I guess I’m in a similar place to you right now. I think Israel could use better social services as well as more free trade (though either one would be a good start) and I agree that limits are needed (everywhere) on corporate exploitation.
One thing I think we should be careful of, though, is looking at poverty in absolute terms. The fact that most poor Americans have a better income and standard of living than most people of any class in the developing world does not at all make it okay that they are poor. There’s ultimately no justification for a system that allow extreme poverty to exist. Making sure every person in the state has access to education, housing, medicine and food would require a relatively small public investment (relative to, say, waging futile land wars in Asia) along with clever economic measures that don’t necessarily have to really restrict the free market – and it’s a good deal for everyone, because people of any class need not live in fear of losing access to these basics, and you also end up with a more able, empowered and free populace contributing to both economy and culture.
The tendency to put these things in black-and-white terms, casting any system that is more socialist than the US as identical with communism, sometimes obscures the fact that the goals of socialism are both desirable and attainable under a free system.

Thanks for your thoughts. I have Hebrew teaching and translation in mind as options, though I’m not sure these are my favorites. As for writing a book, I don’t believe that’s something I can make a lot of money from in the short term. It’s something I want to do some day, but I believe the profit will be in speaking gigs that come as a result of the book, not from selling the book itself.

But it’s not a choice between a completely free market or a completely planned market. There are many things in the middle, and in fact all states occupy that middle ground – government manipulates the markets even in the most capitalistic societies, and even in the most restrictive markets, there is also some free trade going on.
And the problem of other people deciding what to do with your money and making bad decisions is far from a non-issue in supposedly capitalistic America – see the subprime crisis.
Right now I tend to think that:
a. Israel and America are more corporatistic than capitalistic, regardless of what leaders claim to believe. Their economic systems are tilted towards allowing the very rich to become even richer at the expense of all others.
b. The ideal model is something akin to the mixed models of Germany and Scandinavia, in which you have both a strong welfare state and a strong free market.

I too have done quite a bit of soul searching in regards to economics. I was certainly attracted to the virtue behind the supportive nature of socialism but have more recently become aware of the benefits of libertarianism.

I want to address your point when you wrote:

“Moreover, any system that creates and maintains social classes full of people who are essentially condemned to be losers is not the kind of system I want to be in. And when we look at Israel, we see a place where there are remarkably many people who are extremely rich, but far more people who are incredibly poor”

I can’t speak of Israel, but I can of the United States, a traditionally capitalist nation. One can look at the growing disparity between the poor in the states and the ultra rich with disdain, but that’s not a whole picture. What is easily forgotten is that thanks to our capitalist-like system, the living standards of the poor – while arguably deplorable – are still leagues better than they have been in the past. Those we consider poor in the US are still within the top 10% of the world’s highest earners. There’s a reason why migrants from South/Central America flock to the United States – even though they live out of the dingiest motels spending 80 hours a week raking blueberries in Maine, and migrating south in the winter to pick oranges – it’s leagues better than the lack of opportunity or subsistence farming in their home country.

Despite that – I think it’s safe to say the United States does not play the libertarian-capitalist-free trade game. Neither does Israel. Capitalists in the US love to point to our own nation as a grand case study in support of libertarian economics, but forget that we employ tariffs and subsidies for key industries, especially agriculture while promoting free trade to developing countries. We also have a social safety net that some may argue is not enough, but compared to developing nations is quite generous. We have minimum wage laws. We’ve (historically) empowered unions. Our nation has also spent a lot of public dollars on infrastructure including building a complex national highway system and more recently subsidizing phone and internet connectivity.

It is because of our success that I support a balanced approach – though slightly tweaked to avoid exploitative corporatism. I cannot easily label my stance. Some might call it centrist – but I think “moderates” and even some libertarians have usurped that label in the US. I can’t hang out with US-liberals because I’m too pro-business. I can’t hang out with libertarians because I’m in favor of some (marginal) progressive taxation and public education/infrastructure spending. I’m certainly not accepted in US-Conservative circles because I am of course in favor of more civil liberties.

Ultimately, I’ve decided to forego a label all together due to the polarization and hostile nature of politics these days. I’d rather people not make assumptions about where I stand on issues.

I totally see the logic in what you’re saying, and on the first part (corporatism) I actually agree entirely.

But about the level playing field, I disagree. This isn’t about every individual having the same starting conditions and the same chances. It’s about not creating classes of people who have little to no chance of living a fulfilling life. I agree that the blame lies with big government, but it doesn’t only lie there. Poverty has been around for a very long time, and I believe it is in everyone’s interest to end it.
In addition, I see one of the only core roles of government in protecting its citizens – this includes protecting them from one another, even from abuse and exploitation. Poverty and low wages go hand in hand, and essentially an economy that has poverty exploits a class of people who are desperate enough to take any paying job, even if the pay is less than what they need. This should not be allowed. I know, enforcing a minimum wage drives inflation and makes things more expensive for companies. But I don’t think an economy that is based on exploiting people while giving them the short end of the stick is an economy worthy of existing. If we in the middle-upper classes pay a little more so that the lower classes can live in dignity and experience freedom and independence, then so be it. In the end we stand to gain from it.
And this is what I was getting at with libertarianism/capitalism’s idealized concept of the citizenry. Ideally, the minimum wage is whatever lowest wage a citizen would agree to take. But this assumes that all citizens are able to stand up for their rights and refuse an unfair wage. The reality is that many people, especially those who grow up in poverty, never attain that feeling of empowerment, and there are masses of people who will take an insulting pay if you don’t, putting quite a lot of pressure on the individual to give in and take the insulting pay because it’s “better than nothing”. It’s not better than nothing in the long run, it’s much worse than nothing because it occupies you with something that doesn’t give you what you need, keeping you from finding what you need, but in the short run, you have a strong incentive to take it.
And I could write a whole extra post about how the education system seems connected to this, but I won’t right now. Maybe later. The bottom line is, we don’t yet have the empowered citizenry needed for a free market to produce fair wages.

Free market does not always sway towards corporatism (which is what you described). It does so only if the government is big and powerful enough to be able to use it’s influence for it’s own interests, such as helping big corporations.

For instance: saving failing businesses, subsidizing them, giving them tax-cuts are all very harmful acts and are not related to free market at all. Those businesses are protected from the fear of failure, the key ingredient of free-market.

A small, limited government simply could not subsidies any business (it wouldn’t be within it’s abilities) and it’s tax laying abilities would be limited anyway. Therefor such distortions would be dimmed illegal.

Other then that there’s the whole even playing field.
We all are born different, with different skills. We are unequal and unique, we can never have an equal playing field.

Regarding the second point, the equal playing-firled.
Why shouldn’t a man who worked for his money be able to use that money to give his son a head-start? (which is what you implying, you cannot give everyone a head start, the number of really good schools is limited)

The only thing that should be guaranteed is that we are all playing by the same rules (which means not hindered by the government) not that we are starting from the same place.

You are correct that the current system is somewhat corrupted but it is not because of free-market running loose but because of the opposite: big governments doing what they want. And it does not matter for what purpose the government uses that power the fact that is has that power means it will eventually get used for it’s own advantage.

Doron