Summary
Mapai minister who personified the industrialization policy from 1954 as Minister of Commerce and Industry and, as Treasury Minister from 1963, architected the deliberate 1966-67 recession; after 1967 he lost the Treasury’s autonomy struggle against Security Minister Moshe Dayan (Moments of Resistance, PDF p.108, 137, 141, 161-162).
Details
- Sapir’s centralized industrialization policy relied on low-cost unemployed labour, German capital inflows and state subsidization, and averaged 10% annual growth led by construction (PDF p.108).
- As Treasury Minister he refused the Workers Society’s demands for subsidized loans during the recession — a historically remarkable assertion of state autonomy, possible only in crisis (PDF p.141).
- In the last pre-war Sapir-WS meeting (April 24, 1967) he rejected non-indexed loans but tipped the managers that new subsidies would go to military industries (PDF p.142).
- In the secret October 1967 meeting on the 1968 security budget he argued the recession policy must continue — “Israel hasn’t found any oil yet” — and was overruled by Eshkol, who cited Sinai oil; Sapir’s demand represented the Treasury’s desire to retain its dominant budget position against the Ministry of Security (PDF p.161-162).
Related pages
Moments of Resistance, Levi Eshkol, Moshe Dayan, Histadrut, Dual Regime