Israel is in the midst of an economic revolution. Finance Minister Binyamin Netanyahu has a vision and a strategy. He is steadily liberalizing our economy and springing us from our monopolistic, union-controlled prison.
The Histadrut, whose economic warfare has caused a net loss of 1.4 percent of GDP in 2003, is now losing its battle to protect its privilege and power. The tide has turned. Welfare queens have lost their bloom. Union bosses have become their own caricatures.
Netanyahu's adversaries have no vision, only Leninist determinism. Labor leader Shimon Peres has for the past decade been telling us we have no power to improve our lots in life. According to Peres and his fellow-travelers, the Israeli economy is a slave to political forces. If we have peace, we will have economic growth. If we don't have peace, we won't. Not surprisingly, Peres is now wooing Histadrut labor boss Amir Peretz to rejoin the Labor party.
Together, so the old thinking goes, they can destroy Netanyahu's plans for liberalizing the economy as they did when he was prime minister.
Together they can blame Israel's economic woes not on the stranglehold in which the Histadrut and Peres's monopoly owning buddies grip the economy, but on the Likud's failure to accept Peres's vision of political surrender to the PLO.
Luckily, Peretz has overplayed his hand. The public is sick of being blackmailed. No public embrace by Peres can hide the fact that Peretz is a bully. No amount of screaming about workers' rights can erase the pictures of piled up trash in Tel-Aviv, or ships stranded at sea with no one to offload their cargo, or thousands of Israelis stranded at Ben-Gurion Airport because of arbitrary, illegal, and unjustifiable strikes by overpaid baggage handlers.
If Netanyahu is successful in transforming the labor markets, fiscal reform will follow. With a competitive market and lower tax burdens, Israel will be better positioned to attract immigrants from Western countries where most Jews in the Diaspora now live. Today, even the most ideologically driven American, Australian, French, or Belgian Jew has to think twice about making aliya when he knows that moving to Israel means losing his earning power and living in a socialist backwater that rewards mediocrity and punishes initiative.
If Netanyahu is successful, we will be able to tell young Jewish families in these lands that joining the Jewish state makes both ideological and economic sense.
But economics isn't the only thing keeping them away. There is also the problem of jihad. Even as French and German rabbis warn Jewish men not to wear their kippot in public to avoid being attacked by anti-Semites, the call is not going out to pick up and move to Israel.
And why should it? Here in Israel, outside the economic sphere, we are stuck. Our government offers us nothing to counter the Leftist dogma. To the contrary, it accepts it without question. Why should Jews in Germany or France feel more secure in Israel where the government proclaims its support for the establishment of a PLO terror state?
After Prime Minister Ariel Sharon leaked that he is considering destroying a few Jewish towns in Gaza in order to teach the Palestinians a lesson for not negotiating a peace deal with Israel, I asked a number of Likud leaders what the difference is between the Likud and the Labor party.
Deputy Defense Minister Ze'ev Boim and Chairman of the Knesset's Foreign Affairs and Defense Committee Yuval Steinitz described best the Likud's policies in this regard.
"The difference between Likud and Labor," said Steinitz, "revolves around the parameters we envision for an eventual agreement with the Palestinians. The question of the Land of Israel is no longer relevant. We accept that we will have to have a Palestinian state. But whereas Labor, under Ehud Barak, was willing to give away almost all of Judea and Samaria and to divide Jerusalem, we understand we need security zones. We need the Jordan Valley and Western Samaria and of course we will not accept partition of Jerusalem."
I asked Boim if he understood that the state that is about to be established will be a terrorist state.
"So what's new? We been living with terrorist states for the past 130 years," he said.
Both men described the establishment of a PLO state as an historic inevitability. What distinguished them from their Labor colleagues is that they are quite clear that this state will be unfriendly.
Until Netanyahu began his economic revolution, Israel's political and economic policies wre spawned in the same motionless swamp. In both cases, our inability to solve our problems is the result of our unquestioning acceptance of inaccurate strategic assumptions. In the case of our economy, the notion has been that only the PLO can solve our economic problems. In the case of our political debate, the notion has been that only the PLO can solve our demographic and security woes.
