The press and the pundits, us among them, have been busy trying to estimate the cost of Operation Protective Edge – the cost of the weapons, of calling up the reserves, of the collapse of Israel's economy. Yet all that may pale in comparison to the true danger: that the public agenda will regress to one that is convenient for the people in power.
- Gaza Conflict Cost Totals $585 Million So Far
- Gaza Fighting Costs Industry $101 Million
- Gaza War Exposes Economic Weakness
- Southern Comfort a Rarity in Israel Now
- We Must Defeat Hamas – Next Time
- Israel Will Weather This War Perfectly Well
- The Price of the Left’s Silence
- It’s Time to Get Dirty for Social Justice
- The Summer Israelis Would Rather Forget
- Seven Reasons Why the Market Is Down
- Business in Brief
When the guns are roaring and we’re burying our dead, civilian topics are taboo, according to many on both the left and the right. Not so: We must talk about them all the time. It would be pure stupidity to forget the ultimate objective – which is to have a flourishing society, fair and sustainable. That was the vision of Herzl and all the sane Zionists. That isn’t a means, it’s the end.
Certain radicals in Israel have developed a new hobby: pointing at the tragedy of the Palestinians in the Gaza Strip, who either elect or wind up with a leadership that is sometimes corrupt, living off and gaining strength from conflict and war. That is a crude and not-always-accurate generalization – but even if we accept it, we should first of all make sure that we don’t have the same disease, and that we always keep in mind our final goal: our civilian agenda.
Ultimately, this war will end. It may be happening as you read this or it may take a long time, and involve more nasty surprises culminating in some sort of horror that provokes serious international pressure to end it.
But eventually, it will end, and eight million Israelis will get up in the morning, stop ceaselessly and uselessly watching the news on TV and return – to the same old economy of a month ago, to the same old society and same education system, to the same scandalous prices for lousy apartments, to the same crumbling infrastructure and dirt and rot that's spreading almost everywhere, to the same rage on the roads and streets and markets, to the same dwindling human capital and same high cost of living.
The best way to understand why we need to remember the civilian agenda is to mull aloud who exactly benefits from the military-security-diplomatic agenda, who is secretly delighted that the three-year anniversary of the social-justice protest of 2011 has been obliterated by Hamas missiles.
Everybody who did well by the economic structure that developed here over the last 10 years – who saw the social-justice protests as a threat to his social status and privileges of money and status – looked forward to the return of the military-security-diplomatic agenda. That agenda would assure that people who held power (and who got there in the first place because the man in the street was powerless to stop them, and didn’t have clout or influence over his democracy) would be immune to losing it.
But people who benefited from this situation have been arrested and some have been charged in recent months. Many achieved that happy status chiefly because of the social-justice protests, which triggered a domino effect that toppled monopolies, cartels, tycoons, bankers, politicians, lobbyists, machers, policemen, more tycoons, rabbis, generals, lawyers – a long line of crooks in suits, with one common denominator.
These are the people who stole democracy from us, whose deeds most of the public never sees. And these people – and not the marionettes sitting in TV studios orating about Hamas – are the ones who set the agenda, and decide which laws shall pass and which shall be buried, and about allocation of resources.
Unless you belong to one of these groups, I have bad news for you: At the end of the war, you and you alone will be served the bill, and only you can ensure that it won’t grow in the coming years. It is your responsibility – in the street, at the voting booth, in social media, in conversation, everywhere – to ensure that we send a clear signal to the people controlling the public resources in both the public and private sector, that we refuse to go back three or five years in time. Even if the guns are roaring.
So we will continue talking about the civilian agenda and if that isn’t patriotic enough for you, by all means go back to your TV set.
There’s a big argument over who’s suffering the most from the war, but there’s one area where the answer is clear: Small businesses and freelancers and anyone involved in business who isn’t a monopoly or able to tax the public – these people are taking the biggest blow. Nobody will compensate them for exogenous shocks such as missile attacks: they have to make it in the free market. Neither politicians nor the press even thinks about them; after all, they’re not some organized group. There’s no Iron Dome to protect them from damage to business. The only thing that could do that is structural change.
Defense: Stop the blank checks
This newspaper and I have been saying the following for 10 years now: The reason Israel’s defense budget has been growing isn’t threats, or the need to stock up on new technology. It’s because the defense establishment is a giant and like all giants, mainly military ones, it constantly wants more resources.
