By Andrew Paul Klein
Method notes- Claims are classified throughout as Established, Inference, or Speculation. This paper compares two states—Israel and Australia—that have undergone neoliberal restructuring and subsequent right-wing political surges. It argues that the drift to the right is not a consequence of neoliberal economic policy, but a parallel response to the same underlying crisis of legitimacy: the postwar settlement’s failure to deliver security and prosperity for broad populations. The paper does not claim a conspiracy. It describes a structural condition. The boundary between what the evidence establishes and what it suggests is marked throughout.
Abstract
This paper examines the relationship between neoliberal restructuring, rentier capitalism, and the rise of right-wing populism in Israel and Australia. It argues that the two phenomena are not causally linked in the direction commonly assumed—neoliberalism did not produce right-wing populism. Rather, both are responses to the same underlying crisis: the erosion of the postwar settlement and the legitimacy crisis it created. The paper traces the specific mechanisms by which rentier economies concentrate wealth, erode public services, and create the conditions for ethnonationalist and nativist political movements. It identifies the actors who constitute the rentier class in each state, examines the role of the Israeli Supreme Court and the settlement enterprise, and analyses the emerging “Board of Peace” framework as a governance-finance fusion. It concludes by examining morally engaged policies that could mitigate the rentier model and reduce the harm it produces.
1. Introduction: The Parallel Paths
In 1985, Israel announced an Economic Stabilization Plan. In the same decade, Australia began dismantling its postwar settlement. Both states embraced what came to be called neoliberalism: market mechanisms, competition, privatisation, and the retreat of the state from direct provision.
Four decades later, both states are experiencing a political drift to the right. In Israel, the Kahanist bloc has entered the cabinet. In Australia, One Nation has overtaken the major parties in national polling.
The conventional explanation is that neoliberal economic policy produced right-wing populism. This paper argues that the causal arrow is more complex. Neoliberal restructuring and right-wing populism are parallel responses to the same underlying crisis of legitimacy—the postwar settlement’s failure to deliver security and prosperity for broad populations.
The paper proceeds in six sections. Section 2 examines Israel’s neoliberal transformation as a state-led project. Section 3 examines Australia’s rentier economy and political consequences. Section 4 identifies the rentier actors in both states. Section 5 examines the institutional and economic architecture of the settlement enterprise and the emerging Gaza governance framework. Section 6 draws structural conclusions and proposes mitigating policies.
2. Israel: The Neoliberal State Project
2.1 The 1985 Stabilization Plan
Israel’s neoliberal transformation was not a passive adoption of Western models. It was a state-led project driven by specific actors facing specific crises.
The Stabilization Plan, announced in July 1985, is the pivotal moment. As one scholarly analysis states: “The plan, which was designed as a response to an economic crisis, triggered institutional changes that deeply transformed the Israeli economy, taking it from the age of intervention and regulation and thrusting it into the age of liberalization and globalization”. The two key factors that shaped the plan were government prioritization of export promotion and national security policy issues.
The transformation was driven by institutional actors: fiscal and monetary authorities, economists embedded in the state, and big business interests that shaped policy in their favour. As Arie Krampf demonstrates in The Israeli Path to Neoliberalism, the transformation cannot be described as “a simple transplantation of imported economic models from advanced liberal democracies. Rather, it asserts that the Israeli variant of capitalism is the product of the encounter between imported Western institutional models and policy ideas, on the one hand, and domestic economic, social and security policy problems on the other”.
2.2 The Political Consequence
Krampf’s analysis notes that Israel’s transition “has been coupled with the adoption of a hawkish and isolationist foreign policy”. The Israeli variant of capitalism produced “a highly divided society” with inequality comparable to the United States.
The economic consequences are documented. Israel has “developed a dual economy, without horizontal (between sectors) or vertical (wages, employment) diffusion to the rest of the economy,” with “one of the highest poverty rates in the OECD“. The proportion of families living below the poverty line rose from 10–12 percent in the 1980s to 19–20 percent in recent years. Income and wealth concentrated at the top: in 2003 there were eight Israeli billionaires worth $37 billion; by 2015 there were 84 worth $140 billion.
