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Monday, February 22, 2016

Israeli Oligarchs and Zionism’s Failure of Vision

As part of our 25th wedding anniversary celebration we looked at Budapest, Venice and Barcelona.  We settled on Tel Aviv.  To be fair, twelve months before that we had spent two days in Tel Aviv and it wasn’t nearly long enough. Twenty-seven years earlier I had dragged my then girl-friend (now wife) all over Tel Aviv.  Then, it was dirty and dusty but parts were gentrified. Bauhaus hadn’t yet gained the international recognition that it enjoys today.

This time we spent a couple of days walking from Geula Street which runs perpendicular from the seaside to Rothschild Boulevard and beyond.  Rothschild and Chen are two of the streets whose middle has a walkway the entire length, planted with the most gorgeous trees.  Many of those trees have roots wrapped around their trunks providing an organic sculptural majesty - they are a variety of Ficus or rubber tree.   One of the smart things the cities founders did was to create those tree lined boulevards which helps to circulate air and provide shade.

The downside to Tel Aviv is its lack of ambition for itself and its’ shabby chic. It may look good on a teenager but not on a building. It  spells out what is wrong with a city that has only recently celebrated its centenary; more about that later.

For the first few decades of renewed independence the refugee camps (Ma’abarot) housing Jewish refugees from throughout the Arab world were a necessary eye-sore that challenged successive governments to clear them.  Necessities were basics, not luxuries.  The possession of a small foreign currency account in the USA while Yitzhak Rabin was ambassador there (which his wife failed to close after the ambassador returned to Israel) brought about both the resignation of the serving prime minister, that same Yitzhak Rabin, and the fall of his government.

Four decades ago a representative of the state of Israel would recommend that a new immigrant bring with them a decent kettle when they immigrated!  This occurred at around the same time that an investigative journalist wrote an expose demonstrating how 70 families owned most of the wealth of the state.  The book had no impact on the uneven distribution of wealth.

Today, one statistic states that 5% of Israeli families (a few more than the 70 that once controlled everything) have 80% of the nation’s wealth. The GINI co-efficient which measures the distance between rich and poor, places Israel alongside the USA as highest in the developed world in the disparity between rich and poor.  The price of basic foodstuffs is ridiculously expensive. It isn’t just imports that cost too much.  Taxes are only part of the issue.  It is greed, centralized wealth and import policies that protect the oligarchs.  A book in the English language at Steimatsky’s (Israel’s largest bookstore chain) costs almost three and a half times the price it would cost in the West.  Packaged foods are often double what the same or a similar product would cost in a European country.
Outside the country, Israelis are competitive and have great products; internally it is as if a mafia owns everything and has no loyalty to anyone, at least not within Israel.   From a country of farmers and pioneers to a modern nation fed up with austerity, but led by politicians that have no national agenda, no unifying national vision, it makes sense that every man  and woman  is for themselves, and only themselves.

That explains the greed but not the lack of civic community.  An example is Tel Aviv which is called “the White City,” a designation based on its 4,000 Bauhaus/ International Style buildings, many of which are in need of serious renovation.   (It used to also be called the Big Orange as a nod to the Big Apple).  Enormous infrastructure projects are being proposed (such as the TA Light rail project and redevelopment of former military lands for large-scale commercial and residential construction.)  But almost everything in Tel Aviv appears tired and even decrepit.   The cosmetic face of Tel Aviv is usually ignored.  Newly constructed hotels and beach-side apartments are soon in need of maintenance and even the 5 star hotels along the sea-side appear externally dilapidated.  1970’s entertainment structures are ugly and clearly no longer maintained.  Some-one is making lots of money but it is not from any attempt at creating civic pride. 

Operation Protective Edge and other previous military conflicts affected Jerusalem – generating fear and damaging tourism.  But TA has rarely been touched (excepting during the First Iraq War when Iraq fired 39 missiles at it).  An enormous quantity of cash (mostly foreign donations) has contributed to the ongoing beautification of Jerusalem and to its maintenance. But TA is overwhelmingly ignored.  So the question is, why do its citizens ignore aesthetics? To show its contempt for modern town planning, the Midrachov, the seaside walkway that stretches the length of Tel Aviv from the   fashionable area of shops in the North to Jaffa in the south was still under reconstruction in the summer time during the peak period of the tourist season.

Maybe the main problem is that that 5% who own most of the wealth are funding both the political left and the political right.  So there are few (if any) national politicians with significant influence who are willing to take on any national issues that impact their own narrow interests.   A simple example occurred with the 2015 budget.  Yair Lapid planned three modest agricultural reforms for sheep’s milk, egg quotas and fish. These plans would have lowered prices, but Agriculture Minister Yair Shamir blocked them.  He did so because his party has activists from farming communities and agri-production organizations who we must assume, opposed the reforms. (Ha’aretz January 2nd, 2015) The Israeli market is not competitive.  It is controlled by vertical monopolies that prevent competition in local and national markets.  Israel is too small not to be regulated but control can also be abusive.  The danger in any relationship is that those that seek control rarely know when to stop and the difference between control and dictatorship is in the degree by which control is exercised.

