The Economics of Settlement

By George Gilder from the June 2011 issue, AMERICAN SPECTATOR

The root cause of Middle Eastern turmoil, according to a broad consensus of the international media and the considered cerebrations of the deepest-thinking movie stars, is Israeli settlers in what are described as the “occupied territories” on the West Bank of the Jordan River. Even such celebrated and fervent supporters of Israel as Alan Dershowitz and Bernard-Henri Lévy put the settlers beyond the pale of their Zionist sympathies. Remove the settlers, according to these sage analyses of the scene, and the problems of the region become remediable at last.

Lester Brown of the Worldwatch Institute adds to these political concerns a coming environmental catastrophe, also presumably aggravated by the Israeli settlers and their hydrophilic irrigation projects. He sees the Middle East as severely threatened by the growth of population and the exhaustion of water resources. The Institute explains: “Since one ton of grain represents 1,000 tons of water, [importing grain] becomes the most efficient way to import water. Last year, Iran imported 7 million tons of wheat, eclipsing Japan to become the world’s leading wheat importer. This year, Egypt is also projected to move ahead of Japan. The water required to produce the grain and other foodstuffs imported into [the region] last year was roughly equal to the annual flow of the Nile River.”

Although these two concerns might seem unrelated, they converge in the history of Israel, created by several generations of settlers and constrained at every point by the dearth of water in a mostly desert land. In the mid-19th century, before the arrival of the first groups of Jewish settlers fleeing pogroms in Russia, Arabs living in what became the mandate territory of Palestine — now Israel, the West Bank, and Gaza — numbered between 200,000 and 300,000. Their population density and longevity resembled today’s conditions in parched and depopulated Saharan Chad. Although Worldwatch might prefer to see the Middle East returned to these more earth-friendly, organic, and sustainable demographics, the fact that some 5.5 million Arabs now live in the former British Mandate, with a life expectancy of more than 70 years, is mainly attributable, for better or worse, to the work of those Jewish settlers.

CHRONICLING THE ORIGINS of this Jewish feat in 1939, nine years before the creation of the modern state of Israel, was one of the little-known heroes of the 20th century, Walter Clay Lowdermilk. An American expert on land usage, he formulated and popularized the best techniques of soil reclamation and watershed management around the globe. Today the agricultural school at Technion bears the lapidary name of this American-born Christian, and the world-leading feats of Israeli water conservation attest in part to his influence.

A Rhodes scholar at Oxford who earned his Berkeley doctorate in forestry, Lowdermilk focused his career on “reading the land” for its tales of human civilization. Married to a Christian missionary, he moved early in his career to northern China to find remedies for the great famine there in 1920 and 1921. Rejecting the prevailing view that the crisis was caused by climate change, Lowdermilk and his team identified the real problem as the huge load of silt borne down the Yellow River every year and deposited in the lowlands of the river, causing floods and depleting the up-country of soils. “In the presence of such tragic scenes,” he wrote, “I resolved to devote my lifetime to [the] study of ways to conserve the lands on which mankind depends.”

Becoming assistant chief in charge of research for the U.S. Soil Conservation Service (now part of the Department of Agriculture), he embarked in 1938 on a global mission to determine how the experience of older civilizations could guide the U.S. in surmounting its own agricultural crises of the Dust Bowl and Southern erosion. This 25,000-mile peregrination ended in Palestine, where he confronted the question of how the “land of milk and honey” described in the Bible had become a wasteland.

In ancient times, as he knew, Palestine was largely self-sufficient, with a population of millions. Replete with forests, teeming with sheep and goats, full of farms and wineries, the landscape evoked a European plenitude. By 1939, however, when Lowdermilk arrived in the area, it was largely an environmental disaster. As he recounted in his 1944 book, Palestine, Land of Promise, “when Jewish colonists first began their work in 1882…the soils were eroded off the uplands to bedrock over fully one half the hills; streams across the coastal plain were choked with erosional debris from the hills to form pestilential marshes infested with dreaded malaria; the fair cities and elaborate works of ancient times were left in doleful ruins.” In the late 19th century around the current Tel Aviv, Lowdermilk was told, “no more than 100 miserable families lived in huts.” Jericho, once luxuriantly shaded by balsams, was treeless.

