Israel Is NOT a Democracy

Israel’s leaders hold the country out as a democracy … just like the U.S.

Of course, America is officially no longer a democracy … as wealth is so concentrated that it has broken the political system.

The same thing is true in Israel …

Lior Akerman – former Brigadier General and division head in the Shin Bet (Israel’s Security Agency) – writes in the Jerusalem Post that Israel has never been a democracy.

Forbes Israel warned of oligarchy in 2006.

In 2012, Amir Owen  wrote in Haaretz:

Since last week, Israel has been governed by an oligarchy. These are self-styled lords of the manor who have power over civil and military sectors, and share the spoils of rule between themselves. The subjects can talk, but have no influence. Israel has been transformed from the only democracy in the region, to a democracy where power is held by only a few.

Bloomberg noted in 2013 “Israelis rise up against the oligarchs“.

Alternet noted in 2013:

Most Americans probably don’t know that the 2nd most unequal “rich” country is the close ally and client state of Israel, whose own oligarchs own a significant slice of the Israeli economy.


Most Americans probably don’t know that the 2nd most unequal “rich” country is the close ally and client state of Israel, whose own oligarchs own a significant slice of the Israeli economy.


About 21 percent of Israelis live in poverty, the highest among developed countries that are part of the Organization for Economic Cooperation and Development.

And the Israeli people’s anger is increasingly being directed at the Israeli tycoons that hold an immense amount of wealth. Ordinary Israelis see the oligarchs as a testament to the vast gulf between the very rich and the rest of Israel. For many, inequality is the main economic issue in the country. But the Israeli economy didn’t always have such striking inequality. The country was a lot more equal when it was operating on a more social democratic model—at least for Jews—in the decades after 1948.

Today, about 20 Israeli families control a disproportionate amount of the Israeli economy. The families, whose holdings span the gamut of the Israeli economy, lay claim to about half the Israeli stock market and own one in four Israeli firms, according to the Financial Times. In 2010, a parliamentary report found that 10 business groups, most of them owned by wealthy families, control 30 percent of the market value of public companies. The families have holdings in real estate, financial services, supermarkets, the airline industry, telecommunications and more.


What it all adds up to is an oligarchy, a system where a tiny slice of Israelis maintain a stranglehold over much of the Israeli economy.

These facts are no shock to Israelis. They live it everyday, made all the more apparent by the high cost of housing. The government has taken a keen interest in the problem, particularly since massive protests sparked by the high cost of living and inequality. They’ve convened committees, like the Knesset committee on economic concentration, established in 2010.

A report from that committee singled out business groups that control both financial and non-financial companies. In November 2013, Israeli Prime Minister Benjamin Netanyahu criticized the high level of concentration in the economy. “The primary factor in the lack of competition in Israel is economic concentration fostered by cartels or the monopolistic behavior of wealthy individuals,” Netanyahu told the Israel Democracy Institute. The OECD has also singled out Israel’s concentration of wealth as a problem to be addressed.


The oligarchs‘ immense power, and the inequality that accompanies their economic might, stands in sharp contrast to what some Americans believe about the Israeli economy. In the American imagination, Israel’s economy is a high-tech paradise. Books like Start-Up Nation: The Story of Israel’s Economic Miracle have cemented that image.

Paul Krugman pointed out in March:

Israel is now right up there with America as one of the most unequal societies in the advanced world. And Israel’s experience shows that this matters, that extreme inequality has a corrosive effect on social and political life.


According to Luxembourg Income Study data, the share of Israel’s population living on less than half the country’s median income — a widely accepted definition of relative poverty — more than doubled, to 20.5 percent from 10.2 percent, between 1992 and 2010. The share of children in poverty almost quadrupled, to 27.4 percent from 7.8 percent. Both numbers are the worst in the advanced world, by a large margin.

And when it comes to children, in particular, relative poverty is the right concept. Families that live on much lower incomes than those of their fellow citizens will, in important ways, be alienated from the society around them, unable to participate fully in the life of the nation. Children growing up in such families will surely be placed at a permanent disadvantage.

At the other end, while the available data — puzzlingly — don’t show an especially large share of income going to the top 1 percent, there is an extreme concentration of wealth and power among a tiny group of people at the top. And I mean tiny. According to the Bank of Israel, roughly 20 families control companies that account for half the total value of Israel’s stock market.


