Gilder Throws Down a Gauntlet

Israelis have created prosperity wherever they have touched ground.

Charles Murray, no slouch among public intellectuals, described him as the most underrated public intellectual in America today. Murray offered this assessment of George Gilder at a recent American Enterprise Institute colloquium to discuss Gilder’s newest book, The Israel Test. Murray explained: From Gilder’s national debut with Sexual Suicide (later reissued as Men and Marriage), to his seminal Wealth and Poverty, to his farsighted Microcosm, Gilder makes being ahead of his times look easy. And, Murray noted with admiration, Gilder has always been right. Is Gilder underrated? Yes, because his gifts and contributions deserve more or less full-time celebration. After the probably trillions of words that have been devoted to the Israel/Arab conflict, it is no small achievement to approach the matter from a unique vantage point. Gilder’s thesis is this: Today’s hatred of Israel is feeding off the same poison that has nourished anti-Semitism throughout history — envy, resentment, and misunderstanding of economics. Gilder asks: “Are you for civilization or barbarism, life or death, wealth or envy? Are you an exponent of excellence and accomplishment or of a leveling creed of troglodytic frenzy and hatred?” Jewish accomplishment is an undeniable fact of history. Many, Murray included, have speculated about the disproportionate number of Jewish intellectuals, musicians, millionaires, scientists, and others. Gilder, a gentile, is interested less in the why of Jewish excellence than in its consequences. A society that is organized to permit individuals to flourish and to realize their potential, like the United States and post-1980s Israel, will broadly share in the increased prosperity those individuals help to create. A society or a global system that misunderstands wealth creation and wishes to level society by penalizing success will make life poorer for everyone. Gilder boldly declares that Jewish genius laid the foundation for winning the Second World War and for the prosperity that followed. Jewish refugees from Hitler’s Europe provided much of the brainpower for the Manhattan Project. And Jewish geniuses including Albert Einstein, Niels Bohr, Heinrich Hertz, John von Neumann, and Richard Feynman, and entrepreneurs like Andy Grove, made indispensable contributions to the information technology that forms the scaffolding of modern prosperity. Israel has only recently become a technological and economic powerhouse. It got there after a protracted dalliance with socialism that gave Israel high unemployment, anemic growth, and inflation rates that reached 1000 percent in early 1985. Three catalysts changed everything: (1) the influx of 1 million vehemently anti-socialist immigrants from the former Soviet Union; (2) the addition of a far smaller but still consequential cohort of American Jewish immigrants who had business experience and expertise; and (3) economic reforms urged by Natan Sharansky and Bibi Netanyahu. The results, Gilder writes, were “incandescent.” He cites a 2008 Deloitte & Touche survey showing that in six key areas — telecom, microchips, software, biopharmaceuticals, medical devices, and clean energy — “Israel ranked second only to the United States in technological innovation.” Israel’s high-tech research and development puts it at the center of the information revolution. Intel’s microchips, Gilder notes, might as well be tagged “Israel Inside.” But what has this to do with the Palestinians? In addition to his guided tour through Israel’s equivalent of Silicon Valley, Gilder also provides a taut and clarifying economic and political history of the modern Middle East. The economic piece is key, because Israelis have created prosperity wherever they have touched ground in that otherwise listless part of the globe. And Arabs have responded by flooding into areas they previously disdained after Israelis made them habitable, even desirable. It was so in the Yishuv (the new Jewish settlements in the Holy Land starting in the 1880s). And after Israel reluctantly took control of the West Bank and Gaza in 1967, the economy in the territories became one of the most dynamic on earth, posting 30 percent annual growth. The Arab population, along with per capita income, tripled. Arabs are and have always been in a position to share in the wealth created by Israel — and to create their own. But they have flunked the “Israel Test” by choosing envy and hatred. It’s a test the outcome of which, Gilder persuasively argues, will determine our own future as well. Gilder has always been right. Read the book.