Sunday, March 24, 2013

Supplying Matzot: Central Planning or Free Market?

Surely, you'd say to yourself, founding a Jewish state would ensure there'd never again be any problem of having enough kosher-for-Pesach stuff, first and foremost Matzot. Surely, you'd be wrong.

A recurring theme in Israel's early years was the lack of an adequate supply of Matzot for Passover. There are any number of files in the ISA with officials and politicians kvetching about how again there hadn't been enough to go all around and how could that possibly be?!

In 1962, for example, the general manager of the Ministry of Trade and Industry appointed a committee of three to figure out what had just gone wrong and make recommendations for 1963. It was headed by Y. Gal-Ad, his deputy, who was joined by two external experts; the committee also had talks with a parallel committee set up in the Tel Aviv Rabbinate. The comittee submitted its recommendations in September 1962 - except that its members hadn't managed to agree.

There were structural problems, such as the fact that Matzot are prepared under strict conditions in the few monsths before the holiday, but mostly purchased only in the final week; what isn't sold by the end of the holiday won't be sold at all. There were complex issues about estimating how much would be required, and these included knowing how much the population had grown in the past year, even while noticing that in 1961 Pesach had effectively been one day longer since it had ended on Friday, so Saturday (i.e. Shabbat) was also Pesach-like. There were administrative problems, such as that the rabbinate was not willing to permit working in three shifts. There was the problem with the rumors about how the matzot were running out and this caused hoarding at various parts of the supply chain.

The committee members did manage to agree that having a free market in which the prices were fixed from above didn't help. Clearly, the structure of the market needed to be changed - but how? The two outsiders recommended that as of 1963 the market be opened and allowed to do its own thing. Sooner or later that would have to happen, they said, and there's no purpose in further delay, even if it caused one additional season of confusion. Gal-Ad wasn't convinced, or perhaps, being an insider, he was apprehensive of the fallout should the issue reappear the following year.

Our file doesn't say what happened in 1963. Perhaps we'll go looking for the next file, next year.

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