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The Globalist’s Plan for Middle East Peace

After failed military and diplomatic attempts, will peace for the Middle East be found in economic principles?

June 10, 2002

After failed military and diplomatic attempts, will peace for the Middle East be found in economic principles?

For too long, the Middle East conflict has been defined in terms of rights and wrongs. After all, the ultimate source of unrest in the region involves the genuine grievances of individual Palestinians and Israelis.

But these grievances have grown to the point that they now stall any progress.

But suppose we create incentives for individuals to lay down those grievances. That just might be the one change in dynamics that the region requires.

After all, politics has given us Ariel Sharon and Yassar Arafat. Diplomacy gave the region a long series of failed agreements.

The military has provided a variety of more or less spectacular wars.

But nobody has come close to offering a dependable peace. Maybe it is time to give economics a try.

We propose recasting the conflict — as a matter of incentives. These incentives are in harmony with the general views of the world community — and that make all of the participants think long and hard before resorting to their old patterns of thinking and acting that continue to lead to violence.

Essentially, the market becomes a key tool for redefining the incentives of all of the participants towards peace.

How would this work? Take one example: the crucial issue of the right to return for Palestinian refugees.

Palestinians are determined to have the world recognize the fact that many of them used to live within what became the pre-1967 borders of Israel.

The poignant stories of families that have kept the keys to houses across the “Green Line” that separated Israel from Jordan and Egypt before 1967 testify to that.

Of course, the turn of events in the past year and a half has turned Israeli Jews completely against allowing a single Palestinian into Israel. Security considerations simply would not allow it.

But even after things quiet down, it has become clear that, from the Israeli perspective, permitting the return of all of those Palestinians is not acceptable.

After all, it would mean the effective destruction of the Jewish state by demographics.

That seems like an impossible dilemma. But what about applying the tools of economics to create an answer to this vexing problem?

Here is a proposal that views the problem as one of creating incentives.

All Palestinians who can reasonably claim to have left or been chased out of the Palestine Mandate territory in 1948 would receive certificates. However, the number of certificates to be issued would be limited to the number of that actually fled the area at the time.

These certificates would be inheritable.

Each certificate would grant the owner the right to live within Israel — under certain conditions.

Those conditions are that the portion of Palestinians in the Israeli population not rise above a set percentage — in order to preserve the Jewish character of the state. That set percentage could be equal to today’s portion of Arabs in Israel’s population (about 19%). In that case, Palestinians could only use their certificates under point #6, below.

In addition, the Israeli government may ban for cause certain potential “returnees” (convicted criminals, for example).

One additional Palestinian certificate holder (above the set percentage) would be allowed to reside in Israel for each Israeli settler in the West Bank and Gaza.

The certificates could be bought and sold on the open market. A commission funded by Israel, the United States and Saudi Arabia would set a minimum price to purchase certificates. If purchased by this consortium of countries, the certificates would be effectively removed from use by anybody.
The Globalist thanks Dan Morrow for his thoughts and collaboration in writing this article.

Now consider the far-reaching impact of the plan. First, it protects Israel from any overreaching ambitions of Palestinian extremists by capping the requirement that Israel accept (perhaps hostile) Palestinians into the country.

On the other hand, it protects the Palestinians by giving the Israelis a strong incentive to curb the overreaching ambitions of Israeli settlers. After all, every settler equals an additional Palestinian within Israel.

But beyond this, the plan creates incentives for individuals — rather than politicians and generals — to make the hard choices that are required for peace.

Certificate holders will be faced with a familiar dilemma. Familiar, because families around the world make similar economic decisions every day.

The question facing the Palestinians will be: Should they sell their certificates? Either the Palestinians can wait for Israel’s Jewish population to grow, or more settlers to move to the West Bank.

Or the Palestinians can decide that the memories, and the certificate on the wall, are more valuable than the money. What they cannot deny is that the world acknowledged their rights — and gave them the opportunity to receive compensation.

Israel can, of course, reduce the number of certificate holders — by purchasing certificates on the open market. But it can only purchase them if it pays the Palestinians “enough.”

And the amount that is “enough” is determined by the individual Palestinians themselves — not through diplomatic negotiations.

It truly places a market price on peace. How much money are Israelis and Palestinians willing to, quite literally, pay if they wish to keep the current state of affairs going?

Thus, suppose the Israeli government offers $10,000 for each certificate.

Palestinians can decide that this is enough compensation for their loss from 1948 — or they can decide to retain their rights.

Perhaps they will sell them for $100,000? Israelis, on the other hand, will have to decide whether they wish to pay $10,000, or $100,000 for a certificate.

Israeli taxpayers can weigh the cost of the certificates against the potential for reduced security costs in the future.

Until now, the peace process has been vexed by ultimately futile attempts to resolve past issues such as: Are Israeli settlements illegal? Should Palestinians be allowed to return? The plan converts such questions into different ones. The new, future-oriented issues arising from the plan include: