Friedman believed that while monopolies and oligarchies are injurious to everybody, these systems are particularly ruinous for Jews and for Israel. He argued that though Jews shared the American respect for individual freedom, Israel’s socialist character was not only exacerbating its greatest social and economic problems but also threatening its very future. Consistent with his general economic and political philosophy, he maintained that for Israel to be successful, it would have to consign socialism’s reliance upon a paternalistic and coercive government to the trash bin of history and, instead, emphasize self-reliance; implement a competitive financial structure; and adopt policies supporting private enterprise and initiative. And he was more than happy to help the Jewish state however he could; as he stated in a May 31, 1977 interview:
Insofar as I can give any assistance [to Israel], I am delighted to, both because of my general desire to see freedom prosper, and also because I have a very strong personal sympathy and interest in Israel. I am Jewish by origin and culture. I share their values and their belief. I share the admiration which many have had for the miracles that have occurred in Israel.
I corresponded with Friedman on this subject in December 1994, arguing at length (though tongue in cheek) that the trend is such that soon the only two countries with true socialist economies will be Israel and the United States – and this was more than 20 years before self-identifying socialist Bernie Sanders earned broad popular support in his run for the American presidency. In the fascinating December 23, 1994 correspondence on his Hoover Institution letterhead exhibited with this column, he responded as follows:
Dear Mr. Singer:The United States today is more than half socialist as judged by (a) government spending as a fraction of national income plus (b) government regulation and controls over private spending. Israel is perhaps 70 or 80 percent socialist in that sense. I do not believe in simply extrapolating the past and, while I too find the observation provocative and troubling, I too am not sure of its validity. The recent election illustrated in the United States a strong public opinion in favor of a smaller and less socialist government. I believe the same popular opinion exists in Israel. In both countries, it may produce a reversal of trend.
The November 1994 midterm elections to which Friedman refers, which occurred during Democratic president Bill Clinton’s first term in office, was known as the “Republican Revolution,” an epic slaughter of the Democratic Party in which Republicans captured majorities in the House of Representatives (winning an additional 54 seats), Senate (additional 8 seats), and governors’ mansions (an additional 10 seats). As our correspondence demonstrates, Friedman was optimistic that the election results constituted a positive harbinger for smaller government and for the growth of the American economy.
Friedman concluded his letter with sharp analysis in response to my discussion of the correlation between economic freedom and democracy:
Finally, the relation between economic freedom and political freedom is complex. I believe that the growth of economic freedom initially tends to promote political freedom, but the growth of political freedom, of what is called democracy, tends in turn to restrict economic freedom.
Friedman maintained high expectations that Israeli socialists would eventually come to their senses, and he frequently wrote to Israel’s economic and political leaders urging them to adopt free market reforms. For example, he famously wrote to congratulate and encourage Benjamin Netanyahu who, as Israel’s finance minister, adopted significant reforms consistent with Friedman’s own thinking. As he quipped, “Fortunately for Israel, the ancient tradition [as opposed to socialism] is strongly renewable.”
