Israel Center for Social and Economic Progress

The Israel Center for Social and Economic Progress (ICSEP) is "an independent pro-market public policy think tank" set up in 1984 and it has a number of board members connected to neoconservative causes and free market fundamentalism.

It claims that its work 'facilitates crucial economic reforms and helps overcome resistance to them'. It considers Israel to be 'plagued by painful social, economic and political problems rooted in its socialist-statist system' and states that its mission is 'to help Israel realize its enormous potential by freeing its economy from the shackles of this regressive system'. Its motto is 'Where there is no bread, there is no Torah.'

ICSEP has been praised by Israel's Prime Minister Benjamin Netanyahu, President Shimon Peres, former Deputy Prime Minister of Industry and Trade Natan Sharansky and by Milton Friedman, widely considered to be the father of free-market economics. Friedman said:

ICSEP is like a breath of fresh air… It deserves the support of all of us who are deeply committed to the survival of a strong and healthy Israel.

History

ICSEP says that since its inception it has 'led the effort in creating a consensus for economic liberalization and deregulation'. Its right wing credentials have been clear from the start and are evidenced by the personnel involved in the organisation.

The late Arthur Seldon who co-founded British free-market thinktank the Institute of Economic Affairs was a member of the British friends of ICSEP along with the IEA's co-founder Lord Ralph Harris of High Cross. The US Board of Governors includes American neoconservative Irving Kristol, while the UK board includes Sir Stanley Kalms, ex-Treasurer of Conservative Party, and former director of the Centre for Policy Studies, another British free-market think tank.

It claims to have had a significant impact on Israeli policy makers and the Israeli public's understanding of economics, moving it towards a free-market stance. ICSEP states:

When ICSEP began its work, market economics were either unknown, ignored or derided in this country. Today, as a result of ICSEP’s continuing efforts and the growing international momentum toward market economies, public opinion has dramatically changed.

Israeli policy-makers no longer ask whether Israel should reduce government interference in the economy, rather, they ask where and at what speed, and how to overcome resistance to change.

Financial market reform

In 2004 ICSEP formed a working group led by the late Prof. Marshall Sarnat, a leading Israeli banking expert, Prof. David Levhari, Izhak Devash and David Boas that director Daniel Doron states 'formulated a capital market reform package and presented it to then Finance Minister Benjamin Netanyahu'. Netanhayu, reports Doron, 'immediately embraced it and delegated the director of his ministry, Yossie Bachar to implement it'. Doron states that there was 'powerful resistance' to the reform plan but it was ratified by the Knesset and he believes it created more competition that 'greatly improved the performance of [Israeli] capital markets'.

On August 10 2005, Bachar wrote to Doron, whom he addressed as 'my dear friend Daniel', thanking him for his 'support and encouragement' and calling ICSEP an 'important ingredient' in the 'struggle' for reform.

Activities

Economic analysis

The problem according to ICSEP

ICSEP considers Israel to have a 'dysfunctional political and economic system' which it states causes high unemployment and low productivity. It also regards there to be 'a culture that resists' free-market reforms and believes this is because of 'a strong and politically well-connected oligarchy and media determined to perpetuate the monopoly-dominated system'.

Among Israel's problems, according to ICSEP's analysis, are:

oligopolistic businesses; militant labor unions; huge unaccountable government bureacracies; a strong leftist ethos with a belief in big governmentl high unemployment; low productivity; slow real wage growth; poverty remains widespread; the young flee; defence is underfunded.

ICSEP's solution

ICSEP’s says that its work has 'served as a major catalyst for reforms in the Israeli economy', citing examples which include:

financial market de-monopolization and deregulation; a major drive for privatization; banking sector reform; tax reform; the release of large tracts of government-owned land; deregulation of the building industry and break-up of building materials monopolies; simplification and abbreviation of construction and planning procedures; movement towards privatization of municipal services; substantial reduction of government interference in the agricultural sector; privatization of the immigrant absorption process

ICSEP's work aims to impact policy makers directly but is also targeted at the wider Israeli public, with the intention of creating a market-friendly political climate. It claims to be 'at the forefront of the struggle to educate Israelis and inspire them with market thinking'.

Free market proselytising

Policy makers

ICSEP carries out research on contemporary economic issues and has collaborated in the past with the International Center of Economic Growth and the Koret Foundation.

It also tries to influence policy makers in Israel by publishing reform proposals. It claims to have 'laid the groundwork for the successful anti-inflationary policies in the mid-eighties, and for the “privatized” immigrant absorption policies that facilitated the successful integration of the great mass of immigrants from the former Soviet Union'. It presented its work to the government of Benjamin Netanyahu in September 1999.

