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.”

You have 2 free articles left this month

Sign up now for unlimited access

Subscribe Now

Read more at Bloomberg

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

The U.S. Must Maintain the Kurdish Enclave in Eastern Syria

Aug. 16 2018

Presently only two rebel enclaves remain in Syria, and both are dependent on outside powers: one in the northwest, under Turkish control, and an area in the east controlled by the U.S.-backed and Kurdish-led Syrian Democratic Forces (SDF). Only by continuing its support for the latter can America prevent Iranian domination of Syria, writes Jonathan Spyer. Officials in Washington have made various statements suggesting that the White House has no intention of ceding the country to Iran, but haven’t clarified what this means in practice:

Actions . . . are a better guide than sentiments. And it appears that the SDF leaders remain skeptical regarding America’s long-term plans. Last week, the first direct negotiations took place between their representatives and those of the Assad regime, in Damascus.

It is not quite clear where things are heading. But Israel’s interest in this is clear. Maintenance of the east Syrian enclave and the [U.S.] base in Tanf means keeping a substantial physical obstacle to the Iranian hope for a contiguous corridor [connecting it to Lebanon via Syria and Iraq]. It would also prevent an overall Iranian triumph in the war and give the West a place at the table in any substantive political negotiation over Syria’s future. . . .

Specifically, efforts should be made to ensure a formal U.S. declaration of a no-fly zone for regime and regime-allied aircraft east of the Euphrates. This move, reminiscent of the no-fly zone declared over Iraqi Kurdistan after the Gulf War of 1991, would with one stroke ensure the continued viability of the SDF-controlled area. There should also be a formal recognition of the SDF zone, or the “Democratic Federation of Northern Syria,” as it is formally known. This entity is not seeking independence from Damascus, so Western concerns regarding the formal breakup of Syria need not be raised by such a move.

As the strategic contest between Iran and its allies and the U.S. and its allies in the Middle East moves into high gear, it is essential that the West maintain its alliances and investments and behaves, and is seen to behave, as a credible and loyal patron and ally.

You have 1 free article left this month

Sign up now for unlimited access

Subscribe Now

Read more at Jerusalem Institute for Strategic Studies

More about: Iran, Israeli Security, Kurds, Syrian civil war, U.S. Foreign policy