David R. Henderson  

Free Trade for Gaza

Social Security and Kids... Who Wants to Move to Minnesota...

Tom Palmer has an excellent post on why it's important to let people in Gaza engage in free trade. Currently, the Israeli and Egyptian governments have extreme restrictions on trade, something I posted on recently. Palmer writes:

The trade embargo against the people of Gaza is itself a crime, and the incompetence and avoidable deadly violence of the Israeli authorities in dealing with the aid flotilla are further arguments that it should be lifted.

Searching for weapons is one thing, but embargoing trade and aid altogether is another. How can the Israeli authorities expect peace from people who, in the end, feel that they have nothing to lose? Free the trade with Gaza and let the people there work, produce, and flourish. Let them trade with Israelis. Search for weapons, but do so with intelligence, not rank incompetence that results in the spilling of blood.

Note also his links to Dan Griswold's article and the short interview with free trade doyen, Jagdish Bhagwati.

Comments and Sharing

CATEGORIES: International Trade

COMMENTS (23 to date)
ThomasL writes:

They don't expect peace without the embargo, because before the embargo there was no peace.

Jonathan Cast writes:
The trade embargo against the people of Gaza is itself a crime

I completely agree. Let's spend all our time condemning that, and not, say, blowing people up in an attempt to destroy the state of Israel and kill every Jew in the Muslim world.

Ted writes:

The trade embargo is a stupid policy not only because it is collective punishment, but because it doesn't work. The purpose of the embargo isn't to prevent weapons, it never was, unless the Palestinians have managed to build bombs out of goats or chocolate (both of which are banned). The goal of the policy is to keep their lives so miserable that they will somehow turn against hamas.

The problem is, this logic NEVER works. Punishing the citizens collectively has never turned them against their governments. It merely allows their governments to make excuses about why they can't govern and provide for them and then shift blame onto the enforcer (in this case Israel) making the whole situation even worse. It creates political entrepreneurs who can exploit this inhumane policy to garner even more hatred against Israel. They are executing a policy whose sole result will to just bring suffering among the innocent and create more terrorists. The mind baffles at the logic that by punishing people who have had nothing to do with terrorism that you are suppose to turn them from apathetic into supporters of the oppressor. I don't know of any embargo in human history that has ever accomplished that goal, they usually have the opposite effect.

The problem with the people who support Israel's embargo is they like to pretend it's something it's not. They like to pretend it's about weapons, which I would be fine with if it were - but it's not. It never has been. You can't build a bomb out of jam - but yet it's banned. What more proof do you need that this is about inhumane cruelty and collective punishment - not security?

BZ writes:

Aren't the nice states of Isreal and Egypt just providing a helping hand here? Aren't they helping the good people of Gaza protect their local industries from cutthroat competition from abroad? Just think of this as an outside implementation of a "Buy Palestine!" movement!

Daniel writes:

Ted writes:

The goal of the policy is to keep their lives so miserable that they will somehow turn against hamas. The problem is, this logic NEVER works.

The problem with this is that it's totally wrong. Gaza used to be Hamas' core of support. Now, if anything, they're more anti-Hamas than the Palestinians of the West Bank. If Hamas hadn't blocked the elections that were supposed to take place last summer, they'd have been run out of office, with the people who live most closely with them leading the way. Set a Google alert for the words "Palestinians" and "poll", and you'll see that, whether the pollster be Israeli or Palestinian, the chances of Hamas repeating their victory in the last election with one in the next election is just about nil.

Regardless of whether you see it as moral or not...regardless of whether you see it as legal or not...the Israeli policy of working with Abu Mazen in the West Bank and attacking Hamas in Gaza has largely halted the latter's rocket attacks into Israel and decimated their support amoung the people.

John Caird writes:

Ted - In your world all that Israel would need to do is prevent all trade cargo marked WEAPONS and problem solved.....

Jon writes:

Actually, Ted, the embargo is about preventing the smuggling of weapons. Your suggestion about trying to build a weapon out of jam, goats, or chocolate is simply a red-herring that avoids the real issue. The embargo is about preventing people from smuggling weaponry into Gaza under the guise of transporting other goods. For example, there are well-documented instances of the Palestinian Arabs (Hamas, in particular) using ambulances to smuggle weapons.

You shouldn't take such protestations from the Palestinian Arabs at face value. Of course, you also shouldn't take assertions from the Israeli government at face value. Seeing what happens first hand is usually best; reviewing evidence from non-biased observers is typically second-best.

