Reprinted in International Socialist Review, No.23, May-June 2002.
Introduction to this reprint.
ISRAELI SOCIETY, like all other class societies, contains conflicting social interests—class interests which give rise to an internal class straggle. Yet Israeli society as a whole has been engaged, for the last 50 years, in a continuous external conflict: the conflict between Zionism and the Arab world, particularly the Palestinians. Which of these two conflicts is dominant and which is subordinate? What is the nature of this subordination and what is its dynamic? These are questions that everyone involved with Israeli society and politics must answer.
For revolutionaries inside Israel these questions are not academic. The answers given determine the strategy of the revolutionary struggle. Those who consider the internal class conflict to be the dominant one concentrate their efforts on the Israeli working class and attach secondary importance to the struggle against the colonizing, nationalistic, and discriminatory character of the Zionist state. This position sees the external conflict as a derivative of the internal one. Moreover, in this perspective, the internal dynamics of Israeli society will lead to a revolution in Israel, without this necessarily depending on a social revolution in the Arab world.
The experience of classical capitalist countries has often demonstrated that internal class conflicts and interests dominate external conflicts and interests. However, this theory fails to hold in certain specific cases. For example, in a colonized country under the direct rule of a foreign power, the dynamics of the colonized society cannot be deduced simply from the internal conflicts of that society, since the conflict with the colonizing power is dominant. Israel is neither a classic capitalist country nor is it a classic colony. Its economic, social, and political features are so unique that any attempt to analyze it through the application of theories or analogies evolved for different societies will be a caricature. An analysis must be based rather on the specific characteristics and specific history of Israeli society.
THE FIRST crucial characteristic of Israeli society is that the majority of the population are either immigrants or the children of immigrants. In 1968, the adult (i.e., over 15) Jewish population of Israel numbered 1,689,286, of whom only 24 percent were Israeli born and only 4 percent of Israeli-born parents.  Israeli society today is still an immigrant community and has many features typical of such a community. In such a society, classes themselves, not to mention class consciousness, are still in a formative stage. Immigration produces an experience and a mentality of having “turned over a new leaf in life.” As a rule the immigrant has changed his occupation, social role, and class. In the case of Israel the majority of the immigrants come from the petty bourgeoisie, whether they are from urban areas in Central and Eastern Europe or from towns and cities in the Arab world. The new immigrant looks forward to changing his place in society. Moreover, he sees that all the advantageous positions in the new society are filled by earlier immigrants and this enhances his ambition to climb the social scale through long, hard work. The immigrant considers the actual social role he occupies as transitional. His father was rarely a worker, and he himself lives in the hope that he too will become independent one day, or at least that his son will be able to do so. The class consciousness and pride which exist in the British and French proletariats do not exist in Israel, and appear odd to many Israeli workers. An English worker, if asked about his origins, will almost automatically reply in class terms (“I’m working class”) and will define his attitudes to other people in terms of similar class concepts; an Israeli worker, however, will use ethnic categories and consider himself and others in terms of being “Polish,” “Oriental,” and so on. Most people in Israel still consider their social position in terms of their ethnic and geographic origins, and such a social consciousness is obviously a barrier hindering the working class from playing an independent role, let alone a revolutionary one aiming at a total transformation of society.
No working class can play a revolutionary role in society while the majority of its members desire to improve their situation individually, within the framework of the existing society, by leaving the ranks of their class. This truth is reinforced when the proletariat does not recognize itself as a stable social class with its own group interests and its own value system in conflict with those of the existing social order. The impulse toward a total transformation of society does not arise easily in a community of immigrants who have just changed their social and political status and who are still living in conditions of high social mobility. This does not mean that the Israeli working class cannot become a revolutionary force in the future; it merely implies that today political activity inside this class cannot proceed from the same assumptions and expectations as apply in a classic capitalist country.
