Taking Stock / Where Amir Peretz Meets Big Business


Yuck. The mere word brings up the following image: a clique of indolent but power-hungry paper-pushers lounging about their Jerusalem offices and preventing the economy from bursting ahead.

That is, at least, the image that comes to mind among people who read newspapers. Israel is probably the only place in the world where regulation is a synonym for red tape, superfluous government intervention or some form of archaic bolshevism.

People who read the papers in Europe or the U.S. associate the word "regulation" with something entirely different. Last week the IHT wrote that intensifying competition, supervised by government regulators, usually lowers consumer prices and creates better conditions for business. In most cases, competitive markets are characterized by aggressive, effective government regulators.

Latter-day Bolsheviks?

Why does the rest of the west associate "regulation" with competition and improving the lot of consumers, while in Israel, it is another word for red tape and bolshevism?

The simple answer is that here, regulation is opposed by a particularly aggressive, belligerent, effective lobby: the owners, managers and workers of the biggest monopolies in the land, armed with PR agents, lawyers, lobbyists, advertising budgets and a cuddly relationship with (or ownership of) the media.

But that is not a good answer. These owners, managers and workers are protecting their businesses, their livelihoods. They aren't using threats or extortion, so their battle to preserve their comfy monopolistic existence is legitimate. The problem begins and ends with the people who are supposed to serve us - the politicians, and the regulators themselves.

The test of results - feeble competition throughout many sectors, and the miserable image of regulation itself - shows that somebody has fallen down on the job. Maybe the job was done dreadfully, or maybe it was just done with poor communication.

How not to protect the people

The root of the problem is the politicians. Every elected rep in town - and the reporters, too - are vying to see who can sob more loudly on behalf of the poor, but not one voice has risen up arguing for the need to institute "aggressive, effective" regulation.

Amir Peretz made a tremendous contribution to the public debate by placing poverty, unemployment and the minimum wage at the head of the public agenda. Good for him. But we haven't heard Peretz discuss the need for anti-monopolistic regulation to protect consumers, lower prices and accelerate economic activity.

That may be because Peretz, like many politicians, actually derives most of his power from the very monopolies that abhor competition so much.

Last year Peretz stood at the side of the big labor unions and bank owners against the Finance Ministry's reforms of the capital market, which would introduce competition into the banking sector. It was not a one-off position. Big business and monopolies - and their workers (some defined as public sector, some as private) - all share a common interest: to preserve the economic status quo and thwart any attempt to change the structure of the market.

The dissolution of the Likud and the stampede of almost the entire right wing to Ariel Sharon's new party, Kadima, ends the era of the great parties riding on tanks into power. Social issues are gaining momentum.

How disappointing it is to discover that not one of today's politicians, as caring as they are, can explain how to create jobs; how to find resources to help the poor and the old; or how he would act on behalf of the biggest sector of all, the consumers and taxpayers.