01:47 , 02.13.07



click here to enlarge text click here to enlarge text
Day after privatization ends

Eventually Israelis will realize that privatization served to whitewash the corrupt
Ariel Rubinstein

It is hard to imagine a political or public force that will stop the rest of the privatization process. The governmental situation in Israel is dismal; the public would like to weaken the government and refuses to accept the argument that privatization also carries a heavy price.


So let's imagine the not-so-distant moment when all of the privatizations have been completed. The Postal Bank, the hospitals, the universities, the prisons and Channel 1 have been privatized. The Herzliya Conference has, officially now, replaced the deliberations of the Knesset Foreign Affairs and Defense Committee. An oligarch, who made his fortune from Maccabi Jerusalem and power plants in Combinastan, has completed the acquisition of the Border Police. All of the state's lands have been sold. On Tu B'shvat, the holiday marking our renaissance in Israel, the Jewish National Fund was also privatized. A year later, the JNF's holiday became Privatization Day, marking the victory of the forest over the wasteland, and efficiency over bureaucracy. Nothing has remained to be privatized. What will happen then?


At first, nothing happens. The public continues to blame the depleted government with every failure of the economy, just as some circles have continued to blame Mapai for the social polarization. But then things start to happen.


It begins with some very small shareholders who invested their money in the country's biggest corporation. They discover that the chairman of the board has appointed his son, an infamous good-for-nothing, to manage the corporation. The group submits a class-action lawsuit against the company's failing management. The lawsuit argues that the company's obligation is to maximize its profits and not to pamper the sons of the elite. The lawsuit is rejected, perhaps because the other side hired a top attorney or perhaps because the matter is not within the purview of a police investigation and the embittered investors are unable to prove that the unsuccessful appointment was a caprice of the chairman of the board and not a result of an innocent effort that failed.


A shortage of land in Gush Dan generates a rumor that some rich people from overseas have gained control of most of the valuable land and are refusing to sell it, in anticipation of a price increase during the next decade. At the same time, there is suddenly a water shortage, even though it is not a dry year. The television program "Fact" dares to claim that the privatized water companies have collaborated to reduce the water supply in order to drive up the price. The program compares what happened to the case of the electricity companies in California, but no one watches the program because the competing channel is broadcasting "A Director is Born."


New bank crisis 

Rumors circulate about investments by the pension funds in Mongolian currency that have gone sour because, contrary to the predictions of the pundits at the Ramat Gan Stock Exchange, Mongolia's request to join the European Union was rejected. This leads to a new bank crisis. Astute commentators note the chronological proximity of bank crises and wars in Lebanon.


Matters reach the boiling point after a dirty bomb explodes in the Tel Aviv subway. The privatized market finds it hard to cope with the catastrophe since capitalists believe that the notion of investing in Israel is not only uneconomical, but also insane.


At this stage, the idea sneaks into people's heads that perhaps Israel went too far. The public begins to realize that all that privatization did was to whitewash the corrupt, that the lands should have remained in the state's hands, that the privatized employment bureaus are not functioning, and that privatization primarily entails the transfer of control in society to the hands of those who are no less infantile than politicians. At this stage, there will remain only one thing for the children of this land to do. It is called: nationalization.


Unlike privatization, nationalization hurts. The weak and poor grumble when you take things from them, but the strong and rich are furious when you take what "belongs to them."


In the best scenario, just a lot of tears will flow while returning to more or less the same situation that existed prior to the beginning of the privatization process. So here is some advice for attorneys, economists, journalists and students who wish to be ahead of their time: Put aside all of the discussions on the limits of privatization. Instead, start discussing the relevant question of the limits of nationalization.