RONALD REAGAN BANQUET
February 17, 2001
PRIME MINISTER BENJAMIN NETANYAHU
PRIME MINISTER NETANYAHU: Thank you. Thank you very much. You're very kind. Thank you.
Well, thank you very much, Ed. I have to say I haven't been in such a liberal audience for a long time.
PRIME MINISTER NETANYAHU: I see you're laughing but I'm not. You see, because we're really committed to the idea of liberty. This is the one idea that unites everyone sitting around the dais here today and around these tables and so many others. And there are people here from around the world. This is what unites Prince Buthelezi, who came here from South Africa. This is what unites David Tremble, who came here from Northern Ireland. And this is what unites Israel and America. It's the idea of liberty, the idea of freedom.
And I think that all movements in history have had a guiding idea. Otherwise, nothing happens. Things dissipate into chaos. Whenever you have any achievement in the activity of mankind, it is an achievement that is guided by an idea. Sometimes, by the way, you can have bad ideas. And sometimes they could be good ideas. But all movement, all human movement, is guided by ideas. And the guiding idea, especially for our two nations Israel and America has been the idea of freedom.
It has been, however, for us a longer experience, because we're a somewhat older people. So, we have a millennial perspective on the question of freedom, something that was imparted in many ways to the United States. Because the United States was founded on the idea of being the new promised land, the new Jerusalem. And this is one of those things that cement our two nations and our two countries as no two other countries, I think, are welded together.
I have tried recently, a few years ago, to explain to somebody from an entirely different culture this enduring perspective of liberty and national redemption. And I was visiting China, my wife and I. My wife, by the way, is here. She is as happy as I am to be with all of you.
PRIME MINISTER NETANYAHU: Well, we were visiting China, and the president of China, Jiang Zemin, began the conversation with me by saying, "You know, I really admire the Jewish people." So, I said, "I really admire the Chinese people."
PRIME MINISTER NETANYAHU: He said, "The Jews and the Chinese are two of the oldest civilizations on earth. They go back 4,000, 5,000 years, respectively." And I said, "That's correct, Mr. President, but I would also add the people of India, the civilization of India, which is also that old." And he nodded his head in agreement.
And then I said, "Well, don't you see something strange here?" He said, "What?" I said, "How many Chinese are there in the world?" He said, "1.2 billion." I said, "How many Indians are there in the world?" He said, "About 1 billion." I said, "How many Jews are there in the world?" Silence. He didn't know.
I said, "Mr. President, there are only 12 million Jews in the world." He was absolutely shocked. This is one small suburb of Beijing for him.
PRIME MINISTER NETANYAHU: So, I said, "It's odd, isn't it? I mean, we've been around thousands of years, like you. If you extrapolated the numbers of the Jews from Roman empire times, where the Jews constituted about 10 percent of the population, if you extrapolated the numbers, you'd get about a quarter of a billion Jews, yet there are only 12 million."
He said to me, "What happened?"
PRIME MINISTER NETANYAHU: I said, "Mr. President, a lot of things happened, but they boil down to one main thing: You, the Chinese, kept China, and the Indians kept India, but we Jews lost our homeland. And from that dispersion, in exile, sprang forth all our misfortunes and tragedies and calamities. The pogroms and the massacres and the terrible deprivations, down to the worst tragedy of them all in our time, the Holocaust. So, for the last 2,000 years what we've been trying to do is to get back to our ancient homeland and reconstitute our life there as a free, proud, independent people, capable of controlling our own destiny, which is what freedom is."
Now, I tried to fashion all my activities and to subordinate all my policies to this one guiding idea: how to ensure that my people, the Jewish people, have this precious freedom and this precious independence protected for the future. And for me that meant translating this larger goal into two specific policies: To provide Israel with enduring economic prosperity; and to give Israel a secure peace. And I want to talk about both of these things tonight, because I think they're not only specific to Israel. I think they're specific to any place around the world. I think they're universal. And I think they apply to just about every conflict, every area, every piece of geography on this planet.
