Book Review
M. Eliany

Being Israeli
The Dynamics of Multiple Citizenship
Peld Y. and Shafir G.
2005 Tel Aviv University Press (Hebrew)
2002 Cambridge university Press (English)


Peled and Shafir is one of the most comprehensive reviews of research dealing with integration processes through which Israel turn newcomers into citizens. But beyond the valuable synthesis of research, they also offer a critical analysis that sheds a new light on the ‘old elite’ through its perennial transformation as well as its differential stratification impact on the Israeli society.


Peled and Shafir claim that a settlement (colonialist) policy characterized Labour Zionism and gave legitimacy to its social integration policies until 1967. Thereafter, Labour declined as integration policies could not be applied as effectively to a wider Palestinian population without putting at risk the Jewish majority in Israel and without constraining Israel’s participation in a liberal global market. Consequently, a political struggle for hegemony between forces in favour of liberalization (individual rights and universalism) and proponents of group rights (autonomy of Jews and Moslem side by side or particularism) is now at play. Peled and Shafir tend to attribute political instability in Israel to this struggle. They also suggest that orthodox nationalists (i.e., settlers, read also as Mafdal party) together with ‘Orientals,’ (i.e., orthodox ‘Oriental’ Jews, read also as Shass party) are proponents of group rights, although they admit the failure of peace negotiations and the Palestinian uprising (Intifada) led to a national consensus among Jews of all camps on matters of group rights. Therefore the liberalization discourse narrowed to the economic domain and no longer applies to civil rights at large. Peled and Shafir propose that a resolution to existing counter trends may arise from a simultaneous recognition of universal individual civil, political and social rights along with particularistic cultural rights to distinct groups or minorities. Such recognition would allow groups to maintain their culture and use it to enhance their position in society through the use of individual rights without undermining national cohesion. In addition, Peled and Shafir believe that the state must invest significant resources to elevate the culture of disadvantaged groups (i.e., Palestinians and ‘Oriental’ Jews) in a multi-cultural democratic context in order to prevent the hierarchical stratification of the past.



Key findings

Peled and Shafir suggest that early Zionists had many good intentions but a history of intentions if written, would ignore the complex relations between intentions and deeds, and focus on real facts and deeds, rather than the intentions behind them. (p.32).

The reality is that the law of return grants Jewish immigrants rights that are not extended to Palestinian citizens and that Palestinians remained under martial law from 1948-1966. Similarly, immigrants of European origin received preferential access to national institutions in comparison to those who came from non-European countries (p. 39).

Globalization dragged Israel into the adoption of liberal policies, as well as into the peace process, which resulted in an accord with Egypt as well as with the Palestinians (Oslo 1993). However, liberalization came on the expense of social and civil rights as weaker social segments of the Israeli society (Jews and Palestinians) suffered, turning them to ethnic and religious organizations for comfort (p. 42). 

Labor elite used socialist ideology to provide legitimacy to hierarchical stratification and differential access to national institutions from 1920 through 1977 in order to ensure nation building but also to hang on to power and control of Jewish international resources. Social scientists provided academic legitimacy to the same through 1990 (Eisenstadt and his students – the Functionalists).  Overall the basic theory was that Palestinians and Oriental Jewish immigrants benefit from modernization and thus differential treatment is to their advantage. However, as nation building came to fruition, stronger elements in the Israeli society (previously perceived as a functional elite) demanded liberalization (1985), which gave them even more advantages on the expense of disadvantaged groups (Arabs, Oriental Jews, the poor and the religious) (p.44-51).

In general, Labour parties supported democracy but only as a procedural matter. In reality, Labour undermined the development of voluntary association networks, which provide the basis of real democracy. Israel thus remains a particularistic democracy (Smooha calls it ‘ethnic democracy’) where citizenship is based not on equal individual-rights but on unequal differential group-rights (Smooha, 1983, 1993, 2000 and Peled and Shafir, 2005: p.51-53).

Privileged Pioneers

About 2 million Jews left behind poverty, oppression and anti-Semitism in Eastern Europe between 1882-1914 for a better life elsewhere. Most Jews immigrated to the Americas, South Africa and Western Europe. Less than 3% settled in Palestine. The first wave of immigrants (1882-1903) bought land and established farming communities relying on Arab Labour to a large extent. They sought co-existence with local Arab communities. The second wave of immigrants (1904-1914) came penniless, expecting their predecessors to provide them with work. But first wave veterans preferred Arab labourers who were cheaper, obedient and hard worker. Facing hardship, 90% of the second wave immigrants left Palestine but those who stayed established a labour movement and launched a struggle to conquer both labour and land on the expense of their Arab competitors, causing thereby rising tensions.  Labour acquired leadership in ‘nation building’ but managed to do so only due to the financial support of World Zionist Organizations. Although Labour, like the old orthodox sector, both relied on financial support from abroad to survive in Palestine, it acquired pioneer and leadership status as it laid the organizational foundation for the absorption of subsequent waves of immigrants.Subsequently, the Labour movement monopolized resources received from world Jewry and aimed for nation building. It implemented a policy of differential allocation of the same resources based on affiliation to the labour movement and ethnic and religious proximity (i.e., Polish/Russian first, then Hungarian and Romanian, then Orientals etc… while Arabs were excluded  (Shafir 1989 and Peled and Shafir, 2005: p.59-68).

The coalition between the Labour movement and World Zionist Organizations was fruitful in term of nation building as Labour provided the manpower and the infrastructure for absorption of new immigrants while WZO provided financing to conquer both labour (avoda ivrit) and land, while excluding local Arabs. Pioneer settlements and related organizations were cooperative in character (kibbutz, moshav and covered a variety of services from health to finance…), allowing the labour movement to control both members and resources acquired from WZO. Further, land ownership remained in national hands, except in urban areas where land was more expensive and where private ownership was more prevalent. But the Labour movement’s domination of most national resources was used not only to fulfill nation-building objectives but also to control allocation of resources and membership loyalty to enhance particularistic Labour parties’ interests, undermining thereby universal principles of citizenship in the nation in the making. Subsequently, the Labour movement constrained Israel’s democracy through systematic allocation of privileges to loyal groups fostering thereby dependence of individual members (Ram 1995; Shapira 1977 and Peled and Shafir, 2005: p.68-76).

