If You Want Israelis to Favor Peace Negotiations, Let Them Trade Stocks
A fascinating experiment.
Sam Winter-Levy, a PhD student in politics at Princeton University, writes in the Washington Post:
Two weeks ago, after Palestinian gunmen killed an Israeli soldier, Israel launched one of the fiercest aerial assaults on Gaza since the 2014 war. The hostilities followed months of tension, including Palestinian rocket fire against Israeli communities and waves of Israeli airstrikes on Hamas positions in Gaza. After three wars in the past 10 years, many believe a fourth war between Israel and Hamas looms. With the peace process at an impasse, the conflict seems intractable.
But new research suggests a possible way forward. In a new working paper, Saumitra Jha of Stanford’s Graduate School of Business and Moses Shayo of Hebrew University found that giving Israelis a short, intensive opportunity to trade stocks made them much more willing to negotiate with the Palestinians. Involvement in the stock market made Israelis less likely to vote for harder-line, right-wing parties, especially Prime Minister Benjamin Netanyahu’s incumbent Likud party; more supportive of a two-state solution, and more willing to make concessions in exchange for peace. And the effects lasted: A full year later, the changes in people’s voting preferences persisted.
The idea that trading can make war less attractive dates back at least as far as Montesquieu. “Commerce is a cure for the most destructive prejudices,” he wrote in 1748. “Peace is the natural effect of trade.” Jha and Shayo hypothesized that one way that commerce, and financial markets in particular, can reduce conflict is by making people more aware of the broader economic costs of war — costs they may not have otherwise noticed.