Daniel Lubetzky

It is a sign of how messed up the region can get that Palestinians in Gaza were motivated to throw rockets at Israel to try to undo the cease-fire agreement, rekindle the fighting, ensure a continued closure of the borders, preventing imports and trade, and thereby keeping at artificially high levels the prices of seeds they had purchased to sell to farmers within Gaza.

I am not making this up.  Hamas, now motivated to keep the cease-fire, arrested Palestinian seed traders who had thrown rockets at Israel, and received their confessions.

Kenneth Pollack offers a compelling perspective on the effects an oil boom in the Middle East.

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I was initially persuaded by media and pundit assertions that what is behind this meteoric rise in raw materials is at least connected to "speculation" – ie, hedge funds plowing in billions into commodity future contracts and other financial investments that make the goods artificially rise in cost.

But look at the Deutsche Bank chart (which my law school buddy Stanley Haar shared with me) below.

Non-Exchange traded commodities have risen more than those traded on exchanges. Unless hedge funds are also buying the physical goods in all these sectors, the more likely culprits are sheer global over-consumption and over-consumerism.  For years the mantra was that we should only hope the rest of the world will have a standard of living that is closer to the Western world’s.  Now that India and China are more than catching up, we are learning how this taxes our planet.

A better plan would be for all of us to learn to live just a little bit more modestly and less wastefully. 

David Ricardo introduced the theory of "comparative advantage" – advising that each country has the ability to produce a good at lower cost, relative to other goods, compared to another country.

Ricardo’s theory advises countries to specialize in the production of goods and services they can produce most efficiently – or with lowest relative costs. 

Complementary Comparative Advantage involves identifying countries (or parties or companies) where each has a comparative advantage over complementary areas of production – so that partnering will bring both economic benefits. 

This was the language I used in my college thesis and law school work to explain the economics of peacemaking.

When we started PeaceWorks in 1993, we relied on this theory to encourage Israeli food manufacturers to purchase their olives from Palestinian growers, their sun-dried tomatoes from Turkish growers, and their glass jars from Egyptian manufacturers.

Another requirement of PeaceWorks is to ensure symmetry in economic relations, which is another prerequisite to ensuring or maximizing the chances of positive impact from economic cooperation.  Besides the agricultural field, where Israelis and Palestinians and other Arabs can make symmetrical contributions, other areas in the Middle East where there are symmetrical complementary comparative advantages include the textile sector, and the area of Dead Sea cosmetics, where we dabbled in 1993. Furniture (where Palestinian craftsmanship from Gaza has a lot to offer) is another area ripe for collaborative cooperation, as is construction, and of course tourism.  Business leaders like Dov Lautman have spearheaded cooperation in the textile industry between Israel and Jordan, between Israel and Egypt, and within Israel between Jews and Arabs cooperating side by side.

As my prior post notes, Zvi Schreiber has now also proven that even in the hi-tech world you can achieve worthwhile synergies between Israelis and Palestinians.

According to my commodities futures trading genius friend Stanley Haar, this is a silly scapegoat because:

True manipulation involves buying both futures contracts and hoarding the physical commodity, as attempted by the Hunt Brothers in the silver market years ago. I don’t believe this is happening now in the oil market or any other market. Blaming speculators (like shooting the messenger) is always popular, as it is easier than finding real solutions like conservation and adjusting to a lower standard of living.

The Economist agrees with him:

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To handle the energy, the scarcity of natural resources from food to raw materials, the dangers of increasing waste and overflowing landfills, and to slow down the threats of climate change, a wide range of measures are being discussed, from tech and scientific progress to come up with cleaner renewable energies, to carbon-trading, resource-planning, energy conservation, etc. etc.

But what policy makers don’t talk about and which our world needs to come to terms with is that we need to learn to live more modestly! So much waste in every aspect of our lives.  SUVs drive me nuts.  The digital economy could not arrive soon enough – more consumption will increasingly be digital, which takes less space and energy, hopefully.

Is a slow-down in consumerism going to lead to "economic pain" from less economic growth? And if so, isn’t that a price we should need to accept as a condition to continue inhabiting this planet?

Goldman Sachs reckons consumers are handing over $1.8 trillion a year to oil producers.

-The Economist

These states include Iran, Venezuela, Russia…  No wonder "authoritarian-driven economies" have looked so good over the last few years.  No wonder Iran and Venezuela can afford divisive hegemonic policies.

When returning a rental car on my last trip to LA, I noticed a car packed to the ream with bags and random stuff.  I wondered what it was.

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Ben Stein’s article in the New York Times Wall Street, Run Amok highlights one of the core reasons why our financial system is not working: investment bankers are incentivized to leverage themselves to the sky; the more debt they take, the more their upside from structured deals and the more compensation they get, with the downside severely mollified by the public serving as the unwitting insurer.

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With growing human population and consumption, our planet is already strained with water scarcity, fossil fuel scarcity, food scarcity, mineral scarcity, and environmental degradation.  Is the big picture that humans will eventually kill each other to compete for scarce resources?

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