The structural outcome is precise: neoliberal restructuring weakened the social-democratic base, and the right filled the vacuum with ethnonationalist politics. The Kahanist ideology is not a cloak for economics. It is the political form that the crisis of the Israeli welfare state has taken.
3. Australia: Rentier Capitalism and the Populist Surge
3.1 The Rentier Economy
Australia’s rentier economy is structurally documented. A conservative estimate puts aggregate economic rents at 23.6% of GDP—equivalent to 87% of total government revenues. Over 80% of Australia’s richest 200 people amassed their wealth via political connections.
The concentration is accelerating. Between 2019 and 2024, the corporate share of national income increased by 7.5 per cent while the family business and self-employed share dropped by 20 per cent. The foregone income lost by family businesses and the self-employed from 2020 to 2023 was $149 billion. Workers lost $215 billion in foregone compensation due to the relative decline in their share of national income.
The rentiers are specific actors: the FIRE sector (Finance, Insurance, Real Estate), mining companies, and politically connected property developers. The fossil fuel lobby is documented as one of the most obstructive climate lobbyists globally. The PRRT is “laughably weak“—$1.1 billion received from over $70 billion worth of LNG sold in 2023-24.
3.2 The Political Consequence
One Nation, led by Pauline Hanson, overtook Labor in a national poll for the first time in May 2026, polling at 31% to Labor’s 28%. The surge is driven by voter discontent over budget measures and anxieties over high living costs, economic uncertainty, and anti-immigration sentiment.
The polling data shows that One Nation’s support comes predominantly from Baby Boomers and Gen Xers—the cohorts that have benefited most from the rentier economy and feel most threatened by its apparent fragility.
The structural parallel with Israel is precise: neoliberal restructuring concentrated wealth, eroded public services, and created a legitimacy crisis that a right-wing populist movement filled.
4. The Rentier Actors
4.1 Israel: The Security-Tech Complex
Israel’s rentier class is constituted by the defence-tech complex. The Ministry of Defence directly funds and shapes the private sector. In the first half of 2026, orders to defence startups reached $330 million, double the previous year, with 322 defence-tech companies operating under Ministry oversight.
The venture capital architecture reinforces this. Protego Ventures, Israel’s first and largest dedicated defence tech VC, closed its debut fund at $125 million. Ares Management committed $30 million as a limited partner, with the conviction that “new technologies would be key to boosting Israel’s defence capabilities”. The founders are embedded in military and intelligence networks; one spent 11 years in the military and intelligence field.
The structural dynamic is that of a dual economy: a high-tech defence sector that generates massive wealth for a narrow elite, while the broader economy stagnates. As Sibylle Heilbrunn documents in Dark Sides of the Startup Nation, “at the centre is a startup nation with a vibrant and successful high-tech entrepreneurial ecosystem, accumulating resources and enabling constant growth. At the geographical and social periphery, there has emerged a parallel society with often-marginalized groups not able to keep up”.
4.2 Australia: The Resources-Finance Complex
Australia’s rentier class is constituted by the resources-finance complex. The corporate share of national income increased from 26.5% to 28.5% between 2019 and 2024, while the family business and self-employed share decreased from 8.75% to 7%.
The “Big Three” index funds (BlackRock, Vanguard, State Street) hold one-third of the substantial shareholding positions across the ASX 50. The separation between ownership and control has produced what is termed “the agency costs of agency capitalism”.
The defence sector is smaller but growing. In 2024-25 alone, Labor and the Liberal Party accepted over $200,000 in donations from weapons manufacturers, including over $100,000 from Raytheon and tens of thousands from NIOA Munitions. Both companies have been awarded giant government contracts as defence spending increases.
5. The Institutional and Economic Architecture
5.1 The Israeli Supreme Court: Accommodation, Not Obstruction
The Court’s role is not that of a check on settlement expansion, but as an institutional enabler through selective non-intervention. The Court has systematically avoided ruling on the legality of settlements under international law, focusing instead on a “proportionality test” that balances settler “human dignity” against Palestinian rights. This framework legitimizes the settler presence as a fact to be balanced rather than a violation to be stopped.
