Israeli Neo-conservatism€¦ · Israeli Neo-conservatism | 5 2006 elections, we demonstrate the claims discussed theoretically above. The election results show that while the Likud

Israeli Neo-conservatismRise and Fall?

Guy Ben-Porat and Fany Yuval

Abstract: This study of neo-conservatism in Israel argues that despite its powerful emergence, internal contradictions prevent it from establishing a hegemonic position. This argument is used to explain the collapse of the Likud in the 2006 elections after it adopted a neo-conservative agenda. The attempt to maintain simultaneously a hawkish foreign policy and a neo-liberal eco-nomic agenda proved costly, since the demands of such a foreign policy often contradict the ‘small state’ tenets of neo-liberalism. Consequently, as this article demonstrates, neo-conservatism has a difficult time sustaining a stable constituency, as those who sup-port an aggressive foreign policy may desire a more welfare-type state, while those who support neo-liberalism generally favor a moderate foreign policy.

Keywords: economics, elections, foreign policy, Likud, neo-conser-vatism, neo-liberalism, Netanyahu, peace process

Two years before the 2006 elections, neo-conservatism appeared to have made a significant mark on Israeli politics. The sweeping victory of Ariel Sharon in the elections and the nomination of Benjamin Netanyahu to the Ministry of Finance seemingly locked together the two essentials tenets of neo-conservatism—hawkish foreign policy and neo-liberal econom-ics—in a policy framework. What was especially telling was the ability of the government, and especially of Netanyahu, to receive support from constituencies previously alienated from the Likud such as the business community and the bourgeoisie. The neo-conservative policy paradigm (Ben-Porat 2005), however, soon fell apart in the elections of 2006. The

Israel Studies Forum, Volume 22, Issue 1, Summer 2007: 3–25 © Association for Israel Studiesdoi:10.3167/isf.2007.220101

4 | Guy Ben-Porat and Fany Yuval

defeat of Netanyahu, who led the Likud Party in these elections, is gener-ally explained by the rift in the party after the execution of the disengage-ment plan and by the charisma of Ariel Sharon, who had built a new party, Kadima. While these factors are certainly relevant, we would like to offer an overarching explanation with respect to the contradictions of neo-con-servatism itself.

Defining neo-conservatism as an ideology committed to a hard-line foreign policy and to a market economy, we argue that despite its power-ful emergence, neo-conservatism, in Israel and elsewhere, suffers from internal contradictions that prevent it from achieving a hegemonic posi-tion. Specifically, the commitments, on the one hand, to a hawkish foreign policy and, on the other hand, to a neo-liberal economic agenda are hard to maintain simultaneously. From a policy perspective, the high costs of such a foreign policy (in terms, for example, of military spending) often contradict the ‘small state’ vision of neo-liberalism. More importantly for this article, neo-conservatism has difficulty sustaining a stable constitu-ency, as those who support a hard-line foreign policy may desire a more welfare-type state, and those who support neo-liberalism are likely to pre-fer a moderate foreign policy. While historical conjunctures might provide opportunities for neo-conservatism, its window of opportunity may be narrow and short-lived.

This, we claim, can explain the defeat of Netanyahu and the Likud Party in the 2006 elections. After the failure of the Camp David Summit in 2000 and the collapse of the Israeli-Palestinian peace process into unprecedented levels of violence, the Israeli public largely accepted the ‘no partner’ the-sis, thus blurring the left-right ideological cleavage. This change provided a window of opportunity for Netanyahu’s neo-conservative agenda that included a hard-line position on foreign policy and commitment to lib-eralizing the economy. The opposition of those hurt by the new economic policies, many of them traditional Likud supporters, did not receive much attention and was possibly overshadowed by the support of the bourgeoi-sie, previously unidentified with the Likud, for the new economic plan. However, the disengagement from Gaza again intensified the debate over territories and positioned Netanyahu on the right, against the wishes of the pro-compromise bourgeoisie. Thus, in the elections of 2006, both the bourgeoisie, disappointed by the Likud’s hard-line position, and many of the Likud’s traditional voters, angry at its economic policies, withdrew their support from the party.

We begin this article with a general discussion of neo-conservatism and its contradictions to argue that it is an incoherent policy paradigm. In the second section, we describe neo-conservatism in the Israeli context and its rise to prominence since the late 1990s. Finally, using the data from the

Israeli Neo-conservatism | 5

2006 elections, we demonstrate the claims discussed theoretically above. The election results show that while the Likud has lost some of its bases of support in the periphery, severely hurt by its economic policy, it did not gain compensating support in the more affluent areas. This, we argue, dem-onstrates that the attempt to combine a hawkish foreign policy with a neo-liberal economic agenda has so far failed to create a stable base of electoral support. The Likud’s defeat, therefore, is not the result of a personal failure, but of the inherent contradictions in neo-conservatism itself.

Neo-conservatism—a Theoretical Overview

The important role neo-conservatism occupies in the contemporary United States has worldwide importance. While neo-conservatism evolved in the United States because of the US position of power and developments associated with globalization, it stretches beyond its original boundaries and is part and parcel of the political debate in other Western democra-cies. Following the terrorist attacks of September 11, the hawkish foreign policy attitudes associated with neo-conservatism gained popular support and merged with the earlier emphasis on liberal economics to form a new policy paradigm. Recent reports highlight the key positions that ‘neo-cons’ hold in the Pentagon and the White House, and describe “a web of connec-tions [that] binds these people in a formidable alliance” (Drew 2003).