If the uniqueness of the Israeli working class consisted only in the fact that it was composed mainly of immigrants, then it could still be assumed that through time and patient socialist propaganda it would start to play an independent, possibly revolutionary, role. In such a situation, patient educational work would not differ much from similar work elsewhere. However, Israeli society is not merely a society of immigrants; it is one of settlers. This society, including its working class, was shaped through a process of colonization. This process, which has been going on for 80 years, was not carried out in a vacuum but in a country populated by another people. The permanent conflict between the settlers’ society and the indigenous, displaced Palestinian Arabs has never stopped and it has shaped the very structure of Israeli sociology, politics, and economics. The second generation of Israeli leaders is fully aware of this. In a famous speech at the burial of Roy Rutberg, a kibbutz member killed by Palestinian guerrillas in 1956, General Dayan declared:
We are a settler generation, and without the steel helmet and the cannon we cannot plant a tree or build a house. Let us not flinch from the hatred enflaming hundreds of thousands of Arabs around us. Let us not turn our head away lest our hand tremble. It is our generation’s destiny, our life’s alternative, to be prepared and armed, strong and harsh, lest the sword drop from our fist and our life cease. 
This clear evaluation stands in sharp contrast to official Zionist mythology about “making the desert bloom,” and Dayan brought this out by going on to say that the Palestinians had a very good case since “their fields are cultivated by us in front of their very eyes.”
When Marx made the famous statement that “a people oppressing another cannot itself be free” he did not mean this merely as a moral judgment. He also meant that in a society whose rulers oppress another people the exploited class which does not actively oppose this oppression inevitably becomes an accomplice in it. Even when this class does not directly gain anything from this oppression it becomes susceptible to the illusion that it shares a common interest with its own rulers in perpetuating this oppression. Such a class tends to trail behind its rulers rather than to challenge their rule. This, furthermore, is even truer when the oppression takes place not in a faraway country, but “at home,” and when the national oppression and expropriation form the very conditions for the emergence and existence of the oppressing society. Revolutionary organizations have operated within the Jewish community in Palestine since the 1920s and have accumulated considerable experience from such practical activity; this experience provides clear proof of the dictum that “a people oppressing another cannot itself be free.” In the context of Israeli society it means that as long as Zionism is politically and ideologically dominant within that society, and forms the accepted framework of politics, there is no chance whatsoever of the Israeli working class becoming a revolutionary class. The experience of 50 years does not contain a single example of Israeli workers being mobilized on material or trade-union issues to challenge the Israeli regime itself; it is impossible to mobilize even a minority of the proletariat in this way. On the contrary, Israeli workers nearly always put their national loyalties before their class loyalties. Although this may change in the future, this does not remove the need for us to analyze why it has been so for the last 50 years.
A third crucial factor is the ethnic character of the Israeli proletariat. The majority of the most exploited strata within the Israeli working class are immigrants from Asia and Africa.  At first sight it might appear as if the reduplication of class divisions by ethnic divisions might sharpen internal class conflicts within Israeli society. There has been a certain tendency in this direction, yet the ethnic factor has worked mainly in the opposite direction over the past 20 years.
Many of the immigrants from Asia and Africa improved their standard of living by becoming proletarians in a modern capitalistic society. Their discontent was not directed against their condition as proletarians but against their condition as “Orientals,” i.e., against the fact that they were looked down upon, and sometimes even discriminated against, by those of European origin. The Zionist rulers have taken measures to try to fuse the two groups together. But, in spite of these, the differences remained clear and in fact were growing.  In the mid-sixties, two-thirds of those doing unskilled work were Orientals; 38 percent of Orientals lived three or more people to a room, whereas only 7 percent of those from Europe did so; and in the Knesset only 16 of the 120 members were Orientals before 1965 and only 21 after it.
