How Israeli Economic Policy Should Have Been

In its early days, Israeli economic policy was quite socialistic. Beginning in the 1980s and particularly during the periods when Binyamin Netanyahu was Prime Minister and Finance Minister, respectively, Israel have pursued free market reforms that have now made it a lot less statist and socialist then it once was. Still, a lot of time was lost, and Israel is still too socialist for its own good. The reason why Israel became relatively socialist was that many early Zionists, including Chaim Weizman (Israel's first President) and David Ben Gurion (Israel's first Prime Minister) were leftists.

Yet as this Jerusalem Post article reveals, the most important original Zionist, Theodor Herzl, author of the Jewish State, was actually a follower of the Austrian School and an advocate of capitalist economic policies. He grew up in Vienna, close to early members of the Austrian School like Carl Menger, and was influenced by their ideas. Had Israel followed his policies, then its economy would have been much stronger, enabling it to become a greater power than it actually has been.