The Waning of Israeli Etatisme

Abstract

SHORT OF REVOLUTIONS, SOCIAL CHANGES tend to be gradual. Their manifestations, however—in particular their institutional results—often tend to appear at discrete intervals at the end of a cumulative process by which imperceptibly small changes attain a critical mass. In the last decade Israel has been undergoing what may have amounted to revolutionary changes in its politico-economic landscape. What seemed to have been some of the country's most solidly entrenched institutions, many of them dating back to pre-independence days, were seen to be crumbling. This was most vividly apparent in the case of enterprises and public service providers associated with the Histadrut—the once all-powerful federation of Israeli trade unions. It was these enterprises and organizations, such as the business firms owned by the Histadrut, the General Sick Fund it ran, or the Kibbutz Movement, which was more loosely associated with it, that gave Israeli economy and society much of its special flavor. Now they suddenly found themselves in what were often insurmountable economic difficulties, forcing the Histadrut to divest itself of what used to be its flagships, or transforming them into regular business firms, in exchange for being bailed out by banks, private entrepreneurs, or the government.

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