Students

In the early 1990s, ICSEP received grants from George Soros’s Open Society Institute and gave workshops in Israeli high schools to '9,000 young immigrants from the former Soviet Union' which, the centre states, 'helped them integrate into a western-style economy'. In the mid-nineties, reportedly 'at the request of the Ministry of Education', ICSEP held what it describes as 'enrichment courses' for high school economics teachers to 'bring them up to date on new developments in the field'. Since 1998, ICSEP has held economics classes in several Israeli high schools in which it says more than 2,000 students have participated.

In universities, ICSEP is keen to preach its economic philosophy to students from all academic disciplines since it feels that many students are largely 'ignorant of economics and of market realities' which 'impairs their career decisions' and means they 'lack the tools to analyze government policies, or to ask what their costs effectiveness is' and so 'cannot act as enlightened citizens'.

Since 2000, ICSEP has given its seminar The Free Market and its Critics , based on Free to Choose by Milton Friedman and his wife Rose to almost 2,000 university students at the Hebrew University, Tel Aviv University and Ben Gurion University. It seems the centre hopes these course will trigger 'the beginning of a true pro-reform grass roots movement that could have an immense impact', boasting that graduates have 'changed the atmosphere on the university campuses from outright hostility to market thinking to a great curiosity about, and increasing acceptance of classic liberal thought' and 'participate in promoting free markets ideas in the public arena outside campus'.

Israeli public

The centre has translated free market texts such as Free to Choose by Milton Friedman and Rose Friedman into Hebrew. According to ICSEP's website it is currently producing a book about the reform of the financial market initiated by then Finance Minister Benjamin Netanyahu and is also working on a TV series.

The centre also translates into Hebrew articles from publications that share its economic analysis - such as Commentary, The Wall Street Journal, The Weekly Standard and others - in order to 'expose Israeli readers to a wider range of thinkers and ideas than is available in the mostly one-sided Israeli media' via its website Kivunim. Among others, it has carried articles by well known neoliberals and neoconservatives:

Francis Fukuyama | Samuel Huntington | Alan Dershowitz | Charles Krauthammer | Martin Wolf | Hernando de Soto | Irving Kristol | Mortimer Zuckerman

Events

Attendance at Herzliya Conference

Director Daniel Doron has spoken twice at the Herzliya Conference, the major annual gathering of military and political figures in Israel.

• At the Sixth Herzliya Conference he was part of a panel discussing 'Social Policy and Economic Growth' on 24 January 2006
• At the Twelfth Herzliya Conference Doron spoke on the topic 'Governing Israel's Economy: Social Justice vs. Capitalism' on 1 February 2012

Conference on the Balance of National Strength and Security

On 25 May 2004 a two and a half day conference attended by 'over 500 people from the highest echelons of the military and the defense establishments' was held at the Center for Policy and Strategy at the Herzliya Interdisciplinary Center’s Lauder School of Government. Over ten sessions participants discussed 'how critical economic growth is to national strength'. ICSEP helped 'initiate and implement the conference' and organised two panels; one on 'Economics & National Strength', the other on 'Technology & National Strength'.

Speeches

Prosperity will bring peace

Daniel Doron, ICSEP's director, gave a speech sponsored by the America-Israel Friendship League entitled 'Israel’s Prosperity, Peace Depend on Economic Reform' in 2009. He argued that 'free and prosperous markets provide the most powerful incentive for peace, not just paper peace signed by politicians but a real peace between people who recognize the benefits of peace'. He claimed that '[a]rrangements that only reflect political considerations often fail to address the real needs of people or dissipate their animosity' and later stated '[e]conomic growth demands cooperation. It makes former differences seem irrelevant, or at least less important'. He went on to say:

Before the 1993 Oslo agreement was signed between a deluded Israeli leadership and Arafat’s terrorist PLO, a most promising though non-political process of economic collaboration led to a gradual reconciliation between Arabs and Jews. From Israel’s 1967 conquest of the disputed territories to the 1987 Intifada, Israel followed a laissez faire policy. It maintained open bridges with Jordan and did not interfere in the Palestinian Arabs’ internal affairs. Israel’s maintenance of a modicum of law and order in the disputed territories of the West Bank and Gaza facilitated the development of trade and rapid economic growth. Crowds of Israelis ate and shopped on weekends in Arab towns and markets. Hundreds of thousands of Palestinian workers, freed from backbreaking drudgery on primitive Arab farms by Israeli-introduced modern farming techniques, moved from a bare subsistence in the backward Palestinian economy to far more lucrative jobs in the growing Israeli economy.

