The small, but capable, Israeli economy has charted an upward trajectory of economic freedom over the past 26 years, due in no small part to the efforts of Israel’s foremost free markets advocate, Daniel Doron, who died Feb. 28 at age 92. (Photo: Atlantide Phototravel/Corbis Documentary/Getty Images)
Daniel Doron, the notable Israeli free market thinker and the recipient last year of The Heritage Foundation’s inaugural Steven M. Sass Economic Freedom Award, died Feb. 28 at the age of 92.
The annual Economic Freedom Award was established specifically to recognize individuals and organizations that promote free market principles.
Indeed, throughout his career of promoting policies of economic freedom and entrepreneurship, Doron had been a leading voice promoting market-oriented reform of Israel’s economy for more than 60 years.
He founded the Israel Center for Social and Economic Progress in 1983. The center, an independent, pro-market public policy think tank, has since its founding been the most influential advocate of economic freedom there.
In remarks in 2009 that are as relevant today as they were then, Doron elaborated on why he fights for economic freedom:
Since the recent financial crisis, we have heard many voices asserting that it revealed that the market economy was deeply flawed; that the “invisible hand” cannot be relied upon any longer to promote economic welfare; and that we must, therefore, resort more and more for the correction of its putative faults to the all-too-visible hand of regulation; namely, of government.
The powerful lessons we have learned in Israel run in the opposite direction. They teach that government control and regulation aggravate, rather than solve, problems.
They also point out that globalization—namely, enhanced global trade, also under attack—has been highly beneficial precisely for developing nations.
Doron further noted:
But above all we have learned in Israel that free and prosperous markets provide the most powerful incentive for peace, not just paper peace signed by politicians, but [also] a real peace between people who recognize the benefits of peace when it is based on the mutual interests of people and on the mutual cooperation that it engenders.
Over the past few decades, Israel has risen into the ranks of countries whose economies are “mostly free,” according to The Heritage Foundation’s Index of Economic Freedom, a policy guidebook that tracks free market policies and economic governance of nations across the globe. (The Daily Signal is the news outlet of The Heritage Foundation.)
More specifically, Israel’s openness to global commerce has been an important factor in promoting innovation and productivity growth. The relatively sound judicial framework that sustains the rule of law and provides consistent protection for property rights has also contributed to economic stability and long-term competitiveness.
The small, but capable, Israeli economy has charted an upward trajectory of economic freedom over the past 26 years. Israel is striving to be a scale-up nation, and more market-based reforms will facilitate its progress toward greater economic freedom and entrepreneurial dynamism.
Much of that progress has stemmed from the efforts of principled free market thinkers and freedom advocates, such as Doron.
As the now-deceased Nobel Prize-winning economist Milton Friedman once pointed out, “Daniel Doron has consistently been perhaps the most effective proponent of a strictly free market approach in Israel.”
Indeed, Friedman’s keen observation about Doron was well-received by many. We at The Heritage Foundation were honored to have the opportunity to recognize the remarkable achievements of Doron in his lifetime of service in the promotion of economic freedom through Heritage’s Sass Economic Freedom Award.
In a lecture at The Heritage Foundation in 1991, Doron emphasized:
Educating people to function in a market economy is a long, arduous process, but there are no shortcuts. It is the reformer’s task not to hit their opponents over their heads, but to educate them patiently, convince them that through individual freedom and free markets their yearning for a better life can be realized sooner, more peacefully, and even more justly.
Indeed, Doron’s insightful words still ring true and remain even more relevant today.
Rest in peace, Daniel Doron.
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Milton Friedman on the American Economy (5 of 6)
Uploaded by donotswallow on Aug 9, 2009
THE OPEN MIND
Host: Richard D. Heffner
Guest: Milton Friedman
Title: A Nobel Laureate on the American Economy VTR: 5/31/77
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Below is a part of the series on an article by Milton Friedman called “Capitalism and the Jews” published in 1972.
