Shelly Yachimovich in a Challenge to Neoliberalism

Shelly Yachimovich says working with her ‘ideological opposites’ has helped her make progress on social welfare issues. But the test of the Labor Party will be whether it can fight the assumptions of the neoliberals.

Danny Gutwein
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Danny Gutwein


Al Kalkala, Hevra, Musar Uleumiyut Beyisrael ‏(On Economy, Society, Morality and Nationality in Israel‏), by Shelly Yachimovich. Am Oved (Hebrew), 435 pages, NIS 98

Shelly YachimovichCredit: Eyal Toueg

Shelly Yachimovich’s book is an unusual event in Israeli political culture. The Labor Party leader is one of only a few active politicians who in recent years have felt it necessary to lay out their agenda in a thorough manner, one that allows for a critical discussion of alternative socio-economic policies for Israel. As such, “On Economy, Society, Morality and Nationality in Israel” challenges not only the current neoliberal hegemony in Israel, but also the political discourse that enables and empowers it.

In the book, Yachimovich examines the ways in which the Israeli privatization regime dismantled the welfare state and increased socioeconomic inequality, and documents her own struggle against social injustice during the past decade as a senior journalist until 2006; and as a Knesset member since then. Alongside essays written especially for the book, Yachimovich has included op-eds she aired on Channel 2 television, columns she published in the press, and some of her blog posts and Knesset speeches.

Yachimovich repeatedly points to the unequal distribution of power and resources in Israel; the ongoing privatization of its social services and natural resources; the corrupting power of wealth; slanderous criticism of the state together with worship of Mammon and the deification of everything private. All these, she emphasizes, have increased wealth for the few and led to growing poverty for the many, while undermining the dignity and freedom of hardworking people who are too weak to cope with the new order.

When it comes to ideology, “On Economy” does not offer much in the way of new insights. Yachimovich reiterates her well-known worldview, which draws heavily from the social-democratic discourse that has developed in Israel in the past decade. Nonetheless, the extensive self-documentation of her parliamentary activity reveals a less familiar element of Yachimovich’s political conduct: the limits of her struggle against economic privatization. In order to be effective in politics, Yachimovich writes, one has to balance the desire to fulfill an ideological vision with political constraints and the need for compromise. Effective politics, then, is a fight for a limited “change in the reality,” even if it doesn’t “totally reverse the trend.”

Yachimovich particularly emphasizes the compromises required of Israeli social democrats who wish to advance their agenda under the reigning ideology of the free market. For example, in the wake of the battle she and other MKs waged against the 2007 Economic Arrangements Law, she came to the “gloomy conclusion” that opponents of the law were successful in changing it mainly when “our ideological motives happened to coincide with the interests of groups that have power.” Likewise, cooperation with Prime Minister Benjamin Netanyahu and Finance Ministry officials in the battle earlier this year to raise the state’s share of future revenues from oil and gas discoveries led her to a similar “regrettable but sober” insight: It’s easier for neoliberal economists to pass socially progressive laws than it is for social democrats to do so alone − just as right-wing politicians are said to have an edge over left-wing ones when it comes to embarking on “a daring political move” or signing a peace agreement.

Recognizing limitations

Acknowledging the difficulties of realizing a social-democratic agenda under neoliberal hegemony has become Yachimovich’s working assumption. Accordingly, she has gradually shaped this assumption into a political strategy of cooperation with “ideological opposites,” as she described her allies from the socioeconomic right in 2008.

Aside from stating that “partial success” is better than “an emasculated desire for perfection,” Yachimovich does not explain what her limits are for compromise with the neoliberal right. But from what she underscores in “On Economy” − and no less from what she ignores and minimizes − we can infer the logic that guides her policy of compromise. To generalize, this logic can be described as a struggle against the injustices inflicted by the privatization regime while refraining from attacking its assumptions, mechanisms and power structure.

This logic is reflected in Yachimovich’s attitude toward the package deal signed by the Histadrut labor federation, the government and the Manufacturers' Association in June 2009. She says the deal was “the only positive aspect of Labor’s entry into the Netanyahu-Lieberman-Shas government,” and credits Histadrut chairman Ofer Eini − her close political ally − with securing labor legislation in an “impressive” way. But Yachimovich chooses not to mention the price Eini paid: an agreement to advance the partial privatization of key national infrastructure and utilities, including the seaports, the electricity industry and, mainly, the Israel Lands Administration.

Yachimovich’s warm approval of the package deal, however, is in blunt contradiction to the tough battle she waged against the ILA reform law passed by the Knesset that same summer, which she rightly described as “the mother of all privatizations,” a “challenge to the values of Zionism” and “a rejection of all the values of the Labor movement.” The duality reflected in Yachimovich’s policy, which condemns the privatization of land while supporting the Netanyahu-Eini deal that paved the way for it, demonstrates the limits of the type of compromise she considers to be an “effective” social-democratic tool under neoliberalism. This compromise expands the foundations of the privatization regime in exchange for making the rules of the game more flexible, and accepting the change in the balance of power in favor of the wealthy, while alleviating the aggressiveness of the regime.

