Opinion

A Global Economy and a Closed Society: Can Israel Swing It?

Many on the right seem to think so, but it will be very hard to square free trade and investment with chipping away at freedoms and the rule of law.

An ultra-Orthodox Jewish man next to Intel's Jerusalem office building.
BERNAT ARMANGUE/AP

In America, economic and nationalist populism go hand in hand. Donald Trump was elected not just because he promised to build a wall to keep out Mexicans, but because he promised to crack down on Chinese exports. In his first week in office, he issued an order banning travel from seven Muslim-majority countries and ripped up the Trans-Pacific Partnership trade agreement.

Trump-style nationalist populism is raging through Europe. But unlike their brothers and sisters in America, most European rightists aren’t quite willing to do away with free trade and open investment. The theme shared by Europe’s populist right is more subtle: We don’t want our labor markets swamped by outsiders (even if most of them are fellow Europeans), and we don’t want our laws and institutions subordinate to Brussels.

France’s Marine Le Pen believes in protectionism, but that doesn’t put her outside mainstream French thought. Geert Wilders of the Netherlands (who lost Wednesday’s election resoundingly) holds up Switzerland as his model, a non-EU country with a very liberal economic policy. Even Brexit voters don’t want to lose the trade and investment benefits of close links with Europe.

In Israel, we share this same divergence between nationalist populism and economic populism. If anything, in Israel the dichotomy is even more prominent.

While the Knesset merrily votes to silence muezzins and expropriate Palestinian land for Jewish settlers, no one complains that Mobileye, a gem in Israel’s high-tech crown, is being sold to a foreign company.

While Prime Minister Benjamin Netanyahu tries to ensure political control over Israel’s broadcast media, Culture Minister Miri Regev attacks “unpatriotic” artists and Justice Minister Ayelet Shaked packs the Supreme Court with right-wing justices to ensure settler-friendly rulings, Israel reaches an agreement to bring in 6,000 Chinese construction workers.

The idea that we would give up free trade with the United States or even the hated European Union isn’t on the agenda at all. But a global economy and a closed society – can we swing it? A lot is at stake.

Close to a third of Israel’s GDP is based on exports. Startup Nation would wither without the free flow of capital, goods, services and people across borders. The giant Leviathan natural gas field in the Mediterranean will never be tapped if we don’t find customers in Egypt, Turkey or Europe.

Wilders’ Swiss model would seem to suggest that we can have everything. Three years ago, the Swiss voted to restrict immigration, and in December their parliament approved a watered-down version that sets up mechanisms to favor locals over foreigners for jobs. Voters approved a ban on minaret construction six years ago and are now weighing a burka ban.

At the same time, Switzerland is a major international financial center and exports are responsible for nearly two-thirds of its GDP. Switzerland is home to a huge number of multinational corporations. Close to a quarter of its people are non-native born, although the vast majority are other Western Europeans.

But what works for Switzerland won’t necessarily work for Israel. You may have noticed some slight cultural differences between the two countries; well, actually, we’re polar opposites.

The Swiss are orderly, law-abiding, culturally unified despite multiple languages, and are safe and secure deep inside the heart of Europe. We, on the other hand, resist rules, are divided by religion and national origin, and contend with a volatile security situation.

The right’s assault on the rule of law and on Israel’s Arab minority is anything but a benign process for a society like ours.

The right believes in an Israel where Jews have special privileges and the settlers have the most privileges of all. Everyone should rally around the government and spurn anyone who doesn’t buy the Zionist narrative as it’s understood by the national camp. Even if we do business with them, other countries are our enemies.

That's you how you get the bizarre phenomenon of Israelis cheering on Brexit because it undercuts the European Union, even though the EU is our biggest trade partner.

But Israel needs to be open and inclusive, not just because this is right and fair, but because our prosperity depends on it.

We need to bring more Israeli Arabs into the workforce, including the high-tech sector, or we’ll face a severe labor shortage in the coming decades. Israel’s best and brightest (as painful as it may be for the right to admit it) tend to be left of center and secular, and can’t be pushed too far politically and religiously. Everyone has to feel that the country is theirs if we want to have a dynamic workforce that doesn’t flee to other countries.

We have enough trouble with maintaining the rule of law; we shouldn’t be chipping away at it. It’s critical for business to know what to expect from regulators and judges. We’re a country that thrives on innovation and original thinking – it helps us win wars and invent self-driving cars – but the right seems intent on clamping down on people whose thoughts it doesn’t approve of.

It’s wishful thinking that we can somehow live in two worlds for very long.