You know a country is in trouble when it blames shark attacks on the Mossad.

Following the New Year's Eve massacre of a score of Coptic Christian worshippers outside a church in Alexandria, Egyptians are wasting no time fingering the likely culprit. "With careful consideration," observes commentator Ammar Ali Hassan in the independent daily Al-Masry Al-Youm, "the incident could lead to other interpretations, especially the application of the Zionist conspiracy against national unity in Egypt."

Going one better, Essam El-Irian, a senior member of the Muslim Brotherhood, says that while he believes "the Israeli Mossad was behind the incident," he won't rule out the possibility that al Qaeda itself may now be under Israeli operational control. And in a bid for Christian-Muslim unity, Gamal Assad, a Christian member of Egypt's parliament, accuses the perpetrators of "carrying out a Zionist scheme aimed at fragmenting the Arab region as a whole."

All of which leads to the depressing conclusion that Egypt, the country that forged a brilliant path to peace with Israel 31 years ago, is becoming something worse than an anti-Semitic cesspool. It is turning itself into a nation of political imbeciles. In a 1962 lecture, the philosopher Leo Strauss noted that "The fact that anti-Semitism is the socialism of fools is an argument not against, but for, anti-Semitism; given the fact that there is such an abundance of fools, why should one not steal that very profitable thunder?" Strauss's point was that anti-Semitism is a handy instrument in the tyrant's tool kit, particularly for deflecting primitive hatreds that might otherwise be directed squarely at him.

But Strauss was also quick to point out that the success of anti-Semitism as a political strategy depended on the leadership not becoming, as the Nazis were, true believers in the hatreds they so freely sowed. Just imagine how history might have turned out if Hitler hadn't sent the cream of European science—Jüdische Physik—packing for the labs at Los Alamos.

Egypt's current leaders don't partake in their subjects' obsessions: They're too smart, and Israel is too valuable a partner against common enemies in Gaza, Tehran and the Bekaa Valley. And they remain strategically and economically bound to an America whose sole demand is a nominal peace with Israel.

But even if Egypt's leaders don't believe the preposterous anti-Israel and anti-Semitic conspiracy theories that circulate in their streets and newspapers, they are increasingly becoming prisoners of those theories. It's a trap with two sides: On the one hand, the regime understands that hatred of Israel remains the string that binds an unhappy and increasingly fractious country together, and it has been perfectly happy to allow an otherwise censored media free rein in this department. On the other, the regime has to pay the increasingly steep political price of allying itself with Israel, as it essentially did in the 2006 war in Lebanon and the 2009 war in Gaza.

For Egypt's rulers, this means they must deal with charges of hypocrisy, to which they can only respond with double-speak, denial and, as long as they have the means and the will to mete it, repression. For the West, it means an Egypt that resembles nothing so much as Iran in the waning days of the Shah, in which a comparatively moderate regime led by a sickly despot confronts a restive and radical public. As for Egyptians themselves, it means the world they inhabit, intellectually speaking, has become almost medieval in its outlook and therefore in its possibilities.

Why do the Arab states lag so far behind the rest of the world, including Muslim states such as Indonesia, when it comes to most measures of social, economic and political development? Several comprehensive studies, including the U.N.'s Arab Human Development Report, have offered a variety of explanations, ranging from demographic pressures to the absence of representative government. But the ultimate source of Arab backwardness, unmentioned by most of these studies, lies in the debasement of the Arab mind. When the only diagnosis Egyptians can offer for their various predicaments—ranging from sectarian terrorism to a recent spate of freak shark attacks at a Sinai beach resort—is that it's all a Zionist plot, you know that the country is in very deep trouble.

Is there a way out? George W. Bush thought he had an answer with the freedom agenda, and Barack Obama thinks he has one in what might be called the respect agenda. But freedom and respect for what? Egyptians will enjoy neither until they develop and adopt a set of political ideas that rests on something more than obscurantism, conspiracy and a zero-sum struggle for power.

In a word, Egyptians need liberalism (of the old-fashioned kind), which begins not with a vote but with an education. Distributing an Arabic translation of the complete works of John Locke, starting with his "Letter Concerning Toleration," would be a good place to begin undoing the damage so cruelly done in Alexandria. WSJ . Write to bstephens@wsj.com