Israel’s Capitalist Revolution

With the anniversary of the Six-Day War upon us, it is easy to forget the anniversary of another event nearly as important in the history of the Jewish state. On May 14, 1977, Menachem Begin led the Likud party to its first national electoral victory, defeating Labor (then known as Mapai), which had reigned uninterrupted since 1948. Zev Chafets explains how Begin put the country on the path to becoming the economic powerhouse it is now:

Perhaps the worst accusation [his political opponents] leveled against Begin was that he was a capitalist. That was a bit ironic for a man who was born broke and stayed that way all his life. Even as prime minister, Begin bought his suits on an installment plan.

From Israel’s founding until the 1977 vote, Mapai or its affiliated Histadrut labor organization tightly controlled most of the country’s agriculture and industry, health care and social welfare, infrastructure and development, education, housing, and radio. No detail was too small for the socialists: in 1964, the government banned the Beatles on the grounds that they would subvert the morals of Israel’s pioneering youth.

Begin, who had spent an instructive year in a Siberian Soviet gulag during World War II, was skeptical of such power. He had simple instructions for his finance minister, Simḥah Ehrlich: free the economy and make life better for the common people (by which he meant Likud voters).

Ehrlich, who owned a small optics factory in Tel Aviv, was a short, sixtyish man, pink-cheeked, fastidious, and laconic nearly to the point of silence. He . . . was devoid of formal education or economic training. The Israeli media began calling him a follower of Milton Friedman, the free-market guru who had recently won the Nobel for economics. But Ehrlich, who couldn’t read or write English, didn’t know the first thing about Milton Friedman. . . .

Although Ehrlich’s reforms led to what Chafets describes as a “fiasco,” they paved the way for the more successful reforms of the mid-1980s—which saved a cratering Israeli economy—and for the even more sweeping changes of the 1990s, which allowed for the birth of today’s “start-up nation.”

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More about: Capitalism, Israel & Zionism, Israeli economy, Israeli history, Menachem Begin

Palestinian Acceptance of Israel as the Jewish State Must Be a Prerequisite to Further Negotiations

Oct. 19 2018

In 1993, in the early days of the Oslo peace process, the Palestine Liberation Organization (PLO) under Yasir Arafat accepted the “right of the state of Israel to exist in peace and security.” But neither it nor its heir, the Palestinians Authority, has ever accepted Israel’s right to exist as a Jewish state, or the right of the Jewish people to self-determination. Robert Barnidge explains why this distinction matters:

A Jewish state for the Jewish people, after all, was exactly what the [UN] General Assembly intended in November 1947 when it called for the partition of the Palestine Mandate into “the Arab state, the Jewish state, and the city of Jerusalem.”

Although the legitimacy of Israel as a Jewish state does not stand or fall on this resolution—in declaring the independence of Israel on the eve of the Sabbath on May 14, 1948, the Jewish People’s Council, [the precursor to the Israeli government], also stressed the Jewish people’s natural and historic rights—it reaffirms the legitimacy of Jewish national rights in (what was to become) the state of Israel.

The Palestinians have steadfastly refused to recognize Jewish self-determination. [Instead], the PLO [has been] playing a double game. . . . It is not simply that the PLO supported the General Assembly’s determination in 1975, rescinded in 1991, that “Zionism is a form of racism and racial discrimination.” It is that that the PLO leadership continues to speak of Jews as a religious community rather than a people, and of Zionism as a colonial usurper rather than the national liberation movement that it is.

The U.S. government, Barnidge concludes, “should demand that the Palestinians recognize Israel’s right to exist in peace and security as a Jewish state” and refuse to “press Israel to negotiate with the Palestinians unless and until that happens.”

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More about: Israel & Zionism, Peace Process, PLO, US-Israel relations, Yasir Arafat