How American Influence Has Generated a Breakdown of Israeli Social Collectiveness

8/2/2019 How American Influence Has Generated a Breakdown of Israeli Social Collectiveness

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Israeli Society: All together now...and always?

How American influence has generated a breakdown of Israeli social

collectiveness

14 November 2011


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INTRODUCTION

In writing observations for this course, I identified at least seven of the Ten

Commandments of Israeliness, some of which appeared several times. With equal

frequency, I observed examples of improvisation (Commandment VII), avoidance of

hierarchy (Commandment VIII) and collective consciousness (Commandment X). Initially, I

intended to write a focused comparison between American and Israeli cultures that pivoted

on all three of these commandments. After conducting interviews, however, and hearing

clear depictions of Israeli collectiveness, I decided that the Tenth Commandment alone

would provide me with enough material for a rich discussion. Moreover, I realized that it

would be far more interesting to write about what I perceive to be a current trend occurring in

Israel. Although Israels founding mythology differs distinctly with American mythology

regarding the issue of collectiveness, I will argue that this is no longer reflects reality.

The bulk of this discussion will describe neoliberal economic reforms that have been

implemented in Israel since about the mid-1980s. The assertions I present are based on

Israels changing economic system because, as Kasser et al. phrase so well, it is the very

nature of economic systems to motivate behavior, define the role of participants and

determine rules for many human interactions and exchanges.1 I contend that Israels

adoption of market-oriented policies which so closely resemble American economic policy

undermine the collective values instilled by the founders of the Israeli welfare state. In the

beginning, the Israeli imperative was to create a Jewish utopia defined by equality, where all

citizens received precisely the same allocation of resources and the object of concern was

society as a whole. Following in the footsteps of their American counterparts, contemporary

Israelis are only willing to guarantee the livelihood of their immediate family and friends.

PART I: OBSERVATIONS & INTERVIEWS

Israeli Society: All together now....and always? 2

1 Kasser, T., Cohn, S., Kanner, A.D. & Ryan, R.M. (2007) Some Costs of American CorporateCapitalism: A Psychological Expoloration of Value and Goal Conflicts. Psychological Inquiry, 18:1, p. 2


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Two shining examples of Israeli collectiveness that stood out to me since my arrival

in Israel involve new immigrants and the relationship between Israeli parents and children.

For the sake of structure, I will first discuss collectiveness on the part of the new

immigrants. Being an anglo-phone who knew not a word of Hebrew less than three years

ago, many of my friends here are new immigrants. Their level of zeal for life in Israel tends

to vary from person to person, though I would say that most are excited to fulfill the Zionist

dream. An extension of this is the fact that many new immigrants immediately identify

themselves as Israeli, completely discarding their native culture. That is, the moment a new

immigrant receives his / her Israeli passport, Israeliness becomes the immigrant s nationality.

A new immigrant will confidently state, Yes, Im Israeli. I just arrived this week.

From the perspective of a non-Jewish outsider, this behavior is truly bizarre. How

can a conscientious adult so quickly abandon his / her native culture? One must only be

able to do so if he / she arrives to the scene already instilled with the feeling of being part of

the collective. Jews are famous for their ability to stick together and, at least in recent

decades, for creating the sense that being a Jew meant being a member in a highly

exclusive club. Obtaining an Israeli passport certifies a new immigrants inclusion in the us

of Israeliness.

Another representation of Israeli collectiveness is the extent to which Israeli youth

remain dependent on their families. I have consistently observed that young Israelis remain

financially and emotionally dependent on their parents at least until their mid-twenties, if not

later. True, mandatory military service does somewhat retard the progression toward

independence, but it seems as though the pervasive attitude is, These kids work so hard in

school, then are forced to spend precious years in the army. We (the family) will provide

them with everything during that time. If after military service, the kids want to take a year or

two off, they deserve it! They have risked their lives for us! We (the family) will continue to

provide them with everything. When the time is right, the kids can go on to college. How

can they support themselves while they are studying? We (the family) will continue to



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provide them with everything. Recalling that Israelis do not begin university until the age of

23 or 24, this dizzying support can easily last until the child reaches 30. The apparent

thought process is that a child cannot possibly manage alone. The family must stick

together to survive.