From a strict economic point, WZO had limited success attracting immigrants with private investment since profit considerations led them elsewhere and those who did immigrate to Palestine between 1882-1903 (i.e., first wave) preferred hiring cheap labour (i.e., Arab labour) which undermined early Zionist nation building objectives. Subsequently, WZO combined with the Labour movement to subsidize labour as well as land in order to establish a sheltered Jewish economy separated from the competitive Arab one. Labour also controlled monetary funds from internal and external resources as well as their allocation. In early phases, priority was given to the agricultural sector. Around 1962, funds were directed to industrialization. After 1967, following the French arms embargo, investments in the military sector received priority. In general, investments in the local industry aimed to reduce dependence on imports. This applied especially to the military industry, which became and engine of economic development while offering new opportunities in the civilian sector and export, especially in high tech in the Eighties. Finally, as local production rose, pressures to liberalize monetary funds controls increased and market forces weakened institutional and Labour controls (Kleinman 1967 and Peled and Shafir, 2005: p. 76-84).

Civil and Social Rights

From the beginning the Labour movement was not interested in philanthropic services, which characterized the old orthodox sector and conceded them to other parties such as religious parties, the Joint and the Jewish Agency. The Labour movement chose to focus on nation building by providing and/or subsidizing services that would ensure a ‘European’ standard of living in the areas of housing, employment and health to its members. It used these services or privileges to increase its membership as well as its political influence. Thus social services were reserved to Labour members rather than to all citizens as universal rights  (Shalev 1992). Labour leaders also helped themselves from the public purse. They considered this type of self-service as a deserved right and on occasions when caught red-handed, they were forgiven on account of their contribution to nation building (Shapira 1977 and Peled and Shafir, 2005: p. 84-88).

Labour nation building strategy proved effective in tying immigrants to the land through subsidized social services. However, Labour’s preferential treatment of its own members implied also the exclusion of immigrants from North African and Middle Eastern countries, religious groups, women, as well as Arab Palestinians. Thus, nation building became characterized by an elitist and sectarian approach on the expense on real pluralism and universal principles. Yet Labour managed to maintain its hegemony until 1977 because of its significant contribution to nation building.

Labour Zionism however appears to be a special case in nation building. Some researchers noted its colonialist character although such comparisons remain quite controversial. In reality, Jews, like other groups, wished for the acquisition of civil and social rights in the context of national sovereignty due to the influence of the French revolution and the rise of nationalism. In addition, with the rise of nationalism in Europe, Jews became subject to increasing pressures as a minority and more than they wanted a solution for themselves in their own homeland, hosting nations wanted them gone. The historical opportunity rose after WWI when the League of Nations broke apart the old Empires to establish a new World Order in which sovereign nations were the key building blocks. Thus, Jews were granted a homeland in Palestine on both sides of the Jordan. Britain was given the mandate to oversee the establishment of the Jewish homeland while the Jewish Agency was meant to bring it to fruition but in reality the Labour movement led the way in nation building while all other parties and organizations followed suit. Unfortunately, the Labour movement failed to extend equal civil and social rights beyond its membership; thus creating a stratified society in which non-European immigrants, women and religious groups were assigned a lower status. Arab Palestinians took an even lower level in the same hierarchy. Rather than establishing a universal criterion for membership in the Israeli society, Labour ranked higher its own members (Arendt 1973; Peled and Shafir, 2005: p.89-98).


Differential treatment of Non-European Immigrants

In general, Jews of European origin claim that because they were pioneers, they deserve to be at the top of the Israeli social hierarchy. In the pioneers’ mind, Europeans Jews provided Israel with quality while non-Europeans Jews supplied the quantity. However, Jews of North African and Middle Eastern background always immigrated to Palestine and constituted there about 10% of the pre-independence Jewish population. In addition, a significant number of Yemenite Jews settled in Palestine during the first and second wave (1880-1914). Yet, Jews of non-European background were not included in the pioneer category and were often discriminated against in terms of allocation of resources as well as employment benefits. Furthermore, the Labour elite held an ‘Orientalist’ bias in the sense that they feared the ‘Levantinization’ of Israel. They identified Jews of North African and Middle Eastern background with an inferior Arab culture and wished to make Israel a ‘European’ like nation. But faced with an Arab demographic threat, the Labour pioneers decided to bring in Jews of North African and Middle Eastern background to settle the periphery, provide cheap labour as well as low level manpower to the army, in all likelihood because the Holocaust dwindled the European Jewish population. This policy had dire consequences as it differentiated between European and non-European Jews in terms of access to economic and educational opportunities and widened the gap between them further (Peled and Shafir, 2005: p.99-114).

Constraining the Political Rights of North African and Middle Eastern Jews
Given that the share of Jews of North African and Middle Eastern background in the general population increased after the independence of Israel and given that equal political rights were granted to all citizens at the formal level, one may ask why non-European Jews did not make political gains in terms of representation. One of the key observations appears to be that Jews of North African and Middle Eastern background were constrained in terms of the use of their political rights, as such use was perceived as divisive and therefore illegitimate. The divisiveness argument was never used in the case of parties dominated by European Jews. Under these circumstances, non-European Jews remained under-represented and when represented – they were prevented from using ‘ethnic’ considerations to advance their causes. Dejected, they turned first to the Liberal Conservative parties (i.e., Likud) to punish the Labour parties and when disappointed from the Liberal Conservatives, they turned to orthodox parties (i.e., Shass) for comfort. But unfortunately, while voting for orthodox parties may bring about improvements in the area of religious services, it is not likely to advance the lot of non-European voters in the socio-economic domains. Interestingly, so far North African and Middle Eastern Jews did not adopt class or ethnic arguments to negate their spatial, economic, cultural and educational exclusion and time will tell if gains made within mainstream political parties in terms of representation will be translated into policies to advance their causes (Peled and Shafir, 2005:p.114-123).

Differential treatment of Women

Social equality has been the declared ideology of the Labour Movement in Israel in all matters related to women. However, Labour did not install institutional structures and processes to make equality between the sexes real. As nation building required both hard physical work and military involvement, women were ranked according to their contribution to both domains; in other words, lower than men. Women in Israel have been involved in the military more than elsewhere in the world, yet they have not been exposed to front line battle positions. Further, many are relieved from military duty to facilitate marriage, care for children and bear as many of them as possible to win the demographic battle.

