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WORLD AUGUST 3, 2011

What Caused the Current Wave of Economic Protests Across Israel?

Tel Aviv—Among the many signs and witty slogans in the improvised tent camp that has recently sprung up on Rothschild Boulevard, part of a larger economic protest movement happening nationwide, one says “ROTHSCHILD, CORNER OF TAHRIR.” To be sure, it is hard not to acknowledge that, while watching protests sweep the Middle East, Israelis have gotten a lesson in participatory democracy from the residents of some of the least democratic countries on the globe. But, while Tahrir Square may have served as an inspiration, the grievances in Israel are certainly not the same as they were in Egypt. So how, exactly, did Israel’s own grassroots demonstrations come about?

The Israeli wave of protests began with a group of students demanding affordable housing in Tel Aviv. In a manner more reminiscent of the American 1960s than of the Arab Spring, the students chose theatrical means: They brought tents to one of the most expensive residential areas in Tel Aviv and set up camp. (The added irony of the boulevard’s name was hard to miss.) The students were surprised, though, by what their spark ignited. Because, soon, tents began to spring up all over the country, and many Israelis—middle and lower-middle-class people—found ways to join in.

The problem spurring the protests, it soon became clear, exceeds young students and is broader than housing prices. It has to do with a structural problem in Israel’s economy. While the economy is healthy and growing, the middle class’s purchasing power keeps eroding. More and more families with two professional, university-educated bread-earners struggle to make ends meet. And what is difficult for the upper-middle class becomes acute with the lower-middle class (not to mention the poor). Police officers, nurses, teachers, civil servants, social workers—the people entrusted with the very backbone of social order—are earning insulting wages. The protests thus coalesce around the problem of a grossly unequal and unfair distribution of wealth.

Slogans against the tycoons of Israel’s economy have sprang up everywhere. But, more than anyone, Prime Minister Benjamin Netanyahu is the target of the protests. Not only does Netanyahu bear general responsibility for Israel’s domestic policy, but his economic views are of the right-wing variety. Many very different economic grievances thus seem to have found their common source.

But there is also an undercurrent to the protests that is less readily visible, and it extends even beyond economy. It also helps explain why the protests, despite appearances, are not just the purview of the middle class; they are issuing from the larger, vital political center—the political, not just the economic “middle,” which increasingly feels that Netanyahu’s government is a coalition of narrow sectarian interests: the extreme nationalism of Foreign Minister Avigdor Lieberman, the hawkish religious settlers, and the ultra-orthodox.

On Saturday night, when an unexpectedly huge swarm of people—some 100,000, the press reported—marched from Rothschild Boulevard to the Tel Aviv Museum, I passed by a lone counter-protester holding a sign that read, “THE SOLUTION IS IN JUDEA AND SAMARIA—CHEAP HOUSING.”  On the face of it, this is true: You can get cheap housing in the territories. But, in fact, cheap housing in the territories is exactly the problem, as are the mass exemption of the ultra-orthodox from mandatory military service and the wild privatization that has benefited a small class of millionaires. The very rich benefit from privatization, settlers get cheap housing from the state, ultra-orthodox are supported by a selective welfare state. Meanwhile, the largest sector of Israel’s society, non-orthodox Jews, who do their army service and go on to do reserve service for many years, who work hard and pay the bulk of Israel’s taxes, feel that their efforts and contributions are diverted to the benefit of small sectors. It is the majority who sows what those small sectors reap; Israel, as Ma’ariv journalist Ben-Dror Yemini has quipped, is becoming a “minoritocratia.”

So far, the protests have neglected at least one important root of this serious problem: Our system of government depends on a coalition that gives disproportionate power of political extortion to small parties. But the movement certainly is right in that Netanyahu has greatly aggravated this problem.

The gathering momentum of this upheaval may not, as many now hope, topple the government immediately. But no government can ignore it, because participatory democracy does apply effective pressure. Unlike in most of the Arab world, the protestors are also the voters, and, though they are not violent enough for a true revolution, they will vote in the next elections. Their sheer mass is a loud and clear message—and, in providing that message, they have already changed a great deal.

Gadi Taub is a senior lecturer at the Federman School of Public Policy at the Hebrew University of Jerusalem.

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19 comments

Hmm. Sounds familiar . . .