Furthermore, it seems as though Israeli parents have little interest in teaching

children how to manage by themselves. In her commentary on American society, Margaret

Mead noted that American parents [merely train] their children for a race they will run

alone.2 Israelis do not imagine acting in a unit smaller than the immediate family, especially

not as individuals. When an Israeli finally does choose to stop sharing a roof, and

everything else, with his / her parents, the Israeli will frequently try to find a home that is very

close by so that he / she may continue to visit the family several times per week. Together is

better.

This truth was not lost on my interviewees. Nira Ashkenazi, an Israeli mother of four

in her mid-50s, stated from the outset that Israelis are family-oriented. She added that

there is nothing like an Israeli family, saying, Togetherness is very important...I think that

what unites Israelis, and maybe Jews, in all the world is family. It is notable that Niras

affirmation of Israeli collectiveness is focused solely on family closeness. She does not

extend her sentiments to broader society.

Nisim Ashkenazi, Niras husband, described Israeli collectiveness as friends helping

friends. He explained that Israelis are very generous among themselves, and love to help

and take care of each other in times of need. He says, That s how it works here! Why?

We are a small country. We are in social groups that are very clique-y and close.

Nonetheless, he says this closeness is beginning to break down. Nisim described that

Israeli society was once unified at the macro social level, but today collective concern exists

only at a micro level. Contemporary Israelis are reluctant to make sacrifices for those that


2 Mead, Margaret. (1942) And Keep Your Powder Dry: An Anthropologist Looks at America. New York:William Morrow & Co.


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they do no know personally. He closed the interview with the thought, I would make society

how it was a few years ago, when we acted together as a group and people didnt only think

about themselves...That profound unity is missing today. There is too much fracturing in

society. The next part of this discussion will detail why Nisim is right.

PART II: CAPITALISM REPLACES COLLECTIVISM

Israels economy has changed drastically over the decades. In its roots, the

Jewish national movement and the first pioneer communities were mainly

socialist in nature. Since then, the Israeli economy has become a liberalized and

open economy, with strong tenants of capitalism...

- The Israeli Economy, Ministry of Finance, Summer 20113

The nascent State of Israel pursued highly socialist policies, placing great emphasis

on the Jewish collective working together to build and protect their new nation. A primary

economic goal for the early Israeli government was to maintain full Jewish employment.

This was achieved through the rapid absorption of new immigrants and prevention of

emigration, even if it meant utilizing very inefficient methods.4 In spite of the long-term

weakness of these economic policies, Israel was especially disciplined in its economic

planning and experienced almost immediate growth. The growth was facilitated by large

waves of destitute Jewish immigrants and monies sent from abroad, including German

reparations and foreign gifts. This dynamic ushered in a very strong central government

which directed all political, social and economic decisions. Political will to continue forcing

full employment eventually waned and by 1966, Israel decreased government intervention

through implementation of recessionary policies, though this was to be short lived.


3 The Israeli Economy: Fundamentals, Characteristics and Historic Overview, Israeli Ministry ofFinance, International Affairs Department. http://eng.mni.gov.il/FinanceIsrael/Docs/En/The_Israeli_Economy.pdf (accessed 08 November 2011)

4 For example, Jewish labor and industry was forcibly protected from Arab competition creating anideal yet unsustainable labor market conditions.
http://eng.mni.gov.il/FinanceIsrael/Docs/En/The_Israeli_Economy.pdfhttp://eng.mni.gov.il/FinanceIsrael/Docs/En/The_Israeli_Economy.pdfhttp://eng.mni.gov.il/FinanceIsrael/Docs/En/The_Israeli_Economy.pdfhttp://eng.mni.gov.il/FinanceIsrael/Docs/En/The_Israeli_Economy.pdfhttp://eng.mni.gov.il/FinanceIsrael/Docs/En/The_Israeli_Economy.pdf


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The 1967 Six Day War caused the first major shift in Israeli economic policy,

introducing a military industrial complex. Though the economy remained centrally planned,

government efforts became focused in a new area. Michael Shalev writes that the basis for

this shift was a potent combination of government-subsidized local military procurement, the

burgeoning world market for arms, and (from 1970) US government financing of Israels

foreign arms purchases.5 Given the occupation of the West Bank and Gaza Strip, growth

was also encouraged by the suddenly expanded domestic consumer market and readily

available cheap labor. The introduction in 1970 of American financing for arms procurement

was the United States first step to becoming an unmistakable influence on Israeli economic

policy.

