Two seemingly unrelated events took place in theKnesset last week that should worry Israeli citizens. The first, andmost severe, was final approval of the package deal between theTreasury and the Histadrut, as part of the Economic Arrangements Law2009-2010. In an historic irony, unprecedented Bolshevik laws wereadopted and legislated by a Likud-led right-wing government.
Whilethe free world is celebrating 20 years since the fall of the Berlinwall and the communist bloc, the Knesset approved a law that will givelabor unions more prerogatives than the police have. Histadrutrepresentatives will have the right to appear at any work place,without notice and without the employer's consent, to assemble workersand preach to them about their rights and, of course, try to convincethem to join the union.
A criminal offense
This will take place during working hours - at the employer'sexpense, regardless of how urgent and important the workers' job is. Ifthe employer refuses entry to the Histadrut representative, he can befined NIS 200,000 and be indicted on criminal charges. Not even apolice officer has the right to enter a business without a courtwarrant.
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. Holdingback wages is a moral sin, inhuman and the Torah is full of warningsabout this issue. But making this a criminal offense is an even biggersin. After all, it is a civil dispute about a payment of debt.
The employer owes money to the employee due tohis labor service. What is the moral difference between a boss notpaying his worker on time and a customer who is delaying payment to asupplier? Why isn't the latter considered to be a criminal offense?
But even if you think this is reasonable, wait and see how ourpoliticians will abuse the new law and only apply it to privatebusinesses. The Knesset Labor Committee, which still has to ratify thelaw, sent it back for "corrections." Care to guess why? Because most ofthe places where wages are being held back are the municipalities andreligious committees, branches of the government itself.
So the politicians in the Labor Committee want to change thelaw to exempt their friends in city hall from criminal offenses. Thisway most of the people who suffer will probably be owners of smallbusinesses on the verge of collapse. On top of that, they will now beconsidered criminals and might face jail time. Is there a biggerdistortion of justice than that?
On the road to serfdom
The second event that took place in our noble Knesset is alsoconnected to the communist atmosphere gaining ground in our publicsphere. The Knesset's so-called "culture lobby" is very concerned abouta new marketing method by one of the nation's leading chains ofbookstores. 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 onefor only NIS 10.
The lobby hosted author Yoram Kaniock, who complained thatthese promotions have cut his income to NIS 1.5 per book. The MKsdecided to be the saviors of our nation's literary world. They arepushing a law that will dictate a fixed 10 percent maximum discount onnew books, together with a fixed share of the store's revenue, whichwill be paid to the author and the publishing house.
You might say this is a minor issue that affects a very smallpart of our lives, and even think authors should earn more than themiserable NIS 1.5 Kaniock says he does. But this issue isn't minor atall. Every journey starts with a small step, and this small step is thefirst one on the road to serfdom.
How dare those politicians even think about dictating the priceand the distribution of revenues for a private entrepreneur whoinvested his money and talent in his own business? It is the basicright of any business to sell a product at any price it chooses, and topay suppliers based on free negotiations.
Tzomet Sfarim is not a monopoly, and if Kaniock isn't pleasedwith his share, he can go and sell his books elsewhere. The proposedlaw is the start of a communist campaign whose target is to gain moreand more control over our commercial lives. History has taught us thatsuch control is doomed to lead to control over every other aspect oflife as well.
A Bolshevik trend
This Bolshevik trend is not only the result of a weak governmentthat depends on the Labor Party's votes. It seems the current economiccrisis has seriously cracked the belief in the virtues of free-marketideas. Governments all over the world are nationalizing banks andbusinesses. Calls for public intervention are being sounded everywhere;public opinion has accepted the notion that it is the government'sresponsibility to correct chaotic economical cycles. This is the besttime for socialist mice to crawl out of the holes they've been hidingin for 20 years. "Capitalism has failed," they say; "It's time to raisethe red flag again."
The debate over these notions is too comprehensive to besqueezed into one article. Let's just remind ourselves that communismis a normative philosophy, proved to be false by a huge humanexperience that involved billions of people over a period of severaldecades. 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'sleading bankers that got us into this mess. This traditional greedturned extremely dangerous when it met the ability to create complexfinancial instruments such as mortgage-backed securities, which enabledbanks to package loans they made and sell them to other financialinstitutions. Banks were encouraged to make as many loans as possible,regardless of their quality, package them and sell them. The loans wereno longer under anyone's direct responsibility and the profits wereinstant. When this "musical chairs" game stopped, everything collapsed.
You can't run a true free market without anunderstanding of personal responsibility for one's actions. The notionthat it is some super-entity that should be responsible for everythingis itself a communist belief. This is why the financial systemcollapsed. And this is why I was shocked to learn a few days ago thatour central bank is about to import this poisonous pill to ourfinancial markets.
Aspecial Bank of Israel committee is working on a law that will enablebanks to make the same mistakes that destroyed the United States'financial system: issue mortgage-backed securities. The justificationfor this move is the same as it was in the US: "It's a sophisticationof 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 moresophisticated tools but simpler ones. And the idea of letting anyoneown a house is exactly what destroyed the US housing market. If you area 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 bankand bad for the economy.
Many bankers and home builders are pushing these newmortgage-backed-securities regulations. Let's just hope that thecentral bank's noble regulators will regain their senses and abolishthis stupid and dangerous "reform."