Ontocide: The Despair of Gaza

Ontocide destroys the will to care about things in the world. Together with politicide and genocide, it forms the “dark triad of occupation”: destroy the state, the people, and meaning as such.

Gaza is being decimated. There are reports of polio virus found in Gaza’s sewage by the World Health Organization (WHO). Mountains of garbage are piling up as basic services have collapsed. The UN reports that clearing 40 million tons of rubble may take 15 years, with housing stock not rebuilt until 2040 at an estimated cost of $40 billion. And as of July 2024, some 39,000 Palestinians have been killed in Gaza. The real body count may prove much higher, given the significant destruction of civil infrastructure by Israel’s armed forces, making recovering and registering fatalities difficult, with thousands likely buried beneath the rubble of the bombed-out enclave.

That the War on Gaza may one day be classified as genocidal by the International Criminal Court (ICC) seems increasingly likely as international legal institutions dare to condemn Israel’s government. Recently, the International Court of Justice (ICJ), the UN’s top court, determined that Israel’s “continued presence in the Occupied Palestinian Territory” was “illegal” and should end as “rapidly as possible” (even as the Court limited their scope to East Jerusalem and the West Bank). In May 2024, the ICC prosecutor applied for arrest warrants against Hamas’s leadership as well as Benjamin Netanyahu and Yoav Gallant.

The Israeli sociologist Baruch Kimmerling has described Israel’s policies as a form of politicide, involving the “gradual but systematic attempt to cause Palestinians’ annihilation as an independent social, political and economic entity.” If politicide involves the denial of statehood and/or destruction of the basic trappings of an autonomous polity (including, as Max Weber pointed out long ago, the right to collect taxes which serves as the fiscal basis of the state), then genocide is the deathly acceleration and lethal concentration of a state’s firepower against the Other, the maturation of a still-nascent germ at the core of politicide.

Less commented upon than the “polity-destroying” (politicidal) or “people-destroying” (genocidal) nature of war and occupation, however, is the Gaza War’s deeply damaging effects on the continued belief in existential meaning and hope. This overwhelming destruction of meaning can be said to constitute what we can call ontocide (from the Greek, ὄντως [ontos] or “being”): Like any besieged, bombed, and starving population, Gazans are not only being killed and displaced in the thousands but are also facing a destruction of belief in the future, of meaning-in-existence, and of certainty that their personhood will advance into the future, under reasonably safe and secure conditions, respectful of their human dignity. Ontocide is the killing of belief in existence as such, the destruction of faith that the world, and the people who live in it, will go on, achieved through the concentrated intensification of multiple, overlapping agonies. Needless to say, ontocide is a terrible crime, because it tends to grind down the survivors—and all genocides in modern history have left survivors to pick up the pieces.

Ontocide is taking place in Gaza. By April 2024, after 200 days of war, some 75,000 tons of explosives had been dropped on Gaza—more than the bombing of Dresden in 1945. The result of this atrocity is pure negativity and despair: As someone has written on the walls of Gaza’s European Hospital: “We don’t care anymore about anything.” And who can blame them? The Israeli human rights organization B’Tselem has collected eyewitness testimonials from Gaza’s population, which vividly demonstrate the deep despair into which the enclave’s civilians have been thrown. One 30-year-old man “recounted how his entire family was killed while sheltering in a Rafah warehouse, after repeatedly being displaced”:

Since then, I’ve been alone in the world. I lost my family. I have no home and no future. I cry every day. I go to sleep alone and wake up lonely and lost…My mother really wanted me to get married. We hoped the war would end and we’d go back to our lives, but they killed my mother, my father and everyone else in my family. They killed everyone…My life is black now. I don’t think I’ll ever get over the trauma.

