Taking Stock / Will Naftali Bennett Be a New Sort of Politician?

Don't dismiss him out of hand just because of his support for settlements if you want to see change in Israel’s economy.

Natfali Bennett isn't holding back. One might even think him a hair hasty.

In his first public appearance the day after the cabinet was sworn in, Bennett announced war against the “connected” on behalf of the “unconnected.”

Read, war on crony capitalism.

Bennett never bothered to explain who the “connected” were, indicating he thinks that perfectly obvious. Even so, let's explain.

The “connected” are a few hundred thousand Israelis. They belong to a few dozen powerful pressure groups.

These pressure groups are small enough for each to be homogeneous. Its members share interests, and can get organized to grab sweeping privileges at the public’s expense.

Though small, these groups have the clout to influence the public discourse.

The Israel Electric Corporation, the ports and the Airports Authority are the best-known pressure groups. But there are dozens more like them, and they're a lot bigger, too. For instance there are the defense establishment and the banking establishment, which are enormous. And of course there are the gang of about ten tycoons (and the tens of thousands of people who serve them) – a group that controls most of Israel's private monopolies, and a trillion shekels of the public’s money.

Well before Bennett hit politics, in fact when he was still in high-tech, he studied and analyzed the real map of the economy. He realized this group of ten was stifling competition, raising the cost of living and suffocating efficiency, innovation and creativity.

No politician wants to deal with this gang and the pressure groups that go with it for a very simple reason. The millions of “unconnected” people (who would benefit if the "connected" lose their privileges) don't care.

Sit! Heel! Bow before us!

The "unconnected" show no interest in reforms in general. The issues at stake are complex and the results, if any ensue, will take years to show up.

For their part, the “connected” ones know well that reforms would mean losing their privileges and status. But they are resourceful and will focus on Bennett like a laser beam. Through their friends in the media and in many other places, they will “train” him and any other politician who comes with such revolutionary ideas.

At first Bennett seemed to be simply naive. He didn’t understand whom he was up against.

But when he spoke yesterday, it became clear that he knows how the system works.

We have a brief window of opportunity... so we can move reforms along, but gradually the 'connected' players will infiltrate us, he said.

Benjamin Netanyahu deserves enormous credit for having established the Committee for Increasing Competitiveness in the Economy. But at a some stage, the tycoons’ counter-attack on him stopped him from taking it all the way.

As the members of this centralization club tried to portray the prime minister as “anti-business,” we tried to explain that the war on centralization was good for business in general and for competitive business in particular.

Netanyahu should have explained that there are two kinds of businesses – those that live off existing value (monopolies and franchisees) and those who create value (competitors, innovators, factory builders and founders of enterprises).

But Netanyahu took fright. He never made the distinction between these two types of businesses even though he understands it very well.

Bennett distinguishes between gougers and creators

Bennett is the first politician in Israel to make a clear distinction between these two types of businesses: rent-seeking businesses, which make their profits at the public’s expense, and competitive, innovative businesses that create wealth for all.

While the difference between these two types of businesses isn’t hard to understand, Bennett is the first politician willing to take the trouble to explain it. He will learn that his effort will make him few friends and many enemies. He will also learn that while friends come and go, enemies accumulate.

There’s a good chance that the “connected ones,” with the help of their lobbyists, their journalists and their scare tactics will “train” Bennett. They do have an enormous interest in “training” Bennett and people like him.

On the other hand, the general public, which is “unconnected,” has no ability, nor desire, to organize, learn and understand these ideas and support Bennett.

The best way to attack Bennett would be to claim that he supports the “settlers” and all sorts of far-right legislation.

But it would be a mistake for anyone who really wants to see change in the country to dismiss Bennett just because he supports the settlements.

For decades, politicians have used these subjects as a smokescreen to stop, prevent and paralyze discussion and work on things that have nothing at all to do with the occupation and the settlements.

There is no reason to wait for peace or an agreement with the Palestinians before bringing competition into the banking system, dismantling monopolies, lowering the cost of living and eliminating the connection between wealth, power and the press and its control over the policymakers. Nor is there any reason to wait to slash the defense budget. The size of the budget has nothing to do with threats to security: it is a function of the military lobby, vagueness, and the defense establishment’s insatiable hunger for resources.

It is no coincidence that Zahava Gal-On and Naftali Bennett are the only two politicians who are loud and clear about dismantling the centralization in the business sector. Both came to Knesset and became stronger without selling themselves to the club of the “connected.”

If Meretz and Habayit Hayehudi are wise enough to work together to create a just economy not just for some people, but for all, then it will be possible to talk about new politics.

But don’t hold your breath. This is a process that will take years – and many disappointments are in store for us along the way. Still, at least things could go in the right direction.

Nir Kafri
Emil Salman