Operation Protective Edge isn’t going to change anything. The military needs to go on a diet. It isn’t spending its money on protecting us from missile attacks and on locating and destroying terror tunnels, but on its bloated manpower and, mainly, on an organizational culture of surplus and squandering, because the bill is served to the unprotected, amorphous anonymous taxpayer.
The real test for Finance Minister Yair Lapid will be to tell the army chiefs, as soon as the war ends, that they can’t have any more blank checks. That, more than ever before, resources need to be moved from military to civilian needs, first and foremost health care and social security.
If not for the Gaza war, we’d be marking the third anniversary of the social protest, which changed the public discourse in Israel. Many who enjoy the present order of things and certain interest groups would like to present the protest as a failure, and many members of the public suspect that may be true, because of the slow pace of economic change, and in particular because of the ongoing rise in housing prices in the last three years.
The social-justice protest was a watershed. The fruits may be slow to grow but without that protest, Israel’s social and economic paths would be a lot worse.
Consumers are about to pick one of these fruits. The protest birthed the Trajtenberg Committee, the first such forum in Israel to operate without constraint by interest groups that want to preserve the status quo. That committee gave a tailwind to another body, the Kedmi Committee, which stated in 2012 that Israel is the most economically concentrated country in the West regarding food production, and recommended steps to open the country to imported food and beverages.
The Finance Ministry was supposed to start implementing the Kedmi recommendations through legislative amendments to facilitate the import of dry foods and ensure lower prices. Each product was required to have the Health Ministry's blessing, and Israel was to adopt a method of allowing imports to come in. Supervision was to pass to the consumer and the markets – with civilian and criminal sanctions to be imposed on importers who didn’t follow the rules and meet the standards. But Attorney General Yehuda Weinstein prevented the treasury from passing the amendments using the Economic Arrangements Law. He is demanding a longer legislative process, via the Knesset's committees and plenum.
The law in question is a hodgepodge of totally unrelated acts each with some economic bent or other, that gets tacked onto the national budget bill each year.
Among their demands, the social-justice protesters sought to abolish the Economic Arrangements Law. The emergence of the food-import problem shows the importance of delving into the details of regulation and the structure of political economics.
Opposition to the Economic Arrangements Law is generally appropriate. The government has been abusing the concept for years, in order to circumvent democratic public debate on a host of topics.
The public has ended up feeling that the government has usurped the Knesset’s role regarding economic reforms. But the case of the “cornflakes reform”– allowing free import of certain food products – may reveal the opposite scenario.
When the government tries to act against interest groups – for instance, the tycoons controlling the five big food monopolies – the fast track of the Economic Arrangements law can be a terrific way to push through reform. The so-called cornflakes law might pass the Knesset hurdle, but the food monopolies’ lobbyists could find a way to kill it softly.
The Economic Arrangements legislation is supposed to help the government manage economic policy, usually with respect to urgent matters. It’s not supposed to be a tool to effect radical change. That requires thorough, open discussion in Knesset. But opening the dry-goods market to competition isn’t exactly a constitutional assault; it’s an arrangement designed to facilitate imports so Israelis don’t have to pay more for food than the denizens of other countries.
The attorney general, who is well aware of the difficulty in getting through legislation that hurts the interest groups, should be helping to prise open the market, not hamper reform. In the case of the food market, the Economic Arrangements Law is the right means. Most of the reforms in the telecoms were achieved by means of that law and Israeli democracy was not impaired. Quite the contrary.
In our complex economic reality, the Economic Arrangements Law isn’t always an enemy of the people. It can be their friend. The attorney general and his representatives must distinguish between interests and goals; a regular legislative process will play into the hands of the monopolies that want to preserve the status quo.
Victory for security guards
As rockets peppered Israel last week, another victory of the social-justice protest was achieved, but failed to attract notice: the collective bargaining agreement for security guards working in the business sector (not for government), which increased their minimum wage by 20%, and requires employers to give them social benefits. This is a direct corollary of the agreement the government reached two years ago with cleaners and government-employed security guards.
It was the social-justice protest that presented the government and Histadrut labor federation in a ridiculous light regarding these low-status workers; the protest forced through the two agreements.
Having said all this, we have to admit that the triumph of the private-sector guards is an aspirin that won’t cure the condition of hundreds of thousands of low-income workers in Israel. After the raise, guards will gross 4,743 shekels a month ($1,384) for a full-time position. It’s impossible to live on that based on local prices. It assures the guard will live in poverty, and shows exactly why a far more comprehensive reform of the labor market is such a crying need – one that will cover not only the paycheck but lower the cost of public services, chiefly education and health care, and lower the cost of living. Cornflakes is a good place to start.