The Doctors without Borders psychologist Davide Musardo has recorded similarly harrowing eyewitness accounts from the ground:

Children maimed, with burns or without parents. Children having panic attacks, because physical pain triggers psychological wounds when pain reminds you of the bomb that changed your life forever. […] ‘I haven’t had a glass of fresh water for months. What kind of life is this?’ another patient asked me…I have seen people break down when receiving news of another evacuation order. Some people have changed places as many as 12 times in eight months. ‘I won’t move my tent anymore, I might as well die,’ I have heard people say. […] In Gaza, one survives but the exposure to trauma is constant. Everything is missing, even the idea of a future. For people, the greatest anguish is not today – the bombs, the fighting and the mourning – but the aftermath. There is little confidence about peace and reconstruction, while the children I saw in the hospital showed clear signs of regression.

To repeat: “Everything is missing, even the idea of future.

Despair is a weapon of war, and ontocide is a tool for destroying hope and meaning, instilling existential emptiness in the Other.

Are not Gazans today slowly being turned into a kind of “living dead,” husks of humanity for whom little remains but bleak despair, with those fortunate enough to survive the 500-, 1000- or 2000-pound bombs, mostly supplied by the United States, left to attempt to reconstitute fragments of meaning in a totally abyssal, meaningless world? For these seemingly lucky ones, trauma is too weak a word; for them it is as if the world itself has ended.

For the survivors of genocide, the problem of existential meaning can prove intractable. Adorno famously wrote that “to write poetry after Auschwitz is barbaric.” Finding or reclaiming meaning after the destruction of meaning—the subjective experience of ontocide—is among the primary difficulties facing survivors. There can be great cruelty in having survived the guns and bombs—only to find that nothing matters, that “we don’t care anymore about anything,” as the anonymous graffiti in the Gazan hospital writer phrased it. Speaking to B’Tselem in February, a 45-year-old Palestinian mother of nine said: “We’re exhausted. We’re broken and have no strength left…I don't know where else we can run. We’ve been displaced four times. I don’t know what fate awaits us.”

When 24-year-old Muhammed Bhar, a Gaza resident with Down’s syndrome, was bitten by an Israeli army dog during a military raid on his family’s apartment, according to a BBC report, and found two weeks later, dead and on the floor by his displaced family, the question of despair naturally sets in: We find ourselves thrown into an abyssal horror story, that of a totally defenseless, innocent disabled person mauled in the course of a military raid. As his brother Nabila described to the BBC: “This scene I will never forget…I constantly see the dog tearing at him and his hand, and the blood pouring from his hand…It is always in front of my eyes, never leaving me for a moment. We couldn't save him, neither from them nor from the dog.”

Reclaiming existence after existence as such has been shattered is a near-insurmountable task. Think only here of Samuel Beckett’s famously paradoxical phrase: “I can’t go on. I’ll go on.”

Politicide smooths the way to genocide, and genocide naturally pairs with ontocide—its natural consequence for those escaping lethal destruction. The triplet of politicide, genocide, and ontocide might even be said to constitute the dark triad of occupation: destroy the state, destroy the people, destroy meaning as such.

Faced with this “dark triad,” the question confronting the international community is raised poignantly by two volunteer medical doctors returned from the Gaza Strip: “We must decide, once and for all: are we for or against murdering children, doctors and emergency medical personnel? Are we for or against demolishing an entire society?”

To this we can add: Are we for or against the destruction of belief in meaning as such? How can those who must go on, still go on? And what chance for poetry “after Gaza”?

The Nexus of the Presidency

Overemphasizing Biden’s verbal gaffes risks falling prey to a reactionary politics of the performance: What matters more is the nexus of forces the President surrounds himself with.

On Friday, the New York Times Editorial Board called for Biden’s resignation from the 2024 presidential race. Recognizing that a call for “ending his candidacy” was an extraordinary step, the Times still lamented “the president’s performance,” noting: “Even when Mr. Biden tried to lay out his policy proposals, he stumbled.”

The somewhat hysterical anti-Biden reactions to the Biden-Trump presidential debate on CNN suggest that we still have an essentially olympic and theatrical relationship to politics, that is, a politics of performance and (implicit) athleticism.

