A Coaseian Peace Settlement for Israel/Palestine

According to this article, the Netanyahu government is willing to cede 90% of the West Bank to the Palestinians.  The Palestinians are demanding 98.4% plus land swaps.  Eventually, one hopes, a middle ground could be reached, but why not settle things right now?  How about if Israel simply “buys” (without necessarily conceding lack of current ownership) the extra land from the Palestinians?  And not by giving the money to the Palestinian government, but by giving every man, woman, and child in the West Bank $5,000, payable over a five-year period.  The total cost: approximately $10 billion.  Make the offer, and let the Palestinians decide in a referendum whether they’d rather continue the conflict, or would rather have more money than most of them have ever seen (GDP per capita $1,000), plus their own state, plus peace.  I’m sure this sounds simplistic, but it’s about time someone started thinking outside the box.

UPDATE: I’d be just as happy if the Coaseian bargain went the other way, and the Palestinians were able to offer something to the Israelis that would lead the Israelis to accept the Palestinians’ terms.  But if (and it’s a big if) the main sticking point is something less than 10% of the West Bank, surely some sort of creative solution is better than the blood and treasure being spent.

FURTHER UPDATE: Lawprofs Peter Siegelman and Gideon Parmochovsky suggested a similar but more complex arrangement in the L.A. Times in 2002.

This sort of suggestion also raises the question of whether “pro-Palestinian” activists are more concerned with the plight and interests of Palestinians, or more concerned with righting what they consider righting the historical wrong of the existence of Israel.  Norman Finkelstein, of all people, has recently posed this question in rather dramatic fashion, much to the dismay of his comrades in the Palestinian solidarity movement.  (Fwiw, Finkelstein should engage in a bit more self-reflection.  With his consistently venomous rhetoric often verging on anti-Semitism, covered occasionally in prior blog posts (e.g.), perhaps no American has done more to associate the Palestinian cause with visceral hostility to Israel and its American supporters).