Capitalism and the Jews
Milton Friedman, recipient of the 1976 Nobel Memorial Prize in Economic Science, is a Senior Research Fellow at the Hoover Institution. This article is reprinted with the permission of Encounter and The Fraser Institute.
“Capitalism and the Jews” was originally presented as a lecture before the Mont Pelerin Society in 1972. It subsequently was published in England and Canada and appears here without significant revision.
Freedom of Entry and Jewish Representation
Moreover, within those countries, Jews have flourished most in the sectors that have the freest entry and are in that sense most competitive. Compare the experience of the Jews in banking, that I have referred to, with their experience in retail trade, which has been almost a prototype of the textbook image of perfect competition and free entry. Or compare their minor role in large industry with their prominence in the professions such as law, medicine, accountancy and the like.[4] Though there are barriers to entry in the professions, too, once past the initial barriers, there is a large measure of free competition for custom. Even the differences within the professions illustrate my theme. In the U.S., for which I know the details, there was for a long time a major difference between medicine and law in the extent to which state licensure was an effective bar to entry. For reasons that are not relevant here, there was significant restriction of entry in medicine, relatively little in law. And Jews were proportionately much more numerous in law than in medicine.
The movie industry in the U.S. was a new industry and for that reason open to all. Jews became a major factor and this carried over to radio and television when they came on the scene. But now that government control and regulation has become more and more important, I am under the impression that the Jewish role in radio and T.V. is declining.
Capitalism and Israel
A rather different example of the benefits Jews have derived from competitive capitalism is provided by Israel, and this in a dual sense.
First, Israel would hardly have been viable without the massive contributions that it received from world Jewry, primarily from the U.S., secondarily from Britain and other Western capitalist countries. Suppose these countries had been socialist. The hypothetical socialist countries might conceivably have contributed, but if so they would have done so for very different reasons and with very different conditions attached. Compare Soviet aid to Egypt or official U.S. aid to Israel with private contributions. In a capitalist system, any group, however small a minority, can use its own resources as it wishes, without seeking or getting the permission of the majority.
Second, within Israel, despite all the talk of central control, the reality is that rapid development has been primarily the product of private initiative. After my first extended visit to Israel two decades ago, I concluded that two traditions were at work in Israel: an ancient one, going back nearly two thousand years, of finding ways around governmental restrictions; a modern one, going back a century, of belief in “democratic socialism” and “central planning.” Fortunately for Israel, the first tradition has proved far more potent than the second.
To summarize: Except for the sporadic protection of individual monarchs to whom they were useful, Jews have seldom benefited from governmental intervention on their behalf. They have flourished when and only when there has been a widespread acceptance by the public at large of the general doctrine of non-intervention, so that a large measure of competitive capitalism and of tolerance for all groups has prevailed. They have flourished then despite continued widespread anti-Semitic prejudice because the general belief in non-intervention was more powerful than the specific urge to discriminate against the Jews.
III. The Anti-capitalist Mentality of the Jews
Despite this record, for the past century, the Jews have been a stronghold of anti-capitalist sentiment. From Karl Marx through Leon Trotsky to Herbert Marcuse, a sizable fraction of the revolutionary anti-capitalist literature has been authored by Jews. Communist parties in all countries, including the patty that achieved revolution in Russia but also present-day Communist parties in Western countries, and especially in the U.S.,[5] have been run and manned to a disproportionate extent by Jews—though I hasten to add that only a tiny fraction of Jews have ever been members of the Communist party. Jews have been equally active in the less- revolutionary socialist movements in all countries, as intellectuals generating socialist literature, as active participants in leadership, and as members.
Coming still closer to the center, in Britain the Jewish vote and participation is predominantly in the Labor party, in the U.S., in the left wing of the Democratic party. The party programs of the so-called right-wing parties in Israel would be regarded as “liberal,” in the modern sense, almost everywhere else. These phenomena are so well known that they require little elaboration or documentation.[6]
The Daily Hatch 