But overemphasizing Biden’s verbal gaffes and stammering risks falling prey to a reactionary politics of the performance.

In the age of hyperindividualized politics, what counts, seemingly, is measuring the figure of the Leader, according to the ideals of the individual performer—a bit like a contestant on America’s Got Talent, or an athlete in an olympic sport evaluated by judges, like gymnastics or figure skating. As the comedian Jon Stewart said, to much laughter from his audience: “Both of these men should be using performance-enhancing drugs.” And while this is a good line for a stand-up comedian, it nevertheless reveals the essentially performative-dramaturgical nature of politics in the West today. 

Clearly, criticizing this hyperindividuality has its limits. The President of the United States is often thought to be the most powerful individual in the world, and there is a performative, “personal suitability” element to the job. To take but one example: The President stands at the apex of a nuclear weapons force that includes more than 400 nuclear-armed Minuteman intercontinental ballistic missiles, 14 Ohio-class submarines carrying up to 20 nuclear ballistic missiles, and 66 nuclear-armed bombers; in theory, the President has the power to wipe out all of humanity at the push of a button. On a smaller scale, the U.S. president wields the authority to assassinate single persons using drone strikes: President Obama, for instance, ordered 563 drone strikes during his two-term presidency, killing “between 384 and 807 civilians” in Pakistan, Somalia, and Yemen; and Trump nearly started a regional conflagration in the Middle East in 2020 when he ordered the airstrike that killed the Iranian general, Qasem Soleimani in Baghdad. The President also has the power to (attempt to) break individual dissidents, as the case of Julian Assange’s 14-year ordeal shows. All of this means that personal suitability and individual characteristics are not totally irrelevant. 

And yet: We ought to think more about the way a President acts as a nexus of complex interlocking forces involving a machinery of politics that draws upon the energies of thousands of individuals: An incoming president must, for example, make “about 4,000 political appointments” in a short period of time after taking up office. As the philosopher Slavoj Zizek reminds us, via Hegel, the King should be an idiot, an “idiotic dotter of the i’s.” It is when the Leader “embodied the rational totality”—Stalin comes to mind—that we are really in trouble and run the risk of a figurehead who involves themselves in every aspect of the polity.

Thinking in terms of nexus, not personal character—and what kinds of forces will be mobilized within this nexus—should occupy our time far more than the current hyper-stress on individuality indicates.

So what kind of nexus of forces did the two presidents hint at in the debate?

First, Biden pulled leftward and attacked Trump for his vehement class politics. It is telling in the extreme that Biden’s very first statement went straight for Trump’s class/economic jugular: “[H]e rewarded the wealthy. He had the largest tax cut in American history, $2 trillion,” Biden said. The 2017 Tax Cuts and Jobs Act (TCJA) is the most important Trump policy that hardly anyone seems to remember.

Remember that Biden is the first sitting U.S. president who has attended an ongoing strike: In September 2023, he “visited a picket line in Michigan in a show of loyalty to autoworkers.” And as Bernie Sanders points out in his most recent book, It’s OK to be Angry About Capitalism, Biden in 2020 understood the need to “adopt policies that could create some degree of excitement within the progressive community.” He can be made to understand it again.

Second, Biden suggested a much more fiery and self-assertive (potentially progressive) Democratic Party, with barbs against Trump that matched the 45th president’s own historic aggressiveness. In one memorable utterance, Biden said of his opponent, “You have the morals of an alley cat,” after having accused him of “having sex with a porn star”—words one never expected to hear in a U.S. presidential debate. Biden dismissed  Trump’s ramblings coolly: “I’ve never heard so much malarkey in my whole life.” And when Trump accused Biden, surreally, of being “a very bad Palestinian,” Biden rightly riposted that he had “never heard so much foolishness.”  He sliced against Trump’s alleged remark that the war dead of World War I were “losers and suckers,” and attacked Trump’s far-right allegiances for his infamous, and chilling, remark after the Charlotesville “Unite the Right Rally” that there were “fine people on both sides.”