In the mid-1990s, Norman Podhoretz (1996), one of the founding fathers of neo-conservatism, announced the end of a movement whose legacy will continue to plague its enemies for a long time. Neo-conservatism described an intellectual group that in the 1960s moved from neo-liberal politics (or in some cases from a more leftist-Marxist orientation) to what was described as a new type of conservatism, whose main tenets were moder-ate economic liberalism, aggressive foreign policy perceptions, opposition to the 1960s counterculture, and support for Israel. In the early 1990s, after the end of the Cold War, the movement seemed to have exhausted itself. Its critics argued that its high-water mark had passed (Dorrien 2001), and its proponents described its missions as complete. However, only five years after Podhoretz’s eulogy of neo-conservatism, it reappeared, in a somewhat new formation, after the election of George W. Bush, the events of Septem-ber 11, and the war in Iraq.

The opposition to, and the disdain of, the counterculture of the 1960s was a major force behind the rise of neo-conservatism, which was designed to protect the great institutions of the liberal community and traditional American and Western values, including capitalism. Neo-conservatives supported the restriction, rather than annulment, of the welfare state and


the initiation of what they described as a “compassionate conservatism” (Wolfson 2004) that would strengthen the incentives to work, which were seen as being undermined by the availability of welfare benefits (Podho-retz 1996). Economic liberalism was coupled with a cultural concern that united the neo-cons, many of them secular, with religious traditionalists, as did a strong sense of patriotism—“a natural and healthy sentiment [that] should be encouraged by both private and public institutions” (I. Kristol 2003). This patriotism underscored the contempt for and hard line against the Soviet Union and also the neo-conservatives’ support of Israel, which was viewed as “a democratic nation under attack from non-democratic forces” (ibid.) or as a “highly vulnerable outpost and surrogate of the West in a strategically vital region” (Podhoretz 1996).

The neo-conservatives have sought to introduce new ideas to Ameri-can politics and have operated—something their Israeli counterparts adopted later—through different institutions they joined or formed, such as the Heritage Foundation or the American Enterprise Institute (AEI), that are designed to influence policymaking (Steinfels 1980: 12). Dur-ing the Reagan era, neo-conservatives also held important positions in government, promoting both anti-communism and Reaganomics. The New Republic warned half-seriously that “neoconservatives were taking over the government as they provided the intellectual ballast for Reagan’s military buildup and his anti-communist foreign policy, especially his maneuvers in Central America” (Dorrien 2001: 63). Podhoretz (1996) could look back with satisfaction “over a just war well fought, and a time for rejoicing in a series of victories that cleared the way and set the stage for other victories in the years to come.”

Neo-conservatives continued to remain active through institutions such as the Project for the New American Century (PNAC), which was founded in 1997 by, among others, Dick Cheney, Donald Rumsfeld, Paul Wolfowitz, and Eliot Abrams, figures who later occupied key positions in the Bush administration. If during the Clinton era neo-conservatism appeared to have been defeated, the election of George W. Bush, September 11, and the military action in Iraq brought neo-conservatism and the neo-conser-vatives back into the spotlight. A decade of neo-conservative argument, debate, and policy papers, previously ignored, was translated after the attack on the World Trade Center into an American foreign policy that includes the use of military force, with or without the approval of multi-lat-eral institutions, the use of pre-emptive strikes, and the inclusion of states that support terrorism in an “axis of evil” (Stelzer 2004: 13).

Neo-conservatives dismiss the notion of a political conspiracy or a ‘cabal’ used to describe their power in the Bush administration. What explains their influence, they argue, is that they have had not only a correct


analysis of what was wrong in American policy but also a coherent policy alternative (Muravchik 2003). The Bush revolution in foreign policy, it was argued, rests on two beliefs: that American security would be ensured by the removal of constraints imposed by friends, allies, and international institutions, and that America should use its power to change the status quo around the world (Daalder and Lindsay 2003). These principles, artic-ulated by neo-conservatives, are argued to be deeply embedded in Ameri-can history and public opinion (Selden 2004).

In an article in Foreign Affairs, William Kristol and Robert Kagan (1996), leading neo-conservative thinkers, advocated “actively pursuing policies—in Iran, Cuba, or China, for instance—ultimately intended to bring about a change of regime.” Initially, these ideas were rejected by both the Clinton and Bush administrations. The perceptions of the latter, how-ever, as well as the wider public opinion, have changed since the events of September 11. Neo-conservatives were able to discredit the isolationist policy supported by many traditional conservatives and to push forward America’s promotion of democracy, not so much for the sake of democ-racy but as a means of bolstering US security and furthering its global pre-eminence (Wolfson 2004).

The economy is also a significant factor in contemporary neo-conser-vatism as it seeks to provide an answer to some of liberalism’s internal contradictions. While the neo-liberal state is expected to allow business to function independently, it is also supposed to act collectively to safe-guard business’s position in global politics and, consequently, to ensure the loyalty of citizens to the collective. This is particularly problematic because of the social incoherence that liberalization and commodifica-tion produce. One response is to reconstruct social solidarities and use religion, morality, and nationalism as the building blocks of neo-conser-vatism. Neo-conservatism veers away from the neo-liberalism that pre-ceded it in two fundamental respects: the concern for order as a response to the chaos of individual interests, and the concern for morality as the social glue that would hold the body politic secure (Harvey 2006: 80–82). That said, neo-conservatism remains haunted by the same contradictions it seeks to resolve. While in certain periods, such as that described below, it can gain popularity and political power, it is questionable whether the combination of neo-liberal economics and hawkish foreign policy is sus-tainable in the long run. In the United States, for example, the interven-tionist unilateral policy that would preserve American power would have a high economic cost and threaten the conservative commitment to bal-anced budgets and low taxes. Alternatively, cuts in spending elsewhere, especially in public services, to compensate for the costs of war can cause public resentment and unrest.