If Israel embargoes weapons but permits food, then Hamas will sneak weapons in with the food. If Israel embargoes weapons but permits ambulances, then Hamas will sneak weapons in with the ambulances. This isn't speculation; it's simply the historical record.

Brian Clendinen writes:

Does anyone have good information on exactly the nature of the trade restriction other than all goods need to be inspected in a port before they can be transported into Gaza? Limited goods and Aid can go through once inspected is what I have read. So Palmer is wrong in in his statement that there is an Aid Embargo. My understanding was the embargo was to hurt Hamas who is the government of Gaza.

Hamas main goal is the annihilation of all Jews. They are a terrorist organization through and through. I presume if one nation is at war with another it is a crime for the fighting nations not to embargo each other? Hamas is in a de-facto war with Israel, there are still rocket attacks on civilian targets coming from Gaza.

So I fail to see how this is unjustified and a crime when a state of war exists? Now if Israel fully occupied Gaza I think the Embargo would be wrong because Israel would be the government. However, Gaza is self governing they need to accept responsibility for their governments actions. There is no way voters in this case can claim they put Hamas into power (it was a free election) and did not know what type of policies their elected government would have towards Israel. That is the way democracies with free elections works, you get what you want and suffer the consequences of poor choices.

Now that is not to say the Embargo is effective and should still be enforced because its results are contrary to Israelis goals. The embargo not being a good strategy to topple Hamas can be argued quite well. However, the embargo independent of its desired results is perfectly valid.

From what I have read things in Gaza and West Bank are actually decent and a lot better than a few years ago. The economy is growing and things are improving to pre-2000 levels. The current Israeli government has been quietly working with Palatines. I would not claim it is great and they still have significantly restricted freedoms but things are rapidly getting better which is what is important.

Stan writes:

I would agree on principle, but even if the Israeli gov't did free up Gaza, it wouldn't last long. It's politically impossible. Once one of those rockets is found to have been acquired as a result of liberalization, you might as well welcome the new ultra-conservative Israeli leadership.

This kind of simple-mindedness among libertarians frustrates me; there is little or no thought put into the strategy of its practical application.

Patrick R. Sullivan writes:

Stan has used just the right word, it is simpleminded to ignore that Israel--a tiny sliver of a country of 6 or 7 million people surrounded by something like 300 million hostile Arabs who would like to see it annihilated--is de facto at war with Hamas which resides in Gaza.

William Barghest writes:

This seems like a splinter issue between anarcho- and fasco-libertarians. Being the former, I think that the problem with Gaza is not that they have too much government involvement in their economy which is smothering an otherwise prosperous nation, but that there simply is no authority strong enough to keep criminal gangs from launching missiles at Isreal which is the proximate cause of the blockade anyways. But even if there was no blockade, how can you have a well functioning economy when there are gunmen from rival factions roving the streets? There can be no liberty if there is no authority capable establishing security and rule of law.

Nykos writes:

If you want a sound economic analysis of the whole Gaza (or even the whole Middle East) situation, you must take into account the way that religious (and for that matter, all kinds of group-think) ideologies alter human action and disturb normal patterns of trade.

Religious people trade lower standards of living and worse economic conditions in this life for happiness and pleasures in the hypothesized afterlife (a theory which seems to be disproved by findings in neuroscience). This is bad because Abrahamic holy books tend to say that God rewards those who spread "the true Faith", which is sometimes only possible through threats and violence. Jihad is considered by many Muslims a religious duty; the fact that Jews are portrayed as both the murderers of Christ and as the enemies of Muhammad certainly cannot help.

Religions also tend to prescribe arbitrary, strange rituals that have no evidently useful effects but which negatively affect economic output (prayer costs time; constraining women to avoid going out in public without a male family member is probably also very damaging to the economies of those societies that have those practices).

The fact that Israel is a much more secular state, and therefore wealthier, is probably seen with incredulity and envy in the Muslim world, which adds up to the desire for war.

Dan Weber writes:
Actually, Ted, the embargo is about preventing the smuggling of weapons. Your suggestion about trying to build a weapon out of jam, goats, or chocolate is simply a red-herring

It might be a red herring, but it's one that Israel created. img (from the Economist, it looks like) shows some of the things that can and cannot be imported.

Is coriander dual-use now?

