by Shimshon Bichler and Jonathan Nitzan June 2007
FULL TEXT: http://bnarchives.yorku.ca/232/
Many observers of the Israeli scene have been perplexed by the country's apparent resilience to bad political news. The headlines of late seem uniformly dreadful. While the country is still licking its wounds from a botched, if not humiliating, war with Hezbollah, the Palestinian territories again slide into turmoil, and the experts rumour yet another conflict with Syria. The U.S. entanglement in Iraq and Afghanistan is only getting deeper, and many speak of an imminent attack on Iran with untold regional consequences. Israeli politicians and public officials -- from the president, through the prime minister, to the chief of staff, to the justice minister -- have been embroiled in corruption and other scandals. The courageous capitalist media routinely expose government officials as incompetent crooks and the Israeli Parliament as an irrelevant institution.
And yet none of these headlines seem to impact the economy. It's roaring.
Local commentators have been trying to make sense of this apparent puzzle for over a year now. Most point to the effect of liberal globalization. The long fight for sound finance, they say, is finally bearing fruit. The government was forced to rein in its spending, and the consequent emergence of budget surpluses now helps free scarce resources for more productive private use. In parallel, free trade and capital decontrols attract global investors, while allowing Israeli capitalists to link up with the rest of the world. Laissez faire has arrived in the Holy Land: the country’s political folly and its security roller coaster no longer matter for its 'economy.'
Foreign analysts offer other explanations. For Thomas Friedman of The New York Times, the secret lies in the Israeli genius. The imagination, innovation and flexibility of the country's citizens, bolstered by higher education and government support for entrepreneurship, help Israel adjust and respond to an ever-changing world. Prosperity, according to Friedman, comes from the head.
Social critic Naomi Klein snubs Friedman. Israel's soaring stock market and China-like growth rates, she argues, are fuelled not by the country’s human capital, but by its mutating war economy. Military calamities, terrorism and counterterrorism offer an ideal environment for developing and testing weapons of oppression. Israel has become a big laboratory for such weapons. It develops and tests the hardware and software of violence -- against its Arab neighbours and against the Palestinian population -- and then sells them to the rest of the world. Economic prosperity thrives on political crisis.
These explications, whether plausible or not, all fall into the same trap: they believe the capitalist media. They rush to explain why the Israeli economy is roaring without ever stopping to ask whether it is roaring.
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FULL TEXT: http://bnarchives.yorku.ca/232/
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Jonathan Nitzan
Political Science York University 4700 Keele St. Toronto, Ontario, M3J-1P3 Canada Voice: (416) 736-2100, ext. 88822 Fax: (416) 736-5686 email: nitzan at yorku.ca website: http://bnarchives.net -----------------------------------------------------------------------------------------