[OPE-L] Israel's Roaring Economy?

From: glevy@PRATT.EDU
Date: Thu Jun 21 2007 - 12:24:55 EDT

---------------------------- Original Message ----------------------------
Subject: Israel's Roaring Economy
From:    "Jonathan Nitzan" <nitzan@yorku.ca>
Date:    Wed, June 20, 2007 2:16 pm

Israel's Roaring Economy

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


FULL TEXT: http://bnarchives.yorku.ca/232/


Jonathan Nitzan

Political Science
York University
4700 Keele St.
Toronto, Ontario, M3J-1P3
Voice: (416) 736-2100, ext. 88822
Fax: (416) 736-5686
email: nitzan at yorku.ca
website: http://bnarchives.net

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