What Socialism Has Done To Israel Part II

  Monthly Report: 5/1/1990  



The founding fathers of Israel believed that they could establish a dream state, or as they called it, a "messianic era". By creating a socialist state, they would enable Jews everywhere to return to their homeland. Once in Israel, the Jewish people would receive jobs, equal wages and a real chance to pursue happiness.

Instead, what the fathers created is a government and economy which sustains a corrupt and greedy elite bureaucracy, feeding off a poverty stricken mass of unproductive workers.


Israel's power brokers consists of (1) parliament members, including the Prime Minister (2) the labor bosses of the Histadrut (National Labor Union monolith) and (3) the industrial bureaucrats who run state-controlled industry. These ruling elitists managed to entrench themselves early on in a power base that is self- perpetuating. Year after year, decade after decade, the same faces and their protégés have appeared in places of power and money.

Power corrupts. Absolute power corrupts absolutely.

How did this sad state of affairs evolve? Ezra Sohar, in his book, "Israel's Dilemma: Why Israel is Falling Apart and How to put it Back Together", tells the story:

"In the first Israeli elections in 1949, a special assembly (of leading political figures) was elected to write the country's constitution and prepare elections for the Knesset, Israel's parliament. Instead of doing so, the assembly appointed itself as the first Knesset.

"Because Israel has no constitution, the Knesset's power is absolute. It can enact anything a majority of its members fancy at a given moment, unhindered by checks or balances. It can pass retroactive laws...Furthermore, there is no separation between the legislative and executive branches of government. All these vast powers of state are concentrated in the hands of the Knesset and the cabinet-which is composed of Knesset members."1


One of the first laws the Knesset passed was to stipulate that "An MK (member of Knesset) shall not be responsible, criminally, or civilly, for any action taken in fulfillment of his duty." This incredible lifting of ethical responsibility from Israel's political leaders has led to moral catastrophe. Thus, we have the example of MK Flatto Sharon, an accused criminal who escaped from France. In order to keep himself from being extradited back to France he had himself elected to the Israeli Knesset. Fraud, lying and stealing is the order of the day.

For instance, a typical common conflict of interest is found with MK's who as lawyers and consultants continue working for their clients during their public service tenures. Though they cannot receive direct payment for these moonlighting jobs, MK's have voted themselves the right to receive enormous benefits such as unlimited expense accounts, overseas travel, etc. The misdeeds of other MK's is much more blatant, such as using government funds for whatever... The religious orthodox parties are especially prone to misappropriate funds for their favorite charities and institutions.


Knesset members have voted themselves automatic salary increases, including free limousines and chauffeurs, lodging in Jerusalem, entertainment expenses, 25,000 phone calls per year at no charge (and that's for life even if they serve only one term). Health insurance for high officials includes treatment in Israel or abroad at public expense. An MK or his surviving spouse's pension is 100% of his entire salary including perks.

"According to one estimate, the ratio between pension rights of the general public to those of the privileged is one to twenty-four." 2

The allies of these politicians run government's big businesses, and milk these institutions for all they are worth. It must be added that as a rule these bloated inefficient corporations often show losses forcing the public taxpayer to bail them out time and again.


The most publicized example-but not unusual-was the "resignation" a couple of years ago of Ernst Japhets, a senior bank executive, for incompetence. In return for his forced resignation, he was given a $5,000,000 early retirement grant and a $30,000 monthly pension. He had been making about $1,000,000 a year.3

In order for Israel's politicians and their allies to facilitate the preservation of their vast powers, they have voted themselves public funds to run the elections. The official State Comptroller's report put the cost of the parties' official 1984 campaign expenses at some $40,000,000, most of it coming from the taxpayer.4

4,000,000 PEOPLE OWE $63,000,000,000 5

To maintain an overall perspective of Israel's financial debts, we must realize that there are only 4,000,000 Jews in Israel, the number in a medium large size city in the United States! For this small number of citizens to support an elite bureaucracy such as Israel's is an act of economic self-destruction.

The bilking of the nation's industries and institutions by politicians and bureaucrats has had a devastating and demoralizing influence on the whole country. (This at the same time that they claim no responsibility for errors or crimes committed by them).

Every single group of employees in Israel is clamoring for more money, benefits and advantages for themselves. The striker sees the government as his employer. Government leaders have everything, so why shouldn't he? Work production quotas and the profit factor do not come into the picture. Remember, a state-controlled, centralized economy does not operate on a profit/loss system. It operates on economic decisions that are made to "enhance the power and the privilege of the bureaucracy ."6


Since the government employs, directly or indirectly, over a third of all Israeli workers7, the strikes are continuous, relentless and debilitating to the country. Each company is involved in creating what perks it can for its own employees. Thus, employees of the electricity company get unlimited electricity; university employees' children go free to university; employers of banks get interest free loans, etc.

