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.

Boosting Hamas will come back to haunt Israel

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A special mazal tov to Hadas Silver on her bat mitzva...
shabbat shalom
elliot
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Signs of life


The onus has always been on kidnappers to prove that their hostages are alive and well. Yet this week, the government of Binyamin Netanyahu paid Hamas to do just that.

Rather than tell Hamas that unless it could prove Gilad Schalit was in good condition there was nothing to negotiate, Israel agreed to release 20 Palestinian women prisoners in exchange for a recent video of the captive soldier.

The official spin is that these Palestinian ladies are not accomplished terrorists. Yet each and every one of them tried to kill, or help someone else try to kill Israeli soldiers or civilians. They are members of Fatah, Islamic Jihad and Hamas. Some, like the knife-wielding Bara'a Malki, are juveniles serving short terms. Others such as the 47-year-old Zohar Hamdan, were caught smuggling suicide bomb belts.

Forget those stereotypes about Jewish business acumen. This was a bad bargain.

In paying for this "sign-of-life," Israel has also certified that Hamas's counterintelligence operation is superb. Clearly, our intelligence agencies don't have a handle on where Schalit is being kept - even though it's probably a relatively short drive from the Defense Ministry in Tel Aviv.

Discharging the women inmates is phase one of a deal that could see the staged release of 1,000 terrorists, including key operatives behind some of the most heinous bloodbaths carried out by the Palestinian "resistance." If things go smoothly for Hamas, it will have essentially achieved the objectives put forth the very first week Schalit was taken prisoner three years ago.

The main stumbling block to total Israeli capitulation is, apparently, the security establishment's insistence that the 1,000 terrorists be confined to the Gaza Strip. Assuming further elasticity of Israeli principles, a steadfast Hamas politburo will have triumphed over two consecutive Israeli cabinets loaded with savvy ex-generals.

WHILE PAYING Hamas's price will end the Schalit family's ordeal, it will also have two perilous repercussions: Some of Hamas's most able "engineers" and tacticians will resume their careers; and the movement's standing within the Palestinian polity - and in the international arena - will further solidify.

Palestinians assert that Israel is holding 9,000 prisoners. If one Israeli soldier can buy 1,000 prisoners, how many will it take to deliver the other 8,000?

From Hamas's vantage point, all this could not come at a better time. The Islamists, under Egyptian auspices, may soon sign a "national unity" pact with Mahmoud Abbas's Fatah, paving the way for West Bank and Gaza elections in 2010. Hamas will then reasonably campaign as the "resistance" faction that can "deliver" Israeli concessions.

It is true that the Abbas "moderates" have shown no sign of wanting to come to an agreement with Israel - not with the Olmert-Livni government, and not with Netanyahu's. Fatah refuses to recognize the legitimacy of Israel as a Jewish state; Abbas's maximalist negotiating demands would have a militarized Palestine face a truncated Israel confined behind the 1949 Armistice Lines. Strategic settlement blocs would have to be abandoned. The cost of making peace on Abbas's terms would be acceding to the demand for millions of Palestinians to "return" to Israel proper.

Nor has Abbas prepared his people for the idea of coexistence. In fact, though he egged Israel on to rout Hamas during Operation Cast Lead, now he's exploiting the Goldstone Mission's findings, leading the bandwagon to have Defense Minister Ehud Barak, IDF Chief of Staff Lt. Gen. Gabi Ashkenazi and Shin Bet head Yuval Diskin labeled "war criminals."

With all that, Abbas does proclaim his backing for a two-state solution. He does not advocate portraying the Palestinian conflict with Israel as part of the global jihad. Hamas, in contrast, will not even entertain the prospect of Israel's right to exist. And its theoreticians are unregenerate anti-Semites.

WE DO not presume to know the depth of suffering felt by Gilad Schalit and his parents, Noam and Aviva, dignified and indefatigable advocates for their son's freedom. But the government's responsibility extends to the entire House of Israel.

