When you speak about pyramids in the middle-east you are usually talking about ancient tombs in the Egyptian dessert. But here in Israel, we are talking about the favored business structure of Israel’s old business elite. Israel’s most successful actual companies – Teva, Iskar, Checkpoint, Amdocs, Strauss are real companies that do real things. But Israel’s old line businessmen like putting puzzles together with other people’s (i.e. our) money and give jobs (“job-im” in Hebrew) to their buddies and relatives.
It is this ability and joy in spending other people’s money that makes them the favorites of our politicians.
Some of that might come to an end though. Netanyahu’s “Competition Committee” has issued recommendations that will start us on the road to freer and more open markets. While my first inclination is less regulation and less government rules in this case the pyramid structure of our largest corporations lead to markets that are less free and more highly regulated. The breaking apart of conglomerates that fund their own activity with the banks and pension funds that they themselves own will free up capital for more productive use.
For those of us who have some of our pension money in Clal Insurance for example, it will be nice to know that the Dankners can’t count on them to buy their bonds because they own them. The same goes to Teshuva’s Delek Group and their control over Phoenix Insurance and Excellence Investment House.
We could go on and on… but we won’t. See here for the corporate structures just two of our largest conglomorates (make sure you are sitting, it will make you dizzy):
If these recommendations actually make it through the Knesset – and that is not a sure thing – we may be able to build corporations that will actually do things other than put together puzzles.
No comments:
Post a Comment