Meanwhile, Israel’s oligarchs owe their position not to innovation and entrepreneurship but to their families’ success in gaining control of businesses that the government privatized in the 1980s — and they arguably retain that position partly by having undue influence over government policy, combined with control of major banks.

In short, the political economy of the promised land is now characterized by harshness at the bottom and at least soft corruption at the top. And many Israelis see Mr. Netanyahu as part of the problem.

Professor Shelly Gottfried owrote in March :

Israel’s economy and regulatory apparatus, which has become increasingly captured by special interest groups over the past two decades, enabled the rise of an Israeli oligarchy comprising just ten pyramidal business groups, controlled by individuals or families – and affiliated professionals, such as accountants, lobbyists, lawyers, managers, consultants and other businessmen and business groups.

This oligarchy, whose power is embedded by the big banks, controls substantial shares of the market economy and the public’s financial assets, managing tight relations with state agents. It is further linked to other powerful monopolies in the public sector.

And it’s not only Israel’s oligarchs who have skewed Israeli’s political system … it’s also American oligarchs.

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  • Robert Barsocchini

    Here’s a hypothesis I haven’t checked out but will at some point: the more desperate a country is to appear as, and thus insists to others that it is, a democracy, the less democratic it actually is. It’s an inverse correlation. Hence you see the US and Israel constantly begging others to regard them as democracies, and then at the very bottom you have a country like North Korea, where it is so anti-democratic that they have to put it in the name: Democratic People’s Republic of North Korea.

  • jadan

    And is it true that undemocratic oligarchic states are more war like? In truth, there never was a time when the US was a democracy. The US has always been an aggressor nation and its domestic policies have always favored oligarchs, the “robber barons”, not the common man. We are an oligarchy because we have a history of nurturing oligarchs and our political apparatus set up barriers against direct democracy from the beginning. Israel is a theocracy if Jews, other than the head bangers in black, can be said to be religious. God is in charge in a theocracy and God is the maximum oligarch. God dictates Israeli foreign policy: drive out non-Jews and re-establish ancient Israel. This is called “manifest destiny”.

    • diogenes

      “Democracy” is a relative term, not an absolute. While it is true that “there never was a time when the US was an [absolute] democracy, it is also true that the US is drastically less democratic today — economically, politically, and culturally — than it was in 1890 and that the entire period from 1890 until today has seen a continuing and accelerating diminishment of all forms of democracy in this country and a continuing and accelerating consolidation of oligarchic control and predation. Any undeluded, properly skeptical, informed examination of the history of America in the 20th century makes this plain. It also shows that the major turning points of increasing consolidation of oligarchic power were the first world war, the second world war, and 9/11, and that the periods between were characterized by resistance to this process. Most of this history — and especially of this resistance — can only be uncovered by careful historical research outside the the boundaries of the “official history” disseminated by official sources. But it is plain to intelligent adult inspection.

      • Robert Barsocchini

        This is myth. Women couldn’t vote, slavery had basically been reinstated, oligarchs and government were working together to shoot down striking employees, and people who knew were saying things like “There are three important things in politics: money, money, and… I forget the third.” – Mark Hannah

        • diogenes

          On the other hand control of the economy was not nearly so consolidated in the hands of a national-international oligarchy with headquarters in New York, and this oligarchy had not begun to create and dominate a federal police state, and the imperial project and the military industrial complex to go with it had not begun. America’s cultures were diversified, not locked in by a centrally owned media and a closely regimented “education” system. Most cities and towns had their own locally owned newspapers, the proportion of mortgaged homes was far lower, more than half the population lived in rural areas where they had direct access to livelihoods uncontroled by NYC cartels, basic local markets were not controled on a national-international basis, etc.

          • Robert Barsocchini

            Agree with a lot of that, except some points like “oligarchy had not begun to create and dominate a federal police state, and the imperial project and the military industrial complex to go with it had not begun.” The imperial project was the colonies, and expanded from there. The police state was extremely violent and going strong. Convict leasing was still being used. A popular Republican stance had been that wage slavery was not that different from chattel slavery.

