During Tel Aviv's 100th anniversary celebrations, almost every aspect of the city was celebrated. What was not celebrated was the fact that Tel Aviv was, and remains the country's capital of private enterprise. Private enterprise enabled the city - with the urban centers built in Jerusalem and Haifa and the 52 private settlements (like Petah Tikva or Metulla) to rescue the Zionist enterprise from the economic and social collapse caused by socialism.
When the Zionist settlement project was launched in Palestine, the Zionist leadership headed by Chaim Weizmann was determined to use it to create a new type of Jew - the antireligious, socialist pioneer who would then create a new nation and redeem the Jewish people from its exilic degeneration. With British cooperation, the Zionist Organization restricted emigration into Palestine to people holding "certificates" issued mostly to non-religious, anti-bourgeois, penniless young socialists. Only very few capitalists were permitted entry. As a result, in a decade the Left became a majority in Palestine's Jewish community.
THE ZIONIST Organization, through its settlement department, headed by the closet communist Arthur Ruppin and manned by a cadre of communists recently arrived from revolutionary Russia, allocated all the donations from capitalist Jews to collectivist (actually communist) kibbutzim and moshavim. For ideological reasons, they were to engage, without adequate training, in extensive dry farming. This in a country short of arable land and water, and in a period when the growing mechanization of agriculture shrunk it dramatically and the price of cereals sank.
Because the socialists believed that only farming was pure, honest work, and all other work, as Marx taught, was tainted by exploitation, the Zionist Organization gambled the future of its enterprise on a regressive economic system that was bound to fail, despite the billions in subsidies sunk into it.
By focusing on farming, the Zionist enterprise has also expanded the national conflict with the Arabs. Instead of expanding the economy through urbanization and industrialization that could provide plenty for all, socialist Zionism made scarce arable land, water and employment matters of bitter contention. The socialists also inflamed the Arab masses with their violent boycott of Arab labor and produce, and other provocations (the first murderous assault by Arabs on Jews followed a May 1 march by communists through traditionalist Jaffa).
The private settlements had a very difficult childhood. They overcame it with aid from the Baron Rothschild, and subsequently succeeded economically, demonstrating that it was possible to settle remote areas (such as Metulla and Gedera) by private initiative. It was not necessary to do so with failing socialist collectives.
Labor could not tolerate such success, and recruited "a class struggle force, well organized and strong to pursue a determined class struggle," which according to David Ben-Gurion "would unify the nation." Ben-Gurion and his comrades were then unabashed Leninists. "Class warfare,' Eliahu Golomb explained "is a struggle for political dominion." Labor hated town dwellers, the bourgeoisie - "the seltzer peddlers" as Ben-Gurion contemptuously called them.
The Zionist Organization, and later the Jewish Agency, supported Labor with all their means. The ZO and the agency financed the "economic" enterprises of the Left, the Hamashbir trade conglomerate, the construction giant Solel Boneh and Bank Hapoalim. With costless capital they could unfairly undercut private business. The ZO and the agency also financed the wild strikes and violent boycotts that according to Ben-Gurion would help build a workers' economy on the ruin of the private one.
When in the mid-1920s a recession hit Palestine following the collapse of Eastern European currencies and bankrupted Tel Avivian homebuilders, the Zionist Organization refused to help them.
Ben-Gurion and his comrades were happy to see these "capitalists" lose everything and leave the country. Like their ideological mentor Nachman Sirkin they believed that "bourgeoisie Zionism has no moral or national value."
Despite the ferocious war waged on it, private enterprise managed not only to survive but even to prosper, economically, culturally and socially; this despite the lack of natural resources or of a relative advantage, and despite the very poor human and physical infrastructure. The agricultural productivity of Petah Tikva alone was several times higher than that of all the collectivist settlements, and it employed thousands of Jewish workers compared to the few hundred working in all the kibbutzim and moshavim.
THE FAILURE of the Zionist Organization and the Jewish Agency to quickly urbanize and industrialize Palestine weakened the Jewish community economically and politically. It thus lacked the clout to pressure the British to allow increased aliya (the British in fact used economic retardation as an excuse to curb it) and it lacked resources to attempt to save those European Jews that could be rescued before the war. It lacked the means to prepare for the 1948 War of Independence - one reason Israel suffered so many casualties.
If not for the relative success of Tel Aviv and the other towns and settlements, it is likely that the whole Zionist enterprise would have failed when the collectivist sector did. No amount of devotion and hard work could have saved the heavily subsidized collectivist projects. As Ze'ev Jabotinsky observed (in a 1929 piece "We the Bourgeoisie"): "The individualistic element in developing creativity is basic and inevitable; the entrepreneur and the organizer are the visionaries of real progress."
All this was not even mentioned in Tel Aviv's anniversary celebrations.
The writer is director of the Israel Center for Social and Economic Progress (ICSEP).
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