Israel: The Political Terrain

Both conservatism and neo-conservatism have minimal roots in the politi-cal history of Israel. Revisionist Zionism, associated with Ze’ev Jabotinsky, is a natural candidate for the conservative right in Israel. The Likud Party, however, the official heir of revisionism, is made up of several groups and has adopted electoral strategies that have reinforced its more centrist ori-entation (Rynhold 2002). The Likud was formed by two parties that shared the opposition to the dominant Labor Party: Herut, the revisionist party committed to territorial maximalism and militant nationalism, and the Liberal Party, whose principal concerns were economic reform. In 1977, after almost 30 years of Mapai rule, the Likud, led by Menachem Begin, won the elections.

From its inception, and even more so after it took power, the Likud was burdened with the contradictions of the sort described above. On the one hand, as opposed to Labor’s social-democratic agenda, the Likud was com-mitted to market economy and economic reforms. On the other hand, it also presented itself as the party of the disadvantaged, and its important power base that enabled the 1977 election victory came from the less afflu-ent Jews of non-European descent and residents of the periphery. Ironi-cally, the Labor Party, supposedly the party of the workers and socialism, received its support from the more affluent voters. This irony is a result of the general confusion in Israel over the terms ‘right’ and ‘left’, which refer to hawks and doves rather than socio-economic positions. What determined the vote in elections was not the economic debate but rather the territorial dimension (1984), ethnicity (1977–1984), and religiosity (1996) (Shamir and Arian 1999). Accordingly, the left in Israel is committed to a policy of ‘peace and privatization’ and promotes a liberal discourse based on a civic view of the state. The right, on the other hand, promotes an ‘ethno-national’ discourse that rests on Israel’s definition of a Jewish state and a religion-based understanding of Jewishness (Shalev and Levy 2004).

The Likud positioned itself to the right (hawkish) side of the Labor Party, but nevertheless signed a peace agreement with Egypt in 1979 that included the return of the Sinai to Egypt. The economic policy of the Likud has drifted even further from its liberal agenda. As the party of opposition, the Likud was perfectly poised to take advantage of the resentment of Mizrachi Jews (immigrants from Muslim countries or their descendants) toward the Labor Party and mobilize a majority of these voters. In the 1977 elections, a hawkish foreign policy was combined with the promise of economic reform to win the elections. The Likud sustained its position of power by, on the one hand, a hard-line foreign policy and a nationalist rhetoric and, on the other hand, a mixture of economic policies. In addition to economic


liberalization plans, limited in scope, it also sought to eradicate poverty. The neighborhood renewal project, for example, targeted about 90 neigh-borhoods and small towns in order to improve the lives of the poor sectors of Israeli society (Carmon 1989).

In spite of the lack of conservative roots in the political history of Israel, the Likud, described by Ilan Peleg and Paul Scham (2007) as “neo-revi-sionist,” developed a political outlook comparable to neo-conservatism. Specifically, this approach included assertive nationalism, expansionist tendencies, unilateralism, militarism, and a general “Hobbesian, Social Darwinist attitude towards international relations” (ibid.). While the neo-revisionist foreign policy attitude developed early on, it was only in the late 1990s, under Netanyahu’s leadership, that the foreign policy outlook was coupled with an economic viewpoint and, more importantly, policy that drew the Likud closer to neo-conservatism.

Peace, Economics, and the Israeli Public

The dividing line between Labor and Likud, especially since 1967, became not economics but foreign policy, as the Labor Party’s strongholds (and other parties associated with the ‘left’), in spite of its social-democratic rhetoric, were in the more affluent sectors of Israeli society. The Likud, conversely, in spite of its more liberal economic worldview, received strong support from the Jewish lower classes and the periphery. A particularly sig-nificant indicator for this supposed paradox was the business community, which remained closer to the Labor Party. This can be explained by the earlier ties established during the dominant period of the Labor Party, the more moderate foreign policy agenda of the party, and, since the 1980s, the party’s adoption of a liberal economic agenda undistinguished from that of its rival. This became even more significant in the early 1990s when the business community sought to expand outward and globalize and found itself blocked by the continuation of the conflict. Its support for the Labor Party, which committed itself to compromise vis-à-vis the Palestinians, was all but inevitable (Ben-Porat 2005).

The victory of the Labor Party in the 1992 elections reflected the growing desire among Israelis to ‘normalize’ the country and turn it into what was described as an advanced, sophisticated, and more tolerant society. It was a perception shared by the upper and middle classes, who began to associate economic liberalism and economic growth with peace. Accordingly, the Labor Party’s platform stressed the need to ‘normalize’ Israel through peace and criticized the ‘irrationality’ of the Likud’s foreign policy. The ‘peace and liberalization’ agenda did not last for long, as the peace process that had


begun in 1993 deteriorated into cycles of violence, and domestic support, limited from the start, rapidly diminished. The 1996 elections followed not only the assassination of Prime Minister Yitzhak Rabin, but also a ter-rorist campaign and retaliations that brought the peace process to a halt. Netanyahu, who led the Likud for the first time, managed to mobilize what was described as a ‘rainbow coalition’ of those who felt alienated from the peace process and the globalization of Israeli society. The Likud, in other words, reaffirmed its position as the party representing the periphery leaning toward the primordial identity and managed to portray the Labor Party and the left as less patriotic and concerned with the Jewish essence of the state. Nahum Barnea (1996), a distinguished columnist, described the roots of the hostility and alienation toward the Labor Party displayed in the election outcomes: “It was a coalition of communities and indi-viduals who believed he [Peres] is not loyal enough to the national, Jewish interest … It was a coalition of the hungry. Many of them feel neglected, unfairly treated and marginalized by Israeli society. They identify the left, not unjustifiably, with the political, economic and cultural establishment, in which they play no part.”

