T. Cliff

The Problem of the Middle East

Part III
The Economic Structure of the Arab East

<p. 86>

Chapter X
The Economic Structure of Palestine

I. General Features of Palestine’s Economy

Tiny Palestine, whose area is only as large as that of Wales, and the number of whose inhabitants is less than two million, is poor in everything except problems. Its economy is quite unique, and unparalleled by any other in the world. We know different combinations of the feudal and capitalist economies. In Europe we have seen how a capitalist economy has arisen side by side with a feudal economy, or cells of a capitalist economy within feudal surroundings. In these cases both the feudal lord and the capitalist were members of the same people, or at least, after capitalism had become the decisive economic form, the capitalist came from the people comprising the majority of the local population. On the other hand, in many colonies we have seen how the decisive capitalist element is foreign, while the feudal lords come from the natives. We have also seen situations in which the capitalist element is foreign while feudal classes do not, or almost do not, exist (as, for instance, in South Africa). But in all these instances both the basis of the capitalist economy and the feudal economy – if it exists – is the masses of native toilers, even though in certain cases there may be the addition of a layer of skilled workers who are not natives. We have also seen instances where a capitalist economy has arisen basing itself on the introduction of both capital and workers from abroad, without, or almost without, the natives being employed at all, and instead being evicted and destroyed (e.g. USA, Canada, Australia). In these cases the navies were poor, weak and backward, and very far from being able to mould nuclei of a capitalist economy for themselves and they were reduced by the arms of the colonists and the state which rose, flourished and identified itself with their interests. All the time that capitalism on a world scale was a progressive factor, the fight of the natives against the expansion of the colonists had no prospects of success.

The economy set up in Palestine is different from all these instances. World capitalism has already become reactionary, and the penetration of British capital into Palestine, as into all the colonies, and its control of the key positions of the economy of the country are directed solely towards the extension of the existence of declining monopoly capitalism, towards a policy of the ‘organization of scarcity’ on a world scale, and towards a retarding of the forces of production in this country and in the Arab East in general. This element of the Palestine economy – the foreign capital that controls the key positions – is not peculiar to this country. The special features of this country are: firstly, the junior partners and agents of foreign capital do not come mainly form the native merchants and capitalists but from immigrant-colonists; secondly, while in all colonies imperialist capital controls the key positions of the economy and at the same time light industry is to a large extent in the hands of the native bourgeoisie, in Palestine even those positions of secondary importance are not mainly in the hands of the native bourgeoisie; thirdly, while in general capitalist labour in the colonies bases itself mainly on the exploitation of native labour (as for instance in all the African colonies) in Palestine the economy of the Zionist immigrants is based precisely on the practically complete boycott of Arab labour; fourthly, while the Red Indians in America, for example, were so backward that they were not capable of setting up a capitalist economy of their own with their own forces, the Palestinian Arabs, as the majority of the Eastern Arabs, are in a process of transition from feudalism to capitalism, a process which on the one hand has been retarded by the rule of imperialism and by Zionism but on the other received a certain stimulus because of those very factors which are themselves honeycombed with contradictions. The former aspect will be dealt with later. Here we shall deal with the latter. The railways which were constructed for imperialist purposes, at the same time facilitated the development of Arab trade and commerce, and the buying of land by Zionists who wanted to monopolize the capitalist development, has accelerated the accumulation of capital in the hands of a group of Arabs. The Arabs in Palestine are furthermore relatively not at all few in numbers, and, especially if they are assisted directly by the struggle of their fellows in the other Arab <p. 87> countries, are not at all a force which Zionism can overcome as the American colonists overcame the Red Indians.

What makes Palestine unique is the existence of two national economies, of which one is altogether capitalistic, while the other is mainly feudal but in the process of transition to capitalism, both them subordinated to big imperialist capital which controls the key positions of the country.

II. Foreign Capital

The main banks, railways, ports, electricity, the Dead Sea minerals and the Haifa Refineries are in the hands of foreign capital and imperialism which also has a great say in the many light industries (such as tobacco, breweries).

