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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

How Lebanon—and Hizballah—Conned and Humiliated Rex Tillerson

Feb. 21 2018

Last Thursday, the American secretary of state arrived in Beirut to express Washington’s continued support for the country’s government, which is now entirely aligned with Hizballah. His visit came shortly after Israel’s showdown with Hizballah’s Iranian protectors in Syria and amid repeated warnings from Jerusalem about the terrorist organization’s growing threat to Israeli security. To Tony Badran, Tillerson’s pronouncements regarding Lebanon have demonstrated the incoherence of the Trump administration’s policy:

[In Beirut], Tillerson was made to sit alone in a room with no American flag in sight and wait—as photographers took pictures and video—before Hizballah’s chief allies in Lebanon’s government, President Michel Aoun and his son-in-law the foreign minister, finally came out to greet him. Images of the U.S. secretary of state fidgeting in front of an empty chair were then broadcast across the Middle East to symbolize American impotence at a fateful moment for the region. . . .

Prior to heading to Beirut, Tillerson gave an interview to the American Arabic-language station al-Hurra, in which he emphasized that Hizballah was a terrorist organization, and that the United States expected cooperation from the “Lebanon government to deal very clearly and firmly with those activities undertaken by Lebanese Hizballah that are unacceptable to the rest of the world.” . . . But then, while in Jordan, Tillerson undermined any potential hints of firmness by reading from an entirely different script—one that encapsulates the confused nonsense that is U.S. Lebanon policy. Hizballah is “influenced by Iran,” Tillerson said. But, he added, “We also have to acknowledge the reality that they also are part of the political process in Lebanon”—which apparently makes being “influenced by Iran” and being a terrorist group OK. . . .

The reality on the ground in Lebanon, [however], is [that] Hizballah is not only a part of the Lebanese government, it controls it—along with all of the country’s illustrious “institutions,” including the Lebanese Armed Forces. . . .

[Meanwhile], Israel’s tactical Syria-focused approach to the growing threat on its borders has kept the peace so far, but it has come at a cost. For one thing, it does not address the broader strategic factor of Iran’s growing position in Syria, and it leaves Iran’s other regional headquarters in Lebanon untouched. Also, it sets a pace that is more suitable to Iran’s interests. The Iranians can absorb tactical strikes so long as they are able to consolidate their strategic position in Syria and Lebanon. Not only have the Iranians been able to fly a drone into Israel but also their allies and assets have made gains on the ground near the northern Golan and in Mount Hermon. As Iran’s position strengthens, and as Israel’s military and political hand weakens, the Israelis will soon be left with little choice other than to launch a devastating war.

To avoid that outcome, the United States needs to adjust its policy—and fast. Rather than leaving Israel to navigate around the Russians and go after Iran’s assets in Syria and Lebanon on its own, it should endorse Israel’s red lines regarding Iran in Syria, and amplify its campaign against Iranian assets. In addition, it should revise its Lebanon policy and end its investment in the Hizballah-controlled order there.

Read more at Tablet

More about: Hizballah, Israeli Security, Lebanon, Politics & Current Affairs, Rex Tillerson, U.S. Foreign policy