Think about it: Bridling free-market mechanisms

"What is needed is a combination of an effective mixed (private/public) economy on the one hand, and universal humanitarian values on the other."

February 26, 2017 22:13
4 minute read.

Shekel money bills. (photo credit: REUTERS)


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The revelation last week on Channel 2 of the maltreatment of helpless elderly residents of the Haifa nursing home Neot Kipat Hazahav was shocking. It also offered, yet again, proof of what happens when “free” market forces, accompanied by the absence of an appropriate prioritization in the sphere of welfare and concern for human life, rights and dignity is allowed to prevail.

The first problem with regard to provision of care for the helpless elderly, whose families cannot afford to pay for it in full, is that it cannot be left in the hands of private institutions whose main concern is profit (and I am not saying that all the private institutions fall into this category). There must be effective government supervision of said institutions and sufficient state subsidization to ensure that the provision of the service does not deteriorate to the inhuman levels that were revealed in the Channel 2 documentary.

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It is generally agreed that many of the caregivers employed in nursing homes are unsuitable, for lack of professional training and the required basic human qualities, but that due to the extremely low salaries offered, suitable manpower is almost impossible to find in Israel.

Why are the salaries so low? Because the forces of supply and demand, which are supposed to determine prices and wages, apparently do not operate properly in this situation.

Most of those familiar with the issue argue that in the short run the only solution is to bring to Israel at least 5,000 foreign workers, of the sort employed privately by families who keep their elderly relatives at home, to work in the nursing homes. In other words, to import cheap labor. At the moment this is not allowed by the authorities responsible for approving the employment of foreign workers.

In the long run Israel must contend with the issue of whether it is socially acceptable that some of the most sensitive welfare-related jobs should be left in the hands of cheap labor from Southeast Asia, Eastern Europe and South America, and what that says about the deficiency in compassion and concern in our “patriotic” society, which prides itself on its “Jewish” family values.

Another issue that must be dealt with is a decision on whether the government is willing to allocate the resources to ensure that private nursing homes provide appropriate services to those requiring them on the basis of either domestic or foreign manpower, or whether it might be more cost-efficient for the government itself to provide the services directly. Unbridled market forces are certainly not the solution.


Of the issues which have recently caught the headlines, that of the nursing homes is not the only one which reveals that free market considerations must be bridled by the government. The issue of construction site accidents in general, and the safety of crane operators in particular, is another.

The number of persons killed and injured annually in Israel in construction-site accidents is higher than that of persons killed or wounded as a result of terrorist attacks, and double that of the OECD average.

The fact that so many construction-site accidents occur is related to the fact that construction contractors, like the owners of nursing homes, are motivated primarily by the desire to maximize profits and minimize costs. Among the results of this is the fact that most contractors skimp on safety precautions on their building sites, and knowingly place the welfare and even lives of their workers at risk – as in the case of crane operators forced, under threat of losing their jobs, to mount the cranes even when the climatic conditions are hazardous. Recent cases of cranes collapsing due to negligence demonstrate the seriousness of the problem.

As in the case of nursing homes, so in this case the government has demonstrated exceptional nonchallantness when it comes to its supervisory duties, refraining from implementing them effectively.

Unlike the case of the nursing homes, no one suggests that the government ought to undertake construction itself. Therefore what can one expect of the government is to take the problem more seriously and increase the number of its inspectors in the field from the current 17 (for an average of 13,000 construction sites at any given moment), and to ensure that offenders are tried and punished not only so that justice is done, but also as a deterrent.

That “market forces” cannot be left to contend with the problem is clear. The question is how the government determines how much to invest in preventing avoidable construction-site accidents. Is it a function of the financial cost of each accident, or are we talking of the cost in lives?

What is most disturbing is that the government is willing to invest unlimited resources in preventing people being wounded or killed in terrorist acts, but skimps when it comes to preventing construction-site accidents. Could it be that the determining factor is that in the case of terrorist acts the perpetrators are Palestinians and those killed or maimed are predominantly Jews, and in the case of construction accidents the perpetrators are predominantly Jews, and those killed and maimed are Palestinians and other foreigners?

In short, what is needed is a combination of an effective mixed (private/public) economy on the one hand, and universal humanitarian values on the other.

The problem is that mixed-economy principles and universal humanitarian values are no longer the bon ton.

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