THE MONSTER OF TOTAL CAPITALISM - 29-Jul-96

(Article by Avraham Tal, "Ha'aretz", 29.07.96, p.B2)

THERE ARE TOO MANY POLITICIANS IN BOTH CAMPS TRACKING THE GOVERNMENT'S ECONOMIC PROGRAMS FOR THERE TO BE ANY REAL HARM DONE TO SOCIAL VALUES.

It is not by coincidence that a "click" has been created between Benjamin Netanyahu and Jacob Frenkel. Both spent an extended and formative period of their lives in the Republican United States, and were influenced (each by his surroundings) by the economic and social values of the time and the place. If Netanyahu's plan to appoint Frenkel finance minister had been fulfilled, Israel would have had a neo-conservative economic leadership which would have made the free market the ultimate value, reduction of government intervention in economic and social spheres its primary feature, and the squashing inflation at any price including a social price the over-arching first goal.

But the match did not come about. It is true that it was ruined, first and foremost by internal forces within the Likud, but the danger was not unapparent that the country's economic and social leadership was to be in the hands of two conservatives: an all-powerful "absolutist" prime minister, and by his side, a technocrat with no public obligation.

The couple did not come about, but even if it had become a reality it would not have gone far, because it would have failed to obtain support for its programs.

We still do not know much about Dan Meridor, but what we do know does not allow us to classify him as a Reaganite neo-conservative. He favors a market economy, privatization, public sector budget cuts. But in his position as an experienced politician who grew up in a party of the masses, he is also aware of the emotions of the wider public, the distress of the weaker segments of society, and of the need not to completely subjugate break social values to economic objectives.

Thus, it is nonsense to talk about the Netanyahu-Frenkel-Meridor "triumvirate" (as MK Shlomo Ben-Ami said in Ha'aretz, 26.7.96). From the beginning, Frenkel was ousted from the primary focus of power, and even as Governor of the Bank of Israel his standing is disputed, in public and in the bank (it is enough to read about the "revolt" against him in the bank's advisory council last week). And even Meridor does not coordinate his social outlook which the triumvirate is supposed to transmit.

The fact that the government is committed to its calls for privatization, to scaling back its involvement, and to bringing down inflation, still does not make it Reaganistic or Thatcherite, heaven forbid. The program of budget cuts approved by the government takes into account social factors, and even if distribution of the burden is not optimal the program is too compassionate to the rich an effort was made minimize the harm to the weaker strata.

More significant, however, is the public's reaction to the program, especially within the prime minister's political party. The chances are very slight that the Likud faction members will approve it without changes and will not adjust the burden in the direction of the stronger. In Israel, there is no chance for an economic move suspected of harming the weak and even the middle classes.

Where was the budget cuts program born, and where were all economic programs born, including those dealing in "structural change?" Not in the Reaganistic heads of Netanyahu and his advisors, but rather among the economists at the Finance Ministry. It is the spring from which former Finance Minister Avraham Shohat drew the designers of the Labor Party's 100 day plan, and now also the current Finance Minister, Dan Meridor, and the government. If complaints were made about steps taken towards "a wild free market" or "total capitalism," they are the address.

Yet, not only is there some hyperbole here, but also some injustice. The Finance Ministry economists, more than any other economic sector or group, are entitled to take an objective (as much as this is possible in economic and social matters) and balanced approach, which considers the economy's possibilities and needs without a sectorial influence. Even if they have, and most economists do, a trend towards free market economics, privatization, and budget cuts, there is no worry that they will be allowed to "go crazy." Too many politicians, in both camps, are meticulously tracking the government's economic programs for there to be any real harm done to social values.

Therefore, there is no basis for the fear that "total capitalism" will control Israel neither from above ("the triumvirate") nor from below