In general, women have not fared as well as men in the labour market. Many of the positions they occupy remain secondary both in ranking and remuneration. They also remain at a disadvantage in orthodox courts. In addition, they failed to translate their weight in the population into electoral representation (hardly 10%). Further, they did not manage to promote an agenda that favours women interests, mainly because attempts to do so were labelled divisive and anti-patriotic, as was the case when Jews originating from Arab countries made similar attempts (Safir 1991, Swirski 1991, Izreli 1997, Yishai 1997, Peled and Shafir, 2005: p.123-128).

Differential treatment of Orthodox non-Zionists and Orthodox Nationalists

Orthodox Jews wish for national redemption to materialize in the hands of a divine messenger and in the context of a national entity respectful of Jewish law. Zionism, however, provides for the establishment of a Jewish nation that is secular and thus non-conforming to orthodox interpretations of Jewish law. These differences present a paradox for both sides. Orthodox groups had to decide whether to support a Jewish but secular entity, which engaged in bringing about national redemption. Orthodox groups responded in a variety of ways. Pragmatist Zionists (i.e., Reines’ Hamizrahi) support Zionist’s initiatives as a life saving response to counter threats for Jewish existence. They do not perceive Zionist secular initiatives as a part of religious redemption. Orthodox nationalists (i.e., Kook’s Mafdal) grant support to Zionist‘s nation building as a preliminary step to divine redemption. Orthodox objectionists (i.e., Agudat Israel) object to the Zionist initiative but deal with it as a worldly political entity and do so to advance religious interests. Orthodox antagonists reject the Zionist initiative completely.

As Jewish orthodox groups provide historical and Biblical legitimacy to nation building, Labour Zionism conceded to them civil and social rights but also autonomy in matters of education, authority over marriage and divorce, kashrut, Sabbath related laws, as well as, the privilege to define ‘Who is Jewish.’ They were also granted exemption from military service, except for Orthodox nationalists who serve in the Israeli army. The latter group raises a potential problem since while their weight in the army increases; there is a risk that they would opt to conform to rabbinic rather than military authorities. Concessions to orthodox groups cost Israel dearly (about 3.5 billions per year, or a sum equivalent to the budget of 12 government ministries).

Some have argued that Labour Zionists made concessions to 0rthodox groups as a necessity to form coalitions and maintain power (Cohen 1997a). However, Labour Zionism adopted its Jewish characteristics as a matter of fact to legitimize itself as a national movement representing Jews all over the world. This may be the main reason Labour Zionism makes concessions to orthodox groups. Further, even when concessions were not needed, Labour government adopted ‘Jewish studies’ in secular school to strengthen Jewish identity. In light of this observation, it is of essence to inquire whether it would be feasible to separate religion from the state in Israel and adopt civil and social rights that are applied according to universal principles. Polarization between religious and secular groups suggests that pressures are likely to lead in the direction of a separation between the state and religion. However, historical observations indicate that Israeli-Palestinian tensions (i.e., the Intifada in 2000) tend to strengthen reliance on ethno-Jewish characteristics to foster internal solidarity. Therefore, as long as Israeli-Palestinian tensions remain in effect, it would be difficult to separate religion from the state in order to adopt universal principles of citizenship. This of course has implications for the place of the Palestinians in Israel.

Differential treatment of Palestinians


About one million Palestinians live in Israel, 17% of the population. They live in the Galilee, the ‘Triangle’ where they constitute the majority and in the Negev. (After 1967, Palestinians made the majority in Gaza and the West Bank too). Military-rule (1948-1966) controlled Palestinians entree into the Israeli labour market and facilitated their political cooptation as well as land nationalization.

Land is the main dividing issue between Arabs and Jews in Israel. Palestinians lost about 70% of their land through nationalization. Israeli authorities control construction and land leasing on all nationalized land. Palestinians are permitted to acquire only short leases (1-3 years). They received low compensation for nationalized land and low water allocation for agriculture (Lustick 1985; Haidar 1995).

Under the above condition, self-employment among Palestinians decreased and dependence on Jewish employment, mainly low status jobs, increased. Palestinians are hardly represented in high scale positions, they get lower salaries and more of them live under the poverty line. The Jewish and Arab education systems are separate until the end of high school. The Palestinian education system received fewer resources and students’ achievements tend to be lower than in the Jewish sector. Consequently, lower education resulted in limited employment opportunities and partial access to social rights. (Peled and Shafir, 2005:p.139-156).

After the abolition of military rule in 1966, Palestinians enjoyed equal civil and political rights on an official level. However, anyone who does not serve in the Israeli army or does not contribute to Jewish nation-building, finds his/her civil and/or social rights curtailed in one way or anther. Thus a Jew who does not serve in the army may not have access to certain categories of employment or housing subsidies… Such limitations apply to Israeli Arabs with more vigour. Arab citizens are not permitted to form parties that support hostilities towards Israel. Arab parties have not been included in coalition governments, although some governments rely on their votes to maintain a majority (i.e., Rabin re the Oslo agreement). Further, Arab attempts to demand equalallocation of land (i.e., Ka’adan in Katsir) and pro-Palestinian demonstrations (i.e., during the Second Intifada – 2000) were interpreted as real threats to nation-building. Israeli police shot and killed Israeli Palestinians and common Israelis reduced dealing with them (50% decline of commerce). Given that real civil and social integration appears difficult in light of Jewish nation building interests, Israeli Palestinians have voiced the option of an ethnic autonomy within the context of ‘an ethnic democracy’ (Lewin-Epstein and Samyonov 1993; Smooha 1997; Peled and Shafir, 2005: p. 156-170).

Expansion beyond the Green lines for Security

The 1967 war opened new-old frontiers to Israelis. Although Israelis got used to a smaller Israel within the ‘green lines’, the occupation of Gaza, the West Bank of the Jordan and the Golan Heights revived yearnings for a Greater Israel, perhaps as large as the mandatory Palestine destined by the League of Nations to be a home for the Jews on both sides of the Jordan. Soon, the Labour elite resorted to the establishment of strategic settlements along the Jordan River (Alon’s plan), in Gaza (Dayan’s plan) and finally in the midst of Judea and Samaria (Galili’s plan) while the Golan Heights were annexed. Interestingly, the occupation offered an opportunity to exchange land for peace (Sadat offered such a deal in 1971 before the 1973 War) but the Labour elite, dominated by activists with military background, opted for hanging on to the occupied territories for security reasons. Security reasons were brought to the forefront to legitimize the expansion of Israel beyond the ‘green lines’ (Harris 1990; Peled and Shafir, 2005: p. 193-199).

