Many who dismiss President Trump’s idea of renewing Gaza lack a clear understanding of what he meant by “owning.” Was it private companies buying land from Gazans willing to sell, and the sellers employed in building roads, pipes, apartments and commercial buildings rather than tunnels?
Meanwhile, many critics float the completely irrelevant and inapplicable subtitute idea of copying the Marshall Plan to reconstruct Gaza – although the historical original turns out, upon a closer look, to have had marginal impact.
Recall that at the end of World War II, when Berlin and Dresden were in ashes, the Allies stayed in control, executing Nazi leaders and de-radicalizing Germany (the way they did in Japan), changing drastically the country’s institutions.
However, contrary to modern mythologies, the Marshall Plan’s impact in revitalizing Germany was trivial.
Never mind that UN agencies and Middle East players now trumpet its imagined applicability as a model, with even the Jerusalem Post writing as if funding were the main problem for such a plan.
They all omit many facts, among others that the US and Allies “owned” Germany and Japan for a few years.
Germany between 1944 and 1948 saw an influx of about 12 million skilled Germans that Eastern and Central Europe had expelled although their families had lived there for centuries. Most of those resettled in West Germany.
In 1945-6, after the war ended, West Germany faced economic chaos, with inflation raging at 19,000 percent per month, black markets thriving, and a tax rate at a confiscatory 95% at relatively low incomes.
Germany changed its fiscal and monetary policies drastically. Ludwig Erhard, West Germany’s new finance minister, in 1948 stabilized the currency and carried out drastic fiscal changes, drastically lowering tax rates and abolishing price controls. The Deutsche Bundesbank documents that the reforms “changed people’s lives from one day to the next.”
The Marshall Plan was only enacted in 1948. From 1948 to 1951, the US contributed $13.2 billion to European recovery. Of that, $3.2 billion went to the United Kingdom, $2.7 billion to France, $1.5 billion to Italy, and only $1.4 billion to the Western-occupied zones of Germany.
Research done decades ago also shows that the Marshall Plan did not finance the reconstruction of destroyed infrastructure. Rather, the reconstruction was pretty much complete before the plan was executed.
Although no doubt the $1.4 billion offered some assistance (and there is no point showing what percentage of the “gross national product” it reflected, since the latter was utterly mismeasured and underestimated), what brought about the post-World War II West German miracle was Erhard’s policies combined with the massive arrival of skilled people.
Such “miracles” happened around the world when significant numbers of people arrived in certain countries. They had nothing to do with foreign aid.
The miracle of 17th-century Europe was neither Spain nor Portugal – both of which fit the “finding treasure” mold – but below-sea-level Amsterdam and Holland, whose riches were created despite natural obstacles.
The new republic’s unprecedented openness to all religions and its laws allowing the practice of finance (Amsterdam had the world’s first stock market) attracted immigrants, some of whom were or became merchants and bankers. Jews and Huguenots, discriminated against elsewhere in Europe, were prominent among them.
They turned Amsterdam into the financial and trading center of the 17th-century world, and much capital active in Amsterdam was either foreign owned, or owned by Amsterdammers of foreign birth.
Perhaps this is what Trump, president of another country whose development has benefited from such immigration, has in mind when he uses the term “ownership” – though there is no sign that skilled people from around the world would move to Gaza, or that whatever governing body that might be set up there would pursue any decentralizing policies.
The histories of Hong Kong, Singapore and Taiwan have much in common with those of 17th century Amsterdam and of Germany after World War II. The state provided an umbrella of law and order, exacted relatively low taxes and gave people stakes in what the business society was doing – and in consequence was able to attract immigrants and entrepreneurs from around the world.
Sir Stamford Raffles designed Singapore as a port at the beginning of the 19th century, and backed it with an administrative and legal system and an educational system that was open to its multiracial population. Trade and security brought prosperity to the penniless immigrants from Indonesia and, in particular, China.
Crowded Taiwan, Singapore and Hong Kong offered immigrants opportunities denied them in China, which was dominated at first by warlords and a status-conscious bureaucracy and later by a communist bureaucracy.
Hong Kong benefited from waves of immigrants from China, in particular from the inflow of Shanghai merchants and financiers when Mao Zedong “liberated” China in 1949.
Of course, the example of Israel, which decentralized and opened its financial markets from the late 1980s (turning into the “Start-up Nation”) and benefited from waves of skilled immigrants, fits the historical patterns of previous centuries.
None of these historical experiments has a chance of being emulated in Gaza, or, for that matter, in most parts of the Middle East.
It is important to discard perhaps once and for all the “Marshall Plan” government-foreign-aid-aggrandizing mythology as a solution for failed societies. It is as important to use words with precision – such as just what “ownership” or “control” may mean and whether or not it is applicable to start with.
As of now Hamas, Hetzbollah and theocratic Iran are labeled as “terrorist” organizations or “axis of evil,” but with no Nuremberg trials on the horizon for their leaders.
Briefly: No matter which way one looks at Gaza, Marshall Plans, “controls” (in the post-World War II sense), “ownerships” and expectations of “miracles” are nonstarters. Nobody wants to move there although if Egypt, or Jordan with a majority-Palestinian population already, opened their borders, perhaps some Gazans would move there.
The article draws on Brenner’s books Force of Finance (2001) and Labyrinths of Prosperity (1994) and his articles “Venture Capital in Canada,” (2010), and “Venture Capital Secret Sauce” (2019).