Pierre Honeyman writes:

It doesn't really matter what specific goods are allowed or disallowed by Israel, and the list is likely to contain some ridiculous items on it as all such bureaucracy created lists do. The people of Gaza are suffering, but they aren't in a humanitarian crisis. If the people of Gaza were in a real humanitarian crisis then their leaders would be forced to act like it. As it is Hamas does not act as if there is a true humanitarian crisis in Gaza. Hamas acts as if there is a humanitarian crisis when it is convenient of them to say so, but acts as if there is no such crisis when it is likewise convenient of them to do so.

Furthermore Israel is not the only State with borders into Gaza. Egypt also has borders with Gaza, and Egypt, like Israel, is not very interested in maintaining open borders with Gaza as long as Hamas is in power there.

Israel has dual duties: a duty to their own citizens to secure them from attack from abroad, and a duty to Gaza to ensure that civilian aid is allowed in. It should surprise no one that Israel sees its duty to it's own citizens as primary.

I agree that the *people* of Gaza should enjoy free trade, and that free trade will, in the long run, build closer ties between Gaza and Israel. I don't think it naturally follows that Israel should end the blockade of Gaza immediately, or even while Hamas remains in power. I think it's quite obvious that, in the short run, opening the borders and ending the blockade with Gaza would end up in more violence, not less. Hamas isn't interested in trade, Hamas is, by its very foundational documents, interested in the elimination of the State of Israel.

So how could Israel end the blockade and restore free trade, and thus increase freedom (which is a good thing) while not risking a return to the days of daily missile and mortar launches from Gaza into Israel? Let's be clear: the financial and military supporters of Hamas aren't very interested in a lasting peace with anyone, and Hamas currently controls Gaza.


Andy Hallman writes:
If the people of Gaza were in a real humanitarian crisis then their leaders would be forced to act like it.


So Ukrainians didn't actually starve in the 1930s because their government didn't act like they were starving?

Hamas acts as if there is a humanitarian crisis when it is convenient of them to say so, but acts as if there is no such crisis when it is likewise convenient of them to do so.

How are Hamas' acts relevant to the matter of fact question of the standard of living in the Gaza strip?

Pierre Honeyman writes:

I can't comment on the situation in the Ukraine in the 1930s. I can comment on the actions of Hamas. Hamas is currently refusing to let the aid from the intercepted flotilla into Gaza and there is no international outcry over this; this tells me that there is no crisis in Gaza. Life may be tough there, and it undoubtedly is, but to the point of humanitarian crisis? No. If there was a real humanitarian crisis Hamas would exploit that with more than rhetoric, and they don't. There is no crisis.

I'm not trying to say that life is rosy in Gaza; and that the residents of Gaza are all in on some massive conspiracy; I'm saying that whatever the situation in Gaza "humanitarian crisis" is not, at this point in time, the right term for it. From available public sources it appears as if Gaza receives massive foreign aid from NGOs, the UN, and from Israel itself on a daily basis.

Clearly a free, independent, prosperous Gaza would be vastly preferable to the current situation. I just don't believe that lifting the blockade, and thus necessarily increasing the avenues for weapons smuggling available to Hamas, is going to lead to anything like a free, independent, or prosperous Gaza. Clearly the blockade will not lead there either, but with Hamas in power in Gaza I think that Israel's political and strategic choices are extremely limited. No Israeli government will survive ending the blockade if it means that rockets and mortars rain down on Israel again. No government anywhere would survive that.


Paul writes:

I don't remember Palmer or Henderson being so outraged as Hamas deliberately targeted Israeli grade schools with rockets. Kindergarteners, for God's sake! But interfere with free trade, even with people who literally want to exterminate you, and you are committing a horror. That's fair, David. Israel left Gaza in 2005, told that they should take steps for peace (land for peace!). In return, they were rewarded with rockets on their homes and children. Now they are being scolded by a total joke of a hypocritical international community for trying to prevent these weapons from arriving in Gaza. The Turks lecture about massacres. That's rich. Let's talk to the Kurds or the Armenians. And spare me the nonsense about how this is all about getting the people of Gaza peanut butter and jelly. It’s about opening the shipping lanes so that tons of weapons can get to Gaza. Funny that a proud libertarian pacifist such as David would happily support this. Not that any more evidence is needed, but posts such as this prove why libertarians should really not bother commenting on foreign affairs. On this issue, they are absolute ideologues, ignoring history, culture, and what is plainly obvious to what anyone with two eyes can see: Hamas does not want peace, they do not want free trade, they want to kill Jews. They are at war. And Israel is held responsible because it wants to protect its citizens. Free trade is great. Markets are great. Libertarians have powerful arguments on limited government, markets, and trade. But on this issue, they are a disgrace.

