Disaster capitalism: Israel as warning

Raymond Deane, The Electronic Intifada, Oct 15, 2007

"....Exhibit A: Israel

Before the advent of Friedman and his successors, conventional wisdom had it that "relative peace and stability were required for sustained economic growth." More recently this state of affairs gave way to "the Davos Dilemma": "Put bluntly, the world was going to hell, there was no stability in sight and the global economy was roaring its approval." In a context where "instability is the new stability," "Israel is often held up as a kind of Exhibit A." Despite -- or because of -- its parlous political situation, "Israel has crafted an economy that expands markedly in direct response to escalating violence."

The explanation is that Israel's technology firms grasped the potential of the global "homeland security" boom long before the horrible phrase was even coined, and they now dominate that rapidly expanding sector. Klein stresses the negative aspects of this development: "Israel should serve as ... a stark warning. The fact that Israel continues to enjoy booming prosperity, even as it wages war against its neighbors and escalates the brutality in the occupied territories, demonstrates just how perilous it is to build an economy based on the premise of continual war and deepening disasters."

With considerable perspicacity Klein traces two factors contributing to Israel's retreat into unilateralism in the post-Oslo period, both linked to the Chicago School free market crusade. "One was the influx of Soviet Jews, which was a direct result of Russia's shock therapy experiment." The Rabin/Arafat "handshake on the White House lawn was on September 13, 1993; exactly three weeks later, Yeltsin sent in the tanks to set fire to the [Russian] parliament building ..." Subsequently there began a wave of immigration to Israel from the former USSR, thus "markedly increasing the ratio of Jews to Arabs, while simultaneously providing a new pool of cheap labor" and swelling the population of illegal settlements. It suddenly became possible for Israel to dispense with Palestinian workers and introduce a policy of closure, "sealing off the border between Israel and the occupied territories ... preventing Palestinians from getting to their jobs and selling their goods." The result was that the territories "were transformed from run-down dormitories housing the underclass of the Israeli state into suffocating prisons.".....

Light at the end of the tunnel

Naomi Klein's blockbuster is a worthy successor -- in scope, ambition and achievement -- to Noam Chomsky's Deterring Democracy. Her contextualization of Israeli politics is utterly convincing, and can only confound those who still believe that Israel has the slightest interest in reaching an equitable accommodation with its neighbors......"