Seeking Legitimacy in Biblical Inheritance and Messianic Redemption

In the same way that the occupation of Gaza, the West Bank of the Jordan and the Golan Heights revived yearnings for a Greater Israel for security reasons among Labour Zionists, Orthodox nationalists perceived the liberation of holy sites (Old Jerusalem as well as Judea and Samaria) as the beginning of redemption (i.e., Kook’s thesis). Orthodox nationalists adopted with fervour the duty to expand into territories beyond the ‘green lines.’  Their young generation educated in separate orthodox nationalists schools funded by the state, however small, reclaimed a ‘new pioneer’ status, providing renewed legitimacy to settling occupied territories for Biblical and historical reasons as part of a religious national redemption. For them, negotiated peace is secondary to a messianic and divine redemption. As their actions indicate, i.e., settlements without government approval and hostility towards Palestinians and secular Jews alike, religious nationalists may pose a significant security challenge from within as well as a threat to peace with Arab neighbours (Sandler 1981; Lustick 1988; Sprinzak 1991; Peled and Shafir, 2005: p. 199-207).

Expansion beyond the ‘Green Lines’

All Israeli government, whether Labour or Liberal-Conservative led, supported the expansion beyond the green lines by providing security, infrastructure development as well as subsidies that made living in the new settlements worthwhile. Orthodox nationalists were the most visible and vocal settlers, but even they could not enlist a large pool to thicken their settlements. In reality, most of the settlers were not religious nationalists but people of moderate views and income who sought cheaper and better quality housing beyond the green lines but close to main urban conglomerations. Most were motivated by economic considerations.

Most of the development beyond the green lines was financed on the expense of development within, especially to the detriment of the periphery, i.e., the Galilee and the Negev; in other words, to the disadvantage of immigrants from North Africa and the Middle East who make the majority in the outskirts. Objections to settlements beyond the green lines (about 200,000 around Jerusalem and another 200,000 elsewhere) grew as their cost increased and especially when Palestinians responded with increased violence (i.e., two Intifadas). At this point, many Israelis began questioning the legitimacy of occupation and its costs to the Israeli society and began considering peace as an alternative to reliance military solutions and territorial expansion (Benvenisti 1986a, 1986b; Peled and Shafir, 2005: p. 207-220).

Palestinian Resistance beyond the Green Lines

Israel expanded its territories to include Gaza, the West Bank of Jordan and the Golan Heights to include the majority of the Palestinian population by the end of the 1967 war. Soon after the war, the Labour government considered immediate withdrawal to the 1967 borders in exchange of peace as well as a proposal to grant Palestinians autonomy with a security treaty and an open market with Israel. But these worthwhile proposals were set aside in order to establish a military rule similar in nature to the one imposed on Israeli Palestinians between 1948 and 1966. Its objectives were to control Palestinian access to the Israeli labour market as well as appropriation of as much Palestinian land as possible. To start Israel appropriated all public land (about 30% of the occupied land, excluding the Golan Height). It also permitted the purchase of private land in the occupied territories by Israelis. Israel prohibited voluntary association but allowed municipal elections under the old Jordanian rules, which privileged notables (1972). However, election rules were reformed in 1976 to allow wider participation to include women and the poor. Palestinians then elected a pro-PLO leadership to displace the old notables as well as convey their dissatisfaction on continued occupation. Subsequently, they made their intensions clearer in a series of strikes which would turn later into violent rebellions, i.e., two intifadas in 1987 and 2000 (Peretz 1986;Younis 2000, Peled and Shafir, 2005: p. 221-222; 228-232).

Resistance increased in all likelihood because Palestinians observed how Israeli policies not only denied them autonomy but also resulted in creeping appropriation of Palestinian land. Although Israelis claimed that Palestinians benefit from occupation due to access to the Israeli labour market, civil and social rights improvement and infrastructure development, studies refute their assertions. The standard of living improved in Palestinian territories only slightly in comparison to Syria and Jordan. Palestinians did benefit from improved medical and judicial services, extended voting rights to women and the poor, paid sick leaves as well as compensation upon dismissal and abolition of the death penalty.  Yet, Israel did not allow industrial development, and it constrained water allocation to agriculture and employed only low paid labourers into Israel (30% of equivalent salaries in Israel), while Palestinians contributed to the Israeli economy taxes on labour and purchases as well as duties on imported goods. Israeli importers who supplied the Palestinian market also benefited from exclusive import privileges. In addition, educated and skilled Palestinians working abroad also contributed to the local economy through imports of foreign currency (Kleinman 1993; Bellisari 1994; Benvenisti 1990; Peled and Shafir, 2005: p.222-228, 232-236).

Palestinian resistance began with complaints and occasional protests but gathered force and turned into a full-scale rebellion (i.e., Intifada) when Palestinians realized that Israeli policies undermined their hope for autonomy. Thus, in spite of prohibition of political association, a network of associations geared to provide social and professional services managed to formulate Palestinian demands of a political nature, stating clearly a desire for independence, recognition of the PLO as a representative of the Palestinian people, removal of economic development restrictions, re-imbursement of taxes and duties collected by Israel, re-instatement of municipal election and an end to military oppression. Although the rebellion had economic consequences on the Palestinians, it had a significant impact on Israelis too (increased military expenses, reduced exports to the occupied territories, reduced tax revenues as well as a decline in tourism, or about 2.5% of the GNP). As the benefit associated with occupation declined, Israelis began looking for alternative solutions, leading to the Oslo and Camp David agreements. But these agreements failed due to divergence relating to Jerusalem, settlements and refugees. Israel proposed to the Palestinians sovereignty on Arab neighbourhoods in Eastern Jerusalem, including the Temple Mount while keeping sovereignty in the Jewish quarter of Jerusalem as well as in all the newly built neighbourhoods around Jerusalem. Israel offered to keep 80% of the settlements, i.e., about 10% of the West Bank, including Jerusalem and gave in exchange a strip of land to thicken the Gaza strip (equivalent to about 3% of the West Bank). Israel was to keep settlements in the Jordan Valley for 3-6 years for security reasons as well as a measure of confidence building. A compromise was possible on the basis on the first two dividing issues but not on the right of return of refugees (about 3.5 millions). The Palestinians rejected Clinton’s bridging compromise, i.e., the return of 100,000 refugees to Israel in the framework of family unification while the remaining refugees would be compensated and resettled elsewhere with the help of the international community. They also demanded territorial continuity between Jerusalem and the West Bank as well as a return to the 1967 border elsewhere (Peretz 1990; Lustick 1993a; Sontag 2001; Peled and Shafir, 2005: p.236-250).

