The Never- Ending Military Conflict
The Israel- Arab conflict occupies my thoughts almost from birth. I grew up in a family who was always politically minded. I was brought up with a great sensitivity to racial and ethnic hatred behavior. I always believed that reconciliations among ethnic and national conflicts are unavoidable. When I was younger I was always optimistic about the prospects for some resolution of the conflict. But as I grow old I am more pessimistic. This is how the Economist describes it: “After the ignominious defeat of 1967, the Arab states again rejected the idea of peace with Israel. That was, indeed, a wasted opportunity. But even though the Israel of 1967 discussed how much of the West Bank it was ready to trade for peace, the Likud governments of the
late 1970s and 1980s wanted it all. For Israel fell in love with the territories it had occupied. This was the period of Israeli rejection. Israeli prime ministers such as Menachem Begin and Yitzhak Shamir
asserted a God- given right to a “greater Israel” that included the West Bank and Gaza Strip, in which Israeli governments of all stripes continued to plant (illegal) settlements. In some Israeli minds the Palestinians became a non- people, to be fobbed off with under Israeli or perhaps Jordanian supervision. self-government
It took an explosion of Palestinian resistance, in the intifada (uprising) of the late 1980s and the far more lethal one of 2001- 03, to convince Israel that this was an illusion.”
As an economist I tend to view the conflict between the Israelis and the Palestinian as a Prisoner’s Dilemma game.
The prisoner's dilemma game was popularized by a simple story. Two men are captured by
the police and separately offered the same plea- bargain: "If you confess and he doesn't, you
walk free; if you both confess, you'll both get five years; if neither of you confess, you'll both
get one year; if he confesses and you don't, you'll get 20 years." Rational prisoners will
confess, wishing there was a way to commit each other to silence. The equilibrium outcome is
much worse than if the two prisoners would not confess; and get one year in prison. But each
player, taking the strategy of the other player, has an incentive to deviate from this
equilibrium because it looks to him/ her that by confessing, while the other player doesn't, he/
she can walk free. Game theorists have known since the 1950s that when the prisoner's
dilemma is repeated indefinitely, more cooperative strategies can flourish. Most important, the
"prisoner's dilemma" is merely a two- player game. This is a crucial omission. Most social
arrangements stand or fail with the help of third parties.
A keen observer of the global conflict, Anthony Cordesman, writes: “It is now all too clear that the war of attrition between the Palestinians and Israel that began in September 2000 unleashed a “war process” that will be difficult to turn into any kind of peace process for years to come. The death of Yasser Arafat clearly solved nothing. The weak, corrupt and divided Palestinian Authority he left behind cannot be fixed by a handful of
good leaders. Hamas may not reflect a Palestinian majority, but it and the Palestinian Islamic Jihad have much better internal discipline and are widely seen as an alternative to a hopeless peace process.”
For many of us who have lived in Israel from birth, there was a grim awakening, after Yasser Arafat rejected the only feasible solution offered by Bill Clinton for the decades long conflict. Arafat not only rejected the peace proposal, but he also started the second Intifada; first by proxies, such as Hamas military wing; and then by his own PLO militia.
For most of my adult life I have been involved in trying to push our own government towards accommodation with our neighbors. I have been always against the occupation of the West Bank. I was active as one of the leaders of the then emerging “Peace Now” movements in the 1970s. Indeed met in 1990 the PLO leadership in a Dutch town Nijmegen, when meeting a PLO leader was outlawed in Israel. We bypassed the law by
meeting them in a group; like in any academic seminar. When the Oslo peace track started, followed by both sides, the Israelis and the Palestinians, I remember how hopeful I became. The most difficult conflict is now moved into a “peace process”. I will see peace in my life; an almost like a dream comes true. Intellectually, I feel now a bit guilty of the fact that I ignored in the way my political thinking evolved, almost completely, one aspect of the complexity of the Israel Palestinian conflict. That is, the inability of the emerging Palestinian Authority to create democratically run institutions, such as one army under well structured civilian control,
checks and balances, well functioning and transparent institutions, etc. Once you build such an institutional set up it is very difficult to allow yourself to resort to war, rather than peace. Arafat’s leadership in the period of transition from the Diaspora to statehood was nothing but a disaster to his own people. Because he made himself a dictator who pursues his own agenda, which never focused on bread and butter issues such as
improving the well being of his own society. He was unwilling to confront the growing opposition to peace by the Hamas. He was making strategic miscalculations because he surrounded himself with only yes men.
