An Equilibrium of Perpetual Conflict


Consider the following proposition:

I’ve got a company with your name on it, but I won’t give it to you until you demonstrate you’re ready to run things on your own. Not to worry, though, I’ll keep it safe. Better yet, I’ll treat you like the CEO (and compensate you like the CEO) while we continue to hash out the transition. Plus, if anything goes wrong in the meantime, you can always blame me, since I haven’t given you full control just yet.

One happy day, though–when you prove that you’re ready–I’ll hand over the reins of the company. Running the company is going to be really hard. I mean, running a company is always hard, but this company in particular is a total mess, i.e. lots of infighting, low productivity, lots of dysfunction, deep resentment, etc. And remember, once you’ve got the company, you’ll have to pay your own salary, which is going to be really tricky since the company loses a lot more than it makes, but you’ll turn that around! That also means that if you go bankrupt, you’ll be out of a job and everyone will blame you.

Sounds awesome, right? I mean, in the meantime, you have (a) guaranteed income and stature with no responsibility; but someday you’ll have (b) lots of responsibility and no guaranteed anything. Let’s start negotiating that transition!

It’s pretty obvious what happens next: A deal is never reached and indefinite transition becomes the status quo. That’s never the stated position, of course, because the possibility of transition has to stay open in order to justify the interim arrangement. One would expect lots of deliberation, public hand-on-my-heart declarations of long term commitment, close-but-no-deals, and lots and lots and lots of blame and recrimination for the persistent failure to reach a deal. Over time, the CEO-in-waiting would develop carefully calibrated negotiating tactics that were designed to fail. For example, she might insist on certain preconditions that she knew the Trustee would never accept. If she sensed that acceptance were on the horizon, she might orchestrate some upheaval or subtly move the goal posts to ensure a deal was just out of reach.

The prediction is simple: if the interim arrangement is better than a final status agreement, then it becomes “interim” in name only. Perpetual transition becomes the norm.


That “interim” equilibrium perfectly describes the relationship between the Israelis and Palestinian leadership (and their foreign sponsors). For the Palestinian leadership, conflict is all upside and little downside (and resolution is all downside and little upside). Not surprisingly, peace remains “elusive.” [Note: It’s important to distinguish between the Palestinian leadership and ordinary Palestinians. Because it’s the leadership that is responsible to negotiate an agreement, it’s their interests that are most relevant. Most people would agree that the leadership is not representative of the (divided) Palestinian public at-large, and yet they do not account for that divergence when analyzing the likelihood of an agreement. If individual Palestinians had the ability to separately negotiate their peace(s), this analysis (and conflict) would look very different.]

These are the current state of affairs:

  • The Palestinian leadership has, for the most part, secured a future state in escrow. That is the two-state solution in a nutshell. Even better, thanks to Barack Obama’s gratuitous commitment to the ’67 boundaries in his 2009 Cairo Speech (and ongoing fascination with the settlements), the precise contours of the Palestinian state are similarly in escrow. If the prize isn’t going anywhere, what’s the rush to close the deal?
  • Not to mention the fact that the “struggle” generates a fantastic income stream for the leadership in the form of international support from Europe, the U.S., the Gulf and Iran–support that may dissipate the moment a deal is reached.
  • The struggle also provides the leadership with visibility, stature and sympathy, that are similarly contingent on, well, the ongoing struggle. Their cause becomes uninteresting the moment the Palestinians become re-possessed.
  • Finally, the leadership bears very few costs of the conflict, which are instead born almost entirely by ordinary Palestinian Arabs. Politically, the leadership can always blame “The Occupation” for its failures, as well as use the “struggle” to justify recourse to corrupt and autocratic policies (as all wartime leaders do).
  • In sum, the leadership has an interest-bearing note with indefinite rights to the principal and none of the risk or custodial costs. That’s a really good thing to have.

The Palestinians’ patrons also benefit from the conflict:

