Q&A: The Fall of Israel – funding settlers at the expense of middle class

Dan Steinbock’s new book The Fall of Israel is a clinical examination of a delicate issue – what does the future of Israel look like?

The book received praise from different quarters of the globe, with well-known scholars like John Mearsheimer and Ilan Pappe endorsing it.

The cost of Israel’s war on Gaza will exceed $50 billion according to estimates, an unparalleled amount compared to any conflict, making the Zionist state most vulnerable since its establishment in 1948, Steinbock, the Finnish scholar, tells TRT World.

It is not like the 1967 Arab-Israeli War, which continued only for six days, when four Arab states were handed an embarrassing defeat by Israel, he says, referring to the prolonged Gaza war, which has been ongoing for 418 days and counting.

Steinbock is an internationally-acclaimed author with an expertise in the multipolar world economy. He argues in his book that Israel’s settler colonial project is financed at the expense of the country’s middle class, while the annexation of the remaining Palestinian land is being pushed violently.

We spoke to Steinbock for a deeper look into his latest work.

TRT World: What prompted you to write this book at such a critical juncture?

Dan Steinbock: Well, in a way it was a very personal decision. I hated writing this book more than anything else I have ever written in my life. And it was very difficult. It was very depressing. It was painful. But at the same time, I had the sense that I won't find peace until it's done, it had to be written. And that even had to do with the very title of the book, The Fall of Israel because I envisioned that from a many different perspectives. One was Gunnar Myrdal, who wrote the famous book, An American Dilemma in the 1940s. On the one hand, he saw this aspiration for democracy and freedom and opportunity in the US. On the other hand, there was segregation in the 1950s in the US, there was a significant minority of people who were not part of the system.

I thought of The Fall of Israel in these terms, it's almost like a fall from grace if you will, in the sense that here we have a country that was born from the European Holocaust. Yet the claim is that it's engaging in genocidal atrocities. You can look at this from different perspectives. I chose only four, mainly economic, political, social, and military. In each case, the result wasn't unambiguous and it was untenable.

If you look at it economically, it's a dead end, you cannot wage war for such a long time. There's a reason why the Six-Day War in 1967 was so victorious to Israel. It was six days. Whereas now we're going 400 days and more, no economy can take this even with the US help and US help always comes with strings attached. Then there's a question of politics, which is massive polarization between secular Israel and religious Israel. Let's not forget the judicial reforms that led to the massive protests up to October 7. The country was strongly divided internally and then inside itself further divided between the Israeli Jews and Israeli Arabs, Israelis and the Palestinians, and finally religious and secular Israelis. And within the religious people, those who were Orthodox and ultra-Orthodox.

There was finally this issue of the military, the objective of the so-called war. It's hard for me to call it a war because war is usually between two states. Even if it's between a state and a non-state actor, it's a fight between two parties. What we see is something very different. We see atrocities day after day after day. It's very hard for me to believe that 70% of those who die will happen to be women and children and elderly that they are strategic assets that somehow are a way to peace. Then, there's the question of Hamas. I personally don't see how any resistance that's based on an idea can be eliminated. It will continue, there will be a counter insurgency as long as there are operations against insurgents, whether one wants to call it terrorism or something else.

You said writing the book was a depressing experience for you. Why?

DS: It's depressing in the sense that first of all, I don't remember any comparable incident in human history where alleged genocidal atrocities, which I see happen in real time, instantly streaming live. This hasn't happened before. There's a natural tendency I think in all human beings, at least those who have a heart and brains say no, no, stop this. This is wrong. There has to be a better way. This is what the families of the hostages said: “We fight wars in Israel to survive, not to let go of the people or people who end up being hostages.”

Certainly in the book, The Fall of Israel, I do make a case that these wars from 1948 from the unilateral Declaration of Independence by Israel to the 1967 War were for survival as long as you are able to set aside the issues of ethnic cleansing, which were also a reality. The Nakba on the Palestinian side is often suppressed when we talk about these things. But after the Israeli occupation [of the West Bank and Gaza following the 1967 War], I don't believe that Israel has had wars of survival. There have been wars of expansion or wars of ethnic cleansing. Ultimately, it ends up with a situation that we have today where most of Gaza has been obliterated to the point that the continuation of human habitation will be extremely challenging in the coming years and the West Bank, I believe, is being effectively annexed by Israel.

This is a long process. It's not a straight line, but we can see it from 1967 until now. The Golan Heights has been practically annexed quite a long time ago. So for these reasons, I personally felt that it was a very depressing book to write because it talked about very depressing realities. But at the same time, I thought that if we allow this, if we allow Pandora's Box, more of these sorts of things will happen. We see elements of it in southern Lebanon. If this is allowed, it will spread and this cannot be good for the neighboring countries of Israel. I personally believe it's not good for Israel at all. Allowing this would be giving carte blanche to those elements of the [Israeli] government that are not willing to talk about peace. It had a very strange view of democracy, religion and regional integration.

How will Israel fall?