Biden’s gloves were off, which is the only way of dealing effectively with Trump: One must, within limits and while maintaining one’s dignity, confront Trump at his own rhetorical level. Silk-glove politics will not work against Trump the street brawler. For all of Biden’s verbal bumbling and stumbling, it remains the case that Trump, as Biden rightly said, “has no idea what the hell he’s talking about”: He is the ultimate empty signifier, the opportunist par excellence, who turns wherever the winds of political fortune will take him.

Trump did not do himself any favors among black or other minority voters when describing the former as “the black people”—a syntactic construction seeming to confirm suspicions that his relations to minority voters are still entangled in the racist policies of his father’s real-estate business in the 1970s, when black would-be tenants found themselves barred from Fred Sr.’s buildings.

Third, on the geopolitical front, Biden’s statements suggested business as usual, and stasis, with more deaths and killings on the horizon. It was clear he had no meaningful policy for Ukraine—short of delivering ATACMS missiles and the like—capable of pulling the country out of its stalemate, if not outright war of attrition, with the more populous Russia. Trump, conversely, could credibly score major points on his observation that “[t]hat’s a war that should have never started” and his view that “they’re running out of people, they’re running out of soldiers, they’ve lost so many people.” His pathos-filled line, “It’s so sad,” even seemed half-authentic.

On Palestine, Biden’s ghoulish side came to the fore. He claimed to have denied Israel nothing except “2,000-pound bombs” because “[t]hey don’t work very well in populated areas. They kill a lot of innocent people. We are providing Israel with all the weapons they need and when they need them.” This pseudo-noble attitude is an outright lie: The news agency Reuters has revealed that the U.S. has in fact sent some 14,000 MK-84 2,000-pound bombs. Biden’s latter claim, however, is more or less accurate: He has provided Israel with all the weapons they want (though “need” implies that the destruction of Gaza is rational, not wanton): “6,500 500-pound bombs, 3,000 Hellfire precision-guided air-to-ground missiles, 1,000 bunker-buster bombs, 2,600 air-dropped small-diameter bombs,” according to Reuters. The dead and mutilated among the ruins of Gaza cry out against Biden’s presidency.

Two other elements stand out from that night': The lack of an audience—and yet Biden for some reason walking out on to the stage pointing and smiling, as if to an invisible or spectral audience—with the consequence that both candidates looked like Zoom-call lecturers at the height of the pandemic, speaking out into the abyss of virtual space; and the absurdity of the two candidates comparing their golf game, in what is surely the most “privileged male senior citizen” moment in U.S. presidential politics.

The absence of an audience is hard to square with the democratic process: Even if we all know that the audiences in televised debates are likely highly selective and, in some sense, “rigged,” maintaining this minimal fiction, it turns out, is still important to what I would call, borrowing a term from the culinary arts, the “mouthfeel” of democracy. Without even this veneer of public participation, the (Baudrillardian) simulacra-like tendencies of modern democratic politics reach an almost unbearable degree.

***

In short, for Biden, the debate performance amounts to a familiar picture: An unhinged or impotent foreign policy (on Gaza and Ukraine, respectively), and yet with a domestic policy that can, with enough popular mobilization, be pulled leftward. In his most recent book, Bernie Sanders boasts of having “succeeded in pushing Biden in a more progressive direction” back in 2020. The question is whether the left in America can succeed in doing so again—that is, in reshaping the nexus of forces that Biden represents, more so than obsessing over his personal characteristics, such as they are.


[First published on The Theory Brief (Substack).]

Israel/Gaza: The Economic Consequences of War, the Economic Prospects for Peace

Israel cannot continue its war on Gaza indefinitely—not so much owing to grueling moral quandaries or unbearable ethical qualms, but due to strictly fiscal and macroeconomic concerns, with all the political-economic consequences that an expensive war must have for both Israeli society and state in the coming year.