- chaitless

August 3, 2011 at 12:17am

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The settlers, privateers, and right wing nationalists have hijacked political debate in Israel, just as the Tea Baggers did here. But as these protests show, they're bankrupting their own country - and for now they no longer will have phantom foreign or internal enemies to blame. It's their own short-sighted vision of what makes the Jewish nation. A few weeks ago former CIA analyst Robert Baer warned of an Israeli attack on Iran in September. Here's my bet. He was alerted by higher-ups in Israel's security establishment, specifically because of concern that Netanyahu's government would look to release internal pressure by explosions outwards. At the time, the internal pressure was the Palestinian threat of going to the United Nations. In a way, this is even bigger. Ultimately, it wouldn't matter all that much if the Palestinians did get some new status under a UN mandate. But these protests can do what Netanyahu most fears; skewer his ass politically in his own nation. I'm not sure what would replace him but this really is its own Tahir Square - so far as a public cry that demands deep structural change. Whether they'll get it is another matter. Dozens of Knesset members yesterday lobbied openly for a West Bank Solution. But it's a bit like the Republican party's establishment wing who will be bloodied by the folks they exploited to do their bidding - which will result in military cuts those folks certainly don't support. Only there resource scarcity (namely real estate - land) is going to be an issue constrained deeply by the power of today's transparency. No way can Israel go on a West Bank building spree without totally alienating it's few friends left in the world. I only hope there are brave (and it will demand brave) Palestinian and Arab leadership that can identify the mutual interest they have in supporting these unlikely allies. Who, on the face of it, might themselves do as those Knesset fools did yesterday - look to displace the native population in so-called Judea and Samaria. But my bet is the mass of the Israeli public won't go for it. They may be short sighted in their vision for picking government, but they're aware enough of foreign pressure. And I have trust that they have the integrity to prevent what would demand very open ethnic cleansing. Again, I hope there are brave voices within the Palestinian movement who might reach out to these folks and those among the demonstrators that will welcome them.

- sollyman2

August 3, 2011 at 8:32am

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Martin Peretz has repeatedly informed us that Israel is a paradise on Earth, with no social or economic problems whatsoever -- except those caused by Palestinians, people who are not really people at all. There is a description for people who contradict Mr Peretz: anti-Semites [or self-hating Jews]. Therefore, nothing in this article can be accurate. Just Jew-hating propaganda and only people who are the moral equivalent of a Nazi prison guard will believe a word of it. Nice.

- DC Spence

August 3, 2011 at 9:09am

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Peretz may be enormously hostile to Israel-directed criticism. And that results in a level of vitriol and hyperbole that is gut nasty sometimes. That said, his own critics don't lack their own indulgence of the spleen, similarly hysteric. This article - much less than my own comments certainly - was calm and reported from someone with eyes wide open. It - and the demonstrations - give me more faith, not less, in the larger Israeli polity. Not in a romantic way but from a practical level.

- sollyman2

August 3, 2011 at 9:18am

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"as are the mass exemption of the ultra-orthodox from mandatory military service" I didn't realize that was the case. Interesting. Why is that, exactly?

- Tristan

August 3, 2011 at 10:33am

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A word about the draft - it is not only the ultra-orthodox who are exempt, many middle class and upper midle class draft age youths are exempt, especially from the Tel Aviv area. The groups which currently constitute the largest group of soldiers are from the religious nationalist camp and the secular kibbutz movement. These figures are for 2006 In breaking the latest IDF conscription figures down according to locales, military exemptions issued for Jerusalem residents reached 52 percent of draft-age youths. In Tel Aviv, the figure is 34.8 percent. In the south of the country, 22.7 percent of potential soldiers are exempted from service, while only 17.4 percent of those in the north are not drafted

- jneuberg

August 3, 2011 at 11:08am

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Great info jneuberg, thanks

- Tristan

August 3, 2011 at 11:11am

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DC Spence is his usual nasty self. (India and China are doing very well, yet there is still an amazing amount of poverty in those countries. Still those countries don't face external threats the way the Jewish State does.) In any case, the demonstrations in Israel are long overdue. While the Israeli economy is doing better than many or most economies in the world, not everyone is in a position to take advantage of the economic gains. Here is where the government needs to step in and help out. I too like the Gadi Taub wish that the demonstrators would include electoral reform as one of their demands. I also wish that Americans unsatisfied with our own economic situation would assemble in Washington and make our voices heard. At the very least it would counter the Tea Party and their fellow travelers.

- arnon

August 3, 2011 at 11:27am

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jneuberg, while I believe in national service, here as well as in Israel the country is better off with a small professional army. The day of large militaries is over.

