ISRAELI DILEMMAS: ECONOMIC RELATIONS BETWEEN JEWS AND ARABS
Ben-Porath, Yoram
The idea of a Jewish homeland lends itself to more than one interpretation. We start with the premise that a Jewish homeland should serve Jewish national goals and, in doing so, conduct itself...
...Sussman, Zvi, "The Determinants of Wages for Unskilled Labor in the Advanced Sector of the Dual Economy of Mandatory Palestine," in Economic Development and Cultural Change 22 (October 1973): 95-113...
...Normalization" of the Jewish occupational structure was to be achieved by inverting the existing pyramid: broadening the base of primary occupations and narrowing the apex of tertiary occupations...
...All these combined to form the skeleton of the Jewish state in the making...
...The power of the state was also used for the acquisition of land through confiscation...
...As a healing goal, it would rid the Jewish people of their "parasitic" economic role...
...Jerusalem: Ihud [Union] Association, 1947...
...While some chose to ignore the Arab problem, the potential conflict haunted Zionism's political leadership and was the subject of ideological debate throughout the century...
...For example, the capi tal intensity of the construction industry i n Israel has lagged behind other sectors since 1967...
...But it cannot translate into the kind of social structure that will resemble anything that an enlightened Jew could regard as satisfactory...
...This has been underlined since 1981 with the attempt to create the Civil Administration in the territories, which is to replace what was to have been transitory military rule...
...5) We're usually quick in giving editorial decisions...
...The dominant forces in Zionism shared the ideals of the return to the land, the achievement of a healthy occupational structure, and the building of a just society that would rely on its own labor...
...No wonder that within the Zionist camp there were people (such as the members of Hashomer Hatzair and Brit Shalom) who were willing to depart from the separatist model...
...This aspiration in fact distinguished the Jewish settlement in This article is part of a series, all written by Israeli contributors and dealing with Israeli society and politics, made possible by a grant from Mr...
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...In all the partition plans the Jewish state would include a significant Arab minority...
...and several hundred thousand Palestinians left the country and became refugees...
...This division of labor is not a transitional stage on the way to an ethnically undifferentiated society...
...Further, product per worker was twice as high and per capita product was 3.4 times larger in the Jewish than in the Arab sector...
...Quoted in The Case for a Binational State, Hashomer Hatzair Workers' Party of Palestine, 1946.] On the long road that led from a vague notion of a Jewish homeland to a sovereign Jewish state in part of Palestine, several options were considered...
...Meron Benvenisti provides extensive research and analysis on this and related topics...
...These restrictions were liberalized in 1959, but institutional separation remained in place...
...In the state of Israel, the workers from the territories are primarily manual workers, and 80 percent of them work in construction, agriculture, and industry, compared to three-fifths 464 of the Israeli Arabs who work in the Jewish economy...
...the educational system...
...Until 1967 the West Bank was the backwater of the Jordanian kingdom...
...Beilinson, M., "Problems of a Jewish Arab Rapprochement," in Sereni and Ashery, eds., Jews and Arabs in Palestine (see below...
...There were instances of joint action on economic matters, but on the whole the Arab and the Jewish communities existed under a dual institutional system...
...It was brought about by three factors: high Jewish immigration, which doubled the Jewish population within three years (immigration continued at a slower pace afterward...
...Arab labor does not have the union protection that Jewish labor enjoys...
...These ideals, largely forged by the Second and the Third Aliyah in the first quarter of this century, became the cornerstone of labor Zionism but were shared well beyond its ranks throughout the Zionist movement...
...Arthur Ruppin, who was part of both the establishment and Brit Shalom, also advocated moderation in JewishArab economic relationships...
...Free trade and free movement of labor can be mutually beneficial...
...Similarly, pride in how the Arabs benefited did not prevent the Jewish Agency from advocating a financial system that would avoid spillovers...
...Moreover, since it would include only Arabs who already held jobs, it could not offer a real solution to the basic issue...
