When I asked in this blog why the U.S. funds Israel, I got a list of 25 reasons. Many of them sound quite reasonable and beneficial, even to me. All of you non-economists would conclude that my question has been answered. But you’d be wrong.
I was an economics major in college. (Pity me.) I got a second dose of it when I got my MBA. The most important skill you learn in business and economics classes is how to compare things. The average person can be forgiven for lacking those skills. It’s not a natural capability. Like most things, it helps to be trained.
For someone trained in economics, the question “why fund Israel?” always implies “compared to every other use for that same money.” So for me, the only acceptable answer to the question would take this form:
“I have considered every other use for the money and decided that foreign aid to Israel is the best use.”
And of course when you talk about the “best use” of money, you need to be clear how you measure that sort of thing. I generally default to the question of what saves the most lives, with a bonus if those saved lives include me or people close to me.
We economist-minded people also understand that the odds of various events will drive most decisions. We count a 10% chance of killing 1,000 people as the same as killing 100 people. It helps drive the emotion out of decisions that should be based on practicality. So when I hear arguments that say something “won’t happen” or “will happen” I generally discount those opinions as worthless. But if you say, “I think the odds of that happening are only 2%,” then I have something I can react to.
When I look at the 25 reasons for funding Israel, I ask myself how many other countries would have an equally impressive list of benefits if we were to toss an extra 3 billion in their direction.
Take Russia, just to pick one. They have lots of oil. They vote in the Security Council. They have nukes-o-plenty. We have lots to gain by ensuring they stay (or become more of) a democracy. We often need their support in the U.N. to put pressure on other countries. I can think of a dozen compelling strategic reasons to give them an extra 3 billion per year in bribes or foreign aid or whatever else you want to call it.
And what would an extra 3 billion per year buy us in terms of homeland security or better health care for the elderly and poor? How about the victims of natural disasters? How about taking a bite out of global warming? (Or deciding if it’s real – take your pick.)
There are indeed many reasons for giving foreign aid to Israel. But no one here even attempted to answer “why,” because doing so requires a comparison to all the relevant alternatives. The 25 so-called “reasons” are merely explanations and benefits. That’s little more than the first step to answering why.
To address the “why” you would also have to compare all of the benefits of funding Israel with an estimate of the likelihood that discontinuing direct support would improve foreign public opinion and therefore change the odds of success in the war on terror. If you think there’s only a 1% chance that it would make any difference, I wouldn’t argue your estimate. I would just point out that a 1% reduction in the risk of terrorism is worth a lot according to economists. To the untrained observer, 1% rounds to zero and is worth nothing.
Sometimes what looks like a philosophical difference is only a difference in training.