Netanyahu’s neo-conservative agenda was presented prior to the elec-tions, but the time was not yet right for its implementation. He entered the Israeli political scene and took the lead of the Likud with what seemed like a set neo-conservative agenda: strong opposition to the Oslo Accords and a commitment to market economics. The assassination of Rabin, however, forced some moderation, and Netanyahu and the Likud presented a more centrist, moderate position on the Oslo Accords. Similarly, after the Likud took office, the government was too preoccupied with the developments in the Israeli-Arab conflict to implement wide-scale economic reforms and had to compromise its economic agenda as well. But even if the time was not yet right for neo-conservatism, the 1990s can be described as its formative period.

Neo-conservatism—the Formative Period

In his 1993 book, A Place Among the Nations, Netanyahu presented his blueprint for a neo-conservative agenda that would change the face of Israel. The plan included the creation of a vital market economy supported by the change of Israeli bureaucracy and, as a result, prosperity that would attract new immigrants. “An Israel boasting eight million Jews in the early decades of the next century, with double the economic output per person, could be a substantial force on the world scene” (Netanyahu 1993: 320; see also Drake 1996). With its demographic and economic empowerment,


Israel could dictate its terms for peace with its Arab neighbors. Peace would also depend on democratic changes in the Arab regimes. Like contempo-rary neo-conservatives in the United States, Netanyahu argued for the need to strengthen democracy in the Arab world for a Kantian-like peace based on mutual trust (Drake 1996).

The relations between Israeli and American neo-conservatives were also strengthened during this period. In 1996, a Washington study group, headed by Richard Perle, produced a policy report titled A Clean Break: A New Strategy for Securing the Realm. Labor Zionism, the document argued, was Israel’s “large problem”—“efforts to salvage Israel’s socialist institutions—which included pursuing supranational over national sover-eignty and pursuing a peace process that embraces the slogan, ‘New Middle East’—undermine the legitimacy of the nation and lead Israel into strategic paralysis and the previous government’s ‘peace process.’” The report stated that Netanyahu’s new government should come in with new ideas and a new intellectual foundation that would “provide the nation the room to engage every possible energy on rebuilding Zionism, the starting point of which must be economic reform” (Perle et al. 1996).

The ideological buildup of neo-conservatism, based on the US model and with American support, took place in those years. The Shalem Center, established in the mid-1990s in Jerusalem by the Jewish-American Repub-lican Ron Lauder, with the help of other American Jewish Netanyahu sup-porters, was dedicated to promoting privatization, a market economy, and a hawkish foreign policy. The center translated into Hebrew conserva-tive and neo-liberal classic texts—authored by Edmund Burke, Friedrich Hayek, Milton Friedman, and Irving Kristol—that became part of many university syllabi. Another American supporter of Netanyahu, Ted Arison, helped establish the Ariel Center for Policy Research, whose purpose was to produce policy papers especially on the risks of the peace process. The role model for this center, which adopted a more hawkish position than Netanyahu, was the American Heritage Foundation, which was connected to the Republican Party (Kim 1998).

In an interview in Business Week a year after his election, Netanyahu stated his commitment to a neo-conservative agenda. He described himself as the first prime minister in Israel’s history “genuinely committed to free markets” and promised to discard the “anachronistic socialist restraints” that hold back Israel’s potential for economic growth (Business Week, 15 July 1997). How-ever, the neo-conservative agenda proved difficult to implement due to inter-nal and external constraints. While Netanyahu was against the Oslo Accords, he was pressured by the US government, with the Clinton administration still committed to Oslo, to continue the negotiations with the Palestinians. Under these pressures, Israel withdrew from the West Bank city of Hebron


and signed the Wye agreement, the terms of which included a withdrawal from an additional 13 percent of the West Bank (Rynhold 2002). Attempting to maneuver between ideological commitments, domestic demands, and external pressures, Netanyahu was portrayed as inconsistent and, conse-quently, lost much of his credibility (Mendilow 2001).

The economic agenda proved no less difficult to implement. Netanyahu was supported by the ‘soft right’—Sephardic/Mizrachi and traditionalist—which initially seemed to provide him a safety net (Sprinzak 1998), but the neo-conservative panacea of budgetary cuts and liberalization was difficult to implement against budgetary demands from the coalition. The coalition included two important partners: Shas, a religious Sephardic party, whose voters were generally of lower socio-economic status, and Yisrael B’Aliya, representing the new immigrants from the former USSR. Not only did these two parties have demands for budget allocations for their constituencies, but there was strong antagonism between the religious Shas Party and the secular Yisrael B’Aliya that constantly destabilized the government. Neo-conservatism, as it turned out, was difficult, if not impossible, to implement. In 1999, the coalition fell apart, and new elections were announced. Netanya-hu’s defeat in the elections to the Labor Party, headed by Ehud Barak, and his ensuing resignation from the Likud leadership seemed to indicate the end of his political career and a major setback to neo-conservatism.

The Neo-conservative Moment

Four years after the Likud’s defeat, neo-conservatism has made a comeback and has registered a significant mark on Israeli politics. The changes of global and domestic politics, on the one hand, and Netanyahu’s impor-tant role as minister of finance, on the other hand, bolstered the neo-con-servative moment. The breakdown of the peace process after the Camp David Summit in 2000 into an especially violent cycle led not only to the collapse of the Barak government, but also to a more general change of perceptions among the Israeli Jewish public. The popular interpretation of the conflict—summed up in Ehud Barak’s “no partner” declaration after Camp David that the Palestinians responded with violence to the best offer that could be made—was a severe blow to the peace camp. Essentially, the debate over future relations with the Palestinians was replaced by a general desire for security and a consensus (among the Jewish public) that peace could not be reached in the near future. Ariel Sharon, who replaced Netan-yahu as the leader of the Likud, and whose visit to the Temple Mount after Camp David triggered the violence, became the new prime minister, vow-ing to bring security to Israel.


