InterviewMichaeli: 'Limit the so-called free forces in the market'

Merav Michaeli, recapturing Labor leadership, vows to tackle cost of living

Center-left party leader lays out social democratic vision, says her policies, including free education and healthcare, will address capitalist ills

Carrie Keller-Lynn

Carrie Keller-Lynn is a political and legal correspondent for The Times of Israel

Labor leader and Transportation Minister Merav Michaeli votes via phone in Labor's leadership primaries, at primary headquarters in Tel Aviv, July 18, 2022. (Tomer Neuberg/Flash90)
Labor leader and Transportation Minister Merav Michaeli votes via phone in Labor's leadership primaries, at primary headquarters in Tel Aviv, July 18, 2022. (Tomer Neuberg/Flash90)

Hours before the results of Labor party’s leadership primary revealed her victory Monday evening, and in anticipation of the transition to a fight in the November general election, Merav Michaeli said that her party’s social democratic vision is an answer to one of the hottest issues: the cost of living.

Speaking to The Times of Israel in Tel Aviv, after casting her own vote to preserve her seat, Michaeli offered a high-level vision that included free social services, such as education and healthcare, raising wages, and market controls.

“We are a social democratic party, we believe that social services should be given for free. We believe in raising people’s salaries. We believe that you have to limit the so-called ‘free forces’ in the market, leading to terrible prices. We are the only ones with a genuine answer to this problem,” Michaeli, the transportation minister, said.

Israel’s dramatically rising cost of living — attested to by Tel Aviv’s title as 2021’s most expensive city and the country’s current 4.5 percent projected inflation rate — is one of the election’s central issues. From statements by Likud leader Benjamin Netanyahu on the right, to campaign posters for ultra-Orthodox parties, to centrist Prime Minister Yair Lapid carving time out of his Sunday schedule to stabilize the price of bread, cost of living has captured much airtime, while garnering little in the way of concrete proposals.

According to Michaeli, Labor’s social democratic philosophy is an answer to the rising cost of living, which she partially blames on capitalism.

“Labor is the only party that has a different political policy than the rest of them,” Michaeli said, pointing fingers at both political partners in the recently collapsed government and opposition rivals.

Prime Minister Yair Lapid heads a cabinet meeting at the Prime Minister’s Office in Jerusalem, on July 17, 2022. (Abir Sultan/Pool/AFP)

“From [Religious Zionism chief Bezalel] Smotrich to [Blue and White leader Benny] Gantz, from Bibi [Netanyahu] to Lapid, they still have the same old capitalist beliefs about the economy,” she said.

Market power in Israel is highly concentrated in several basic industries, including consumer food and consumer products imports. Without providing specifics, Michaeli said she would “work to restrain the big powers that dominate the market in a manner that raises prices.”

Additionally, her party led a fight to raise the minimum wage during the now-disbanded 24th Knesset, but it was ultimately unresolved.

In her role as transportation minister, Michaeli absorbed flak for pushing bus fare reform that raised prices in lower socioeconomic areas in order to unify fares across the country. While Michaeli supported the reform by saying that fare discrimination was the result of backroom deals, rather than financial need, she clashed politically with Knesset Economic Committee chair Michael Bitton. The Blue and White MK is a former mayor of the affected city of Yeruham, and he accused Michaeli not only of raising prices, but also of subverting his committee’s oversight.

In terms of building the coalition necessary to put Labor in a place of influence, Michaeli did not openly rule out sitting with ultra-Orthodox parties, but rather pointed to periods of past cooperation, both with them and with Arab parties. She did not answer a question about joining a coalition that would include the majority-Arab Joint List party, a contentious issue for many Jewish and Arab voters.

“Not so long ago, in the 19th Knesset,” from 2013 to 2015, “it was Labor and the ultra-Orthodox parties and the Arab parties in the opposition, cooperating beautifully against Netanyahu and Lapid,” Michaeli said, adding that there are many areas of “common… values” among them.

Labor leader and Transportation Minister Merav Michaeli tours Labor’s leadership primaries headquarters in Tel Aviv, July 18, 2022. (Tomer Neuberg/Flash90)

Labor is currently engaged in a battle for seats with other centrist and left-wing parties. The ultimate test for partnership and compromise will come after Israelis go to the polls in November and set the Knesset map.

In that vein, Michaeli, like other political leaders, is keeping her options open, saying her main goal is “to bring as many seats to Labor as I possibly can,” and that once her relative power is set, “from there to see what is the best coalition that we can build.”

However, the real coup would be if Michaeli’s Labor party could succeed not just in drawing votes away from her natural political partners, but also in attracting new voters. In that way, Michaeli would be increasing the size of the center-left’s political pie, rather than just cutting a large slice of the existing one.

She thinks there is a chance to draw back voters who had abandoned Labor throughout the years. Labor was one of the two major parties that led Israel over the decades, but today it remains only a small- to medium-sized party.

While Labor has only held primaries since 1992, today the party has only 14% of the number of registered members it had in 1996 — 36,000 compared to its peak of 260,000, according to figures provided by the Israel Democracy Institute’s Ofer Kenig.

Michaeli hopes the remaining 106 days until the election will provide opportunities to recapture some of those lost voices.

“The Labor party will return to speaking with many audiences that were purged from it for many years, and inappropriately so,” she said, adding that: “This [election] round we have time to properly campaign and turn to many audiences [who feel that] our ideology and what the Labor party offers is the thing that they need and want.”

Michaeli was challenged by in Monday’s Labor leadership primary by Eran Hermoni, the party’s secretary. Hermoni has accused Michaeli of not being the type of leader the party needs to the premiership, and instead called to bring in a big public figure to lend prestige to the role. He has also pushed for the party to move closer to the center.

By winning the primary, Michaeli became the first Labor head to retain her seat in the 13 leadership contests the party has arranged since 1992.

Her victory breaks “the pattern that characterized the Labor Party and because of which it has earned a reputation as a party that ‘devours its leaders,’” Kenig said.

Primaries for the remainder of Labor’s Knesset slate are set for August 9.

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