...2) Please don't write to ask whether we're interested in such and such an article—it makes for useless correspondence...
...In this century, Jews and Arabs in Palestine have lived together under different political arrangements...
...This was the position of the left and advocated to some degree by Ben-Gurion...
...Imbedded in the Zionist dream were social and utopian ideals...
...It depressed wages below subsistence levels for Jewish labor, and it reduced employment opportunities for Jewish immigrants...
...The rate of emigration was 4.4 per 1,000 in 1969-70 and 16.5 per 1,000 in 1974-75 through 1978-80...
...This solution rested on the argument that the rights of the Arab minority would be protected by pressure on the Jewish state from the surrounding Arab countries...
...And Arab agriculture did sell much of its produce to the Jewish sector (vegetables were cultivated for the Jewish market...
...The authorities did pay attention to agriculture, where efforts were made to improve efficiency and introduce technological change, while designing a division of labor that would reduce competition with Israeli agriculture...
...The military government was instrumental in continuing this institutional separation...
...The notion that state lands are a reservoir for the needs of the local population is no longer operative...
...Given the great gap in living standards and levels of education and health, it was in the Jewish interest to separate the provision of public services and diminish the spillover of resources, through taxation, from the Jewish sector into the Arab sector...
...Thus Arabs occupied positions at the lower end of the occupational scale and were most vulnerable to fluctuations in employment —which was most glaring in the economic slowdown of 1965-67...
...pragmatic approximation is possible...
...on the other, there is determined (sometimes violent) action to enforce labor segregation along ethnic lines...
...Our aim is to make the Jewish people master of its own destiny...
...See Sereni and Ashefi...
...On the basis of the specific prestate Jewish organs, and with persistent residential segregation, the public sector has given different treatment to the two communities...
...The institutional structure and the public sector of the occupied territories is kept separate from that of Israel, and it reflects the military status of the territories...
...In a socially and economically integrated society the Arabs in Israel would have been marked for special treatment, being disadvantaged, lagging in public services, and so on...
...Limitations on the entry of Arab labor and agricultural produce were enforced only for a short time and, in fact, goods and services are traded freely between the sectors...
...Yet this process did not end in full integration and equality...
...Thus political domination has sometimes been used to strip Arabs in the occupied territories of collective or individual property rights...
...Unhappily, in a situation without peace, the standard of full integration and equality has proved hard to attain...
...see Miron, 1982...
...Is a formal annexation of the territories a solution...
...1) The Jewish state now was responsible for governing over an Arab minority...
...While the context is political, real economic interests are at stake...
...The preferred economic relationship that would be consistent with the concept of a Jewish homeland would combine trade and cooperation with political and institutional symmetry...
...Both Jewish goals and values, always subjects of controversy, have changed over time...
...Even if it were feasible, a binational state with an Arab minority of 35 percent (assuming it does not increase) cannot retain its Jewish character in the dual sense in which we defined it...
...Yet the contradiction between the desire to have a Jewish state and the reluctance to dominate Arabs could not be repressed...
...In sum, during the Mandatory period the Jews in Palestine, without having the power of a state but engaged in the process of statebuilding, developed a quasi-national economy...
...Benvenisti, Meron, The West Bank and Gaza: Data Base Project Interim Report, no...
...A proposal for a binational state, in which the two communities would enjoy quasi-federal rights, was advocated by Brit Shalom and Hashomer Hatzair...
...Whatever the dilemmas confronting Jews and Arabs, they inevitably are reflected in the economic sphere...
...q To Our Contributors: A few suggestions: (1) Be sure to keep a copy of your ms—the mails aren't always reliable...
...Arabs do not serve in the army...
...True, against this background the Jewish state in its ideal form is also unattainable...
...the partition of the country excluded roughly half a million Arabs from the new state...
...Greenberg, S. B., Race and State in Capitalist Development (Johannesburg: Ravan Press, with New Haven: Yale University Press, 1980...