Similar contradictions can be seen in Yachimovich’s criticism of the quasi-privatization of education in Israel, which causes degradation of public education and perpetuates and intensifies social disparities. As a symbol of the deficiencies of the Israeli way of privatizing education, Yachimovich points to Hevruta, a private school in the affluent outskirts of Tel Aviv. Although Hevruta is a school “for rich people only,” she adds, it asks for government funding. In other words, the lower and middle classes that Hevruta excludes with its huge tuition are being asked to pay for the schooling of the rich with their taxes. Public funding for Hevruta is conditioned on its being defined as a “recognized unofficial” institution, a formula that was created to enable state funding for ultra-Orthodox education, and which the privatization regime has made the main channel for budgeting the exclusivist education of people of means.

In light of the interdependence of the “recognized unofficial” ultra-Orthodox and quasi-privatized schools, Yachimovich’s disregard of the Nahari laws is a revealing omission. These laws, which were passed in recent years at the initiative of Meshulam Nahari, a Knesset member from the ultra-Orthodox Shas party, divert municipal budgets from public education to “recognized but unofficial” schools, thereby encouraging the quasi-privatization of education and its division into separate sectorial school systems. It may be that Yachimovich ignores the Nahari laws as part of her worthy call to eliminate “the instinctive hostility toward the Haredim.” But a distinction should be made between hostility toward Haredim and criticism of Haredi politics. By disregarding the Nahari laws, Yachimovich is obfuscating the role played by that politics in dismantling the welfare state and replacing it with social services for and operated by different cultural-ethnic groups. And indeed, this sectoralization characterizes the “Israeli way” in privatization.

Yachimovich’s attitude toward sectoralization moves from silence in the case of the Haredim to acceptance when she discuss immigrants from the Commonwealth of Independent States. Their integration into Israeli society, she emphasizes, has been significantly eased by having “effective sectoral” representation in politics. Yachimovich affirmation of sectoralization, which borrows from the neoliberal separation of society and economics, draws the lines of her compromise with the privatization regime: She is critical of the evils it causes, but accepts its basic tenets.

Zionism and post-Zionism

In her foreword, Yachimovich declares she will examine “the meaning of Zionism and post-Zionism with new tools,” and the book’s title promises a discussion of nationalism. In fact, these topics are not discussed in the book, aside from a repetition of basic Zionist maxims, along with predictable condemnation of post-Zionism. The blatant gap between the declaration of intentions and the failure to realize them is surprising in light of Yachimovich’s extensive rhetorical use of Zionism, but it suits her politics of compromise. A clear explanation of these issues, which touch on the foundations of Israeli existence, would likely have required her to underscore the difference and distance between her positions and those of her “ideological opposites” − namely, her political partners from the right − and that might have made further cooperation with them difficult. Or perhaps discussion of these issues might revealed the degree to which she has moved in the direction of those allies, thereby making it difficult for Labor voters to support her.

In “On Economy,” Yachimovich reiterates her objection to “the existing political agenda, which deals almost exclusively with the political right and left”; she rejects conditioning the struggle for social justice on a solution to the Middle East conflict; and she attacks Peace Now members who are so busy with peace that “they have forgotten the basic commitment to justice.” While her criticism is correct, the solution she proposes − focusing on social justice and and ignoring the Middle Eastern arena − duplicates the separation between society and politics she criticizes. This separation, moreover, contradicts the social-democratic analytical tradition, which emphasizes the interdependence of these fields.

Similarly, with the exception of general declarations, Yachimovich makes sure to avoid discussion of another controversy that shapes the character of Israeli society: the question of the occupation and the settlements. She did, however, explain her views on theses issue in an August 19 interview with Gidi Weitz in Haaretz Magazine and in a subsequent response to the criticism it engendered, in which, without noting it, she included passages from the preface to “On Economy.” This mixture of contradictions evident in her reliance on different texts is not coincidental. The interview and her subsequent response may well be seen as part of the ideological examination promised in the book, and the policy of compromise it reveals explains their political significance.

Privatization and occupation

The establishment of the Israeli privatization regime was closely connected to the continuation of the occupation. Like “sectoralization,” the settlement project also serves as a substitute for the dismantled welfare state and as a compensatory mechanism for its privatized social services; that the compensatory role of the settlements may explain the political support of the lower classes for the right, which enables the continuation of privatization.

That is also what Yachimovich believed on the eve of her initial election to the Knesset. In an interview with Nehemia Shtrasler ‏(Haaretz, December 2, 2005‏) she noted that “the huge occupation project” had damaged the country’s economy, transferred “a fortune” to the territories and constructed an “alternative welfare state” there, while eliminating it in Israel. But by 2011, Yachimovich had retreated from that viewpoint. In the interview with Weitz, she declared that she does not consider the settlement project “a sin and a crime,” noted that it was a “consensual” step initiated by the Labor Party, and declared that she “rejects the well-known equation” that links the building of the settlements and the dismantling of the welfare state.