- arnon

August 3, 2011 at 11:30am

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Taub's article leaves out some important details and misrepresents others. His analysis is way too simplistic. To wit (within the limited time available to me for this posting): >> The terms "Right" and "Left" in the Israeli context have different affiliations depending on whether you are speaking of security / diplomatic / political /Arab-Israeli conflict issues, versus welfare state / statist economy / "social justice" issues. Thus a party like Shas is generally considered moderate right on the Arab-Israeli conflict but is deep in the left when it comes to welfare state issues. The Likud (p'tooi, p'tooi) is center-right on security / diplomatic / political /Arab-Israeli issues but actually is an amalgam of relatively diverse views on welfare state / economic matters. One of the Likud ancestral parties is the Jabotinsky / Begin Herut party that supported certain core welfare state concepts. Another ancestor is the Liberal (in the European sense of the term) party which was a bit more moderate than Herut on the A-I conflict but advocated very much a free-market economy. Although Bibi's roots are Herut, he is very much free-market capitalist. Kadima is center-left on the A-I conflict but leans more toward a Liberal (again, in the European sense of the term) economy, at least most of its leadership does. Yossi Beilin, who arguably defines or defined the far left on the A-I conflict, is very much a liberal (European) free marketeer on economic issues. And I could go on. But you get the idea. But the critical point is that to tie the current protests to the major left-right issues surrounding the A-I conflict is simply inaccurate. As an example, see this Jerusalem Post news story on right wing groups who marched in Tel Aviv in support of the economic protesters (here). >> Housing in most of the Israeli communities over the Green Line (a.k.a., "The Settlements") is comparable in price to communities inside the Green Line. For example, housing in the historic Gush Etzion region (where I live) is almost as expensive as Jerusalem and is about the same (+/-) as other Jerusalem bedroom communities inside the Green Line. Similarly for "settlements" close to the Gush Dan region (i.e., metro Tel Aviv and then some). Housing is cheaper in what is called the "periphery", that is, communities not within easy commute of the major commercial or governmental regions. Most of the periphery is located inside the green line. >> It's an open secret that there is relatively little new construction happening over the Green Line. The process of getting full approvals for housing projects in Israel (on either side of the Green Line) on average takes about 8-10 years (the average outside Israel is about 3.5 years and that is one of the main problems). Few, if any new approvals have issued during the past 6 years or so. So what construction is happening is limited to what had been approved earlier and not built. And whatever construction is taking place is inside existing communities. No new communities have been started in many years. So even without a formal building freeze, little new housing is being built in Judea & Samaria (a.k.a., the "West Bank"). This also contributes to the rise in housing prices, given the laws of supply and demand. >> Over the past 10-12 years or so, there have been about 10,000 fewer housing starts per year than were needed to keep up an adequate supply. The core problem here is excessive regulatory hurdles which translates into excessive bureaucracy. So this too puts a crimp in supply which in turn raises prices. >> Over 90% of the land in Israel is owned & managed by the State via the Israel Lands Administration, which is a holdover from the early days of the state when Israel had very much an excessively centralized, statist economy (it has improved somewhat but it is still too statist for my taste). The chief economics pundit of Haaretz described the ILA as the quintessential socialist / welfare state institution, with all the negatives that implies. Since 1992 a provision in the laws governing the Lands Administration required that the ILA sell or lease land at prices equal or higher than market value. So contractors & developers bidding against each other tended to bid up land prices which raises their costs. To recover their costs, the developers opted to develop housing which could command higher prices -- i.e., large luxury units which is precisely what students & middle class families can't afford to either rent or buy. >> Many of the luxury projects were market to foreigners (especially American & French Jews) who use them only a few weeks a year. The rest of the year these apartments are kept vacant. There is no incentive to rent them out. As a result, there are neighborhoods in J'lem that are called "ghost neighborhoods" because the housing there stays empty most of the year (a cousin of mine's in laws own one such apartment). >> Bibi has been trying to attack the problem of the ILA & construction bureaucracy for years and has been stymied all along by many of those now criticizing him for not building more housing. There is a lot more to write, especially on the backers & leadership of the protesters but that will have to wait. It's long past my bedtime. Hershel Ginsburg Jerusalem / Efrata

- ginzy

August 3, 2011 at 5:13pm

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At the risk of being accused of ... [whatever], I am a person with Jewish ancestors who does not think of himself as a Jew. [Nevertheless, if the Nazis come, I might be brave enough to step forward and say, "Hi. I am a Jew."] For a while in one job I worked amicably with an American-born man who proudly identified himself as a Jew and who held dual American-Israeli citizenship. He visited Israel once a year. Until he became concerned that he might be drafted into the Israeli army, so he stopped his visits to Israel.

