Gershom, I agree with the spirit of your Cause of Death post, but I think you’re over-idealizing Israel’s socialist past.
Think back to those good old days, when the country was making makework for everyone. Remember getting shunted from one bureaucrat to another in grossly overstaffed government offices where everyone always seemed to be on break? Remember standing in line endlessly at the bank only to finally reach a surly teller? Remember sales clerks who thought they were doing you a favor by deigning to speak to you? Remember having to take an entire day off of work to see a doctor, because there was only “sick call” and no way of making appointments?
Keeping uncompetitive factories open by government subsidy may provide short-term relief, but in the long run it’s destructive. Manufacturers who know they’ll be bailed out have no incentive to innovate or to work efficiently. So they become less and less competitive and need more and more financial support.
Furthermore, a society in which there’s a culture of government support for inefficiencies is a society in which there’s no incentive to offer better goods and services than the next factory or bank or store.
I don’t worship the idol of capitalism. Government must regulate business, and often short-term subsidies and tax incentives can encourage the kind of risk-taking and innovation that a vibrant economy needs. But in the larger picture, what the government needs to do is provide a safety net for workers, not keep old factories open.
I don’t want to live in a society where profit is the only value. But a society in which profit is no value is a society that will steadily regress, becoming sullen and selfish in the process. Yes, I also sometimes miss the communal spirit of thirty years ago. But if we turned the clock back, I’d sure miss getting smiled at when I walk into a store.