Well, the first item, the first objective, is to achieve an enduring prosperity. Now, you might think that the condition for enduring prosperity is technology or science. I will demonstrate to you that that is not the case. Because if you want to look at a place that has the most brilliant scientists, the most brilliant mathematicians, the most brilliant physicists, the most brilliant metallurgists in the world, you can go to the science towns of the former Soviet Union. There are two science towns: Omsk and Tomsk. It sounds like "Humpty Dumpty," but they actually exist, these places, in Siberia.
PRIME MINISTER NETANYAHU: And they have these incredibly gifted scientists and the colleges there. And they were living, until very recently, in absolute poverty. But when you take these scientists and you put them in Palo Alto, all of a sudden they start generating wealth. Their ideas count for something. Because they have that indispensable component for prosperity, which is called "freedom."
PRIME MINISTER NETANYAHU: The key to prosperity is freedom.
PRIME MINISTER NETANYAHU: I don't discount technology. By the way, my own country, Israel, has an enormous amount of it. That is one of the curses turned into a blessing, the fact that we had to live, we had to have a strong military. A strong military means a smart military. So, we have a lot of technology. But what we didn't have was enough degrees of freedom in the Israeli economy.
And so if you want to move the country, as I did, to a prosperous present and future, I had to quickly increase the degrees of freedom in the Israeli economy, and marry the technology that was available there with a freemarket environment. Now, all I had to do was cut the deficit, reduce inflation, privatize, deregulate, and free the currency. Five things. That's all.
PRIME MINISTER NETANYAHU: Now, there you go. You see, you're laughing again. And that's exactly what we did, then, you see. It's exactly what we did.
We cut the deficit from about 5 percent 4.7 percent of GDP, to 2.5 percent, almost half, in 18 months. That's the biggest cut anywhere in the world that I've seen in that equivalent time period.
PRIME MINISTER NETANYAHU: We cut the inflation a related event, a related outcome we cut it from about 12 percent to 1 percent in that time period. We privatized about three times what had been privatized during the previous 47 years. We did that very quickly.
And we also deregulated. By the way, deregulation is well, this has ancient roots. You know, when Moses lead the children Moses, is he here? Moses? No, he was here yesterday. Yes.
PRIME MINISTER NETANYAHU: When Moses lead the children of Israel out of Egypt, God said, "I have good news and bad news for you." The good news is you're going to part the waters of the Red Sea, and all of you will emerge intact and safe on the other side. The bad news is you're going to have to file an environmental impact statement first."
PRIME MINISTER NETANYAHU: So, I have ancient roots for my dislike for over-regulation. And in fact, we proceeded to deregulate telecommunications, the phones. For example, if any of you have been to Israel recently, you'll know that you pay a lot less for international phone calls back to the U.S. than you pay here, because we introduced a lot of competition there. Prices fell, in one week, by 80 percent, and they've stayed down since. So, you can imagine how much that government monopoly was gouging the consumer. And so on and so on. Deregulation is the fourth thing.
And the fifth thing is freeing the currency. This ought to be, and was conceptually, the easiest decision to make; it was actually the hardest one to make. Because Israel, until recently now listen to this, this is the Internet age Israel, until recently, in the age of ecommerce, when you flip on your screen and you want to buy a Kia car from Korea and you pay with electric money, right? Until three years ago, in a country called Israel, you could not take more than $2,000 out of the country. If you took a dollar more, you were a criminal.
If you came back from abroad and you had some change in your pocket, some dollars, and you didn't put it in the bank and file it with the necessary authority, you were also a criminal. It was a Third World type of structure. So, it was obvious that if you believe, as I do, in free markets, what you have to do is immediately remove these foreign currency controls, right? Right. Except that the bureaucracy have a way to try to prevent things like that.
So, they would come to me and they said. "Well, you know, Prime Minister, you're right in the long term." They always say that. "But in the short term, if you open up the floodgates, you could have a collapse of the currency like has happened in Mexico." And I thought about it for about one night. And I said, "Do I really believe in free markets?" And the answer is yes, I do. Well, then, pull the lever, which I did.
And you know what happened? Money flowed in. It didn't flow out. It flowed in. Why? Because money, investments, commerce, entrepreneurship, economic activity, trade, all of that flows to freedom. Free societies prosper. Unfree societies shrivel.