A certain picture of the great weight of foreign capital in the economy of the country is given by the census of industry for 1939. This census divides industry into three categories: 1) Arab and other non-Jewish, 2) Jewish, 3) Concessions. ‘Concessions’ includes only three important concessions – Palestine Electric Corp. Ltd., Jerusalem Electric and Public Service Corp. Ltd., and the Palestine Potash Co. Ltd. – and three smaller ones; it does not include some of the most important companies belonging to foreign capital: the Haifa Refineries, Steel Bros. (which in 1943 got a monopoly over the transport for government and military requirements), etc. In spite of this, however, the census shows that the concessions had a decisive weight: they had 53.2 per cent of all the capital invested in industry, and 74.9 per cent of all the motor power. If all the enterprises belonging to foreign capital were included, it would be clear that at least three-quarters of the industrial capital in the country is imperialist capital, and at least nine-tenths of the motor power is concentrated in its enterprises.

There are no calculations of the rate of profit in the companies belonging to foreign capital; nor are these companies inclined to publish detailed reports about their profits. But it is possible to get a certain picture from the above-mentioned census of industry. According to it, the average wage and salary of an employee in the concessions was £P 109 a year while the net annual output per employee was £P 440. From this it is possible to conclude that the rate of exploitation was about 300 per cent (i.e. about double that in the USA). Because of this, although the proportion of wages and salaries in the total capital invested in the concessions was very small – only 4.7 per cent [1], the rate of profit was nevertheless high – 14.3 per cent – this being much higher than in England.

It would now be interesting to point out the relations between foreign capital and the Jewish and Arab economies.

A quick glance shows us that foreign capital adapts itself to the framework of the relations existing between the national economies, and to a great extent fortifies this framework. Thus the companies whose main consumers are Jews generally employ Jewish workers and managers, and those whose main market is Arab employ to the major extent Arab workers and managers. The Anglo-American Co. goes to extremes in practising this policy in its enterprises: the factory which supplies the Jewish market (Maspero) not only employs Jewish workers exclusively but also sells under the slogan ‘Buy 100% Jewish products’, while at the same time the factory which supplies the Arab market (Karaman, Dick & Salti) employs only Arab workers and works under the guise of an Arab national enterprise, combining the sale of its cigarettes with propaganda against the selling of land to the Jews. The companies belonging to foreign capital which market their goods outside the country – the Refineries, the Dead Sea concession and others – are interested in one thing only – the buying of cheap labour power – and so they employ Arab labour for unskilled work and mainly Jewish labour for the skilled work.

<p. 88> The indirect influence of foreign capital on the preservation of the boundaries between the national economies is even greater than its direct influence, as it keeps the one in its feudal backwardness while the other is capitalistic. This is achieved primarily by foreign capital and imperialism’s hindering the Arab economy and society from leaving the primitive feudal bounds. Foreign capital, indeed, binds the feet of the Jewish economy too – thus, for instance, ICI and its agent, Palestine Chemical Development Co., prevent any serious development of the chemical industry in Palestine, Steel Bros, seriously damage the local transport companies, Jewish and Arab alike, and so on. But even if foreign capital handicaps the Jewish economy, nevertheless by controlling all the key positions, and by taking mainly Jewish partners and agents, it impairs to a much graver degree the Arab economy, checking any transition towards capitalist development to any real extent. Thus by the gluttony of the third, decisive factor, imperialist capital, the differences between the features of the Jewish and Arab economies are made much greater.

We have already seen in the chapter The Imperialist Powers’ Stake in the Arab East to what extent foreign capital hinders the productive powers of the country in general, and it is therefore unnecessary to repeat here.

III. The Features of the Jewish and Arab Economies

We shall now analyse some of the features of the Jewish and Arab economies. Let us see what is the occupational composition of the Jewish and the Arab populations. Since 1931 no population census has been taken. Seeing that the largest Zionist immigration even took place in the years 1933–36, the 1931 figures have definitely become obsolete, and estimates for 1936 which are fairly accurate which be used. These were made by L. Gruenbaum in National Income and Outlay in Palestine, 1936, Jerusalem 1941:–

Distribution of Population According to Occupations


Occupational Group

No. in 1000s














Building industry



Property owners



Liberal professions






Other services



Total occup. Groups










Occupational group

No. in 1000’s














Building industry



Living on income



Liberal professions






Finance, insurance


Domestic servants









*99 per cent of this category are Arabs

Thus while the Arab population is to a major extent agricultural, only a small percentage of the Jews are engaged in agriculture. The percentage of those employed in industry among the Arabs is only a third of that among the Jews, in commerce it is 2½ times smaller, and in the free professions over one-sixth.

