All Commentary
Sunday, July 1, 1990

A Reviewers Notebook: Israels Dilemma

Israel’s Dilemma: Why Israel is Falling Apart and How to Put it Back Together by Ezra Sohar (Shapolsky Publishers, 136 W. 22rid Street, New York, NY 10011, 263 pages, $15.95) tells the same sort of story about the strangulation of industry in Israel by socialist monopolies that made Alvin Rabushka’s and Steve Han-ke’s Toward Growth: A Blueprint for Economic Rebirth in Israel one of the notable books of 1988. The lesson of the two books is what any believer in the free market might expect: You can’t get competition, with its attendant plenty, in a system that offers nothing but subsidies and jobs on the State payroll.

Sohar makes his points dramatically by comparing Israel to Taiwan. Both countries were established in the late 1940s. “Both,” says Sohar, “were founded by immigrants who put ashore at a small, resource-poor new home. Both have to bear onerous defense burdens.” But Taiwan cut loose at an early date from dependence on government grants from abroad. It made landholding easy for accomplished farmers, and it learned much about the ins and outs of international trade. Israel followed a different course: it socialized practically everything.

The result is apparent to even the most casual observer. The Israeli government now owns the country’s railroad, the E1 A1 airline, the telephone company, the radio networks, two TV channels, several oil refineries, and the largest department store chain. It controls access to the land through regulation of the water supply, and it drives even the sons of landowners into kibbutzim.

Sohar doesn’t feel comfortable with the fact that the average Israeli, to pay his incredible taxes and the bill for monopolized goods, has to cheat in various ways. His tone differs from that of Sam Lehman-Wilzig of Bar-Ilan University, who contributed a remarkable article on “Israel’s Grassroots Libertarian Revolution” to the April 1990 issue of The Freeman. Lehman-Wilzig accepts the Israeli black market as a fortunate thing. It may be evidence of what he calls “quasi-criminal behavior,” but there seems no way of avoiding it.

Where Sohar’s book does some “tut-tutting,” Lehman-Wilzig glories in the ingenuity used by Israelis to engage in “pirate” cable television, to find doctors willing to take on patients out of hours, to hire teachers for afternoon “enrichment” education. Socialism is being “dismantled” in Israel according to Lehman-Wilzig, and “there is all the chance in the world that the new system taking its place will be successful and stable, once the not-inconsiderable transitional difficulties are overcome.”

I could wish that our various authors—Rabushka, Hanke, Sohar, Lehman-Wilzig—had done a more specific study of the role played in Israel by the organization called the Histadrut. This seems to be a state within a state. Says Sohar: “The His-tadrut became the de facto government of Palestine’s Jewish workers, embracing a wide variety of functions in its bearhug. Such a complex task required it to assemble a massive bureaucracy.” We could stand more information about the workings of this bureaucracy. It sounds truly formidable.

The complaint voiced by Norbert Yasharoff in the quarterly magazine Lincoln Review is that there is an “Israel We Rarely Read About.” Yasharoff was surprised by accounts of growing grassroots cooperation between Jews and Arabs within the pre-1967 boundaries of Israel. He made visits to two of the better known cooperative projects.

There was the Friendship’s Way Center in Jaffa, with its all-volunteer staff of 50 that includes Israeli university students, Arab and Jewish high school pupils, as well as young students from the United States, England, and West Germany. Friendship’s Way was the brainchild of Motti Golan, a Jewish public accountant who decided six years ago that “somebody’s got to do something to improve the miserable lot of the Arab residents of Jaffa, especially their children.”

The second project visited by Yasharoff was the Neve Shalom, or Oasis of Peace, founded by Father Bruno Hussar of the Dominican Order in Israel. Neve Shalom has evolved into a cooperative village of some 60 Arabs and Jews.

The Western press and TV coverage of Israeli affairs impresses Yasharoff as “one-dimensional” and “all-negative.” “What,” he asks, “can be done to correct the lopsided reporting . . . . The obvious remedy would be for American newspaper editors to encourage, and demand, the kind of coverage that goes beyond depiction and analysis of violent or other negative events . . . .”

The next best thing, of course, would be to depend less on the big press and more on the little magazines such as Lincoln Review and, yes, The Freeman.

  • John Chamberlain (1903-1995) was an American journalist, business and economic historian, and author of number of works including The Roots of Capitalism (1959). Chamberlain also served as a founding editor of The Freeman magazine.