Israel is 60 years old. In the space of a few decades, the country has been able to haul itself up to join the ranks of the world's great economic powers, at the price of repudiating the values of equality and sharing that the first Zionists extolled. Our contributor explains the paradox of the "Israeli economic miracle" today.

    One of Tel Aviv's most prestigious real estate projects, the "City Village," has just been completed. It comprises about 50 duplex apartments laid out by the country's best designers.

    Gigantic teak terraces all face a park. In the lobby, an ultramodern sports facility is adjacent to an immense swimming pool.

    Prices for four-room apartments start at $2 million. The price of a roof villa is not communicated. "Most of our buyers are Israelis," asserts Sales Director Mina Orgad. "They are primarily Sabras who have been successful in business. They've taken full advantage of the Israeli economic miracle."

    This economic prosperity of which the Israelis are so proud jumps out at you pretty much everywhere, but especially along the Mediterranean coast between Tel Aviv and Haifa.

    Made up primarily of deserts and marshes a century ago, today Israel ranks eighteenth globally in income per inhabitant. In 2007, the Israeli economy posted growth above five percent, falling unemployment around eight percent and minor inflation. A sign of the times: the custom of setting rents in dollars (during the 1980s, the country experienced three-digit inflation) is tending to disappear.

    And Israel Central Bank President Stanley Fisher continues to buy up massive quantities of dollars to buttress the greenback: its collapse against the shekel, the Israeli national currency, dangerously punishes Israeli exports.

    Between Luxury and Poverty

    At Dizengoff Square, in the heart of the fashionable district of Tel Aviv, luxury boutiques never empty.

    "All that you see here did not exist at the time of the creation of the state," testifies 86-year-old Malka Steinberg, a pioneer. "In the beginning, we didn't even have potatoes to eat. And when we found some, we'd save them for the holidays."

    At that time, she continued, most people lived together with several families in each apartment. "We had a code up on our door: ring once for the Steinbergs, twice for the Rosenbergs."

    Proud of this success, Malka nonetheless acknowledges that Israel's foundational values have been sacrificed on the altar of this economic growth.

    For the other side of the facade is distinctly less cheery. To the extent Israel has grown wealthy, the social gap between rich and poor has deepened.

    Less than twenty minutes from the sparkling boutiques of northern Tel Aviv, the city of Lod plunges into poverty and criminality. Caved-in sidewalks, empty plots strewn with garbage, narcotics trade in broad daylight: we are far from the first Zionists' dream of social justice.

    Nestled in a disused Lod warehouse, the charitable organization Yad b' Yad (Hand in Hand) is weighted down by solicitations.

    "You cannot imagine the number of families that aren't even able to feed their children," protests Rabbi Globerman, the association's director. "And don't think they're unemployed. Most people work, but with a minimum wage of $1,000 when life here is as expensive as in America, how do you expect them to get by?"

    Horse Medicine

    Like many other actors in the charitable sphere, Rabbi Globerman imputes the spectacular explosion of poverty to the ultra-free-market horse medicine inflicted by Israeli right leader Benyamin Netanyahu at the time he was finance minister: draconian reduction in family allowances, tightening of unemployment benefits, freeze on the minimum wage....

    A recent OECD report showed that Israel was among the industrialized countries that devote the least money to social assistance, behind the United States.

    As for the kibbutzim, the collectivist villages emblematic of the Zionist vision, they are in their death throes. Not because they are experiencing financial difficulties - converted to high-tech or tourism, some kibbutzim are posting record profits - but because they are turning their backs on their ideals. One after the other, they are opting for privatization and giving up the sacrosanct rule of the same salary for everyone. As of now, Israel lives entirely in the moment of triumphant capitalism.

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