            Good point that among white males, who faced far less state violence than blacks and natives, there were stronger movements in opposition to the state. But we should always make the distinction, as you do in your follow-up above, that it was this opposition to the state, not the state, that was more democratic at the time. As you note, the state was working hard and brutally to cow these movements, and was very successful.

          • diogenes

            The key historical point we need to understand is that the corporate-financial oligarchy that has usurped the rule of American coalesced in New York City in the decades following the Civil War and seized dominion in the later 1890s. The key events were the corporate-financial consolidations engineered especially by JP Morgan and the launching of the international imperialist project and the military industrial complex with the Spanish-American War and the seizure of the Philippines, Puerto Rico, Hawaii, and Cuba. This was the key turning point toward the American we now confront and the point at which the oligarchy that has usurped rule of America did so.

          • Robert Barsocchini

            Yes, consolidation been happening since Brits landed and began invasion. Although just a semantic point: the imperial project was always international. When the colonists kicked out the Brits and started expanding further, that was also international expansion: they were cleansing and annexing other nations. But this is tertiary.

          • diogenes

            It seems to me that your categories are so all-compassing that they do more to conceal than to reveal the specific character of our present problems and their sources. The corporate oligarchy did not land with the Pilgrims and Injun-killers are not our present problem. I don’t put this forward as an attack on you, Robert Barsocchini, but as an attempt to clarify thinking and forward discussion. US Steel (one of dozens of still operating major corporations created by JP Morgan around 1900) and the Federal Reserve (engineered 1905-1913) are still very much with us, at the center of the ongoing operation to smother American democracy under the oligarchy they established. Understanding how and where and by whom they were put in place and are still operated is key to solving our present problems.

          • Robert Barsocchini

            Disagree with: “The corporate oligarchy did not land with the Pilgrims and Injun-killers”. It did, in slightly different form. In fact it landed with the Spanish years earlier. The cultural roots and techniques are all there, and are very much with us. I can’t go into this too much more now, but would cite Dunbar Ortiz, Indigenous History of the US, and Stannard, American Holocaust, as documenting sources. I may have discussed it in previous work. Knowing how deeply ingrained these mindsets are is essential to dealing with them.

          • diogenes

            OK, but let’s fill in the historical specifics: the actual predecessors of the culture of NYC corporate finance that usurped American government in the 1890s and has ruled America ever since as a colony to be exploited, this specific predatory culture arrived in North America in the 1640s in New Amsterdam — with the establishment there of an economy based on trading liquor and guns to the Indians for furs, mercantilism, usury, the sugar-liquor-slave trade, smuggling, and piracy. By the 1680s the Roosevelts were established as a major banking family and by the 19th century besides banking and politics they were engaged in the opium trade. So yes, the culture of predation landed — specifically — in Manhattan not long after the Pilgrims and this fact is instructive about the culture of predation. But the specific corporate and financial institutions which were created in NYC in the 1890s and after concern us more closely, since these institutions dominate America now more than ever. For this reason I think that this history demands our closer attention and reflection.

          • Robert Barsocchini

            You’re talking about something important, a major symptom of an underlying “disease”. If we don’t know about/understand the disease that causes the symptom, we’re in trouble, just like we’re also in trouble, as you are saying, if we don’t deal with the symptoms like the current form of the corporation and a system based on bribery, which of course is key, and why we cover these issues.

          • diogenes

            The distinction I’m trying to make is that if we focus our attention too much on generalities it detracts from our ability to DEAL WITH specifics. If we say that “the cause is greed”, well, yes, ultimately, and since to some degree human greed will always be with us, focusing on trying to change it is a futile waste of time and a dangerous distraction. What we need to focus on is disassembling the social, legal and financial mechanisms that organized greed has constructed to usurp, rule, pillage and ruin our country — with usury leading the parade of scum.

          • Robert Barsocchini

            I still have no argument with that part and it’s why we report on these things.