A precondition to entree into the world of political discourse in Israel has over the past decade become one's acceptance of the Leftist determinist view that if Israel does not allow the PLO to establish a terrorist state in our country's heartland, we will not be able to retain our identity as a sovereign Jewish democracy.
All of our leaders and most of us have accepted this completely baseless strategic assumption. Our extremists, on both sides of the ideological divide, push us ever more feverishly to this conclusion. Our extremists on the right tell us that given the axiomatic fact that we cannot sustain our status as Jewish and democratic state we must chuck democracy. Our extremists on the left exhort us that we have to quit being a Jewish state. And standing between the two extremities are our leaders whose answer to the quandary is to build the Great Wall of China and pretend that if we can't see our enemies, they will magically disappear.
In truth, the notion that our ability to remain a Jewish democracy is in question is a total fallacy. Over the past 55 years, the demographic balance between Jews and Muslims in Israel has remained more or less static. The Muslim birthrate has declined from three times the Jewish birth rate in 1967 to two times the Jewish birthrate in 2002. The rest of the difference has been made up by immigration of Jews to Israel.
There has been a major Muslim population increase in Israel as well as in Gaza, Judea, and Samaria over the past decade (although Jewish immigration from the former Soviet Union kept the balance steady). This increase in Muslim immigration is a direct consequence of the Oslo process which empowered the PLO to bring tens of thousands of Jordanians and Egyptians into the Palestinian Authority while encouraging Palestinian women to view their wombs as weapons and to have as many babies as possible.
Those who think that establishing a PLO terror state in Judea, Samaria, and Gaza is necessary to maintain Israel's Jewish majority must ask themselves the following questions: Do they really believe that such a state will curb Muslim immigration to the area? Do they believe that somehow, when the PLO has attained sovereignty it will suddenly encourage its women to join the work force instead of the maternity wards?
On Sunday, Shin Bet head Avi Dichter extolled the separation fence. The presence of the fence, he said, is responsible for the drop in the level of terrorism inside of Israel. But the day after Dichter made the announcement it was reported that the PA has test fired a Kassam rocket with a range of 17 kilometers.
In a recent speech in Washington, Sharon adviser Dore Gold explained that the newest strategic threat to Israel's security stems from the flow of small arms from Iraq. How long after the PLO receives independence will it tak
e for its terrorist forces to acquire Stinger anti-aircraft missiles? Just the threat of missile attack against El Al passenger planes in Canada caused the Canadian government to announce that it was considering stopping El Al traffic into Canadian airports. How many passenger planes will the Palestinians need to shoot down to shut down Ben-Gurion Airport and destroy Israel's economy? In this state of affairs, how many Jews will consider immigrating to Israel? How many will consider emigrating?
From 1967 until 1993, the policy of every Israeli government was that Israel needed to retain Judea, Samaria, and Gaza because of their strategic importance. From Eshkol to Begin to Shamir it was clear that arrangements with the Palestinians for self-rule could be made only when a Palestinian leadership emerged that would respect Israel's rights, including our right to remain a Jewish democracy. Israel made tactical errors in our relations with the Palestinians over the years, but our strategy of retaining strategically vital territories while expressing a genuine willingness to live at peace with the Palestinians was a sound one.
But then for absolutely no apparent reason, and without a hint of logic, as one million Jews from the former Soviet Union landed at our shores, the Labor party arbitrarily decided that our future as a Jewish democracy was imperiled and we threw a generation of strategic wisdom out the window.
Netanyahu is doing yeoman's work in convincing us to reject the Labor party's lies about our economic impotence. But these positive changes cannot stand on their own. Until we free ourselves of the canard that we cannot remain a Jewish democracy unless we enable the establishment of a terror state that will undermine both, our leaders will continue to delude themselves, and most of us, that fences and unilateral surrenders will save our lives and our state.
Originally published in The Jerusalem Post.