PRIME MINISTER NETANYAHU: The one thing we didn't get to do, by the way I have to tell you I didn't get to cut taxes. But somebody else is doing it, and I hope I didn't get to do it, because we had a 5 percent deficit of GDP. If I had started out with cutting taxes, we could have gone through an immediate collapse.
I told my friend Jack Kemp today that I'm a great believer in cutting taxes and cutting spending at the same time. That is where Israel is going to be headed now. That is where we are going to be headed now.
PRIME MINISTER NETANYAHU: But the result of all these things has been that Israel has become one of the great centers of technological innovation, with thousands of startup companies thousands. And, other than the United States, it is the only place that is producing this enormous array of new technologies and information technology and biotechnology and something called nanotechnology. If any of you want to know what that is, talk to me later.
These are enormous things that offer us this future of prosperity, providing we keep deregulating and liberating the economy. You can see the effects of such liberalization in a country like Ireland, which has just overtaken Britain in GDP per capita, because they have understood that the key to prosperity is freedom. It applies everywhere. Everywhere.
PRIME MINISTER NETANYAHU: So, now, what is the key to achieving the next objective, the second objective, a secure peace?
You notice that I'm talking about a secure peace and not just peace as in peace treaties. Peace treaties, in themselves, give you nothing. Some of the most celebrated peace treaties in their time, in the 20th century, produced the most calamitous results. You can think of Versailles or Munich, but there are many other examples, as well.
Peace treaties, in themselves, do not secure peace. In order to have a peace that will endure, it must be grounded in security. Peace without security is an oxymoron. It just doesn't have any meaning. Yet, when I took office this is precisely what we had. We had a socalled peace process, with buses blowing up in the heart of Jerusalem and Tel Aviv and elsewhere. And I insisted that we had to have security, insisted that the Palestinian Authority do their share of what they promised to do, and in fact restored security in a very short time, within a matter of months.
I think that this coupling of peace and security is not accidental, in my view. I borrowed it. I borrowed it from a treatise that I read when I was a teenager, and then reread it when I was an adult. And this is a tract called "Perpetual Peace." It was written by one of the most brilliant thinkers of all time, and certainly one of the great thinkers of modern times. His name is Immanuel Kant.
And over 200 years ago he wrote this essay, in which he said that there are two kinds of peace in the world. There is peace with democracies and peace with dictatorships. Immanuel Kant said that peace with democracies is automatic. It's selfsustaining. You don't have to do anything. And the reason is very simple. Democracies represent the will of the majority, and most people don't want to go to war. Most people don't want their children to go to war. So, the natural inclination of a democracy is toward peace.
And it will punish a regime or a government that will unnecessarily go to war. I use the word "unnecessarily" because Kant said that democracies might respond to aggressive provocations, but they will not, as a rule, tend to initiate it.
And then he asked, "If that's true of democracies, how do you keep the peace opposite dictatorships? Because, unlike democracies, dictators naturally tend toward aggression. That's how they get to be dictators over their own people. And if they practice aggression against their own people, what is to prevent them from practicing aggression against their neighbors?" He said, "Internally, nothing. There is no break on aggression, because there is no electorate."
And so Kant said that the only thing that will prevent a dictatorship from going to war is external deterrence, something that he called the "league of free nations." Now, you notice he didn't use the word "united nations." That would mean an amalgamation of dictatorships and democracies. He had no illusions about that. He was right on that, too.
PRIME MINISTER NETANYAHU: He said you need a league of free nations to deter aggression, or roll it back in case deterrence failed.
Now, this parsing of the two kinds of peace in the mind's eye of this brilliant man, who I think never left his home town of Konigsberg, but he could see, before the rise of Napoleon, before the rise of Hitler and Stalin and the Ayatollahs and the Qaddafis and the Saddams of the world, he could see this most important principle of the makings of peace, that you have to make this distinction between democracies and dictatorships. Pretty easy, right? It wasn't that easy.
Because in the first half of the 20th century, nobody, or practically nobody, made that distinction. And in the face of the growing power of the dictatorship of Nazi Germany, what did the democracies do? They practiced the wrong kind of peace. Instead of building up their deterrent power, instead of strengthening themselves, they weakened themselves, and weakened themselves, and still weakened themselves. And what did they get? Not peace. They got the most catastrophic war in history, and something that of course caused the greatest catastrophe for my own people. That did not produce peace.
