The Pandemic Depression
The Global Economy Will Never Be the Same
There are no more Israeli giants left. Shimon Peres was the last one, and he died yesterday at 93. In history books, his name should be listed alongside those of David Ben-Gurion, Yitzhak Rabin, Menachem Begin, and Moshe Dayan as one of those Israeli leaders who built the country through hard work even as they remained committed to a larger vision. But in many ways, Peres belongs in his own category; apart from Ben-Gurion, the father and first prime minister of Israel, none of the other giants changed the course of the country’s history in so many issue areas: defense, the occupation of the West Bank, the economy, and the peace process. Peres remained a figure apart for other reasons as well, kept there certainly by his own actions but also by the persistent belief of his fellow citizens that he was too manipulative, too cunning to be a “real” Israeli; as the Haaretz journalist Chemi Shalev put it, he never even “looked like an Israeli,” resembling an eastern European rather than a Middle Easterner. What makes such attitudes so surprising is that Peres was Israel; he grew and matured in tandem with the Jewish state.
Peres was a flawed leader, full of contradictions. He was a visionary who helped make Israel a nuclear power and was the primary architect of its powerful, self-sufficient defense industry. But he often engaged in crass political maneuvering in order to hold on to power. As minister of defense he facilitated some of the first Jewish settlements in the West Bank in the mid-1970s. Then, in the 1990s and in the first decade of this century, he became their primary opponent. He began his political career as a hawk and ended it as the country’s definitive dove. He started out as a socialist but, in the 1980s, initiated the country’s shift toward free-market capitalism as a way of getting past hyperinflation.
Peres stuck to the principles he believed in but could not shake the accusation that he was unprincipled. He spoke of the value of human life, but during the lead-up to the 1996 election, he authorized Operation Grapes of Wrath, an attack on Hezbollah in southern Lebanon that killed scores of Lebanese civilians. He never shied away from working with political rivals, including Rabin, Ariel Sharon, and Yitzhak Shamir; yet he often undermined that cooperation by working on his own initiatives. He was beloved by diaspora Jews and Western leaders, but not well liked by Israelis. He was always at or near the top of the country’s leadership, but despite all his years in office, he only won a single election to high office (for the presidency, in 2007—his second time competing for that position).
These apparent inconsistencies reflect the country that Peres helped found. Israel was formally created in 1948 during war, but its institutions and norms were established well before that. These institutions represented a series of noble ideas, including a redemption of the Jewish people, a commitment to inclusive democratic norms, and a promise of equality and egalitarianism. Yet the secular Ashkenazi elites that dominated the founding marginalized Mizrachi Jews and Arab citizens, and the formation of country necessarily required a loss of territory for the Palestinian people.
Above other principles, Peres was simply committed to Israel’s survival. During the difficult decades of the 1940s, 1950s, and 1960s, when the country struggled under the weight of constant terror attacks and bouts of open warfare, the absorption of hundreds of thousands of immigrants, and the establishment of an economy, the rule of law, and the legitimacy of the governing system, Peres represented the gritty determination that kept Israel alive and, eventually, allowed it to thrive.
But he could not resist grandiose dreams. His authorization during the 1970s of settlements in the West Bank reflected the unbridled euphoria that overtook Israeli Jews at the capture of the historic and biblical lands of the Israelites.
Peres made mistakes and poor decisions. But he was a tireless advocate for a stronger, better country.
In the 1980s, as leader of the Labor party, he negotiated a rotating premiership in a coalition government with Likud’s Shamir, as the country shifted away from the dominance of the Labor party and labor Zionism itself. Although he had long been committed to the collectivist-socialist ethos of early labor Zionism, Peres—serving as prime minister first—devalued the Israeli currency, reduced government expenditures, and fought the powerful labor union, the Histadrut, over wages. This was during a period in which Israelis were becoming more confident about their future, demand for high-quality consumer goods was growing, and an individualist culture was emerging.
At the same time, the 1980s saw a dramatic shift in Israel’s perception of itself as an embattled minority in a region—indeed, in a world—populated by hostile actors. The 1982 invasion of Lebanon and the 1987 intifada shocked the Israeli conscience; the Israeli military, long thought of as the defender of the country’s ethics through its focus on what the institution labeled “purity of arms” and “wars of no choice,” proved capable of harming civilians in Lebanon and then acting like a police and occupation force in Gaza and the West Bank.
By the 1990s, Peres supported direct dialogue with the Palestine Liberation Organization in order to reduce Israeli control over Palestinians in the West Bank and Gaza. The growing evidence that military force was not enough to protect Israel from the surrounding threats became, for Peres, proof that economics was the key to Israel’s future security. In tandem with the immigration into Israel of tens of thousands of skilled workers and scientists and artists from the former Soviet Union, he worked to integrate Israel into the regional economy through trade with the Arab states, even as the country was just starting to become a world leader in computer and defense technology, biomedical research, and diamond processing.
By the 2000s, Israel’s survival was no longer in doubt. It had become increasingly integrated into global economic, political, and security structures, but the conflict with the Palestinians persists and world opinion has turned against Israel’s presence in the West Bank. Its human capital is nearly unparalleled, but social divisions within the country seem to be deepening. Israelis are materially better off than ever before, but the disparity between rich and poor is among the highest in the West. Poverty is deep, and significant segments of the population—primarily Palestinian citizens and the Orthodox—are not well integrated into the economy. For his part, Peres had finally achieved high office on his own merit, serving as Israel’s elder statesman. Yet he was unable to translate that into any concrete achievement, in part because the office of president is purely ceremonial. His final success, then, was constrained.
In death, Peres will be remembered and loved by Israelis. It is tragic that they never understood and appreciated him during life, for he was their mirror. He made mistakes and poor decisions. But he was a tireless advocate for a stronger, better country. He never stopped thinking ahead. Today, as Israelis have turned away from the large ideas that motivated them in the early years of the country’s existence to focus on their immediate economic and security concerns, Peres’ life should be a lesson: that the struggle for something more can never stop.