5.2 The Settlement Economy
The settlements are a structural economic interest. Over 700,000 settlers control more than 42% of West Bank land and the majority of its water resources. Settlers consume 247 liters/day, while Palestinians consume 82.4 liters/day, far below WHO minimums.
Finance Minister Bezalel Smotrich has proposed a 10-year plan to bring 1 million Jewish immigrants from North America and Europe—explicitly framed as a demographic counterweight to Palestinians.
5.3 The Board of Peace: Governance-Finance Fusion
The emerging Gaza governance framework integrates private financial interests directly into post-war governance. The Board of Peace, chaired by President Trump, concentrates extraordinary authority in the Chair, including control over membership, agendas, and subsidiary bodies. Membership can be secured permanently with a $1 billion contribution.
Jared Kushner serves on the Executive Board while his firm, Affinity Partners, is the largest shareholder in Phoenix Financial, an Israeli company whose portfolio includes at least nine companies supplying the Israeli military. Phoenix’s investments include approximately $265 million in Elbit Systems, Israel’s largest arms manufacturer, whose shares have surged since the Gaza war began. Kushner has said he maintains a “very active dialogue” with Phoenix executives.
At Davos in January 2026, Kushner presented a $30 billion “master plan” for Gaza featuring data centres, industrial zones, residential towers, and seaside resorts. He described it as offering “amazing investment opportunities“.
5.4 The Ideological Conflation
The conflation of Zionism with Judaism performs a specific structural function: it makes the extraction economy unassailable. If the project is divine, then opposition is not political disagreement—it is sacrilege. The economic interests of the security-tech complex and the settlement enterprise are protected by a narrative that renders them beyond debate.
As the academic analysis in The Industry of Silence argues, racialization underpins the Nakba—”the ongoing process of dehumanization, demobilization, fragmentation, and ultimately, erasure of the Palestinian people“. This process “extends beyond Israel into the ‘Western’ world, to organizations in Europe and the U.S.”. The “industry of silence” masks systemic violence, enabling genocide.
6. Conclusion: The Structural Assertion
The evidence supports the following formulation:
Neoliberal restructuring is a state project that serves specific rentier actors. It concentrates wealth, erodes the welfare state, and creates a legitimacy crisis. The political consequence is not automatic but structural: the crisis creates space for movements that offer simple explanations for complex problems.
In Israel, the explanation is ethnonationalist (the Palestinians, the “left,” the “traitors“). In Australia, the explanation is nativist (migrants, “elites,” “international organisations“).
The Kahanist ideology and One Nation’s nativism are not “cloaks” for economics. They are political forms that the crisis of the rentier state takes. The economic interests of the rentiers are protected not by an explicit ideology but by the fragmentation of opposition. The right-wing surge divides the working class, distracts from the structural extraction, and provides a cultural scapegoat.
In both states, the rentiers continue to extract. The political drama is the noise. The structure is the signal.
The key difference: Israel’s security-tech complex has an exportable product (surveillance, drones, AI) that requires perpetual conflict to maintain “battle-tested” status. Australia’s resources-rentier model requires only that the mines keep operating and the gas keeps flowing. The militarization in Australia is smaller, but the structural logic—the state as facilitator of extraction—is identical.
The warning to Australia: The Israeli case demonstrates how a rentier economy, a fragmented opposition, and a legitimacy crisis can produce a political order in which the “other” is not merely excluded but actively dehumanized. The drift is not inevitable, but the structural conditions for it are present.
7. Morally Engaged Policies
The rentier model is not immutable. The following policies address the structural dynamics identified in this paper:
1. Transparency and accountability in political finance. Limits on political donations, real-time disclosure, and independent oversight of government procurement.
2. Rent taxation. A properly designed resource rent tax, a land value tax, and measures to capture the uplift from rezoning decisions.
3. Anti-concentration measures. Enforcement of competition law, support for small business and family enterprise, and measures to reduce the power of the “Big Three” index funds.
4. Rebuilding the public service. Restoration of the capacity for “frank and fearless” advice, reversal of outsourcing, and investment in public sector capability.
