Dr. Clam said...

Unionists are the wrong metaphor; you can't just shut out all the Unionists and employ Sandor Kovatses cloned from skin scrapings, while Israel can just shut out all the Palestinians and employ Filipinos.

I was casting about for the right example of disengagement, and it was staring me in the face all the time: Korea. Sure, there is a long-term penalty incurred by the lack of labour mobility, but that is made up for by the fact that South Korea can get on with life without being shot at. North Korea is not a significant threat to day to day life in South Korea, even though it is ruled by a lunatic and has no economy, becuase there is a big fence down the middle with thousands of soldiers guarding it. South Korea can make up its shortages of unskilled labour from Southeast Asia, just like Israel, and wait for generational change to solve a problem that would only be inflamed if the borders were porous.

One point at a time: First of all, I can shut out unionists and employ Fijians as easily as can Israel (In fact, that is the path our competitors have gone down - albeit by sending stuff to Fiji) as part of the fight against them. My point is that although this looks like a single-edged sword, it isn't. Plus, using the Korean analogy kind of makes my point for me anyway. Even a 100% complete barrier between Israel and Palestine as in Korea would just store up the problems for future generations to resolve. I would argue that the threats to South Korea now are much more dangerous, they have a lot more to lose, and North Korea even seems to have the means to make it happen, while South Korea no longer has the means to stop it happening.
Another point is that Israel would be more like East and west Germany, with Jerusalem having a huge impenetrable wall like Berlin did. I suspect this part is at least a few elections (and talks) away if it is feasible at all. The path of least resistance seems to be a two state solution with a land for peace deal being part of it. I would guess that a wall or fence would cement some of the borders as facts on the ground. It doesn't particularly go against this "path", but various facts, such as terrorism always attacking the weakest security points, palestinians being free to travel to neighbouring arab countries (where North Koreans were not free to travel through China), places such as Phillipines having terrorists as well - all mean that these security "victories" have very dubious connections with reality.
Yet another point is that by implication, you could also say that complete import restrictions against one country only would not hurt Australia if we are freely trading with a host of other countries. Clearly, any country allied to the country we have restricted would feel empowered to do the same to us. Also, completely separate countries might start to think that it is a good Idea and would follow our example with countries they hate. A single action against the movement of goods or labour has this kind of repercussion.