Carrots for the rich, sticks for the poor
By Arie Caspi
The dominant economic theory in Israel, as in America, is one that benefits the affluent
In the last few days, the most uncaring government in Israel's history has been waging a war against the internal solidarity of our society and against the egalitarian principles on which it was founded. Equality is a horizon we will never reach. Nor will anyone else. But it is a goal to strive for. A compass. A society that abandons the dream of equality is an immoral one. People are not born with equal abilities, but they do have an equal right to happiness and wealth. The stronger, more capable, and more cunning individuals will always demand - and obtain - a bigger share than others. The question is, how much bigger.
Most people define their own worth in relative terms. To feel successful, you need others to do less well than yourself. Inequality is an essential fact of life in competitive society. Competition and economic success are central values of our culture. The inequality of Western society is like a game of musical chairs: there are always fewer chairs than people. Every contest has its winners, but it must also have losers. Marx thought there was an absolute historical solution to inequality, but the struggle is in fact unending. Any change, whatever its direction, is temporary, valid only until someone gains enough power to effect a counterchange.
The strong imprint their values on society's consciousness. That's why the dominant economic theory in Israel, as in America, is one that benefits the rich. That's how the economy of the previous century became a blend of scientific research and ideology.
Credo of the well-fed
Economy, like other social sciences, is an inexact discipline, but economists are the only scholars who presume to shape the life of an entire nation. When the country has trouble on the international front, the prime minister does not commission plans of action from professors of political science. Experts in psychology might propose solutions to specific educational problems, but they would not presume to shape the country's educational or emotional character. Economists often do make that audacious claim. Many of them are propagators of the ideology that they learned in their studies.
Economy is less precise than psychology, because psychologists can create a pseudo-reality, isolate certain factors and conduct experiments under carefully defined conditions. No country would allow such experiments to be conducted on its economy. That's why economic research is largely based on past data. Determining which exact variable affected inflation or economic growth is always up for debate. Economy seems like an exact science only because it deals with a value that seems to be subject to precise quantification: money.
In recent years, more and more economists in Israel and abroad have come to acknowledge the limitations of their profession. In recent weeks, Haaretz has published three articles by professors of economics, all criticizing the economic plan advanced by Finance Minister Benjamin Netanyahu. This plan has been presented to the public as the professional, scientific, ultimate and irreplaceable solution to Israel's economic woes. In fact, it is the ideological-political credo of the well-fed.
Netanyahu's plan contains a catch that is typical of the way elites impose the ideology that serves their interests. The plan includes various tax cuts for high-earning Israelis. The reductions are supposed to boost their income and encourage them to invest money in creating jobs and revenue. Great. But when it comes to people who make less money, the motivational theory behind the plan is abruptly reversed. Suddenly, wage cuts become the main modus operandi: lower pay and fewer benefits are supposed to make people go out and work. The wealthy are given a carrot, while the poor get the stick. Undoubtedly, the finance minister finds it easier to comprehend the motives of his peers. To everyone else he attributes a nearly opposite personality structure. The result is different economic policies for rich and poor.
All in the same boat
The media has been concerned largely with the fate of Israel's poorest citizens. What we should be fighting for, however, is the standard of living enjoyed by the lower nine-tenths of Israeli society, and the game rules affecting their welfare. In recent years, we have witnessed a gradual erosion not only of services given to the poor, but of the fundamental principles underlying Israel's social consensus. Retirement pensions, health care and social security have all been whittled away. Education Minister Limor Livnat's furtive layoff plan, which sent 1,500 veteran teachers home, is perhaps the most blatant expression of this process.
At some point in their lives, many people make a decision based on their personality: They choose between a low, secure, risk-free income and a more pernicious road that promises greater rewards, but also the possibility of utter ruin. The former become employees, usually of large, public organizations. Their world seems safer, if more modest. But in recent years we have learned that there is no such thing as security. The employees, having exchanged high wages for security, are discovering that they have been swindled. Though they waived the fat paycheck, they find themselves without jobs and without security.
This process has been going on for quite a few years. Netanyahu is now causing it to accelerate. He is trying to fashion a society without security. And that has serious implications not only for the poor, but for all of us.
The dehumanization of Israeli employees is reflected in the obscene claim that the market is being pushed into "recuperation," while in fact the process is making so many people sick. Recuperation, a flesh-and-blood dynamic, is attributed to an organization, a soulless, synthetic product, while actual people are transformed into synthetic units.
These processes have until now taken place quietly, because most people are oblivious to them. Israel's health maintenance organizations don't tell their patients that many drugs approved for use in the United States are unavailable here, or that doctors are under constant pressure to avoid expensive tests and treatments that have been okayed by Israel's medical authorities. Many years from now, Israelis saving up for their retirement will suddenly discover their lives have been drastically affected by changes in their pension plans. Layoffs are taking place sporadically, a bit here, a bit there.
Too many people live with a false sense of security, thinking that it will never happen to them. But it is happening, all the time. If the battle used to be fought over how private employers treated their workers, it is now being waged along the last line of defense, the commitment of the public employer to the people on its payroll.
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Carrots for the rich, sticks for the poor
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