Netanyahu finance minister
Selling shares in Bank Leumi to CitiGroup, July 2005. Yaron Zelekha stands next to then-Finance Minister Benjamin Netanyahu (far right) Photo by Tomer Appelbaum
Text size
Tomer Appelbaum
Yaron Zelekha says El Al managers are receiving 'unprecedentedly high salaries.' Photo by Tomer Appelbaum

Shinui Behergelei Hatzrikha
(A New Socioeconomic Agenda for Israel‏) by Yaron Zelekha Hakibbutz Hameuchad and Ono Academic College ‏(Hebrew‏),
239 pages, NIS 88


Anyone still struggling to understand exactly what happened last summer − when tent cities made up of Israelis demanding “social justice” spread across the country’s cities and towns, and who wants to know just who constituted the core of the protesters and what they hoped to achieve, is welcome to read a new book by someone who − for a few moments at least − became one of the demonstrators’ most admired guides: Yaron Zelekha. Reading it will help one to understand that, much like Zelekha, this core group was not looking to replace the existing economic system, but rather to correct the faults they believe pervade the one now in place.

The protest was led not by desperate people, but by believers who, out of their faith in the system, asked it to make good on its promissory notes. And so, despite the important and moving gestures to Charlie Biton and his friends, it was not the descendants of the Israeli Black Panthers who filled the city squares, but, paradoxically, their historical opponents: supporters of the mainstream Zionist parties, of blessed memory.

Like these protesters ‏(and perhaps this accounts for their mutual enthusiasm‏), Zelekha, a former accountant general of the Finance Ministry, seeks adjustment and not change. Like them, he too avoids everything that smells of politics or ideology. For this reason, he declares in his book that he offers “a modern social-welfare doctrine for the Israeli economy, not because of social or political ideology, but with the intention of achieving efficiency and fiscal welfare.” It may be that he too, like some of the protesters, believes that this is even possible. Bless them all.

I approached the book with some trepidation. My concern had several sources. First, collaborating, as a reader, with a commercial product that promises to be a guide to “a new socioeconomic agenda for Israel” yet has a bar code and a recommended price of NIS 88, seemed illegitimate to me: another victory for the capitalist system, in which everything, even a protest as important as the one last summer, is considered a product.

The real questions are: What is the final price of that product and who will benefit the most from it?

Second, on the back cover, we are told that the author “doesn’t want to cry over spilled milk or lament the last 40 years,” and I’m disturbed by the implication that this indicates a Protestant ethic that views suffering as ordained by God, and about which it’s better not to think too much. I believe that not only is it important to cry over every drop of spilled milk ‏(mainly because so many of the thirsty don’t have any, and it is only right to acknowledge the pain of their thirst, even if only retroactively‏), but that it is also vital to know who dared to take from the small milk jug we shared so they can enjoy expensive cream on their tables. No less important is to find out what happened to those who were supposed to be guarding the jug, mainly to avoid similar looting in the future.

Personal trauma

The third reason for my unease stems from a personal trauma that I underwent last summer. There were a few days when I considered having myself hospitalized, because I began to think that until then I had lived an imaginary life, based on severe hallucinations.
This is how it happened: All summer, in the media, and in the streets and squares, I kept running into many public figures ‏(former government officials, and academics and businesspeople‏) who had joined the protest and even gave speeches − with impressive fluency − about how the current system was unjust and how much we needed a different one.

More than once I rubbed my eyes in wonder at the sight of some of the protesters, who just yesterday had been the principal agents of this system and even praised it. They were the ones who spread it as a pensee unique ‏(group think‏) with near-religious fervor. And they were also the ones who had personally benefited from the quasi-capitalist system. It would have been okay if they were admitting they had erred. But they weren’t even acknowledging that they had changed their minds. On the contrary, many of the speakers said that even when they held senior positions in the Finance Ministry or enthusiastically represented one interested party or another, they had actually fought for the opposite opinion, the social-democratic one.

At the sight of the great number in this last group, doubt began to gnaw away at me. Against whom had we been demonstrating all these years? Whom had we been clashing with in Knesset committees and in court? Who spoke out against us in the media? And if there were so many of us, for crying out loud, how could there have been so few of us? Was it all just the product of a sick imagination that had read too many books about revolution?

