European economists ask somebody to explain how capitalism works again
TEL AVIV, Israel — European economists are struggling to explain how Israel’s economy has continued growing despite three years of warfare, security emergencies and extraordinary military expenditures, particularly when several peaceful European governments have encountered difficulty producing economic growth without first establishing a committee to investigate it.
Israel’s economy has demonstrated surprising resilience, supported by technology exports, investment, financial institutions and a private sector that apparently failed to receive the memorandum explaining that serious geopolitical problems require businesses to stop producing things.
According to The Wall Street Journal’s analysis of Israel’s wartime economy, strong economic performance has nevertheless been accompanied by enormous defense costs and difficult long-term budget decisions.
European Economists Request Instructions
At an economic conference in Brussels, several experts reportedly expressed confusion over Israel’s performance.
One economist explained that economic growth normally requires a comprehensive industrial strategy, multiple government initiatives and a 400-page report describing why implementation must be postponed.
Israel, meanwhile, continued exporting technology.
“We don’t understand,” complained the economist. “Where are the committees?”
Another participant suggested that Israeli businesses might be operating under the outdated assumption that profits are generated by producing goods and services customers actually want.
The suggestion was considered dangerously simplistic.
A third economist recommended establishing a European Commission task force to investigate capitalism.
The task force immediately requested a larger budget.
Israel’s Businesses Continue Working
Israel’s technology sector has helped sustain economic activity through cybersecurity, software, research and internationally competitive services.
The Bank of Israel’s October economic forecast projects 3.4% growth in domestic economic activity for 2026, excluding production abroad by Israeli companies.
This has frustrated the conventional theory that national resilience can be achieved exclusively through press releases.
Israeli entrepreneurs have continued developing products, attracting investment and expanding commercial relationships.
Their European counterparts have been offered valuable guidance on implementing sustainability documentation for the office printer.
An Israeli technology executive explained the difference.
“We have customers, competitors and deadlines. If we don’t deliver, somebody else will.”
A European official requested clarification.
“What do you mean, somebody else?”
Economic Growth Does Not Eliminate the Defense Bill
Israel’s economic performance does not mean the war has been inexpensive or painless.
Military spending has placed enormous pressure on public finances, while disruptions, reserve military service and security requirements have imposed real costs on households and businesses.
Growth is evidence of resilience, not evidence that war is an attractive economic policy.
That distinction should be obvious, although economists occasionally require several conferences to establish it.
The next government will face difficult decisions involving taxes, borrowing, defense spending and essential civilian investments.
Nevertheless, Israel has demonstrated that an economy can remain productive under extraordinary pressure when businesses retain the ability to innovate and compete.
At the conclusion of the Brussels conference, European officials agreed that Israel’s economic performance deserved further study.
They scheduled another meeting.
The Israelis returned to work.
And somewhere in the European Union, a consultant submitted an invoice for explaining why productivity remains disappointingly low.