The film The Scrambled System (Shittat Hashakshuka), recently aired on Channel 1, has provoked a stormy debate around a vital issue: the close connections between our oligarchy, the dozen-and-a-half families that control Israel’s economy, and our top politicians and bureaucrats. The media generally deals with this sensitive issue only episodically, in generalities, without naming names or exposing concrete instances.

Miki Rosenthal, the maverick producer-director of The Scrambled System has focused on the Ofer brothers, among Israel’s greatest oligarchs, and their relations with the government. He has done so with great courage but in the worse possible manner. Once the scandal his film unleashed will subside, all will be quiet again.

The Scrambled System paints a simplistic world view (the film’s name reflects a quote from one of Israel’s top lawyer-”machers”, who describes how when negotiating with government officials on behalf of his mogul clients, he “scrambles all the offers together and gets a sort of an average, usually slightly favoring his clients,” he boasted).

On the one side are the good guys, justice-seeking fellows like Rosenthal’s late father who allowed his carpentry business to go bankrupt because he would not fire workers during a recession (he subsequently died of a broken heart). On the other side are the bad guys, all the money-grubbing businesspeople, who cheat, exploit and even endanger consumers’ lives in their obscene pursuit of profits.

The world of creative enterprise, of millions of devoted hard-working entrepreneurs and workers who sustain the phenomenal advance in the well-being of billions of people, is entirely absent from Rosenthal’s Manichean world. They simply do not exist in a world fashioned by the Marxist pornography that most Israelis still endorse. Israelis believe that profit inevitably comes from exploitation. Therefore money-making is born in sin (Marxism has embraced this Christian belief and dressed it in pseudo-scientific terms). The mere fact that someone is making money is proof that he is evil.

This is, of course, a self-fulfilling prophecy. If one believes that business rests on fraud and exploitation, one will act so, as some Israeli businesspersons and oligarchs indeed do.

Rosenthal’s film therefore perpetuates very pernicious prejudices about business. Such attitudes prevent us from addressing this serious problem of collusion between capital and government. Few bother to ask how the situation arose that politicians and a bunch of government bureaucrats, high and mighty as they may be, can dispense with properties and privileges worth many billions? How is it that they are allowed to allocate huge benefits in monopoly rights, tax exemptions and such, to the politicians’ cronies at the taxpayers’ expense?

It was not by accident, of course, that our government and the Histadrut Labor Federation possessed all those huge assets that were “privatized” in bargain fire sales to well-connected oligarchs who paid for them with credit they received from our nationalized banks. It was the inevitable result of the huge concentration of economic power in the hands of government and the Histadrut that was created by almost a hundred years of Socialist dominance of the Israeli economy. It was this huge concentration of economic and political power in the hands of politicians and oligarchs that caused the corruption both of our politics and our economy.

It was also not by chance that true privatization—which means a decentralization of ownership and the enhancing of competition—has never happened in Israel. It was not by mere chance that most of the “privatized” government or Histadrut enterprises were “sold” to cronies at bargain prices and that as a result the concentration of assets increased in the hands of the few and competition was stifled. Nor was it by chance that big business has been winning most government tenders by offering very low bids, and then, after winning the tender, employing a battery of lawyers and accountants to jack up the price of the project for which they bid.

Is it, furthermore, just a coincidence that almost all former Bank of Israel bank regulators are now working for the banks which they earlier regulated; that they help them maintain their rapacious oligolopolistic practices under the pretext that it helps “bank stability”? Is it only a coincidence that many former high government officials are hired by our monopolies and paid fabulous salaries and perks to help them exploit the poorly paid Israeli consumer by overcharging them on practically everything they consume? Is it by chance that in an economy whose labor work rules have been dictated by the Histadrut—the workers federation that represents mostly public monopoly labor unions—a “work ethic” was created that makes the capable Israeli workers produce about half what an American worker does, with the result that Israeli workers are paid shamefully low wages that do not enable most families to make ends meet? No, it was not by accident that the huge Workers Enterprises Union (Hevrat Ovdim) as well as the kibbutzim and moshavim were first to go bankrupt despite the huge privileges they enjoyed.

In the childish dichotomous world of The Scrambled System there are only evil businessmen versus virtuous workers. The corrupt political system that is crucial to promoting a collusion of government with the oligarchy is neither explained nor analyzed. This is why the film is part of the problem and not of the solution.

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