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The New International, Spring 1956

Albert Findley

Israel’s Laboristic Economy

A Discussion of its Strength and Weakness


From The New International, Vol. XXII No. 1 (Whole No. 171), Spring 1956, pp. 29–39.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for ETOL.


On September 23, 1955 Israel was swept by a wave of enthusiasm inspired by an economic discovery. Oil was struck for the first time in Israel. It promised to be an excellent source which might save the country $50,000,000 in foreign exchange.

The company that discovered oil was the Lapidoth Oil Company, financed jointly by Ampal – the Histadrut and Labor Zionist investment organization and Solel Boneh – the Histadrut contracting and manufacturing concern, and by a “Federation group” of United States and Israeli private investors.

The Histadrut, a labor organization, is now in a position to control a basic natural resource and a developing new industry in Israel. The role of the Histadrut in the discovery of oil only highlights the development of what can legitimately be called a labor economy, which has had a tremendous growth in the last 15 years.

For years we have heard hosannas sung to the “socialist” character of Israel; singled out were the “socialist Kibutzim.” Marxists discounted much of it. The country is small and poor in natural resources. The “socialist economy” existed locally on the charity of bourgeois Zionists throughout the world. The socialistic forms of economic organization did not control any decisive sectors of the econorny. Even in agriculture, they hardly had a foothold in the profitable citrus culture. The boastings of the propagandists therefore bred a feeling of caution in the socialist observer. This was especially true for socialists trained in the Trotskyist tradition whose vigorous polemics against the theory of “socialism in one country,” was so tragically confirmed by the horrors of developments in Stalinist Russia. Socialism in one country Israel – or as sometimes represented by its more naive advocates as socialism in one Kibutz – did not impress them.

The developments of the last decade, however, demand a new assessment of the Israeli labor economic set-up. A new analysis of its nature, problems and extent is therefore necessary, to lay the groundwork for a proper evaluation.

If one were to conceive of the Israeli economy as divided into three main categories, (a) agriculture, (b) light industry and commerce, (c) basic industry and finance, a significant generalization could be made. Labor or Histadrut units (owned, controlled or heavily influenced) dominate the field in the two fundamental sectors, agriculture on the one hand and basic industry and finance on the other. Only in light industry and commerce does private capital have a predominant position.

A discussion of the Israeli labor economy is of special interest to the Independent Socialist League. The ISL has been among the pioneers in studying the relationship between nationalized industry and democracy, developing the only scientific description of Russia as bureaucratic collectivism, a new type of social system. It has called attention to incipient bureaucratic collectivist developments in industries nationalized by the British Labor government, and in state economic developments of many newly free countries. There are no lack of such points of similarity in the Israeli labor economy. A truly interesting manifestation of the law of combined development.

The economic organizations in “Israel referred to as “socialist” or “labor” are in the main not nationalized or government owned. There is little or no tendency in Israeli labor circles to give the state the predominant role in social ownership. Their historic road has been the development of labor-owned or controlled co-operatives, settlements, etc. It has been the General Zionist Party – conservative party of free enterprise – that has raised the cry of nationalization. The reason being, to deprive labor of some of its power by placing these economic functions in the hands of the government – that the bourgoisie may now influence and hope to control in the future. They have demanded the nationalization of education, health, employment, transportation, etc. Mapai – the Social Democratic Labor Party of Israel – the leading party of Israeli labor – has conceded to the General Zionists in the field of social services. It has nationalized education and is ready to nationalize other social services. Should Mapai find it expedient to form another coalition government with the General Zionists, they stand ready to nationalize more of the social services.

A discussion of the Israeli labor economy must therefore start with a discussion of the Histadrut. The Histadrut, or to give it its full name Histadrut Haklali shel Poale Eretz Israel – General Federation of Jewish Labor in Israel – is not only a trade union federation in the same sense as the American Federation of Labor or the British Trade Union Congress. The Histadrut is that, but it is also much more. It is the largest employer in the Near East. It is the co-operative society of Israel. It is the largest social agency of the area, and the largest insurance and banking organization in Israel. Sometimes, the Histadrut itself, enters candidate’s in local elections, and thereby influences politics directly. More often, it has indirect political power through the political parties that base themselves on the Histadrut membership. The Mapai, the leading party of the Histadrut, has been the dominating party of the various governmental coalitions since the formation of the state of Israel. The present government is composed of three workers parties: Mapai, Mapam and Achdut Avodah, all based upon the Histadrut. In addition the Hapoel Hamizrachi and the small Progressive Party are in the coalition.