The Struggle for the Universalistic Character of Israel

One of the key problems Israel has faced since its independence is its dependence on foreign Jewish resources originating from a very generous and liberal Middle Class which stayed abroad and left the task of nation building in the hands of a Labour movement, which failed to make a transition from representation of narrow sectarian and/or party interests into caring for universal national interests. Debates did take place as to what should be the character of the underlying new nation’s institutions, i.e., whether they should be universal (i.e., Weizman and the Liberals) or sectarian (i.e., Labour); but the Labour parties won because they controlled most of the national resources before independence and used them post independence to hang on to power. The debate went on within the Labour movement itself. Ben Gurion did manage to establish a national army free of sectarian divisions. He tried to do the same in the domain of education but had limited success because of concessions made to the orthodox sector. Ben Gurion made another attempt to lead Israel into universalism when he called for electoral reform in the early 60’s, but the Labour movement did not wish to relinquish its hold on power and used national resources to maintain it by institutionalizing a system of allocation of privileges which resulted in a stratified hierarchy. Labour made generous concessions to the religious sector in order to maintain its legitimacy in the eyes of the international Jewish community and thereby continue to control the flow of external resources into Israel as well as their differential allocation to suit its sectarian interests. The coalition between Labour and orthodox sectors crippled the Liberal-Conservative movement and delayed its growth until the mid-eighties, when Progressive Liberal parties renewed their call for democratic, electoral and economic reform, in addition to the separation of religion from the state and a peaceful solution to the Israeli/Palestinian conflict (i.e., Shinuy, Dash, Rats). Often neglected but of great significance is the shift in the voting pattern of immigrants from North Africa and the Middle East, who elected a Liberal-Conservative government (i.e., Likud) to ‘break’ the Labour system of allocation of resources which disadvantaged them. This shift forced Labour to re-assess its platform (i.e., Mashov and Kfar Yarok circles), introducing into it elements of liberal character, while weaning its labour union from its medical and industrial arms; thus bringing about convergence across political camps around democratic and economic reform. Another significant consequence of this convergence is the reformulation of the Israeli/Palestinian conflict within an economic framework, which led to the Oslo agreement. The most significant indication of the ongoing process of convergence is the recent congregation around the political centre (i.e., Kadima in 2006) (Torgovnik 1980; Corbin 1994; Peled and Shafir, 2005: p.253-271).

Economic Liberalization and Peace

Interestingly, the re-assessment within Labour which led to its disassociation from its industrial and medical arms coincide with the rise of an increasingly independent business community, which happen to have also intimate links to the Israeli military industry. This shift, however complex and paradoxical, requires some explanation. One may inquire why the disassociation of Labour from its industrial and medical arms became associated with its detachment from commitments to social rights? In other words, why members in the largely cooperative industrial complex did not get their share? Or why the ‘new’ Israeli business elite which took over the Labour industrie, became so intertwined with politics?(Lane 1998; Shalev 2000; Peled and Shafir, 2005: p.272-273).

It is of essence to recall that most national resources (internal tax revenues and world Jewry sources) were used to subsidies the agriculture, then labour intensive industries, then military industries and then high tech industries most recently. Israel’s industrial development coincides with its rising expenses on defence  (10% of the GNP before 1967 to 20% between 1967 and 1973 and to over 30% after 1973). It evolved as a response to the French arms embargo as well as an expanding global demand for arms. However with the peace treaty with Egypt (1979) and the withdrawal from Lebanon (partial in 1987 and final in 2000) and the decline in security expenses that followed (to about 10% of the GNP), provided Israel with the occasion to shift from military to a sophisticated civilian high tech industry. Israel then signed economic treaties with the European community (1975) and the USA (1985) to facilitate its integration in the world global economy. These markers also coincide with increasing economic and political liberalization as well as with attempts to resolve the Israeli Arab conflict peacefully. Around the same time, USA enticed Israel to liberalize its economy by converting an arms related loan into a grant. This, in turn, made the absorption of a massive Jewish immigration from Russia possible; adding might to Israel's economy. These developments facilitated changes in hierarchical stratification too: the old Labour elite (mostly of European origin) was able to move its control from the heavily subsidized Labour industry, through heavily subsidized military industry into the hands of a privileged group affiliated with it through privatization processes. This transfer of wealth created a new economic elite, with a high concentration of economic might. It also allowed for its mobility into an even higher position in the hierarchical stratification system, making room for others to move up in the hierarchy. Thus orthodox nationalists and Jews of North African and Middle Eastern origin gained some mobility, filling political (i.e., Perets at the head of Labour) and military positions (i.e, Mofaz as chief of staff in the Israeli army), which lost shine in the meantime (Silver 1990; Levy 1997; Barnett 1992; Grinberg 1991;Waldman 1991;Asa-El 1997; Peled and Shafir, 2005: p.273-280; 288-296).

Opening the Financial Markets

Liberalization became possible due to a change in the balance of power in the financial markets. Labour controlled most of the financial resources before the rise of the Liberal-Conservatives (i.e., Likud) to power in 1977. Thereafter, economic legislation changes reduced government and Labour control of financial resources, making room for a stock market to emerge, for a more open foreign currency market to evolve, as well as, for the Central Bank of Israel to make effective monetary policy (i.e., control of interest rates). Access to open financial market freed capital, professional and educational resources from the old Labour controlled system, bringing about a liberalization of the Israeli economy. (Contrary to widely held beliefs, a few non-European Israelis played an important role in this liberalization process (i.e., Gaon and Ben Ami in the case of Koor) along with the old European elite) (Grinberg 1991; Razin and Sadka 1993; Gaon 1994a; Koor 1994; Peled and Shafir, 2005: p.280-288).