In a sharp contrast, remarkably, successful, transparent, and democratically run institutions were built in the then Palestine by the Jews, when Israel has emerged as a sovereign state from its war of independence in 1947- 1949.
This is in my way of thinking, the “secret” of Israel’s remarkable development in years to come; a performance which is almost unmatched by the new states that gained independence since 1949 for a country constantly at war with its neighbors. I took the Israeli experience for granted; as something that every other society, including the Palestinian society, which faces similar challenges, would do. Especially because the Palestinians had such a favorable initial conditions: the support and advice of most of the civilized world around them. But the Palestinians failed so miserably to meet the challenge to peace by the Hamas, in their own backyard. My optimism throughout most of my adult life about the possibility of reaching an end to the conflict sadly evaporated.
Peace, it now seems, will come during my children’s life time, not mine. Especially, because in the present time when the government in Israel is dominated by the Jewish settlers. This set of events may meet the classical Greek definition of tragedy: hubris (arrogance), Ate (folly) and Nemesis (destruction).
Multiple Careers vs. Single Career
I have had opportunities to switch career in three junctures of my life. At the age of 38- 45 I had an opportunity to move to policy making career, or politics. I was the chief economist to the Israeli government when I was 38. At this point, Israel economy was in a big crisis and highly educated economists were on demand by both coalition and opposition parties. At the age of 50 to 60, I could have developed a career in academic administration; either as a president of one of the Universities; or as a Rector of my own University. At the age of 60 to 65, I could have developed a career in business on boards of directors. At those junctures of my life I always decided to stick to my academic career. Looking back I am blessed in the fact that I was not tempted to leave academia.
[The contrast to the career path of one the most talented academic economists in the US the leading economist Larry Summers cannot be sharper. The difference is of course firstly the talent; but also the opportunities for a US born person relative to an Israeli born person. At age 52, Larry Summers already finished his first three careers. A swift rise to tenure at Harvard- career one, he then moved to a high policy making role in Clinton’s first term; promoted to deputy Treasury secretary; and in the last year of the Clinton presidency became the
Treasury secretary: career number two. Career number three is in academic administration; the president of Harvard. After rocky five- year tenure, he starts the fourth career path: back to economics with a lucrative part- time job at a big hedge fund, D. E. Shaw. And when Obama became the president in January 2009, Larry became his chief economic adviser to fight successfully the 2007- 9 financial crisis, which could have but did not follow the downward path of the Great Depression. I cannot of course compare myself to Larry Summers in terms of intellectual capacity; he is one of a kind. But, in terms of my own sphere of opportunities, though, I am glad I have stuck to the academic economics career path.]
What is Happiness?
“Happy families are all alike; every unhappy family is unhappy in its own way.” This is how Lev Tolstoy begins in Chapter 1 of Anna Karenina. Are we a happy family? We had our tragedy when Ofer, our oldest son,
acquired a unimaginable debilitating and cureless disease; and passed away at the young age of 30. For this we are of course an “unhappy family”, in our own unique way. Perhaps the way we bounced back to be optimistic in our outlook, at least me. But, with regard our children, Ronny and Einat, and our grandchildren, Iddo
and Neeve, we are a “happy family”, but contrary to Tolstoy, somewhat distinguishable from many other happy families. Nearly everyone has been stung by an insect at one time or another. It is an unpleasant experience that people hope not to repeat, but for most people the damage inflicted is only temporary pain. [Stinging insects are limited to the order Hymenoptera, which includes wasps, bees, and ants. The stinger is a modified egg- laying apparatus; so, only females can sting.]
