Comment / Shelly Puts Stanley in His Place

Stanley Fischer, the governor of the Bank of Israel, does not know what trouble he got himself into.

Stanley Fischer, the governor of the Bank of Israel, does not know what trouble he got himself into. At the press conference where he presented the bank's 2005 annual report, Fischer dared to speak out against raising the minimum wage - as proposed by the head of the Labor Party, Amir Peretz.

Just minutes later he was on the receiving end of an attack by newly elected MK Shelly Yachimovich.

"It would have been proper for Fischer to have waited until the appointment of a new finance minister before speaking," criticized Yachimovich.

It's impossible not to be shocked by her words. No one disputes her many talents, and there are high hopes for her in the new Knesset. But that is why her comments were so disappointing. Not only because her attack on Fischer showed incredible intolerance - because if Fischer had spoken out in favor of raising the minimum wage Yachimovich would have kept quiet - but because she showed how little she knows about the law.

Fischer has a role as an economic advisor to the cabinet, and as such his duty is to provide an opinion about economic policy. His legal obligation is to advise the government, and as far as the law is concerned it does not matter one bit whether the government is a temporary one or not.

Our disappointment in Yachimovich is nothing special. Wherever you look you can see well-spoken, mature and educated people whose knowledge of economics is embarrassing.

Just this week there was an educated discussion on one of the television channels concerning various policies the new government must choose. When the discussion turned to economic questions, one of the participants, a well-known historian, vehemently quoted the founder of modern economics, Adam Smith: "Even he said that it was forbidden to privatize the education and health systems," the participant said.

Smith, you should remember, is no longer among the living. In fact, he hasn't been since 1790. So although his place in the Pantheon of modern economics is quite safe, even Smith never would have expected to be a pillar of economic debates some 220 years after his death.

By the way, if any of those participating in the discussion had had any form of economic education, they would have known that it was unnecessary to go back in time as far as Adam Smith. It would have been good enough to know that one of the chief opponents of privatizing the Israeli health system in 2006 is the Finance Ministry. Their reasoning is of course based on worldwide medical experience from the past 20 years.

It did not seem to bother anyone taking part in the television debate that none of the participants knew anything about the subject they were talking about.

It didn't seem to bother them, since it didn't bother the viewers. The average Israeli is a complete ignoramus about economic matters, so when Yachimovich says that economics is not science, no one criticizes her.

Her listeners know nothing about economics either, so they have no problem ignoring economic science - even when economics is one of the leading branches of science today - and has been since Adam Smith's day. There is even a Nobel Prize for economics.

But since economics is not a science, it is quite understandable why it is not represented in the Israeli legislature. Never in the entire history of the Knesset has a real economist - one with more than a bachelor's degree - ever been a member. Professor Avishay Braverman, who was just elected to the 17th Knesset, will be the first.

Even in this Knesset he will remain alone. If he wants to have a serious economic debate, even within the Knesset committee responsible for supervising the cabinet's economic policies, the Knesset Finance Committee, he won't have anyone else to talk to.

There is no one else in the entire Knesset with an economic education, and the Knesset discussions on the matter show it.

It is obvious of course that there is no other parliament in the western world with a similar situation. Nowhere else in the world do they think that economics is not a science, and they don't quote politicians who don't have a clue about economic matters. In no other country would they have dared to tell the central bank governor to shut up because it is not acceptable for him to comment on economic matters.

Only in Israel is it possible. Only in Israel is management a dirty word. Only in Israel is an economist by definition a capitalist pig, and not someone who thinks that the state must govern - and in order to govern it must know something about economics. Otherwise, we get inefficiency, waste of public funds and corruption.