Two seemingly unrelated events took place in the
Knesset last week that should worry Israeli citizens. The first, and
most severe, was final approval of the package deal between the
Treasury and the Histadrut, as part of the Economic Arrangements Law
2009-2010. In an historic irony, unprecedented Bolshevik laws were
adopted and legislated by a Likud-led right-wing government.
the free world is celebrating 20 years since the fall of the Berlin
wall and the communist bloc, the Knesset approved a law that will give
labor unions more prerogatives than the police have. Histadrut
representatives will have the right to appear at any work place,
without notice and without the employer's consent, to assemble workers
and preach to them about their rights and, of course, try to convince
them to join the union.
A criminal offense
This will take place during working hours - at the employer's
expense, regardless of how urgent and important the workers' job is. If
the employer refuses entry to the Histadrut representative, he can be
fined NIS 200,000 and be indicted on criminal charges. Not even a
police officer has the right to enter a business without a court
Under the new law, an employer who fails to pay workers on time can be indicted on criminal charges.
That is not to say we take this kind of offense lightly. Holding
back wages is a moral sin, inhuman and the Torah is full of warnings
about this issue. But making this a criminal offense is an even bigger
sin. After all, it is a civil dispute about a payment of debt.
The employer owes money to the employee due to
his labor service. What is the moral difference between a boss not
paying his worker on time and a customer who is delaying payment to a
supplier? Why isn't the latter considered to be a criminal offense?
But even if you think this is reasonable, wait and see how our
politicians will abuse the new law and only apply it to private
businesses. The Knesset Labor Committee, which still has to ratify the
law, sent it back for "corrections." Care to guess why? Because most of
the places where wages are being held back are the municipalities and
religious committees, branches of the government itself.
So the politicians in the Labor Committee want to change the
law to exempt their friends in city hall from criminal offenses. This
way most of the people who suffer will probably be owners of small
businesses on the verge of collapse. On top of that, they will now be
considered criminals and might face jail time. Is there a bigger
distortion of justice than that?
On the road to serfdom
The second event that took place in our noble Knesset is also
connected to the communist atmosphere gaining ground in our public
sphere. The Knesset's so-called "culture lobby" is very concerned about
a new marketing method by one of the nation's leading chains of
bookstores. A customer can now walk into one of Tzomet Sfarim's stores,
buy one of its promoted books at the regular price and get a second one
for only NIS 10.
The lobby hosted author Yoram Kaniock, who complained that
these promotions have cut his income to NIS 1.5 per book. The MKs
decided to be the saviors of our nation's literary world. They are
pushing a law that will dictate a fixed 10 percent maximum discount on
new books, together with a fixed share of the store's revenue, which
will be paid to the author and the publishing house.
You might say this is a minor issue that affects a very small
part of our lives, and even think authors should earn more than the
miserable NIS 1.5 Kaniock says he does. But this issue isn't minor at
all. Every journey starts with a small step, and this small step is the
first one on the road to serfdom.
How dare those politicians even think about dictating the price
and the distribution of revenues for a private entrepreneur who
invested his money and talent in his own business? It is the basic
right of any business to sell a product at any price it chooses, and to
pay suppliers based on free negotiations.
Tzomet Sfarim is not a monopoly, and if Kaniock isn't pleased
with his share, he can go and sell his books elsewhere. The proposed
law is the start of a communist campaign whose target is to gain more
and more control over our commercial lives. History has taught us that
such control is doomed to lead to control over every other aspect of
life as well.
A Bolshevik trend
This Bolshevik trend is not only the result of a weak government
that depends on the Labor Party's votes. It seems the current economic
crisis has seriously cracked the belief in the virtues of free-market
ideas. Governments all over the world are nationalizing banks and
businesses. Calls for public intervention are being sounded everywhere;
public opinion has accepted the notion that it is the government's
responsibility to correct chaotic economical cycles. This is the best
time for socialist mice to crawl out of the holes they've been hiding
in for 20 years. "Capitalism has failed," they say; "It's time to raise
the red flag again."
The debate over these notions is too comprehensive to be
squeezed into one article. Let's just remind ourselves that communism
is a normative philosophy, proved to be false by a huge human
experience that involved billions of people over a period of several
decades. But capitalism has been a positive force. In simpler words:
the opposite of communism isn't capitalism, it's human nature.
Human nature is greedy. Indeed, it was the greed of the world's
leading bankers that got us into this mess. This traditional greed
turned extremely dangerous when it met the ability to create complex
financial instruments such as mortgage-backed securities, which enabled
banks to package loans they made and sell them to other financial
institutions. Banks were encouraged to make as many loans as possible,
regardless of their quality, package them and sell them. The loans were
no longer under anyone's direct responsibility and the profits were
instant. When this "musical chairs" game stopped, everything collapsed.
You can't run a true free market without an
understanding of personal responsibility for one's actions. The notion
that it is some super-entity that should be responsible for everything
is itself a communist belief. This is why the financial system
collapsed. And this is why I was shocked to learn a few days ago that
our central bank is about to import this poisonous pill to our
special Bank of Israel committee is working on a law that will enable
banks to make the same mistakes that destroyed the United States'
financial system: issue mortgage-backed securities. The justification
for this move is the same as it was in the US: "It's a sophistication
of the markets that will enable more people to own their own houses."
Didn't they learn anything in the BoI? What we need isn't more
sophisticated tools but simpler ones. And the idea of letting anyone
own a house is exactly what destroyed the US housing market. If you are
a waitress receiving minimum wage, you shouldn't be able to buy a
$200,000 house with a 95% mortgage. Its bad for you, bad for the bank
and bad for the economy.
Many bankers and home builders are pushing these new
mortgage-backed-securities regulations. Let's just hope that the
central bank's noble regulators will regain their senses and abolish
this stupid and dangerous "reform."
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