When Ofer’s MS disease got worse, we heard about a possibility that the bee venom could help. We used to drive south of Alexandria, Virginia, to get Ofer get stung by captured bees, for training. Then, we got shipments of stinging bees by mail, and Ofer learned to perform the stinging therapy on him. It did not help much. Now, fast forward by 8 years, I was riding on a double- decker bus in London with my grandchild, Iddo, who was then only 6 years of age, in the company of Joe, his classmate, and Raffie, Joe’s brother. I overheard Iddo telling his young friends of the bee stinging story. I felt like I have been suddenly linked to my cute grandchild, through Ofer’s heroic struggle story, in the most intimate way. In the memorial we have been doing annually on
December 16, 2008, I “recruited” the 8 year old Iddo to play the Beatles’ song, Eleanor Reagby, for us, family and friends who gather in the cemetery of Kibbutz Einat. Iddo instantly became a trustable friend. My granddaughter Neeve, is smart and also a partner for interesting conversations. Our family had tragedies but also great bits of luck.
Apples and Trees
"The apple doesn't fall far from the tree," quipped an academic friend of mine, on seeing how Ronny is doing well. I must add that this seems also true to how my grandson, Iddo, is quickly emerging as a curious, talented and well disciplined, who is likely to excel in an exciting future endeavor, even though we do not know yet what direction in life he is going to choose for himself. It seems though that the apple fell not so close from the tree, when one thinks of the different life my father had, compared with mine. But, we have to remember that the society my father chose to live was extremely confining, not allowing to him to fulfill his aspirations based on his most evident talents and extremely unique traits. I was obviously lucky not to be in such a confining environment. This, I was able to make, what turned out to be good choices, when lucky opportunities came around. But, I believe that the differences in life- long outcomes between my father and I resulted only from
stark differences in opportunity sets we were confined by which led to stark different choices of directions. They are not due to any intrinsic differences in our personal makeup. We had very similar make ups. Indeed, my father's outlook of what is important in life and worthy of devoting your talents to, and his outlook and my mother's of how to raise a good family, guided my choices in critical stages of my life.
Jewish People who fascinated me
Moses ben Maimon— the RAMBAM (mimonides), 1135– 1204, Jewish scholar, physician, and
philosopher, the most influential Jewish thinker of the Middle Ages, b. Córdoba, Spain, d.
Cairo. He is sometimes called Rambam, from the initials of the words Rabbi Moses ben
Maimon. His organization and systemization of the corpus of Jewish oral law, is called the
Mishneh Torah [the Torah Reviewed] and is still used as a standard compilation of halakah. He
also produced a number of discourses on legal topics; a work on logic; a treatise on the
calendar; and several medical books, including an important work on hygiene. His great
philosophical work is the Moreh Nevukhim (tr., Guide for the Perplexed, 1963), written in
Arabic, in which he explained the esoteric ideas in the Bible, formulated a proof of the
existence of God, expounded the principles of creation, and elucidated baffling metaphysical
and religious problems. The Moreh Nevukhim, which reflects Maimonides's great knowledge of
Aristotelian philosophy, dominated Jewish thought and exerted a profound influence upon
Moses Maimonides was a Renaissance man before there was a Renaissance: a great
physician who served a sultan, a dazzling Torah scholar, a community leader, a daring
philosopher whose greatest work—— The Guide for the Perplexed—— attempted to reconcile
scientific knowledge with faith in God. He was a Jew living in a Muslim world, a rationalist
living in a time of superstition. Eight hundred years after his death, his notions about God,
faith, the afterlife, and the Messiah still stir debate; his life as a physician still inspires; and
the enigmas of his character still fascinate. Told by Sherwin B. Nuland
Shi Kefa (1601- 1645 CE), he came from the Shi family of Kaifeng (Capital of the Northern Song Dynasty) which was one of the seven Jewish families there. The names were assigned by the government, and
Shi corresponds to Simon, so it must be something like 'Ben Shimon', in the beginning.
Shi was not only a brilliant general but also a great calligrapher. In fact, after his capture, the Manchus tried their best to offer him a high postion with praise, but was firmly but civilly refused, and only for cosiderable time, the Manchus granted his wish to become a martyr, and established a memorial hall to honor his memory
in order to promote the spirit of loyalty in the entire Manchurian Empire.
