Thursday, August 4, 2011

The Israeli Summer of 2011: When the Start Up Nation Became the Burned Out Nation

“The work of the righteous is done by others,” or so goes the Jewish saying. Well, I am certainly not righteous (though I have been accused of self-righteousness). There is no need for me to write about the social protests, since good pieces have been written in the last few days by Dimi Reider and Aziz Abu Sarah in the New York Times here and Noam Sheizaf in Middle East Project here (And check out the post by APN’s Lara Friedman here).

I have yet to get to Sderot Rothschild in Tel Aviv – I am planning a trip Sunday evening. On Saturday night I may check out the protest in Jerusalem; last Saturday I heard the chants from my window.

The protests have had high turnouts because they tap into a general feeling of economic malaise in this country, particularly among the secular – as Reider and Abu Sarah put it, the rent is too damn high. And it’s not just the rent. – housing prices are simply unaffordable for all but the rich and the subsidized (more on them later.) The cost of living is ridiculous here; I spend more money buying food in a supermarket in Jerusalem than I do in DC, and I buy there at Whole Foods. Israel has never had a tax revolt – the ethos here is not that of the greedy, selfish rich folks that make up the US Tea Party movement – and taxes are ridiculously high. The middle class is squeezed at the same time that certain sectors of the society – especially haredim and settlers – get huge government subsidies.

The “social justice” protest is about two fundamental economic inequities: the inequity between rich and poor (and rich and middle class), and the inequity between privileged and unprivileged sectors.

Around forty years ago, when I first came to Israel as a student, the major economic inequity was between Ashkenazim and Sefardim. But then, basic food stuffs and social services were available to all. There were significant government subsidies; housing was relatively modest and affordable. Few, except students, rented. This was an Eastern European socialist society, with all the pluses and the minuses. Privatization may have started in the late 1970s, with the ascent of the Likud, but it really went into high gear during the 1990s in a process described by Tom Segev in his Elvis in Jerusalem: Post Zionism and the Americanization of Israel. The Soviet Union had fallen, and so had Eastern European socialism; Rabin was the head of the Labour Party but was known for his American-orientation, and this continued under all subsequent prime ministers. Bibi is taking the heat for neo-liberalism and Thatcherism, and he sounds a lot like an American Republican. But these protests are not about Bibi, or they are not only about Bibi. They are in part a mourning for the passing of the Israeli socialist vision. When once asked about Israel’s greatest achievement, Martin Buber replied, “The Kibbutz.” The 1990s coincided with the privatization and industrialization of the kibbutz movement, now a shadow of its former self. So it is not surprising that a Labour Zionist dinosaur like Shlomo Avineri now lauds the protest movement as representing the true Zionism

But let’s not get carried away by nostalgia. Nobody wants to go back to the bad old days of Israeli socialism, when proteksia, based on your party allegiance, was everything; when you had long waits for government service, strikes all the time, 400% inflation, etc., etc. That was followed by privatization, but the privatization was not competitive; proteksia went from party affiliation to family cartels and monopolies, and the inequity between rich and poor became enormous. In the 2011 OECD survey, “Society at a Glance”, Israel had the second highest income poverty rate in the OECD after Mexico; 39% of Israelis find it difficult or very difficult to live on their current income. And Israelis reported “the 6th lowest positive experiences…in the OECD. At the same time israelis report the most negative experiences – pain, worry, sadness, stress and depression – in the OECD.”

So how does one explain the relative strong economy on the one hand with the social inequities on the other? The answer, I think, is that Israel retained a lot of its government regulation and oversight, smart fiscal policy, which favored the mega-rich and tycoons, and continued massive subsidies of some sectors at the expense of the others, mainly the settlers and the haredim.

This brings us to the second fundamental economic inequity: between sectors of the society. The haredim are a powerful political bloc, and their representatives are in the government coalition. There are massive subsidies to a sector with one of the largest fertility rates and highest unemployment rates in the world. As for the settlers, Lara Friedman’s piece cited above talks about subsidies on the West Bank. It is not just cheap housing; it is cheap everything. One of the reasons why the Gush Katif evacuation was a mess was that there was no way the state could provided the settlers with the standard of living they had been used to – living cheaply on stolen land just has no substitute.

