All this came despite the presence of the Technion University, one of the world’s supreme institutions of practical science and the chief contribution of Israel’s founders to its eventual preeminence in technology. Located atop a hill overlooking Haifa, the institute sprawls over its spectacular site with a massive maze of concrete institutional architecture as formidable as MIT’s: labs, auditoriums, nuclear facilities, giant telescopes, and research monoliths, mostly named for American Jewish philanthropists. But nearly 80 years passed after the Technion’s opening in 1924, with Jews around the world forging the science of the age in an intellectual efflorescence unparalleled in human history, without any exceptional contributions coming from Israel.
For much of Israel’s short history, the country has been in the grips of reactionary forces, upholding a philosophy of socialist redistribution that could only impede its progress. In 1957, a team of American economic consultants found that Israel’s “high labor costs… reflected the high degree of job security… [and] the absence of adequate incentive to or rewards for superior efficiency or performance.” This was partly a result, they added, of “virtually complete protection from foreign competition.” Two years later, A. J. Meyer of the Harvard Center for Middle Eastern Studies noted “uncertainty in the minds of many [Israeli] industrial producers that theirs is the ‘good’ occupation or that society really gives them credit — financially and in status — for their efforts.” He also cited “welfare state concepts [that] often dictate that incompetent workers stay on payrolls.”
Many of Israel’s Jews, as the writer Midge Decter described them, “were coming into the country armed with their socialism and their ideologies of labor and a Jewish return to the soil.” Imagine it: urban socialists trying to reclaim their past glory and save themselves in a hostile world by returning to the soil in a desert! They created communal experiments — kibbutzim — and put intellectuals to work with hoes and shovels, for all the world like a Zionist version of Chairman Mao’s Cultural Revolution. Unlike Mao’s coercive crucible, the Jewish version was voluntary and it succeeded in agriculture. But the Zionist intellectuals did not want to stop there. In a truly menacing démarche of ideological madness, they attempted to abolish the family and private property.
They assigned close to a third of the economy to the ownership of Histadrut, a socialist workers’ organization prone to threatening nationwide strikes. Under Histadrut pressure, they instituted minimum wages that stifled employment and propelled inflation. Then they imposed more controls on wages, prices, and rents, making everything costly and scarce.
In a general enthusiasm for public ownership of the means of production and finance, the government through the 1990s owned four major banks, 200 corporations, and much of the land. Israel’s taxes rose to a confiscatory 56 percent of total earnings, close to the highest in the world, stifling even those private initiatives that managed to pass through the country’s sieves of socialism. Often explained as needed for defense against millions of bellicose Arabs, such tax rates had the contrary effect of eroding the economic base that sustains defense spending. Erecting barriers of bureaucracy, sentiment, and culture, Israeli leaders balked the entrepreneurs and inventors who gathered there, creating a country in its way nearly as inhospitable to Jewish geniuses as the European anti-Semitic regimes they had fled.
Far more welcoming of Jewish and Israeli talent in those days were American companies, particularly Intel. It was an Israeli engineer, Dov Frohman, who in 1971 invented electrically programmable read-only memory (EPROM), a chip-based permanent memory that could retain a personal computer’s core programming for “boot-up” even when the power was off. Necessary for distributed personal computers, EPROM would contribute some 80 percent of Intel’s profits over the next decade and sustain the company’s growth to become the world’s leading semiconductor company.
With the help of a company called Xicor, started by Israeli Raffi Klein, EPROM evolved into the flash memories that now dominate the industry. Today, under a series of Israeli companies from Sandisk and M-Systems (now part of Sandisk) to Sai-fun and Anobit, flash memories are a mainstay of the Israeli microchip industry. These devices lie behind many American miracles of miniaturization, from tiny and now ubiquitous “thumb drives” to Apple’s iPods and pads to Hewlett-Packard’s netbooks.
After leaving Intel in 1974 for a philanthropic sojourn teaching electrical engineering in Ghana, Frohman returned to Israel to establish an Intel design center in Haifa. This laboratory soon conceived the 8088 microprocessor, which was incorporated into the first IBM personal computer. In 1979, also in Haifa, Frohman supervised the development of Intel’s first mathematical floating-point coprocessor, which transformed the personal computer into a business-ready machine suitable for IBM’s favored market. As a guest in the country, albeit an imposing one, Intel could tap the genius of Jews while bypassing the rules, tolls, and taxes that frustrated many Israeli companies.
Following the success of the Haifa design center, Frohman wanted Intel Israel to establish a semiconductor “fab,” or fabrication center, in Jerusalem, together with the necessary chemical and engineering support services. At first he battled Intel executive Andrew Grove — himself a Hungarian Jew who became a legendary figure in Silicon Valley — over the costs of training Israelis to run the fab. But in the end Frohman managed to enlist $60 million in subsidies from the Israeli government and led the project to completion in three and a half years.
By the late 1980s, the Jerusalem fab, Intel’s first outside the United States, was producing some 75 percent of the global output of Intel’s flagship 3 8 6 microprocessor and was gearing up to produce the successor 486 as well. Frohman later persuaded Grove to open production plants in Kiryat Gat in the Negev, Israel’s desert. Meanwhile, from Intel’s Israeli design centers — by now, there were several — emerged several generations of the Pentium microprocessor, as well as the Centrino low-power processor that integrated Wi-Fi wireless capabilities into portable PCs.
For all the achievements of Israelis working for Intel and other foreign firms, Israel’s native technology sector languished. Redemption came in unexpected forms. One was a new infusion of genius: nearly a million immigrants, chiefly from the Soviet Union, whom Israel absorbed in the late 1980s and the 1990s. Impelled by constant harassment from the U.S. government — including Senator Henry “Scoop” Jackson’s emancipation amendment, which for a decade was attached to any American legislation of interest to the USSR — the Soviet government finally agreed to a frontal lobotomy of its economy. Under Gorbachev, it released the bulk of the Soviet Jews, who had continued, despite constant oppression, to supply many of the technical skills that kept the USSR afloat as a superpower.
The influx of Soviet Jews into Israel represented a 25 percent increase in the population in ten years, a tsunami of new arrivals that would be the demographic equivalent to the entire population of France migrating to the United States. Essentially barred in the USSR, as earlier in most of Europe, from owning land or businesses, many of these Jews had honed their minds into keen instruments of algorithmic science, engineering, and mathematics. Most had wanted to come to America but were diverted to Israel by an agreement between Israel and the United States. Few knew Hebrew or saw a need for it. At best, they were ambivalent Zionists. But many were ferociously brilliant, fervently anti-Communist, and disdainful of their new country’s bizarre commitment to a socialist ethos that punished economic success.