In fact, any desire to end the war on Israel’s part—beyond the terms of the temporary truce negotiated by Qatar—is likely to have very little to do with strictly moral reasoning, much less international law. Israel is not a state party to the Rome Statute, and consequently, the International Criminal Court holds no sway over Israel; and in the face of international criticism, Netanyahu seemed to double down on his Gazan policy in the war’s first 45 days. All the rhetoric and actions of Israel’s far-right-influenced government suggest that appealing to the conscience of Netanyahu with reference to the more than 5,500 Palestinian children killed so far[1]—with another 1,500 children reported missing by mid-November,[2] likely trapped under the rubble of Gaza’s destroyed or damaged housing stock, estimated at 50%—is unlikely to yield tangible results. Instead, economic concerns are likely to play a far more important role in driving the Israeli government to pursue a more lasting peace deal.

The reasons are straightforward: The war is dealing significant damage to the Israeli economy, and any state must sooner or later contend with the economic consequences of war, no matter how righteous its cause might seem to both leaders and voters.

Currency Troubles, Declining Consumer Confidence

First, some relevant data points. A weekly analysis report from the Israeli bank Leumi,[3] published one month after Hamas’s October 7 attacks, shows that Israel’s currency fared better than feared in the first month of war, with the “exchange rate of the shekel vis-à-vis the US dollar return[ing] to its pre-crisis level.” After the attacks, the shekel weakened significantly against the dollar, reaching a nadir two weeks out from the October 7 attacks. There were palpable concerns among analysts and central bankers that a continued currency depreciation would cause rising import and manufacturing input prices, with predictable inflationary effects.

This was avoided, however, solely due to the Bank of Israel’s resolute, costly, and (in recent memory) unprecedented intervention in currency markets to prop up the shekel. The central bank “announced a program to sell up to  US$30 billion in foreign exchange, and a program to make swap transactions up to $15 billion in the foreign exchange market” in the weeks after the attack.[4] Recall that Israel’s foreign exchange reserves only stood at slightly less than 200 billion dollars in September 2023,[5] meaning the central bank was forced to sell some 15 percent of its reserves to prop up its currency in the wake of October 7. One Bank of Israel head noted, “We are in an unprecedented security situation, and our estimate was that the market could get to a situation of divergence without the announcement of our intervention.”[6] Divergence is, of course, just a central banker euphemism for currency catastrophe.

Bank Leumi’s Capital Markets Division emphasizes how exceptional this move was: It “came following a period that began in January 2022 during which the central bank was not active at all in the foreign exchange market.” The central bank’s actions were further exceptional because “for the first time in 15 years” the central bank “sold foreign currency” (see Figure 1). To reiterate: Israel’s central bank had not sold foreign currency in a decade-and-a-half, a pattern broken only because of the October 7 attacks, indicative of Israeli central bankers’ concern that the nation’s currency was in for a rough ride, with predictable results for the domestic economy.

While significantly adverse effects on the currency were staved off—but not before taking a significant chunk out of the country’s foreign exchange reserves—consumer spending took a real hit after the October 7 attacks. As Figure 2 shows, credit card spending in Israel declined appreciably, “lower[ed] by about 14 percent compared to the forecast value,” according to the Bank of Israel—a pre-October 7 forecast, that is. Meanwhile, the market research firm Ipsos’s Global Consumer Confidence report in November 2023, tracking consumer sentiment in 29 countries, showed that out of all these countries, ranging from the U.S. to Turkey and beyond, “sentiment is down most of all in Israel (-5.6 points).”[7] The one-year decline was even greater: Compared with November 2022, Israeli consumer confidence had fallen by 10 percent over the preceding 12 months.