- skahn

August 3, 2011 at 5:30pm

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For matters of aesthetics, coherence and rudimentary comprehension it's a delight to read something on Israel in TRN not by Marty Peretz. Peretz is a divisive figure (and not without reason), but that may distract from the fact TNR has lately indulged way too many atrociously written, rambling, self-congraultory pieces from him. We all know his history with the magazine and if he wants to blog that's one thing. But it's always frustrating to click on a link about Israel only to discover it's three pages of fulsome prose, scattershot thinking and name-dropping. It's a pleasure to read something about Israel in the TNR that appears to have actually been edited.

- mtinora@me.com

August 3, 2011 at 5:35pm

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It's also good to read something about Israel that emphasizes that it's a normal country with a (in most respects) standard menu of problems to deal with.

- ironyroad

August 3, 2011 at 7:48pm

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skahn "At the risk of being accused of ... [whatever], I am a person with Jewish ancestors who does not think of himself as a Jew. [Nevertheless, if the Nazis come, I might be brave enough to step forward and say, "Hi. I am a Jew." I doubt you will be "brave enough to step forward." Why would you carry such imaginary scenarios in your head? If you don't identify as Jew now why would you in times of danger. Are you a masochist? If you don't identify yourself as a Jew, then you are not a Jew. Others can make you self-conscious about your ancestors, but they can't turn you into a Jew. To be a Jew you would have to value and respect your ancestors which means that you would have to live in, and continue your ancestral culture. I also doubt the story you posted about your work friend.

- arnon

August 3, 2011 at 8:15pm

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Grimes "For matters of aesthetics, coherence and rudimentary comprehension it's a delight to read something on Israel in TRN not by Marty Peretz." Problem is that you incapable of reading anything in TNR without thinking of Peretz. For your information, Peretz is very much left of center. He would probably be sympathetic to the demonstrators.

- arnon

August 3, 2011 at 8:18pm

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sollyman2 “The settlers, privateers, and right wing nationalists have hijacked political debate in Israel, just as the Tea Baggers did here.” Israel is not a political party but a country with many political parties with diverse points of view on politics as well as economics. What makes the Tea Party, and some of the right wing nationalists so objectionable, is that they present themselves as the only legitimate point of view possible in their respective countries. I read a news article today that said that among the supposedly leftist demonstrators in Tel Aviv were a number of “right wing settlers” who said that people on the left were not the only people affected by the economy and that they too were facing economic hardships and needed to raise their voices in protest. Reality is often a lot more complicated than ideologues of all stripes like to deal with. In general ideologues are given to “magical thinking” which is to say they reduce reality to a number of slogans which they think will help them drive away threatening problems.

- arnon

August 3, 2011 at 9:45pm

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A far more accurate summary and analysis of Israel's "Cottage Cheese Rebellion": http://online.wsj.com/article/SB10001424053111903341404576481672456466138.html hg

- ginzy

August 4, 2011 at 7:44am

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"Similarly, rising food prices in Israel have led to widespread protests this summer—dubbed the "cottage-cheese rebellion"—which could grow into an uprising against a dysfunctional political system and an economic system long controlled by monopolies and cartels." From his pen to god's eyes and ears.

- arnon

August 4, 2011 at 10:23am

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Anon, You totally missed my point. You quoted a sentence (that sums it up) and still missed it. Again: it's a pleasure to read something about Israel in TNR that's BEEN EDITED! That isn't three pages of rambling awful prose where Marty free-associates on people he's known and whatever happens to come to mind! Pay attention now: I wouldn't be opposed to reading something by Peretz on the demonstrations because I feel differently about the demonstrations than he does (maybe I do; maybe I don't; maybe I'm, frankly, too ignorant to have an informed take on the demonstrations.) Rather I would be opposed to reading it because it wouldn't be edited and it would be way, way too long and there'd be no inherent structure. His writing of late has been self-indulgent and awful (much, much worse than anything else that's put up under TNR's banner.) I'm interested in Israel. It's thus nice to on occasion read something on Israel that meets the minimal aesthetic and editorial standards of this magazine.

- mtinora@me.com

August 4, 2011 at 7:18pm

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