A capitalist government
The two largest factions – Likud Beytenu and Yesh Atid – are outspoken in their support for smaller government and market capitalism.
Yesh Atid leader Yair Lapid at a faction meeting, February 18, 2013. Photo: Marc Israel Sellem/The Jerusalem Post
Almost eight weeks after going to the polls to elect the 19th Knesset, Israelis
will finally see the democratic process kick into action. If all goes as
planned, the Jewish state’s 33rd government will be sworn in on
From Binyamin Netanyahu’s point of view, it would have been much
easier to form a coalition that included Shas and United Torah Judaism, not
because Likud Beytenu and the haredim share an ideology or a political platform,
but because of political pragmatism.
But by choosing – or being forced
into – forming a coalition with Yair Lapid and Naftali Bennett, Netanyahu has
facilitated the creation of a government that reflects a majority consensus
among Israelis. And that consensus is surprisingly bourgeois in its
sensibilities and capitalist in its outlook.
Not since the 1965 election,
the last before the Six Day War, was attention so focused on domestic issues
that eclipsed the question of a negotiated peace with the Palestinian – rightly
seen as all but unattainable under the present reality (split Palestinian
leadership, intransigence even in the “moderate” Palestinian camp, and a lack of
an Israeli majority to accommodate Palestinians’ demands).
the vote was so heavily determined by domestic issues, it revealed that a strong
majority of Israelis in a nation designed and built by socialists has moved
decisively away from the economic dogma of its founders.
heads of the two largest factions – Likud Beytenu and Yesh Atid – are outspoken
in their support for smaller government and market capitalism.
Bayit Yehudi, a reincarnation of the National Religious Party, succeeded in
doubling its strength, reinstating the party’s standing that began deteriorating
in the 1981 election over internal squabbling about the settlements, the role of
rabbis in politics and the rise of Shas.
The man who succeeded in doing
this was Bennett, a software entrepreneur whose company, Cyota, a developer of
anti-fraud security software for financial institutions, was sold in 2005 for
$145 million. In contrast, Labor’s Shelly Yacimovich, despite her high level of
personal integrity and dynamic leadership, failed to significantly improve her
party’s showing with a campaign that emphasized almost exclusively a left-wing
Yacimovich had hoped to capitalize on the economic
protests that began sweeping the nation in the summer of 2011 and mobilized a
record number of protesters not seen since demonstrations against the 1982 First
But Yacimovich – and others – misunderstood the most
significant sociological phenomenon to unfold in recent Israeli history. True,
some leaders of the protests articulated decidedly left-wing economic views,
calling for larger welfare transfers and attacking Netanyahu’s policies as
tilted in favor of the rich.
But the vast majority of Israelis who took
to the streets were not demanding more government spending. Consumer rights were
in the forefront. They demanded that major food producers cease colluding with
the supermarket chains, and complained about the tremendous bureaucratic
obstacles making anything from starting a business to building a house a
The middle class was fed up with the market inefficiencies, red
tape, and unfair competition that jacked up the cost of everything from cottage
cheese to housing. They were not lamenting the breakdown of the welfare state.
If anything, mainstream Israelis were making it clear they were tired of paying
too much taxes to support a population that does not work, while they serve in
the military and perform reserve duty from which others are exempt.
popular demand, one of the most burning issues facing the new government is the
tens of thousands of ultra- Orthodox who do not perform mandatory military
service, are not schooled to integrate into the labor market, and inevitably end
up becoming a drain on the rest of society.
Now with Lapid as finance
minister and Bennett as economy and trade minister (formerly the Industry, Trade
and Labor Ministry), the two newcomers to politics are in a unique position to
do away with aspects of the economy that are either remnants of the Jewish
state’s socialist roots or the product of special entitlements conceded to the
haredi population when it was still a tiny, embattled minority.
hope that petty infighting and personal feuds do not get in the way of the
important domestic goals the 33rd government was voted into office to