So, then, why doesn’t Israel succeed in “integrating” its Jewish society and improve the working skills of the Oriental Jews? The answer lies in the nature of the Israeli state: With the expansion of the economy, a great demand was created for skilled workers. The obvious way to meet this demand would be either to launch a massive campaign for educating the large number of unskilled and semi-skilled Oriental Jews, or else to recruit Jewish skilled workers from abroad. The dynamics of both capitalism and Zionism lead to the second solution, thus perpetuating the inferior position of Oriental Jews in Israeli society.
Besides the general tendency of capitalist societies to maintain the prevailing class divisions, it is cheaper in this case to import skilled workers than to create them at home. Moreover, aside from the intrinsic value of Jewish immigration to Israel from the Zionist point of view, a massive upward movement of Oriental Jews could create a problem for Zionism at the same time: Namely, the vacuum created in the unskilled and semi-skilled working class could only be filled by Arab labor, who would then dominate the vital sectors of the Israeli proletariat. This, of course, would not be tolerated by the Zionist leadership.  Thus, there is no doubt that as long as Israeli society remains capitalist and purely Jewish, the ethnic divisions are largely going to correspond to the class divisions.
However, such social divisions and differences are interpreted by the Orientals in ethnic terms; they do not say, “I am exploited and discriminated against because I am a worker,” but “I am exploited and discriminated against because I am an Oriental.”
Furthermore, in the present context of colonial Israeli society, the Oriental workers are a group whose equivalent would be the “poor whites” of the USA or the Algerian pied noirs. Such groups resent being identified with Arabs, Blacks, and natives of any kind, who are considered “inferior” by these settlers. Their response is to side with the most chauvinist, racist, and discriminatory elements in the establishment; most supporters of the semi-fascist Herut Party are Jewish immigrants from Asia and Africa, and this must be borne in mind by those whose revolutionary strategy for Israeli society is based upon a future alliance of Arab Palestinians and Oriental Jews, whether on the basis of their common exploited condition or on the basis of their cultural affinity, a result of the Oriental Jews having come from Arab countries.
All this said, it is important to take note of periodic waves of bitterness which sweep the Oriental-Jewish community. The most important of these were the short-lived violent protest in Haifa immediately before the Suez war in 1956, and the movement which started before the June 1967 war. It revived in 1970 with the creation of the Israeli Black Panther group. It is encouraging that these Black Panthers have begun to understand some aspects of the connection between their plight and the Zionist-capitalist nature of Israel.
ISRAELI SOCIETY is not only a settlers’ society shaped by a process of colonizing an already populated country, it is also a society which benefits from unique privileges. It enjoys an influx of material resources from the outside of unparalleled quantity and quality; indeed, it has been calculated that in 1968 Israel received 10 percent of all aid given to underdeveloped countries.  Israel is a unique case in the Middle East; it is financed by imperialism without being economically exploited by it. This has always been the case in the past: Imperialism used Israel for its political purposes and paid for this by economic support. Oscar Gass, an American economist who at one time acted as an economic adviser to the Israeli government, recently wrote:
What is unique in this development process ... is the factor of capital inflow ... During the 17 years 1949–65 Israel received $6 billion more of imports of goods and services than she exported. For the 21 years 1948–68, the import surplus would be in excess of 7.5 billion dollars. This means an excess of some $2,650 per person during the 21 years for every person who lived in Israel (within the pre–June 1967 borders) at the end of 1968. And of this supply from abroad ...only about 30 percent came to Israel under conditions which call for a return outflow of dividends, interest or capital. This is a circumstance without parallel elsewhere, and it severely limits the significance of Israel’s economic development as an example to other countries. 