...As late as 1937, in his testimony before the Royal Commission, David Ben-Gurion stated: We did not say to make Palestine a Jewish state...
...Given the great differences in income, the extension of equal, let alone equalizing, public treatment will be enormously costly...
...Against this background the ideal of a large democratic homogenized country in which Jews and Arabs will shed their separate national identities and aspirations is ludicrous and not sincerely desired by either side...
...Two of the most important aspects of direct economic relations concerned labor and land...
...3) The armistice line (the "Green Line") became an effective border, sealing off relationships between Israelis (both Jews and Arabs) and the rest of the Palestinians in the West Bank, the Gaza Strip, and other parts of the Arab world...
...In reality, however, the Arab economic sector has not been an object of concern...
...Tel Aviv, 1946...
...And please remember that we can't return articles unless they're accompanied by a stamped, self-addressed envelope...
...It also rested on relative numbers: Jews constituted less than one-tenth of Palestine's population after the First World War and approximately one-third at the end of the Mandatory period...
...Only an Arab political entity will have a real interest in the economic welfare of the Palestinian population...
...Hazan, Yakov, "Jewish Unions and Arab Labor...
...While in the years 1936-39 the economy was affected by the Arab rebellion and ties were reduced, the Second World War greatly increased British needs, which affected both Arab and Jewish employment, income, and industrial development...
...But as occupation persists and official Israeli policy opposes any form of repartition, this institutional separation has to be seen in a new light...
...6) Please bear with us—we have accumulated quite a backlog of material, and you may have to wait for a few issues before you see your article in print...
...The concern with the occupational structure of the Jewish people in its original version has become anachronistic...
...The Arabs' entry into the Jewish labor market was caused mainly by the Jewish sector's growing demand for manual labor, which increased with the upward mobility of the Jewish immigrants...
...A partial residential segregation of the two populations also supported the functioning of separate markets...
...The Histadrut opened its doors to Arab workers and government offices acted more responsibly toward the Arab population...
...Economic relations thus commence within a dual institutional framework based on asymmetrical political power...
...Zionism envisioned the growth of the Jewish community in Palestine through immigration, that is, Aliyah ("going up") from other lands...
...But we can ask: if complete economic separation of the sort that prevailed before 1967 were feasible, should we want it...
...Nevertheless, the two sectors were not completely separate...
...While none of these conform to any of the models listed above, they illuminate the separate issues...
...Jacob Metzer (1982) believes that the direct flow between the sectors was not very important from the point of view of the Arabs...
...Arab competition in the labor market conflicted with the national goal of increasing the Jewish population through immigration...
...III: Greater Israel — Free Trade, Institutional Segregation, and Political Domination THE 1967 WAR was another major watershed...
...This was largely the Arab refugees' land, but in many cases the owners or their families were living in Israel...
...Jews who settle in the West Bank live partly under Israeli law, are heavily subsidized on an individual basis, and enjoy a system of services fully integrated with those in the state of Israel proper—and completely separate from those supplied to the territories' Arab population...
...Porath, Yehoshua, The Palestinian Arab National Movement, 1929-1939: From Riots to Rebellion (London: Frank Cass & Co., Ltd., 1977...
...In 1980, a quarter of all workers in Greater Israel were Arab...
...Halevi, Nadav, The Economic Development of the Jewish Sector in Palestine, 1917-1947 (Jerusalem: Falk Institute, Discussion Paper no...
...3) Type your ms double-spaced with wide margins...
...While there were some instances of coordinated union activity, and the Histadrut was instrumental in setting up a separate Arab union, this was indeed a far cry from a joint labor front...
...the economic loss to the Arabs of the territories, however, would be appreciable...
...This distinction has been of paramount importance in how the Zionist movement viewed itself, and it has governed the debate between Zionists and their opponents...
...Their argument for a binational political solution rested partly on the advantages of economic integration...
...Ben-Gurion, who advocated "100 percent Jewish labor," also boasted of the prosperity afforded Arab labor in Petah-Tikvah, the target of much of the struggle for Jewish labor...
