The fixation appears to be incorrigible. It is quite evident below in Prime Minister Binyamin Netanyahu and Defense Minister Moshe Yaaaon Moshe Yaalon, and it has shaped the mentality of their American counterparts. A case in point is an interview of American Secretary of State John Kerry with Udi Segal of Israeli Channel 2 in Jerusalem in the fall, 2013. Underlying this fixation or dogma is a crypto-Marxist mode of thought in which economics trumps religion. This is to be expected in a era of triumphant secularism, and very few statesmen and academic policy makers are immune to this pernicious fallacy.
For the purpose of this article, it will be sufficient to quote only the remarks of Mr. Kerry, beginning with the following cheerful and naive remark: “Peace brings with it extraordinary benefits for everybody. Imagine this region with the ability to attract tourists who can move freely, and you build hotels. You begin to have an increase in your universities and colleges, schools. Young people come…. I think–and the [Arab] leaders understand this—[that] the alternative is a perpetual kind of conflict which restrains everybody, creates increasing risks and dangers, and deprives people of the opportunities for the next generation to have the kind of future that people want….”
Kerry went on to say that peace:
"[W]ill have a profound impact on the day-to-day life of everybody in this region and on the economic possibilities for this region. I can envision – and an Arab minister said this to me the other day – if peace comes to Israel and to Palestine, this will be a financial powerhouse. This will be the economic center of the region. Israel’s talent, Israel’s ability to be able to break through on science and technology and agriculture [including] the desalinization of water – all of these things are things Israel can sell and bring to other people in the region,
"If you want people to believe in the possibilities of peace and the benefits of peace, you need to show them the benefits. If the life of Palestinians continues to not have opportunity, not see economic opportunity, not find jobs, not improve their lives, it’s hard for them to believe … anything anybody says. But if their lives are beginning to improve, then they have a stake in the future, and they begin to believe in the possibilities of peace. And you have a better chance of making peace if life is improving and things are happening on the ground….
"So yesterday I announced $75 million in Bethlehem that will be used for road improvements … in order to provide, number one, jobs to build the roads and work on them, but number two, better access to sites … to the Bethlehem, [which will] attract tourists….. We’re going to help the schools. We want to help with health clinics….. water is coming into the West Bank on a daily basis….. We’re improving the number of work permits so that more Palestinians will be able to come into Israel and be able to work. I mean, these are the ways in which you break down the barriers and you begin to show people what peace could possibly look like.
Now let us ponder Kerry’s optimistic remarks vis-à-vis the following historical background.
First, consider a policy paper attributed to Binyamin Netanyahu, but actually written (as stated) by his then Chief of General Staff Moshe Yaalon, published in 2008. The paper is entitled “Israel and the Palestinians: A New Strategy.” Yaalon set forth the proposition that conflict results from economic scarcity. “Eliminate scarcity or poverty and you eliminate the basic cause of conflict.”
This economic or materialistic mode of thought, which dominates the mentality of secularists like Netanyahu and Yaalon, trumps the religious convictions of Israel’s Muslim adversaries.
Yaalon’s “new strategy” seems to have been composed in complete ignorance of the Peel Commission Report of 1937. This Report indicated that thanks to Israel's economic assistance, Arab income in the “West Bank” multiplied four-fold. Moreover, the Report noted that Israel’s Government established new hospitals, health centers, primary and secondary schools and universities. Nevertheless, the Israeli-built schools and universities became hotbeds of Arab insurrection.
In fact, the Peel Commission Report of 1937 concluded that the Jewish contribution to Arab prosperity in Palestine only increased Arab hatred!
The same phenomenon occurred after the Six Day war of 1967 when Israel regained control of Judea, Samaria, and Gaza. Once again both Israeli and American officials and decision makers failed to understand that there are motives and even cultural affinities which are stronger than economics.
