My Post op-ed "Theodor Herzl's vision betrayed" (May 22) in which I argued that the founder of political Zionism had a capitalist economic idea, but it was betrayed by Chaim Weizmann and David Ben-Gurion, has raised the ire of several critics. One is a prominent scholar who studied Weizmann. He disagreed with my thesis that Herzl's followers, especially Weizmann, undermined his plan to base the Zionist national revival on private initiative and free markets and not on public or state institutions. I think, our scholar wrote to a mutual acquaintance that "Doron's Herzl article makes false assumptions." It seems "to suggest that the Zionists in the early part of the 20th century had all the options in the world as to how they would constitute their state. But since they were not as far-sighted as Daniel Doron who has perfect 20/20 vision, they did not create a market economy which presumably would also have saved more Jews. Where does he think the capital investments were going to come from? Creating the kibbutzim and moshavim etc. was the most cost-effective way to settle immigrants in Palestine, given the circumstances at the time and the lack of foreign investment. "I was also unaware that European Jews were free to leave Europe and come to Palestine and the only thing that prevented them from doing so was the socialist society. Even if they could have left Europe, first the Turks and then the British and the Arabs did a good job of stopping the immigration or at best permitting a trickle of immigrants to come in." The following facts cast doubt on this scholar's assertions: Zionism did not have "all" the options, of course. But Zionism did have a clear choice between two options. They were articulated early in the 20th century by Z. D. Levontin's (the man Herzl chose to head the Zionist bank) and who publicly challenged Weizmann to select between two settlement strategies: to either base the Zionist effort on private investments and enterprise, as Herzl wanted, or on charity supported collectivist settlements. Experience already garnered with the kibbutzim made it possible to predict, Levontin argued, that if Zionism chose the socialist collectivist way it would fail. LEVONTIN'S warning proved prophetic. The year 1928 saw the first of repeated kibbutzim and moshavim bankruptcies. They went bankrupt every single decade until their final economic and social demise in the 1960s. But they were bailed out by capitalist donations that cost the Zionist movement billions. Is this what our scholar insists was the "most cost effective way to settle immigrants?" A bipartisan committee appointed to investigate the 1928 debacle included socialists like Prof. Hans Oppenheimer. Its verdict nevertheless vindicated Levontin's prognosis. The kibbutzim and moshavim, it concluded, were based on untenable principles that assured their failure. They had to be disbanded and replaced by efficiently run farms like those in the private, non-subsidized moshavot. Intense political pressure by the growing Labor camp and by Weizmann (who believed, as he explained in his memoirs, that the kibbutzim were the only proper breeding ground for the New Israeli, the anti-religious and anti-bourgeois socialist pioneer) led to the shelving of these recommendations. The Zionist organization and the Jewish Agency kept wasting meager resources on the economically, socially and demographically failed project of collectivism. This dangerously impoverished the Jewish community in Palestine. In 1948 Golda Meir had to fly to the US in a last minute effort to raise a few tens of millions of dollars to purchase arms, because the Jewish community could not afford it. Our scholar asserts that the kibbutzim were "the most cost effective" given "the lack of foreign investment." But Levontin listed many economic projects in which wealthy Jews were eager to invest through his bank following the Balfour declaration. Weizmann and his appointed head of the Zionist settlement department, Arthur Ruppin (a closet communist) and their socialist allies, undermined these efforts to discourage capitalist investments (Weizmann admitted his bias in his memoirs). The Marxist Labor camp not only undermined big capital investment, it also ruined many small private firms and workshops by engaging in an unrelenting aggressive "class warfare" (financed by the Zionist organization) that included boycotts, beatings, intimidation, forcing their owners to leave the country. There is corroborative evidence on this by many contemporary commentators including Nahum Vilbush and Ze'ev Jabotinsky and Left- leaning witnesses such as Moshe Smilansky. As for our scholar's claim that Jews were prevented from coming to Palestine it seems that he is unaware that immediately after the Balfour Declaration they were free to do so, and that a great wave of aliya swept then devastated Europe. Astoundingly the Zionist organization - under Weizmann - overrode protests by such leaders as Sheinkin and Ushisskin - and discouraged Jews from coming claiming that "the land was not ready." Weizmann later admitted that he did not want exilic Jews, particularly Orthodox and bourgeois Jews to come lest they deform his utopia. He therefore colluded with the British in imposing the restrictive "certificates" system which the Zionist organization controlled to bar "undesirable" elements, encouraging the entry of young penniless, unskilled but socialist "pioneers." They were controlled by leftist political parties and tilted the political balance so that Labor came to dominate Zionism. It might not please those who adhere to the official Labor-Zionist line to face these facts, but unless we accurately diagnose what caused socialist Zionism to fail, we cannot hope to extricate ourselves from the terrible mess it left behind. The writer is president of The Israel Center for Social and Economic Progress.