Saturday, November 30, 2013

ISRAEL NOT A FREE MARKET ECONOMY


A student in one of my classes got quite angry when I mentioned that  Israel cannot be classified as a free market economy. Israel continues to receive the most aid of any country in the world, from the US and currently receives $3. billion a year. Given that there only 6 million approx Israelis...you can do the maths and see how much Israeli citizens are being subsidized by the American taxpayer..

This explains US aid to Israel: http://www.fas.org/sgp/crs/mideast/RL33222.pdf

Here is an opinion piece
http://www.huffingtonpost.com/steven-strauss/us-aid-israel_b_4251742.html

US military aid to Israel isn't just about Israel's defense, but is helping to subsidize its defense industry.
The US sends military aid and technology to Israel, which helps to subsidize its thriving weapons industry. In turn, Israel sells weapons to China (which doesn't sit well with the US) and many other countries. Israel is the world's sixth largest weapons exporter.
http://www.aviationweek.com/Article.aspx?id=/article-xml/AW_08_05_2013_p76-600058.xml

Aid money from the US is used to develop Israeli industries which in turn compete with American businesses.
 

While Israel does have some free trade agreements, its defense sector is largely protected by US aid paid for by US taxpayers. The irony is, Israel has been under fire for selling its weapons to China.

For an account from 2002 of Israel's protective tariffs , see this:

http://www.iasps.org/policystudies/ps53eng.pdf

There is no reason to suppose this has changed much since then. There have been massive protests in Israel due to poverty and financial restrictions. Here is a blog that explains Israel's LACK of competition, and you can check out the facts yourself:

"The main reason why it is so hard for Israelis to earn a decent living is that the Israeli economy is strangled by anti-competitive behavior by business in cooperation with government bureaucracy. It wouldn’t cost money for the government to stop doing the things it is doing that enable Israeli businesses to make undeserved profits while operating inefficiently and charging excessive prices. :

http://blogs.timesofisrael.com/from-crony-capitalism-to-a-free-market/

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