  • For Europeans, the humanitarian industrial complex (“HIC”) thrives. [I know that’s glib and pejorative, but it’s also useful shorthand–i.e. you know what it means.] Not only are the Israelis welcoming to foreigners (including international technocrats, activists, NGOs and journalists), but the Israelis are deliciously Western, making them a veritable wet dream of post-colonial, neo-Marxist political economy. Attacking the Israelis not only feels good, but it’s a good way for the European Left to marshal “petro-dollars” as well as votes from North African and Middle Eastern immigrants (just like it was a good way for the USSR and Western European Labor parties to curry favor with the Arab states during the Cold War).
  • The conflict also matters a good deal to the authority, role and stature of international technocrats. The “international legal consensus” has insisted for years that the conflict ought to be resolved with its active participation and seal of approval. Not surprisingly, the technocrats strenuously agree with the activists that Israel must do what the technocrats tell them to do: “we decide what’s yours, and now stay on your side of the line!” The two-state solution along the ’48 armistice lines is, in that respect, a power play. Any other solution (like one that the Israelis would actually accept and doesn’t validate the initial Arab invasion) undermines the AUTHORITEH of the technocratic elite and sacrifices the substantial reputational and institutional capital invested in their hardline view that there is only one just solution. That says nothing of all the jobs and funding dedicated to “resolving” the conflict that go away the moment the conflict is resolved. In certain cases, like UNRWA, the apparatus is massive. Like billions of dollar per year massive.
  • For Gulf/Levant states, the “Palestinian Issue” is leverage against a regional rival and a crowd pleaser for the Arab street (although I suspect increasingly less so). Indeed, a cynical, but probable account of Palestinian nationalism is that it has always been primarily (not exclusively) a proxy war. Palestinians are denied equal rights everywhere (but Jordan) in order to perpetuate refugee status (consistent with UNRWA’s mandate). Palestinian self-determination only became a thing after four failed attempts to absorb Israel into Transjordan (’48, ’56, ’67 and ’73)–until 1988, the Hashemite Kingdom claimed the entire territory “from the river to the sea” as part of Transjordan–and the eventual Hashemite realization that they would never, ever want to govern even more Palestinians (culminating with Black September and the expulsion of Arafat to Lebanon along with remaining PLO members they couldn’t kill). More simply, for as long as the Palestinians are stateless, their Gulf/Levant patrons can use their plight (and threats of violence) to obtain concessions (and reprieves) from Western powers. In other words, investing a little money in the Palestinian leadership generates Western-sized returns, which is a hell of an ROI. Certain countries, like Egypt and Jordan, brilliantly double-dip (or at least used to) by making peace with Israel (and getting paid handsomely to cash out of their conflict) while preserving ongoing conflict-payments by sponsoring a Palestinian proxy war. It’s like settling a litigation and then finding another plaintiff to take your place. Other countries, like Iran, use the conflict as a pretext to project power West and South (and similarly extract concessions from the West).

So conflict pays handsomely, but what about resolution? Without belaboring the point:

  • In the event of an agreement, the Palestinian leadership will immediately have to govern, without international sympathy or a scapegoat. Funding probably persists, but in lesser amounts and with more strings attached. As with all things, sustainable endogenous growth will require significant decentralization of power, i.e. crime bosses and “revolutionaries” will have to give way to ordinary bureaucrats and private citizens. The Palestinian proto-state will go from being an international cause celebre to just another dysfunctional Arab socialist kleptocracy with no economy or institutions to speak of. The occupation will end, but for the leadership especially, it really wasn’t that bad in the first place. Palestinians will still be poor and frustrated (like all ordinary, non-Israeli, folk in that part of the world) but they will blame their leadership and not the Israelis. Maybe Abbas (or whoever else is PM) wins a nobel prize and gets invites to all the swankiest parties, but those rewards are his and his alone.
  • European activists and technocrats will have to pick another cause to support. That won’t be easy because change is always hard and true believers don’t become converts overnight. Also, European Muslims don’t really care about “Social Justice” so finding another democratically useful cause will be a little tricky (but identifying as People of Color will help). Social Justice is also a territorial business, precisely because it depends on rent-seeking, rather than productivity. There is only so much sympathy to go around, and the Save the Africa crowd isn’t going to be elbowed aside by suddenly unemployed Justice for Palestine people. UNRWA itself operates with a $1.23 Billion annual budget. That’s a lot of conflict-jobs on the line. To be sure, some well-intentioned activists/technocrats will happily conclude their work is done, but for the most part, people do not give up their day jobs and switch careers easily. That doesn’t make activists and technocrats bad people, it just makes them people.
  • Gulf/Levant patrons will be vulnerable to deep-seeded populist sentiment of the Arab street against Jews and the Zionist entity (which will no longer be a tool at their disposal). More importantly, they will also have to find some other ways to both put pressure on Israel and be useful to the West. The conflict has allowed Arab countries to raise their stature considerably in “international” fora, which not only deflects negative attention, but effectively provides U.N. letterhead for their foreign ministries.

To summarize, the benefits of conflict are high, while the costs are low. In contrast, the benefits of peaceful resolution are minimal, while the costs are high. Conflict is better than the alternative, therefore conflict persists. “But what about the basic human right to self-determination?!” Well, if the consequences of realizing that right make the leadership demonstrably worse off, then it’s going to stay a pie-in-the-sky ideal. “But what about ending the Occupation?!” Again, the leadership doesn’t absorb those costs (regardless of how severe they may or may not be), and while members of the leadership may genuinely care about ordinary Palestinian Arabs, they care more about their own prospects (particularly when the Israelis make it easy to mitigate their feelings of guilt).