Internationally, there were also relevant and significant changes. First, there was a new president in the United States, which was no longer com-mitted to the Oslo Accords. Second, while the Bush administration initially contemplated a more isolationist approach, the events of September 11 turned things around, with neo-conservatism strengthening its influence on policymaking. The United States’ declaration of ‘war on terrorism’ was adopted by Israeli policymakers for their own domestic concerns, includ-ing Netanyahu himself: “Do those in the free world calling for a Palestinian state really want unlimited sovereignty for the Palestinians? Do they really want to have a Palestinian state with its own army, free to dispatch suicide bombers all over the world? Certainly not. But unlimited sovereignty will produce just that: a fanatical, dictatorial armed terrorist state in the heart of the Middle East. This state will threaten Israel, America and the entire free world” (Netanyahu 2003). The re-reframing of the Palestinian issue as a ‘security problem’ and the general consensus over the ‘no partner’ approach, together with the international developments, opened a window of opportunity for neo-conservatism in Israel. It was the almost accidental nomination of Netanyahu to the Ministry of Finance, however, that fos-tered the emergence of a coherent neo-conservative policy paradigm.

After being re-elected in a landslide victory in 2003, Sharon decided to reshuffle ministerial portfolios. He moved Netanyahu, to the latter’s dismay, from the Ministry of Foreign Affairs to the Ministry of Finance. With the political debate over the future of the territories all but dead, this new position allowed Netanyahu not only to implement a major economic liberalization reform but also to win the support of constituencies previ-ously alienated from the Likud. Essentially, the linkage established earlier between peace, economic liberalization, and economic growth was at least temporarily suspended, as Netanyahu explained before he was nominated to the Ministry of Finance:

I don’t think that anyone believes today in the possibility of making peace with the Palestinian society. This society that nurtures battalions of suicide bombers … set itself a goal of Palestinian nationalism that seeks to con-struct a Palestinian state on the ruins of Israel … [T]he Palestinian regime must be removed and replaced and Israel’s power buildup must continue, including economic recovery that is definitely possible. The most impor-tant steps for economic recovery, except the security problem, are growth-promoting measures. The most important step to encouraging growth is a dramatic tax reduction. (Bar-Tal 2002)

Netanyahu’s ideas and performance in the Ministry of Finance gained the support of the economic elite and others who disdained what they per-ceived as an oversized welfare state. Netanyahu, who described the private


sector as the ‘thin man’ carrying the ‘fat man’, the public sector, on its back, captured the feelings of many of the Israeli bourgeoisie:

I believe that we lag behind the world because of our huge public sector, not because of security. The economic system here is the problem. A system of a small private sector that supports a huge public sector, a growing public liv-ing on government support, including those who view welfare as an alter-native to work, and a paradox of more foreign workers than unemployed Israelis. And the private sector … is shrinking while it funds all of this. Tax rates in Israel are incomprehensible. Tax cuts are one of the most important tenets of the plan. (interview, Ha’aretz, 21 March 2003)

With the deadlock in the peace process and Netanyahu’s focus on eco-nomic affairs, the business class and the bourgeoisie could easily lend support to his policies, which included making budget cuts, privatizing state-owned companies, reducing the size of the public sector, and forc-ing people to move from welfare to work. The Manufacturers Associa-tion, which had supported the Labor Party’s peace initiative in the 1990s, described Netanyahu’s economic plan as “courageous and in the right direction” (press statement, 18 March 2003). When Netanyahu threatened to resign because of political differences with Sharon, the manufactur-ers, along with other business organizations, called upon him to remain in office and warned that his resignation would destabilize the economy, which was in the process of recovery (press statement, 8 November 2004).

The new economic policies, however, were not a matter of consensus. In February 2003, a majority of the Israeli population (57 percent vs. 31.5 percent) opposed the economic plan (Peace Index 2003). These trends were repeated 16 months later, as the public disagreed over the question of whether the national economy had improved, deteriorated, or remained unchanged compared to the previous year. But the majority gave the government’s eco-nomic policy a medium or failing grade (Peace Index 2004). The welfare cuts negatively affected the lower classes, many of them traditional Likud supporters, but their outcry did not consolidate into an effective opposition. First, those hurt by the new economic policies were splintered into different groups that carried out different struggles with different goals. Second, with the evermore popular Sharon leading the Likud, no other party seemed able to offer a feasible alternative. And, third, like elsewhere, the economic plan was backed by a coherent ideological framework and by the threat of an economic crisis that supposedly left no alternative but the budgetary cuts.

Under these favorable terms, the neo-conservative paradigm could eas-ily withstand the opposition. The outcries of those hurt by the economic plan were either ignored or resolved by specific measures directed at lim-ited constituencies, breaking down the opposition into additional splinter


groups. In line with the neo-conservative ideology, poor people were to take responsibility for their own lives or bear the consequences. Accordingly, it was easy for Netanyahu to dismiss an unemployed single mother’s march from the peripheral city of Mitzpe Ramon to Jerusalem, which turned into a large protest of single mothers—“a woman who can walk 200 kilometers to Jerusalem is certainly able to work” (Yedioth Aharonoth, 18 July 2003).

Neo-conservatism Redux?

The combination of a hard-line foreign policy and a liberal economic pol-icy formed a neo-conservative policy paradigm (Ben-Porat 2005). In other words, it was the conjuncture of the deadlock in the peace process and the external changes described above that underscored the neo-conservative policy paradigm. This paradigm, we argue, proved difficult to sustain once its inherent contradictions surfaced, thus undermining its support and facilitating its opposition. When, on the one hand, the consensus over the territorial question was rendered moot and, on the other hand, the linkage between peace and economic growth was reaffirmed, the neo-conservative agenda lost much of its (new) supportive constituency and failed to regain its old one that had been lost in the economic reforms.