The All-Importance of Labor

Far more important were ongoing, chronic labor shortages, probably the key contributor to the war’s negative economic impact. Some 360,000 reservists were called up on October 10, and as the New York Times reported a month later, most of those thousands of reservists were busy doing exactly nothing: “For now…the hardest part is the waiting.”[8] Remember that Israel’s total labor force only stood at 4.37 million workers prior to the war.[9] Pulling nearly one in ten out of the labor force—or 8.23 percent to be more precise—would be detrimental to any economy and certainly fiscally burdensome: All those boots on the ground come with hungry mouths to feed and bank accounts in need of replenishment from government coffers.

In fact, no need to guess about the extent of this costly endeavor: On November 9, more than a month after the attacks, the war cost the Israeli economy “an estimated NIS 2.3 billion ($600 million) a week, or about 6 percent of the weekly GDP,” according to central bank research, mainly due to the call-up of reservists, but also owing to an estimated 200,000 people relocated from areas bordering on the Gazan theater of war.[10] By November 22, the Times of Israel was reporting on a survey conducted by the Manufacturers Association of Israel, showing that “the absence of workers is posing an acute problem” for manufacturers.[11] Indeed, some sectors were hit harder than others. Tourism declined precipitously: Arrivals by air quickly declined to levels not seen since the tail-end of the pandemic in 2021,[12] and Reuters reported that October 2023 saw a paltry 99,000 visitors, “most designated as tourists…versus 369,000 in October 2022 and 485,000 in pre-pandemic October 2019,” according to Israel’s Central Bureau of Statistics.[13]

The construction industry was adversely affected as well. Some 90,000 Palestinian laborers were estimated to have been working in Israel’s construction industry pre-October 7, but the attacks “prompted Israeli authorities to revoke their work permits.”[14] The Israel Builders Association, an organization representing firms in the construction industry, was reportedly “negotiating with India,” its vice president said, hoping in lieu of Palestinian workers to “engage 50,000 to 100,000 workers from India to be able to run the whole sector and bring it back to normal.” The construction industry, vital to any thriving economy, was no longer able to function without cheap, docile Palestinian labor; other foreign laborers would have to be brought in to resuscitate the industry.

The real estate market as a whole seemed increasingly in a parlous state, too. In an interview with an investment officer in a leading Israeli investment house, a journalist asked, “What’s your forecast for the Israeli real estate market?”. The answer was forthright:

“At the moment, it’s completely frozen. There are hardly any sales of new homes, because financing costs have risen so much. Also, workers are not coming in from Judea and Samaria [i.e. the Occupied West Bank] and from Gaza, and some of the foreign workers have left.”[15]

Even the Bank of Israel’s rose-tinted economic forecast of October 23 could not conceal the fact that the War on Gaza was macroeconomically damaging:

“Under the assumption that the war will be concentrated on the southern front during the fourth quarter of the year, GDP is expected to grow by 2.3 percent in 2023 and by 2.8 percent in 2024.  It is expected that the impact to economic activity will lead to an increase in the government’s budget deficit, which will reach 2.3 percent of GDP in 2023 and 3.5 percent of GDP in 2024.  In view of this, the debt-to-GDP ratio at the end of 2024 is expected to be 65 percent.”[16]

The assumptions are worth paying close attention to: This better-than-feared outcome was predicated upon the war remaining limited to Gaza, or “the southern front,” without further regional conflagration, and the war would have to remain restricted to the tail-end of 2023. If moderate economic growth and a debt-to-GDP ratio of 65 percent by the end of 2024 was going to be realistic, according to Israel’s central bank, Netanyahu would need to wrap up the war in short order.