The social justice protests have been, so far, about the first economic inequity not the second. And that is why they have been relatively successful. Everybody recognizes that cartels and monopolies are problems – the neoliberals because they discourage free trade, the socialists because they concentrate wealth in the hands of a few families. So Bibi has his solution; the socialist economists have theirs.

But the second economic inequity is, as Reider and Abu Sarah write, the elephant in the room. Attempts by some ultra-right wing movements to join the protests (“Hey, we need more building in Judea and Samaria”) have been met with scorn. I am surprised that Barukh Marzel knows where Tel Aviv is; he spends much of his time dissing it.

The social justice protests are not about the Occupation; well, they are not just about the Occupation – they are about Israel gaining a vibrant economy and losing its way socially.

And this is where the protests become interesting. For the last two weeks have seen greater delegitimization of Israel in the eyes of its supporters in the West than the last two years of the BDS movement. How will AIPAC and the Israel Campus Coalition spin this? That the protesters are not being shot at, like in Syria? But these are not protests that challenge the Israeli regime – these are protests that are asking for the government to do something.

Israel has been looked on by a lot of people as an economic success story. Look at how well the propaganda piece, Start-Up Nation sold in the US. (And look at the decisive refutation of the book’s hasbara thesis by Yagil Weinberg here). One of my friends challenged me two months ago with the question, “Which economy would you rather have? Israel’s or the US’s.” And he had a point. The housing madness in the US did not have its counterpart in Israel. In the US, people bought and defaulted; here, people can’t afford to buy in the first place. How would you rather die, by fire or by ice?

But my friend posed his question to me before hundreds of thousands took to the streets. Now, Israel will not even be seen as a place where most Jews prosper, much less Arabs. And this is happening when? You guessed it, right before September. Some secularists will blame the settlers and the haredim (and much of new haredi housing is built over the green line); some won’t see the connection, but this social economic malaise weakens Bibi at a critical point. He is no longer the prime minister of the start-up nation; he is the prime minister of the burnt-out nation.

And what is the Knesset doing through all this? Yesterday a bill was introduced in the Knesset that would define Israel as the nation state of the Jewish people, not necessarily democratic, and would demote Arabic from an official to a non-official language. Now that's important, isn't it?

Needless to say, I hope the bill passes. More of that de facto discrimination has to become de jure in order to wake up people.

In short, the social justice protests by Israeli Jews are about social justice for the Israeli Jews. Most of Israel's supporters can care squat about the Arabs, either Palestinians living in Israel or in the Occupied Territories. But now that the narrative has been not peace, and not freedom, but social justice for Jews, those supporters will start looking into why.
More bad publicity. And effective bad publicity, at that.


Anonymous said...

wow, you really do pray for israel to implode...dont ya

you rejoice in the thought

this is a very positive mindset to have during the 9 days

Anonymous said...

Regarding the rhethorical question about which economy you would prefer, I would like to expand on it: What kind of economy would you want Israel to have? I'm not trying to be flippant, or accusing you of 'praying for Israel to implode'; I'm genuinely curious. I have limited knowledge about economics, but it seems like much of the worlds economies have seen -much- better days.

i_like_ike52 said...

A modern version of Lenin's famous pre-Revolution dictum...
"the worse things are, the better things are".
Many Left/"progressive" bloggers are saying and praying for the same thing...once people are angry enough they will somehow decide the "settlers" are at fault and get rid of them once and for all. Of course, many blamed the bloody suicide bomber war on the settlers, but that didn't mobilize the public against them, so I am not sure why this supposedly "social" protest will do the trick.
If the people of Gush Katif were perceived by some as parasites, because they got government subsidies (who doesn't in Israel) how would these same people look at their money being spent to keep various Humanities programs going in the universities, most of which contribute nothing to the economy?

ddapriori said...

"contribute nothing to the economy" reflects a certain view of what is desirable. A more social view would incorporate the social value of humanities courses. It was the failing of the "invisible hand" that it envisioned gain and loss in explicit money terms, rather than a view of the good as being more than the monetary optimal. You are wrong to say "nothing", rather you should say "nothing that I value."