Opponents have, with some justice, called the Histadrut an octopus. Friends, with equal justice, have called it the all-inclusive labor movement of Jews in Israel.

How was the Histadrut formed? How is it governed? To what extent is it democratic and to what extent has it become subject to bureaucratization? The reference here to democracy is to the responsiveness to, and identification with, its own electorate. I will not deal with the shameful and undemocratic attitude of the Histadrut toward Arab workers. That is a subject for special treatment.

The Histadrut was formed in 1920 by the representatives of labor parties and agricultural supplements. Only a few urban trades such as printers and construction workers, were represented. Real trade unions developed later. National union centers of a trade or industry; equivalent to the American international unions, came much later and have had their greatest development in the last decade since the decision of the 1946 convention.

Organization and even membership is therefore centralized. In theory, at least, one becomes a member of the Histadrut directly and, therefore, eligible to join a local or a constituent body such as a trade union or a co-operative. Dues are paid to the Histadrut which keeps a portion for itself, and then distributes the rest to subordinate organizations.

Wage policy is set-by the Histadrut and despite the organizational autonomy of the trade unions, they only adapt the general policy to their own needs. This is true despite the fact that the trade unions form only a small portion of the Histadrut membership. Local trade unions operate in a still more restricted sphere – more as grievance committees than as bargaining agents. They can only apply the Histadrut policy adapted by national trade unions to the local scene. No strikes can be called without the sanction of the Histadrut. There have been wildcat strikes, but these have been comparatively few, e.g., seamen, doctors, and have been met with harsh organizational and economic measures by the Histadrut leadership.

The basic governing body of Histadrut is the general convention. Convention delegates are elected nationally by proportional representation. Each political party of the country puts up its own slate for the convention. Politics are not hidden, but form the basis of organization. In the last election to the Histadrut convention, even the General Zionist Party put a ticket into the field with a platform for a “giveaway” of most of the Histadrut organizations and functions. The daily functioning of Histadrut is the responsibility of the General Executive Committee which meets once every two weeks. It is elected by the convention on a proportional representative basis. The Executive appoints a Secretariat that meets once a week and is headed by a General Secretary.

Local labor councils with jurisdiction over local matters are elected by all local organizations of the area in the same democratic manner. What happens if the local is controlled by one party while the General Executive is controlled by another? Representatives of Histadrut rule out serious conflicts on the assumption that in national questions the center has final jurisdiction and in local matters the local organization has jurisdiction. There is a court of honor to settle all disputes in the Histadrut. If the court of honor fails to settle matters, the question goes to the General Executive for adjudication. The General Council has other extensive powers to intervene – in practice, these interventions seem to be rare. Whether this is due to the democratic setup of the Histadrut or to the fact that one party, Mapai, has had a majority in both the national and in important local centers, is difficult to say.

The Histadrut is also the co-operative society of Israel. It has a parallel organization that conducts or supervises all of its economic activities – Chevrat Ovdim. Membership and organization of Chevrat Ovdim is almost identical with that of the Histadrut. The convention of Chevrat Ovdim is the same as that of the Histadrut. Until recently the General Executive of both organizations was also the same. Now a separate executive is elected for the Chevrat Ovdim, fifty percent of whom are also members of the Histadrut Executive, and the rest are appointed from the various companies, institutions, etc. Representation on the council is in accordance with the proportion of votes each party has received in the elections.

The economic organizations of the Histadrut show a great variety as to form, size and principles of organization. They include the world known Rochdale type consumer co-operatives, producer co-operatives, agricultural settlements varying in degrees of cooperation from joint marketing to communal living, banks and factories organized on conventional private enterprise lines but owned by Histadrut, and last but not least the mixed companies. It is these last categories, and particularly the mixed companies that have had the most spectacular growth.

