Israel, like the United States, is a vibrant democracy. But also like the US, it is subject to the whims of an increasingly ambitious judiciary, imposing its vision of a 'good' society on citizens, without the benefit of democratic mechanisms of accountability. Only a widespread public reaction, accompanied by aggressive use of judicial accountability mechanisms (a.k.a. impeachment by representative bodies) can reverse the trend.

Israel's Supreme Court handed—down a ruling on June 2nd which will seriously degrade the vigor and competitiveness of Israel's economy in the longer run. It ruled that companies can only be sold to new owners with the consent of their workers. Keep in mind that most of the vibrancy in Israel's economy is provided by hi tech entrepreneurship, and that the traditional reward mechanism for such entrepreneurs prominently relies on capital gains.

Israel's legal code imposes no such requirement. It is entirely the creation of a plurality of the Court.

The Jerusalem Post carries a fairly lengthy account of the complexities of the situation. But the implications are fairly simple. Those who contemplate starting a new company in Israel are on notice that they may not be able to reap the fruits of their effort.

Hat tip to Ethel Carol
Posted by Thomas   06 16 04