Further, the difference between the two economies as regards the level of development of the forces of production is not smaller than the difference as regards the occupational structure which his shown up clearly by the following table. (Here we shall deal only with industry, as agriculture will be dealt with in a separate chapter.):–


No. of

No. of persons

Value of capital

H.P. of

Arab and other non-Jewish*















* We must take into account the fact that this category includes a number of fairly highly rationalised industries belonging to non-Arabs: to German and English capitalists. If not for this, the backwardness of Arab industry would show up even more prominently.

<p. 89> This table shows up the backwardness of Arab industry as compared with the Jewish which in turn lags far behind the enterprises of imperialist capital.

Thus while for every worker engaged in the concession an average of £P 2,312 was invested, and the average motor power was 52.9 hp. and in Jewish industry £P 71 and 0.4 hp. respectively, in Arab and other non-Jewish industry the figures were only £P 18 and 1.0 hp. respectively. Actually, if we exclude the non-Arab industries included in this last category, the figures would be even lower.

The average income per man occupied in Arab industry is very low compared with the net income in Jewish industry, and much more so compared with that in the concessions. It was, according to the same census: in the concessions £P 440, in Jewish industry £P 207, and in Arab and other non-Jewish industry £P 81.

According to another calculation – that of L. Gruenbaum – the income received by the population according to occupation groups (per capita) was as follows (£P):




Jews as % of





Industry (including handicrafts)




Building industry




Commerce and transport












(Note: incidentally, in Gruenbaum’s calculation, the differences between the net income of Jews and non-Jews in industry is much less than according to the 1939 census, this being partly due to the fact that they group the industries differently. Gruenbaum’s calculations are excellent and, made much use of here, but they are only estimates, and not necessarily absolutely correct.)

Again Arabs and non-Jews must not be entirely identified. But if we take this into account, certain important general conclusions are permissible, these being: the difference between the average net income of Jews and of Arabs is greatest in agriculture and smallest in industry, commerce and transport. Hence the tremendous difference between the average standard of income of all Jews and of all the Arabs in Palestine springs to a great extent from the fact that the Arab economy is mainly agrarian, while secondary and tertiary occupations occupy only a small place in the economy.

So far a static description of the economy has been given, and now the trend of the development must be described: is the differentiation between the degree of development of the forces of production in the Arab and the Jewish economies getting smaller or not?

A clear answer to this question will be given by a comparison of the extent and rate of investment in the two economies. The statistical investigations of L. Gruenbaum give us this comparison:–

National Income and New Investment (1936)


£P 000

£P 000

National Income



New Investment



New Investment as %
of national income



As will be seen later, actually the new investment of the Jews comes mainly from the import of capital (the import of Jewish capital was £P 7.5 millions in 1936, i.e. nearly as large as the new investment). In any case, as far as the question being dealt with at the moment is concerned, it is of no importance what is the source of new invested capital in the Jewish economy. One fact here is decisive: that the new investment in the Jewish economy surpasses that in the non-Jewish by 345 per cent, i.e. at an incomparably higher rate than the income of the Jews surpasses that of the non-Jews (19.5 per cent). And not only this, but we must also take <p. 90> into account that included in the new investment of non-Jews are new investments by the government – in buildings, roads, etc. – to the extent of £P 971 thousands which sum, if we deduct, leaves us with an amount of £P 899 thousands as the new investment of private capital among the non-Jews. The part of the government in new investments of the Jewish section amounts to £P 624 thousands, which sum if we deduct leaves us with an amount of £P 7,703 thousands as the new investment of the Jewish section, i.e. a sum nearly eight times greater than the new investment of private capital among the non-Jews.

New investment among the Arabs is negligible particularly in industry. According to a calculation of L. Gruenbaum the composition of new investment was:–


Jews %

Non-Jews %






−  1










Depreciation of transport and
          household equipment






Actually 1936 was not a typical year for Arab activity in industry, as that was the year of the general strike and the Arab uprising. Nevertheless there is no doubt that the table gives a fairly true indication of the situation on the whole in the Arab economy. The major portion of new investments made in building and agriculture and a little in transport, but the portion devoted to industry is almost infinitesimal.

And so not only does a division exist between the standard of development of the Jewish economy in general and industry in particular and that of the Arab economy and industry in particular, but this division is growing larger and larger.