Equally I can say that in the second half of the 20th century, the democracies learned their lesson and, faced with a far greater dictatorship than Nazi Germany how can you compare the ballistic missiles, tipped with nuclear weapons of the Soviet Union to the power of Nazi Germany? It's infinitely greater. So, faced with a much more powerful dictatorship, in the form of the Soviet Union, the democracies practiced the right kind of peace.
In fact, they did exactly what Immanuel Kant said. They built a league of free nations to contain Soviet aggression. We call it NATO. And what they got was half a century of a cold peace. Call it the Cold War; I call it the cold peace. Now, a cold peace is not that comfortable, but it's a hell of a lot better than a hot war.
PRIME MINISTER NETANYAHU: Now, here's our problem in the Middle East. In a very large radius, Israel is the only democracy. So, the kind of peace we can make with our neighbors is a peace of the second kind, a peace opposite dictatorships. And that is predicated on Israel's strength in deterrence. So, if one of our neighbors comes to us as the late president of Syria, Hafez AlAssad, came to me, and he said, "I will sign a peace treaty with you. I will negotiate the Golan Heights with you, if you give me the Golan Heights in advance of the negotiations and get down to the water's level."
PRIME MINISTER NETANYAHU: That's the way we negotiate in the Middle East. And the answer to that is: No. The answer is no.
PRIME MINISTER NETANYAHU: And apart from any other reason, the answer is "No," because if you get down from the Golan Heights, you cannot defend the peace. There is nothing to stop Syria from tearing up that piece of paper. And you would have Syrian tanks in the Galilee within short order. And the same way, when Yasser Arafat came to me and he said, "I will sign a peace treaty with you, providing you go back to the '67 lines and cut half of Jerusalem." And the answer is "No." "No."
PRIME MINISTER NETANYAHU: And apart from anything else and there's a lot of "else," especially Jerusalem, but in other parts of our ancient homeland apart from anything else, you do not go back to those lines, because they are indefensible. And if you cannot defend the peace, don't sign it. Don't do it.
This is the kind of principle that should guide any nation facing undemocratic neighbors in a situation of conflict. It guided most of the governments of Israel. I think it guided virtually all of the governments of Israel, both Labour and Likud alike, until recently.
And here came a different approach. The approach up to that point was the approach I had; namely, you maintain your security, you maintain your territorial buffers and defenses, and you insist that the other side carry out their part of the deal. This was presented in some quarters as an obstacle to peace. In fact, I was the obstacle to peace. If you remove the obstacle, you'll get peace.
Well, they removed the obstacle. They brought in a new government. How shall I say this? I'll use the "A" word. A very "accommodating" government, which chose a policy of accommodation. David Tremble, there's a British word, an English word, for that from Britain, but I will not use it tonight. An accommodationist government. And the result, of course, was that in the face of farreaching concessions that were offered again and again, what we got was a wave of violence. And in the face of this violence, they got more concessions offered. And we got still greater violence. And in fact what ensued was the collapse of Israel's deterrence, or the erosion of Israel's deterrence, and we got still more violence. So, that failed.
The message you got from the Israeli electorate just a few days ago was, "We want to restore the policy of strength and deterrence. That's the only way that we can have peace. Only a strong Israel can give peace."
PRIME MINISTER NETANYAHU: Part of the restoration of Israeli strength and deterrence is the relationship with the United States. And I'm very encouraged by what I hear in this city, in this new administration. I think there is a much more sober understanding and appreciation of the Middle East as it really is. I think there is an understanding that the key to peace in our part of the world is strength. This is the same understanding that guided Ronald Reagan, when he understood that the key to peace with the Soviet Union is American strength. And, in fact, it is exactly a parallel situation.
The only way that we can secure a stable Middle East is to strengthen Israel, and to strengthen the American/Israeli relationship. And to have, as so many of you have told me in the brief meetings that we had, to have the United States approach Israel not as another element in the Middle East, but as a democratic ally, as a real ally, as the only true, lasting and enduring ally of the United States, and vice versa in this area.