5. Truth and reconciliation processes. Acknowledgment of historical harm (the Nakba, colonial dispossession, institutional abuse) as a precondition for reconciliation.
6. Protection of civil society. Legal protections for advocacy, journalism, and dissent. Resistance to the “industry of silence”.
7. International accountability. Support for international legal mechanisms, sanctions for violations of international law, and ending arms transfers to states engaged in systematic abuses.
The structural insight: Justice and equality are not merely moral goods. They are structural stabilisers. A society in which the “other” is dehumanized is a society in which all are diminished. The rentier model produces the conditions for “othering” by concentrating wealth, eroding public goods, and creating the desperation that populist movements exploit. Addressing the rentier model is not charity. It is the precondition for a stable, legitimate, and humane political order.
Claim Status Summary
# -Claim- Status
1 -Israel’s neoliberal transformation was a state-led project- Established
2- The 1985 Stabilization Plan was shaped by export promotion and national security -Established
3 -Israel’s transition was coupled with hawkish foreign policy -Established
4- Israel has a dual economy with high poverty- Established
5 -Australia’s corporate share of national income increased 7.5% (2019-2024) -Established
6- Family business share dropped 20% -Established
7- Defence-tech VC in Israel is expanding rapidly- Established
8 -Kushner’s Affinity Partners is largest shareholder in Phoenix Financial -Established
9- Phoenix supplies military equipment to Israel -Established
10 -Board of Peace integrates private finance into governance- Established
11- Racialization underpins the Nakba- Established
12- Neoliberal restructuring creates conditions for right-wing populism- Inference
13- The drift to the right is parallel, not consequent- Inference
14- Israel’s model presents a warning to Australia- Inference
References
1. Krampf, A. (2018). The Israeli Path to Neoliberalism: The State, Continuity and Change. Routledge.
2. The Stabilization Plan. (2018). In A. Krampf, The Israeli Path to Neoliberalism. Taylor & Francis.
3. Protego Ventures closes debut $125 million fund for Israeli defense tech. (2026, September 28). TechCrunch.
4. Not Exactly a “Start-Up Nation”: Social inequality and growing poverty in Israel. (2026, June 15). Rosa-Luxemburg-Stiftung.
5. Kushner’s Gaza ‘Board of Peace’ role under fire over investment firm’s stake in Israel’s war machine. (2026, September 30). PressTV.
6. Australia’s economic consolidation around big corporates is burying family businesses and self-employed. (2025, September 18). Institute of Public Affairs.
7. In the dynamics of Occupation, the indigenous Palestinian population is subject both to management and gradual elimination. (n.d.). Taylor & Francis.
8. Speech on Defence Contractors. (2026, September 13). Elizabeth Watson-Brown MP.
9. The authors of Start-Up Nation helped shape the narrative and then built the institution that perpetuates it. (2026, February). Transnational Institute.
10. Legislative Council Hansard. (2026, June 18). Parliament of NSW.
11. Dark Sides of the Startup Nation: Winners and Losers of Technological Innovation and Entrepreneurship in Israel. (2023). Routledge.
12. Board of Peace will be a bonanza for wealthy board members. (2026, February 19). Responsible Statecraft.
13. The Industry of Silence: The Ongoing Nakba and the Racialization of Palestinians. (2026). Wiley Online Library.
14. Defence Procurement. (2026, September 14). OpenAustralia.org.
15. Australian Parliament House. (n.d.). Shareholding concentration analysis.
16. Israel construye las bases de un sistema soberano de IA. (2026, January 31). JNS.org.
17. Proportional Representation Empowers the Extreme and the Bizarre. (2016). The Tyee.
Andrew Paul Klein is a writer and analyst based in Boronia, Victoria. He accepts funding from no one.
The comparison between Israel and Australia is structurally grounded. The rentier actors are identified. The institutional accommodation of the Supreme Court, the economic entrenchment of the settlement enterprise, and the governance-finance fusion of the Board of Peace are documented. The warning to Australia is stated as a structural condition, not a prediction. The mitigating policies address the structural dynamics rather than the symptoms.
