Commentary Magazine


Topic: Milton Friedman

Imagining a Jewish Conservatism

There is a remarkable expression of market economics in the Mishnah, the Jewish law book, in the discussion of fast days, and it’s worth revisiting when reading this month’s typically incisive Mosaic essay on Jewish conservatism. The Mishnah discusses the establishment of communal fast days when the rains don’t arrive by a certain point in the season in which they are needed. If the drought continues, the leaders declare three such fast days in two weeks, with the fasts taking place on consecutive Mondays and Thursdays. The mishnaic text reads:

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There is a remarkable expression of market economics in the Mishnah, the Jewish law book, in the discussion of fast days, and it’s worth revisiting when reading this month’s typically incisive Mosaic essay on Jewish conservatism. The Mishnah discusses the establishment of communal fast days when the rains don’t arrive by a certain point in the season in which they are needed. If the drought continues, the leaders declare three such fast days in two weeks, with the fasts taking place on consecutive Mondays and Thursdays. The mishnaic text reads:

Public fasts are not to be ordered to commence on a Thursday, in order not to raise the price of victuals in the markets; but the first fasts are to be on Monday, Thursday, and [the following] Monday; but the second three fasts may follow on Thursday, Monday, and [the following] Thursday. R. José says, “Even as the first fasts are not to be commenced on Thursday, so also are the second and last fasts not to commence on that day.”

Beginning an unscheduled fast on Thursday would raise prices just when people need to begin their grocery shopping for Shabbat. According to this logic the second fast can be a Thursday because it’s known in advance, giving shoppers time to prepare ahead of time and causing less havoc in the markets.

What we have here is a rather amazing case of Jewish law being set according to market economics and the principle of unintended consequences. You could call such ideas “conservative” or “classically liberal,” such as they are–but of course they preceded thinkers like Milton Friedman by almost two thousand years.

We’ll come back to Friedman in a moment, but first: this month’s fantastic Mosaic essay. In it, Eric Cohen argues for a Jewish conservatism as a political project in response to the threats–demographic, security, and otherwise–the Jews face today. A summary can’t really do the essay justice, so read the whole thing. Cohen talks about the role of the family in fostering continuity; the purpose of Jewish nationalism; the primacy of economics; and other conceptual areas of this political program. But he also says, as well he should, that: “What such an agenda would look like—its programmatic content—is a task for a separate essay and another occasion.”

Cohen’s purpose is to establish the principles, and he does so with great insight and erudition.

But we should still think about how to fill in the blanks, and also make one important distinction. Cohen’s essay is so valuable because it weaves together disparate elements into a “Jewish conservatism.” Yet part of any program of “Jewish conservatism” will also be conservatism as practiced by Jews. And for that, we really do have some idea how it would look.

Israel is the most obvious testing ground for Jewish conservatism. It is a country ever in the process of breaking free from its socialist shackles, but the seeds were planted earlier.

When we discuss the promotion of democracy abroad, we often hear objections like: “There are no Thomas Jeffersons and James Madisons in Iraq.” True. And what makes the United States and Israel such easy allies is the fact that Israel did have Thomas Jeffersons and James Madisons (though it needed more of them; it could have used a full constitution, for example). One such founder was Vladimir Jabotinsky.

Jabotinsky rejected socialism and had a fuller appreciation of individual liberty than virtually any other Israeli founding father. Here is Jabotinsky on representative democracy:

What is especially difficult to understand is the mentality of those who yearn for “leaders.” The situation was completely different and better in my youth. We believed that every movement was made of people of equal worth. Each one was a prince, each one was a king. When election time came, they chose, not people, but programs. Those who were chosen were nothing but the executors of the program. We, the masses, would follow them and listen to them, not because they were “leaders,” but specifically because they were our “servants”; when you, of your own free will, chose a group of people and order to them to work for you, you had to help them–or remove them. Because you were obeying not their will, but only your own will, which was expressed in the election. … This philosophy of my youth was perhaps a complete fiction (like all human philosophies), but I much prefer it; it had more genius and more noblesse, even though it bore the name, whose prestige has declined–democracy.

