So what’s so great about Israeli culture anyway?

Mitt Romney has followed up his controversial comments on the link between Israel’s economic success and its culture (See Daron Acemoglu and James Robinson for a rebuttal to the argument.) with a short piece in the National Review arguing that the Jewish state "has a culture that is based upon individual freedom and the rule of law," which has "created conditions that have enabled innovators and entrepreneurs to make the desert bloom."

That’s a little bit vague (and arguably it was a tradition of mandatory conscription and collectivism that made the desert bloom in the early days)  but for a more nuanced understanding of the case for Israel’s cultural advantage, it’s useful to turn to Romney’s advisor Dan Senor. As Michael Shear of the New York Times writes today, "It was Mr. Senor’s book about entrepreneurs in Israel that informed his comments, Mr. Romney explained to the group of Jewish-American donors he had assembled at the King David hotel."

So what cultural factors does the 2009 book Start-Up Nation, co-authored by Senor and Saul Singer, credit for Israel’s success? For starters, Senor and Singer reject that the answer is simply Judaism. (In recent days, some have interpreted Romney’s comments as a repitition of the old stereotype that Jews are simply good with money.) They write:

[P]inning Israel’s success on a stereotype obscures more than it reveals. For starters, the idea of a unitary Jewishness–whether genetic or cultural–would seem to have little applicability to a nation that, though small, is among the most heterogenous in the world. Israel’s tiny population is made up of some seventy different nationalities. A Jewish refugee from Iraq and one from Poland or Ethiopia did not share a language, education, culture, or history–at least not for the two previous millenia.

The main factors the authors identify in Israeli culture are bluntness, informality, a love of argument, and a high tolerance for failure:

In The Geography of Bliss, author Eric Weiner describes another country with a high tolerance for failure as "a nation of born-agains, though not in a religious sense." This is certainly true for Israeli laws regarding bankruptcy and new company formation, which make it the easiest place in the Middle East — and one of the easiest in the world — to brith a new company, even if your last one went bankrupt. But this also contributes to a sense that Israelis are always hustling, pushing, and looking for thenext opportunity. 

Newcomers to Israel often find its people rude. Israelis will unabashedly ask people they barely know how old they are or how much their apartment or car cost; they’ll even tell new parents–often complete strangers on the sidewalk or in a grocery store–that they are not dressing their cildren appropriately for the weather. What is said about Jews–two Jews, three opinions–is certainly true of Israelis. People who don’t like this sort of frankness can be turned off by Israel, but others find it refreshing, and honest. 

This frankness can create a unique workplace atmosphere:

[H]eated debate is anathema in other business cultures, but for Israelis it’s often seen as the best way to sort through a problem. "If you can get past the initial bruise to the ego," one American investor in Israeli start-ups told us, "it’s immensely liberating. You rarely see people talk behind anybody’s back in Israeli companies. You always know where you stand with everyone. It does cut back on the time wasted on bullshit."[…]

The cultural differences between Israel and the United States are actually so great that Intel started running "cross-cultural seminars" to bridge them. "After living in the U.S. for five years, I can say that the interesting thing about Israelis is the culture. Israelis do not have a very disciplined culture. From the age of zero we are educated to challenge the obvious, ask questions, debate everything, innovate," says Mooly Eden, who ran these seminars. 

Despite its military tradition, the authors argue, the culture of the Israeli army encourages challenging authority:

[Military theorist Edward] Luttwak says that "in the reserve formations, the atmosphere remains resolutely civilian in the midst of all the trappings of miltiary life."

This is not to say that soldiers aren’t expected to obey orders. But as [venture capitalist Amos] Goren explained to us, "Israeli soldiers are not defined by rank; they are defined by what they are good at." Or, as Luttwak said, "orders are given and obeyed in the spirit of men who have a job to do and mean to do it, but the hierarchy of rank is of small importance, especially since it often cut across sharp differences in age and social status."

Senor and Singer argue that the maturity and sense of responsibility Israelis gain from miltiary service, as well as a tradition of international travel, for fostering a culture of entrepreneurship in the country’s youth. They also emphasize the informality, the common use of nicknames and lack of strict social heirarchy as important factors: 

A bit of mayhem is not only healthy but critical. The leading thinkers in this area… argue that the ideal environment is best described by a concept in "complexity science" called the "edge of chaos." They define that edge as "the estuary region where rigid order and random chaos meet and generate high levels of adaptation, complexity, and creativity."

This is precisely the environment where Israeli entrepreneuers thrive. They benefit from the stable institutions and rule of law that exist in an advanced democracy. Yet they also benefit from Israel’s nonhierarchical culture, where everyone in business belongs to overlapping networks produce by small communities, common army service, geographic proximity, and informality. 

It is no coincidence  that the military — particularly the elite units…– have served as incubators for thousands of Israeli high-tech start-ups. Other countries may generate them in small numbers, but the Israeli economy benefits from the phenomena or rosh gadol thinking and critical reassessment, undergirded by a doctrine of experimentation, rather than standardization, wide enough to have a national and even a global impact. 

It’s worth pointing out that the emphasis in the book is less on demonstrating Israel’s superiority to the Palestinians or other neighbors than on the economic lessons the United States could borrow from its culture of entrepreneurship. Whether or not you buy Senor and Singer’s argument, it’s a lot more nuanced than "Israeli culture superior. Arab culture inferior" — the takeaway that a lot of observers got from Romney’s remarks. Senor’s boss might have used his arguments about Israel as the starting point for an interesting conversation on U.S. economic, military, and education policies, if he had done a somewhat better job explaining them.