Ignorant of history, they were (and continue to be) oblivious of the fact that France and Germany were the greatest trading partners before the Franco-Prussian War—and these countries, unlike Muslims and Jews, shared the same European heritage.
Now ponder this: after 1967 Six Day War, as many as 100,000 Arabs from Gaza had jobs in Israel and thus worked alongside Jews. In fact, even though an increasing majority of Israel’s own Arab citizens, who enjoy a relatively high standard of living and possess educational and professional opportunities unequalled in the Islamic world, they nonetheless identify with Israel’s enemies and are therefore committed to Israel’s demise—contrary to their own economic interests.
Incidentally, Yaalon’s policy paper cites Middle East expert Daniel Pipes, who, Yaalon says, “has correctly noted that it is not despair [meaning poverty] that encourages extremism among the Palestinians, but rather the hope and belief that the Zionist state can be defeated.” This admission makes nonsense of the cheery optimism of Secretary of State John Kerr who obviously represents “Team Obama.”
Pipes also declared that it would take at least two generations to pacify the Palestinians, if only because they have educated their children to hate Jews and emulate suicide bombers. This is probably why Pipes has said he is bored with peace plans.
Now let us consider Professor Efraim Karsh’s assessment of the economic solution to the Israel-Palestinian conflict naively prescribed by Netanyahu and Yaalon. (49):
"Following the 1967 Six Day War, the West Bank and Gaza, under Israeli management¸ comprised one of the most dynamic economies on earth, with a decade of growth of roughly 20 percent per year from 1969 to 1979. Annual investment in constant dollars soared from under $10 million in 1969 to some $600 million in 1991 (maintained through 1991). The Arab population rose from roughly two million in 1967 to almost three million in some 261 new towns. Despite the nearly triple growth in population, per-capita income tripled in the West Bank and in Gaza [and] rose from $80 to $1,706 from 1967 to 1987. Meanwhile the number of Jewish settlers in the territories rose to nearly 250,000".
During this period when the West Bank and Gaza were run by Israel, the territories received little foreign aid. [Nevertheless] the economy boomed, and the Palestinians increased their business activity and their standard of living rose dramatically. Here is George Gilder’s assessment:
"At the inception of the occupation, conditions in the territories were quite dire. Life expectancy was low; malnutrition, infectious diseases, child mortality were rife; fewer than 60 percent of all male adults had been employed, with unemployment among refugees running as high as 83 percent. Within a brief period after the war, Israeli occupation had led to dramatic improvements….improvements…[The number of Palestinians working in Israel rose from zero in 1967 … 109 thousand by 1968, accounting for 35 percent of the employed population of the West Bank and 45 percent in Gaza. Close to two thousand industrial plants employing almost half the work force, were established in the territories under Israeli rule.
"During the 1970s, the West Bank and Gaza constituted the fourth fastest growing economy in the world … with per capita GDP expanding tenfold between 1968 and 1991… Life expectancy rose more than 48 years in 1967 to 72 in 2000.…By 1986, 92.8 percent of the population … had electricity around the clock, as compared to 20.5 percent in 1967… (Similar advances occurred in hygiene, child mortality, immunizations, and communications, which all rose to levels equal or exceeding other Middle Eastern countries]. The number of school children … grew by 102 percent … Even more dramatic was the progress in higher education. [From zero in 1967] by the early 1990s, there were even [universities] boasting some 16,500 students.”
Did this incredible economic and human progress, which is a matter of public knowledge, render the Arabs less hostile toward Israel? Not at all!
It seems, therefore, that Secretary of State John Kerry is oblivious of this knowledge—which would render his competence in question—or what is to say the same, he is incorrigible, a failing for which Israel’s ruling elites are not innocent.
 Maher Shalabi of the Palestinian Broadcasting Corporation participated in this interview, but his remarks may be disregarded for understanding the mind set of Secretary Kerry.
 George Gilder, The Israel Test (Vigilante Books, 2009), 49-50.