For the vast majority of the Israeli population the only form of patriotism is economic. In fact, that’s the only long-term form of patriotism for any people. The Soviets tried to instill patriotism in paupers, but after the World Youth Festival of 1957 in Moscow revealed the Americans’ affluence, communism was doomed. The leftist Zionism survived on intense patriotic propaganda for decades, but cannot continue forever. Since the early 1980s, emigration from Israel to economically developed countries has accelerated. No amount of ideological brainwashing can overcome a simple truth: humans long, first of all, for affluence. As long as professionals can earn four times more in the US than in Israel, nothing will stop the brain drain. If tomorrow the US and Canada eased their residential visa restrictions for Israelis, the Israeli-Palestinian conflict would be solved by Israel’s depopulation.

The relatively small 40 percent per capita purchasing power difference between Israel and the United States is misleading. The $45,000 US PPP averages highly productive Jews with non-productive Mexicans, for example. It is also a mistake to speak of median Jewish income in America, which is about $55,000 because less productive Orthodox Jews drag it way down. The real median figure for Jewish professionals in the US is closer to $80,000 a year, three times the income of their Israeli counterparts.

The correlation is still worse for disposable income. The major expense, housing, costs about the same in Israel and America. Cars and gasoline are much more expensive in Israel. Both Israel and America have an inexpensive option for public education. The disposable income of Israeli Jewish professionals is a whopping six times lower than that of American Jewish ones. By American standards, Israeli Jewish professionals belong to the poor class.

Israeli society is also more stratified than the American society. The twenty richest Israeli families control about 60 percent of the national wealth. Israel is economically vulnerable: a significant war could burden her economy with national debt for years to come.

Israel’s economic problems are not due to security issues. The military budget is modest at $2,000 per capita, only twice the American level. Absorption is also not a major problem: Israel was also poor in times of low immigration. Russian immigrants quickly became economically efficient and covered the costs of their absorption. The real and the only problem with the Israeli economy is socialism.
Welfare weighs on our national income. And don’t even think of blaming the Haredim: their subsidies pale in comparison to what we give the Arabs.

Government regulation and bureaucratic red tape impede entrepreneurship. No civilized country has as many ministries as Israel. Traditional Jewish legalism coupled with socialist leanings and corruption to create a bureaucratic nightmare. The system should not be reformed, but dismantled altogether. Israel needs a totally free market.

Organized labor is a millstone on Israel’s neck. Except for the 3-4 percent growth, our economy is a zero-sum game: the trade unions’ pay increases come from consumers’ pockets. When the teachers’ union racketeers strong-arm the government into paying them higher wages, the money is taken from other parts of the budget, and someone else gets less. When port workers strike to exclude private contractors, the contractors’ non-unionized workers go jobless and consumers of the imported goods pay more.

Israel is full of monopolies. The power generation company operates under a monopolistic arrangement granted to them by the British. The real reason for their continuous monopoly, of course, is not an obscure British authorization but the trade unions’ grip over the Avodah Party. New monopolies keep springing up: recently, Israel practically banned imports of European cars from America, so that a few car distributors enjoy mad profits. There is no imaginable legal reason to ban consumers from market arbitrage, from buying foreign cars from America on the weak dollar.

Israel’s original purpose for high customs duties was two-fold. One, implicit taxation. Two, protection of fledging local industries. The first purpose is immoral, as the government has at least an obligation to tell people clearly how much it robs them for. The second purpose is gone: during her sixty years of existence, Israel has long since established competitive industries. It’s pretty clear that we won’t start an internationally competitive production of cars or refrigerators. Accordingly, there is no justification for imposing high duties on their imports. Even if at some time the government would decide to support a hypothetical domestic car manufacturer, it should properly do so with tax subsidies rather than duties. Tax reduction helps a particular manufacturer while duties oppress the entire population.

The Judaism of the Torah envisages no economic regulation. Once the tithes are paid, economic agents are completely free. Perhaps Shmita, the seventh-year land rest, hints at ecological concerns, but no one argues about them, anyway. Neither priests nor kings had the power to install red tape.
Zionism can only exist in a free economy.