The Finance and Peace Connection

Investors prefer to operate in predictable financial markets. They do not invest in war zones or unstable political countries. Therefore, when the financial markets opened up in Israel, the business community demanded a peaceful resolution to the Israeli-Arab conflict. Leaders in the business community estimated that peace would open Arab and international markets to Israeli investments and goods. They lobbied for a peaceful settlement and laboured for the acceptance of the Oslo in the general population. Subsequent to the Oslo agreement becoming public, they also established Israeli-Palestinian business forums to enhance collaboration between Israelis and Arabs. Gaon, Koor’s CEO, led the pack by establishing an office in Egypt as well as signing a variety of commercial deals in Egypt and Morocco (Rossant 1989; Gaon 1993; Peled and Shafir, 2005: p.288-304).

From a Subservient to an Autonomous Judicial System

Upon the declaration of independence in 1948, the Israeli parliament decided not to adopt a constitution, mainly due to Ben Gurion’s objection, as he wanted to give the state enough power to complete the task of nation building. Israeli parliaments adopted ‘constitutional laws’ (hukey yesod) which did not have any overriding power but were added to existing laws. This system allowed for more power to the parliament and the government and a weaker subservient judiciary.

Following the October War (1973) and Lebanon War (1982) as well as the economic crisis (high rate of inflation) around the same time, a group of intellectuals (mostly lawyers) called for a constitutional reform to address Israel’s mounting problems and increasing corruption. They called for the adoption of a constitution and a change from proportional elections to a hybrid system that combines personal-regional and proportional elections.

Attempts to change the election system failed. Most analysts suggest that the attempt to elect prime ministers directly (1996-2001) led to increased political fragmentation as small parties gained power on the expense of larger ones. Further, as party members elected parliament candidates in a democratic contest (rather than through internal selection committees), party control of its membership weakened (within the Labour party especially). As these developments, which pointed to increasing opportunities for more democratic and balanced representation, disappointed the larger parties which hoped for more power consolidation in their hands rather than fragmentation, direct elections of the prime minister were abandoned  (Hazan 1996, 1997a; 1997; Peled and Shafir, 2005: p. 309-312).

The call for constitutional reform resulted in the adoption of two constitutional laws, which address human rights. These laws, considered by some as ‘revolutionary,’ provided for the first time a legal foundation for the protection of civil rights while constraining national rights due to ‘security considerations’ or ‘ethnic/national interests.’ This change gave the judicial system the opportunity to act as protector of civil rights and weakened the institutional powers established by the Labour movement. Some argue however that the empowerment of the judicial system could hardly be attributed to the adoption of the new laws, as similar laws existed before then and remain valid and that in reality it occurred due to ‘liberal activism’ by a judiciary that has close ties to a privileged elite that is in the process of losing power (i.e., see above - weakening of large parties etc…) and sought protection behind a judicial veil. Thus, as long as the old elite controlled most institutional powers, it used ‘security considerations’ or ‘ethnic/national interests’ to maintain its privileges; but as soon as it began losing its hold on national institutions, it sought cover behind non-elected institutions such as the Central Bank and the Judicial System and civil rights. This view gains some validity in light of recent interpretation of labour laws (i.e., by Justice Barak), which indicate to a shift in favour of employers and capitalists on the expense of employees. Another test of the so-called judicial ‘revolution’ relates to the protection of civil rights of non-Jewish Palestinians. Although Israeli courts appear to be more willing to offer some protection to Palestinians (or non-religious Jews), ‘security considerations’ and ‘ethnic and Jewish national interests’ remain an important element in their considerations  (Gross 1998; Lahav 1993; Hirschl 2000a; Peled and Shafir, 2005: p. 305-309; 312-324).

Diluting Social Rights

Studies indicate that inequality has been increasing since Israel’s independence. This trend is closely related to structural changes, especially the liberalization of foreign exchange and the privatization process. Government research also reports that income inequality, before and after tax, is wider in Israel in comparison to other developed countries. Tax reforms benefited high-income earners especially. In general, groups such as North Africans, Middle Easterners, the orthodox and Palestinians are disadvantaged as the weight of high tech professional requirements increase and the need for low skilled jobs decreases as well as the decline of union contracts and the rise of employment through agencies that do not offer social benefits. Moreover, the percentage of families and children living in poverty has been on a steady increase, reaching (22.4% and 31% respectively in 2004). Interestingly, allocations to the elderly (who are mostly of European origin) have been indexed to inflation while allocations to children (mostly of North Africans and Middle Easterners background) have been reduced systematically. (Palestinians did not get children benefits as they did not serve in the army, until 1993 when this restriction was removed.) (Rosenhek and Shalev 2000; Peled and Shafir, 2005: p.325-342).

Some researchers suggest that reductions in security expenses (below 10% of GNP) would allow raising allocations to disadvantaged groups (above 11% of GNP), but such an occurrence appear unlikely. Further, trends in liberalization of the Israeli economy do not bode well for the disadvantaged. Five families own 40% of the capital traded in the Tel Aviv stock exchange! And while the income of Israeli managers is higher that their colleagues in industrialized nations, the income of employees is lower and the gap is increasing. Although most people living in poverty tend to be old people or the unemployed, one third of the employee category are working poor. Thus liberalization does not appear to bring much hope for the poor or the working poor (Rosenhek and Shalev 2000; Peled and Shafir, 2005: p.325-342).



As Taxation and employment do not seem to promise equal access to citizenship, would education, health or housing services do?

Recent trends indicate that education, normally an effective tool of mobility in industrialized societies, has not been effective in reducing inequalities. Economic liberalization meant also privatization of educational services and in other words less public allocations to education and even less so to the disadvantaged. Thus, a process of differentiation between the rich and poor has become more evident (some Israeli researchers call it segregation, i.e., Swirski 1999). And in general, Israel educational achievements regressed when compared to other industrialised nations (Swirski 1999; Peled and Shafir, 2005: p.342-346).

