No More US “Aid” for Eternal Poverty in Gaza

EspañolThe debate over whether Gaza Strip residents deserve to be punished for the acts of men who do not represent them warrants our attention. Criminals must be accused of having committed crimes, face trial, and then be brought to justice. Life should be preserved and protected at all costs, especially the lives of innocents; and where due process isn’t an option, innocents suffer the consequences.


Beyond the latest outbreak unfortunate violence, though, something else has been bothering me: the underling, long-term situation for Palestinians living in Gaza, and how their existence offers a glimpse into the many factors that keep them from being free and independent.

Economic Realities

Economics deals with how we exchange with one another, and its application is pertinent in this case. Its most basic principle is scarcity. If means were abundant, allocation would be irrelevant, and there would be no need to work. Scarcity makes certain means special to men.

Scarcity of certain items prompts men to rearrange their surroundings, so they may obtain what is not readily available. However, once they have bought into the illusion that there’s an infinite supply of certain goods or services, such actions appear superfluous to achieving their goals.

A government’s promise to keep people clothed, well-fed, and housed promotes a culture that boosts this false sense of entitlement. This in turn erodes people’s will to reorganize their surroundings and create the products and services that they desire or require.

Under the spell of the welfare state, people go from working toward their own goals to working toward entitlements, prompted by ignorance of the fact that there isn’t an infinite supply of anything they were promised. Inevitably, entitlements also dry up, and people must then shift their actions back to their environment once again.

The Welfare-State Delusion

Many of us still weigh a policy’s success by how many people it’s able to help in a short period of time. Projects are not initially measured by their long-term consequences, which leads to a vicious cycle of policies enacted to fix the problems created by the shortsighted attempts that came before.

In a sense, a system where government benefits exceed what an individual would arrive at through personal commitment represents a form of tyranny disguised as benevolence. The speech may sound appealing to the crowd, but it soon proves pointless, once it’s clear that the very existence of a welfare state limits the individual.

Whether big or small, a government’s power to control certain aspects of the lives of citizens by being their sole providers of essential services corresponds to its influence on their personal beliefs and willingness to act.

In Gaza, dependence on foreign aid has turned the people’s focus toward entitlements, not means, and created an artificial demand that cannot be met at present. Roadblocks have become more numerous than opportunities in the Strip, and foreign governments are key culprits.

Blockades, Artificial Scarcity in Gaza

Out of the 1.5 million people in the Gaza strip, 1.2 million have refugee status. About 80 percent of the population depend on foreign aid and international financing via the United Nations’ special body known as the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). The agency was created in 1949 with the goal of aiding Palestinians who were expelled from their territories as a result of the 1948 Arab-Israel War. Most of the financial aid sustaining the agency comes from the United States and Europe.

Through the pernicious international-aid industry, young Gazans face of future of perpetual poverty and frustration. (@JonDonnison)

By 1949, 750,000 Palestinian Arabs had been displaced. Most had been refused entry by other Arab nations, and their presence in refugee camps became a greater burden on the international community financing the UNRWA. Now, descendants retain the status of past generations, perpetuating the refugee stigma the elders carried their entire lives.

The Gaza Strip, which consists of eight refugee camps spread out across the 139 square miles of the district, holds over 1.5 million people whose very existence depends mostly on the services provided by the UNRWA. Egypt and Israel have imposed physical and economic blockades that have made the situation even grimmer for anyone forced to remain within the confines of the strip.

Freedom is scarce, and so is everything else, but the artificial scarcity of certain entitlements fabricated by the presence of the UNRWA distorts the focus of Gazans.

The territorial confinement and the UNRWA’s insistence in labeling residents as refugees create a huge problem for Palestinians. Freedom is no longer the only goal, they also dream of returning to the territory that once belonged to members of previous generations.

The war has been fought, and the territory has been taken. A peaceful agreement with Israel that would allow displaced Palestinians a “right of return” is unlikely to be achieved anytime soon. Their best shot at living fulfilling lives is to cross the territorial boundaries that confine them in search for economic prosperity abroad, but even that is a nearly impossible option, mostly because of the UNRWA’s operations in the Strip and Israel’s blockade.

Palestinians in Gaza are essentially being bribed to remain on the run from independence. The existence of a welfare state induces them to embrace their perpetual refugee status. In an environment of frustration and desperation, which is intermittently converted into anger among some Gazans, they turn their dissatisfaction to Israel.

What was once created with the respectable goal of aiding displaced Palestinians, suffering the loss of their territory, has turned into the very root of their present frustration.

Goods versus Armies

There are many who defend the position that the very presence of an internationally funded welfare state favors terrorism in Gaza, but I do not seek to address that specific assertion here.

In Economic Sophisms, Frédéric Bastiat reminds us of the importance of lifting economic barriers and how the erection of blockades makes nations less safe:

A French ironmaster says: “We must protect ourselves from the invasion of English iron!” An English landlord cries: “We must repel the invasion of French wheat!” And they urge the erection of barriers between the two nations. Barriers result in isolation; isolation gives rise to hatred; hatred, to war; war, to invasion. “What difference does it make?” say the two sophists. “Is it not better to risk the possibility of invasion than to accept the certainty of invasion?” And the people believe them, and the barriers remain standing.

And yet, what analogy is there between an exchange and an invasion? What possible similarity can there be between a warship that comes to vomit missiles, fire, and devastation on our cities, and a merchant vessel that comes to offer us a voluntary exchange of goods for goods?

Those with discretion over the matter may have a hard time dismantling the UNRWA. But it is a necessary condition for Gazans to have a chance at freedom, from their eternal state of subsidized poverty.

Before this can happen, Israel must understand its role and work to facilitate international trade. This would give Gazans business options, increase investment, and improve education. Once Gaza is able to become more economically independent, it will then be able to trade its current frustration for peace.

The United States, for its part, should consider cutting all foreign aid to the region, including Israel. Subsidized war creates a greater demand for fighters, just as subsidized poverty creates a greater demand for paupers.

Once the United States understands its role in the current struggle, Gazans and Israelis may have a shot at peace. If so many on this side of the Atlantic understand the risks that the welfare state can pose to US Americans, why deny the negative consequences of subsidizing products and services abroad?

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