Unilateral separation, a concept raised in the past by the Israeli left, seemed to more and more politicians, including Ariel Sharon, to be a solu-tion that could satisfy many of the demands and form a consensus among Jewish Israelis. Sharon’s decision to break the political deadlock through a unilateral withdrawal from the Gaza Strip received wide political sup-port in the polls, but split his own party down the middle, with Netanyahu leading the opposition. The execution of the disengagement plan in August 2005, which included the removal of settlements in Gaza and the north of the West Bank, as well as the relocation of some 10,000 settlers, went more smoothly than expected as the large numbers of military and police overcame the resistance of settlers and supporters. However, the disengage-ment plan shook the political system and particularly the Likud. Sharon, frustrated with internal opposition, resigned from the Likud Party he had helped build some 30 years earlier, called for new elections, and announced the formation of a new party, Kadima.

The neo-conservative ideology was put to the test in April 2006 with the Likud’s election platform. The Labor Party, led by Amir Peretz, positioned itself on the left with a social-democratic agenda and a pro-peace stance. Kadima, led by Sharon and drawing candidates both from the Likud and Labor, positioned itself in the middle with promises for more unilateral steps vis-à-vis the Palestinians and blurred its economic message, although


it seemed closer to the Likud than to Labor’s economic agenda. The Likud, under the leadership of Netanyahu, adopted a neo-conservative platform, criticizing the disengagement plan and committing to a market economy. Netanyahu entered the race with a record of economic growth achieved during his term as minister of finance (attributed also to the improved security and world support), but also of large social gaps and resentment, even among traditional Likud supporters, toward these policies.

In the United States, the cost of interventionist foreign policies and of the commitment to small government and low taxes poses significant chal-lenges to neo-conservatism. In Israel, the political spectrum began to realign along the old divides and forced Netanyahu to choose between the old ‘fam-ily’ of a hawkish-right constituency and the new ‘friends’ of the neo-liberal constituency. Success for the Likud in the election depended, therefore, on three not mutually exclusive possibilities. The first was that the Likud would be able to maintain its strongholds in the periphery that had been hurt by economic reforms yet remain loyal to its hawkish ideology. The second was that it could compensate for the support lost in the traditional strongholds with new constituencies that are less attracted by hawkish ideology but sup-portive of its liberal economic position. The third was that neo-conservative ideology has become well entrenched with a substantive constituency that supports both neo-liberalism and a hard-line foreign policy.

As the election results show, none of the three scenarios played out, and the Likud dropped to a record low of 12 parliamentary seats. Neo-conser-vatism, as demonstrated here, fell victim to its own inherent contradic-tions. The Likud, identified with harsh economic measures, lost much of its support in the periphery. Its neo-liberal platform, however, did not help it attract new votes among the upper classes, who disdained its hawkish position and resented Netanyahu’s opposition to Sharon. Netanyahu, a few months later, reflected disappointedly on the position this class took: “I don’t know if the businessmen turned against me, but they certainly did not stand by me. Hardly any of them stood by me. I knew before the elec-tions that most of them opposed my political approach. But I would have expected some of them to stand up and say: we dispute Netanyahu politi-cally, but support his economic approach” (Shavit 2006).

The Impact of the Economy

The lower classes, a bastion of Likud support, did not benefit from the eco-nomic growth and were often hurt by the economic measures initiated by Netanyahu. These groups were frustrated with economic policies that (cou-pled with the more relaxed security situation) led to economic growth and


reduction of unemployment, but also increased poverty rates and socio-economic gaps. Thus, despite the economic growth (from -1.2 percent to 4.4 percent), the socio-economic gaps have grown in terms of poverty levels: 19.3 percent of the households had disposable income below poverty level during 2003, and their average income was 31 percent under the poverty line in 2003, on average, as opposed to 26 percent in 2001 (Taub Center 2004: 14). Given that the poverty threshold is equal to half of the median disposable income, obviously, poor households became poorer. In terms of inequality, the disposable income of the upper three deciles increased in real terms by 5–6 percent, while the disposable income of the first decile plunged by 9 percent. Real wages increased overall by 3.3 percent, but the minimum wage was not updated and decreased by about 1 percent of the average wage (from 48.8 percent of the average wage in 2003 to 47.2 percent in 2005).

The government’s socio-economic policy during the years 2002–2003 contributed to a substantial increase in the dimensions of poverty and the deepening of the gaps in disposable income. The transfer of payments (as a percentage of the general income) decreased from 18.3 percent in 2002 to 17.5 percent in 2003 and to 16.2 percent in 2004. As a result, only 40 percent of poor families were extricated from poverty by the transfer payments, while the percentage of poor families in the population, based on their disposable income, reached 20.5 percent. This expansion in the dimensions of poverty occurred mainly during this period due to accelera-tion in the depreciation of allowances and pensions, a development that hit families in the lower deciles more, whereas the income tax reform ben-efited the more affluent populations, who in any event reaped the rewards of economic growth (see table 1).

Table 1: The Dimensions of Poverty and Socio-economic Inequality

2002 2003 2004 2005

Growth measured in gross domestic product (GDP) -1.2 1.7 4.4 — Unemployment rate 10.4 10.7 10.4 9.6 The real rate of change in the average wage in the economy (in percentage) 5.6 0.7 -0.4 0.3 Public expenditure on welfare (percentage of the GDP) 19.48 19.05 17.88 17.17 The percentage of families who extricated themselves from poverty thanks to the transfer payments and direct taxes 47.2 42.7 39.2 39.2The poverty gap 29.7 30.5 33.3 —

Source: Stein-Kapach (2005).