It’s not a coincidence that the Palestinian leadership has three preconditions for negotiation that just so happen to be non-starters for the Israelis: (1) Right of Return; (2) ’67 Borders; and (3) Jerusalem. Nor is it surprising that when Israel finally budged on (3), and parts of (2) and (1), that Arafat unleashed the dogs of war, rather than make a deal. Or when Israel withdrew from Gaza, that Hamas unleashed the dogs of war. War good; deal bad.


Some of that is already happening. Of all the factors weighing against resolution, the weakest is probably the interests of Gulf/Levant patrons. Israel is gradually becoming their natural regional ally against an emergent Iran and they can easily curry favor with the West by joining the “war on terror,” so they don’t need to play peace broker (for a fight they started). I don’t want to understate the significance of Muslim-Arab patrimony–losing sovereignty over part of the Muslim empire, to the Jews no less, and Jerusalem to boot, will really sting. But regional security and economic partnerships (blessed and bankrolled by the West) can make it worth their while. If so, the narrative will shift accordingly to the effect of “the Jews aren’t so bad, we all know they were there first–I mean, that’s why Omar built the mosque there–and frankly we’ve got bigger fish to fry.”

In terms of the Palestinian leadership, time needs to be less on their side. Current calculus is that Israel has two options: (a) surrender now (by ceding under fire to Palestinian demands in such a way that would validate the entirety of Phase I, i.e. the struggle against West Bank occupation, leading to Phase II, the struggle against coastal occupation); or (b) surrender later through annexation and citizenship to Palestinian Arabs. In the meantime, Resistance Inc. pays handsomely.

That can change in a variety of ways that work in whole or in part:

  • First, the settlements continue to expand. If your future state is shrinking before your eyes, you cannot hold out indefinitely. The best way to stop the settlement of “Palestinian land” is to come to an agreement on what constitutes Palestinian land. Clinton and then Bush embraced this policy with early success, by publicly assuring Israel that settlement blocs and “natural growth” would remain part of Israel and putting the onus on Abbas to oversee structural reforms as a precursor to a functioning state, i.e. Fayyadism. Unfortunately, Obama reversed course and for the first time promised the ’67 boundaries to the PA (which responded by firing Fayyad and pivoting to Fatah-Hamas unity instead, i.e. the conflict-pays coalition).
  • Second, funding begins to dry up and/or becomes contingent on structural reforms focused on decentralization and economic growth. Those reforms are pejoratively referred to as “normalization,” but normalization is another way of saying “making peace.” Similarly, put a clock on UNRWA’s mandate and give a definite end to the gravy train of perpetual refugeedom. Along the same lines, generally empower ordinary Palestinian Arabs and cut out the leadership and entrenched technocracies. Resistance needs to be relatively less profitable than coexistence, which it obviously would be for ordinary Palestinian Arabs (which is what necessitates anti-normalization in the first place).
  • Third, put demographic shift on the table. Just like the PA’s territorial aspirations can’t be indefinitely in escrow, their polity can’t be either. Currently Palestinian Arabs face enormous barriers to exit: all Arab countries (except Jordan) legally discriminate against Palestinians; the PA forbids (on pain of death) selling land to Jews; the international community breezily refer to paid resettlement as “Ethnic Cleansing.” The net result is that Palestinian Arabs are basically stuck, which permits the PA to dawdle indefinitely without worrying there will be no people for them to govern.

Solve the conflict with Coase. Let Palestinians decide if their political rights are really non-negotiable. Plainly the leadership thinks so, because their status depends on it, but ordinary Palestinians? Like the millions of other immigrants from that part of the world, they might prefer to take the money/opportunity elsewhere and leave the “Palestinian State” for someone else to enjoy. Some might *gasp* prefer to be a minority citizen in Israel than realize the towering heights of self-determination. [Note: it’s hard to imagine a more self-serving obsession than the technocratic obsession with self-determination. “The more polities, the more politicians–isn’t it grand?!”]

If the Palestinian leadership realized that continuing to hold out would eventually leave them stateless, people-less and jobless, I’m confident they would make a deal quickly. A previously implausible coalition of Trump, Putin, the Gulf and Jordan/Egypt could make a take-it-or-leave-it offer: a demilitarized Palestinian state, with Ramallah as its capital, and none of the main settlement blocs (which stay with Israel). Israel controls the air space and will coordinate on borders. If the PA refuses, then Israel begins the process of total annexation + sponsored re-settlement (with US+Russian+Gulf approval), and I firmly believe (without evidence other than general migratory patterns going East to West) that hundreds of thousands will freely take the money, so long as they’re permitted to enjoy it. To be clear, that’s not forced resettlement (which is oddly not a redline when it comes to Israelis living in JS/WB…); it’s just an opportunity for Palestinians to literally determine their own fates, which is really what this is about, right? The PA knows that too and will therefore make that deal. They frankly won’t have much of a choice because without exogenous support for Resistance Inc., they have little to no leverage. Which brings me to . . .