IV. The Connections Between the Arab and Jewish Economies

Complete autarchy not even a capitalist state can establish, and much less can a national economy establish autarchy in relation to the workers, capital and product of the other inhabitants of the country. But nevertheless the boycott that the Zionist movement practises against the Arab masses has achieved a very great measure of success, the total payment given by Jews to non-Jews for produce or labour in 1936 amounting to only £P 1,026,000, which sum does not come up to five per cent of the amount of purchases made by Jews, and is only ten per cent of the value of the purchases by Jews of overseas imports.

The fact that the Jews continue to a certain extent to buy Arab produce despite the Zionist propaganda for the boycott, results firstly from the fact that they are still far from being able to supply all their needs and are therefore in need of many imports from abroad, and also of buying from the Arab producers of the country; and secondly from the fact that the products of Arab agriculture, and Arab building materials, were, till the war scarcity, much cheaper than their Jewish equivalents.

The backward Arab economy on its side employs practically no Jewish workers, and the Arab population, small and poor to a decisive extent, buys products amounting (in 1936) to only £P 796,000.

The wall of national separation runs also between Jewish and Arab capital. This is brought out most clearly by a grouping of the companies registered according to nationality (According to Z. Abramowitz’s calculation in National Economies – Countrywide Economy? appearing in Hameshek Hashitufi, Tel Aviv 1935, Hebrew):–

<p. 91>







and Arab





























(Later figures unobtainable)

These facts show how completely unrounded is the legend created by the Zionists and bolstered up by imperialism and the Arab feudal lords, firstly that it is Zionism which holds in its hands the main key positions of the country – as though imperialist subjugation does not exist; and secondly that an abundance of gold flows from the Zionists to the Arab economy – as though Zionism itself does not build national segregation.

V. Is the Jewish Economy a Normal One?

We shall now examine the structure of the Jewish economy. We shall begin with basic problem – the productivity of the Jewish population in Palestine.

As is well known, for many decades the Zionists have claimed that in contradistinction to the Jews in the diaspora who are mainly engaged in commerce and banking and to an entirely negligible degree in agriculture, they, the Zionists, are erecting in Palestine a settlement which earns its livelihood from agriculture and other productive occupations. When during the last twenty years they saw that only a little portion of the Jews were being absorbed into agriculture they changed their tune: not necessarily agriculture, the main thing is that they should engage in productive occupations, and not in commerce and banking. Let us examine the extent to which the occupational structure of the Jews in Palestine is different to that of the Jews in other countries, for instance, pre-war Poland, where a large number of Jews were concentrated:–


Palestine %


Poland %



) 49


) 42

Industry and handicrafts (including
        building and transport)



Free professions, officials, etc.


) 34


) 39.5

Commerce and banking



And how far reality is from the Zionist dream, will be made even clearer if we compare the occupational distribution of the Jews of Palestine with that of the whole population of some other countries:–



Industry and Handicrafts
(including building)

Commerce, Credit
& transport

Free professions
and public service

Palestine (Jews)




















Gt. Britain










What does this table teach us?

Firstly we see that except for England whose industry developed with her control over a vast empire and which therefore managed to develop it tremendously, while at the same time agriculture nearly disappeared, in all the other countries of the world, even the industrial ones, the percentage of agriculturists is very much greater than that among the Jews of Palestine. Secondly, the percentage of those engaged in the free professions among the Jews of Palestine is very much greater that that in the other countries. Thirdly, the percentage of those engaged in commerce, banking and transport is greater among the Jews of Palestine than that of even the centres of international commerce, banking and transport – England and USA. <p. 92> Thus while the occupational structure of the Jewish population in Palestine is more ‘normal’ than that of the Jews in the rest of the world, it is very far indeed from being ‘normal’.

From many other points of view too, the Jewish capitalist economy existing in Palestine is not ‘normal’, one of the main being that it depends on imperialism as the sine qua non of its existence and on the suppression of the movement for unity of its countries. The Jewish economy in Palestine is based on yet another two pillars both of which reflect is unsound basis: the one the boycott of the Arab worker, the other the unceasing flow of capital into Palestine. The first factor has already been discussed, and the second will now be dwelt upon.

It is estimated that in the twenty years between the two world wars the import of Jewish capital to Palestine amounted to £110 millions. During the war the import did not stop, amounting in 1940 to £P 5,200,200, in 1941 to £P 4,350,000 and in 1942 to £P 5,000,000, and continuing thereafter at a similar rate.

