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PDF FormatOf all the social-spending parties, however, it is Shas which is most influential—and, in the long run, probably the most important. Shas currently controls the Interior Ministry and the Ministry of Labor and Welfare, and has been Israel’s fastest-growing political movement over the past decade. Through its system of schools, yeshivas and social welfare programs, this relative newcomer to Israeli politics has won the allegiance of an increasing percentage of the populace, making it the third-largest faction in the Knesset, after Labor and Likud. Originally organized to serve religious interests, in recent years Shas has come to champion its constituents’ material interests as well: Like Gesher, it depicts Israeli society as fundamentally divided into the “haves” and the “have-nots,” the latter being, for the most part, poor Sephardim who are burdened with bad jobs, high unemployment and exposure to crime and drug abuse, and whose children go to poor schools, leading to more bad jobs and unemployment. And, like Gesher, Shas’ principal economic goal is the redistribution of wealth to its constituency, ostensibly to relieve the income inequality prevalent in Israel today.
A prominent party leader, Minister of Labor and Welfare Eli Yishai, describes Shas as a party with a social agenda as well as religious and ethnic goals. Yishai was responsible for creating the “Council for the Fight Against Poverty,” a committee of political, social and labor leaders dedicated to increasing government welfare programs. At the Council’s well-publicized and well-attended opening session, Yishai described Israel as a “divided society” that discriminates against its weaker elements. Yishai’s view is that the task of sustaining the weak falls properly on the state, as the “agent” of the public: “I believe that a determined decision by the state to reduce income differentials, backed by the funds required to achieve this, can bear fruit,” Yishai stated. “If we allow market forces alone to determine the course of our lives as a society, we will find ourselves ... without a market and without a society.”5 When the government’s economic goals for the 1998 fiscal year included an inflation target and a fiscal deficit target, Yishai called upon the government to adopt as well an “unemployment target” of seven percent in 1998—which would have effectively negated the government’s commitment to these other targets.6
Yet Israel’s new “social lobby” is not confined to the smaller factions. In both major parties, Likud and Labor, anti-reform ideas have been adopted by ambitious young politicians. Likud leaders such as Minister of Tourism Moshe Katzav and Finance Minister Meir Shitreet, for example, have consistently called for increased social spending. In Labor, a large number of MKs, encouraged by the recent victories of social-democratic parties in Europe, have begun advocating European-style social democracy, in which the “weakest” segments of society are systematically protected from the supposed brutality of the free market. Their most notable figure is Shlomo Ben-Ami, a professor of history at Tel Aviv University and former ambassador to Spain. Ben-Ami first entered the Knesset in 1996, at the very bottom of the Labor list, but he quickly rose in the ranks to run a close third in the 1997 election for party chairmanship, on the platform of recasting Labor as a “social party.”7 In the Labor primary which took place in February of this year, Ben-Ami won the top position on Labor’s list.8
Ben-Ami’s main message is the continuing relevance of socialism in solving the problems of cultural and social polarization in Israeli society, problems he maintains have been worsened by market reform. According to him, the free market necessarily creates poverty, unemployment and increasing income differentials; it is both unethical and a social failure.9 Echoing the fears of his European counterparts about competitive challenge, Ben-Ami claims that “the global market has brought about social fragmentation.... A society that derives its values from the principles of the free market, as Israeli society does today, condemns itself to social destruction.” Social democracy, on the other hand, means public policy with a conscience, in which government largesse reflects a unified society which takes care of its own. To this end, Ben-Ami advocates “a policy of reducing social gaps,” a master plan to fight poverty through legislation that will guarantee everyone a job, provide universal public pensions, and strengthen labor unions—all in order “to prevent the penetration of market principles into social thought.”10
Ben-Ami’s line of reasoning has found favor in a number of political and intellectual circles. Ovadia Soffer, a Likud activist and former ambassador to France, adds to this viewpoint a particularly alarmist element. He writes:
The experience of most Western countries proves that complete [economic] liberalization and the privatization of national resources hurts the economically disadvantaged, and causes unemployment and serious social problems that have caused changes of government in most European countries. Economists and thinkers [in Europe and Japan] are calling for a revision of contemporary capitalism. They identify the source of evil in the slow rate of economic growth, caused by the erosion of economic demand.... Income differentials cause tensions, conflict, and the rise of extremists. The racist party of Le Pen won 15 percent of the vote in France….11
This, in a nutshell, is the contemporary European social-democratic critique of the market.12 The market causes unemployment, because international investors refuse to recognize the productive potential of Europe’s highly skilled (though rather expensive) workers. Growth is slow because demand is depressed, so economic policy should be Keynesian: Spend public money, put the workers to work, and they will stimulate demand, which will spur growth. The market causes social inequality, which generates social unrest and votes for Jean-Marie Le Pen. Soffer recommends that Israel “learn the lessons” of the European experience by stimulating employment, and broadening and deepening the social safety net for the disadvantaged. Like the European politicians and publicists who are the source of his analysis, Soffer ignores nearly everything that economists have to say about the causes of Europe’s high unemployment and slow growth and the remedies for them; he opts instead to repeat classic étatist formulae.
Similar beliefs have been expressed by influential movements in recent years. One of these is the Mizrahi Democratic Rainbow, or “Keshet.” Keshet views Zionism as the ideology of Israel’s dominant Ashkenazi elite, and the State of Israel as the political construct this elite created in order to perpetuate its hegemony. One movement spokesman, Tel Aviv University political scientist Yoav Peled, has declared that liberal economics is nothing more than an attempt by the Ashkenazi Labor elite “to free economic activity of political and social obligation and establish it on the pure profit principle.”13 Peled writes, “A policy of tax reduction and reducing social services benefits taxpayers and harms the users and administrators of public services; it is, in other words, a redistribution of resources from the have-nots to the haves….”14 Peled summarizes one element of Keshet’s underlying motivation with the observation:
For three-quarters of a century the Zionist enterprise ... rested upon two [institutions]: A corporatist socioeconomic and political system centered on the Histadrut, whose purpose was to extract resources from Jewish society, and a military-security apparatus intended to appropriate resources from the Palestinians… both systems benefited primarily the Zionist-Ashkenazi Jewish elite….15
Keshet’s more radical members echo this harsh analysis: Contemporary Israeli elites are the Ashkenazi masters of concentrated economic, political and cultural power, which they use to exploit the disadvantaged (chiefly Sephardim and Palestinians). Zionism is “Ashkenazi Zionism,” and the establishment of the State of Israel was “the Ashkenazi revolution,” which Keshet’s members oppose by means of a proposed new “Mizrahi revolution.”16
Keshet’s rhetoric on economic affairs is reflexively socialist. During the movement’s founding conference in early 1997, Yossi Dahan, one of the group’s central figures, claimed that economic efficiency is antithetical to “just socioeconomic policy.”17 This sentiment was echoed by other prominent Keshet representatives: Neta Amar, a member of Keshet’s secretariat, said, “I do not believe in a market economy... my loyalty is to an egalitarian ideology...”; and Shlomo Vazhna, a Keshet spokesman, offered, “[Keshet] responds to the great longing in Israeli society for social solidarity.… I believe in social democracy, not in an unrestricted free market.”18
While not a political party—at least not yet—Keshet is clearly determined to effect political goals. In 1997 and 1998, it campaigned for the passage of a far-reaching housing law allowing the low-income tenants of public housing units to purchase their apartments at drastically reduced prices. Keshet’s demand aroused support among mainstream members of Knesset, who submitted a draft bill providing for the sale of 100,000 public housing units—a giveaway which may cost taxpayers as much as $2 billion.19 In October 1998, the bill passed into law.20