Seventy percent of this $6 billion deficit was covered by “net unilateral capital transfers,” which were not subject to conditions governing returns on capital or payment of dividends. They consisted of donations raised by the United Jewish Appeal, reparations from the German government, and grants by the United States government. Thirty percent came from “long-term capital transfers”—Israeli government bonds, loans by foreign governments, and capitalist investment. The latter benefits in Israel from tax exemptions and guaranteed profits by virtue of a Law for the Encouragement of Capital Investments ; nevertheless, this quasi-capitalist source of investment came far behind the unilateral donations and long-term transfers loans. In the entire period from 1949 to 1965, capital transfers (both forms taken together) came from the following sources: 60 percent from world Jewry, 28 percent from the German government, and 12 percent from the United States government. Of the unilateral capital transfers, 51.5 percent came from world Jewry, 41 percent from the German government, and 7.4 percent from the United States government. Of the long-term capital transfers, 68.7 percent came from world Jewry, 20.5 percent from the United States government, and 11 percent from other sources. During the 1949–65 period, the net saving of the Israeli economy averaged zero, being sometimes +1 percent and sometimes –1 percent. Yet the rate of investment over the same period was around 20 percent of the GNP. This could not have come from within because there was no internal saving within the Israeli economy; it came entirely from abroad in the form of unilateral and long-term capital investments. In other words, the growth of the Israeli economy was based entirely on the inflow of capital from outside. 
Since 1967, this dependence on foreign capital has increased. As a result of the changed Middle Eastern situation, military expenditure has risen. According to the Israeli minister of the treasury, in January 1970 military expenditure was estimated as 24 percent of GNP for 1970, which was twice the US ratio in 1966, three times the British ratio, and four times that of France.  This has placed an additional strain both on internal sources of investment money and on the balance of payments, and has had to be met by a commensurate rise in capital inflow. In 1967-68, three “millionaires’ conferences” were called in Israel; foreign capitalists were invited to join in increasing the inflow of capital and foreign participation in industrial and agricultural projects. In September 1970, the Israeli minister of the treasury, Pinhas Sapir, returned from a three-week money-raising tour in the USA and summed up the situation at that time:
We set ourselves the aim of raising $1,000 million from world Jewry in the coming year, by means of the United Jewish Appeal and the Israel Development Bonds campaign sponsored by the Jewish Agency. This sum is $400 million higher than that raised in the record year of 1967 ... During the recent visit to Israel of the US financial research team we explained to them that even if we succeed in raising all that we expect from the United Jewish Appeal and the Israel Development Bonds campaign we shall still be millions of dollars short of our requirements. After summing up our requirements in arms we informed the United States that we shall need $400-500 million per year. 
It thus appears that the dependence of Israel on the United States has changed significantly since the 1967 war. Fund raising among Jews all over the world (by cashing in on their sentiments and fears) no longer suffices to support the enormously increased military budget. The rough average of $500 million from fund raising has now to be doubled, and on top of this the United States government has been asked to provide directly an additional $500 million. It is obvious that the readiness of the United States government to forward these sums depends on what it gets in return. In the particular case of Israel this return is not economic profit. 
British capital has also been developing close ties with Israel.  Twenty percent of Israel’s imports comes from Britain, and trade has nearly doubled since the June war. British Leyland participated with the Histadrut (who have a 34-percent holding) in bus production, and with private Israeli capital in car and jeep production.
The increased participation of foreign capital in Israel has led to certain changes within the economy itself, which have also been carried out under the increased pressures set off directly by the level of military expenditure. The economy has been made more “efficient” by American capitalist standards: Taxes have been reformed, investment conditions “liberalized,” and army generals sent to US business schools and then put in charge of industrial enterprises. In the period 1968-69, there was a compulsory wage freeze, and some public enterprises were even sold off to private capital—for instance, the 26 percent state share in the Haifa oil refinery.
This influx of resources from abroad does not include the property which the Zionist establishment in Israel took over from refugee Palestinians as “abandoned property.” This includes land, both cultivated and uncultivated; only 10 percent of the land held by Zionist bodies in pre-1967 Israel had been bought before 1948. It also includes many houses, and completely deserted cities like Jaffa, Lydda, and Ramleh, where much property was confiscated after the 1948 war.
