A Capitalist’s Take on the Tent Protests

by Brian on August 4, 2011

in In the News

Tent city in Tel Aviv

I’m not quite sure what to think of the tent protests that have taken over the country in recent weeks. On the one hand, the rising costs that have plagued Israel in recent years have hit our family quite personally. On the other, I remember the days before Israel’s so-called capitalist revolution, and I wouldn’t want to go back there.

There’s no question that Israel is one of the most expensive places in the world to live – and that our salaries are way below other Western countries. Our food costs more, the price at the gas pump is outrageous, and even bus fares (at $1.80 a ride with no transfers until recently) are far beyond the Egged rates of 5 cents back I remember back when I first came to the country. And don’t get me started about the price of imported electronics and automobiles with their import duties of 100%.

The list of financial grievances goes on: healthcare is relatively cheap compared with the U.S., but oy va voy if you need a bed in a hospital or to see a specialist in less than six months. Pre-kindergarten schooling costs a bundle and, once the kids get to first grade, class sizes can jump to 40 kids per teacher unless you can afford to pay for “extras.”

Now add in the rapidly expanding gap between rich and poor, and the shocking number of families who live at or below the poverty level, and you have a social structure that’s entirely untenable, both in the short and long term.

The protests started with the cost of buying a home and how young couples and students were effectively locked out of the big cities. Although we were fortunate enough to buy our apartment before the ridiculous price jumps (although we still have a mortgage that rivals rents), it pains me that – at least now – our kids have no chance of buying near us. I want to be a saba who lives close enough to be “used” as a regular babysitter. And my kids say they love Jerusalem. Why can’t they have the same breaks us old fogies got?

But looking at it from the other side, pre-capitalist, pre-privatized Israel was a much less pleasant place to live. I was here in the mid-1980’s when you had to go to the bank every day to change shekels to dollars and vice versa to beat the seemingly insurmountable inflation. Yes, cottage cheese and felafel were cheaper, but so were our choices.

Moreover, Israel’s economic miracle, so dutifully covered in Saul Singer’s Startup Nation, was made possible in large part due to the drive towards a more free market economy. When everyone makes more or less the same salary, there’s no incentive to innovate. In 1988, there was no startup culture in Israel. Immigrants were told to “settle” for low paying jobs in fields they weren’t trained for nor necessarily had any interest in. Ten years later, if you had an idea for an Internet application, you had to fight off the venture capital money.

OK, I exaggerate a little, but I don’t think the recent flood of immigrants from North America (a flood compared with 20 years ago at least) would have happened when we were essentially a socialist state. You wouldn’t be able to sit in any one of the fashionable cafes that dot our modern landscape (assuming you can afford that latte) or enjoy an authentic Italian gelato, let alone sushi for goodness sake, back in a time when the idea of a cash-back return was a mere bad joke of a future unfulfilled.

It seems, in fact, that much of what the protesters are calling for is a return to the “good old days” of their parents, when life was easy and cheap. Maybe they should ask their folks what it was really like.

Moreover, more social services mean higher taxes, and we’re already topping out at 50% when you include health insurance and social security. It’s a tradeoff – lower daycare costs mean even less take home pay.

The protesters want all their demands met and a revamping of the income tax code, reduction in VAT and a 50% bump in the minimum wage. Sure, I’d like all that too, but where’s the money going to come from? Israel amazingly has almost no national debt – do we really want to go the way of Europe and the U.S.?

Protesting for social justice is popular (“populist,” the cynics say), but the government’s “intransigence” is not illogical nor is Netanyahu off base when he says “the state should stop poverty, but cannot limit success and the pursuit of happiness.”

At the same time, as someone who suffers just as much as the next guy by high prices and a sense that we’ve lost a valued cohesiveness, I too want change.

The Israeli “Spring” is often compared with the uprisings in neighboring countries. I hope we have more success than they did. In Egypt, one autocratic regime has been replaced by another (Mubarak’s army). Protests in Syria, Libya, Iran and Yemen have sadly not gone very far yet.

Of course, we’re not any of those countries – we have a thriving economy, a true democracy, a free press and a functioning judicial system. And now we have a mass protest movement too.

My wish, then, for the heady summer in which we’re swimming, with a still ill-defined paddle, is that our politicians prove wise, devising ways to ease the financial burden on Israel’s populace without breaking the bank and plunging us back to the not so good old days of 1984.

I posted a shorter version of my capitalist manifesto earlier this week on Israelity.

Leave a Comment

Previous post:

Next post: