The Economic Analysis of the Israel-Gaza Conflict: Understanding the Systemic and Structural Factors

The Economic Analysis of the Israel-Gaza Conflict: Understanding the Systemic and Structural Factors

Exploring the economic perspective sheds light on the underlying causes of the Israel-Gaza conflict

The ongoing conflict between Israel and Gaza has been widely analyzed from a political standpoint, but an economic analysis can offer valuable insights into the systemic and structural factors at play. This approach challenges the Israeli narrative that attributes the conflict solely to attacks by Hamas, revealing a more complex and interconnected reality. By examining the economic theory of fundamentalism and the market for martyrs, we can gain a deeper understanding of the root causes of violent extremism and the cycle of violence in the region.

The Economics of Religious Extremism

American economist Laurence Iannaccone’s research on the economic theory of fundamentalism provides a framework for understanding the origins of violent extremism. According to Iannaccone, the market for martyrs operates on economic principles such as rational choice. In this market, terrorists and suicide bombers act as suppliers, while those who recruit them are the demanders. Contrary to popular belief, typical extremists are not necessarily poor, ignorant, or mentally unstable. Successful terrorist missions require individuals who are well-educated and mentally composed. This challenges the notion that poverty or lack of education directly contribute to terrorism.

Filling the Void

When individuals feel displaced or ill-served by secular governments, fundamentalist ideologies become more appealing. Groups like Hamas emerge to fill the void left by the absence of public services and welfare programs. Additionally, when basic civil liberties are undermined and economic opportunities are stifled, violent extremist groups gain traction. Terrorism, according to economist Michael Intriligator, is often employed by the weaker party in asymmetric warfare as a means of seeking retribution for past actions. This observation resonates with the cycle of violence between Israel and Gaza, where the current bombing may further radicalize a new generation of militants.

See also  Default Title

Rational Extremists and Deterrence

While the Israeli government has adopted a far-right stance, it is crucial to recognize that the economic approach views extremists as rational actors, not psychopathic or animalistic. The argument that suicide bombers cannot be deterred because they have nothing to lose is flawed. Successful negotiations with Hamas, resulting in the release of Israeli hostages, demonstrate that the group has political objectives and can be reasoned with. This suggests that further negotiations and addressing economic disparities and grievances would be a more effective strategy for Israel than indiscriminate bombing, which perpetuates the cycle of violence.

Choking Off the Market for Martyrs

To effectively combat terrorism, the focus should be on checking demand rather than inhibiting the supply of martyrs. The market for martyrs is sustained by multiple sources of supply, making it difficult to eradicate entirely. Imprisonment and execution have minimal impact. Instead, changing the political and economic environment through the promotion of civil liberties, social services, political representation, and economic freedom can inhibit religious radicals from embracing violence. A comparison can be drawn to Christian extremists in the United States, where social, legal, economic, and political factors make religiously sponsored violence unprofitable for radicals.

The Role of Arms Industry and Profit Motives

While addressing the demand side is crucial, the economic approach reveals a profit motive behind the indiscriminate bombing of Gaza. The weapons industry benefits from military aggression, leading to increased share prices for weapons manufacturers. This highlights the counterproductive nature of the bombing in terms of achieving long-term peace and stability. Instead, tackling terrorism requires investing in public goods, respecting civil liberties, and addressing political grievances. For Palestinians, the resolution lies in ending the long-standing Israeli occupation and addressing the systemic and structural factors that perpetuate the conflict.

See also  Default Title


An economic analysis of the Israel-Gaza conflict provides a fresh perspective on the underlying causes and potential solutions. By understanding the market for martyrs and the role of economic factors in fueling extremism, we can recognize the need to address political grievances and provide avenues for peaceful resolution. Ceasefire and the end of the systemic occupation are crucial steps towards breaking the cycle of violence and fostering lasting peace in the region. It is clear that military aggression alone is not the answer, and a comprehensive approach that prioritizes economic development and political stability is needed to bring about a sustainable solution.