Blue State Blues: Israel Is a Failed Socialism’s Great Success

JERUSALEM — May 1 is still a significant day in Israel. There are marches through central Tel Aviv and Jerusalem celebrating May Day and the solidarity of the international working class. (The international working class has shown less interest in solidarity with Israel lately, but never mind.)

Today, however, Israel is more “start-up nation” than workers’ paradise, known more for the entrepreneurship of its Internet millionaires than for the power of its labor unions or the collectivism of the kibbutz.

Socialism failed in Israel, as it has failed everywhere. It led to inefficiency, economic stagnation, and hyperinflation. And yet there is a residual nostalgia for socialism in Israel, because without it–without the romantic utopian sentiment that drew thousands of early immigrants to work the land, without organized labor providing the institutional infrastructure for statehood, without the spirit of self-sacrifice for the whole that infused the Israeli military–Israel would not be here today.

Israel today is a triumph of free enterprise–with all the attendant problems of economic inequality that often accompany rapid economic growth. Much of what the Israeli state does, it does poorly–or, at least, inefficiently. The public education system, for example, has suffered a steep decline in recent decades. And yet there are a few rare, marvelous exceptions. Public transportation in Israel, for example, is ubiquitous and reliable, superior to most urban systems in the U.S.

Taxes are high in Israel (compared to the U.S.), and regulations are onerous–leading to noncompliance, corruption, and chaos. The economy thrives alongside statism because innovation is almost a cultural trait, and because Israel has the benefit of a deep science and technology skills base. And Israel is less socialist than it used to be. Ironically, Israel dodged the 2007-8 financial crisis partly because it did not have significant state intervention in the real estate market.

Today’s socialism might be described as a luxury of the comfortable classes. Thus it has been for the Israeli left, heavily represented among the urban, European elite. It is easy to believe that the solution to inequality is more redistribution when you are able to enjoy the kind of economic growth and stability that only comes with a less redistributive state.

Such ideas are even more compelling given that socialism played such an important role in the founding of the country.

Stand on a train platform on a busy Thursday afternoon–the start to the Israeli weekend–and watch the rush of Jews, Arabs, mothers, soldiers, religious, secular, black and white, and you start to understand that there is some kind of connective tissue that holds it all together, some shared sense of responsibility that transcends religion, some basis for pluralism and democracy in a society made up of refugees from some of the least free and least tolerant places on earth.

Recalling life in Barcelona in the Spanish Civil War, George Orwell wrote in Homage to Catalonia of the egalitarian social change wrought by socialism: “Waiters and shop-walkers looked you in the face and treated you as an equal. Servile and even ceremonial forms of speech had temporarily disappeared…All this was queer and moving. There was much in it I did not understand, in some ways I did not even like it, but I recognized it immediately as a state of affairs worth fighting for.”

There is something of the same flavor in Israel today–even as the country struggles with new economic divisions, even as the threat of war hangs over the country’s future, even as postmodern problems like gentrification and racial politics shape the political arena.

That early socialism, now largely discarded in form if not in spirit, is likely what enabled Israel to be the prosperous free market society it is today, without flying apart. Even in destructive ideas there can be positive potential.