In the Histadrut affiliated co-operative settlements land is owned by the Jewish National Fund, leased to the individual farmer, but the members are not allowed to employ hired labor, and they usually buy and sell through co-operatives. These are known as Moshavim.

In addition there are the Kibutzim, about whom a great deal has been written. They are agricultural settlements where all economic activities are joint ventures. Land is leased from the Jewish National Fund to the group, not to the individual, and is cultivated in common. The harvest is divided in complete equality. In most of the Kibutzim there is communal living, eating, child rearing, etc., depending on the principles of the political group that runs the Kibutz. Recently, there has developed a new form of Kibutz, the Kibutz Shitufi which retains the economic features of a Kibutz, but has abandoned communal living. The growth and development of the Kibutz is due to the meeting of two currents. On the one hand, Zionism needed to settle people in Palestine as economically as possible, to utilize people who did not have the ability to farm on their own.

A large co-operative effort of settling many people as a single community promised the best results. A German liberal Zionist was the father of the idea. It was given flesh and blood because it practically coincided with the social aspirations of the Zionist Socialist groups. Together with the smaller initial investment of capital, went a division of labor, and a greater use of machines and fertilizer than was possible on an individual farm.

In recent years many Kibutzim have been compelled to resort to hired labor. This practice has deeply worried the leaders of the Kibutz movement since it is contrary to the fundamental principles of self-labor. A special company owned by the Union of Kibutzim, Yitzur Upituaach, now employs hired help to work at various points in the Kibutzim, and devotes all profits to further land development. In addition to their agricultural endeavors, the Kibutzim have about 300 small industrial enterprises, employing about 4000 workers. These workers have the same rights and privileges as other members of the Kibutzim.

Since the Arab-Israeli war, a new large-scale factor has entered into labor controlled agriculture. Until the war, co-operative agriculture in all its forms, had only a small share of the most profitable sector of Israeli farming: citrus culture – the raising and processing of oranges, lemons, etc. The war changed that. The government took over and the Jewish Agency ran the former Arab orange groves. The Histadrut also greatly expanded its contracting services through which it manages and cultivates private land on a contracting basis. At first the Jewish agency and the Histadrut each had its own contracting organization. The two have since been merged and now control about 25 per cent of the citrus industry, and about 15 per cent of the canned food industry of the country.

The relative position of the Kibutzim in the “socialist” agriculture has suffered a sharp drop. The reasons being, the policy of the Mapai government which now favors the Moshavim, the reluctance of new immigrants fresh from the barracks of concentration camps to enter communal living, and to the relative growth of hired labor working in the Histadrut controlled agricultural contracting organization.

Taken together, all forms of labor agriculture control 58 per cent of cultivated land and raise about 78 per cent of the crops.

Tnuva – a co-operative marketing agency – controls 72 per cent of the marketing of all food in Israel. Co-operative canning and food processing is only at its beginning, with different Histadrut organizations entering the field.

The most important wholesale organization in Israel is Hamashbir Hamerkazi which supplies its own members, agricultural settlements, Histadrut industries, etc., and together with the consumers co-operatives has entered the field of department stores. It also has its own export company and processing plants, the foremost (Shemen), being for the production of edible oil. In addition, Hamashbir has a considerable interest in Fertilizers and Chemicals Ltd. for the development of raw materials extracted from the Dead Sea.

Co-op retail distribution, until recently limited to the villages and agricultural settlements, is now expanding into the cities as well. Nearly half a million customers, that is a third of the population were served in1953 by co-operatives which employed 3000 workers.