Only the existence of this incessant stream of capital made it possible for the Jewish capitalist economy to remain, during the period of the world crisis and depression, a ‘prosperous’ island with relatively very large new investments, tremendous imports for consumption purposes, very substantial profits for the bourgeoisie and wages which are much higher than those in all the colonial countries.

Only the tremendous import of capital makes it possible for the new investment in Palestine to reach such relatively large dimensions – £P 80 millions in the twenty years 1920–1939. The total investments of Jews in Palestine which are a combination of capital coming from abroad and invested here, and of the accumulation of capital in the country itself, does not even come up to the amount of imported capital (£110 millions). And of course the difference between these two, which amounts to £P 30 millions, has as a dissaving, a tremendous influence on the whole economic structure. Its indirect influence is even greater than its direct influence. The import of capital also makes possible the existence of a negative trade balance of great dimensions. Over the years 1920–1939 the deficit on the trade balance amounted to £P 119,853,000. Only a very small portion of the imports – at most a quarter – consisted of means of production. The rest consisted of means of consumption. A capitalist economy which enjoys an abundance of imports without giving anything in exchange, which enjoys the possibility of the dissaving and squandering of much capital, can of course enjoy ‘prosperity’ in the midst of surroundings steeped in deep economic depression while world capitalism is declining, rent with crisis, smothered by a superfluity of products and weighed down by a tremendous burden of unemployment.

From such results the Jewish economy could partly, and for some time, escape, mainly by directing a great part of its undertakings into a channel namely, building. As we have already seen, in this branch more than half the Jewish capital is invested. Activity in this branch had a great cumulative effect on the other branches or industry.

Which capital paid for the Zionist ‘prosperity’, big, medium or petty capital?

Of all the Jewish immigrants who came to Palestine in the years 1919–1943 totalling 367,410, there were:–






1) Persons of independent means



2) Persons with £P 1000



3) Artisans with £P 250



4) Various owners of means






Let us assume that groups 2) and 3) brought £P 55 million while group 1) brought £P 75 millions. Seeing that the dissaving of the Jewish community amounted during the same years to £P 40 millions, we may assume without any fear or error, that the ‘eating up’ by the small capitalists of the capital they brought with them when they immigrated, <p. 93> was one of the major causes of the ‘prosperity’, the existence of a relatively wide internal market and the existence of conditions for high profits and high wages for Jewish workers compared with their Arab fellows. The ‘prosperity’ of the Jewish economy in Palestine is not like the prosperity which existed in other capitalist countries in the time of ascending capitalism, which was the result of the acceleration of the process of accumulation, but is here an artificial growth which is the result of the destruction of many petty capitalists; it is not a process of growth of the forces of production, but an eating into of the basic substance of the economy. The hole in the barrel is not revealed all the while that a large stream of water is unceasingly poured into it.

Other capital which is ‘ready’ to be lost, besides the capital of the Jewish petty bourgeoisie, and has influenced and still influences the economic situation of the Jewish community very much is the Zionist funds which are collected in all corners of the world. The net proper income of the Jewish national funds and institutions from voluntary contributions during the period 1917–Sept.1942 was (in £P):–




Annual Average












   817, 406




In 1942/3 the income was £P 2,855,268 and in 1943/4 £P 4,502,468. These sums constitute about 6–7 percent of the total income of the Jewish community, i.e. a higher percentage than that from British capital invested abroad in the national income of Britain. It makes up about a fifth of all the new Jewish capital invested during the last quarter century. This is a very high rate. And being directed mainly into spheres that private capital is not interested in penetrating directly, assisting the fortification of private capital in other positions of the economy, as well as bearing the yoke of the different public expenses (health and education) which were liable to affect either the wages of the worker or the profits of the capitalist, it has a great cumulative influence on the possibility or the existence of ‘prosperity’ in the Zionist economy during a period when world capitalism is in decline, and in a country where most of the inhabitants live on a very low standard.

The Zionist expansion, the import of Zionist capital, and the Zionist boycott of the Arab toiler – and all this as an appurtenance of imperialist rule – deepen the chasm between Jewish and Arab economy and society, and drive the masses of Jewish workers from their fellow Arab workers by a partial and as we shall see, temporary, softening of the class struggle in the Jewish community.

