Religious fundamentalists in the US have a favorite foreign country. They revere Israel, campaign there, and use it as a prop for fundraising. Their reverence for Israel might prove useful if they took the time to actually look at the place. Unfortunately the far right’s affection for Israel resembles certain other things they love, like market economics and the Bible, in that they know very little about it and refuse to learn more.
That’s a shame, because there are powerful lessons we could learn from Israel’s remarkable economic success and its growing internal political dysfunction. A reality-based look at Israel might bring some much-needed sobriety to the Republican Party.
The state of Israel was built on Socialism and was perhaps the earliest, most committed Marxist experiments outside of Russia. Early relations with the US were understandably tense and complex. The country’s first major ally was the Soviet Union and relations with the Soviets were strong until Stalin’s death.
The post-Stalinist Soviet government made allies of Arab-nationalists and for the next twenty years Israel had no firm international support. Relations with the US only started to warm significantly after the 1973 Yom Kippur War placed Israel solidly, though still awkwardly, in the global anti-Communist bloc.
Much like Western Europe, Israel since the ‘90’s has worked to dismantle the infrastructure of state socialism. That effort has led to a slow, but concerted privatization campaign and the liberalization of its laws on capital ownership and private enterprise. It has not, however, had a meaningful impact on the dense network of social support that the state has constructed.
Israel has a highly successful system of universal healthcare. Just like the US under “Obamacare,” they have a personal mandate requiring everyone to obtain insurance. Unlike the US, basic coverage is paid for through a tax surcharge collected through the authority that maintains the social safety net. Israel’s system costs of fraction of what we pay in the US, while delivering health care ranked among the best in the world.
Tax rates in Israel are very high, even in comparison to Western Europe. Those who earn more than the equivalent of about $200,000US annually pay the top marginal tax rate of 50%, in additional to social security and health insurance tax surcharges. When all of these charges are included, the top marginal rate is well over 60%. Israelis also pay a VAT of 18% on purchases. Capital gains rates can reach 50% for some transactions and corporate tax rates are 25%.
The social welfare system provides the poor with payments for food, transportation, housing and cash which are relatively generous compared to the US. About a quarter if Israeli households use the welfare system, about the same as in the US.
Abortion is legal in Israel, though a review committee must approve the procedure in each case. The review committee has historically approved 98% of requests. This year the government has further extended abortion rights by deciding to significantly expand state funding of abortions. That’s right, American fundamentalists whose religious freedom is supposedly destroyed because Obamacare provides contraception coverage are somehow untroubled that their aid money is indirectly underwriting Israeli abortions.
Though Israel’s abortion laws are among the most lenient in the world, Israel has very low abortion rates compared to the US and Europe.
Gay marriage in Israel is a practical reality through a sort of common-law marriage provision. The Israeli state does not provide any government-sanctioned marriage. Marriage law is a purely religious matter regulated by each religious community, but a civil union law grants same-sex couples equivalent rights.
Discrimination on the basis of sexual orientation has been illegal for more than twenty years. There have been no bans on gays serving in the military officially since the sixties. Women have always been permitted to serve in combat roles since before Israel was formally a state and women are subject to compulsory military service.
Taxes are high. Everyone gets health insurance. Gays are treated equally and abortion is safe, legal and rare. If Ted Cruz’s vision of the world makes any sense, this place should look a lot like North Korea (or even worse, France). In reality Israel has developed into a powerhouse of economic dynamism.
Israel hosts 60 companies on the NASDAQ exchange, more than any other foreign country except China. Technology you use for cell phones, virus protection, cutting edge health care and navigation all have roots there. Israel hosts major development centers for nearly every influential player in information technology. As recently as 2008, Israel attracted as much venture capital as Britain. Israel leads the world in per capita venture investment, entrepreneurship, and research & development spending.
A strong public education system, a tight social safety net, excellent public infrastructure, an aggressive effort to recruit immigrants, strong ties to the West, significant state support for research and development, and a solid base of property protections have contributed to Israel’s successful embrace of the modern knowledge economy. This progress has come in the face of daunting internal and external obstacles. Though Americans tend to be aware of Israel’s external challenges, the internal ones may be the most dangerous to this emerging super-economy.
Like the US, conservative politics in Israel is increasingly influenced by religious extremists. A rapidly growing community of ultra “Orthodox” Jews, Israel’s answer to the Amish, are challenging Israel’s liberal political establishment.
They are fundamentalist, poor, and thanks to a specialized curriculum, badly under-educated, leaving them largely incapable of functioning in a modern economy. They are driving a hardline foreign policy that keeps the country locked in constant military tension, yet they are exempt from national service.
The Orthodox community is a small but consolidated voting bloc that has been very successful in carving out concessions at the expense of the rest of the country. They are pushing Israel toward international confrontation while undermining the political liberalization and economic progress that has powered the country toward greater integration with the wider world.
American conservatives could learn from Israel’s success. Economic liberty, combined with a strong infrastructure, immigration, and a solid safety net are a fine formula for economic growth. We also have a lot to learn from Israel’s worst political problem. The religious extremists who are terrified by the modern world will destroy the personal freedom and prosperity that comes with a dynamic economy. There’s a lot to love in the Israeli experience if we have the stomach to view it honestly.
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