The Truce and the Noose
The six-month truce between the Israeli government and the Hamas chiefs in Gaza offers opportunities which if not fulfilled could lead to greater dangers.
July 1, 2008
Fred Foldvary, Ph.D.
Economist

There are two purposes of a truce. One is to enable both sides to restore their full military capability so that they can fight more fiercely when the truce is broken. The second purpose is to prepare the way to a peace agreement.

The chiefs of Hamas, which rule the Gaza territory, have stated they could enter into a long-term truce with the State of Israel, but not a lasting peace. Palestinian extremists reject any peace treaty with Israel regardless of the borders and other terms. They seek the elimination of Israel and the expulsion of all Jews from the Middle East. No compromise will satisfy them.

With this all-or-nothing position, why did Hamas agree to a truce? First, the Hamas chiefs need public support in the next election, and the on-going war with Israel has resulted in great suffering among the people of Gaza. The truce provides short-term relief from the blockage of travel and trade. Second, the Hamas chiefs can use the first purpose of the truce, to enable them to strengthen their military capability in order to wage a fiercer war with Israel in the future.

The DEBKAfile news of June 20 reports that Iran’s top leaders held a meeting after the truce came into effect. They consider the Hamas regime a base of their power, and that Hamas will use the truce to both strengthen their military and to extend their power to the West Bank. The report states, “Iran has tightened its noose around Israel...”

The U.S. election in November and the end of the Bush administration creates a deadline for both peace and war. Remarks by Israeli leaders as well as Israeli military preparations have indicated that there could be an attack on the Iranian nuclear sites. The optimal time would be before the Bush presidency expires, but after the US elections. Thus an attack could come in November or December.

The Bush administration also seeks a peace agreement between Israel and Palestine before the president’s term expires. A genuine peace agreement would present the extremist with one big fact on the ground: that any further violence will not change the outcome. It would stop the march of conquest by Hamas and Iran. Palestinians are willing to suffer if this will lead to a exodus of Jews from Israel and Palestine, but if this is no longer possible, they will not flagellate themselves for no reason.

While peace talks have been going on, unfortunately the knowledge of peace is lacking even among Israelis and Palestinians who seek an agreement. As stated in Isaiah 59:8, “The way of peace they know not; and there is no judgment in their goings: they have made them crooked paths: whosoever goeth therein shall not know peace” (King James version).

The path to peace has to be based on deep equality. Every resident of Israel and Palestine has to be treated as an equal human being. That requires that the land be made common property, implemented by each title holder paying the rent of that land to the whole community. The payment of rent would then provide the title holder with rights of possession, including the control of the site and the ability to transfer title.

This payment of rent implies an agent that collects that rent. The logical agent would be a confederation of Israel and Palestine. The confederation government would use that rent for its expenses, and then send the remaining rent to all the residents, each receiving an equal share. The confederation would also take control of water and some other joint resources and areas.

Israel would have the greater rent payment, and so the Palestinians would receive rent from Israelis. That would compensate them for not being able to use Israeli-held sites.

Paying rent would diffuse the land question, because there would be a price for holding land. If Palestinians were to take over the Israeli settlements on the West Bank, they would lose the rent revenue paid by the settlers, and they in turn would become the rent payers.

That land rent is the key to peace is not a novel idea. Ecclesiastes 5:9 states, “Moreover the profit of the earth is for all: the king himself is served by the field” (King James version). Isaiah 59:8 applies to Ecclesiastes 5:9. People know not that the profit of the earth is for all, so they don’t know how to achieve peace. If the economic profit of oil had been shared equally, the Middle East would have been spared several wars.

The way to peace is for there to be an international conference that would present Israel and Palestine with a peace agreement in which the two nations would be under a confederation that collects the ground rent. The confederation would also control transit between Gaza and the West Bank. The Israeli settlements in the West Bank would have perpetual lease with the Palestinian State. This would be recognized as the permanent agreement, and all Arab countries would then recognize the confederation and Israel under this agreement.

The pressure would be on Israel and Palestine to agree, because the alternative would be for Israel to confront Iran’s nuclear noose and risk the consequences. There has to be peace in the Middle East by January 2009, or else there will be war. Once the way to peace is known, it would be obvious and accepted. How can any reasonable person not agree that equality with respect to both self-ownership and land ownership is the deepest justice?

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Fred Foldvary, Ph.D.
Economist

FRED E. FOLDVARY, Ph.D., is an economist and has been writing weekly editorials for Progress.org since 1997. Foldvary's commentaries are well respected for their currency, sound logic, wit, and consistent devotion to human freedom. He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and currently teaches at San Jose State University.

Foldvary is the author of The Soul of LibertyPublic Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary's areas of research include public finance, governance, ethical philosophy, and land economics.

Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.