Voices critical of Israel’s role in the Middle East sometimes argue that its occupation of the West Bank, much of the Golan Heights and the Gaza Strip is imperialist in nature. Such criticism draws a parallel with 19th and 20th century European imperialism, casting the Palestinians as the indigenous inhabitants of the region and the Israelis as a hostile ‘foreign’ power. Another implication of this characterization, however, is that the occupation is economically motivated, or is best understood in economic terms. Today, to complement our discussion of ‘Economics, Politics and War’ last week, we examine some aspects of the political economy of the Palestinian-Israeli conflict. Specifically (and with the help of Miriam Qamar’s recent essay “Thoughts on the Dialectics of Revolution and Palestinian Nationalism”), we do so through a Marxist lens.
The essence of Marxism is that patterns of economic activity are the key to understanding politics and historical change. In Marxist analysis, therefore, it is the historical development of the “productive forces” of society (i.e., tools, machinery, land, human labor power, etc) and their organization into social “relations of production” (such as property laws and the division of labor) that ultimately explains particular political arrangements. Together, Marx described specific combinations of productive forces and relations of production as modes of production – such as feudalism, capitalism or socialism. Arising out of the dominant mode of production in a society, also know as its economic “base,” are its political institutions, laws, customs and culture – or what Marx called its ‘superstructure.’ The point here is that the ‘superstructure’ is determined by the nature of the ‘base.’ In other words, things like politics, culture, and religion are effects: mere outward signs of underlying economic realities, or even tools of underlying class interests. Perhaps the best illustration of this idea is Marx’s famous observation, in the context of 19th century European capitalism, that “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.”
With this perspective in mind, let’s have a look at the economic logic of Israel’s occupation.
Though disagreement exists about its nature and extent, a recurring feature of the history of the Palestinian-Israeli conflict is the expropriation of land from Arabs, whether from Arab Israelis or Palestinian refugees. Indeed, organized campaigns promoting exclusive Jewish ownership of land in Palestine reach back as far the First Zionist Congress in 1897 (with the establishment of the Jewish National Fund and the Jewish Colonial Trust). The continuation of these exclusionary land ownership policies by the Israeli state after 1948 had dramatic consequences for Arabs. To paint a stark picture: in 1931, more than 60% of the total Arab population in Palestine was employed in the agricultural sector and more than 80% was rural. Forty years later, that number had fallen to 44 % and Palestinian Arabs made up more than 50% of Israel’s total unskilled or semi-skilled labor force. As Marx might have put it, the Jewish influx into Palestine in the first half of the 20th century, together with Israeli policy in the early decades of its existence, “unnaturally” transformed the class structure of Palestinian society. It imposed capitalist relations of production upon a (pre-capitalist) peasant society, resulting in the “proletarianization” of Palestinian Arabs. This forced decline of agriculture created a mass of unemployed Arabs at the bottom of the employment scale that was cheaply available to the Israeli economy.
Interestingly, the history of exclusionary practices towards Arabs has widened class tensions across all of Israeli society — not just along ethnic or religious lines. Take the Histadrut, for example, Israel’s organization of trade unions established in 1920. Until the late 1960s, Palestinian Israelis were not allowed to join, and Palestinians from the territories are still not allowed to join today. In addition to dividing the Israeli workforce along ethnic lines, this policy marginalizes labor and provides important leverage to the Israeli government (and thereby, a Marxist might argue, to the capitalist classes). In 2004, for example, when union protests demanded better working conditions and opposed the privatization of seaports, then-Finance Minister Netanyahu was able to break the strike by threatening to open a seaport in Gaza employing much cheaper labor from the territories instead. A history of exclusionary policies, in other words, means that cheap Palestinian labor now exerts a downward pressure on wages and labor standards for the Israeli working-class in general – for Jewish and Arab Israelis alike. The failure of the 2004 strike was a powerful illustration of this.
The question a Marxist might ask about Israel today is how economically beneficial the occupation still is for the classes whose interests the state manages. In the 1950s and 60s, the cost of occupying the territories was relatively low. Israel could levy taxes on Palestinians without investing in infrastructure or welfare. Only a small number of Israeli soldiers was needed to guarantee security. However, the increased resistance associated with the First Intifada in 1987 changed the economic logic of occupation radically. Israel had to step up security spending. Including subsidies for the various settlements, it now spends around nine percent of its annual budget on the occupation alone — a figure which invites the question: how can the government justify the occupation to its citizens?
And this is where a Marxist perspective can be quite convincing. The simple answer, it seems, is that the state serves the interests of some classes and not others. In recent decades, ‘globalization’ in Israel has made the poor poorer and the rich richer. Israel today is one of the most unequal economies in the developed world, with an estimated 60 percent of all corporate equity belonging to roughly 18 families. In the 80s and 90s (as Miriam Qamar argues) the influx of immigrants further undermined Israeli labor, while the influx of foreign investment drove the centralization of capital and transformed the economy into a “high-tech military and security complex.” This means that although the occupation places a heavy burden on Israel’s economy and working class, many businesses have vital interests in continuing it. A perfect example of this is Magal: an Israeli company that specializes in security products and builds devices that detect perimeter intrusions at the wall of separation. Indeed, the economic clout of businesses such as these vis-a-vis labor means that the state can focus on serving their interests and ignoring others, which means keeping up the occupation.
But there are signs that the tables might be turning on Israeli policy-makers. Class consciousness is growing in Israel — perhaps even across ethnic and religious lines. Last September, Israelis vented their anger in the form of protests demanding social justice, lower costs of living and a clear government response to the concerns of an increasingly squeezed middle class. This suggests that Israelis may no longer be willing to accept massive reductions in welfare spending to fund an ever-expanding security apparatus and a highly questionable occupation – economically speaking, at least.