THE ENORMOUS influx of capital did not come into the hands of the small Israeli bourgeoisie, but into the hands of the state, of the Zionist establishment , and this establishment has been under the control of the bureaucracies of the Labor parties since the 1920s. This has determined the way in which all inflowing capital, as well as conquered property, has been put to use. Funds collected abroad are channeled through the Jewish Agency which, with the Histadrut and the government, forms part of the triangle governing institutions. All the Zionist parties, from Mapam to Herut, are represented in the Jewish Agency. It finances sections of the Israeli economy, in particular the nonprofitable parts of agriculture like the kibbutzim, and it also distributes funds to the Zionist parties, enabling them to run their newspapers and economic enterprises. The funds are divided according to the votes cast for the parties at the previous election, and this system of subsidies enables the Zionist parties to survive long after the social forces that created them have disappeared.
Historically, the purpose of this system was the strengthening of the colonization process, in accordance with the ideas of the Zionist Labor parties, and the strengthening of the grip which the bureaucracy itself had over Israeli society. This has proved successful, since not only is the Israeli working class organizationally and economically under the complete control of the Labor bureaucracy, but so too is the Israeli bourgeoisie. Historically, the bureaucracy has shaped most of the institutions, values, and practices of Israeli society without any successful opposition from within, and subject only to the external constraints imposed by imperialism and the resistance of the Arabs. Most of this enormous inflow of resources went into immigration projects and the housing and employment necessary to cope with the inflow that raised the Jewish population from 0.6 million in 1948 to 2.4 million in 1968.
This process was accompanied by relatively little personal corruption, but by a lot of political and social corruption. The influx of resources had a decisive effect on the dynamics of Israeli society, for the Israeli working class shared, directly and indirectly, in this transfusion of capital. Israel is not a country where foreign aid flows entirely into private pockets; it is a country where this aid subsidizes the whole of society. The Jewish worker in Israel does not get his share in cash, but he gets it in terms of new and relatively inexpensive housing, which could not have been constructed by raising capital locally; he gets it in industrial employment, which could not have been started or kept going without external subsidies; and he gets it in terms of a general standard of living which does not correspond to the output of that society. The same obviously applies to the profits of the Israeli bourgeoisie whose economic activity and profit making is regulated by the bureaucracy through subsidies, import licenses, and tax exemptions. In this way, the struggle between the Israeli working class and its employers, both bureaucrats and capitalists, is fought not only over the surplus value produced by the worker, but also over the share each group receives from this external source of subsidies.
WHAT POLITICAL circumstances enabled Israel to receive external aid in such quantities and under such unparalleled conditions? This question was answered as early as 1951 by the editor of the daily paper Ha’aretz:
Israel has been given a role not unlike that of a watchdog. One need not fear that it will exercise an aggressive policy towards the Arab states if this will contradict the interests of the USA and Britain. But should the West prefer for one reason or another to close its eyes one can rely on Israel to punish severely those of the neighboring states whose lack of manners towards the West has exceeded the proper limits. 
This evaluation of Israel’s role in the Middle East has been verified many times, and it is clear that Israel’s foreign and military policies cannot be deduced from the dynamics of the internal social conflicts alone. The entire Israeli economy is founded on the special political and military role which Zionism, and the settlers’ society, fulfill in the Middle East as a whole. If Israel is viewed in isolation from the rest of the Middle East there is no explanation for the fact that 70 percent of the capital inflow is not intended for economic gain and is not subject to considerations of profitability. But the problem is immediately solved when Israel is considered as a component of the Middle East. The fact that a considerable part of this money comes from donations raised by Zionists among Jews all over the world does not alter its being a subsidy by imperialism. What matters is rather the fact that the United States Treasury is willing to consider these funds, raised in the United States for transferring to another country, as “charity donations” qualifying for income tax exemptions. These donations depend on the good will of the United States Treasury and it is only reasonable to assume that this good will would not continue were Israel to conduct a principled anti-imperialist policy.
