Social Protests in Israel: Pay Attention

The social protests in Israel are worth noting. The Cottage Cheese Revolution led to a drop in cottage cheese prices as the manufacturers backed down. Israeli medical residents and interns are protesting a new labor agreement. The perceived lack of affordable housing has led to tent cities and other actions. (I briefly posted on real estate prices here)

For me, these events raise questions (I have few answers):

1.  Did the wave of regional protest against dictatorship influence these Israeli movements? Are Arab and Israeli domestic protests caused by the same underlying motivation? (OK, a stretch, but sometimes it is good to stretch)

2. Israel’s dramatic shift from a socialist-oriented economy with significant state ownership of industry to a high-tech, globalized, capitalist economy may have come with some costs such as a) growing income and wealth inequity or b) declining tax revenue to support education and social welfare programs or c) over-concentration of industry in too few hands (crony capitalism)? Are today’s protests the result of Israel’s economic changes of the last 25 years? Ari Shavit (Ha’aretz) thinks so:

The new economic and social regime it established was based on two supreme principles: maximum competition below, minimum competition on top. Low wages for the worker, high profits for the mogul. No loans for the salaried worker, astronomical loans for the tycoon. A war to the death with the unions. Empowerment of the cartels. Duopolies and monopolies. Thus, the state soon became a robber state. The new Israeli capitalism was not popular capitalism or liberal capitalism, but swinish capitalism. It tyrannized the working class, annihilated the middle class and denied young people hope.

Shavit wants a new social order that combines “economic prosperity with mutual responsibility.” (Or see Yair Lapid’s op-ed)

So ignoring question #4 below, what is happening in Israel may be what many capitalist countries face today: what is the balance between individual enrichment and societal equity (and social needs)? Of course, in Israel you have other factors as well such as heavy defense spending (like the US) and a socialist flavor from the past that might make current inequities seem that much more out of line (unlike the US).

3. One Israeli told me that the cottage cheese revolution broke a psychological barrier. For the first time, Israeli consumers prevailed. She predicted it was the start of a wave on the basis of a new sense of empowerment. Will she be proven correct?

4. Could these domestic, Israeli events have unintended political implications for Israel’s external affairs, especially on the Israeli-Palestinian track? (or: Gideon Levy of Ha’aretz noted/complained that the energy invested in fighting cottage cheese prices would have been better directed toward addressing the conflict and diplomacy.)

Food for thought.

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3 Comments to “Social Protests in Israel: Pay Attention”

  1. Gideon Levy always complains that whatever energy is being spent is being spent on something other than lavishing the Palestinians.

    On the upside, I really look forward to seeing these protests succeed. Israel remains, at least partially, a socialist country, and I’m excited to see Israeli protest movements push forward into new economic realms.

  2. Interesting that in the last few months, American voters once again seem unwilling to demonize the rich and push back on any attempts to raise taxes on the wealthiest 1% of Americans – all in the name of pro-growth, pro-business principles. It’s hard to imagine any other country, never mind Israel, allowing such a range of policies to exist WITHOUT widespread protest!

    Eli claims Israel is still partially a socialist country. Do you think that’s true, Jeremy? It certainly flies in the face of the “Start-Up Nation” culture I’m familiar with in the entrepreneurial, high-tech sector.

  3. As I think about this more, I wonder if we would need some common definition of socialism. How much state ownership of land or industry counts as socialist? For example, Israel has high state ownership of land that, arguably, persists for non-economic ideological reasons. Israel has nearly universal health care but private providers have grown as well. How do we count that?

    As a friend noted, over the last century, capitalism has been modified to include social welfare provisions across many countries, so the line between “pure” capitalism and “pure” socialism has been blurred. (As an aside, I think that is how capitalist leaning-systems blunted the appeal of East bloc solutions, whether by intent or not).

    Perhaps Eli would like to mention specific aspects.

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