          • diogenes

            Yes, and we need to think of the forest and the trees in ecological terms: together they are one system and interact. For example, America’s black-white racism problem “goes back to slavery” — yes — and Manhattan was the center of the American slave trade until NY State outlawed it (1820s?) and Manhattan bankers kept writing mortgages with slaves as collateral — a key element in the South’s slave economy — right up until the Civil War. But after the Civil War the economy of the South was transformed from a basis in chattel slavery to a basis is debt slavery, debt peonage, that enslaved both black and whites, and just as the South’s chattel-slave based import-export economy was dominated by NYC from 1810 until the Civil War, so, after the war, its debt slavery import export economy was dominated by NYC and as populist progressive elements there managed to resist this in some measure, in the 1890s the Dixiecrat system worked hard and successfully to re-ignite and exacerbate black-white racism in the south to split this force and maintain the dominion of NYC finance. If we focus only on the forest, or only on the trees, it makes it harder to see how the whole system operates. And since we live in the present, as our children will live in the future, it behooves us to concentrate on how this system maintains itself now, who operates it, where and how. If we focus on blaming the South for slavery we ignore the fact that the slave trade — not the plantations, the trade in slaves — was operated mostly from NYC and Boston up until the 1820 and beyond and the profits of the South’s slave-based import-export trade were harvested mostly in NYC from about 1810. So when we’re looking at “the forest”, we need to look at the whole forest.

          • Robert Barsocchini

            Right on.

            Here’s a quote from a piece I wrote for WB one month ago:

            “And this does not touch the issue of the American flag itself, as noted by Frankie Boyle. North and South were originally united in
            favor of slavery (and always remained united in favor of extermination
            of indigenous peoples for white living-space expansion). The North only
            eschewed slavery once it had used slavery, in collaboration with the
            South, to create a stable economic base (the US used slavery to such an
            unprecedented extent that it created the world’s biggest economy). Once
            their economy was well established, Northerners then decided slavery
            was bad, until after the Civil War. Then, the Northern economy, which
            had been based on slavery, began to crash, so to save itself the North
            supported slavery again in the form of black imprisonment and prison
            labor, a practice which continues today, as noted above, also, though to
            a far lesser extent, exploiting poor whites.”

          • diogenes

            Yes, what we need to effect is a new emancipation, from financial-industrial-consumer slavery. A good start is freeing rent-serfs and mortgage serfs. And put a stop to Robber Baron oligarchs owning and charging tolls for other public utilities besides shelter — like power, transportation, food, health care, credit, media of public discourse, education…

            All that is required to effect these changes is to exercise our will as voters to eject from Congress all members — district by district, precinct by precinct — who do not forward our program and elect ones pledged to it in their stead — and eject them in their turn if they sell us out and do not, as we instruct them, change specific laws in specific ways, and abolish various forms of predatory bookkeeping, speculation and predatory financial flimflam. There are 100,000 thousand lawyers to tell us it’s not possible like they’re taught to and paid to, but if enough adults get an adult clue and insist, things can change — peacefully, like in East Germany and the former Czechoslavakia. America’s constitution and constitutional traditions are much better suited to do it. All we have to do is play by the rules and insist that others do. If enough of us don’t sell our votes and do insist, things will change.

          • Robert Barsocchini

            First we need a lot more people like you. Keep spreading the word.

          • diogenes

            We need to figure out ways to do that locally and broadly, precinct b precinct and district by district. It’s the most important thing we can do, and we need to put our heads together and figure out how to do it better and how to make it snowball and how to bring it to a focus. Together we can do it. One by one we are moving backwards and have been moving backward throughout my adult life — my political education commenced with the spectacle, on nationwide TV, of Oswald going “oof” in the basement of the Dallas jail. It’s all downhill since then and it will continue downhill as long as we remain a nation of parrots and sheep owned and fleeced by pigs.

  • jehan heraux/mario j

    Israel is definitely a great Democracy. Oligarchs directed??? Well all countries have an elite that governs. Nothing new there. Should be taken as example.Of course there are problems of segregation whether ethnic or tribal; they still apaul. Nevertheless it is a Great Democracy with its faults.Definitely the only one in the middle east and better than many others in the west. Compare to Washington; it could be 3rd in line.

  • Hp B

    It’s a den of vipers.

  • robertsgt40

    The US was founded as a constitutional republic. The word “democracy” wasn’t in the Constitution or Declaration of Independence. The founding fathers knew the difference. DEMOCRACY was first uttered by FDR.