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.”

Read more at Bloomberg

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

 

Hizballah Is Learning Israel’s Weak Spots

On Tuesday, a Hizballah drone attack injured three people in northern Israel. The next day, another attack, targeting an IDF base, injured eighteen people, six of them seriously, in Arab al-Amshe, also in the north. This second attack involved the simultaneous use of drones carrying explosives and guided antitank missiles. In both cases, the defensive systems that performed so successfully last weekend failed to stop the drones and missiles. Ron Ben-Yishai has a straightforward explanation as to why: the Lebanon-backed terrorist group is getting better at evading Israel defenses. He explains the three basis systems used to pilot these unmanned aircraft, and their practical effects:

These systems allow drones to act similarly to fighter jets, using “dead zones”—areas not visible to radar or other optical detection—to approach targets. They fly low initially, then ascend just before crashing and detonating on the target. The terrain of southern Lebanon is particularly conducive to such attacks.

But this requires skills that the terror group has honed over months of fighting against Israel. The latest attacks involved a large drone capable of carrying over 50 kg (110 lbs.) of explosives. The terrorists have likely analyzed Israel’s alert and interception systems, recognizing that shooting down their drones requires early detection to allow sufficient time for launching interceptors.

The IDF tries to detect any incoming drones on its radar, as it had done prior to the war. Despite Hizballah’s learning curve, the IDF’s technological edge offers an advantage. However, the military must recognize that any measure it takes is quickly observed and analyzed, and even the most effective defenses can be incomplete. The terrain near the Lebanon-Israel border continues to pose a challenge, necessitating technological solutions and significant financial investment.

Read more at Ynet

More about: Hizballah, Iron Dome, Israeli Security