j writes:

Basically, Gaza can import anything but it has to pass through Israel. Israel offered to transfer all the Marmora ship cargo to Gaza but only through an Israeli port. The items that are restricted are connected to military activities against Israel (plus bureaucratic incompetence). Cement and iron is restricted to specific projects so no bunkers, etc. can be built. Iron pipes and metal working machinery is restricted because they are used to manufacture Kassam rockets. I dont know why chocolate is restricted - maybe it is stupidity or may be because it was used to smuggle drugs or may be used as rocket fuel (lipids). Gaza has launched thousands of rockets against Israeli civilian population, the blockade is one of the few non-violent weapons we have against them. Anybody who heard the rockets coming from Gaza can easily understand the situation. Maybe better than myself.

josh writes:


There's this new invention called history. You should try reading some of it. Apparently, and I'm not making this up, people have at various times been made to submit peacefully to rule by another nation without resorting to suicide bombing.

JKB writes:

First off it is not an embargo. No one is trying to prevent the Palestinians from getting an iPad. It is a blockade of an enemy as the result of an armed conflict between belligerents. The goal is to damage the enemies ability to conduct hostilities. International law, however, requires that humanitarian and medical supplies be permitted.

103. If the civilian population of the blockaded territory is inadequately provided with food and other objects essential for its survival, the blockading party must provide for free passage of such foodstuffs and other essential supplies, subject to:
(a) the right to prescribe the technical arrangements, including search, under which such passage is permitted; and
(b) the condition that the distribution of such supplies shall be made under the local supervision of a Protecting Power or a humanitarian organization which offers guarantees of impartiality, such as the International Committee of the Red Cross.
118. In exercising their legal rights in an international armed conflict at sea, belligerent warships and military aircraft have a right to visit and search merchant vessels outside neutral waters where there are reasonable grounds for suspecting that they are subject to capture.

Being in breach or intending to breach a blockade subjects the vessel vessel to capture. I really hope the Israelis keep all the vessels as prizes subject to adjudication so we have every idiot european government arguing against historical international law governing warfare that they used for centuries. Most amusing are the Brits who seem to forget they blockaded Jews escaping europe (widows, orphans, camp survivors) after WWII and interned those captured in camps that did not meet Geneva convention standards.

[The quoted passage comes from http://www.icrc.org/web/eng/siteeng0.nsf/htmlall/57jmsu?opendocument --Econlib Ed.]

Stephen W. Stanton writes:

Of course, issues like this are never as simple as they seem.

Yes, Israel should allow free trade while ensuring security.

But many Muslim Arab nations simply won't trade with Palestine because it is ostensibly part of Israel... In fact, when one UAE executive suggested that Arabs increase trade with Israel, he rescinded his comments shortly thereafter:


JoshK writes:

This is not an embargo to try to chance policy (like the Cuba embargo). This is an embargo to stop anything that can be used to make more rockets. And, it's been fairly effective since it went into effect.

If the Arabs in Gaza want to improve their situation they could try electing some folks whose charter is something other than the destruction of Israel. It would be pretty easy to get of this blockade - Israel doesn't care what kind of government they have as long as it doesn't attack.

Boonton writes:

Actually, Ted, the embargo is about preventing the smuggling of weapons. Your suggestion about trying to build a weapon out of jam, goats, or chocolate is simply a red-herring that avoids the real issue. The embargo is about preventing people from smuggling weaponry into Gaza under the guise of transporting other goods. For example, there are well-documented instances of the Palestinian Arabs (Hamas, in particular) using ambulances to smuggle weapons.

On the news this morning Israel announced cookies will now be allowed to be imported into Gaza. No explanation was given, though, as to why cookies were banned before. It's also been reported that particular foodstuffs have been temporarily dropped from the embargo when Israeli farmers discovered they had a surplus and needed an additional market to offload the product.

I appreciate the danger that scud missiles might be smuggled inside cookies (beware of those 'super choc. chip' cookies), but why do you feel this gov't policy would be any less stupid, any less suspectable to special interest manipulation and abuse than any other?

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