Frontpage Interview’s guest today is George Gilder, an active venture capitalist, co-founder of the Discovery Institute in Seattle, and the author of 15 books. His new book is The Israel Test. He will be speaking at The Wednesday Morning Club this Thursday, September 10, 2009, at the Four Seasons Hotel in Los Angeles. For more information on how to attend, click here.
FP: George Gilder, welcome to Frontpage Interview.
Tell us what the Israel Test is.
Gilder: The world faces it. It tests one’s response to excellence and achievement. Do you envy and resent people who excel you? Or do you admire and emulate them?
In the 20th Century, this test chiefly applied to Jews around the world. But today Israel epitomizes the excellence and accomplishment of Jewish culture. It is hated by anti-Semites not because of any moral flaws or legal infractions but because of its manifest virtues which show up and shame the forces of mediocrity everywhere.
FP: Illuminate for us the successes of Israel.
Gilder: Of all the nations in the world, Israel ranks first in per capita achievement and excellence. By any per capita measure it is preeminent, whether in technological innovation and invention, venture capital investment and creativity, share of GDP produced by technology companies, or number and quality of scientific papers. But even more impressive, Israel ranks second only to the U.S. in companies on the NASDAQ stock exchange and in achievements in such fields as telecom, microchips, software, biotech, medical instruments, and clean-tech. Israel today represents and symbolizes capitalist excellence and freedom.
FP: Israel has a powerful and progressive government. Why does the left hate Israel so much?
Gilder: The left loved Israel as long as it was socialist and utopian, pacifist and beleaguered. The left loved the Kibbutzim with their fatuous and always unfulfilled dreams of transcending family and property. The left loves Jews as victims. When Israel emerged as a leading capitalist state, capable of defending itself from deadly enemies, and pragmatic in its policies, the Left turned against it.
But whether in Russia, Hungary, Germany, or Israel itself, socialism has always brought catastrophe for Jews. Socialism focuses on gaps between groups rather than on achievements of superior individuals. Socialism concentrates on equalizing excellence rather than promoting it. Historically, equalizing excellence has always meant suppression of Jews. This rule applies everywhere, whether by quotas as in the United States, or by pogroms in Stalin’s nationalities policy designed to equalize ethnic groups in the USSR.
FP: But isn’t hatred of Israel chiefly an effect of anti-Semitism?
Gilder: Anti-Semitism is chiefly a virulent form of anti-capitalism. In my book I closely scrutinize Hitler’s Mein Kampf . His fundamental objection to Jews is their superiority to Aryans as capitalists, as financiers, as entrepreneurs, as “middlemen.” Thomas Sowell has shown in several books that during bad times such hostility to “middleman minorities” flares up wherever an identifiable ethnic group outperforms the rest of the population in the economy. In Asia the overseas Chinese have so dominated Moslem economies and incurred such brutal massacres that they are called “the Jews of Asia.” But the overseas Chinese are so numerous that Jews might well be termed the “overseas Chinese” of Europe.
FP: Is Israel a battlefield? What is the battle over?
Gilder: It is over the survival of democratic capitalism and freedom. The Israelis just face the battle more directly and undeniably. But ultimately the battle is over the survival of the United States as a free nation and global influence.
The golden rule of capitalism is that the good fortune of others is also one’s own. Wealth does not cause poverty or environmental degradation or ethnic oppression. It opens horizons of opportunity for all. Without recognition of this rule capitalism cannot prosper, whether in Europe, Israel or the United States.
FP: How does this rule apply to the Palestinian Arabs?
Gilder: In writing my book, I was surprised to discover that the Arab Palestinians are the greatest single beneficiaries of Israel. The key period came between 1967 and 1987, the era when Israel inherited the territories after Arabs rejected offers of land for peace after the 1967 war. For this entire two decades, the West Bank and Gaza were world leaders in economic growth. Their GDP and investment rose by close to 30 percent per year for more than twenty years. In fact, these territories grew far faster than Israel itself, which was still mired in a slough of socialism.