...Metzer, Jacob, Technology, Labor, and Growth in a Dual Economy's Traditional Sector: Mandatory Palestine, 1921-1936 (Jerusalem: Falk Institute, Discussion Paper no...
...Most of the development effort in Jordan was focused on the East Bank...
...Harry Kahn, to whom we wish to express our gratidude...
...These efforts only bolstered the tendency toward economic self-sufficiency on the Jewish side (and led directly to the establishment of the port of Tel Aviv to free the Jews from dependence on the neighboring, old port of Jaffa...
...The extent of public and institutional integration • the degree to which the two peoples live as equals in a single institutional framework, or Symmetry or balance in political power • the extent to which the two peoples assert themselves in social and economic matters...
...Greater Israel, since 1967, is approximately 35 percent Arab, with a much higher natural increase in the Arab population (about 30 per 1,000) than among the Jews...
...Separation was also desired on basic institutional levels...
...A highly developed dual institutional structure emerged during the Mandatory period: the Jewish Agency as a quasi-government...
...in Greater 465 Israel free trade but distinct and asymmetric institutional structures, with Jewish supremacy...
...Parity" in running the 459 central government and cantonization were among the ideas offered as to how Jews and Arabs might share power...
...It is a consequence of economic and political realities...
...See Sereni and Ashefi...
...Most of the land was purchased from wealthy landowners, and less than one-tenth was bought from small farmers...
...Miron, R., The Economic Development of Judea, Samaria, and the Gaza District, 1970-1980: Economic Growth and Structural Change (Jerusalem: Bank of Israel, 1982), Hebrew...
...This, in turn, brought about a greater measure of domestic peace and partial renewal of economic relations...
...They also spent much of their time in Jewish surroundings...
...However, there do remain striking differences in the occupational structure of Jews and Arabs...
...To establish a viable Jewish community necessitated acquisition and control of land...
...Purchasing land and protecting property rights became important parts of the struggle over Palestine...
...Thus a large proportion of Arabs (particularly the younger generation) established an employee-employer relationship with Jews, often worked among Jewish workers, and depended directly for their livelihood on the Jewish sector...
...Asymmetry indeed is even more glaring in the case of property rights...
...The real estate added to the hinterland of Israel's congested coastal plain is an attraction both for the government and for individuals...
...Unilateral benevolence is not a good enough guarantee against the misuse of power in such a context...
...Greenberg, Hayim, "Is Zionism Imperialistic...
...The Jewish demand for land raised land values, and the consequent transfer of liquid capital contributed to economic change in the Arab sector...
...4) The composition of the Jewish population changed with the large immigration of Jews from Arab countries, many arriving with low levels of skills and schooling...
...The leadership of the Yishuv (the Jewish community) also sought to secure government employment for Jewish workers at higher wages than those paid Arab workers...
...As we're not an academic journal, we prefer that they, wherever possible, be dropped altogether or worked into the text...
...By itself this is a significant advantage for Arab youth...
...In agriculture and in construction, the Arabs make up more than half of the work force...
...IV: The Fourth Alternative — Is a Jewish Binational State Feasible...
...Without this supply of Arab labor, many of these jobs probably would have been eliminated through capital-intensive methods of production...
...Initially, almost half of the Arabs worked in agriculture and very few in the service sector, while Jews were more heavily concentrated in services and industry...
...Their incomes accounted for a fifth of their GNP Together with remittances from emigrants, this was also the driving force behind the growth of the territories' domestic economies...
...In the state of Israel proper, Israeli Arabs, supplemented by those from the territories, add up to 15 percent of the total work force— a third of all workers in agriculture and more than half in construction...
...The desire to build a separate Jewish economy was coupled with pride in the benefits of economic ties...
...The occupational and industrial structure of Arab employment was very distinct...
...Moreover, a literal "return to the land" was essential if a durable hold on the country was to be established...
...And very much to the point, the principle was accepted by the Jewish Agency...
