Shalom may claim in defense that while vital reforms are strongly resisted by very powerful interests, such as the banks, there are no countervailing forces supporting them. The public seems indifferent and the chattering classes, so influential in molding public opinion, are hostile to freer markets.

Strong leadership could create, of course, support for reform by explaining how much all citizens will benefit from it. But Shalom does not try.

Not that mobilizing support for reform is simple. For decades Israelis have learned to mistrust “reforms” because they usually further extend the government’s reach into their pockets. Their distrust is fortified by our elites’ belief in the power of government to “solve” all “social ills,” and their reluctance to see its power curtailed.

Our elites are indoctrinated in universities dominated in the past by outright Marxists and nowadays by their neo-Marxist, post-modernist successors. You will therefore seldom find in the bureaucracy, in the educational establishment, in law and in the media, namely among the movers and shakers, support for free-market reforms, even when it is admitted that Israel suffers from excessive bureaucracy and that its economy is strangled by it.

Two recent pieces by political science gurus illustrate the problem. In “The Ugly Face of the Market Economy” Hebrew University professor Ze’ev Sternhell avers that whoever “does not wish to live in a barbaric society must [have government] control the economy and make it serve society.” Capitalism, he states, “creates not only wealth but also great distress and periodic deep crises.” Moreover, “it is based on coercion and on the believe that the strong is right and the weak is responsible for his [misery].”

This is mild stuff for Sternhell, who lost a libel suit in France when he falsely accused the distinguished political scientist Bernard de Juvenal of being a Nazi sympathizer. But it is typical of a mind-set incessantly promoted by the radical neo-Marxist teachers in the social sciences and humanities. If they ever mention Adam Smith it is to “prove” that he was an inferior thinker to Karl Marx.

Small wonder then that in a high-school history textbook, written under the supervision of a panel of university professors and approved by the Ministry of Education, you discover that the reason the Communist revolution failed in Russia was because Russia did not have a proletariat or a middle class, and its peasants, alas, were incapable of understanding Communist economics; or that the US launched the Cold War because American monopolies wanted to grab a large market share in Europe.

Even more reasoned professors, known for their scholarship and good sense, exhibit a worrisome misunderstanding of economics. In an op-ed, “An Arab Marshall Plan” (Jerusalem Post, November 14), professor Shlomo Avineri affirms that poverty is a breeding ground for radicalism. He then argues that since “the internal gap between rich and poor Arab countries” is the cause, the remedy is “an Arab Marshall Plan” which he conceives as ”...a process of redistribution of wealth among and within the Arab countries themselves.” Rich Arab countries such as Saudi Arabia could “invest in the poorer ones” such as Egypt, and help do away with poverty.

But “redistribution” and “investment” are worlds apart, of course. “Redistribution” is usually politically enforced and counterproductive, while productive investment occurs voluntarily where opportunities beckon. What wastes investments in Arab economies are their huge nepotistic, wasteful and corrupt public sectors. This is also true for capital-rich Saudi Arabia. Its rulers mitigate their citizens’ poverty by widespread subsidies from current oil income, not by providing them with gainful employment in productive investments. So it is unlikely Saudi investments can save a retrograde Egyptian economy.

To a large extent the Israeli economy is also stymied by a bloated, wasteful public sector. But professors hostile to the market and favoring “wealth redistribution” cannot fathom it. Nor do their students who man most key positions in Israel. This is a major reason why reforms are not implemented, and why our economy is so often in crisis, and suffers from slow growth.

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