The greatest impediments to peaceful resolution are international technocrats and activists, i.e. the “exogenous support.” Again, they’re not bad people (although I’m sure some are); it’s just that they have the most to lose and the least to gain. They have spent years insisting that the Palestinians must have a state and that it must adhere to (now) 70 year-old boundaries whose only significance is that they were blessed by international technocrats (even though they were arbitrary and unfair to begin with, and more importantly, emphatically rejected by the actual participants to the conflict (well, one side, at least)). The HIC will not easily put their non-negotiables, like Palestinian borders or the Palestinian polity, back on the table. As a group, they have little skin in the game besides remedying “injustice,”–a platonic ideal that is mostly untethered to facts on the ground–so it’s hard to see how any change in the status quo would help, rather than hurt. In other words, unlike Palestinians who could happily get on with their lives, activists have no other lives to get on with. Their pride, stature and careers (collectively, their “worldview”) depend on “resolving” things their way–the current conflict-equilibrium is (largely) their creation and they’re not gonna let go easily (and unlike the Palestinian leadership, they have the resources to keep the fight going).


So that’s it, I’ve solved the most unsolvable political problem of our time. Again, I think the most serious objections will come from the HIC (and general status quo bias): “Palestinian self-determination is non-negotiable. Paying them to leave is ethnic-cleansing.” [Hamas and other hardliners will object as well, but that’s inevitable.] Perhaps–those are their categories, so I’ll let them define them–but that still doesn’t change my analysis that making those non-negotiable, i.e. indefinite escrow, is the sine qua non of perpetual conflict. [Note: I do not think Palestinians (who are not ethnically distinct, but I digress) will be “ethnically cleansed” if 0.5-0.75 million of them decide to move to another part of world, including a few miles to the West, and the Palestinian State dies in-utero. There are many political and (actual) ethnic minorities–again, Palestinians are part of an ethnic majority in many countries–without their own independent states.]

Plus, I find the argument a bit circular: if “ethnic cleansing” means a demonstrably better life for the “cleansed” then why is it so objectionable? I understand that the HIC has already determined that “it’s against the rules” and “that the rules must be followed,” but if the rules are no good, then change them, and if not, why should anyone follow them? The cynical answer is that these “collective” rights to ethnicity and state provide opportunities for would-be community and state leaders, and I have far less sympathy for them than I have for ordinary human beings.

The final objection is of course why pick on the Palestinian leadership, as opposed to the Israeli? Why not give them a take-it-or-leave-it deal? Why not put their rights to self-determination and the Jewish state (also non-negotiables) on the table?  The simple answer is that they already are. The reason that Israel does not accept the current two-state solution framework is that acceptance is an existential threat. It’s true that holding-out does preserve the territorial aspirations of one faction of Bibi’s current coalition, but all other factors tend towards resolution (and Israel has repeatedly demonstrated its willingness to sacrifice its territorial aspirations, including that faction’s) except for one little detail: making “peace” with the Palestinians in such a way that validates and rewards the “struggle”–rather than impose clear costs– is no peace at all. It’s surrender under fire. A 2SS that simply resets the clock to the original 2SS in 1948 (the “international consensus”) clearly communicates that fighting the Zionist Entity was right all along. Phase I complete. On to Phase II, i.e. unwinding the occupation of coastal Israel. NO JUSTICE, NO PEACE. Again, the Palestinian leadership knows that too, which is why they have the Israelis dead to rights: “surrender now or later–you just let us know when–we’ll be here, but we’ll liberate the homeland eventually.”

More simply, threatening Israel’s existence changes nothing about the current equilibrium because it’s already part of the current equilibrium. You could offer to pay the Israelis to leave, but they would never accept precisely because that would actually constitute ethnic cleansing–there’s nowhere else for them or the Jewish people to go. TransIsrael is not right next door and there is certainly no grab-bag of majority Jewish (and ethnically heterogeneous) countries to choose from as alternatives–putting aside the whole 3,000 years of tradition thing.

Peace between the Israelis and Palestinians is within our grasp. We just have to convince thousands of pious Westerners that they were the problem all along. Trump just made that happen in the U.S., so maybe it’s not so far-fetched?


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