A Worsened Economic Outlook

The lid could not be kept on the bad economic news coming out of Tel Aviv. By November 21, nearly 45 days out from the war’s start, the Times of Israel was reporting that credit rating agency Moody’s had cut its growth forecast for the country quite severely. Moody’s now “expects [the] economy to contract 1.5% in 2024, with 18% of Israel’s workforce absent during war.”[17] The agency noted a report from the Institute for National Security Studies, affiliated with Tel Aviv University, suggesting that the war’s price tag could be “as much as NIS 150 billion to NIS 200 billion [$40-53 billion], equal to up to around 10 percent of gross domestic product.” And the credit rating agency “put the Israeli government’s A1 credit ratings on review for downgrade.”[18]

Similarly, only a week earlier, the ratings agency Standard & Poor’s had published an equally muted report detailing the state of Israel’s economy, citing “‘lower business activity, depressed demand from consumers, and a very uncertain investment environment,’ as well as the massive call-up of reservists, as reasons for the downturn.”[19]

Could this be part of the motivation for the late November ceasefire? As the newspaper Haaretz noted, Israel’s military forces began rolling out vacation leave to “soldiers fighting in Gaza, following expected cease-fires” on November 23 not simply because they had been on duty for a month and a half and wanted, or needed, a break: It was to “allow them to return to their jobs, [and] also to alleviate the damage to the economy.”[20] The ceasefire was less a grand humanitarian gesture to the Gazan population, nor solely aimed at bringing Israeli hostages home, but also sought to restore macroeconomic solidity. With nearly 10 percent of the labor force out of commission and on the government payroll, and with international ratings agencies cutting their outlooks for the future of the Israeli economy, increasingly it appeared as if Netanyahu could not afford to keep the war in Gaza going indefinitely.

And this was the case even with U.S. military and financial support: Biden’s announced $14.3 billion aid package earlier in October came with multiple strings attached and caveats that restricted its macroeconomic utility.[21] It is worth taking a closer look at President Biden’s request for supplemental funding from Congress.[22] First, $4.4 billion of the package was not so much aid to Israel as a boost to U.S. domestic military spending, including money for “replacement, through new procurement or repair of existing unserviceable equipment, of defense articles from the stocks of the Department of Defense”—in other words, money to replenish U.S.  armament supplies. Another $4 billion was devoted to funding Israel’s Iron Dome systems, with a further $1.2 billion to “Iron Beam defense system capabilities.” Finally, and perhaps most importantly for our purposes here, $3.5 billion would be spent on “Foreign Military Financing” of Israel’s armed forces—still a drop in the bucket when Tel Aviv University-affiliated researchers were claiming the war might cost in the order of 40-50 billion dollars.

While it would be foolish to discount the importance of the injection of U.S. military aid, only a proportion of this money would be spent on covering the direct operational expenditures a state would need to devote to placing hundreds of thousands of boots on the ground, and this proportion would itself not be matched by the true scale of the costs of war: Defensive rocket systems, yes; ammunition and missiles, yes; but not so much the “political economy” of war. And while some of this cash certainly freed up Israeli state spending to be devoted to other budgetary items, it seemed unlikely that U.S. aid packages alone would be able to prop up Israel’s economy as such.

In short, the war is slowly bleeding the Israeli economy—perhaps not dry, but surely resulting in a slow trickle that over time will undermine the livelihoods of ordinary Israeli voters. A shrewd and discerning political leader must necessarily take this into account.

While reporters and commentators in the West have given a surprising amount of coverage to the suffering of Palestinian civilians in the wake of Israel’s Gaza War, far less analytic firepower has been trained on the economic consequences of the war. And yet it is these fiscal, monetary, and economic effects that hold out the best hopes for peace.

Practically overnight, this has come to constitute conventional wisdom among Israeli economic analysts as well. “No end to the war in the Gaza Strip is yet in sight,” the Senior Equity Markets commentator Hezi Sternlicht of the Israeli business newspaper Globes intones, “but this is an event that will eventually pass, and its intensity is expected to decline in the first quarter of 2024.”[23] And as already noted, Israel’s central bank similarly made the assumption in its October 23 outlook that “that the war will be concentrated…during the fourth quarter of the year.” People who think about the Israeli economy for a living seem increasingly to be planning around the prospect of peace with the onset of the new fiscal year.

