A common argument by critics of Israel in its conflict with Hamas is that Palestinians wouldn't have to resort to terror if they didn't feel isolated and economically beleaguered in Gaza. This ignores that Palestinians on the West Bank have enjoyed generous foreign aid and a period of strong economic growth. More important, this ignores that Hamas pours whatever money it has into what is essentially a terror economy.

Consider the network of tunnels, whose number and expanse are the big surprises of this latest Gaza war. These are not the tunnels scratched out of dirt by hand a la Charles Bronson in "The Great Escape."

These are large and sophisticated passageways that sometimes run for miles and are often more than 60-feet down to escape seismic detection. They are reinforced by concrete and some are large enough for vehicles. Their purpose is to hide and transport weapons, as well as to infiltrate men into Israel to grab hostages or murder civilians.

The economic point is that building these tunnels and smuggling thousands of missiles takes money—lots of it. If Hamas cared about the well-being of its citizens, it would use that money to build schools and public works or invest in businesses. Instead, Hamas devotes its scarce resources to building a terror economy of tunnels and rockets and sending its young men to die in suicide raids. That is why Gaza is impoverished.