An inquiry committee appointed by the Knesset to study the increase of poverty reported that “an increase in the number of needy people apply-ing to the services of charitable societies that provide food for the needy, soldiers who refrain from going home on leave on weekends, and students who are forced to miss classes on certain days, because they lack the bus fare or school books or need to help contribute to the family’s income, all these factors create the feeling that the reality on the ground is deteriorat-ing. Not only is there an increase in the incidence of poverty, but it appears that the poverty is deepening and now we are talking about poverty that is not just proportionate, but there is real hunger, homelessness and a lack of basic learning equipment” (Parliamentary Committee 2002: 22).

We argue that this growing poverty and inequality undermined the bases of support that the Likud had in the periphery. The free market economy, however, could potentially draw the business class and bourgeoisie to the Likud. The party’s hard-line foreign policy approach, however, the other side of neo-conservatism, was a major drawback for these voters in favor of territorial compromise. These inherent contradictions of neo-conserva-tism revealed themselves in the 2006 elections, in which the Likud lost its support in the periphery (because of its economic policies), but was not compensated in the center (because of its foreign policy agenda). Thus, traditional Likud voters who previously did not prioritize economic issues punished the Likud in the 2006 elections for its economic policies that hurt them. In the following section, we will demonstrate these arguments empirically by analyzing the election results.

The Election Results—Neo-conservatism Defeated?

The 2006 elections brought the Likud down from 39 parliamentary seats to 13. By analyzing the results of the last two elections, we will attempt to provide an answer to the following questions: Which voters deserted the Likud? Why did they desert? And where have they gone? We contend that the inherent contradictions of neo-conservatism, discussed above, underscore the Likud’s collapse in the 2006 elections. First, its economic policies cost it the support of the poor sectors, and, second, its foreign policy kept the upper classes away from the party. To substantiate our arguments, we segment the voting results at the polling stations into ten clusters based on the division of towns in Israel into 10 socio-economic clusters by the Central Bureau of Statistics. An analy-sis of the clusters provides some answers to the questions above.

In table 2, the percentage of the vote gained by the major parties in the past two election campaigns, for the 16th Knesset (2003) and the 17th Knesset (2006), is shown according to the clusters. The first column on the


left groups the settlements from the lowest socio-economic status in Israel to the highest. The results show a drop in the Likud’s support base in all the clusters between the 16th and the 17th Knesset, but at different levels. Clus-ters 1–3 show only a slight decline, which can be explained by the fact that it is composed mainly of Arab settlements, where the vote for the Likud is marginal. In clusters 4–6, however, an intensive desertion of the Likud is evident (up to 28.1 percent), and the desertion by higher clusters, while a bit more moderate, is still quite high (up to 24.5 percent).

In the lower clusters (4–6), the decline of support for the Likud is matched by an increase in the vote for the Labor Party, Shas, and the new Kadima Party. In the higher clusters (7–10), aside from the drop in support for the Likud, there was also a drop in the vote for the Labor Party, although significantly more modest. The transfer of support for Kadima, however, was higher than in the lower clusters. The desertion from the Likud and the empowerment of other parties, according to the elections results divided into socio-economic clusters, appear to follow two different trajectories (see table 3). The first includes the voters in the low clusters, who were hurt by Netanyahu’s economic policy. These voters cast their vote to promote the proclaimed welfare policy of Labor, the more practical welfare policy proposed by the Shas Party, or, in greater numbers, the new and moderate Kadima. In the higher clusters (7–10), a large number of votes shifted from the Likud to Kadima, and a more moderate transfer occurred from Labor to Kadima, indicating the new party’s popularity among the middle and upper classes. The combination of liberal economics and a moderate foreign

Table 2: Voting by Socio-economic Clusters

Party Likud Kadima Labor ShasKnesset 16 17 16 17 16 17 16 17Cluster 1 1.2 0.5 — 4.5 4.7 7.4 14.1 13.4 2 4.5 1.4 — 3.9 4.0 6.2 9.8 11.4 3 7.2 2.3 — 5.9 7.1 10.9 8.3 9.7 4 30.9 10.4 — 14.9 7.7 11.4 12.9 15.6 5 39.8 11.7 — 22.8 10.0 13.6 9.2 11.7 6 38.2 11.4 — 25.7 12.1 13.9 8.7 10.7 7 34.6 10.1 — 28.8 17.3 15.7 6.3 7.6 8 30.3 9.3 — 30.5 22.3 19.0 5.3 5.8 9 26.2 7.3 — 36.3 28.7 21.2 2.7 2.9 10 24.9 7.8 — 39.0 33.0 23.6 1.0 1.0



policy underscored a coherent paradigm that neutralized the internal con-tradictions that were entrenched in the support for Netanyahu.

In table 4, we analyze voting patterns in selected settlements of differ-ent clusters and geographic locations in order to demonstrate the general patterns described above. Two settlements from the third cluster, three from the fourth cluster (all except one peripheral settlements), and three settlements from the ninth cluster were selected. The trends noted above are reflected far more lucidly in these examples, as in peripheral towns the desertion of the Likud is striking. Netivot and Ofakim are peripheral towns in southern Israel with relatively high poverty and unemployment levels. Between 2003 and 2006, these towns often appeared in the news after bud-getary cuts were announced or poverty reports were published. The resi-dents interviewed declared that they would not vote for the Likud again. The election results show that was indeed the case, as in both towns the Likud lost more than half its power. The votes of the Likud deserters went to Kadima, Shas, and even the Labor Party, which rose from 4 percent to 16 percent in Ofakim. In the towns of the fourth cluster—Kiryat Malachi, Ashdod, and Beth Shean—the Likud lost even more of its voters (see table 4), again to Kadima, Shas, and the Labor Party.