In transport, the producers co-operatives control the movement of passengers and occupy an important position in the movement of freight. The government, of course, owns the railroads. Chevrat Ovdim, however, is a leading partner in the development of the merchant fleet and participates in the development of air transport. Zim, Israeli Navigation Co., Ltd. was formed jointly with the Jewish Agency in 1945 and now owns 20 cargo vessels and four passenger ships. Zim employs over 1000 workers. Chevrat Ovdim is also an important factor in the provision of port services, and in the repair of ships in port. In conjunction with El Al Israel Air Lines, the national civil aviation company in which Histadrut has minority participation, Chevrat Ovdim in 1950 formed a special internal aviation company, Arkia, with the object of opening up a network of internal air services.

In finance and banking the Histadrut has many organizations. First, there is the Workers Bank which is capitalized entirely by Histadrut, and which is the depository of the funds of the various Histadrut bodies. This bank is second only to the run by the government. In addition, there are numerous credit unions, welfare funds, special mortgage companies, etc., that add to the financial resources available to the Histadrut. enterprises.

Closely related to finance is insurance. The funds deposited in insurance companies are a source of capital for new and old enterprises. Hasneh, Histadrut owned insurance companies, writes 50 per cent of the regular insurance of the country. In addition, labor and group polices which are “mutuals” are also written by affiliated Histadrut organizations. Introduced as a form of social welfare, these “mutual” policies now total more than seven times the value of all regular insurance policies.

Control of such financial means of investment partly explains the rise of the Histadrut industry. In addition, funds have been received from the United States through Ampal, an American investment company, a subsidiary of the Workers Bank organized by the Labor Zionists to recruit capital.

A major source of funds has been the government and the Jewish Agency. These funds coming from charity, foreign loans and German reparations have been used in various ways. In agriculture, the Jewish Agency directly gives the settlers land, funds and equipment. In industry, these funds are invested in partnerhip with Histadrut or private companies.

The percentage of gainfully employed people earning a living in the labor economy varies from year to year. In 1952, 236,000 people or 57 per cent of the gainfully occupied, worked for labor enterprises or for the government. Approximately 35 per cent of all workers were in labor enterprises. The percentage in the various fields varies from 16 per cent in light industry to 40 per cent in building and construction. A fair figure of the percentage of workers in all industry employed by the Histadrut is usually given as 20 per cent.

These percentages alone do not tell the whole story. Israel is not a highly industrialized country with large scale development. The industry that does exist is small and decentralized. In the fields that it operates, Histadrut companies are, relatively speaking, large concentrations. Solel Boneh, that engages in building contracting, employs over 15,000 people in that on field, a large figure even for an American contracting firm. In the metal working and electrical industries there are 485 firms employing 13,000 workers. However, two subsidiaries of Sole Boneh, Vulcan and Hamat, employ about 3000 workers. This represent only 25 per cent of the metal and electrical industries, but the relative weight of these two companies is obviously much greater.

A similar pattern is present in cement where one Histadrut organization employs 900 workers, in glassware 500, in concrete pipes, 650. For Israel these are large and concentrated industries. After the British-Jewish corporation for the exploitation o the Dead Sea chemicals failed, a mixed company was set up to “mine” the Dead Sea. A mixed company with minority Histadrut participation is now in control of this basic chemical industry. When the influence that these relatively large and basic units of industry are added to the political influence of the Histadrut and then capped by the power of the Histadrut as the bargaining agent for the employees of its rival firm, one gets a glimpse of the Histadrut as a powerful factor in Israel.

How did Labor in Israel begin on the road of the ownership and control of industry? What factors aided its growth?

What gave rise to the spurt of the last decade?

Here too, we find a meeting of necessity, improvisation and ideology. The first steps were taken, to form a contracting organization, in order to provide work for members of the Histadrut. [1] “Building the country” was and is the main aim of the Histadrut. How better could this be done than by entering into the actual work of farm settlements, contracting etc. Then came the depression of the 1930s. Some factories failed. Histadrut members would be unemployed, Jewish immigration would fall off. Unlike the US where the Hatters’ Union and the ILGWU finance the private employer to open a factory or remain in business – the Histadrut bought a controlling interest in Vulcan (1936), Phonecea (1940) – two bankrupt factories. Did not the Histadrut stand for labor’s ownership of the means of production? The action of the Histadrut with its then meager resources received the applause of all. It satisfied the workers, the Zionists, the government. It even satisfied the former owners.