Much as we Israelis welcome a sign of life from the soldier whose fate is so much in our hearts, it is the government's duty to pursue his freedom mindful of the many other lives at stake down the road.

Leading up to the October 1 talks between the G-5+1 and Iran

Think Cuban missile crisis

Iran recently became aware that its adversaries had uncovered the existence of a nuclear facility in Qom. Last week, the US shared what it knew with Russia and China, trying to persuade them to support tougher sanctions against Teheran. Late Thursday, the mullahs abruptly "reported" the secret uranium enrichment plant still under construction to the International Atomic Energy Agency. And on Friday, the US, Britain and France announced that Iran had been exposed - for the third time - trying to deceive the world.

The underground facility, ensconced inside an Islamic Revolutionary Guards base, was described by US Defense Secretary Robert Gates as "part of a pattern" of "lies" that has characterized Iran's nuclear program from "the very beginning."

But don't expect Teheran to show contrition when it meets in Geneva on Thursday with the five permanent members of the Security Council - the US, Russia, China, Britain, France, plus Germany; its first official "engagement" with Washington in decades.

Iran will express, as did Ali Akbar Salehi, head of its Atomic Energy Organization on Saturday, shock at the negative reaction to Qom. In 2003, it promised to reveal any new facilities to the IAEA as soon as it made plans to build them, but later backtracked, allowing Salehi to argue that Iran had had no obligation to tell the IAEA about Qom any sooner.

Add Qom to the scary list of facilities - at Bushehr, Isfahan, Natanz and Arak, and who knows where else - where Islamist fanaticism is being wedded to weapons of mass destruction.

The Iranian leadership's unvarnished thinking on the Qom expose was enunciated by Mohammad Mohammadi Golpayegani, supreme leader Ayatollah Ali Khamenei's bureau chief: "God willing, this plant will be put into operation soon, and will blind the eyes of the enemies."

WHAT happens next? President Barack Obama declared that his "offer of a serious, meaningful dialogue to resolve this issue remains open." But he wants Iran to "come clean" and "make a choice" - cooperation or "confrontation" with the international community. Obama says his policy of engagement and multilateral consultations means that if "diplomacy does not work, we will be in a much stronger position to, for example, apply sanctions that have bite."

That is doubtful. Iran's game continues to be a cunning combination of cooperation and recalcitrance. One step forward, two steps back. For example, Mahmoud Ahmadinejad told The Washington Post that he is willing to have his nuclear experts meet with scientists from the United States as a confidence-building measure. Of course these experts will be in no position to answer questions about Iran's nuclear infractions.

The autocrat who stole a basically fixed Iranian election in which only vetted candidates could compete, who believes a cabal of Jews controls the world, that the Holocaust never happened and Israel should be wiped off the face of the earth, has now given his word that Iran has no interest in acquiring nuclear weapons: "We fundamentally believe nuclear bombs are the wrong thing to have."

Iran's stratagem is to "engage" as it pushes ahead with its bomb, thereby making it hard for the international community to impose meaningful sanctions. Once it feels certain it has all the pieces of the nuclear weapon's puzzle in place - fuel, warhead, delivery system - it might offer Obama a stop just short of a test detonation, in return for a long list of Western concessions.

Anyway, the pace of economic sanctions is way out of sync with the progress the mullahs are making on their bomb. Even if Russia and China accepted a winter embargo on refined petroleum products entering Iran, is there any reason to imagine that the mere discomfort of the Iranian masses would take precedence for Khameini and Ahmadinejad over the bomb?

Obama should leapfrog over futile intermediate steps and place draconian sanctions on the table, now. To paraphrase John Kennedy during the Cuban Missile Crisis, this would mean that all ships and planes bound for Iran, from whatever nation, would be turned back.

Perhaps this prospect, coupled with a complete land, sea and air quarantine, can influence Iran's leaders to rethink their one-step-forward-two-steps-back strategy, and save humanity from an Iranian bomb.