When your nationalist movement has such men at the forefront, democracy and freedom are in the DNA of the state that eventually comes into being. Jabotinsky’s vision might not have been described as “conservative” then, but it sure is now. This focus on nationalism and democratic accountability is falling out of favor in the West, but any aspiring political program would do well to swim against that tide.

But we can get more specific than that, with examples, once the state was actually founded–actually, when the right finally won an election nearly thirty years after the founding of the country. Shedding the country’s socialist skin was not easy. But Israeli rightists were willing to take on the challenge, at least incrementally. Menachem Begin was the Likud’s first prime minister after the 1977 elections. He called on–you guessed it–Milton Friedman for assistance.

Avi Shilon’s biography of Begin probably has the best rundown of the Begin government’s economic plans. A brief summary is as follows.

Begin wanted Friedman’s help with his New Economic Reversal. Friedman called Begin’s reform plans as “daring as the raid on Entebbe.” Subsidies were eliminated. This was politically brave, since lower-income earners were a crucial voting bloc in Begin’s electoral triumph. Also cancelled were foreign-currency controls to open up trade and investment. In order to try to alleviate the deficit, Begin also raised the value-added tax.

But Begin still did not go far enough, and inflation hit. Shilon writes:

The desire to create a free market in an economy that had not known many changes since the establishment of the state was expressed, among other things, in the fact that the linkage mechanism that compensated wage earners for price increases and that had been in existence since the days of Mapai was not eliminated, thus negating the effect of the built-in mechanism of inflation, by which rising prices were supposed to reduce demand and inflationary pressures.

He was also hesitant to push a fuller privatization program. Additionally, he wouldn’t cut government spending where it needed to be cut to help manage the debt. “I want social justice without socialism,” he had said. It was a start, anyway.

Israel took a big step forward with the Economic Stabilization Program beginning in 1985. Though Labor’s Shimon Peres was prime minister that year, he was heading a national unity government at a time when Likud had the upper hand, and the program was overseen by the Likud finance minister, Yitzhak Moda’i. It was instituted to boost the shekel, and rein in government spending through various mechanisms. It also had the assistance of the Reagan administration.

The stabilization was successful. More such programs finally took place in 2003 when Benjamin Netanyahu, at the time the finance minister in Ariel Sharon’s government, instituted more reforms by cutting taxes and increasing privatization while keeping government spending in check. And of course we can’t forget Israel’s reputation as a “start-up nation,” in which the opportunity to take risks and innovate is a mark of pride.

Back in the U.S., many American Jews are already positively disposed toward market economics, which has given them unprecedented freedom and prosperity. But other issues, such as school choice and religious liberty, will play an increasingly significant role in their lives. On those issues, the conservative positions may become more attractive to practicing Jews.

I’ve deliberately left off support for Israel. Although these days the American right is far friendlier to Israel than is the left, there is nothing specifically “conservative,” just as there is nothing specifically “liberal,” about support for an ally and a fellow democracy like Israel. It ought to be part of any conservative political program, but I hesitate to say it’s conceptually conservative.

There are other examples I’m sure I’m missing, but it will only help to put meat on the bones of a Jewish conservatism that we have so many real-world examples of Jews practicing political conservatism. With that combination, a real Jewish conservatism can take shape.

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The Wrong People Are Doing the Right Thing

Mark Steyn, writing in COMMENTARY last November, pulled out a great quote:

In 1975, Milton Friedman said this: “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or if they try, they will shortly be out of office.”

Perhaps that climate is upon us. Who, in political terms, is more “wrong” than the progressive whistlers inhabiting the fiscal graveyard known as California? Yet, on Tuesday, Chuck Reed, the Democratic mayor of liberal San Jose won nearly 70 percent support for a ballet initiative that will deal huge cuts to the bloated pensions of city workers. Currently, retirement costs eat up more than 20 percent of San Jose’s general fund. None other than a Democratic mayor, backed by a clear majority, intends to slam on the brakes. Tea Party not needed.

