Israel's Bell Curve Spread: Between Populism and Elitism

Cofix is a new low price coffee outlet in Tel Aviv, selling
5 shekel espresso where most established chains sell
for 12 to 16 shekels

If you follow the economic and lifestyle stories on Israel's main media outlets, you get a mix of split personality opinions. I say "opinions" because some media stories are not really objective reporting as much as opinion of one expert or another. Sometimes the media outlets are simply a propaganda channel to one politician or another. Which seems to be just fine in the eyes of most Israelis. Lately, besides Bibi's harping about the Americans not taking the Iranians seriously enough (with the supposedly "just around the corner nuclear bomb making drill") most politicians, from proper ministers all the way to Ron Huldai (Tel Aviv's mayor), is the wide economic gaps everywhere. It seems like the Israeli economy is one big Swiss cheese of a system. The mix of socially based and merit driven realities clash each other. Then there is the old school cronyism in friction with simple family centered oligarchy. Some going back a century (Teva pharmaceutical) some just a few decades (Tshuva family / oil and gas). Then there is the continuous scratching between organized labor and private management. This goes on in the private sector as well as in public service (physicians, nurses, school teachers).

Israel has been in a long stretch of steady economic progress. But the economic and political systems have not gone through fundamental changes since the Turks and the Ottoman Empire were the rulers. The legal land laws are still effectively based on Ottoman Empire laws. The legal business and accounting practices (and laws) are still based on British mandate rules. Jewish law governs family legal matters (marriage, divorce, legal citizen status). Add to this a few practices which the Jews of eastern Europe brought with them before the establishment of the state (labor unions, health unions, social benefits), and you got a mix of rules, laws, and guidelines that makes no logical sense and that nobody wants to change. If you want even more strange rules and idiosyncratic and illogical ruling systems, add the Arab legal system used in most Arab family courts (somewhat equivalent to the Jewish Orthodox family law system). It's all very confusing until you spend a bit of time here and have to deal with all the rules, guidelines and government officials of different departments.

Now back to the economic changes and mostly strange gaps between the classes. Until three years ago, friction and protest between the classes amounted to labor union protests. Sometimes even strikes. And rarely open violence in the form of tire burning or destruction of public (or private) property. But three years ago (2010) the landscape of equality protest changed dramatically. Here in Israel, at the same time the Arab world was starting to ferment and Americans wanted to take over Wall Street, popular protest against high retail prices make it's first stand. It started with a small protest against cottage cheese price. But the protest was more symbolic than anything else. Soon, many more groups, from retail prices, to home prices and availability, to equality of many working groups, joined the protest. Quickly the protest became physical with a small tent city setup in the center of Tel Aviv. This is just the beginning of the story. Once the Pandora box of protest was opened, there was no going back.

Soon after the economic injustice protests started, political opportunists started to take to the street. In the last election, two new parties led by Bennett and Lapid received (together) as many votes as Netanyahu and Lieberman's incumbent leading party (31 Knesset seats). Israel, with it's steady economic growth and steady and strong middle class growth is creating wider gaps between people. There are a few which end up with much more than the average. It's hard for people who were told that socialism will give Israel a fair base. The last 100 years, Jews from Europe came to Israel to build a just and equal paradise for everyone. That ideal did not work out as expected. The kibbutzim are almost gone, three generations later it seems like everyone is out for themselves. The new ideal is to have a large middle class: materialistic, economically strong, and fair to the ones that work. Just that effort is hard enough, so taking care of the weak and poor will have to wait to another generation. More to come on the economic front...