Kefa in Chinese means, 'worthy to be emulated' since 'fa' means both emulation and the LAW. Kaifeng Jews were very observant in those years. Chinese record noted that in eating meat, they avoided the sciatic nerves for
religious beliefs. Without emphasizing the depressive aspects of his end, one can still feel that without understanding Masada (or what is mathematically 'the Josephus Problem'), one cannot gain complete insight regarding the Chinese historical record about Shi Kefa (History recorded, he chose to hurt himself, but stopped short of taking his own life, when his personal aides could not follow his personal instruction, and presumably his admiring captors satisfied his wish). This history has been conveyed to me by Henry Wan.
Lev Nussimbaum, a Jew, transformed himself into a Muslim prince and became a best- selling author in Nazi Germany. Born in 1905 to a wealthy family in the oil- boom city of Baku, at the edge of the czarist empire, Lev escaped the Russian Revolution in a camel caravan. He found refuge in Germany, where, writing under the
names Essad Bey and Kurban Said, his remarkable books about Islam, desert adventures, and global revolution, became celebrated across fascist Europe. His enduring masterpiece, Ali and Nino– a story of love across ethnic and religious boundaries, published on the eve of the Holocaust– is still in print today. But Lev’s life grew wilder than his wildest stories. He married an international heiress who had no idea of his true identity– until she divorced him in a tabloid scandal. His closest friend in New York, George Sylvester Viereck– also a friend of both Freud’s and Einstein’s– was arrested as the leading Nazi agent in the United States. Lev was
invited to be Mussolini’s official biographer– until the Fascists discovered his true origins. Under house arrest in the Amalfi cliff town of Positano, Lev wrote his last book– scrawled in tiny print in half a dozen notebooks never before read by anyone– helped by a mysterious half- German salon hostess, an Algerian weapons- smuggler, and the poet Ezra Pound. The story is told by Tom Reiss.
Albert Einstein the Zionist
Einstein had initially thought that his first visit to America might be a way to make some
money in a stable currency in order to provide for his family in Switzerland. “I have
demanded $15, 000 from Princeton and Wisconsin,” he wrote his friend and fellow
scientist Paul Ehrenfest. “It will probably scare them off. But if they do bite, I will be
buying economic independence for myself – and that’s not a thing to sniff at.”
The American universities did not bite. “My demands were too high,” he reported back to
Ehrenfest. So by February of 1921, he had made other plans for the spring: He would
present a paper at the third Solvay Conference in Brussels and give some lectures in
Leiden at the behest of Ehrenfest.
It was then that Kurt Blumenfeld, leader of the Zionist movement in Germany, came by
Einstein’s apartment with an invitation in the form of a telegram from the president of the
World Zionist Organization, Chaim Weizmann. Weizmann’s telegram invited Einstein to
accompany him on a trip to America to raise funds to help settle Palestine and, in
particular, to create the Hebrew University in Jerusalem. When Blumenfeld read it to
him, Einstein initially balked. He was not an orator, he said, and the role of simply using
his celebrity to draw crowds to the cause was “an unworthy one.”
Blumenfeld did not argue. Instead, he simply read Weizmann’s telegram aloud again.
“He is the president of our organization,” Blumenfeld said, “and if you take your
conversion to Zionism seriously, then I have the right to ask you, in Dr. Weizmann’s
name, to go with him to the United States.” “What you say is right and convincing,” Einstein replied, to the “boundless astonishment” of Blumenfeld. “I realize that I myself am now part of the situation and
that I must accept the invitation.” One person who was not only astonished but dismayed by Einstein’s decision was his friend and colleague in Berlin, the chemist Fritz Haber, who had converted from Judaism
and assiduously assimilated in order to appear a proper Prussian. Like other assimilationists, he was worried (understandably) that a visit by Einstein to the great wartime enemy at the behest of a Zionist organization would reinforce the belief that Jews had dual loyalties and were not good Germans. In addition, Haber had been thrilled that Einstein was planning to attend the Solvay Conference in Brussels, the first since the war. No other Germans had been invited, but Einstein was (in the words of Rutherford) “for this purpose regarded as international,” and his attendance was seen as a crucial for step for the return of Germany to the larger
scientific community. Story told by Walter Isaacson.