...Completely integrated economic and social communities with equal access to and control over the public sector...
...the West Bank was an area of outmigration...
...This took a dramatic turn during the boycott and the Arab rebellion of 1936, when terror was applied to support this policy...
...Check all your figures, dates, names, etc.— they're the author's responsibility...
...The presence in Jewish settlements of Arab migrant workers did occasionally give rise to some unpleasant social conflicts...
...Shapira, Anita, Futile Struggle: The Jewish Labor Controversy, 1929-1939 (Tel Aviv: Hakibbutz Hameuchad Publishing House, 1977...
...Throughout the 1950s, the labor exchanges in the Jewish sector were run by the Histadrut, which actively tried to protect the interests of Jewish labor...
...By 1950 there were only 170,000 Arabs in the state of Israel, 11 percent of the total population, and this still was about the proportion in 1967...
...Most of the Yishuv was urban and thoroughly European in orientation...
...Lipset, Seymour Martin, "The Israeli Dilemma," in M. Curtis and M. Chertoff, eds., Israel: Social Structure and Change (New Brunswick: Transaction Books, 1973), p. 359...
...The economic effect of these land transfers fanned dispute between Jews and Arabs in the political arena (particularly as it concerned the displacement and compensation of tenants), but this was secondary to the inevitable clash over territory...
...EDS, Palestine from the European colonies in what is now called the Third World...
...The Israeli currency became legal tender in the territories...
...And while 463 the difference between the Jews from Asia and Africa (the Orientals) and other Israeli Jews has diminished over the years, the gap between Arabs and Jews from Asia and Africa (the two groups were originally closer in terms of their occupational structure) has widened...
...Hashomer Hatzair Workers' Party of Palestine, "The Case for a Binational Palestine," Memorandum, published by the party's Executive Committee...
...Ideally, such a political entity would cooperate with Israel both on issues of development and in the regulation of trade...
...It is important to note that Arab nationalism was vehemently opposed to economic relations with Jews...
...There is no reason to place Jews in jobs now filled by Arabs...
...and national ownership of much of the Jewish-owned land (where the employment of Arabs was prohibited...
...We saw in the three periods three "ideal types" of economic relations between Jews and Arabs, though not fully attained: in the British Mandate period an ideal of separation...
...the Histadrut (Jewish labor-union federation) with its medical insurance and mutual-aid associations...
...Most of the Arab population was rural...
...Contradictions abound...
...The total of Arab workers (in both the Jewish and the Arab sectors) constituted approximately 8 percent of all workers in the Israeli economy...
...Ben-Porath, Yoram, The Arab Labor Force in Israel (Jerusalem: Maurice Falk Institute for Economic Research in Israel, 1966...
...The Israeli economy could adjust to such separation...
...THE EDITORS 467...
...It is not our aim to dominate anybody else...
...All the territory of the British Mandate (and more) came under Israeli rule and so did a population of approximately 1 million Arabs in the West Bank and the Gaza Strip...
...Except for East Jerusalem, which was annexed, the rest of the West Bank and Gaza were occupied territories, raising again the question of economic ties...
...see Source Notes...
...The level of services was relatively high...
...The desire to establish a Jewish homeland in Palestine—a country then sparsely populated by Arabs who started to perceive their own national identity at about the same time (roughly, the turn of the century)—was bound to generate serious dilemmas...
...And still more important is the Israeli settlement effort...
...This free trade has been a great blessing to the territories, and more so for their economies than for the Israeli economy...
...Magnes, J. L., et al., Palestine: Divided or United...
...The old urban Arab centers on the coast were mostly evacuated and the inland centers (with the exception of Nazareth) remained outside the Israeli realm...
...Jewish agriculture, technologically superior and highly capitalintensive, bore no similarity to traditional Arab agriculture...
...Market integration with the Arab population would undermine this goal 460 since Arab labor tended to concentrate in primary occupations...
