Israel's other war

The socialist foundations of the Jewish state are facing their final destruction

Binyamin Netanyahu, Israel's current finance minister and a leading member of the Likud party, was probed early this month about his intention to privatise the Israel Electric Corporation, "the flagship of state-owned companies". Exposing his profound hatred for the organisation, which is known for its strong trade union, Netanyahu replied: "This company is no flagship; it is more like the Nazi destroyer Bismarck, and we are chasing it just as we would chase the Bismarck."

Netanyahu's Second World War analogy provoked outrage across the country. The leader of the union was "appalled, as the son of Holocaust survivors". Binyamin Ben-Eliezer, a candidate for the Labour Party leadership, said the remark was "fit for Joseph Goebbels", the notorious Nazi minister of propaganda.

Such moral indignation over the memory of the Holocaust being invoked in vain is commonplace in Israel these days. And as usual, the real process bedevilling Israeli society has been obscured: the implementation of neoliberal policies and the final steps of a gradual depar- ture from the fundamental values of the nation's founders. Israel was always designated a mono-ethnic Jewish state, but its vision was one of ethnic socialism rather than ethnic capitalism.

The company once known as the Palestine Electric Corporation, pride and joy of the country's enterprising founders, was established in 1923 by Pinchas Rutenberg, also known as "the Old Man of Nahara-yim". It was a part of the Zionist ethos, just like the kibbutzim, Jaffa oranges, Tel Aviv port and other collective ventures now demolished by a brutal process of cutbacks and privatisation.

Netanyahu feels he has the legitimacy to treat the unions as the nation's worst enemy. As with Margaret Thatcher and the British miners in the 1980s, he has launched war on the strongest unions - the electricity workers as well as teachers, 4,500 of whom were fired this month - having already cracked down on pretty much everyone else.

Single mothers, the elderly and the disabled have all suffered cruel cuts in their meagre benefits. The conditions for eligibility to unemployment pay have been hardened, and a fierce campaign by the treasury labelled those not in work as "lazy sluggers" living at the taxpayer's expense. A programme for dealing with the unemployed, recently introduced, consists of forcing them to travel great distances to work for petty cash. The hatred with which Netanyahu speaks of the poor and unemployed matches his loathing for the crippled unions.

The finance minister may be landing the fatal blow on the unions, but he is merely finishing off a process begun by Shimon Peres as Labour prime minister and then minister of finance in the 1980s. It was the Labour Party, mother of Israel's strange version of unionism (where the trade unions are also among the state's biggest employers), that paved the road for its demolition. Needless to say, the present Likud prime minister, Ariel Sharon, is doing nothing to soften Netan-yahu's hardline economic policies.

Many supporters of Israel continue to cherish an image of a relatively egalitarian society based on social solidarity - at least as far as Jews are concerned. They are oblivious to how the kibbutzim have turned from model socialist communities into privatised, upmarket zones whose residents make a fortune on their land reserves while doing their best to get rid of "unproductive" members, such as the elderly. They are equally unaware of the many thousands of foreign workers enslaved by private contractors.

The process Israel is going through makes it similar to countless other countries. However, while many third world states struggle to cope with demands from the World Bank and International Monetary Fund for ever more brutal social and economic policies, Israel's governments, Labour and Likud alike, have been willing players in this scheme of the new world order ever since the 1980s.

Such neoliberalism may prove the death of Israel's founding ethos of solidarity. In a society already riven by disputes between religious and secular groups, doves and hawks, Sephardim and Ashkenazim, the growing gap between the haves and have-nots is threatening the nation. The gap has grown significantly over the past five years, and it continues to widen.

The left in Israel has never been defined by social class or economics - apart from among members of the delegitimised Communist Party, which is often dismissed as an "Arab party". What is known as the left consists mainly of bourgeois doves who do not protest against the government's economic policies, for fear of jeopardising Sharon's plan for Israel's withdrawal from the Gaza Strip and Jewish settlements in the West Bank.

Sadly, the modern left is sacrificing the working classes for an illusion of peace. And, in the current climate, that means leaving the workers prey to two rising forces: religious fundamentalism and neo-fascism, whose agents are already lurking on their doorsteps.

Daphna Baram is the author of Disenchantment: the Guardian and Israel (Politico's)