Does Netanyahu realize that he cannot afford to allow the war to drag on indefinitely? If he does not, his political opponent Yair Lapid, who has repeatedly called for Netanyahu’s resignation after the Hamas attacks, will only be further strengthened.

Given the affective state of current Israeli politics, however, it is far from certain that the patent irrationality if not outright unrealism of keeping a small, vulnerable economy on a war footing for an extended period will be permitted to affect policy. Wars can be waged in deeply irrational ways: The United States spent $2.31 trillion on the War in Afghanistan in the two decades following 9/11, with very little to show for it.[24] But Israel is not America; its economy in 2022 was roughly the size of Norway’s. The bill is coming in—and fast. The economic, and hence political, consequences will not be pleasant if the war drags on much longer—certainly not for the Palestinians, but from the vantage point of Israeli military-political-economic strategy, not for the Israelis either.

References

[1] https://www.hrw.org/news/2023/11/22/israel/gaza-hostilities-take-horrific-toll-children

[2] https://www.ochaopt.org/content/hostilities-gaza-strip-and-israel-flash-update-45

[3] https://english.leumi.co.il/static-files/10/LeumiEnglish/Economic_Weekly/leumi_weekly_08.11.23_english_acc.pdf

[4] https://www.boi.org.il/en/communication-and-publications/press-releases/b23-10-23/

[5] https://www.boi.org.il/en/communication-and-publications/press-releases/c09-10-23/

[6] https://www.reuters.com/markets/currencies/bank-israel-sell-30-bln-forex-moderate-shekels-volatility-2023-10-09/

[7] https://www.ipsos.com/en/november-2023-singapore-sees-sharpest-increase-consumer-confidence

[8] https://www.nytimes.com/2023/11/06/world/middleeast/israeli-reservists.html

[9] https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=IL

[10] https://www.timesofisrael.com/war-is-costing-economy-some-600m-a-week-due-to-work-absence-bank-of-israel/

[11] https://www.timesofisrael.com/worker-absence-due-to-war-poses-main-hurdle-for-manufacturers-survey/

[12] https://www.cbs.gov.il/he/mediarelease/DocLib/2023/355/28_23_355b.pdf, Figure 3

[13] https://www.reuters.com/world/middle-east/tourism-israel-drops-sharply-october-amid-war-with-hamas-2023-11-06/

[14] https://www.dw.com/en/israel-hamas-war-will-indian-workers-replace-palestinians/a-67417429

[15] https://en.globes.co.il/en/article-cheapest-stock-market-in-the-western-world-1001462965

[16] https://www.boi.org.il/en/communication-and-publications/press-releases/b23-10-23/

[17] https://www.timesofisrael.com/war-with-hamas-to-cost-nis-1b-a-day-hit-economy-harder-than-previous-conflicts/

[18] https://www.timesofisrael.com/war-with-hamas-to-cost-nis-1b-a-day-hit-economy-harder-than-previous-conflicts/

[19] https://www.timesofisrael.com/credit-rating-agency-sp-sees-israels-war-economy-shrinking-5-in-fourth-quarter/

[20] https://www.haaretz.com/israel-news/2023-11-22/ty-article-live/israeli-cabinet-okays-deal-for-release-of-50-hostages-held-by-hamas-temporary-cease-fire/0000018b-f52c-d117-abcf-f7ef5d450000

[21] http://www.vox.com/world-politics/2023/11/18/23966137/us-weapons-israel-biden-package-explained

[22] https://www.whitehouse.gov/wp-content/uploads/2023/10/Letter-regarding-critical-national-security-funding-needs-for-FY-2024.pdf

[23] https://en.globes.co.il/en/article-cheapest-stock-market-in-the-western-world-1001462965

[24 https://watson.brown.edu/costsofwar/figures/2021/human-and-budgetary-costs-date-us-war-afghanistan-2001-2022