srael is the 26th-richest country on Earth, according to the World Bank. Now, Israelis will tell you, not without reason, that the wealth numbers provide an improper view of everyday life in their country. The inequality gap is a Grand Canyon–like chasm there. It’s hard for the young to find good jobs and decent housing, in part because an overly intrusive government sector has made workplace mobility nearly impossible and an overregulated economy makes home construction prohibitively expensive. These difficulties are especially enraging to Israelis because they are self-inflicted wounds that result from what might be called “democratic-socialist entropy.”
But still, Israel is the 26th-richest country on Earth—and the fact that you’ve probably taken this in stride is the reason it’s so extraordinary. Israel’s emergence as a wealthy country is among the countless facts of 2018 that would have seemed unimaginable to the Jews of 1948. Seventy years ago, even poor American Jews like my grandparents would scrape together precious dollars to send to relatives in Palestine, so hardscrabble was their existence. And it remained an economic basket case for decades. In the 1960s, consumer goods of any kind were so scarce in part due to startlingly stupid tariffs imposed by the economically illiterate Labour government that any American traveling there would put out an APB and collect all manner of stuff to bring to family members who were studying in the Holy Land or had made Aliyah. In 1984, while Western nations saw renewed economic growth, Israel had an inflation rate of—get this—450 percent.
The nation broke the back of its inflationary spiral, and then in the early 1990s, something amazing happened: An entirely new economic sector kind of snuck into existence because the hidebound labor apparatchiks in control of communications had no idea what cellular telephony was or what it could do. They were still focused on controlling the landline monopoly called Bezek.
As Wired magazine noted in 1997, “In December 1994, an Israeli cellular start-up called Cellcom…announced the lowest airtime rates anywhere on the planet.…In the two years since Cellcom’s launch, the cellular phone, or ‘pelephone,’ as it is referred to generically, has replaced the automatic rifle as the device whose ubiquity now most astonishes Western visitors. From a base of perhaps 70,000 users only two years ago, 900,000 Israelis (out of a total population of 5.7 million) now subscribe to cellular telephone services.” It was this wholesale shift into the digital age that impelled Israel into the world of high-tech from which its wealth spiral has risen.
And now Israel is the 26th-richest country on Earth. The solidification of its economic position has gone hand in hand with its military strength and its determination to continue to exist in spite of the world’s hostility and the wars against it to create another phenomenon no one in 1948 could possibly have imagined. Or no one in 1967. Or 1981. Or the year 2000. And that is the entente between the Jewish state and the Kingdom of Saudi Arabia under its Crown Prince, Muhammad bin Salman. This may be unlikeliest development in 70 years of unlikely developments that have anchored Israel among the community of nations—and a sign that it can outlive its enemies.