The beeper operation that launched in September 2024 ignited all our imaginations. The level of creativity, sophistication, cunning, and detailed planning over years—all of it caused Israeli society to pause in astonishment. The war that broke out on the night between Thursday and Friday, June 13, had a similar effect. Mossad agents on the ground in Iran? Complete aerial control within two days? What is left for the screenwriters of “Fauda” and other shows to imagine, when reality surpasses any script?
It’s strange to think that those who carried out this extraordinary operation are members of the security forces, part of the services that the government provides its citizens. For years we’ve been told that only the free market knows how to work efficiently, be creative, and encourage initiative. That’s a strange narrative to promote in a country whose founding story is one of collective initiatives by organizations that came together to form a state—trailblazing in agriculture, defense, and the building of institutions—not through a free market that treats money as the only incentive, but out of a different motivation: national mission.
A Vicious Cycle of Harm to Public Service
Now that we are beginning to come down from the euphoria, and Air Force planes have returned for a long and well-deserved rest in Israel, and as everything has ended—apparently with great success and with hope for the swift return of our brothers still languishing in Gaza’s tunnels—we are left with a no less important, though much grayer, task: the task of rebuiding. Rebuilding communities and infrastructure, damaged industry and agriculture, tourism, social services. Psychological and health rehabilitation for those harmed by the ongoing war. Rehabilitation of children and youth.
The Israeli public has a low level of trust in the state’s social services. That mistrust is reflected in low wages, media contempt, ridicule in satire programs, and the real threat of violence to public sector workers. As far back as 2003, Prime Minister Benjamin Netanyahu began speaking about “the fat man and the thin man”: that Israel’s thin and efficient private sector is carrying the fat, overfed public sector on its back. The public sector is seen as a burden on the budget. Public services are continually outsourced to the private sector through programs like Gefen, a Ministry of Education initiative that allows local authorities to spend money on private sector programs with money that otherwise could be going to teachers’ salaries.
In her book Mission Economy, economist Mariana Mazzucato argues that this lack of trust trickles down and embeds itself in the consciousness of public sector workers, influencing their effectiveness and performance—a feedback loop that perpetuates itself and encourages the government to outsource social services, deepening the damage to their image in a self-reinforcing cycle.
An Efficient, Innovative, and Creative Public Sector
So what ought to be done?
Rehabilitation, and many other challenges, have to be conceptualized as a national mission—one that the private market cannot take responsibility for, bound as it is to profit and loss considerations. Mazzucato frames it like this, citing economist John Kenneth Galbraith: “Purpose defines missions and guides how public and private actors work together, co-creating value. This collaborative process can be called the ‘creation of public value’. In this context, ‘public’ does not mean that government is the sole actor creating value, but rather that value is collectively created by different actors and for the community as a whole, in the public interest.”
The logic of the free market does not promote the common good. The state itself recognizes this: take the state comptroller’s report about a national plan meant to strengthen buildings against earthquakes. The comptroller found that the plan “did not achieve its objectives and over the years became an urban renewal tool, particularly in areas with high land value.” In other words, the main goal—earthquake protection—disappeared in favor of real estate interests, and the plan was less successful in poorer towns. The public value—earthquake protection—was abandoned for profit motives.
In her model, Mazzucato analyzes the Apollo space program, and how massive resource allocation, wrapped in a unifying national mission narrative, transformed the public sector into one that was efficient, innovative, and creative—and also led to developments and inventions that catapulted the economy decades forward.
From Mission to New Deal—What We Need Now
“We get the kind of government organizations we believe are possible,” Mazzucato writes. ‘If the training of civil servants makes them think that at best governments can fix problems, and that government failure is even worse than market failure, it is not surprising that we end up with timid public organizations, unwilling to take risks, giving into pressure to be ‘business-friendly’, and over time reducing their own capacity to create value.” On the other hand, she notes, in many cases governments have done the opposite—invested in their internal capabilities, acted dynamically, and charted a new course—like the New Deal policy of US President Franklin D. Roosevelt during the Great Depression.
So what do we need to take on the enormous task of rehabilitation and development, as well as future challenges like the transition to green energy?
The guiding logic of the Finance Ministry is to cut. Cut as much as possible, don’t allocate budgets. Public spending is measured not by the amount of public value we all gain—say, a universal and high-quality health care system—but by the expense line alone. But the challenges of rehabilitation require a comprehensive correction for the public’s benefit, not for the bottom line.
Is it possible? The actions of the Mossad and Air Force this past year are redefining what is possible. Our image of a hollow, failed security establishment—especially after October 7—has faded to reveal creative and heroic operations.
It’s just as possible in education, welfare, health care, policing, and other systems. What it requires is a national mission mindset, and funding that matches that concept. It requires trust in public servants, and creating optimal conditions for them to commit to the mission and feel that their work has critical meaning for Israeli society—no less than what the Mossad agents and Air Force teams, from the ground crew to the commander, must have felt.
That’s what a New Deal requires. To pull the United States out of the Great Depression—probably the biggest economic crisis capitalism has ever seen—Roosevelt went against the advice of most economists, experts, and his friends in the financial and banking sector. He spent more money on various projects, from infrastructure and transportation to the arts—the main thing was to get people working, creating, and earning a living. All of this was government-funded, independent of the dictates of the free market.
The result was prosperity and growth that lasted into the 1970s, a high level of economic security and very low inequality relative to America’s ultra-capitalist economy, improvement in infrastructure and education, and public goods enjoyed by all Americans.
What we need is an Israeli New Deal. Israel’s political system will head to elections sometime in the next two years. We must demand that politicians state their plan to rebuild and meet future challenges. Will we abandon government bodies to privatization and the free market, or will we learn from the series of crises we’ve endured and realize that the public sector is not a burden, but the sturdy trunk from which society grows?
For candidates to take this demand seriously, a broad movement is needed that calls for such a New Deal, in Roosevelt’s spirit.
Gal Lustig is the founder of the Israeli New Deal Movement.
This article was translated from Hebrew and lightly edited for context by Leah Schwartz.