PRIME MINISTER NETANYAHU: This is not to preclude other relationships that the United States has in the Middle East. But it is to say that the relationship, based on shared values, shared interests, the shared conception of freedom, is the most powerful bond between our nations. It is not merely a moral bond; it is also a utilitarian value, because it stops aggression. And what we need before we can have peace is the absence of war. A strong alliance between Israel and the United States is the best guarantor of security and, hence, of peace in the Middle East. There is no better guarantee.
Now, having said that, I think that we are now moving into a new area, which has both great opportunities and great risks. The opportunities are there because I think many recognize now around the world that the key to prosperity is freedom and the key peace is security. People recognize that.
And I think there is now a growing receptivity to these ideas that have guided the United States, and certainly have guided this movement in the United States. They are spreading around the world. But there is a race today between the ideas of freedom and the forces of fanaticism. And it's not clear who will win out.
The forces of fanaticism that are the most powerful and the most dangerous to our world and to our common values are the forces of Islamic fundamentalism. They possess at least one sovereign state, in the form of Iran, and there are other affiliate fanaticisms that now govern Iraq. And these nations, these countries, are seeking to arm themselves with ballistic missiles that are tipped with both chemical and biological warheads and, if they can have their way, within a decade or half a decade, with atomic weapons. We will enter a different world if, for the first time in history, such regimes will have atomic weapons. This is an enormous threat to all of us.
I can tell you that simultaneously there is another process that is taking place. I know that because, well, having argued for free markets so vigorously and having worked with them, a year and a half ago, I found myself out a job, so I had to get a job in the marketplace. And I started working with Israeli technological firms and got acquainted with this enormous revolution that is taking place. It is the information revolution that is beginning to collapse the totalitarian regimes of our time. This is the first real change that is producing not only economic changes, not only social changes, but enormously important political changes. Because up to now, technology has really been at the service of dictatorships.
The greatest service that dictatorships have received in the 20th century was this thing, the microphone. And the microphone would give a single dictator the ability to control the minds and hearts of millions of people, to tell them who is the enemy, who are the wellpoisoners of the earth, who are the cancer that has to be excised. That's how Israel was referred to in the Middle East. That's how the Jewish people were referred to in the heart of Europe by the Nazis. And they did the same to other peoples, as well. It is the power of the microphone, the power of mass communications, controlled from above, that was the greatest threat to freedom in the 20th century.
[End Tape 1B. Begin Tape 2A.]
PRIME MINISTER NETANYAHU: We are witnessing the breakup of that monolithic control. Because you now have, or very soon will have, millions of people, tens of millions, hundreds of millions of people, ultimately billions of people, who can access networks of information and communication from below, who can become their own broadcasters, or narrowcasters. And that is fundamentally eroding the power of dictatorships.
Some of them understand that and are beginning to adjust to it. China now has 50 million Internet users. Three million of those now have access to uncontrolled Internet. When that number reaches a hundred, and when the uncontrolled part reaches 10 million or 15 million, it's a different China. It will not become the United States or Israel. But it will no longer be the completely totalitarian and controlled society that it is today. And that's good news for you and it's good news for everyone. It's good news for the Chinese, by the way.
PRIME MINISTER NETANYAHU: If you want to see where that is also changing, it is changing in Iran. Iran has 200,000 satellite dishes and Internet use. I once spoke to the head of the CIA, and I said: Look, if you want to encourage a change of regime in Iran, forget about all this standard CIA stuff. All you need are these bigger transponders to beam forth "Beverly Hills 20050" and "Melrose Place," and all that other I don't want to say junk, but stuff. Which obviously has problems when it's beamed to our children, but, you know, it's a much bigger problem with it's beamed to theirs.
PRIME MINISTER NETANYAHU: Because the young people in Iran see these very nice houses and these nice cars and these swimming pools and they say, "We'd like to have that, too." And this is causing this enormous tension between this totalitarian Ayatollah regime and the forces of reform.
I believe that this change is inevitable. I believe that the march of freedom is wedded to this collapse of technological control, of broadcasting control, and that is a very important piece of news.