Another factor connected with the import of Zionist capital, and conditioned by it, made possible the ‘prosperity’ in the Jewish economy in Palestine during a time when world capitalism was in a deep crisis and lengthy depression, and this factor was the very crisis of world capitalism itself. It is self-evident that during an economic crisis when prices are low, the buyer in the commodity markets is in a more advantageous position than the seller. And seeing that the Jewish economy in Palestine buys much more than it sells, it profited considerably from the decline in prices in the world market. The prices of means of production, as also of means of consumption, declined. A relatively high rate of profit therefore accompanied relatively high real wages. But it must not be forgotten for one moment that the fundamental condition of this prosperity was the import of the capital of a large number of petty Jewish capitalists and the ‘eating up’ of the capital here.

With the Second World War a new infusion of life was given the spider-legged Jewish economy. 25 thousand Jews were absorbed into the army, 15 thousand into work in military camps, and a large number into industry supplying military needs (the number employed in industry increased from 6 thousand in 1939 to 61 thousand in 1943). The army camps and industry supplying military needs absorbed about 65 thousand Jews. These, accounting for about a third of all Jewish earners, has a reflex influence on the activity of the economy as a whole. Military orders for tens of thousands of millions of pounds was a certain substitute for Zionist capital whose flow <p. 94> into the country was slowed down during the war.

But just as the penetration of Zionist capital into Palestine is a process of a double character – of ‘construction’ which is fundamentally a process of destruction of the capital of many small capitalists and the flourishing of that of a few, while the total sum of capital diminishes – so also the war had an influence of a double character: on the one hand tens of millions streamed into the pockets of the capitalists, especially the big ones (the sum of the deposits in the Palestine banks increased from 12.8 millions in August 1939 to 71.1 millions in December 1944), and on the other hand the real capital diminished: the amortization of machines, cars etc. increased, while their import decreased, buildings depreciated while practically no new ones were built. The war ‘prosperity’ is only a blooming based on a wearing down of the fundamental substance of the economy.

So the Zionist economy built in Palestine does not reveal the main features of ascending capitalism, but rather those of declining capitalism, even though these features are to a great extent deflected by the specific conditions in which the economy is placed.

If ascending capitalism was based on free competition, on the tightening of economic ties between nationals and countries, declining capitalism is based on monopolism, protectionism and autarchy. Zionist economy is based on monopolistic control over industry, and nearly full autarchy in relation to the Arab inhabitants of the country.

If ascending capitalism did no need ‘extra-economic’ activity in order to overcome its inner contradictions, for declining capitalism, ‘extra-economic’ activity (intervention of the state in the economy, war as a means towards ‘prosperity’) is a vital necessity. The Zionist economy is based on the ‘extra-economic’ factors of the expulsion of Jewish capitalists from the countries they were active in, of the support of imperialism for Zionist immigration as a weapon against the Arab liberatory movement, and of taking a part in the war prosperity.

If in ascending capitalism the concentration of capital, viz. the expropriation of many capitalist, was a phenomenon accompanying the accumulation of capital, then during the decline of capitalism the concentration of capital is revealed in the destruction of much capital. One monopoly keeps above water by the sinking of others. One capitalist-imperialist state exists by the destruction of the very substance of the economy of other countries; Zionist economy is based on the destruction of the capital of many small capitalists and on the concentration of capital while part of the capital is totally destroyed, the destruction being greater than the accumulation.

Lenin’s definition of imperialism as declining, disintegrating, rotting, agonising capitalism, corresponds also to Zionist economy, notwithstanding the tremendous differences between it and the economy of the imperialist ‘mother’ country.

VI. The Standard of Living of Jewish and Arab Workers

The standard of living of the masses of Arab and Jewish workers derives from the conditions of the world economy, from the specific conditions of the country, from the special conditions of the three sectors of the economy and the intertwining of these three factors.

The main features of the Arab economy are not different from those of other colonial countries: a great majority of the population engages in primitive agriculture which is subjected to feudal property relations and a feudal mode of production, there is very slow development of industry which absorbs only a tiny fraction of the village population which is doomed to pauperisation because of the conservation of feudal relations, the infiltration of commercial and usurers’ capital into agriculture, Zionist expansion and imperialist rule.

These conditions or limited proletarianisation as compared with mass pauperisation bring into existence hidden and open unemployment, land hunger etc., and consequently low wages and long hours of work, and as a result of this – the super-exploitation of the Arab worker in the enterprises of foreign capital and the government, and also in the enterprises <p. 95> of the Arab bourgeoisie.