The outcome was dramatic. The GDP of the Palestinians more than quadrupled. Education levels rose, and some seven universities were established where none existed before.So did health levels, especially of women and children. The population grew rapidly. There were remarkably few terrorist attacks during this period. The few that happened were mostly perpetrated by PLO hirelings and did not enjoy popular support. Not that the Arabs were enamored of Israeli occupation. No one likes an occupation. But they found the occupation a lesser evil to Arab rule, realizing the enormous benefits it brought to them (this was even truer after Oslo when Palestinians learned first hand what PLO rule meant, so when it was rumored that Arab sections of Jerusalem were to be ceded to the Authority real estate prices plummeted).

Besides the characterisation of Palestinian agriculture as 'primitive' and the economy as 'backward', and the description of the occupied territories as 'disputed territories', the assertion that the occupation brought benefits to Palestinians to the extent that they regarded Israeli rule as preferable to rule by the Palestinian Liberation Organisation is highly debatable and completely unsupported by evidence. Furthermore Doron wholly ignores the underlying political causes of the conflict, the international laws Israel persistently breaches and the human rights abuses it commits.

His additional claims are equally incredible:

• that the 'economic revolution' had 'far-reaching social consequences' and 'Arab women were great beneficiaries', implying that the occupation advanced women's rights
• that 'because thriving tourism and commerce made most East Jerusalem Arabs very prosperous, 99% of them opted for Israeli rather than Palestinian papers' after Oslo 'because, while intensely disliking Israeli occupation, they were even less enamored of Palestinian misrule, terrorism and economic extortion' - ignoring the fact that many Palestinian residents of East Jerusalem felt it was the only safeguard against the Israeli authorities forcibly displacing them from the city
• that the Palestinian Authority's 'rule of terror suppressed economic activity and resulted in massive unemployment, reaching in some areas 60%', and only acknowledging Israel's role to the extent that 'bureaucracy made a dependent Arab population miserable with it arbitrary and oppressive strictures'
• that the 'so-called Arab street' is 'prey to radicalism and violence' because 'a UN established welfare regime has rewarded pregnant and nursing mothers, and thus increased the birth rate' creating a population that is mostly youngsters who are 'unemployable and shiftless' and 'prey to agitators'. This argument is similar to the one propounded by Martin Kramer, though Doron advocates economic growth as a means to alter this supposedly harmful demographic balance, where Kramer controversially suggested ending what he called 'pro-natal subsidies'. Both, however, ignore crucial political grievances as a factor in radicalisation.

Other speeches

• Doron also addressed the Republican Jewish Coalition in May 2005 in Washington, D.C.
• At an event in June 2007 called the Strategic Forums, sponsored by Paul Merage, Doron poured scorn on calls policies that prioritise reducing income disparities over growth, asking 'Can anyone explain why a rising tide must float all boats equally or whether it can really do so when different sized boats—to stick to the metaphor—will naturally be affected differently by a rising tide?' He derided what he called 'fashionable talk' of social responsibility and social justice, railed against 'redistributive fantasies', claiming 'it is almost impossible to define what equality really is'.
• In April 2008 at a National Center for Policy Analysis dinner in in Dallas, Texas, Doron introduced Benjamin Netanyahu, calling him 'a courageous, determined prime minister' for initiating free market reforms in Israel in 1996

People

Staff

ICSEP has a small core administrative staff and hires outside expert help for each of its projects, 'thereby cutting costs and achieving operational flexibility and quality'.

• Daniel Doron: Director - formerly an Israeli intelligence officer, economic adviser to Prime Minster Benjamin Netanyahu and Special Consultant to the US Embassy in Tel Aviv
• David Levhari: Director of Research - Hebrew University Professor of Economics and former President of the Falk Economic Research Institute.
• Ben-Zion Levy: Editor of Kivunim, ICSEP's online magazine - former director of the Aliya Center for the southwestern United States

Dr. Gabriel Ben-Ami: Policy Programming Consultant | Lavie Seigmann: Director of University Programming & IT and Internet projects | Yosi Ganel: Course Coordinator, Tel Aviv University and Sapir College; Programming and Assistant Director, The Center for Choice in Education | Yossi Tamar: Policy Programming Consultant. Also manages the Constitution Project at the Shalem Center | Iri Rikin: Media Relations

Board of Advisors

ICSEP has an Israeli Board of Advisors comprised of 'over forty of the country's most distinguished economists, jurists and social scientists'. ICSEP states that it is 'completely non-partisan, its board members representing all Israel's universities and a broad spectrum of opinions'. All Board members agree, however, that Israel's economy 'needs basic structural reform'. In 2012 they were listed as:

• Public Board: David Alexander | Eli Ayalon | David Boas | Isaac Dvash | Yossi Hollander
• Bar-Ilan University: Dr. Sarit Cohen-Goltner | Prof. Arieh Hillman | Prof. Yehoshua Lieberman | Prof. Yaffa Machnes | Prof. Shoshana Noiman | Prof. Yaacov Parush | Prof. Yaacov Rosenberg |
• Ben-Gurion University: Prof. Oded Hochman
• Haifa University: Prof. Nahum Biger | Prof. Moshe Kim | Prof. Arieh Melnick | Prof. Steven Plaut
• Hebrew University: Prof. Avi Ben-Bassat | Prof. Menachem Brenner | Prof. Avraham Friedman | Prof. Dan Galai | Prof. Israel Gilad | Prof. Yoram Lanskroner | Prof. Yehushua Porat | Prof. [Uriel Procaccia]] | Prof. Eytan Sheshinsky
• Herzliya Interdisciplinary Center: Prof. Moshe Bar-Niv | Prof. Uriel Reichman
• The Technion: Prof. Benny Eden | Prof. Uri Ben-Zion | Prof. Moshe Bental
• Tel Aviv University: Prof. Gideon Doron | Prof. Zvi Eckstein | Prof. Dan Givoli | Prof. Avner Kalay | Prof. Shlomo Kalish | Prof. Emmanuel Marx | Prof. Assaf Razin | Prof. Ephraim Sadka | Prof. Itzhak Swari | Prof. Joseph Gross | Prof. Meir Tamari former Chief Economist, Bank of Israel | Prof. Nava Haruvy, Netanya Academic College

Former Board Members

Prof. Tikva Darvis | Prof. Yohanan Schamurov | Prof. Jacques Silver | Prof. Arie Avishur | Prof. Avri Ravid | Prof. Allan Kirshenbaum | Prof. Marhall Sarnat

Friends

US Board of Governors

ICSEP's US Board includes Irving Kristol and prominent Jewish leaders, including two former National Chairmen of the United Jewish Appeal. In 2012 they were listed as:

Richard Fox - Chairman | Prof. Irving Kristol, Chairman Emeritus | Kenneth Abramowitz - Vice Chairman | Edward Minor - Vice Chairman | Milton J. Schubin - Secretary | Daniel Doron - Director

Registered address: c/o Fox Enterprises, 955 Chesterbrook Road, Suite 125, Wayne, PA 19087-5615, +1 (610) 640-1400

American Friends

ICSEP's Friends organization in the US is chaired by Richard Fox, Chairman of the Board of Temple University, a leading developer and a major figure in American-Jewish politics. In 2012 they were listed as:

Howard Berkowitz | Midge Decter | Eugene M. Grant | Roger Hertog | Robert Israeloff | Morris M. Kaplan | Curtis Katz | Leslie Lenkowsky | Prof. Henry G. Manne | Prof. David Meiselman | Prof. David Sidorsky | Prof. S. Fred Singer | Judge Abraham Sofaer

UK Board of Governors

David Lewis - CBE, FCA, President | Lord Stanley Kalms - Vice-President | Lord Young of Graffham - Patron | The late Sir Emmanuel Kaye - founder | Sir Ronald Cohen - President Emeritus

Registered address: c/o David Lewis, Chelsea House, Westgate, Hanger Lane, London, W51DR, +44 (208) 998-8822

British Friends

Sir David Alliance | Stephen Barclay | Stanley Cohen | Ivor Connick | Walter Goldsmith | Maurice Hatter | Sir Anthony Jacobs | Sir Geoffrey Leigh | Conrad Morris | Gerald Ronson | Arthur Seldon | Sir Sigmund Sternberg | Monty Sumray | Barry Townsley | Fred Worms

Former

Bernard Groveman - former Vice Chairman, US Board of Governors | Alexander Grass - former American Friend | Arthur Powell - former American Friend | Stephen Shalom - former American Friend | James S. Tisch - former American Friend | David Wachs - former American Friend | Alan Wurtzel - former American Friend | Lord Harris of High Cross - former patron, UK Board of Governors | Arthur Seldon - former British friend | Sir Leslie Porter - former British friend

Contact

Address:

59 Hadror St.

PO Box 84124

Mevasseret Zion 90805

Phone:

+972 (2) 534-6463

+972 (2) 533-0122 fax

Email:

mail@icsep.org.il

Website:

http://icsep.org.il