August 9, 2012
by Lee Smith
What's holding back Palestinian society? In the wake of Mitt Romney's speech last week in Jerusalem, in which he posited that it is Palestinians' own culture that has kept them from enjoying economic success akin to Israel's, a debate has raged over whether or not his diagnosis was fair.
Romney based his argument in part on the book The Wealth and Poverty of Nations, by economist David Landes, whose son, historian Richard Landes, added his support to Romney's claims earlier this week. Compared to the culture of self-criticism and innovation found in Western countries, including Israel, Arab societies, like that of the Palestinians, "emphasize rote learning and unquestioning respect for those in authority," wrote Landes. "Powerful actors acquire wealth by taking, rather than making."
Meantime, others, including Saeb Erekat, a senior aide to PA President Mahmoud Abbas, countered that the Israeli occupation is to blame for the stunted Palestinian economy. The chairman of the Palestine Development and Investment Company, Munib R. Masri, agreed with Erekat. "As one of the most successful businessmen and industrialists in Palestine today," wrote Masri, "I can tell Mr. Romney without doubt or hesitation that our economy has two arms and one foot tied behind us not by culture but by occupation."
Erekat and Masri are correct—so long as the word occupation is understood in a fuller context. Instead of building a bustling economy, the Palestinians have devoted their energies to waging war against Israel for more than 60 years. The absence of a Palestinian state is proof that this war has been unsuccessful, wasting almost three generations of Palestinian talent.
Culture is a thorny issue—one that is almost invariably, and often intentionally, confused with race. (Not surprisingly, both Erekat and Masri charged Romney with racism.) But the problem with the Palestinian economy is obviously not the Palestinians as a people. In contrast to the Palestinians on the West Bank and Gaza, who are largely dependent on foreign aid, the Palestinian diaspora is successful around the world, including here in the United States.
"Palestinians are a hard-working and an incredible community," former President Bill Clinton told  a Saudi audience last year. "They have done remarkably well outside their country. I have never met a poor Palestinian in the United States; every Palestinian I know is a college professor or a doctor." As New York Times columnist Thomas Friedman noted last week, the financial success of many Persian Gulf states, like Dubai and even Saudi Arabia, is largely due to the talents of Palestinian businessmen.
Success abroad and stasis at home is true of other Middle East diasporas as well. The Lebanese, for instance, are, along with the Jews, among the world's largest and most successful diasporas. In all corners of the globe, the Lebanese excel in every field they enter. Consider the Mexican billionaire of Lebanese descent, Carlos Slim Helou, the world's wealthiest man. Among many others in American politics, there's Donna Shalala, Clinton's secretary of health and human services, and the current Secretary of Transportation Ray Lahood. And yet that tiny country of 3.5 million on the eastern Mediterranean is a tinderbox, perpetually on the verge of war with its neighbors or itself.
So, why are some Middle Eastern societies exemplary in exile and chaotic at home? It's because of the "cake of custom," according to historian Lee Harris. "Cake of custom" is a phrase borrowed from Physics and Politics, a book by 19th-century British writer Walter Bagehot that describes the social institutions and mores that are so deeply ingrained in a society that they are taken for granted. These are the "unshakable taboos," Harris writes in his 2007 book The Suicide of Reason "that prohibit the emergence of independent or critical thinking on the part of any individual member."
"The cake of custom is what a particular culture believes is the natural thing for humans to do," Harris said in an interview. "At its most effective, it is the way the world seems to be by nature," Harris explained. The cake of custom accepts as a matter of fact "rote learning and unquestioning respect for those in authority" because in this kind of society the past justifies the present. Since tradition weighs so heavily on the individual, there is little room for novelty or imagination—which in an economic context translates into a lack of innovation.
How, then, does a culture rid itself of the cake of custom? Often the agent of change, Harris argues, "is migration, forcing men to go some place new. It wouldn't make any difference if, say, one Native American tribe simply left its old hunting grounds for new ones. You have to adopt new habits."
The uprooting doesn't have to be geographical. Sometimes change can take place on the same literal ground, but then the structure of the community needs to change. One way to do this is to shift, over the course of many generations, from a culture based on blood-lines to one based on merit, or other forms of voluntary organization. In this latter type of society, the cake of custom is less of an issue since these societies select for specific abilities, regardless of lineage. In pre-modern societies, for example, often the most highly prized talent was fighting ability. "When the Iroquois defeated another tribe they tortured the surviving warriors," says Harris. "The ones who survived that ordeal were adopted into the Iroquois." Survival of the fittest determined the composition of these societies rather than biological relations.
Indeed, some of these societies set out to counter the pull of tradition by choosing members from outside of the tribe. For instance, the Ottomans, who deeply understood the power of tribal relations in the Middle East, built their military with outsiders, mostly Christian boys from the Balkans taken as slaves. They were thrown together, ensuring that only the strongest survived. The purpose was to create a caste of sturdy young men that would be loyal only to the sultan and the empire, rather than their clan or tribe from whom they were cut off—thereby shattering the cake of custom.
A combination of migration and selection for survival would explain the success of the United States, an immigrant nation that for more than 250 years has attracted the world's hardiest pioneers, mavericks, and outcasts. But what explains the incredible military, technological, and cultural successes of Israel, a Jewish state where everyone is tied to the same tradition?
Harris contends that Israel has escaped the cake of custom and the attendant problems that often beset tribal societies because the Jews who make up the modern state of Israel gathered after 2,000 years of exile and separation. "Moreover, so many brought with them Western skills and habits. They had an advantage in human capital that wasn't mired in the cake of custom of the East."
Perhaps. But it's worth remembering that the Jews pulled off something unique in the annals of human history—re-establishing political sovereignty in their historical homeland after two millennia. What's strangest, then, about Romney's comparison is that the Jews are one of the world's rare exceptions. By historical standards, the current state of the Palestinian economy probably falls somewhere in the middle of the scale. History is nothing but the record of tribes and nations that, in order to survive, change—as the Palestinians must as well.
Lee Smith is a Senior Fellow at Hudson Institute and is the author of The Strong Horse: Power, Politics and the Clash of Arab Civilizations (Doubleday, 2010).
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