DS: No state can survive without economic growth that's sustainable, or at least you have sustained growth or economic development when it's developing or an emerging economy. Now, Israel is an advanced economy, which went to war again and the stated reality was that this is not going to be a long operation. At least some people argue that way. But at the same time, when you saw the war machine moving in, it was very clear that it would be a longer operation. When you look at it from the economic point of view, what this means is that the full cost in a year's operation might go up to $50 billion or more. Half of which has to do with weapons and the military itself, half of it, rehabilitation services. Equal to 10% of the Israeli GDP, the estimate relied on several assumptions that have proved flawed. The war has already lasted 14 months. It has not been limited to Gaza. Moreover, tens of thousands of Israelis remain displaced and military reservists remain part of the Israeli war efforts. Hezbollah has played a significant role. The Houthis remain a part of the equation. A direct conflict with Iran is simmering. In brief, the final bill of the war is likely to exceed the early estimations. The present status quo of the Israeli war economy is unsustainable.

The argument of those who feel that this is untenable and thereby the state of Israel has to fall. I understand it. But I think that the realities are more complex. There are several things that you really have to resolve when you look at the solution for Israel and in the Middle East. One has to do with the ethnic cleansing and the expulsions of Palestinians. The longer it continues, the more it prevails there will be no solution. There will be resistance, there will be no permanent security. Second, the occupation, as long as it continues, there will be no peace.

According to some figures, when you look at the Israeli think tanks, the argument is that with the occupation, the protection of the Israelis has become a second thought. The protection of the settlers has become the primary objective. You can argue that a significant chunk, anything from 50 to 80 percent of the defense expenditures that should be for the Israelis to protect them, is going to the settlers. They are being subsidized and they are being subsidized by the middle class in Israel that is shrinking. This is untenable in the long run. You can play it for some time but you're burning the candle on two sides in the long run. You cannot live in a situation where initially in the war, there were maybe 350,000 Israelis who were displaced because of the war [due to Hezbollah attacks from Lebanon] or they were in the military. Now we see numbers of 100,000 or more. Nobody knows exactly. This is an economy that is currently not functioning. The argument of those is that this is untenable. It's based on the idea that Israelis cannot sustain this kind of situation and they are right.

But the US continues to fund Israel’s wars.

DS: As long as you're getting $4 billion a year in military aid, you can continue this for quite a long time. We know that in the past year, it was not 3.8 billion or $3.9 billion. It was $18 billion with the military aid coming from the US. The Jewry worldwide is also supporting Israel even if philanthropic, it allows the government to put money elsewhere. You sustain a situation that basically should be unsustainable. To many people, it was a real surprise that the US would allow this to go so far. The question is why. Prime Minister Netanyahu has been extremely shrewd. He has used basically the US election year in order to hammer through strategic objectives that otherwise might not have been viable. This has been coupled with the rise of the far right in Israel that has made his job easier because he looks more moderate in comparison with his far right. But he opened that door to them even though their march into the Israeli institutions started around the 1960s and 1970s.

So my concern is not so much how Israel might fall because of the domestic factors. If it was only about that, they would have already changed the policies regarding the settlement and the military activities in the course of the Gaza war. But [more unsettlingly] while Israelis continue doing wrong, they're being rewarded. In other words, the military aid continues despite the fact that the far right in Israel government doesn't look at this war purely in rational terms as people who are outside Israel. They see this as an apocalyptic sign that we are getting close to the end of times and God will always provide.

Will Trump's coming to power further empower the Netanyahu government?

DS: I'm afraid that it will make the situation more sustainable from the point of view of those who are behind the Netanyahu cabinet and support this cabinet and its objectives. I would be concerned that what we're seeing is the kind of a carte blanche that will make a situation that's already terribly difficult and challenging worse in the long run. [Steinbock reminds of Trump’s first term pro-Israel policies like Abraham Accords, the appointment of pro-Israeli David Friedman as US ambassador to Israel, moving the US embassy into Jerusalem and the withdrawal from the Iran nuclear deal, etc.]

In his first term, he was able to hammer down the Abraham Accords and most likely he will try to continue and build on that. And compared to his first term, he has a stronger mandate and the US Congress is behind him at least officially. I'm not very optimistic as to what's ahead. If you look at Trump’s nominations so far, there will be no change from Trump one to Trump two. You will have Americans and American Jewish actors who will represent the US in Israel and they will continue to nurture the iron-clad ties and the symbiotic military ties in that regard.

How does the Trump presidency shape Iran-Israel ties?

DS: We should not forget that the assassination of General [Qasem] Soleimani happened under the Trump administration most likely in cooperating with Israel. While President-elect Trump would very much like to have a peace deal with Iran, he would like to negotiate from a position of strength. This means that the idea of maximum pressure will be revived and the objective is to weaken and soften the Iranian economy further. And of course, the pacification of the Axis of Resistance is something that really unites Israel and the United States. We will see efforts toward this direction, whether they are real causes towards that objective or false flag events, which we have seen in the past. We might see more in the coming months.

There is also a viable opportunity for some people in the Trump administration and the Netanyahu cabinet, especially in the far-right to try to create a strategic situation where things would fall apart in the sense that there would be a major escalation that would lead into a major conflict between Israel and Iran. I don't see it in terms of the US and Iran. In this regard, in the book of The Fall of Israel, I did look at the situation of what would happen if the escalation went further. There was a war game that was played out in the US a couple of months ago with some of the leading members of the US political, military and economic elites. What surprised those who planned the war game was that you started from a conventional conflict, but it ended up being nuclear.

This should be a red light alerting us all. I don't see any automated answers in history. We make history and we make it sometimes in a very poor way. But there is a real risk to that direction and that would be the kind of development that would engulf the entire region. So it's very much in the interest of all actors to be more active than ever before and not to take what I think is a calm before the storm as a harbinger of coming peace. Yes, peaceful steps are possible, but they really require sacrifice on all sides.