That was the beginning. As the Jewish settlement in Palestine grew, the Histadrut grew in membership and means. The same forces that brought about the original step continued to favor its development, except that the bourgeoisie now grew alarmed and. began to raise the cry of “Monopoly” and discrimination against the Histadrut.

But it was too late. The Histadrut now could offer real advantages over the small entrepreneur. The same advantages that large scale industry everywhere has to offer: greater efficiency, stable management, funds to take advantage of opportunities, better bargaining power, etc. Then came World War II and the Nazi extermination of the Jews. Partition, Arab-Jewish war, independence and mass immigration followed. Private capital was not forthcoming in any great amounts but public capital in form of charity, loans etc. met the gap. Who but the Histadrut with its network of organizations, institutions, trained personnel, experience and its own supplementary capital would be able to do the job. The result was a tremendous growth of the entire economy, particularly its labor sectors.

At the current reading of the crystal, the future of Histadrut industry is a favorable one. Unless the political situation alters radically the labor economy should continue to grow. It has recently mastered the art of reinvestment of its profits. It has the efficiency, management and capital, to make it almost indispensable to a country which does not have an abundance of private capital – domestic or foreign. Israel is unlikely to have such capital as long as the present state of no war-no peace with its neighbors persists. Such a state, however, increases the supply of charitable and organizational funds that find their way to Histadrut enterprises.

The “ownership” of the labor economy is difficult to estimate as the strands of ownership twist and turn and are extremely difficult to unravel for the reader. There are corporations owned outright by the Histadrut like Solel Boneh, Vulcan. There are companies owned jointly with the government or Jewish agency or where the partner is either AMPAL or private investors. Companies where a producers co-op or a Kibutz is joint entrepreneur, where a parent company sets up a new corporation in conjunction with one of its subsidiaries. The Workers Bank, Credit Unions, etc. also are partners. The Histadrut has, however, followed a policy of taking 50 per cent of any venture it enters (with one or two exceptions). The 50 per cent includes all Histadrut affiliates and subsidiaries. The “alien” 50 per cent refers to government, private and Jewish Agency funds.

This kind of financing and ownership raises the social question: who is the real owner and controller of this industry. As to the present there can be little doubt. The Histadrut is in control. The labor parties have a majority in Israel. Even in a coalition with the bourgeoisie, the Mapai dominates. There is prosperity in the country, with room and need for all to expand. The conflict of interests exists, but it is not too sharp. What would happen in case of economic reverses? If the political control of the state or of the Jewish Agency fell into hostile hands? Where would the labor economy with its 50 per cent deals be? Who then would be the real social power? Histadrut members, whether Mapai or Achdut Avodah or Mapam are sure that Histadrut would remain on the top.

A great deal, however, depends on policy in this case. We have seen Mapai give up education to the state and subordinate the workers’ wage policy to that of the government. We know – it has said so – it is ready to trade the labor exchanges and other social services. It is safe to assume that given a concerted attack by the Jewish bourgeoisie, the reformist labor leadership will react according to pattern. It will make far reaching concessions. However, there are things it will not do, and that is to give up completely its share of industry on which its power rests, except in case of the development of a real Israeli fascist movement. How the Israeli labor movement will react, in a future conflict with its bourgeoisie depends on the relationship of forces between reformist Zionist and militant tendencies in the working class. One thing seems clear: without political power, the entire edifice can easily be reduced to its pre-1936 position. A great deal therefore depends on Histadrut control of or influence on the Israeli government and the Jewish Agency.

What is the position of the worker in the labor economy? Does he enjoy greater benefits? Has he a voice in the running of his industry? The position of the employed member depends upon what kind of organization he is employed in. If he is a member of a Kibutz, he shares equally with other members the products of the organization. He has full and equal rights in deciding policy. While there is also a tendency for the elective jobs of secretary and manager of the Kibutz to rotate among a relatively small number of people, they are not the sought after jobs.

