At the end of World War II, Germany was not even a country. In occupied East Germany, the Soviet Union established a communist state; West Germany was controlled by the United States, England and France.
Germany lost millions of people in the war, and culturally and practically had to deal with its crimes. Its entire bureaucratic avenue, built as an elite since Bismarck's time, has been extinct. In Germany at the end of the war, there were no railways, factories, roads or two-story buildings. Its cities were in ruins. It had no infrastructure, physical or human capital, sovereignty or national identity.
In England, the situation was the opposite: the victory over evil put the country in a good starting position. Despite the fact that it suffered significant losses, most of the infrastructure was not damaged, sovereignty was preserved and there was a sense of unity and joy.
Had we lived in 1945, we would have expected England to prosper economically, while Germany would lick its wounds for decades and struggle to recover. But in practice, in England, war heroes enjoyed lucrative jobs in the public sector, and the attitude was that what was good for war was good for citizenship. The public sector was inflated, and there was an atmosphere of rampant regulation: rationing and quotas, subsidies, a rampant set of standards and regulations, price controls, and centralized management. The British won the war, and the victory was replaced by bureaucracy and centralized planning. They became the sick man of Europe.
In Germany, bureaucracy was eliminated, and no one wanted to be an official, regulator or politician anymore. The Germans had no ability or desire to produce a pig socialism on the British model. They just went to work, rehabilitating their workshops and factories. As a lesson learned from the war, they refused to create a bureaucratic avenue and refused to entrust their future to centralized planning.
In less than a decade, West Germany was the strongest economy in Europe, transforming from a country without a single two-story building to an economic powerhouse. England had to wait for Thatcher in the 80s to recover. East Germany, which was under communist control, in many respects has not recovered to this day.
Today, the government is supposed to introduce a destructive law that creates sweeping de facto price controls, ostensibly to ensure that prices are not expropriated. In practice, the law will lead to shortages and bureaucracy. In the name of centralized planning, the fat man will get fat and the thin man will starve. This proposal will undoubtedly be joined by other proposals, all of which will require strengthening bureaucracy at the expense of businesses and working people. Government monopolies, cartels and bureaucrats will demand more power and money to "rehabilitate us." We must not follow in England's footsteps at the end of the World War. We must not sacrifice the economy on the altar of bureaucracy.
Israel's current and future priorities should be based on rehabilitation and growth, not the creation of a quick-witted bureaucratic quagmire. A second Mapai must not be established out of the Second War of Independence
Of course, we need to compensate casualties and strengthen weak infrastructure, but we must remember that when they say that "you have to put your hand in your pocket," that "pocket" is ours, and when they say to put things in order, we are the ones who will arrange them.
Israel's current and future priorities should be based on rehabilitation and growth, not the creation of a quick-witted bureaucratic quagmire. A second Mapai must not arise out of the Second War of Independence. The change in priorities must begin now, with the reopening of the 2024 budget: the compensation and extensive rehabilitation funds required are an opportunity for important reforms, and most tax benefits in Israel should be reduced or eliminated. The scope of tax benefits, which are distributed mainly to the strongest deciles, is almost the scope of the entire defense budget. Israel is an exception in the world for the generosity of its tax benefits system. Just one year of reduced tax breaks could probably finance the entire war. A multi-year reduction in benefits could easily put Israel on a growth track. Reducing coalition benefits, opening markets for foreign trade and eliminating harmful regulations, reducing licensing and bureaucracy, putting bureaucratic labor relations and budgetary pensions in order will also be beneficial.
The gray forecasts of economists can be beaten. Israel can be prevented from becoming postwar England.
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