Prosperity not shared

The 2011 protest movement was probably the single most significant development that has taken place within Israeli society in recent history.

By JPOST EDITORIAL
DaphniLeef370 (photo credit: Marc Israel Sellem /The Jerusalem Post)
DaphniLeef370
(photo credit: Marc Israel Sellem /The Jerusalem Post)
On Saturday night, marking the two-year anniversary of the J14 (July 14, 2011) socioeconomic protests, a few thousand Israelis demonstrated in Tel Aviv.
The turnout paled in comparison to the hundreds of thousands who were mobilized in the summer of 2011 and the dozens of tent camps that sprouted up spontaneously, first along Rothschild Boulevard and later across the country.
If one were to judge solely from the relatively small crowd that gathered to hear Daphni Leef and other activists assail Finance Minister Yair Lapid, the J14 demonstrations had little long-term impact. However, that impression would be mistaken.
The 2011 protest movement was probably the single most significant development that has taken place within Israeli society in recent history. The demonstrations rocked the nation, sent the previous Netanyahu government scurrying for damage control and, for the first time in decades, reprioritized Israel’s national agenda to place socioeconomic concerns at a level of importance comparable to security concerns.
At a time of relative calm on the Palestinian front, Israelis had the breathing space to focus their attention on the pressing issues of socioeconomic inequalities, the rising cost of living and exorbitant housing prices.
Unlike the 1985 stabilization plan, which ushered in an era of neoliberal-inspired economic reforms, or the sharp fiscal cuts initiated in 2002 and 2003 that radically reduced welfare spending, the protests of 2011 were not precipitated by a major economic crisis. In fact, if we are to judge from macroeconomic measures such as GDP growth, unemployment rates, or fiscal debt, the situation was pretty good in the Jewish state compared to most of the Western world.
What bothered an increasing number of Israelis was that the nation’s apparent economic prosperity was not being shared.
At first, the demand for more socioeconomic equality was misconstrued as a call for a return to a social democratic economic model that featured higher taxes and government spending. But it gradually emerged that the calls for “social justice” were more sophisticated than that.
The protesters were fed up because there was too much government intervention, not too little. Bureaucracy on the local government level artificially jacked up real estate prices and spawned a class of well-connected insiders who profited not from business acumen but from knowing the right people.
In contrast, the instances in which there was a demand for more government intervention were usually the instances where there were market failures, and fair competition was lacking. Supermarket items like cottage cheese were too expensive because a small group of players who controlled the retail food market collaborated with one another instead of competing. There was a need for government to step in to ensure fairer competition.
Criticism of organized labor was the result of a realization that the strongest labor unions – especially those that control state-run monopolies like the ports, electricity and water – were more about perpetuating unjust inequalities between tenured workers and “temps”; maintaining built-in inefficiencies and outrageous benefits paid for by tax payers; and nepotistic hiring policies than about workers’ solidarity, social justice and protection of labor rights.
It gradually dawned on many Israelis that the extreme inequalities that have developed in our society over the past few decades were not solely or even principally an inevitable product of capitalist activity and expanding equality of opportunity. It was not just that some individuals, groups or communities were succeeding because they were better able than others to exploit opportunities for development and advancement that capitalism affords, although this, undoubtedly, was true for some (the upward mobility of Russian immigrants is just one example). Rather, many Israelis were making large sums of money because they knew the right people, belonged to a particularly strong labor union or were aligned with big-business interests.
It has taken time for the public to articulate a more sophisticated critique of the state of the Israeli economy.
In the first stages, the demands of the protesters were inchoate and contradictory.
One needed a more in-depth understanding of the idiosyncrasies of our economy to reach the right conclusions regarding what needed to be fixed.
But this critique has finally been voiced, and its message has sunk in. This is, perhaps, the greatest legacy of the J14 protests.