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A newly leaked U.S. Embassy cable provides a startling revelation, not so much of the extremist anti-Israel views of one high-ranking New Israel Fund official, but of how money supposedly raised for good deeds pays for full-time radical activists and finances the Israeli political far left.
And this introduced the complex story of an Israeli social protest movement torn between trying to solve real problems with very specific reforms and seeking to bring down the government and transform Israel into a version of an economically faltering European welfare state.
As a result of the Palestinian leadership’s refusal to make peace, the 1990s peace process failure, and the violent 2000-2005 intifada, the Israeli left largely disintegrated or moved towards the center. Suddenly, however, the left has revived in recent months by shifting focus from failed proposals for massive concessions to the Palestinians to protests about Israeli housing and other prices. In this context, Israel’s social protest movement has nothing to do with the “Arab Spring,” and everything to do with trends in Europe and North America.
Of course, many Israelis face real problems with the gap between wages and living costs. Almost everyone I meet – including those on the right – sympathize with the protest even if they have doubts about its leaders and demands. They also all know a long list of factors making Israel different from Europe or North America.
Most understand that Israel has prospered because of jettisoning once-useful but now burdensome socialist features. A few years ago Finance Minister Benjamin Netanyahu became a hero even to many on the left for successful privatization reforms. More recently, the very economic decisions tending to make prices higher and keep wages lower also kept down unemployment, debt, and inflation.
Today’s problems that have motivated protests are a combination of remaining socialist practices, the peculiarities of Israel’s social structure, and the country’s security situation. They have nothing much to do with capitalism or class conflict. And they could be reduced by some relatively simple measures.
The most criticized institutions are socialist-based: like the dairy monopoly, and the idea that the state should control land. The religious sector, rather than favoring Tea Parties and government spending cuts, tends to be the biggest per capita welfare recipient. Supermarket prices are high due to the country’s small market, protectionism, and kashrut standards. Israel’s health system, which some call “socialized medicine,” functions pretty well. There are no big landlords; trade unions aren’t important factors. Taxes are high and security issues – most recently the need to rebuild defenses on the border with Egypt – eat up money that might otherwise be used for social welfare.
Despite all these things, living standards have risen steadily over the years, but maintaining them is stressful for people who often depend on a revolving line of credit from their banks (the overdraft) which they pay off with every month’s paycheck.
To demand the dairy monopoly be broken up to allow competition or that new land beyond the suburbs be opened up for building low-cost housing can succeed. To demand that capitalism be overthrown (in a country that isn’t wildly capitalistic to begin with), that banks provide loans to people who can’t pay them back to buy apartments in expensive urban areas, or that the government go into debt to expand entitlements will not.
Now let’s consider how a recently revealed February 2010 cable from the U.S. Embassy of a conversation with Hedva Radovanitz, then associate director of the New Israel Fund (NIF) in Israel, fits into this picture.
