David's Harp / Does Populism Really Speak for the People?

In fact, it’s a cacophony of interest groups claiming to speak in the name in an inchoate majority.

The power elite acts like it is shaking in its Gucci boots over the economic populism that has taken hold in Israel. Decisions that used to be made in the quiet of corporate boardrooms or in the inner sanctums of the treasury are now subject to relentless and critical media coverage, Facebook campaigns and the threat of consumer boycotts.

“We conduct enough surveys to keep three institutes afloat, but we don’t know if next week we’ll be hit by another cottage cheese protest,” Arik Shor, the CEO of Tnuva, griped this week. Meanwhile, Leumi Chairman David Brodet, whose bank was forced to back down under public pressure on plans to write-down to tycoon Nochi Dankner, said at a conference that he couldn’t recall the public ever being so involved in economic policy and business discourse but bemoaned it as being “saturated with emotions and frustrations.”

Dankner, the populists’ whipping boy of the month, gave an interview to The Financial Times last week lamenting the “trend against the business community.” He did however hopefully add that “it will pass, because without business there will not be an economy, there will not be growth, there will be poverty and anarchy.”

Mooli Eden, president of Intel Israel which has come under fire for its low tax rates, told Yedioth Ahronoth in an interview that the public should look at the bigger context. “Don’t throw the baby out with the bathwater. Our competition – Intel’s, Check Point’s – is global. If Intel doesn’t see it as worthwhile to develop manufacturing in Israel, do you think that there will be an Israeli plant that that will see it as worthwhile?”

Meanwhile, Finance Minister Yair Lapid, who promised the middle class its needs and interests would be the benchmark for government economic policy, now rues the very populism that brought him into office. “We’ll elect one of our own,” he told Yedioth about how naive voters came to give his brand-new party 19 seats in Knesset. "He’ll get his hands on buried treasure that no one had touched and he’ll produce billions.”

The theme is the same: Populism is biting the hand that feeds it. If the public pressure doesn’t ease up on the tycoons, the big corporations and the treasury, they argue, we’ll all pay a price, by discouraging business and investment and adopting fiscal policies that will put on the Greek road path into an economic hellhole.

No doubt many of the populists would say it was all coordinated -- the empire striking back with words and warnings. But most likely it is a coincidence that many of those of who have been hit with the machine gun spray of economic populism since the 2011 social-justice protests have come out in public lately to defend themselves.

The funny thing about this populism is that it has very little to do with the people at all.

Since they packed up their tents in the autumn of 2011, there has been nary a peep from the masses. Populism has quickly morphed into a cacophony of interest groups all claiming to speak in the name in an inchoate majority.

Kim Jong-un statistics

Opposition politicians are one such group, offering solutions – as Lapid once did – that seemingly exact no costs or entail any trade-offs. Everyone (except the people you hate) is a winner. Labor unions present the privileges their members enjoy as “workers' rights.” Thus Haifa Port Works Committee Chairman Meir Turjeman this week dared anyone to touch the NIS 38,000 average its costs every month to employ a dockworker. So are the media, which can write bigger and more dramatic headlines about grievances than they can from thoughtful analyses of difficult choices. So are non-government organizations with an agenda to pursue and funds to raise.

Thus we have a survey released this week by Shatil – an organization advocating social, economic and environmental justice -- that found that 89% of all Israelis say the government is failing to address “social problems” and that mass protests are the way to force change. That is the kind of number that Korean dictator Kim Jong-un gets on Election Day and should scare any poll-watching politician into action. Prima facie, it means that more than 4.4 million people – that is, 89% of the country’s adult population – is ready to take to the streets. Yet, two weeks ago, just 10,000 people joined the rally in Tel Aviv and last weekend even fewer than that.

Perhaps 89% of the country does think protests are important, but the reality is that 4.399 million of them didn’t show up for one of these rallies.

This is not to say there isn’t discontent. If you take the combined votes for Yesh Atid and the Labor – two parties that campaigned mainly on economic and social themes during the election – they captured just over a quarter of the vote. Add in Meretz, and the figure grows to over 30%. Assume that Shas voters are also motivated by economic distress as well and you get close to 40% of the electorate.

But you don’t get anything approximately a coherent policy from this 40%. Labor believes in letting loose the government’s purse strings and cutting the tycoons down to the size of dwarfs. It doesn’t like the idea of going after powerful public sector unions. Yesh Atid, the party of the distressed bourgeoisie, isn’t so tycoon-averse or so ready to break the budget, but it wants to go after the Haredim. That puts it into a head-on collision with Shas, whose economic policies consist of ensuring handouts to the Haredi community.

Populism isn’t a coherent policy at all and therefore is less powerful that it seems. It has places where it is strong, such as when the interests of the powerful labor unions are at stake, and it has places where it can effect symbolic change, such as the cottage cheese boycott. But for the most part it’s a vapor. The tycoon bailouts continue uninterrupted, Lapid’s austerity budget will pass and the cost of living and home prices will rise, except for cottage cheese, which is for now marked with a scarlet letter.

It’s too bad, because there are certainly economic policies and institutions badly in need of a shake-up, but the tycoons, the multinational corporations, the big unions and Lapid have less to fear than they think.

Moti Milrod