What amazed Lowdermilk, though — and changed his life — was not the 1,000 years of deterioration but the some 50 years of reclamation of both the highlands and the lowlands by relatively small groups of Jewish settlers. As one of many examples of valley reclamation, he tells the story of the settlement of Petah Tikva, established by Jews from Jerusalem in 1878, in defiance of warnings from physicians who saw the area outside what is now Tel Aviv as hopelessly infested with malarial mosquitoes. After initial failures and retreats, Petah Tikva became “the first settlement to conquer the deadly foe of malaria,” by “planting Eucalyptus [locally known as ‘Jew trees’] in the swamps to absorb the moisture,” draining other swamps, importing large quantities of quinine, and developing rich agriculture and citriculture. By the time of Lowdermilk’s visit, Petah Tikva had become the largest of the Jewish rural settlements,” supporting 20,000 people “where there were only 400 fever-ridden fellaheen sixty years ago.” (Today it is at the center of Israel’s high-tech industry.)

In the gouged and gullied hills near Jerusalem, reclamation by settlers was epitomized by Kiriath Anavim. Founded in 1920 among thorn bushes, dwarfed trees, and a desolate rubble of rocks, the settlement by the time of Lowdermilk’s trip boasted elaborate terraced lands, orchards, and vineyards, with plum, peach, and apricot trees, honey, and poultry, together with prosperous dairies producing milk for Jerusalem and Tel Aviv.

In draining swamps, leaching saline soils, redeeming dunes into orchards and poultry farms, in planting millions of trees on rocky hills, in constructing elaborate water works and terraces on the hills, in digging 548 wells and supporting canals in little more than a decade and irrigating thousands of acres of land, establishing industries, hospitals, clinics, and schools, the 500,000 Jewish settlers who arrived before the creation of Israel massively expanded the very absorptive dimensions and capacity of the country. It was these advances that made possible the fivefold 20th-century surge of the Arab population by 1940.

AS LOWDERMILK recounted in his book, in the 21 years between 1921 and 1942, the Jews increased the number of enterprises four-fold, the number of jobs more than ten-fold, and total invested capital from a few hundred thousand dollars to the equivalent of $70 million in 1942 dollars. Particularly significant in Lowdermilk’s view were the purchases of large expanses of unused Arab land by Jewish settlers, many of whom had earned the necessary funds by their own hard work on the arid soils. On most occasions, the settlers bought only a small proportion of an individual Arab’s holding and paid three or four times what similar plots sold for in Syria (and far more even than in Southern California). Thus the Jewish purchases provided capital for Arab farms, allowing a dramatic expansion of their production. “In cases where the land belongs to absentee owners and tenants are forced to move…I found that the Jewish purchasers had provided compensation to enable the tenants to lease other property.”

Lowdermilk reported that many Arab landowners had already begun to resist the agricultural advances and resented the success of the Jews, while the British in the area “are imbued with old colonial traditions and befriend feudal leaders.” European diplomats often enjoyed going native by mimicking Arab grandees (who in turn were learning European ethnic prejudices and disdain for “men in trade”). Together they smeared these fully beneficial transactions with anti-Semitic slurs and caricatures. However, the results of the purchases were clear: “During the last 25 years (before 1939), Jews have acquired just six percent of Palestine’s 6.5 million acres or 400 thousand acres, less than one quarter of which was previously cultivated by Arabs.”

These new opportunities in Palestine attracted hundreds of thousands of Arab immigrants from Iraq, Syria, Jordan, and the desert. With wages for Arab workers double or more the wages in Syria, Jordan, and Iraq, in 1936, a British Royal Commission could report: “The whole range of public services has steadily developed to the benefit of the [Arab] fellaheen…the revenue for those services having been largely provided by the Jews.”

Lowdermilk clinched his argument by a sophisticated comparison with conditions in Jordan. A country almost four times larger than Palestine (including Sinai), Jordan partakes of the same mountain fold of mesozoic limestone, the same rich river plains, the same Rift Valley and highlands, the same mineral resources, the same climate, and a several times larger population in ancient times. But at the time of Lowdermilk’s visit, its agricultural output and per capita consumption of imports was one-fifth that of Palestine and its population density was one-tenth Palestine’s.

Without Jewish settlements, Jordan was suffering heavy emigration (mostly to America and Palestine) while Palestine attracted increasing flows of immigrants, mostly clustering around the Jewish settlements. With Jewish advances in food production and in medicine and public hygiene, Arab health statistics increasingly converged with those of the Jewish settlers. While the Arab birth rate actually dropped by 10 percent, the death rate fell by one-third and infant mortality dropped 37 percent. The net result was an Arab annual population growth rate of 16.2 percent, the highest in the world (exclusive of immigration). Lowdermilk summed it up: “Rural Palestine is becoming less and less like Trans Jordan, Syria and Iraq and more like Denmark, Holland, and parts of the United States [Southern California].”

CONTINUE