Equality exists, however, only within the Kibutz with a wide variation in the wealth and income between one such co-operative and another, even within the same federation of Kibutzim (of which there are a number, organized by the political parties). There is some attempt at general equalization, but it is primarily in the form of a tax for the formation of new Kibutzim. The basic problem of inequality between Kibutzim though frequently discussed, remains unsolved.

In the producers’ co-operatives, the members have, of course, full control of their activities with the theoretical exception that they cannot exploit labor. Their earnings, like that of a private partnership, are dependent on the amount of business they do. In transportation where the co-operatives have employed hired labor the Histadrut had to step in. In one instance, it forced the organization of a separate co-operative for the mechanics. In another, Histadrut took 50 per cent of the co-operative’s shares and allowed it to continue hiring labor, on the basis that the profits from hired labor will go not to an individual, but to the entire working class – the Histadrut. There is, of course, no sharing or any form of equalization between different producers co-operatives. The General Executive, however, tries to keep an eye out so that one does not get all the cream while the other starves. In some instances, producers’ co-operatives have withdrawn, and turned into conventional partnerships.

In Histadrut owned companies the problem of workers democracy is ever present. For the Histadrut itself is the owner, the manager and, at the same time, the bargaining agent for the workers. The managers are supreme and have the same rights and privileges that their counterparts in capitalist corporations have in the management of their industry. Wages are not higher, but conform to the general wage standards set by the unions. Of course, they are often used to set the pattern. They sign the labor contracts first. In addition, there are usually a few more fringe benefits when one works in a Histadrut industry and to a certain extent there is a greater feeling of fraternity.

This huge (for Israel) concentration of economic wealth obviously can be a basis for the development of vested interests for the leaders either as individuals or as a group. In the US we are quite familiar with those labor officials who use their position to enrich themselves. (A prime example was the case of Maj. Berry, who used his control of the Pressmen’s union to acquire a $2,000,000 playing card concern.)

Israeli labor, however, seems well protected from the danger of an individual exploiting his position for his own enrichment. One of the unique and most interesting features of the constitution of Histadrut is that no person can be a member if he employs labor for hire. While an Israeli labor leader may enjoy privileges or possibly embezzle, he cannot amass a large fortune if he wants to retain his central source of power.

In addition, labor in Israel, because of its socialist ideology and the pioneering character of the country, is very sensitive to all forms of ostentatious living and is strongly in favor of austerity in personal life. When a member of the cabinet, Levnon, built a 5 room house, a scandal broke out in Israel. After much furor, he proved that he had inherited a few thousand pounds from a deceased relative and that he used the house as a study. Nevertheless, the dispute contributed to his being dropped from a reorganized cabinet. Another Mapai leader, Shapiro, had to resign from his post as Member of Parliament because, as a lawyer, he drew up the incorporation papers of one of the oil companies and instead of a fee, he took oil shares. When oil was struck, he became rich overnight. As a result, he had to give up his position.

The different labor parties are ever on the alert to ferret out corruption. Al Hamishmar declared that it uncovered a racket whereby Histadrut officials belonging to Mapai, would take control of parcels of land and in the name of pioneering, land development etc., have the Histadrut agricultural contracting firm operate it but the offending official would pocket the profits. This was not wholly proven but in cases where there was some elements of truth the matter was rectified.

The Histadrut also had a unique salary structure for its officers and employees. At first all received the same salary plus an allowance for dependents. Later a system of classifications was introduced. A small percentage of Histadrut employees remained . unclassified until 1955, so that, in some cases, a messenger with, say, 10 children received more money than a manager with one or no children, despite the latter’s higher scale. In 1955, all employees were put on a straight salary in one of 12 classifications. The range of pay is £300-500 a month for Histadrut professional employees and it compares to £180-200 per month average wage of manual arid clerical workers in Israel.

While the likelihood of Israeli labor leaders turning into a privileged class of private capitalists is very small, there is the danger of the development of a collective privileged group of labor bureaucrats.

