How Economic Liberty Can Gain Political Momentum in Israel

June 3, 2019 | Roger Hertog
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While the Jewish state has a reputation abroad as a conservative country—its voters have kept the Likud party in power since 2009, and there hasn’t been a Labor prime minister since 2001—an actual conservative movement in the country is still little more than nascent. In particular, there is scant ideological support for the free-market policies that have facilitated the country’s economic successes. Roger Hertog explains why this should change, and how it might:

The ideal of economic freedom has had a difficult time establishing itself in Israel. Israel was born as a socialist country, with heavy taxation, heavy regulation, and cartels and controls that continue to this day. The Israeli economy consistently suffers from weak growth in many sectors. . . .

The technology sector accounts for 12 to 15 percent of Israel’s GDP, employing 200,000–300,000 people. Israel has more companies listed on the NASDAQ, most of which are somehow connected to this sector, than any other country in the world except for the United States. But the rest of Israel’s domestic economy, which employs about three million people, has grown more slowly. Why is there such success in one part of the economy and not in the other? . . .

[T]he tech sector is principally export-driven, and its entrepreneurs work without much burdensome government regulation and bureaucracy. But a large portion of Israel’s domestic economy is held back by . . . government oversight, unions, price controls, excessive tax regulation, cartels, and protectionism. As with other countries worldwide, these factors slow growth and impede innovation. . . .

To change this, Israelis must learn from the successes of 20th-century American conservatives, who after World War II built a broad-based movement that included economic freedom as one of its bedrock principles:

If conservatism is to succeed in Israel [as] a political force that can change the economic life of the country, disparate groups. . . will need to see that it is in their interest to come together. Israeli conservatives will need to create a unique synthesis that is right for [their] country—a synthesis embracing all aspects of national life, of which economics is only one. The task at hand is especially difficult because much of the elite intellectual life in Israel is quite unsympathetic to any kind of political conservatism.

On the road to conservative victory, ideas and the promulgation of ideas play a vital part. But to prevail, ideas must manifest themselves in the cultural and political processes that will shape Israel’s destiny. That is the challenge facing conservatism in Israel.

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