As in the pre-1967 regime, the Israeli economy of the 1970s depended heavily on

large government subsidies, many of which went to bodies that the state was increasingly

unable to control (e.g., big banks, conglomerates, the Histadrut). The state found itself

increasingly indebted to these powerful interests, and unable to assert its will and extract

benefits in return for the rising tide of subsidies.6

This reality, the prevailing global economy

and earmarked US aid led to progressively undisciplined economic policy, prolonged

stagflation in the 1970s and hyperinflation by 1980.

Naturally, this dire situation facilitated the speedy passage of sweeping reforms

known as the Emergency Stabilization Plan (ESP) of June 1985. The plan marked a clear

move away from socialism and laid the groundwork for liberal capitalism that would come to

characterize the Israeli economy. Shalev states that the plan...constituted a frontal attack

on mechanisms that had previously protected societal interests, directly or indirectly at the

expense of the state.7 The ESP was implemented under the supervision of Israeli


5 Shalev, Michael. (1999) Have Globalization and Liberalization Normalized Israels PoliticalEconomy? In D. Levi-Faur, G. Sheffer & D. Vogel (Eds.) Israel: The Dynamics of Change andContinuity. (p. 126) London: Frank Cass.

6 Shalev, p. 126

7Ibid.


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academics, the Ministry of Finance, the Bank of Israel and the US Government.8 In the

same year, Israel signed a Free Trade Agreement (FTA) with the United States.

Eckstein and Ramot-Nyska assert that the process of Israel becoming a fully market-

oriented economy occurred over the twenty year period between 1987 and 2007. They note

that during this time the share of directed credit in total bank credit dropped from 60.5% in

1985 to 5.7% in 2004. Additionally, defense expenditure fell from a high of 37% of GDP in

1975 to a steady level of 8% of GDPbeginning in 2004. The state took clear measures to

liberalize capital flows and the foreign exchange market, as well as create a more

independent central bank. According to the authors, the sequence of the liberalization

process was designed to integrate Israel into the global markets.9

The 1990s saw a dramatic increase in foreign direct investment flows to Israel and

the signing of FTAs with several major economies.10 Additionally, buffered by policies

encouraging entrepreneurship, a mass immigration of engineers and skilled labor from the

former Soviet Union helped create a roaring hi-tech sector. During the second half of the

decade, privatization of state-owned enterprises (SOEs) that had begun with the passage of

the ESP increased to a new high. Much of the activity was concentrated in big banks and

Histadrut conglomerates. In 1995 alone, the Koor conglomerate was sold to the American

Disney family and the Israeli government sold its 43% share in Bank Hapoalim to US

investor Ted Arison. By the end of the decade, the state had transferred to private hands

SOEs that in 1994 had employed over one-third of state employees and contributed more

than 50 percent of total SOE sales.11


8 Eckstein, Zvi and Tamar Ramot-Nyska. Twenty years of financial liberalization in Israel: 1987 -2007 BIS Papers No 44. p. 294.

9 Eckstein and Ramot-Nyska, p. 299

10 Israel signed FTAs with the EFTA (1992), the EU (1995) and Canada (1997).

11 Hanieh, Adam. (2003) From state-led growth to globalization: the evolution of the Israeli economy,Journal of Palestine Studies, 17:4, p. 13


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Israels transition to a capitalist society was given a boost by then Finance Minister

Binyamin Netanyahus 2003 economic recovery package. Netanyahus reforms

incorporated all recommendations offered by the neoliberal International Monetary Fund

(IMF), including: a NIS 11.4 billion cut in government spending; an 8% cut in public sector

wages; layoff of approximately 4,000 state employees in 2003; a freeze on national

insurance benefits; a 5% rise in water tariffs, public transportation and municipal taxes;

raising the pension age to 67; canceling immigrant benefits, mortgage grants, aid to needy

university students and payments to families with five or more children.12 The plan also

introduced the Wisconsin programme: a welfare-to-work scheme named after the US state

that pioneered it.13 Indeed, the Israeli government would have been loathe not to pass such

dramatic measures, as approximately $10 billion dollars of American aid was contingent

upon the plans implementation.14

PART III: AMERICAN CAPITALISM

Privatization of industry and deregulation of capital markets continues in force.

Israels status as a developed, open market economy was galvanized in 2010 by its

acceptance into the Organization for Economic Cooperation and Development (OECD), an

international non-governmental agency committed to furthering market economics and

international trade.15 The extent of the countrys entrenchment in the global capitalist

economy is easily found on the Ministry of Finances website: Israel has the second largest

number of startup companies in the world (after the United States) and the largest number of

NASDAQ-listed companies outside North America. Clearly, Israel has joined the US in the

international arena of capitalist players and much of the founding welfare system has been


12 Hanieh, p. 17

13 Miracles and Mirages, The Economist. 03 April 2008. http://www.economist.com/node/10909908(accessed 10 November 2011).

