Demonstrating Dogma

Last summer’s protestors really did have something to complain about. Too bad they went about their business in such a frivolous fashion

Last summer’s protestors really did have something to complain about. The cost of living in Israel is unjustified. Too bad they went about their business in such a frivolous fashion. Lacking clear goals and presenting a fanciful economic agenda, their call for “social justice” was as loose as a welfare state’s budget and raised more questions than it answered. The Article was published in the Jewish Review of Books, winter edition, 2012

Israeli Social Protest; picture: Mark Musayev

 Those Israelis who have blamed their government for the worst economic failures are right. However, almost all alleged market failures in Israel are actually government failures. So why do the protestors believe that the very same corrupt and incompetent government can easily solve incredibly complex economic problems? How many times do governments need to fail before Israelis start asking for less government and more society, less bureaucracy and more private enterprise, less coercion and more liberty, less “big brother” and more civic responsibility?

Welfare-state theory acknowledges the terrible consequences of nationalizing the means of production, but is still obsessed with the notion of economic equality. Its solution is to let the market run free while nationalizing (through taxation) and redistributing its produced wealth. This might work in theory, but as Adam Smith and Friedrich Hayek foresaw, it fails in practice.

The progressive contention is simple: The poor lack money; let them have the money of the middle and upper classes, and poverty will come to an end. But the record clearly shows that most western countries continuously spend a growing percentage of their GDP on social programs. This is terrible news for the welfare agenda, because it means that the welfare system is a sham: welfare creates poverty instead of abolishing it. As a result of this counter-intuitive—yet intelligible—result, a vicious circle develops. More welfare leads to more poverty, which leads to more welfare. Eventually states reach the upper limit of taxation, start increasing their national debt, and get into serious trouble.

At stake here is nothing less than the very morality of welfare statism. One might be willing to accept the dubious measures of nationalization, state coercion, and governmental supervision, if they were at least beneficial to the lower classes. But to employ these harsh measures after observing that they increase the suffering of the many, and the poor most of all, is, at least in my opinion, morally objectionable.

In Israel, welfare statism is a dogma. Right and left, Israelis welcome big governments. This is a dangerous consensus. A lack of economic education, accompanied by too much reliance on the state, leads Israelis to believe that governmental budgets are a matter of pure will, unconstrained by any form of necessity. Apply enough pressure and the government will open its ever-full coffers and shower wealth on its citizens—and on that day the people shall rejoice in “social justice.” The protests were even praised in Israel for their “citizenship,” as if good citizenship means demanding that the government use its power to transfer other people’s money to you in order to fulfill your “positive rights” (to live in Tel Aviv without paying the costs, no less).

But there is some room for optimism. There are many hard-working, responsible Israelis whose sense of self-dignity and honor—the ancient republican prerequisite of good citizenship—leads them to despise welfare, at least for themselves. This admirable sentiment, accompanied by basic economic understanding, could revive an Israel in which people take it upon themselves to provide for their families as well as to promote a healthier and more just society.

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