Israeli Government, Global Herd: Defeat Inevitable

My right-wing friends, supporters of reforming the Israeli judicial system: You have the power to influence your representatives in the Knesset to stop the enactment of the judicial reform and reassess its path. Although it is a bit difficult to see through the commotion, the fight against the judicial coup has already been decided, and the government lost. Inside Israel, it seems that there is a standstill between mass protests and a determined coalition, but in reality, a tremendous global force is weighing in against the government while causing enormous damage to Israel’s economy. Only pulling the brakes on the legislation immediately will prevent this damage from taking place.

That force, which we are contending with, is the ‘global herd’. Thomas Friedman of the New York Times is one of the greatest champions of current globalization and also one of its prophets. His books – The World is Flat and The Lexus and the Olive Tree – sold millions of copies. This is what Friedman wrote 18 (!) years ago: “The ‘global herd’ is the energy source of the global system… the herd consists of private investors who work from home, financial entities and international corporations… those who want to grow… should join forces with the herd… because the herd has the capital required for growth… the secret is the foundations… proper governance, rule of law, courts, regulatory bodies, oversight mechanisms and a free press… but the herd is like a high voltage line… it can light up your country… but it can also burn a hole through your financial system… faster than anything in history…”

Anyone who supports the Netanyahu-Levin-Rotman constitutional overhaul on the grounds that it is good for the country must agree that it was accompanied by a stunning failure in communication, first and foremost towards the markets and the economic press. During the past weeks, the Wall Street Journal, the Economist and the Financial Times – longtime bastions of support for Prime Minister Netanyahu and his economic policies – came out against the coup without citing a single entrepreneur or investor who expressed support for the reform because it is good for Israel’s economy or business. These articles echo dozens of warnings to investors on behalf of banks and international bodies that together cause the global herd to reassess its financial exposure to and investments in Israel. To be sure, in recent weeks, Friedman also warned about the destructive results in the New York Times.

All this and more: in the last few weeks, additional events, seemingly unrelated to the judicial reform, eroded the confidence of the global herd in Israel’s leadership: The Foreign Minister called for an intervention in the Central Bank’s decision; The Prime Minister attempted a political appointment in the Central Bureau of Statistics; Chairman of the Knesset Finance Committee silenced the Governor of the Bank of Israel; and senior Knesset members called for imprisonment of opposition leaders without trial.

Some supporters of the reform believe that speedy legislation will create a new reality, which will lead to the dissipation of the protests. This is an illusion. First, the reform is likely to have ripple effects of instability that may take years to subside. History teaches that enactment of judicial coups is only a comma in a prolonged struggle for power that is likely to increase instability. Six weeks since the government announced its forthcoming legal revolution, and protests are only escalating, and also expanding to the heart of the mainstream rightwing and among the national-religious public. At times it seems that there are more protesters against the reform within the West Bank settlements than there are protesters in support of the reform in Israeli cities.

In a reality of exponential change, Israel’s enormous prosperity, which had been accumulated for 38 years, since 1985, can be destroyed in a year or two. The last two weeks have been hard, but the next two weeks will be harder and the ones after them even more: -2, -4, -8, -16, -32, -64, -128… you get the idea. Imagine how the global herd would react to events such as mass resignation of judges, a general strike, boycotts by leading Jewish organizations, mass civil disobedience or even riots during Independence Day celebrations.

Theories of leadership establish clearly that the power to restore equilibrium is vested in the hands of those who are in positions of authority e.g. Netanyahu as Prime Minister or Levin as Minister of Justice. And the power to influence those in positions of authority is vested in the hands of those who appointed them. Namely, for example, a few Members of the Likud Party are more likely to influence Likud’s ministers than thousands of demonstrators. This quick summary of leadership theory 101 leads me to turn to those who have the right relationships and who see the imminent disaster as described in this article.

So, to you, my right-wing friends who support constitutional reforms in Israel’s judiciary, I say: The reform that you believe in is now in inferior ground facing an existential threat. Advancing, or even stopping in place, will result in tremendous damage that will be our collective defeat. When a military unit finds itself in inferior territory against a superior enemy, retreat is not a shame but the right course of action. Only a patriotic and decisive act by the Prime Minister with the support of his Likud friends and you can prevent the damage. Stop the legislation now! Together, we will reimagine a constitutional reform that will serve Israel for decades!

Gidi Grinstein is the Founder and President of the Reut Institute. Gidi founded the Yesodot Group for a Change in the Electoral System in Israel.