14 Hanieh, p. 17

15 For further information on the OECD, go to www.oecd.org.
http://www.economist.com/node/10909908http://www.economist.com/node/10909908http://www.economist.com/node/10909908


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abolished. By accepting the United States as its primary political ally and financier, Israel

has adopted the American mold. The nation has traded policies which support society as a

whole for an economic system emphasizing individual choice and self-interest.

Though the Israeli economy has consistently grown by about 4% over the past two

decades, the percentage of families below the poverty line16 has consistently hovered

around 20%. Wealth in Israel is highly concentrated, as evidenced by the countrys steadily

climbing Gini coefficient, a measure of income inequality (0 = perfect equality, 1 = perfect

inequality). According to a 2010 OECD report, Israel is the ranked fifth amongst developed

countries for the worst income inequality. The United States is fourth. Moreover, the OECD

report highlights that the poverty rate for the general Jewish population is about 10% (on

track with the OECD average) and has in fact decreased slightly in recent years. However,

poverty rates among Arabs and Haredim are approximately 50% and 60% respectively,

increasing by nearly 20 percentage points since 2000.17 Accordingly, Israel surpassed the

US in 2005 as the country with the highest instance of child poverty among Western

nations.18

19

Transfer payments in OECD countries reduce poverty by an average of 60%.

In Israel, the few tax-and-benefit instruments that remain reduce poverty by approximately

25%. Finally, as noted in a report published by the National Insurance Institute in response

to the OECDs findings, the gap between the overall standard of living [in Israel] and that of

the lowest decile was three times as high as the average for that ratio in OECD member

countries.20 Are these the results of collective values?


16 The poverty line is defined as any person making less than 50% of the median net income percapita.

17 OECD(2010), Israel: a divided society (http://www.oecd.org/dataoecd/0/40/44394444.pdf)

18 The rate of child birth is significantly higher among Arab and Haredi demographics when comparedto the birth rate of secular Jewish Israelis.

19 Chason, M. (2005) Israel leas the West in child poverty, Ynet(online edition). http://www.ynetnews.com/articles/0,7340,L-3124397,00.html (accessed 09 November 2011).

20 Poverty and Social Gaps: Annual Report 2009. National Insurance Institute. http://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdf(accessed 09 November 2011).
http://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.ynetnews.com/articles/0,7340,L-3124397,00.htmlhttp://www.oecd.org/dataoecd/0/40/44394444.pdfhttp://www.oecd.org/dataoecd/0/40/44394444.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.ynetnews.com/articles/0,7340,L-3124397,00.htmlhttp://www.ynetnews.com/articles/0,7340,L-3124397,00.htmlhttp://www.ynetnews.com/articles/0,7340,L-3124397,00.htmlhttp://www.ynetnews.com/articles/0,7340,L-3124397,00.htmlhttp://www.oecd.org/dataoecd/0/40/44394444.pdfhttp://www.oecd.org/dataoecd/0/40/44394444.pdf


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Table 1: Am rican Israel

Israel US OECD (average)

Incidence of poverty

among individuals19.90% 17.10% 10.90%

Incidence of child poverty36.30% 20% 13%

Poverty among elderly 23% 23% 13.30%

Gini Coefficient

(0 = perfect equality,

1 = perfect inequality)0.37 0.38 0.31

Prevalence of low-paid

work24.30% 23.30% 15.90%

Public Social Spending

(as a percentage of GDP)15.80% 15.90% 20.50%

Sources:

OECD (2008), Are we gro

OECD (2011), Society at a

indicators/SAG)

NII (2010), Poverty and So

%20Homepage/Publicatio

ing unequal? (http://w

Glance 2011 - OECD S

cial Gaps - Annual Rep

s/Poverty_Report/Docu

w.oecd.org/dataoecd/4

ocial Indicators (www.oe

rt 2009 (http://www.btl.g

ments/poverty%20report

/56/41494435.pdf

d.org/els/social/

v.il/English

202009.pdf)

The clearly unequal distribution of resources shown above illustrates that the Israeli

economy is becoming increasingly similar to American free-market capitalism. American

capitalism promotes nearly unfettered competition, in which all parties act in self-interest, to

achieve optimal results. To the contrary exists coordinated market capitalism, in which the

ideal outcome is sought through strategic interaction between competing parties.

