Posted BY: Harold Goldmeier

Capitalism came early to Israel’s strategic defense and weapons industry.  In the 1930s, entrepreneurs were delegated responsibility by national leaders for keeping arms and weapons flowing into the hands of Jewish freedom fighters.  Their companies designed, manufactured, and supplied the nascent citizen army with small arms, ammunition, and explosives.

This month, Israel allowed the sale of a publicly owned defense and weapons company to foreign nationals.  It comes on the heels of a rising trend of foreign nationals acquiring Israeli companies.  This sale is fraught with potentially ominous implications for the national economy and security.

The defense and weapons industry evolved into an intimately intertwined tenacious web of private, public, and state-owned companies in partnership with domestic security agencies, Knesset committees, and the foreign service.  Our military-industrial complex dominates the economy and influences public policy and budget choices.  It prospers from annual sales worth tens of billions of dollars in defense products and weapons systems for commercial, military, and homeland security to Israel and other nations.  The partnership has spurred innovation, keeping Israel ahead of the defense technology curve.  Weapon superiority clearly deters enemies from war and promotes peace, evidenced by the Abraham Accords.  But the industry has had more than its share of corruption scandals in a Gilded Age of greed, amorality, and corruption in Israel’s politics and business.

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