The Jewish economy, according to its fundamental features, is not a colonial economy, but it is neither an imperialist economy having millions of colonial toilers at its service. It is not based on the super-exploitation of the ‘natives’. It does not even control the key positions of the economy of the country (railways, electricity refineries, potash, cement). In addition, political rule is not in the hands of the Zionist bourgeoisie. The following results concerning the wage standard of the Jewish worker flow from this:

  1. The Zionist bourgeoisie does not distribute such substantial crumbs to the Jewish aristocracy of labour as the English bourgeoisie does to the English aristocracy and bureaucracy of labour at the expense of the super-exploitation of the colonial workers, and the standard of living of the Jewish workers in general surpasses that of the Arab worker by only a small degree when compared with the extent that the standard of living of the English worker exceeds that of the colonial workers.
  2. The ‘prosperity’ in the Jewish economy is very shaky as it is conditioned by a flow of capital to the country, which must increase in algebraic progression. The continuity of this stream is not assured, and from time to time is broken, firstly because the source may dry up (because of the improvement of the position of the Jews in Europe or their impoverishment, or because of the difficulties the governments put in the way of taking out capital etc.), secondly because of the resistance of the Arab masses to the Zionist expansion, and thirdly because of the readiness of imperialism to give concessions to the Arab national movement from time to time at the expense of Zionism in order to divert the pressure of the masses from being against itself – to serve the policy of ‘divide and rule’.
  3. While the decline of world capitalism drives the toilers of the colonies as also the workers of the ‘mother’ country into the abyss of unemployment, hunger and suffering, even though there is yet a great difference between the former and latter victims of capitalism, this decline has a two-fold and contradictory influence on the standard of living of the Jewish workers in Palestine: on the one hand the decline of capitalism, the crises and anti-Semitism which are bound together, drive many Jewish capitalists to Palestine., thus producing the basis for ‘prosperity’ in Palestine; on the other hand the decline of world capitalism, the crises, the control of imperialist capital over all the key positions of the country drive wide sections of the Jewish working class into great wretchedness and threaten to throw the whole Jewish working class into hunger. Undoubtedly this second trend is becoming and is sure to become the main trend throwing the standard of living of the Jewish worker nearer and nearer that of his Arab fellow.
  4. The existence of the boundaries between the national economies and the segregation of the Jewish worker from the Arab greatly harm the class struggle of the Arab and Jewish workers. They preserve the differences between the standards of living of the Jewish and Arab workers while keeping them both on a low standard and making them impotent to resist effectively the assault of the Jewish and Arab capitalists and imperialist capital.

The third sector, imperialist enterprises, has, as has been shown above, much greater weight that the other two. Foreign capital and the imperialist government preserve and even widen the differences between the standards of living of the Jewish and Arab workers, not only indirectly – by putting obstacles in the way of the Arab economy’s leaving the feudal mode of production and by its supporting the expansion of Zionism – but also directly, by paying Jewish workers in its enterprises and in government employ more than the Arab workers.

The wages that a Jewish worker receives are about double those the Arab worker receives for the same work. But as the large majority of the Arab workers are unskilled and in the main agricultural, while unskilled, and especially agricultural workers make up a very much smaller percentage of Jewish workers, the difference between the standards of living is much bigger than this.

Another factor which influences the standard of living of the working masses, is the size of the family. As government statistics are not interested in the conditions of the ‘natives’, an exact comparison between the sizes of Arab and Jewish workers’ families cannot be made, but we may <p. 96> assume that while the number of persons in an Arab family is about six, the number in a Jewish family is 3–4. And while the wife of a Jewish worker often also earns, the wife of an Arab workers, especially in towns, very seldom does – because of old-fashioned, conservative traditions and because of unemployment.

But side by side with these factors which tend to increase the differences between the standards of living, there are other factors which tend to decrease it: the price of food until the war was lower in the Arab than in the Jewish market (the ‘foodbasket’ cost about 20 per cent less in the Arab that in the Jewish markets). House rents were also much lower in the Arab than the Jewish quarters. (To some extent this reflected a difference in the quality of the housing, but even for the same quality houses considerably less was paid in Arab than Jewish quarters.)

If we take all these factors into account, we may assume without any doubt that the standard of living of the Jewish workers is on an average about three times higher than that of the Arab workers.