Political affiliation determined access to health services before independence. As the labour movement had the largest combined party and health membership (70%), it objected to nationalization of health services. After independence, the state established complementary health services (mostly to expecting mothers or mothers with young children as well as to the mentally disabled) while subsidizing sectarian health services dominated by the Labour movement. However, with the weakening of the Labour movement, the nationalization of health services became possible (after 1973); but in reality, a ‘nationalized privatization’ occurred, under which, existing sectarian health organizations became ‘non-profit providers’ of health services, financed partly by members and partly through taxes. In addition, new legislation abolished employers’ contributions to health services, as part of the liberalization process but did not oblige the state to cover the gap or any deficits. Thus a divergence in health services occurred on the basis on the ability to buy them. Citizens, who want services beyond the minimum provided by the state through sectarian ‘non-profit providers’ of health services, must purchase additional insurance. Further, a grey market has developed within the ‘nationalized private’ health services in which citizens are obliged to pay special fees to doctors to provide them with ‘private’ services within the existing system. In other words, access to health services is subject to an increasing process of privatization, which widens inequality in Israel (Chernichovsky and Chinitz 1995; Peled and Shafir, 2005: p.346-353).

Housing is another measure of equality in civil societies. Housing ownership is one of the highest in the world (73%). The state used it to tie newcomers to their new country, partly through subsidies (i.e., conditional loans). The state also determined to a large extent access to land and housing through ‘a policy of dispersion of the population.’ This policy disadvantaged North Africans who were settled in the periphery (not only in terms of property values but also in terms of limited opportunities in education, employment and business).  However, in the course of the liberalization process, the state sought to privatize land and housing by granting them to citizens who held them, but not on an equitable or universal principle. Thus members of collectives and cooperatives (i.e., kibbutz and moshav, mostly Europeans) stood to benefit greatly from privatization but not so in the case of apartment holders in development areas (mostly from North Africa and the Middle East). Objections and protests did not seem to prevent the state from yet another display of inequitable and differential allocation of resources. Consequently, rates of ownership (80% among Europeans, 78% among Middle Easterners and 59% among North Africans) as well as differences in the value of the properties held by the same groups indicate as to differential access to social rights in Israel with dire consequences for future generations. These conclusions apply even more so to Israeli Palestinians whose access to subsidies is non-existent, in addition to the fact that 70% of their land was nationalized (Lewin-Epstein, Elmelech and Semyonov 1997; Kretzner 1990; Peled and Shafir, 2005: p.353-357).

To conclude, differential access to education, health services and housing through liberalization processes reduced equality of opportunity and thereby civil and social equity in Israel. Egalitarian social objectives used in the discourse of the Labour movement can hardly be acknowledged nowadays in Israel while universality of access to social and civil rights has not been adopted in the process of liberalization.

The New Israelis - the Russians

About one million immigrants came to Israel from the former Soviet Union, about 150,000 in the seventies and the rest in the nineties. Israel made special efforts to absorb these immigrants. It agreed to re-settle them within the 1967 borders as well as enter into peace negotiation with the Palestinians. In exchange, United States limited the number of Jewish immigrants it would accept (to redirect them to Israel) and gave a 10 billion dollars loan guarantee to facilitated their absorption in Israel. Further, Israel modified its definition of ‘Who is Jewish’ to include children and grandchildren of Jews and well as their spouses to facilitate the absorption of immigrants from the former Soviet Union in Israel within the framework of the Law Of Return (although between 25% to 40% are not considered Jewish according to orthodox rules). Moreover, Israel granted each family (up to 4) about $10,000 on top of subsidized services which included Hebrew lessons, cheap mortgages, employment grants and health insurance, among others benefits.

Immigrants from the former Soviet Union tend to have high education as well as higher representation in professional categories such as medicine and engineering. An effort was made to facilitate their absorption within higher categories of employment in Israel, although it is estimated that this group of immigrants lost about 10% in potential income due to employment below their educational level.

This wave of immigration, like previous ones, was associated with economic growth. It also coincided with a process of liberalization as described earlier and in all likelihood contributed to it, i.e., widening the definition of ‘Who is Jewish’ but also through increased competition in the labour market and contribution to a decline of the average income of veteran Israelis.

Until the arrival of immigrants from the former Soviet Union, it was not considered acceptable for any Jewish ‘ethnic’ group to form a distinct political party, so as to discourage divisiveness and foster national cohesion. Yet, this group of immigrants managed to form ‘Russian’ parties and win enough seat in the parliament to advance their interests as well as make a difference in Israeli politics. It is now evident that previousefforts to discourage ‘ethnic’ political formations, were not put to work in the case of ‘Russian’ parties, mainly due preferential treatment of the latter. (It is worthwhile to note here that orthodox parties of European Israelis were never called ‘ethnic’ for the same reason. However, any party of immigrants of North African or Middle Eastern origin was promptly labelled an ‘ethnic’ party, i.e., Shass, a religious party, which attracts many protest votes of non religious voters, in all likelihood to de-legitimize them).

As might be expected, widening the definition of ‘Who is Jewish’ and the absorption of a significant number of immigrants of ‘doubtful’ Jewish origin revived divisions between orthodox and non-orthodox Jews in Israel as to the characteristics of the Jewish state. One may recall that Labour Zionists made concessions in this regard to religious Jews in several ways (i.e., an orthodox definition of ‘Who is a Jew,’ a sectarian education system, relief from army service and control over marriage and divorce and burial services, among other related matters.) However, as the dominance of the Labour movement weakened and as Israel engaged in liberalization process, polarization between orthodox and non-orthodox Israelis became increasingly evident. In this context, immigrants from the former Soviet Union, added strength to the secular side and revived old divisions and the need to address them as would be expected in a modern civil society. Recent attempts to target Shass, an orthodox party whose voters tend to be immigrants of North African or Middle Eastern origin, as the main culprit behind objections to the inclusion of immigrants from the former Soviet Union in ‘Jewish’ national registers (among other related matters), cannot be but another illustration of differential treatment (by the state and the media). In reality, orthodox and non-orthodox immigrants of North African or Middle Eastern origin tend to be more accommodating than orthodox Jews of European origin in matters of ‘Who is Jewish’ and related matters. They also tend to be supportive of a peaceful settlement (i.e., rabbinical ruling stressing that preservation of life precedes land sacredness). Thus, setting aside Shass and immigrants of North African or Middle Eastern origin, immigrants from the former Soviet Union only point to an underlying fault within the Jewish international community at large in matters relating to ‘Who is Jewish.’  This matter needs a resolution within the context of a modern civil society. So far, secular and reform Jews avoided a rift within Judaism by making concessions to orthodox Jews (these concessions were made before religious North African or Middle Eastern Jews became partners to the Zionist enterprise). The question remains if Israelis and world Jewry will be continue making concessions to appease the orthodox Jewry (Gitelman 1995; Paltiel et al. 1997; Lustick 1999; Khanin 2000a; Peled and Shafir, 2005: p.359-374).

