Tuesday, April 28, 2009

Israel Was Not Born of Socialism

Joel Bainerman

Socialists didn't redeem the land of Israel.

A very important book to read is The Business of Settlement: Private entrepreneurship in the Jewish settlement of Palestine, 1900-1914 by Yossi Katz, a Professor at Bar-Ilan University. For one thing, it explains why there are so many streets in Tel Aviv named after non-socialists such as Meir Dizengoff, Zalman Levontin, Menachem Sheinkin, Arthur Ruppin and Eliahu Kapla Professor Katz explains that, from 1900 until the beginning of British rule in Palestine after World War I, wealthy Russian Jews set up investment companies to buy land in Palestine. This was after the French Rothschilds started to invest in the 1870s in Zichron Yaacov, Rishon Lezion and Rosh Pina, but by 1900, had given up. We can assume that the reason the French Rothschilds stopped investing and supporting unsuccessful economic enterprises in Palestine is that by the first years of the 20th century they had secured the Suez Canal. A friendly force and future supply lines in Palestine right next door was not so critical anymore.

The names of the investment companies that bought the land were Geulah, Jewish Colonization Association, Palestinian Land Development Company (PLDC), Nahalat Sadeh, Netaim Association, HaElef Association and Dorshei Zion Settlement Association.

During this crucial period of 1900-1917 in early Zionist history arose the "Estate Companies" through which land was bought and crops planted, so that when the investors came to Palestine they would be moving to a profitable enterprise. These Estate Companies was where most of Israel's moshavim shitufiim came from. Seventeen of these Estate Companies were registered in the US and Canada, 45 in Russia and 56 in Eastern Europe. Once a viable economy was built on these lands, the new immigrants would make Aliyah. Still other types of land settling operations were strictly for profit, such as those created by the Geulat HaAretz organization.

The entire urban landscape of modern-day Israel - the entire coastal plain, Haifa and the Krayot - were created after these land purchases, which allowed land to be parceled out and sold to entrepreneurs who built apartment blocks, commercial and industrial areas. Today, the names of areas built with private capital include Rosh Pina, Migdal, Karkur, Metulla, Gan Yane, Poriya and Raanana.

The process is called "urbanization" and had these investment companies not been as committed to building up Eretz Yisrael as they were, it is doubtful if the national economy would have ever developed to the level at which it is able to support millions of residents. Already by the early 1960s, only about 5% of Israelis lived on kibbutzim and moshavim. Without its urban centers, Israel would not be the country it is today.

The Zionist historical record needs to be corrected: the economic foundation of the State of Israel is not based on socialism.

What Professor Katz has done is dive into a hitherto unknown area of Zionist history—as there is almost nothing written in the established Zionist historical record on this period. The history lessons we teach our children state that the Jewish economy in Palestine had its origins in socialism, the quasi-public enterprises of the Histradrut (labor unions) and the kibbutzim. The private sector's achievements are not part of the story.

What this research reveals is that Israel's economy and its private sector has its roots in capitalist Russia, not in socialism. The fact is that the brand of Eastern European socialism that arrived in Palestine in the late 19th century was never the ideology of more than a small part of the population, and had absolutely no impact or influence on the future of the region's economy. It was only a few decades later, when the British arrived, and with the birth of the Jewish Agency, the Histradrut, the Anglo-Palestine Bank (all of which were registered in the UK, not Palestine) that socialism became the dominant force in Palestine, at least politically. Economically, the private sector persevered and eventually would come to dominate Israel's national economy.

Professor Katz has done a great service to correct the historical record on the issue of Israel's true economic origins and roots. Socialists didn't redeem the land of Israel; capitalists and private entrepreneurship did.

Comments: I'm interested in your thoughts

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