The voting results in the settlements of the ninth cluster, affluent inde-pendent municipalities adjacent to big cities—Meitar in the south, Har Adar near Jerusalem, and Kfar Shemaryahu near Tel Aviv—demonstrate, from the opposite angle, the contradictions of neo-conservatism. The Likud, despite the economic policies that benefited these affluent sectors,

Table 3: Voting Trends in Segmentation According to Socio-economic Clusters

Cluster % Decline in Vote for Kadima % Increase in % Increase in Voters for Likud in 17th Knesset Voters for Labor Voters for Shas

1 0.7 4.5 2.7 -0.7 2 3.1 3.9 2.2 1.6 3 4.9 5.9 3.8 1.4 4 20.5 14.9 3.7 2.7 5 28.1 22.8 3.6 2.5 6 26.8 25.7 1.8 2.0 7 24.5 28.8 -1.6 1.3 8 21.0 30.5 -3.3 0.5 9 18.9 36.3 -7.5 0.2 10 17.1 39.0 -9.4 0.0



not only did not gain but even lost many of its voters in these settlements. However, unlike in the settlements of the third and fourth clusters, the Labor Party, probably because of its social-democratic agenda, did not gain from the Likud’s fall. Instead, voters of these settlements cast their votes in large numbers for the centrist Kadima Party.

Conclusions

Between 2003 and 2005, the neo-conservative moment in Israel did not resolve its internal contradictions, and these resurfaced shortly before the 2006 elections. The dual commitments to a hawkish foreign policy and a neo-liberal economic agenda were proven hard to maintain simultane-ously vis-à-vis a stable constituency. While neo-liberalism appeals to the Israeli business class and bourgeoisie, this group has traditionally favored a moderate foreign policy, as it has linked peace with economic growth. The hard-line foreign policy did appeal to the Jewish working class and periph-ery. This group, however, due to it socio-economic position, could hardly embrace a neo-liberal economic agenda.

The neo-conservative moment was a historical conjuncture that provided a window of opportunity for neo-conservatism, when its contradictions were overshadowed by internal and external developments. Specifically, the ‘war on terrorism’ declaration of the Bush administration, the peace

Table 4: Analysis of the Votes in Selected Settlements from the Various ClustersParty Likud Kadima Labor ShasKnesset 16 17 16 17 16 17 16 17Settle- ment Cluster Netivot 3 23.3 9.6 — 4.5 1.4 9.1 35.0 41.3 Ofakim 3 27.6 10.0 — 9.2 4.0 16.4 21.4 22.2 Kiryat Malachi 4 35.9 10.0 — 13.6 5.6 14.9 18.7 28.4 Ashdod 4 32.0 10.1 — 19.6 6.1 10.4 14.1 17.1 Beth Shean 4 43.1 16.8 — 12.4 4.7 16.3 24.8 30.1 Meitar 9 31.8 8.2 — 28.6 24.2 26.5 1.6 2.3Har Adar 9 23.5 9.3 — 33.6 28.5 27.6 0.2 0.7 Kfar Shemaryahu 9 21.3 5.8 — 51.1 37.0 15.1 0.3 0.4



process between Israel and the Palestinians that came to a halt in 2000, and the division of labor between Sharon and Netanyahu allowed the latter to promote a neo-conservative agenda. The collapse of the peace process brought the business community and the bourgeoisie closer to Netanyahu and his liberal economics. The Likud, under these terms, could reach out to sectors hitherto alienated from it, while its traditional base of support did not yet have an alternative.

The neo-conservative moment came to a close when Ariel Sharon decided on a unilateral withdrawal from the Gaza Strip that split the Likud down the middle and eventually led to the resignation of Sharon and the formation of the Kadima Party. Hurt by its economic policies, the Likud, it was revealed in the 2006 elections, has lost a large part of its traditional base of support, but it did not gain the support of the bourgeoisie, which, once the territorial question was on the table again, was deterred by the Likud’s hard-line foreign policy. Accordingly, large numbers of Likud voters deserted to parties committed to welfare, and large numbers of its real or potential supporters among the more affluent chose the new Kadima Party, which backs economic liberalism but a more moderate foreign policy.

Our explanation for the collapse of the Likud in the recent elections has a significant foothold in the socio-economic and political reality in Israel, but also wider ramifications for the study of neo-conservatism and its contra-dictions that deserve a comparative study. The end of the neo-conservative moment is not the end of the Likud or of neo-conservatism itself. Internal and external developments can potentially create new windows of opportu-nity, but without a stable constituency, the inherent contradictions are likely to resurface. Thus, while Netanyahu was able to turn the Likud into a neo-conservative party, this change could have been temporary, and the Likud could return to its conservative-hawkish roots. Since we began our work on this article, the ‘Second Lebanon War’ seems to reshuffle the political cards again. Thus, Prime Minister Olmert and Kadima’s fall from grace and Netayahu’s growing popularity could open a new window of opportunity. But as the political left-right alignment returns to the traditional doves-hawks dichotomy and the security-peace debate overshadows the economy, it is likely that the Likud will go back to its traditional strongholds and emphasize security rather than market economy. The window of opportu-nity, therefore, might be for the Likud rather than for neo-conservatism.

Acknowledgment

The authors would like to thank the Israel Studies Forum anonymous readers for their comments.


Guy Ben-Porat received his PhD in Political Science from Johns Hopkins Uni-versity in 2001. He teaches at the Department of Public Policy and Admin-istration at Ben-Gurion University of the Negev, Israel, and is the author of Global Liberalism, Local Populism; Peace and Conflict in Israel/Palestine and Northern Ireland (2006).

Fany Yuval received her PhD in Political Science from the University of Haifa in 2001. Joining the Department of Public Policy and Administration at Ben-Gurion University of the Negev, Israel, she specializes in election studies, vot-ing theory, game theory, and management aspects in the public sector, and teaches strategic management in public administration and organizational behavior in the public sector.

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Israeli Neo-conservatism€¦ · Israeli Neo-conservatism | 5 2006 elections, we demonstrate the claims discussed theoretically above. The election results show that while the Likud