As Social Protests Threaten a Return, Israel's Capitalists Are Stirring

Prime Minister Benjamin Netanyahu has very little time: The capitalist protest is about to strike.

We're all familiar with the social protest. It started with the media fiercely criticizing the rule of the tycoons, continued with a public campaign against economic concentration and the high cost of living, and exploded with tent cities and campaigns on social networks. It culminated with the mass protests of the summer of 2011.

The social protest turned the tables in Israel politically as well as conceptually. It propelled Shelly Yacimovich and Shaul Mofaz to the helm of Labor and Kadima, respectively, and brought TV personality Yair Lapid to center stage. Committees were set up and myriad bills submitted in an attempt to strengthen Israel's welfare system. The mass protest movement ended the neoliberal hegemony in Israel, significantly reduced the influence of the rich on government policies and redefined the country's socioeconomic life.

But the capitalist protest is less familiar. It started with a property developer transferring his investments from Israel to the United States. Later, a tourism entrepreneur decided not to build new hotels in Israel and moved his business to Europe. Businessmen who were committed to their employees were forced to lay people off, and patriotic industrialists vowed never to invest in Israel again. It culminated when the owners of many major Israeli companies toyed with the idea of selling them because they were no longer attractive.

Under the surface, far from the public eye, the capitalist protest of 2011-12 revolutionized the relationship between Israel and its business community. In more and more business circles there is a feeling that Israel, the mecca of entrepreneurship and growth over the last decade, has turned against business. It has become a hotbed of populism, retroactive regulation and jealousy. Some people say Israel's new outlook will lead to a slowdown. Others predict a recession.

The leaders of the capitalist protest aren't innocent. For decades, they escaped government regulation and media scrutiny and did as they pleased with public property. In the happy years when the economy was centralized, they enjoyed a comfortable and uncompetitive business environment. They did nothing to stop their colleagues, the unscrupulous tycoons. But many of them are irrevocable Zionists.

They single-handedly set up awe-inspiring enterprises, offering employment to thousands and channeling billions to the treasury. While making profits, they have invaluably benefited the state. If they hadn't, today's Israel would be a backward country.

So Israeli capitalists are shocked to realize that they have become enemies of the people. They are infuriated when they're called usurpers. But they don't express their protest by tweeting, posting on Facebook or setting up tents on Rothschild Boulevard. They just turn their backs on a society that banishes them. They cut back and sell. Don't do us any favors, say major Israeli entrepreneurs, and they pack their bags. They don't emigrate, they just invest and build abroad.

Israel will soon find itself between a rock and a hard place. On the one hand, the social protest is yet to subside: The cost of living is still too high, and housing and energy are still too expensive. The average Israeli family pays too much tax without getting the wages, education, health services and pensions it deserves.

On the other hand, the capitalist protest is about to strike. The outcry against the rich, the over-bureaucratization of the economy and politicians' interference with the market will take their toll. There's a real danger that the venomous atmosphere will put off foreign investors, and as a result thousands will lose their jobs. So Prime Minister Benjamin Netanyahu has very little time.

Before the summer, he will have to throw his weight around and restore sanity. We must balance between two just demands: social justice and maintaining a free, dynamic and competitive economy.