...Those who see Judaism mostly as rooted in humanistic beliefs inevitably are torn when tension flares up between these values and the achievement of Jewish goals...
...82.01, 1982...
...With the Arab side less organized, the Mandatory government acted as a counterweight, serving the interests of the Arab community...
...This arrangement is part of the protection that international law provides for the preservation of the institutions of the permanent government when occupation is considered to be a transitory stage...
...More Arabs now worked in public-service jobs, presumably reflecting increased employment of Arabs in educational and health facilities serving the Arab population...
...the Haganah as a quasi-army...
...It is not easy to visualize complete isolation under conditions of peace...
...These restrictions were enforced throughout the 1950s to regulate the entry of Arab labor and to protect the employment opportunities of Jewish immigrants...
...Israeli authorities control all state lands and use them mostly for Jewish settlement...
...The relative numbers of Jews and Arabs were such that this market integration could not seriously distort the Jewish occupational structure...
...This argument was also used to support Jewish immigration and to oppose the view that the country had a limited economic capacity...
...The official Zionist position, which advocated statehood since 1942, leaned toward partition: separate Jewish and Arab states after the end of the Second World War...
...In the early years, the state maintained market segregation between the sectors...
...The big push toward wage labor in the Arab sector of Palestine, however, had been set off earlier, during the Second World War, sparked by the British war effort...
...Only 35 percent of the Jewish population works in these three industries...
...Full migration was rare and most workers were commuters...
...This contradiction was particularly agonizing for the socialist labor leaders...
...Of course, the Mandatory government and the municipalities of the mixed towns forced some organizational cooperation...
...This has far-reaching implications, affecting the distribution of income, the future course of manpower development, and the composition of the Palestinian population compared to the Palestinian diaspora...
...These were further compounded by the economic and social differences in the conditions of Jews and Arabs...
...There was (and still is) an excessive proportion of workers in the service sector, but the occupational structure of Jews was indeed more "normal" than in the Diaspora...
...The struggle for Jewish labor was—and remains— one of the most agonizing symptoms of the Jewish dilemma in Palestine and Israel...
...Some argued that in the long run the gaps that existed in the standards of living were untenable, and that it was the duty of the Jewish sector to be actively involved in the development of the Arab sector...
...But the shift to wage labor in the Jewish sector as a permanent mode of livelihood was a new phenomenon...
...The Arab population in the coastal towns and their very small industrial sector both grew rapidly...
...With the abolition of the military regime the road was paved to the absorption of the Arabs into the general institutional system...
...While the Arabs' rate of natural increase was higher by 10 per 1,000 462 than that of the Jews in 1951-52 and by 26 per 1,000 in 1960-62, Jewish immigration was large enough to overcome this imbalance...
...If there's a delay, it's because a few editors are reading your article...
...Several proposals along this line were adopted by the Histadrut...
...It is hard to quantify the relative economic contributions under the rule of the Mandatory government...
...But, of course, political independence could lead to severance of economic ties and isolation...
...It often actively sought to prevent or impede the process of market integration, which feeds on economic realities...
...Since 1967, with the West Bank a formally occupied territory, there has been little concern for the economic growth of the domestic economy as an independent unit, and outmigration has continued...
...The continued strife and bloodshed, the persistent rejection of Jewish statehood by the Palestinians and their own reduction from a majority to a minority fearful of dispossession, all these create close to irreversible facts, attitudes, fears...
...Advocates of the Jewish cause, starting with Theodor Herzl, pointed to the economic and social benefits that would accrue through Zionist efforts for the Arab population in Palestine...
...4) Notes and footnotes should also be typed double-spaced, on a separate sheet...
...We start with the premise that a Jewish homeland should serve Jewish national goals and, in doing so, conduct itself according to Jewish norms and values...
...Because of sluggish immigration of Jews to Israel and a significant emigration of Jews, the proportion of Arabs in the state of Israel proper, within the Green Line, has increased, but the proportion of Arabs in Greater Israel has remained stable, because Arabs emigrated from the occupied territories, balancing the rate of natural increase...