All life in Israel is highly partisan. The very pioneer settlements are organized, run and composed by members of the same political party. Political separation is often followed by economic and often physical separation from original village and home. Ordinary factory and agricultural jobs are distributed in the labor exchanges in proportion to political representation in the Histadrut convention. Other groups like the religious labor groups, receive their proportion according to a ratio fixed in agreement between their organization and Histadrut. The individual dissenter without a patron party would find life very difficult.

The key positions in Histadrut political parties and the economic organizations remain more or less in the hands of the same people, depending on the number of votes the Party gets. The Mapai has long been the dominant party in the Histadrut and has been open to constant charges of favoritism and discrimination. In addition, there has been a growing tendency for Histadrut and Mapai officials to take government jobs in addition to their labor positions. There have been charges of favoritism also in the allocation of Histadrut funds, government funds and contracts to Mapai institutions. All these factors tend to develop and maintain the hold of one group over the Israeli labor organizations and labor enterprises.

In the discussions by the labor critics of Histadrut and Mapai, one is struck by the fact that there are few suggestions for a change in Histadrut structure. The cry is usually that Mapai policy is not good, that it is subverting the Histadrut by-laws and that all that is necessary for complete democracy in Israeli labor is the scrupulous observation of the constitution and by-laws.

That there is democracy at the center, elections, opposing slates, proportional representation, etc., cannot be disputed. But is that enough? How do the workers feel in Histadrut plants? The economic journals show that the leadership is concerned with this problem. The general consensus is that the workers have been developing an attitude of indifference, that they feel no greater responsibility or sense of participation in a labor enterprise than they do in a conventional capitalist factory. Mapam and Achdut Avadoh have loudly protested the undemocratic nature of the Histadrut owned companies. This writer, however, found no concrete proposal for reform. In the entire month preceding the last Histadrut election, Al Harnishmar – only once referred to the question of democracy or workers control in Labor enterprises, and that only in a general way.

At the top of each corporation, there is, of course, an advisory board to management – consisting of representatives of the control bodies of Histadrut and appointees of the unions employed. These bodies are purely advisory. They have no real voice in management nor do they directly involve the workers in choice of representatives.

With the introduction of piece and incentive work and the policy of raising production in all plants, Histadrut plants also witnessed the formation of labor-management committees. These committees, however, did not give the workers a sense of participation. In many cases workers looked upon them merely as instruments of speed-up. The producers’ co-operatives have suggested to Histadrut that they convert their plants into co-operatives. One representative of the Histadrut told this writer that Vulcan will be used as an experiment and turned over to the workers. In what manner he couldn’t exactly say. One factory, Homa, has been set aside for experimentation in worker participation in management. However, the majority of opinion in the leadership is violently opposed to turning Histadrut companies into producers’ co-operatives, citing all the drawbacks of co-operatives, virtually accusing them of not belonging in the category of labor or socialist enterprises.

In a recent conversation this writer had with American supporters of Histadrut, in response to a question about profit sharing for the workers, I was told that the enterprises belonged to all labor and that no individual should benefit. Election of management was also repudiated by the same individuals on the ground that experience has shown that it does not get the most efficient managers: I asked whether workers in Histadrut enterprises have the right to strike: The reply was “no” and the reason given was that the workers would be striking against themselves! I pointed out that in the early days of the Russian Workers Government the Bolsheviks permitted the right to strike. There, too, the workers were in a sense, striking against themselves. The reply was to the effect that in the case of the Histadrut, a strike can be called, theoretically, but not without the sanction of the Executive Committee. But as the Executive Committee, is the overall manager it would not sanction a strike. How about giving the trade union section complete autonomy in the question of striking? That has not been considered, as yet.

In the long run, the question of workers democracy will be decisive for the-future of the economy. Without workers voluntary participation, the labor economy will not be able to surpass capitalist organization, With workers democracy, the worker will achieve new status, initiative that will contribute both to a more “human” person and to raising the level of production and material well being. The party or group which pays proper attention to this question, elaborating a program acceptable to the workers can become the spokesman of the Israeli workers. The crucial importance of this question cannot be overestimated.


1. A secondary but very important aim was Kibush Avodah – Conquest of Labor, i.e., drive out Arab labor from the Jewish economy of Palestine.

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