Japan had a similar problem in the period that ended with General MacArthur’s rule.  The Zaibatsu were enormous conglomerates with control over every aspect of Japanese life. Breaking up the Zaibatsu helped to facilitate Japanese competition with the West.  For almost five decades the Japanese economy not only flourished but was viewed as the model of a centralized economy that other states could emulate, if they wanted to develop a healthy economy.

The need for action against oligarchies and monopolistic practices is obvious. Israel needs effective legislation targeting the control that the super-rich have over the Israeli economy. But the only way that will happen is if collusion is permitted by those same people and organizations in the furtherance of international competition because Israel is too small a market to sustain the ambitious entrepreneur.

There needs to be tax incentives to increase domestic productivity without jobs being lost.  Competition has meant the transfer of jobs overseas.  There has to be tax incentives to ensure jobs remain in Israel. Unemployment damages the social fabric.

People do not invest in property maintenance or in the creation of legacy structures if they are not committed to the local community.  A beautiful building, donations to art galleries and parks endowed in their names and the names of their loved ones are demonstrative of public statements of permanence.

Instead, in Israel we have foreign donors who endow universities, museums and public spaces while super-rich Israelis offer 50 shekels to their fellow Israelis and then demand a rename of the building in their name.  Worse, when their inflated egos are insufficiently stroked they emigrate and take their money and their physical assets with them.

Civic pride and economic maturity entails investment in aesthetic as well as commercial infrastructure. It includes long term Israel focused business and social investment; not selling off every technological innovation that emerges from Israel’s creative genius and not ignoring the cultural needs of the people.

The first stage of Zionism, building the nation so that it would be sustainable, is completed.  The second stage, a renewed Zionism that builds and beautifies the land has not yet begun but it is urgently required.  We do not discuss Zionism because we are intellectually and morally fatigued through the constant attacks of bigots who have no interest in understanding its noble birth or its ongoing mission but who have every interest in demonizing Zionism and thereby rewriting the history books; thus preventing any meaningful understanding of it.   A vigorous debate around a renewed Zionist vision will not only raise the quality of debate but also provide critical focus for Israel’s notoriously partisan political parties and perhaps even a means for reuniting some of them.


  1. it's the old yiddish expression."yidden can mach eh madina? hah! a nechtiger tug".(jews can make a country?hah!in a day that's not here)LOL.

  2. A friend from kibbutz was here and I asked him why don't you bottle you own expensive gourmet marinated crafted cheese and sell it. Like every guy with a goat in Australia does. He said Tnuva would crush you. As apparently according to him all of the seven families, the seven rich families of Israel do to any startup they can lay their hands on. Except software which is immune to the seven families because software doesn't need the local infrastructure the rich families control. I said don't the seven families feel bad about holding back our beloved country of Medinat Israel and causing poverty. He laughed. The interesting thing about inequality is that it is caused as you wrote, by both the left and the right. The young ambitious and definitely hungry, poor person who wants to sell peanuts is met by a wall of expensive, time consuming regulations, legal certificates and qualifications that the left have put in and a conspiracy of pricing and collusion from the right to stop him selling his nuts. And it's the fresh blood, the ideas from the young and hungry that send a country's prosperity forging ahead. Inequality is a big sign of collusion from the left and the right in government to stifle the new. And according to my kibbutz friend Israel is one of the worst. There's one good side though. My kids hear me mostly going on about the self righteous desperate search for victim hood from those on the pampered left. Now when I talk about the hypocrisy of the right when they rattle on about the free market I may look a bit more like David the even handed to my offspring.

  3. First time here at your blog. I live in Israel--originally from the States. If I may, I suggest that you cut something like this into 2 or 3 sections; too much stuff, some unrelated, is stuffed in. Also--sorry, but your misuse of the apostrophe bothers me. Are you as careless in your research? (for example, the possessive its has no apostrophe, neither does the plural "Israelis".
    My in-laws lived on Gordon Street near the sea in Tel Aviv. These parts of the city have the same problem as any place next to the sea: the salt air is extremely corrosive. Thus the crumbling look, even if great efforts are made to keep up.
    You enjoyed knocking many places....Have your been to Sarona? The fixed up old port? I've lived here 40 years and seen a huge improvement in aesthetics, and that is my field.

  4. I don't normally engage in point by point refutations - I prefer to discuss these things privately....Re misuse of apostrophes - you need to blame spellcheck - it depends on whether you write in American English, English English or even Aussie English. My spell-check told me and continues to tell me that I am correct - even if on occasion I use grammar and spelling from both US and UK traditions. Second, no need to be insulting - I hope that I am not careless in my research. You should be less offensive with you communications. I did however correct the plural! Check out my profile. I do appreciate the effect of salt on buildings - particularly as I used to live in a part of Israel that was constantly battered by the sea. Your explanation for that crumbling look is far too simplistic. Of course I have been to Sarona and there have been huge improvements over 40 years to places like Sarona that is - huge improvements are required across the nation including within the far too many slums (Jewish ones too). (see the third comment from "Unknown"). Sarona prices are beyond the pocket of the overwhelming majority of Israelis - secular and religious, Jewish and other.