...Small as these numbers are, relatively, they do cloud the image Zionism had of itself—surely not that of a class structure along ethnic lines...
...One should not take the economic relations between Jews and Arabs out of their context...
...2) The Jews, who had been a minority in Palestine (approximately 630,000 as against 1.27 million Arabs at the end of 1947) now were the majority in part of the land...
...For some time there was segregation of the trade in agricultural produce, but the longer and more serious struggle evolved over the free movement of labor...
...Only a political formula of partition, in which Arabs under an Arab flag have a political entity that Source Notes The following is a partial list of relevant material used in the preparation of this article...
...Thus the attitude toward Arab employment, which distinguishes the colonists of the first Aliyah (1882-1904) from those of subsequent waves of immigration, dramatized the tension between goals and values...
...Many elements in the organized Jewish sector helped create barriers to labor integration: the separate organization of Jewish labor in the Histadrut...
...Three aspects of the economic relationship between Jews and Arabs are relevant here: The extent of market integration • options ranging from total economic separation, through controlled trade, to completely free trade in goods and services, including the free movement of labor...
...I: Separation — Policy and Practice THE DOMINANT ZIONIST POLICY under the Brit ish Mandate and in the early years of the state was largely one of separation...
...Asymmetry is also present in the trade relationships...
...The British government defended such a spillover of resources on grounds of equity and progress in an integrated society...
...Thus the Zionist movement saw itself as effecting a social revolution, and the Jewish homeland it strove to create indeed had a social content...
...And this coincided with the rapid rise of the population, the waning acreage of agricultural land in the possession of the Arab population, constraints on the size of the agricultural sector, and the decreasing employment opportunities in Arab farming...
...Particularly relevant for the Arabs was the sharp decline in the number of workers in agriculture and their shift into construction...
...The disturbing aspects are the social relations that surround economic transactions...
...Several Arab-Israeli wars and continuing conflict have put the Israeli Arabs into a difficult position...
...The economic and social regime that is being developed in the occupied territories does not conform to the original and fundamental concept of a Jewish state...
...II: Sovereignty — the Test of Full Equality 1948-67 THE ESTABLISHMENT Of the state of Israel in 1948 changed the basic scene...
...Roughly one-third of the workers in the occupied territories have entered the Israeli labor market...
...but a good, 466 protects their interests, will allow the emergence of economic and social relations that are consistent with the idea of a Jewish state...
...But this was not the view of Jews (who were then a minority...
...Jewish Agency, The Jewish Case Before the AngloAmerican Committee of Inquiry on Palestine (Westport, Conn.: Hyperion Press, 1947...
...Until the mid-1940s, the entire Zionist camp regarded all of Palestine (with or without Transjordan) as its frame of reference...
...THE SEARCH FOR ALTERNATIVES, however influ enced by past history, must be guided by one's values...
...This separatist institutional structure was vital to the development of the Jewish economy and society...
...Over the years, even before the formal lifting of restrictions and especially since the early 1960s, about half of Israel's Arabs have been employed in the Jewish sector, and this has brought about major changes in Arab economic life...
...raising the wages of Arab workers was not only desirable as a social goal, it would also render them less competitive with Jewish labor...
...2, October 1982...
...Free trade but distinct institutional structures and public sectors, with Jewish supremacy...
...in agriculture they were about a quarter of the total work force—while in the Jewish agricultural sector they were approximately 12 percent of all workers...
...The growth rate of product in the Arab sector was quite impressive, though it was lower than in the Jewish sector...
...cooperative and collective organizations (particularly in agriculture...
...The major options here have been and are: • Completely segregated Jewish and Arab economies...
...This may be reflected in such pheriomena as work obtained through labor contractors, inferior social benefits, longer hours, and vulnerability to discharge on arbitrary or economic grounds...
...Zionism's social objectives were concerned with Jewish society...
...Such a sovereign entity could protect the private and collective property rights of the population, devise a trade policy, and tilt economic development in a direction that will serve this population and make it less dependent on the Israeli economy...
