Gaza has not prospered during the Israeli blockade, but Hamas certainly has.

In the wake of Israel's botched attack on a Turkish ship bringing relief to Gazans from Israel's (and Egypt's) economic blockade of Gaza, the Israelis have responded to intensely negative world opinion by relaxing the blockade. That move may help Israel as much as Gazans. Ending the counterproductive economic embargo and blockade would help both parties even more.

Israel is now letting more goods flow into Gaza, but the blockade was surprisingly porous to begin with. When economic sanctions (prohibitions on imports, exports, financial transactions, or movements of people) are imposed, the economic pain often dissipates over time because prices get bid up, thus creating big profits for smuggling. However, when such sanctions are enforced physically with a naval blockade and border closings (a land blockade), one would expect less attenuation of pain over time.

Yet even when the full Israeli and Egyptian blockade — imposed in 2007 to cause pain among the Gazan population to prompt them to turn against their government, run by the militant group Hamas — was enforced, many goods were still available in Gaza. They were somehow brought surreptitiously across borders or sent through underground smuggling tunnels across the Gazan-Egyptian frontier. Where there is a profit-induced will, there is a way.

That doesn't mean the embargo and blockade had no economic and political effects. But these effects may have actually hurt Israel, as well as Gazans. Overall, the blockade helped Hamas, the precise target of the Israeli policy. Surprisingly, Hamas isn't that well liked in Gaza, but people anywhere tend to rally around their government when they are under military or economic attack. What is called the "rally around the flag effect" also occurred in the United States after 9/11, when George W. Bush, who was shortly before elected with only a minority of the popular vote, benefited from soaring approval ratings. If we define terrorism as coercion designed to harm innocent civilians to pressure their government to change policy, then Israel's attempt to economically strangle Gaza is economic terrorism. Gazans resent the attempt at strangulation and provide greater support to Hamas. What pain sanctions and blockade have inflicted on Gazans has further radicalized them against Israel.

Furthermore, the blockade has made Gazan imports more expensive and exports more difficult — Israel refuses to relax the export ban by making the dubious claim that its security would be eroded by Gaza's increased export revenues — thus snuffing out legitimate businesses in Gaza and undermining the above-ground local economy. Because of commercial relationships at home and abroad, business people tend to be less militant than Hamas. In addition, Gazans are no longer allowed to work in Israel, requiring Israel to pay higher costs to import workers from other nations abroad.

Lastly, Hamas profits directly by involvement in or taxation of smuggling. This counterproductive situation follows a rich tradition for heinous regimes under sanction — for example, Iraq's Saddam Hussein and his gang made out like the bandits they were during multilateral sanctions before and after the first Gulf War.

The grinding, comprehensive multilateral sanctions against Saddam — like the embargo and blockade of Gaza — are litmus tests for the political effects of sanctions. The sanctions against the Iraqi regime were the most severe in history, and the blockade by two powerful nations that completely surround the Gazans' small area of land had the potential to be economically devastating. And in both cases, substantial economic pain was initially inflicted but dissipated over time. Yet Saddam did not remove his troops from Kuwait and survived subsequent severe international economic pressure after the first Gulf War. Similarly, Gaza has not prospered during the Israeli blockade, but Hamas certainly has.

As the United States should do with its ridiculously counterproductive embargo against Fidel Castro's Cuba — which has used the U.S. sanctions as an external threat to win internal support and blame all of the island's economic problems on the United States — Israel should dismantle all aspects of its counterproductive blockade, not just relax a ban on imports. Increased commerce among Gazans and among Gaza, Israel, and the world would undermine the Islamic radicalism on which Hamas prospers.

Republished with permission from the Independent Institute.