The New Israelis - The Ethiopians


About 85,000 immigrants from Ethiopia were brought to Israel in the Eighties and Nineties. They consist of two groups: Beita Israel and Falashemura.  Beita Israel are considered ‘pre-rabbinic Jews’ as they practiced an ancient form of Judaism based on the Torah. Falashemura are former Beita Israel who adopted Christianity or intermarried with Christians. It should be noted also that Ethiopian Christians have often voiced their association with Judaism.  Contacts with Ethiopians of Jewish origin have been established around the turn of the century but little effort was made to encourage their immigration to Israel due to doubts about their ‘Jewish-ness,’ dark skin and lack of resources (i.e., education). These three characteristics proved a significant barrier to their integration in the Israeli society.

Rabbinic authorities demanded a symbolic conversion of Beita Israel and Falashemura members at first but were forced to retreat due to strong resistance. As the Jewish-ness of Ethiopian immigrants remains in doubt, it becomes a problem only when they wish to inter-marry with other Jews who meet the orthodox definition of ‘ Who is a Jew.’ At this intersection, rabbinic authorities refuse to offer marriage and divorce services if there is no proof of conversion. Thus, Beita Israel and Falashemura can marry within themselves or seek a non-rabbinic marriage but face the problem of remaining outside of the orthodox definition of ‘Who is a Jew’ for official registration purposes. In this sense, they face similar problems that non-Jewish Russians face in Israel. But, in the case of the Russian Jewry, state authorities did make exceptions to the orthodox definition of ‘Who is a Jew’ by accepting children and grandchildren of Jews as well as non-Jewish spouses of Jews for the application of the Law of Return. Immigrants from Ethiopia did not benefit from this liberal treatment, (although an exception may have been worked out in the course of 2006).

Beita Israel and Falashemura still face other problems that set them aside and prevent their integration in the Israeli society. Israelis fail to consider them for plain labour jobs, even when they are needed to replace Palestinian or foreign labourers (i.e., following the Intifada). State authorities are now making an effort to convince Israelis to offer more employment to Beita Israel and Falashemura members. As in dealing with immigrants from North Africa and the Middle East, Israelis have yet to overcome tendencies to discriminate against Beita Israel and Falashemura members not only due to doubts as to their Jewish-ness but also due to their dark skin as well as fears that they may be AIDS virus carriers!  (Kaplan and Salamon 1988; Reiff 1997; Peled and Shafir, 2005:p.374-377).

The Other New Israelis - Labour Migrants

Israeli employers relied on cheap labour since the beginning of the Zionist enterprise in Palestine under the Turks and the British and after independence too. Early settlers like post independence Israeli employers preferred Arab labourers to Jews because they were hard and disciplined workers who accepted lower pay. However, during periods of increased immigration, efforts were made to substitute Arab labourers with new Jewish immigrants. As Jewish employees tend to be more protected by labour laws, Israeli employers necessarily preferr to substitute them with other labourers who offer them more flexibility (i.e., seasonal employment and dismissal with no legal complications…)

Importing foreign workers before independence passed un-noticed, although there is no doubt that Jewish settlers attracted Arab labourers from the neighbouring region during Turkish and British rule. Labour Zionists made an effort to substitute Arab labourers with Jewish employees and succeeded only when the latter was subsidized or when Jewish settlers received an absorption package which included land and funds to labour the land as well as housing, health and education services, in other words a very elaborate subsidy package.

After independence, Israel used military rule to limit access of Israeli Palestinian labourers to Israeli labour markets until 1966. Israeli employers relied then on new Jewish immigrants from North Africa and the Middle East to fulfill their needs. Labour governments subsidized Jewish employers by offering them employment grants as well as health insurance among other benefits. Similar policies were used to encourage the employment of new immigrants from Russia.

However, Jewish labourers tend to be more mobile. As soon as they adapt to the Israeli labour market and acquire educational and occupational skills as well as economic resources, they move to occupy better paying jobs or establish independent businesses and new labourers are needed to replace them (always at the lower end of the employment market). Thus Israelis relied on Israeli and non-Israeli Palestinians to substitute Jewish immigrants from North Africa and the Middle East after 1967 and before restrictions were put on non-Israeli Palestinians due to their uprising  (Intifada).   About 100,000 non-Israeli Palestinian labourers worked in Israel in construction, farming, among other low paying menial jobs. There must have been some illegal non-Israeli Palestinian labourers too but it is difficult to estimate the exact number, as Palestinian labourers often brought along relatives to work with them unofficially.

Following restrictions imposed upon the employment of non-Israeli Palestinians, Israel became the leading employer of foreign workers among industrialized nations. Estimates as to the real numbers of labour migrants in Israel vary between 170000 to 330000. Roughly speaking, for every legal migrant labourer, there is another illegal one.
Labour migrants are usually employed through agencies. They are employed in construction (East Europeans, i.e., Romanians), farming (Orientals, i.e., Chinese and Thai) and assistance to elderly in need of help (Orientals, i.e., Philippines).

Most of the jobs occupied by Palestinians and migrants are subject to seasonality and are associated with low pay (40% of the average salary paid to Israelis) and low status (i.e., labour that other Israelis won’t do!) Israeli employers have a strong economic interest in keeping a steady supply of foreign workers but official authorities seem reluctant to do so due to demographic and citizenship implications (i.e., weakening the Jewish majority).

While most Palestinian labourers return (or returned) home following completion of employment, an increasing number of foreign labour migrants opt to stay in Israel illegally and thus present a residency and citizenship status problem that needs to be addressed. Israel signed treaties that require fair treatment of migrant workers but evidence as to abuses by employers are widespread and authorities have hardly devoted any resources to curb them. Further, Israeli authorities have not made a serious effort to provide health or educational services to these groups intentionally in order to discourage long-term residency, although they imposed a special tax (8%) on employers to cover such services. Meanwhile, efforts to expel illegal foreign workers are increasing. However, foreign workers have organized and are now working with Israeli civil rights organizations to force Israel to legitimize their status and develop integration policies. The question remains if existing liberalization processes in Israel would be applied to foreign workers as expected by universal human rights standards and international law
(Bartram 1998; Reiff 1997;Kemp et. al., 2000; Peled and Shafir, 2005:p.378-390).


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