People object to “settlements,” but the Palestinians massively voted in favor of the settlements with their feet. The settlements are the heart of the economy of the territories. Between 1967 to 1991, Israeli settlers numbered 250 thousand, while new Arab settlers numbered close to 2 million, or eight times more.
The population numbers completely put the lie to claims of displacement and victimization. Instead there was a giant sucking sound. Israeli investments in infrastructure, electrification, irrigation, healthcare, education and industry attracted the migration of millions of Arabs. The Arab population roughly tripled in 20 years while their per capita incomes also tripled and their life expectancy rose on average from around 40 years to 70 years. Their attendance in schools and universities soared. I call it a golden age for the Palestinian Arabs.
FP: The left claims that this is like saying that the United States produced a golden age for the native American Indians or even that bringing slaves to the U.S created a golden age for African blacks in America. They even offer an analogy between the American Revolution and the Palestinian Intifadas? How do you answer these arguments?
Gilder: Unlike the African blacks, the two million Arab Palestinians settled freely and prosperously on the West Bank and in Gaza, attracted by the economic opportunities created by the Israeli settlers before Bill Clinton and the UN surrendered the hapless Palestinians to the control of Yasir Arafat by making the PLO the world’s leading foreign aid recipient. Unlike the Indian tribes on the American continent who for awhile underwent violent displacement and deadly diseases, the Palestinian Arabs drastically improved their health and wealth under Israeli administration. Unlike the U.S. colonies, moreover, if the Arab Palestinians had desired a state, they could have created one peacefully at any time. From 1948 to 1967, the territories were under the control of Jordan and Egypt, without any gesture toward statehood.
If the Arabs wish to live in peace with Israel, they can work out any number of different forms of constitution and self rule. The eventual solution should include some kind of federation of the Arab Palestinians with Jordan, which was formed essentially as a state for the Palestinians. It is only Arab hatred toward the Israeli state that makes an Arab Palestinian state currently impossible and undesirable.
FP: We see, on many fronts, the West crumbling in the face of the Islamic jihad. Could the rescuer be Israel? If so, then, in the long run, the U.S. might need Israel just as much as Israel needs the U.S., no?
Gilder: In World War II, just a comparatively few Jewish scientists saved the West by leading and executing the Manhattan project that created the atomic bomb. Jewish scientists also played a key role in the prosperity of the United States which has been heavily fueled by the rise of the computer industry. All computers are based on the essential architecture invented by John von Neumann and most microchips use the field effect transistor invented by Julius Edgar Lilienfeld in the 1920s. Over the last several decades, U.S. technological leadership has been heavily dependent on Jewish inventions and Israeli designs. Intel has so benefited from its Israeli talent that its chips could be labeled “Israel Inside.”
Today, while the U.S. suffers from economic and financial turbulence and recession, Israel is developing into what is perhaps the world’s most creative and promising economy. Benjamin Netanyahu is the world’s most knowledgeable and experienced warrior against terrorism and most learned economic leader from his early days at the Boston Consulting Group. Israel is vital both to the future of American capitalism and to its defense.
FP: What are your thoughts on Obama’s treatment of Israel?
Gilder: Obama is becoming nearly irrelevant to Israel. He knows little or nothing true about Israel or its history and he is incredibly naïve about Israel’s enemies. As long as he does not deprive Israel of indispensable military support, he probably will not do irreparable harm. At present, I think he is furtively ducking his Israel test and trying to farm it out to Rahm Emmanuel.
At some point, Obama is going to have to recognize that an Iran that is willing to bomb Israel can also destroy American cities. There is no chance for peace unless the U.S. moves massively and conspicuously toward war with Iran or the Israelis succeed in destroying or frustrating Iran’s nuclear goals.
As I explain in my book, pacifists in power nearly always blunder into war.
FP: George Gilder, thank you for joining Frontpage Interview.
I would like to remind our readers that Mr. Gilder will be speaking at The Wednesday Morning Club this Thursday, September 10, 2009, at the Four Seasons Hotel in Los Angeles. For more information on how to attend, click here.