This means that although class conflicts do exist in Israeli society, they are constrained by the fact that the society as a whole is subsidized from the outside. This privileged status is related to Israel’s role in the region, and as long as this role continues there is little prospect of the internal social conflicts acquiring a revolutionary character. On the other hand, a revolutionary breakthrough in the Arab world would change this situation. By releasing the activity of the masses throughout the Arab world it could change the balance of power; this would make Israel’s traditional politico-military role obsolete, and would thus reduce its usefulness for imperialism. At first Israel would probably be used in an attempt to crush such a revolutionary breakthrough in the Arab world; yet once this attempt had failed, Israel’s politico-military role vis-à-vis the Arab world would be finished. Once this role and its associated privileges had been ended, the Zionist regime, depending as it does on these privileges, would be open to mass challenge from within Israel itself.
This does not mean that there is nothing for revolutionaries inside Israel to do, except sit and wait for the emergence of objective external conditions on which they have no influence. It only means that they must base their activity on a strategy that acknowledges the unique features of Israeli society, rather than one that reproduces the generalizations of the analysis of classic capitalism. The main task for revolutionaries who accept this assessment is to direct their work toward those strata of the Israeli population who are immediately affected by the political results of Zionism and who have to pay for it. These strata include Israeli youth, who are called on to wage “an eternal war imposed by destiny,” and the Palestinian Arabs who live under Israeli rule.  These strata share an anti-Zionist tendency which makes them potential allies in the revolutionary struggle inside Israel and the revolutionary struggle throughout the Middle East. Anyone who follows closely the revolutionary struggles within the Arab world becomes aware of the dialectical relationship between the struggle against Zionism within Israel and the struggle for social revolution within the Arab world. Such a strategy does not imply that activity within the Israeli working class should be neglected; it only implies that this activity too must be subordinated to the general strategy of the struggle against Zionism.
1*. Written by Moshe Machover and Akiva Orr.
1. Statistical Yearbook of the Israeli Government, 1969.
2. Moshe Dayan, in Davar, May 2, 1956.
3. The vast majority of those who immigrated before 1948 were of European origin; between 1948 and 1951 the proportions were about equal; and since then the majority of immigrants have come from outside Europe. By 1966, only half of the Israeli population were of European origin.
4. See Statistical Yearbook (Jerusalem), 1969.
5. “There is a great danger in employing large numbers of [Arabs] in the Israeli economy, one which has nothing to do with security: They are a time bomb ... Some branches of the economy are already becoming dependent upon Arab labor from the occupied territories, and Jewish workers are abandoning whole sectors of the economy.” (Haim Gevati, Minister of Agriculture, in Yediot Aharonot, May 20, 1970.)
6. Le Monde, July 2, 1969.
7. Journal of Economic Literature, December 1969, p.1177.
8. This law was passed in 1959.
9. These figures are taken from The Economic Development of Israel, by N. Halevi and R. Klinov-Malul, published by the Bank of Israel and Frederick A. Praeger, 1968. The category “other sources,” included under “long-term capital transfers,” has been omitted from the figures for both long-term and unilateral transfers taken together.
10. Professor D. Patienkin in Ma’ariv, January 30, 1970.
11. Yediot Aharonot, September 30, 1970. Out of a total of $1,034 million US military aid to foreign countries, excluding Vietnam during 1970, Israel received $500 million.
12. Early in December 1970, Sapir presented the budget for the period 1970-71; 40 percent was devoted to military purposes. This included: the purchase of arms, partly covered by the $500 million promised by Nixon; the development of the arms industry and of military research; and the everyday costs of national security operations.
13. See Why this nation does buy British, The Times (London), March 28, 1969.
14. The term “Zionist establishment” is that conventionally used in Israel to denote the ruling group present in the interlocking set of Zionist institutions.
15. Ha’aretz, September 30, 1951.
16. The opposition movement in Israel, particularly among high school students, was discussed in Akiva Orr’s Israel: Opposition grows, Black Dwarf, June 12, 1970.
Last updated on 20.8.2006