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The Deep Roots of Israel’s Capitalist Democracy

For the first time since Israel’s housing and cost-of-living protests began, last night there was no massive Saturday night demonstration in Tel Aviv. But there were several well-attended demonstrations in other cities such as Haifa, Beersheba and Afula. Though many leftist groups and non-governmental organizations have sought to exploit this movement for their own political ends, it cannot be denied the protesters have touched a nerve. The vast majority of Israelis see them as a reasonable response to genuine problems.

Though much of the coverage of these demonstrations have sought to shoehorn them into a political context in which the Israeli government can be depicted as the villain of the story, COMMENTARY contributor Sol Stern points out in the City Journal that in fact this unrest represents an opportunity for Prime Minister Netanyahu to advance the cause of free market reform.

Stern rightly notes the demonstrations, which have been a model of civil behavior and nothing like the unruly mobs that have protested against entitlement reforms in Europe, are not the result of economic failure but of Israel’s success as its economy expanded and real estate in Tel Aviv became even more valuable. Though, as he points out, many Israelis have been left behind by the boom, the answer to the problem is not the socialism of the past, but more free enterprise to break the shackles of government intervention that are the vestiges of the country’s old East German model.

It is well understood within Israel that to the extent that the protests become co-opted by the left, their support from the general public will drop. In fact, as Stern writes:

If Netanyahu plays his political cards right, he could emerge from this season of demonstrations as the winner who pushed forward the additional economic liberalization and reforms that this “start-up nation” still needs. He has already acted to release massive tracts of government-owned land for the construction of new housing, including rental units. Last week, he appointed a committee of independent experts to report to his government on further steps that can be taken to meet the protesters’ more reasonable demands, without indulging in the levels of welfare spending that brought the economies of Israel’s Mediterranean neighbors—Greece, Spain, and Italy—to their knees.

Though the left would like to hijack the protests, this middle class revolt is likely to remain a mainstream movement. That means that as Stern puts it, they will actually demonstrate “how deep and stable the roots of Israel’s capitalist democracy are.”



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