In 1979, I organized a conference in my brother's memory, on terrorism. And I wanted to show the connection between terrorism and totalitarianism. I invited to Israel somebody who knew something about totalitarianism. His name is Vladimir Bukovsky. After Solzhenitsyn and Sakharov, Bukovsky was the third best known dissident in the Soviet Union. He had uncovered the use of the psychiatric wards as instruments of the subjugation of the state. And he had been released from a Soviet prison just a few months before that.
He came to Jerusalem, and he told me, he said, "Benjamin, 10 years from now there won't be a Soviet Union." And I said, "Vladimir, you spent too much time in those psychiatric wards."
PRIME MINISTER NETANYAHU: And he said, "You don't understand. You see, in this monolithic totalitarian society, the minute the cracks are propagating and people have information, they have samizdad, they have these texts that are replicated on copying machines and circulated. We have foreign broadcasters we can hear. The minute those cracks propagate, it's just a question of time before the entire structure, the entire scaffolding of a police state, collapses." And he was right on the button.
So, I'm telling you today, right now, that all those regimes outside the Middle East and inside the Middle East their time, as presently constructed, is running out. And they're going to have to modify themselves or collapse. One of those two things will happen.
Now, I grant you, it's not going to happen overnight. I grant you, too, that in the Middle East it'll happen last. And they're going to try to build dams and walls to prevent that from happening. But ultimately I think it's likely to happen. But the race now is on. What will happen first?
Will the change, the reformation of those regimes, the more democratized or less dictatorial version of these regimes, come into being, or will these regimes acquire the weapons of mass destruction that could prolong their life and increase the danger to all of us? That is an open question. It's not clear what will happen first.
But it is clear to me that we have to make every effort to do two things. The first thing is to understand in which era we live. Until that day happens, we have to make sure that our policies are based on deterrence and standing up to aggression. What happened today in Iraq is a perfect example of the right policy that has to pursued. Make no allowances for them.
PRIME MINISTER NETANYAHU: The second thing we have to be sure of is that we do everything in our power, in the time we have available, to defend ourselves. It is wise I would say it is absolutely necessary for the United States and its allies, especially Israel but anyone who can contribute, to build a missile defense shield
PRIME MINISTER NETANYAHU: Because one of the things that we want to make sure is that we can protect ourselves. We cannot rely solely on deterrence, because the proclivity for risk, the nature of these regimes that are singleman regimes, what they consider to be deterrents may not be what we consider to be deterrents. They're ultimately concerned first about themselves, about their family, maybe about their tribe.
They could be less concerned about damage done to their populations, to their countries. And therefore we have to ensure that in addition to deterrence we have ballistic missile defense. It is something I strongly support. I have spoken out about it when I was Prime Minister, and I speak out for it everywhere I go, including in Russia recently, when I met President Putin. Everywhere I go. I think this is important.
By the way, I think it's important for every country, including Russia, to protect itself against these rogue regimes. We must do what we can in the time we have available.
I believe that these principles of securing our common defenses, of ensuring the progression of free markets everywhere, can better mankind. But I would be remiss if I would not say that these ideas would not have a chance, would not stand a chance, without the great, enormous historic contribution of the people and governments of the United States of America. I think that the United States has made all the difference in the world.
If the United States had been the world power, the leading world power, in the first half of the 20th century, the terrible tragedies that ensued there probably could have been avoided. It is the emergence of the United States, and the force of the ideas of freedom that guide it, that have made the difference in the course of common history, our common history.
Because in the second half of the 20th century, the United States chose to heed the words of a great American commander from World War II, General Omar Bradley. I think he said in 1948, "It's time we chose to steer by the lights of the stars and not the lights of each passing ship." And the star that guided the United States of America has been the star of liberty.
And I think the United States of America has been an enormous force for good. It has rolled back the tide of totalitarianism. It has fought terrorism, alongside my country. It has championed sister democracies, like Israel. It has made now a world possible that would not have been conceivable in the imaginations of our parents and grandparents. There is now the dream of security and peace and prosperity available to all mankind. It is not an impossible dream. It is possible. It is possible because the right ideas and the right country came forth and spread everywhere.
So, I've come here tonight as a citizen of the world, of the free world, of a free society, as an Israeli and as a Jew, to say a very simple message to all of you: Thank you. Thank you, America. Thank you very much.
(End of Prime Minister Netanyahu's remarks.)