...Trade and economic cooperation between the two communities, with each having its own, separate political structure...
...True, formal annexation would make discrimination more difficult and provide more protection for individuals...
...Look at our last few issues to see if your idea fits in...
...He and the leftists in the labor camp objected to "100 percent Jewish labor...
...To do that it must be predominantly Jewish, a necessary but not at all a sufficient condition...
...Only the existence of a countervailing power could reverse the patterns that we observe now...
...A dual economy emerged...
...As S. M. Lipset wrote (see Source Notes), "Having people who cannot vote to do all your dirty work is the easiest solution of the problem of inequality for any politician, whether left, right, or center...
...What happened in terms of institutional integration...
...Obviously, in such a situation legitimate security considerations interfere with smooth integration...
...Class and ethnicity converge: employer-employee, buyer-and-seller relations are associated with political domination...
...79.14, 1979...
...Given such costs, and given what we have learned from the experience of the small Arab minority in Israel, the achievement of real integration and equality is extremely unlikely...
...Arab employment was quite substantial in Jewish agriculture and construc461 tion...
...and these considerations can also be abused...
...One the one hand, there is the commendable ideal of building a self-sufficient, nonexploitative society in contrast to the colonial model...
...Israel chose free trade with few limitations...
...The Arab sector was governed (until 1966) by military administration, which meant restrictions on the Arabs' freedom of movement...
...And gradually, Arab wage levels moved up toward Jewish wages for comparable skills, contributing to a rapid increase in Arab incomes and standards of living...
...For an economist who sees the mutual benefit of trade, who observes the degree to which the economies have become interwoven, this is not the best solution, nor is it clearly feasible...
...As far back as 1929, Moses Beilinson wrote: "On such a soil there can grow no honest partnership or honest understanding" (see Source Notes...
...Fiscal Incidence and Resource Transfer Between Jews and Arabs in Mandatory Palestine," in Research in Economic History 7 (1982): 87-132...
...in "smaller" Israel an ideal of equality...
...One solution lay in unionizing Arab labor...
...Sereni, Enzo, and Ashery, R. E., eds., Jews and Arabs in Palestine (New York: Hechalutz Press, 1936...
...Over the years, the occupational structure of Jews and non-Jews underwent important changes...
...The logic of separation rested on the conflict between the social aims of Zionism and the reality of a wide gulf between Jews and Arabs in skills and standards of living...
...It is in fact manual labor that is most in demand in Israel, and the skilled and better educated work force has to make do with relatively lower earnings or migrate...
...We do not say it now...
...Moreover, because a large part of the Arab-owned land is neither settled nor cultivated, the authorities have been able to facilitate appropriation of such property from individual owners...
...State organs did not include the Arab population under their normal jurisdiction...
...For them, Arab labor was directly competitive...
...Jewish economic institutions, such as banks, cooperative movements, the Jewish National Fund (the national landownership authority), and municipalities...
...Roughly fourfifths of all outside trade of the territories is with Israel, with per capita GNP rising at 12 percent in 1969-70 and 1974-75 and at 5 percent annually over the span of the decade 1970-80...
...The political and institutional balance is necessary if Jews and Arabs are to reap the benefits of close and cooperative economic ties and to avoid, or at least mitigate, the social and moral implications of a dual system...
...The opportunity to use labor that is not properly unionized, and that can be controlled easily (up to discharge) because of its unprotected, inferior status, is a very important temptation...
...It certainly will not mirror the dreams and predictions of the prestate Zionist leaders...
...He advocated raising the Arabs' standards of living, education, and health, and an agrarian reform that would redistribute land among Arabs and motivate them to shift to intensive agriculture, thus also making more land available to Jews...
...But turn the coin: certain state subsidies and transfers (child allowances, housing, university fees, and more) are associated with army service and are differentially granted to Jews and Arabs...
Vol. 31 • September 1984 • No. 4