We must, nevertheless, have no illusions about the standard of living of the Jewish workers. Let us first of all examine his housing conditions:–

Number of persons per room



Tel Aviv

Daily workers



Monthly workers



If we take into account not all the Jewish workers but only those who live in slums, the picture is even worse. Thus in the slums of Tel Aviv in 1934 an average of 4.9 persons lived in a room in a house, and 4.7 in a wooden hut. How bad these housing conditions are when compared with those in developed capitalist counties will become clear from a comparison with the conditions in, for instance, England. According to the London Survey of the mid-thirties, 20 percent of the population was living at the rate of 2 and more persons per room, and 3 percent at the rate of three and more.

And for this housing the Jewish worker pays very dearly, rent accounting for about 25 percent of his income, while in Germany it accounts for 14.2 percent, in Belgium 9.1 percent and in Poland 7.3 percent.

As regards the nutritional conditions of the masses in Palestine, both Jewish and Arab, statistics are very scarce. The only investigation which can at all be relied on is Inquiry into Poverty and Malnutrition among the Jews of Jerusalem published by Hadassah Emergency Committee, Jerusalem 1943, but as the name implies, it encompasses only a fraction of the Jewish population. The results of this inquiry, however, throw a light on the position of the Jewish toilers in Palestine in general. The following table gives the results of the above inquiry and the results of the investigations of Sir John Orr (Food, Health and Income, London 1936, p. 73) into the nutritional situation of the poorest 10 percent of the population in England:–

Consumption per Capita per Day (grams)
Jews of Jerusalem

Mon. Exp.
per cap.

of Jews











Till 1.2



















































































Poorest 10%
in England












In addition, while in the majority of the developed capitalist countries, medical services for workers are partially provided for by the state, <p. 97> and partially by the employers, the remainder being given by the workers, in Palestine the government gives no contribution whatsoever to medical services for the Arabs, and almost nothing for the Jewish workers; Jewish employers give negligible sums, Arab employers nothing.

We have here described the difficult conditions that the Jewish workers live in. Remembering that the standard of living of the Arab workers is about a third of that of the Jewish, we may get an idea of the conditions they live in!

VII. Summary and conclusions

The conclusions which follow from the above are:

  1. The factor which rules over the main wealth of the country, the main exploiter of its masses, and the main hindrance to its development, is imperialist capital and the imperialist governments.
  2. Secondary position – light industry – is in the hands of Zionist capital which flights for a monopolistic position in this field and for collaboration with foreign capital and imperialism for the purpose of hampering the entrance of Arab capital and Arab workers into this field of production.
  3. Imperialism, Zionist capital and feudalism preserve a wall of segregation between the Arab and the Jewish masses which facilitates imperialist policy of divide and rule, the Zionist bourgeoisie’s rule over the Jewish masses and the Arab feudal lords’ rule over the Arab masses.
  4. The same three factors, while preserving the difference between the standards of living of the Arab and Jewish workers inflict terrible sufferings on the Arab masses and keep the standard of the Jewish workers very low, although it is more comfortable than that of their Arab fellows.
  5. The foundations of the Zionist economy are very shaky, and the development of the contradictions in the world economy, the cessation of the war ‘prosperity’, and the rise of the wave of anti-imperialist struggle, will easily undermine it, thus deepening the class antagonism between the Jewish workers and the Zionist bourgeoisie.
  6. The Arab bourgeoisie, being mainly commercial and very weak, directs its struggle not against foreign capital which controls the key positions of the economy, but against Zionist capital which controls positions of secondary importance. At the same time it reveals, and must according to its socio-national position, reveal, great readiness to be the agent of foreign capital and the servant of imperialism.
  7. The Arab proletariat, subjected to super-exploitation by imperialist and Arab capital alike, concentrated in the big enterprises of foreign capital and the government, connected by a thousand threads to the masses of fellaheen and the proletariat of other Arab countries, is the only power which can lead the social and national liberatory struggle – against imperialism and Zionism and against the Arab capitalists and feudal lords.
  8. In the light of this it is clear that true unity between Arab and Jewish workers can come about only through the severing of the ties binding the Jewish workers to Zionism, by their class struggle against the Zionist bourgeoisie, and by their joining the social and national liberatory struggle of the Arab workers and peasants.


1. In the other Arab and Jewish enterprises the wages paid, not taking into account the labour of the owners and members of their families, which has an important place in these industries, was 22.2 per cent of the total capital.

Last updated on 28.5.2011