-dodging, expatriate son, Shaul. Mouthing his hackneyed, discredited Peace Now dribble, Olmert junior is the perfect foil for Gilder. Only when he dismisses Olmert's criticism of the haredim, is Gilder on shaky ground. Gilder wrongly see these men in black as the "defenders of the faith" and the "answer to the [Palestinian] demographic crunch caused by secular Israelis with their abortion culture and their gay-rights marches."



In fact, the haredim are part of the problem. The more insular among them do not do national service and do not pay taxes; as a community they are dependent on the largesse of the taxpayers; some are openly anti-Zionist; and their political clout stymies needed reform of the political system. Finally their hijacking of the established "church" of Orthodoxy via their stranglehold on the rabbinate has alienated countless non-observant Israelis from their heritage.



Gilder's book has many heroes but among my favorite is Nobel laureate Robert Aumann whose analysis of Palestinian rationality – suicide bombers included -- and Israel's failing nerve, is worth the price of this book, and needs to be understood by anyone venturing an opinion on "how to achieve peace" in the Arab-Israel conflict.



Finally, writing prior to Netanyahu's seminal Bar-Ilan address in June offering negotiations toward the establishment of a demilitarized Palestinian state, Gilder makes an interesting, albeit unrealistic, moral defense of the West Bank status quo -- demography notwithstanding: "If the right answer for Israel is to rule for a thousand years the territories on which reside enemies committed to its destruction, then no true principle of democracy compels them to do otherwise."



The chapter that captured my heart was Gilder's affecting testimony of what it was like to grow up as a privileged WASP in an atmosphere where refined anti-Semitism was taken as a given. It is this section which unravels how Gilder came to be a Judeophile, and reading it reminded me how few friends the Jews have in this world outside the Christian evangelical fold.



In his affinity for Jews and Israel , Gilder recalls the late Robert St. John who wrote several admiring books about the Zionist enterprise and whom David Ben-Gurion described as "our goyisher Zionist."



With this book – for all its faults – Gilder becomes St. John's worthy successor.