Our World: The Peretz challenge

There needs to be a serious, popular debate in Israeli society about the nature of the economy.

With Histadrut general strike king Amir Peretz's primary elections victory over Vice Premier Shimon Peres last week, the Labor Party has finally removed all its masks and officially embraced post-Zionism as its guiding ideology. By electing Peretz, the Labor Party of David Ben-Gurion has declined to the status of an anti-Zionist political party. While Oslo and Labor's embrace of Yasser Arafat signaled Labor's inevitable embrace of the negation of Jewish nationalism, the party staved off its fate for the past six years by placing retired generals at the head of the party. Former prime minister and former IDF chief of staff Ehud Barak, former Labor chief and retired major-general Amram Mitzna, and former Labor chief and retired brigadier general Binyamin Ben-Eliezer along with former IDF deputy chief of staff and Labor leadership contender Matan Vilna'i, all obfuscated their party's post-Zionist platform by prominently parading their past military achievements and ranks before the public. But all that is now behind us. With Peretz's ascension to party leadership, Labor has become a post-nationalist, socialist party along the lines of Meretz under Yossi Beilin. It is not a surprise that Labor under Peretz is now a carbon copy of Beilin's Meretz. Peretz began his political career in Peace Now and achieved his first political prominence as a member of Yossi Beilin's crew of young, radical leftist Labor party activists in what was known as the Kfar Hayarok clique whose members were groomed for eventual party leadership by Shimon Peres in the 1980s. Along with Avrum Burg, (who failed in his attempt to take control of Labor in his 2002 race against Ben-Eliezer), and Beilin and the rest of the Kfar Hayarok crew, Peretz has for the better part of two decades consistently blamed Israel for Palestinian terrorism and for the Arab world's rejection of Israel's right to exist. His line has been consistent. Like Beilin, Peretz has always contended that the only way to deal with terror is to capitulate to terrorists and that there can only be peace if Israel expels all 250,000 of its citizens from Judea and Samaria and divides sovereignty over Jerusalem. It is not coincidental that MK Yuli Tamir, (who also began her career in Peace Now and is one of the signatories of Beilin's Geneva Accord with the PA's former propaganda minister Yasser Abed Rabbo), is Peretz's most enthusiastic supporter among Labor Knesset members. In his first comprehensive statement after his victory, Peretz proclaimed that if he was elected prime minister he would form a governing coalition with the anti-Zionist Arab political parties. If Peretz becomes prime minister, there can be little doubt that he would take measures to effectively put an end to Israel as a Zionist state. Even if he were subsequently replaced by a right-wing government, as was the case with Barak and his short-lived government's disastrous attempt to surrender to Arafat at Camp David, the damage he would cause would likely be irreparable. IT IS a sign of the chaos into which Prime Minister Ariel Sharon has plunged the Likud that all of this seems to have escaped the attention of its members. Rather than consistently pointing out the national significance of Labor's descent into ideological bankruptcy, the Likud is squeamishly concerned about the electoral threat Peretz poses as a result of his economic demagoguery. Likud leaders warn that Peretz's socialist populism will erode Likud support among its voters from the lower socioeconomic strata. This is particularly the case, they claim, among Sephardic Jews who have formed the bulwark of the party's faithful since the Likud's first national electoral victory under Menachem Begin in 1977. As the Histadrut boss, Peretz has been the strongest opponent of Binyamin Netanyahu's economic liberalization reforms. Peretz has consistently opposed the privatization of government companies, the break-up of economic monopolies and cartels, the lowering of taxes, curbing the growth of the welfare system and the weakening of labor unions. He supports raising minimum wage to NIS 4,700 per month, an increase that would immediately lead to a sharp rise in unemployment. He supports the mass expulsion of foreign workers from Israel, assuming, wrongly, that Israeli workers would be willing to take the low-paying jobs they now perform and assuming - again wrongly - that their employers would be willing to pay Israeli workers higher wages to perform these jobs. In opposing every single economic reform that has been enacted over the past decade, Peretz has led general strike after general strike each of which has lost the economy billions of shekels and led to countless lost jobs and economic opportunities for the very people he claims to protect. In leading these strikes, he has ignored court orders to return to work, and he has encouraged striking workers to endanger public safety by illegally blocking highway traffic. Generally speaking, Peretz has made a name for himself by engaging in the kinds of activities that would have earned him jail time and a conviction for sedition were he to have acted thus while wearing a kippa and in opposition to Arafat and Mahmoud Abbas. The economic reforms that Peretz has so thuggishly opposed are the only reason that Israel was able, at the height of the Palestinian terror war, to move out of its recession and into a period of sustained economic growth, low unemployment and low interest rates. Yet the Likud fears this radical post-Zionist because of the resonance of his calls for a reversion to the disastrous statist economy that Netanyahu so bravely shepherded the country away from. That is, what scares Likud the most about Peretz is his strident opposition to the party's most successful policies. THERE ARE two central causes for these perverse fears. First, Israeli politics have never been motivated by economic issues. No general election has ever been decided on the basis of the economy. Security has always been the single deciding issue in Israeli politics. As a result, there has never been a serious, sustained, popular debate in Israeli society about the nature of the economy. Israeli politicians are, by and large, wholly ignorant of economics. And so, empty slogans about "social justice" and "social gaps" have an irrational resonance among Israelis. It is little wonder that the most emotional economic debates tend to revolve around envy. Headlines are annually made when the list of the richest Israelis and the top government salaries are made public. As a result, the deleterious effects of a state-run economy have never been properly understood. A populist, socialist bully like Peretz, who screams in defense of the rights of fattened welfare queens and bloated workers' committees, and corrupt and incompetent public employees can gain traction for his ludicrous one-liners in such an intellectual desert. Aside from this, in adopting the post-Zionist rhetoric and security (or insecurity) policies of the Left by accepting the so-called Quartet's road map and implementing the ill-conceived withdrawal and expulsion plan from Gaza and northern Samaria, Sharon split his own political camp on the one issue - national security - on which all its disparate factions agreed. In so doing, he lost the one coherent issue on which the Likud could stand against a radical gasbag like Peretz. In the absence of unity in the one area where it was previously strongest, the Likud under Sharon now finds itself flailing about madly looking for a way to show, not that Peretz is an anti-Zionist, but that like him the Likud too supports irresponsible populist economic policies. In light of the fact that Peretz's popularity is based upon his economic populism, many Likud members worry that were Netanyahu to replace Sharon as party leader the Likud would lose its Sephardic voters. This is a cowardly and self-defeating view. Were he to defeat Sharon in the Likud primaries, Netanyahu's victory would solidify that base and reunify the various factions of the Right that Sharon has eviscerated over the past three years. Netanyahu would be able to reinstate the Likud's preeminence in security policy - finally uncontested by a former general at the helm of Labor. As well, Netanyahu is the only politician who feels genuine passion for a competitive, free-market economy. As such, he would be able to explain to Israeli voters why a prime minister Peretz would not only undermine our national security and long-term survival, but would also plunge us into a long-term insurmountable economic recession. Peretz's election to the helm of the Labor party is a defining moment in Israel's political history. It will be a national tragedy if the clarity his election brings to the Labor party is not matched by a parallel clarity in Likud.