Begin and Israel's Economy

The Shocking Election That Saved Israel's Economy


It wasn't easy, but the capitalist reforms set in motion by Prime Minister Menachem Begin 40 years ago were transformative. 


Zev Chafets, May 20, 2017‏ 


Forty years ago this week, the dynamic, vibrant, entrepreneurial modern Israeli economy was born, though nobody knew it at the time.

It was May 17, 1977. Israelis crowded around their black-and-white television screens for the national election results. At exactly 10 p.m., the face of Haim Yavin, the normally unflappable anchorman of Israel’s lone TV channel, appeared, looking very flapped indeed. “Ma’hapach!” he intoned, a variation of the usual Hebrew word for “revolution.” It was a softer term Yavin had come up with on his way to the studio. He later explained that he hadn’t wanted to cause panic.

The result was shocking. There had never been a change of governing party before in Israel. For the first time, Mapai, the socialist party founded by David Ben-Gurion and now led by his disciple Shimon Peres, was out of power.

Even more shocking, Menachem Begin was in. Begin, who had lost eight straight elections. Begin, who had been called many terrible things by his political adversaries: “Fascist” (untrue), “rabble rousing street orator” (true), “enemy of democracy” (nonsense) and “former terrorist” (true, but with an explanation).

Perhaps the worst accusation they had leveled against Begin was that he was a capitalist. That was a bit ironic for a man who was born broke and stayed that way all his life. Even as prime minister, Begin bought his suits on a payment plan.


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