In her response to the surprise expressed to the reversal in her viewpoint − from social criticism of the settlements to a false budgetary justification of the project − Yachimovich has rewritten her views. She ignores her initial condemnation of the settlements as a compensatory mechanism and claims that six years ago she also mistakenly believed that “if there are no settlements there will be money for a welfare state.” But now she is opposed to such “mathematics,” saying that it was the neoliberal ideology − not the defense budget or the cost of the settlements − that led the treasury to cut back on welfare-state services.

More than the historico-political justification, then, what informs the reversal in Yachimovich’s attitude toward the settlements is her denial of their role as a mechanism for dismantling the welfare state. This about face accords with the policy of compromise evident in “On Economy,” although in a different version: Here she ratifies another basic tenet of the privatization regime, but instead of condemning its results she finds it morally acceptable, thereby applying the logic of compromise with the right not only in the socioeconomic realm but in the political one as well.

‘Everyone with clean hands’

While Yachimovich discusses the advantages of her cooperation with her neoliberal “opposites,” she barely touches on the reasons that motivated her to cooperate with them. She claims that “everyone who had clean hands, regardless of his economic views” joined the cross-ideological coalition that fought to increase the taxes on gas revenues; and she explains the understandings she reached with former accountant general Yaron Zelekha by the fact that he “has exceptional intellectual honesty.” But these moralistic explanations fail to address the political reasons that led members of the neoliberal right to cooperate with Yachimovich, who would seem to be their bitterest social-democratic rival.

The reasons behind that not unusual political cooperation between ideological rivals can apparently be found in the advanced stage of the privatization of the economy and society in Israel. The more the project of privatization expands its foundations, the more it has to moderate its injustices, which began as a means of undermining the welfare state but became increasingly unnecessary the more it was dismantled. In addition, after guaranteeing its dominance, Israeli neo-liberalism is now concerned with the rising criticism of the growing inequality it inflicted and is trying to secure its public legitimacy by increasing the number of people who benefit from its spoils. This policy is reflected in Netanyahu’s battle against centralization, his consent to improve labor legislation, and the recommendations of the Trajtenberg government-appointed committee in the wake of the socioeconomic protest of last summer. Yachimovich’s “political effectiveness,” then, stems from her support of the changing guidelines of privatization and from challenging it.

The political weakness of the Labor Party as a result, inter alia, of its divergence from its values was, according to Yachimovich, one of the reasons that led her to formulate her strategy of compromise. She points to the 2007 budget discussions as the turning point that informed that policy. As a partner in the government of Prime Minister Ehud Olmert, the Labor Party headed by Amir Peretz was revealed, she says, “in all its weakness”; it was “toothless” and did not try to fight a policy that was “in such profound contradiction to its worldview.” This experience was to be repeated in the fight against land privatization. Yachimovich notes that “the viewpoint of the Labor Party headed by [Ehud] Barak on this issue was a real shock for me,” and that the fact that her party “not only supports the reform” but “is leading it and is the engine behind” it made her ashamed. So that despite her expectations of being “part of a social-democratic party that would make its mark,” Yachimovich discovered that “in effect I was alone.” It was this discovery, according to Yachimovich, that dictated her independent agenda and the “rules of the game,” which coalesced as the policy of compromise.

Yachimovich’s account leaves unanswered the question of why she prefers to ally herself with her “ideological opposites” from the right, and why she didn’t reach similar strategic cooperation with her fellow Labor MKs − as she presumably did not, since she doesn’t mention it in her book. If she were working more closely with some of her fellow party members, perhaps they could create a social-democratic camp within the Labor Party, spurring it to change its policy and giving it more power in its dealings with the right.

“On Economy” was published just after Yachimovich was elected chairwoman of the Labor Party in September ‏(a contest in which I supported Amir Peretz‏). According to all forecasts, the summer protest has strengthened Labor, which under her leadership will be in a position to realize the social-democratic vision spelled out in “On Economy.” This, however, require a reexamination of the suitability of Yachimovich’s policy of compromise.

In “On Economy” Yachimovich suggests that the limits of her battle against the privatization effort were determined by the unfortunate balance of powers created by the encounter between the continuing decline of the Labor Party, as it abandoned its social-democratic values, and the strengthening of the privatization regime and neoliberalism. This analysis suggests that one of the tests for the rehabilitation of the Labor Party will be whether it can break with the Yachimovich policy of compromise. Nanely, will Yachimovich’s Labor attack not only the injustices that result from the privatization project but the power structures and mechanisms that create them as well.

Prof. Danny Gutwein teaches socio-economic history at the University of Haifa.



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