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Mark Steyn, writing in COMMENTARY last November, pulled out a great quote:

In 1975, Milton Friedman said this: “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or if they try, they will shortly be out of office.”

Perhaps that climate is upon us. Who, in political terms, is more “wrong” than the progressive whistlers inhabiting the fiscal graveyard known as California? Yet, on Tuesday, Chuck Reed, the Democratic mayor of liberal San Jose won nearly 70 percent support for a ballet initiative that will deal huge cuts to the bloated pensions of city workers. Currently, retirement costs eat up more than 20 percent of San Jose’s general fund. None other than a Democratic mayor, backed by a clear majority, intends to slam on the brakes. Tea Party not needed.

On national security, we see similarly encouraging signs. Democratic Senators Dianne Feinstein and John Kerry were among others who called for an investigation into recent Obama administration leaks about American cyberwarfare action against Iran. “Whoever is doing that is not acting in the interest of the United States of America,” said Kerry, using the kind of black-and-white tough talk he used to accuse the Bush administration of using to divisive effect.

And of course a slew of Democrats, from Feinstein to Deval Patrick to Bill Clinton, called foul on Barack Obama’s anti-private-equity reelection strategy.

The beautiful thing about living in a democracy with protected speech is that politicians aren’t solely in charge of framing the terms of debate—citizens set the political climate. In what has already passed of the Obama years, the temperature has been raised enough to make liberals sweat. Today a trickle. Tomorrow who knows? As Friedman saw it, that’s ultimately a greater conservative victory than what may transpire in November.

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New York Times, Meet Milton Friedman

Since John has awarded the prize for the most ridiculous headline to the Times, let’s make it a twofer and give the Times the dumbest opening paragraph as well.

The Senate voted Thursday to require health insurance companies to provide free mammograms and other preventive services to women, and it turned back a Republican challenge to Medicare savings that constitute the single largest source of financing for the bill.

Just as there are no free lunches, there are no free mammograms either. The insurance companies will pass the cost along to the policy holders in the form of higher premiums. These politically imposed mandates are a major reason why health insurance is so much more costly in states like New York and New Jersey than it is in neighboring states like Connecticut and Pennsylvania. A family policy that costs $12,250 a year in New York costs only $7,750 a year next door in Connecticut because that state does not have guaranteed issuance (get sick today, buy the policy tomorrow, and still be covered) and many fewer coverage mandates. New York has no fewer than 51 of these, including chiropractic treatment, acupuncture, and — a very big-ticket item — in vitro fertilization. Even if you think chiropractors are quacks, hate needles, and are at a stage in life when you don’t want to make babies even the old-fashioned way, you still must pay for coverage because politicians in Albany have decided you should.

As I have often pointed out, politicians cannot make economic decisions; they can make only political ones. That’s why socialism has never worked — and it never will. For socialized medicine, that goes double.

Since John has awarded the prize for the most ridiculous headline to the Times, let’s make it a twofer and give the Times the dumbest opening paragraph as well.

The Senate voted Thursday to require health insurance companies to provide free mammograms and other preventive services to women, and it turned back a Republican challenge to Medicare savings that constitute the single largest source of financing for the bill.

Just as there are no free lunches, there are no free mammograms either. The insurance companies will pass the cost along to the policy holders in the form of higher premiums. These politically imposed mandates are a major reason why health insurance is so much more costly in states like New York and New Jersey than it is in neighboring states like Connecticut and Pennsylvania. A family policy that costs $12,250 a year in New York costs only $7,750 a year next door in Connecticut because that state does not have guaranteed issuance (get sick today, buy the policy tomorrow, and still be covered) and many fewer coverage mandates. New York has no fewer than 51 of these, including chiropractic treatment, acupuncture, and — a very big-ticket item — in vitro fertilization. Even if you think chiropractors are quacks, hate needles, and are at a stage in life when you don’t want to make babies even the old-fashioned way, you still must pay for coverage because politicians in Albany have decided you should.

As I have often pointed out, politicians cannot make economic decisions; they can make only political ones. That’s why socialism has never worked — and it never will. For socialized medicine, that goes double.

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