Capitalism at the Tipping Point
By Moshe Feiglin
Translated from the NRG website
There is a strong feeling in Israel that the State has become wealthier but the people have become poorer. This is due to the fact that the means for productivity are concentrated in the hands of a small minority. The first and foremost means of productivity was and remains land.
Israel’s economic leadership has conducted itself according to the best criteria known to it: capitalism. This saved Israel from descent into the depths of socialism that had previously brought us triple digit inflation and has toppled the economies of Europe right before our eyes.
There is no such thing as a socialist economy. Economy means creativity, productivity, creation and life; emulating the Creator. Socialism is a euphemism for robbery and self-righteous theft – perpetrated by the law. Creation and robbery go together like life and death. There is not and cannot be a socialist economy.
On the other hand, we are currently at the dangerous tipping point of the type of capitalism that does not enjoy the faith-based framework of charity and kindness. Jewish philosopher Shabtai Ben Dov predicted this tipping point fifty years ago, explaining exactly what happened to us until and during the recent crisis:
“Under certain circumstances, individualistic, divisive capitalism is the best method to achieve prosperity for society as a whole. But it is a method that protects itself from itself. After a short period of flourishing and prosperity, when the divisiveness and competition at capitalism’s foundation begin to take their toll, the weaker, less competitive sectors of society realize that the economic power accumulated in the hands of the stronger sectors prevents them from successfully competing, condemning them to eternal inferiority. The superiority of the successful sectors no longer stems from the important social role that they fill, but rather from the very fact that they control the economic power that they have accumulated. ”
In other words: The weaker sectors of society realize that they are being taken advantage of and that in order to attain economic superiority they do not have to fill a more vital social role. Rather, it is enough to artificially take control of the existing economic power.
Shabtai Ben Dov continues: “When the capitalistic society reaches this stage, the competition is no longer productive and no longer develops society. It turns into competition over reaping the rewards of past achievements. It becomes a rebellious competition that destroys society and wastes its energy for naught. It forces the controlling strata of society to artificially inflate the market that impoverishes ever-increasing numbers of people.”
The concentration of wealth in the hands of a few families in Israel, the salary gaps that are among the highest in the Western world, the inevitable crisis and the economic reaction that tries to “save the economy”, but really just keeps repeating the same mistakes – were all precisely predicted by Shabtai Ben Dov.
Is the solution a return to socialism? Not at all. Shabtai Ben Dov has much worse things to say about that method.
If so, what is the economic regime appropriate to Israel?
The answer is the Jubilee Economy. First and foremost, allocation of the national land reserves to the people of Israel. Israel’s Land Authority currently controls 93% of the land reserves marked for building in Israel. The even more amazing fact is that more than half the land that is marketed for construction does not come from the Land Authority, but rather from the remaining seven percent of private land. The result is a sharp increase in the price of land and housing that drags the other consumer indexes after it.
The Torah instructs us to be a fee people, insisting that the Land of Israel should also belong to each individual personally – not just nationally. The Land of Israel belongs to the Nation of Israel first and only after that to the State of Israel. Israel must return the fundamental means of productivity – land – to its rightful owners. The first step toward a healthier economy is to close the Israel Land Authority and to allocate land by lottery to every Jewish family in the Land of Israel.