The State Comptroller's 30th Annual Report states that in 1979, civil servants received over 400 kinds of payments on top of their regular salaries and reimbursements. These payments bore such peculiar names as “antenna supplement” and “gluing supplement”.8


How did the government apparatus become such a bloated, rigid, exploitative and wasteful bureaucracy, indifferent to its own obligations? Is everybody corrupt and evil? "On the contrary," says author Ezra Sohar, "government employees are decent people who, under different circumstances would perform their tasks conscientiously."

"The simple truth is that many government functions could be accomplished quicker, cheaper, and more efficiently by private business."9

Government workers come late and leave early. Many hold a second job with hours identical to those of their government work. It becomes clear to these employees that advancement in rank is not based on hard work and excellence, but on political considerations.

Furthermore, it is a melancholy law that "the stronger the bureaucracy and the more extensive its authority, the greater its self-importance and contempt for the public."


There is more behind the scenes than you can imagine. For all the Sick Fund monthly dues that are collected from the lowly citizen, two thirds of the levy goes to medical insurance, and one third goes to keep the Histadrut Labor Union and its political allies afloat.10 Yet, the Histadrut Sick Fund managed to run up a deficit of $450 million in 1980-1985 alone. The taxpayer, as always, then bailed the sick fund out so that it would be able to continue sending one third of its income to the coffers of the Labor Union leaders, ad infinitum.


The long and short of it is that Israel's socialist government must get its money from somewhere to support its habit. It must maintain extravagantly paid corrupt upper bureaucrats, continue its profitless based policies in state-owned businesses, and control its unmotivated, uninspired civil servants and government industry employees. Israel's GNP and productivity are today the lowest in the Western World.11


The government feeds its habit in two ways. (1) The low level bureaucrats and workers make peanuts. Forty percent of the workers earn less than $450.00 a month in a land where the cost of living is higher than in the U .S. 12 (2) The government taxes every visible entity seen by mortal man. A $10,000 car in the U.S. would be approximately $25,000 in Israel.

The price of the cheapest European Car (1300 cc. engine) ran something like this in 1985:

Factory price ($2,500)

Price in Israeli port, including insurance 3,000

Duty - 25.2% of CIF price + 2% Lebanese War Levy 816

Importer's profit 540

Purchase tax (42.7% of consumer price, before VAT) 3,246

Total Price before VAT 7,602

VAT - 15% of price (including all extras) 1,140

TOTAL $8,742

Figures taken from Ha'aretz, February 2, 1985.

Remember these taxes are adopted by law makers who enjoy free use of chauffeured limousines.
In 1985, the average American engineer cost his employer $2500 per month. He grossed $2,000, took $1,500 home. In Israel, the cost to the employer was $3,100. The Israeli engineer grossed $2,000, took home $700. 13


The intolerable burden of socialism rests heavily on the Israeli people. Furthermore, it is certainly an oppressive load on every born-again believer in Israel as he attempts to maintain his family and congregation (without all the illegal maneuvers that non-believing Israelis' survival instincts have invented).

We are asking God to have compassion on his people and bring about a new economic system in Israel-as is happening in Eastern Europe-in order that the Gospel can be preached throughout Israel with fewer encumbrances. We believe God's people in Israel are being hindered in witnessing the Good News because of the economic stranglehold of a socialist system.

We pray that you can use the information in this letter to better pray for the Israeli believers and in fact the whole nation. We ask you to intercede for the salvation of Israel.

If you would like to read in more detail the woes of Israel's economy, and what can be done to correct it, you may send for Israel's Dilemma: Why Israel is Falling Apart and How to Put it Back Together, By Ezra Sohar, M.D. Write to Shapolsky Publishers, 136 West 22nd St., N.Y., N.Y. 10011, price $15.95.

1 Israel's Dilemma, Ezra Sohar, pg. 14; 2 Ibid., pg. 26; 3 Ibid.. pg. 173; 4 Ibid., pg. 37; 5 Ibid., pg. 178; 6 Ibid., pg. 4; 7 Ibid., pg. 46; 8 Ibid., pg. 48; 9 Ibid., pg. 55; 10 Ibid., pg. 70; 11 Ibid., pg. 137; 12 Ibid.; 13 Ibid., pg. 150




All active news articles