64th UN General Assembly...leading up to Netanyahu's speech

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Dear Reader.
Thank you for returning. As you can see, we are back from our break.
Shana tova; tzom kal.
& shabbat shalom.
elliot
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Uncles and elephants

When the "family of nations" gathers, expect a mad uncle or two to show up. Sure enough, the 64th session of the UN General Assembly this week was blighted by the participation of Iran's Mahmoud Ahmadinejad and Libya's Muammar Gaddafi.

In 1993, the late Daniel Patrick Moynihan, writing about how cities had resigned themselves to outlandish, unacceptable behavior by segments of their populations, coined the phrase "defining deviancy down." The UN General Assembly established its reputation for "defining deviancy down" in 1974, when it invited Yasser Arafat to speak.

On Wednesday, Libya's costumed colonel denounced the UN's structure, noting disdainfully that the tyrannical majority is partly constrained by the UN Charter; and ripped up a copy. After 90 minutes of blather, he finished by complaining that the General Assembly was "like Hyde Park Corner - we just speak, and nobody implements our decision."

Later, Ahmadinejad took the podium to pronounce that it was unacceptable for "a small minority" to "dominate the politics, economy and culture of major parts of the world by its complicated networks." This cabal - guess who he meant - sought to "establish a new form of slavery and harm the reputation of other nations." He then demanded to know why the "crimes" of the "Zionist regime" received unconditional support from "certain governments."

Out of the 192 Assembly members, let it be recorded that a few, including Argentina, Australia, Britain, Canada, Costa Rica, Denmark, France, Germany, Hungary, Israel, Italy, New Zealand, the United States - and Sweden, according to Israel Radio - dissociated themselves from this odious message by not having representatives present in the chamber while he spoke.

Of course, a bigger test for the international community comes on October 1 when the permanent members of the Security Council, plus Germany, meet with Iranian diplomats to try once again to sway the mullahs to abandon their quest for nuclear weapons. Iran will continue to play for time, knowing that China, but now Russia perhaps less, opposes punishing economic sanctions.

By year's end, it should become apparent once and for all whether the civilized world has the will to stop an Iranian bomb.

IT WASN'T all Hyde Park Corner at the General Assembly.

President Barack Obama delivered a substantive address devoted partly to peace "between Israel, Palestine and the Arab world."

For Israelis, it was a painfully measured speech - one sentence for us, and one for the Arabs.

Still, he advised Arab states to publicly back a peace they claim privately to support.

He said the goal of peacemaking was to end "the occupation that began in 1967" by establishing a contiguous Palestinian state. Palestinian advocates took this to mean that the president wanted an Israeli withdrawal to the 1949 Armistice Lines. He said no such thing.

Radical Palestinians interpreted Obama's advocacy of "a Jewish State of Israel" as negating the Palestinians' claim to a "right of return." We agree.

Relative moderates among the Palestinians were perturbed that Obama wanted negotiations to resume without preconditions. Mahmoud Abbas had been holding out for a total settlement freeze. Yet by speaking of "settlements" in the generic sense, without reference to strategic settlements blocs, the president was inadvertently encouraging Abbas to dig in his heels.

UNSUPRISINGLY, Obama found it politic not to mention that Hamas controls Gaza and has designs on the West Bank. Palestinian disunity was the elephant in the room.

Palestinian elections are supposed to take place in 2010. Paradoxically, unity augurs ill because among the Palestinians, rejectionism has historically trumped conciliation. At the same time, the continuing fragmentation of the Palestinian polity makes genuine conflict resolution a theoretical goal, at best.

Given the inhospitable venue, we did not realistically expect Obama to take moderate Palestinians to task for their unwavering insistence on the "right" to settle Palestinians en masse in Israel proper; nor did we expect him to call on them to budge from their demand for a pullback to the 1967 boundaries. We also did not realistically expect the president to say that Palestinian demilitarization is the sine qua non of any resolution.

But Obama must at least say these things privately to the Palestinians if the prospect of lasting peace "between Israel, Palestine, and the Arab world" is to be fulfilled.