When the protests died down and everyone returned to playing his previous part, I understood that it wasn’t me, it was them. Nonetheless, I was worried that I wouldn’t be able to withstand the similar trauma that I expected to experience from reading Zelekha’s book. After all, Zelekha himself worked with Benjamin Netanyahu between 2003 and 2005 when the latter, as finance minister, he brought a Thatcherite revolution upon us. Now Zelekha has apparently turned to preaching against the system of unbridled privatization and elimination of welfare entitlements and is even suggesting a new doctrine. Did I really want to do this to myself again?

It was in this fragile state that I approached the book, though I quickly calmed down. To Zelekha’s credit, what he writes here is no different from the policies he has previously championed, including during the years he worked under Netanyahu. Zelekha may be offering Israel a “new economic doctrine,” but it is no different from the one he offered almost a decade ago.

It is important to note that even though the book deals with weighty issues and is chock-full of statistics, it is quite readable. Zelekha manages to simplify complicated issues and avoids conducting the socioeconomic discussion in the secret language of the sect that has overtaken it. This may also be one of the reasons for his popularity among protesters. His starting point is that there are “more than a few economic and social cracks,” but that they “do not destroy the whole.” All that’s needed, he writes, is to make sure that embedded in those cracks is “a chance for, and not only a danger to, a better economic future.”

And so Zelekha does not offer an alternative to a free-market approach but seeks to correct the disadvantages he finds in the current system. He says neoclassical growth theory, which emphasizes the need to constantly adjust the balance between labor and capital, has not really taken off in Israel because policymakers have yet to fully recognize how to adapt it to Israeli society.

Not one revolutionary suggestion

The doctrine Zelekha suggests in this book is in effect a continuation of the existing economic order, after important corrections of several principal injustices ‏(the cozy relationship between government and big business, for one‏). It is important to note that this is not a small matter; it requires a lot of courage ‏(a quality Zelekha has in spades‏) to speak out against those who hold power in the existing system. Nonetheless, don’t get the wrong idea. There is not one revolutionary suggestion in the book that would change the social order that has existed here for almost 40 years, not to mention impose a new one.
In Zelekha’s view of the country’s economic system, the main problem that brought about “an absurd degree of inequality in the distribution of income and the incidence of poverty” is that Israeli governments for generations “talked loftily about the need to produce jobs, but in practice encouraged big business at the expense of jobs.” In my opinion, he is correct.

I also agree with the main solution he proposes: weakening the influence of big business on government so that the latter can do the right thing and re-focus the economy on jobs. But I must disagree about the primary means for accomplishing this. Zelekha would battle against government in this dangerous equation. In effect, he suggests that we continue to weaken the public sector, which in his words is “tainted with nonfunctional management, inefficiency and administrative failures that make an ineffective tool out of this enormous resource in the government budget.” Zelekha offers a continuation of the starvation diet for the fat man riding upon the shoulders of the thin one: continued privatization. He correctly states that until now not much genuine privatization has taken place; instead, private monopolies have taken the place of public ones, to the advantage of the newest tycoons, and he suggests other ways to transfer assets to the broader public. But in principle, this is a mere tweaking of the existing tendency to push privatization.

According to Zelekha, the further weakening of the public sector will be carried out by a campaign of continued delegitimization of politics in Israel and those who act within its provenance ‏(since they are all apparently corrupt‏). This will be accomplished by strengthening bureaucrats like legal advisors, internal watchdogs and accountants. who are supposed to help fight government corruption. This seems to me like a dangerous solution that would continue to weaken Israeli politics − a disastrous proposal that would deepen the paralysis forced upon us by a government of bureaucrats and undermine the little public faith that still exists in the fragile Israeli democracy.

The real solution to the problem of government being in bed with big business lies in doing exactly the opposite: in glorifying political activity and offering incentives to high-quality individuals to enlist in the most important work of society ‏(including training and legitimizing political appointees and surely not punishing with fines anyone who dares to participate in party activities‏). In addition, some of the services that have been privatized should be re-nationalized. I think this is the very process that would weaken the presence of big business in places where it is not welcome. If the political arena is corrupt, we must fight corruption, not politics.

But this argument exceeds the boundaries of a book review. The very fact that the book has aroused such a discussion is evidence of the author’s success. Let us hope that this is only the first of many works about socioeconomics that will be written in the wake of last summer’s protests − books that will offer a socioeconomic road map for Israeli society, so that when the protesters mature, shake off their dangerous naivete and begin the most important protest of all, by engaging in political acts, they will have the ideological and theoretical backup they need.

Yuval Elbashan is the author, most recently, of the novel “The Masada Case” ‏(in Hebrew‏), and is the deputy director of Yedid, a network of citizens‘ rights centers.