Unsurprisingly, American capitalism fosters values that directly oppose and undermine

Israels egalitarian, collectivist foundation. Rather, the values cultivated in a market-driven

economy encourage hierarchy, social power and material wealth.21

Moreover, American capitalism entrenches social inequality and discrepancy

creation.22 Ones self-worth is commensurate with the extent to which he / she is more

powerful and wealthy than his / her relative surroundings. Not only are individuals

discouraged from relinquishing personal gain for the greater good of society, but they are


21 Schwartz, pp. 53-55

22 Kasser et al., p.13
http://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.oecd.org/els/social/indicators/SAGhttp://www.oecd.org/dataoecd/48/56/41494435.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.btl.gov.il/English%20Homepage/Publications/Poverty_Report/Documents/poverty%20report%202009.pdfhttp://www.oecd.org/els/social/indicators/SAGhttp://www.oecd.org/els/social/indicators/SAGhttp://www.oecd.org/els/social/indicators/SAGhttp://www.oecd.org/els/social/indicators/SAGhttp://www.oecd.org/dataoecd/48/56/41494435.pdfhttp://www.oecd.org/dataoecd/48/56/41494435.pdf


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almost necessarily always seeking more. As long as there is someone more wealthy or

powerful, there is always someone to beat.

The Israeli development toward other-directedness, or the pursuit of external

validation of ones worth, is similar to the period that began in the US immediately following

the industrial revolution. In the US experience, the industrial revolution led to mass

production (accompanied by labor laws) and the almost immediate emergence of a middle

class. What was once a few very wealthy individuals and a mass of poor became a stratum

of social classes. Israel, on the other hand, changed from a society exhibiting (and

promoting) relative equality, to one that distinctly resembles the United States (Table 1).

Though concern for society as a whole is in decline, it appears that what has actually

occurred is a re-definition of the in group. The belief that Israelis must work together to

ensure the welfare of allmembers of society has been replaced by the desire to support only

ones closest circle of family and friends. Recalling the aforementioned interviews, Nira and

Nisim Ashkenazis perception of Israeli society corroborate this claim. Nira repeatedly

emphasized Israeli familyunity, not the closeness of broader society. Nisim specifically

highlighted the rising importance of social groups, juxtaposing such cliqueiness with the

universal closeness that once defined Israeli society.

This too is supported by American capitalism. In his exhaustive cross-cultural study

of capitalist countries, Shalom Schwartz shows that although free-market, competitive

capitalism apparently undermines concern for the welfare of those outside ones close circle

(Universalism values), it affects pro-social motivation toward members of the in-group

(Benevolence values) only weakly, if at all.23

CONCLUSION

In recent months journalists have asked themselves, What came first: occupy Wall

Street or the tent city protests in Tel Aviv? Many speculated that the events in Tel Aviv


23 Schwartz, p. 56


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inspired the 99% to speak out on Wall Street. What started as a cry against sky-rocketing

housing prices quickly became a protest against Israels esoteric clan of powerful, ultra-

wealthy tycoons.24 Shortly after protests started in Tel Aviv, New Yorkers took to the streets

under the same banner. Two nations with very different histories seem to be headed down

the same path.

The aim of this discussion has been to show that Israeli society has morphed from

one driven by collective responsibility for broader society to one marked by American self-

intereset. Instead of maintaining a welfare safety net strong enough to prevent any Israeli

citizen from falling into poverty, Israelis have redefined their scope of concern to include only

members of their innermost circles. The state has relinquished its power to significantly

redistribute wealth. Society has abandoned the credo of taking according to ability and

providing according to need. The shift began in force with the Economic Stabilization Plan

of 1985 and the appearance of vital US aid that came with strings attached. It continues in

an environment of globalization that requires participants to conform to neoliberal American

standards. Israeli collective values did not survive the coercive forces of the world market.


24 Bronner, Ethan. Protests Force Israel to Confront Wealth Gap, The New York Times(onlineedition) http://www.nytimes.com/2011/08/12/world/middleeast/12israel.html?pagewanted=all(accessed 12 November 2011).
http://www.nytimes.com/2011/08/12/world/middleeast/12israel.html?pagewanted=allhttp://www.nytimes.com/2011/08/12/world/middleeast/12israel.html?pagewanted=all

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