What our elites know

Not enough when it comes to economics.

Prof. Uzi Arad and his capable Interdisciplinary Center Herzliya team have made the Herzliya Conference a prime event, where anyone who considers himself a somebody wants to be seen, and if possible heard. The conference, dealing with "The Balance of Israel's National Security," faced a mission impossible. Since almost everything in Israel relates to national security, it had to deal with many topics, such as defensible borders, demography, Israel-Diaspora relations, the status of Jerusalem, Galilee development, democracy, social and economic policy, patriotism, Judaism as a secular culture - and what not. And the conference, which attracts an important audience and extensive media attention, has also become crowded with Israeli politicians who consider it a must showcase. This meant that important issues had to be presented in shorthand. The conference could not initiate a more elaborate discussion among the variety of qualified attendees, which could have enriched the debate. Still, the mere gathering of so many movers and shakers, the opportunity that it gives them to learn about issues, and meet parties and be exposed to viewpoints that they would not have encountered in their workaday life, is vital. Besides, the conference also affords an interesting reflection of our elites and their cast of mind. THE ECONOMIC session (my special interest, I admit) was a case in point. The conference devoted a whole morning to the fight against poverty and the issue of economic growth. But because it was divided into three sessions, including at least 12 scheduled speakers, important presentations dealing with employment policy (by the US labor economist Diana Furchtgott-Roth, who showed how absurd Amir Peretz's labor plans were), "Entrepreneurship and Growth" (by Sir Ronald Cohen), "Investments Needed to Stimulate Growth" (by Yossi Hollander and Jacob Sheinin) and "The Miracle of Irish Economic Revival" (by Prof. Sean Barrett, specially flown in from Ireland) - could not receive the full attention they deserved. Nor did time permit a discussion of a specific plan for cutting poverty drastically in three years, by changing government policies that support monopolies and other anti-growth rigidities - which I see as the main cause of poverty in Israel. But the lack of appreciation for the crucial role of economics in society that typifies our elites also played a role. Judging by the small attendance at the anti-poverty session, and the paucity of discussion both in and outside the conference room fighting poverty, does not really preoccupy our elites too much. This despite the fact that for a while there was speculation that poverty may be a major issue in the elections campaign. In contrast, the guest appearance of Jimmy Carter, with his corny ruminations about peace, drew a spill-over audience. Even "Mr. Economics," former finance minister and Likud Party chairman Binyamin Netanyahu, whose astounding success in turning the economy from near bankruptcy to vigorous growth earned him great credit he could have capitalized on in such a gathering, must have sensed what his audience was really concerned with. So while he mentioned economics as one of the three major pillars of national strength (along with security and Jewish heritage), he devoted almost all his talk to security matters. His opponent, Labor's Amir Peretz, did speak about economics as he understands it, namely as a problem of hungry children, old people eating out of garbage cans and the social gap (namely the politics of envy). Amazingly his prescription for fixing the economy by instituting a higher ($1,000) minimum wage and a compulsory universal pension scheme drew vigorous applause from his listeners. They should have known better and remembered what happened to the workers' pension funds that the Histadrut under Peretz managed. But then, this was only one additional indication that our elites - in the public sector as well as business people - still think along socialist lines. The two most impassioned conference speeches were by rabid opponents of the market who tried to relate the spreading of government corruption in Israel to putative Thatcherite policies. Shelly Yacimovich, Labor's media star, railed against the conference organizers accusing them of increasing the dangerous connection between money and political power. MK Yossi Sarid, the Meretz ideologue, followed with a clever diatribe against corruption. He said his own great political potential was stymied because he refused to be corrupt. Yacimovich had to be reminded that it was the socialist system, which she so strenuously tries to resurrect, that caused the utter politization of the economy and its decline. This thanks to the corrupting nexus of politics and money that she so deplores. Indeed, it was she and her coterie of fellow leftists that created one of the most dangerous concentrations of power in Israel by exploiting their media positions to monopolize public debate and foist their radical ideology - essentially shutting out opposing views. Yacimovich admitted that this concentration was damaging, though she evaded accepting responsibility for promoting it. In the final analysis, the country's elites must begin to better educate themselves on economic issues. Once they do, much of today's accepted wisdom will fall by the wayside. The writer is director of The Israel Center for Social and Economic Progress. Dorondun@netvision.net.il