Appendix: Writing Books/papers/poems-- A four-generation family tradition
Books of my father:
The Origin of Ancient Isrsael's Kingdom
By Shunia Bendor and Mordechai Razin
מוצא המלוכה בישראל (מבוא לספר שמואל) מאת ש. בנדור ומ. רזין
שם הכותר : מוצא המלוכה בישראל ( מבוא לספר שמואל )
שם המחבר : מ . רזין ש . בנדור
: 1959 שנת ההוצאה
קשה : כריכה
הוצאת ספרית פועלים
2.מפקדים ומגילות יחס ומשמעותם לימי שאול ודוד מאת מרדכי רזין , ספרית אורנים, תש"ל
Books of mine:
1. Elhanan Helpman and Assaf Razin,
A theory of international trade under uncertainty
Academic Press, 1978;
This is how Elhanan Helpman describes the joint project which resulted in the book: “My first major
project was undertaken jointly with Assaf Razin. We were both familiar with international finance and with
international trade. We were puzzled by the fact that assets play important role in the theory of international
finance but hardly any role in the theory of international trade. Where this dichotomy comes from? We
concluded that trade in assets may interact in an important ways with trade in goods and services. As a
result it would be interesting to develop a theory that clarified these interactions. It should also help in the
understanding of the effects of capital- market policies on trade in goods and assets.” The result was a series
of papers which were synthesized into the book. One chapter of the book, chapter 11, which was not
published as a paper, became 30 years later the base line for the modern theory of international equity
2. Jacob Frenkel and Assaf Razin, Fiscal Policies and the World Economy
MIT Press, 1987, Japanese Edition 1990, Spanish Edition, 1991,
Second Edition, 1992, Third Edition 1996;
3. Marc Nerlove, Assaf Razin and Efraim Sadka, Population Policy and Individual Choice :
A Theoretical Investigation, (Research Report/ International Food Policy Research
Institute, 60) Paperback (June 1987), International Food Policy Research Institute;
4. Marc Nerlove, Assaf Razin, and Efraim Sadka
Household and Economy: Economics of Endogenous Fertility (Economic Theory
Econometrics, and Mathematical Economics), Academic Press, 1988;
5. Jacob Frenkel and Assaf Razin, Spending, Taxes, and Deficits : International-
Intertemporal Approach (Princeton Studies in International Finance, No 63),
(December 1988) Princeton University, International Finance;
6. Jacob Frenkel and Assaf Razin,
Fiscal Policies and Growth in the World Economy: An Inter-temporal Approach
1986, MIT Press;
7. Amnon Neubach, Assaf Razin, Efraim Sadka,
Israel’s Economic Growth (Hebrew)
"Maariv" Publishing House, 1988.
8. Amnon Neubach, Assaf Razin, Efraim Sadka,
Challenges to the Economy of Israel (Hebrew)
"Maariv" Publishing House, 1990.
9. Jacob Frenkel, Assaf Razin, Efraim Sadka
International Taxation in an Integrated World
(January 1992) MIT Press;
The ongoing process of increased integration of national economies, culminating in
the single European market of 1992, still leaves as virtually separate the national
fiscal systems. In this book we provide a new treatment of international taxation,
one that focuses on the interactions between fiscal policies of sovereign nations and
the magnitude and directions of international capital and goods flow in an integrated
world economy. They unfold a lucid and clear analysis of the implications of tax
competition, tax harmonization, capital flight, external imbalances, and the terms of
trade for the design of efficient national tax systems. The book reviews the principles
of international taxation and international macroeconomics, analyzes the
international transmission of various tax and budget policies, and provides a rigorous
analysis of optimal open economy tax policy in an integrated world economy. Special
emphasis is placed on the interdependence between direct and indirect taxes and on
the international allocation of saving, investment, and production.
10. Assaf Razin and Efraim Sadka