Labour and the Political Economy in Israel

409 Pages·1992·5.96 MB·English

by  Michael Shalev

Labour and the Political
Economy in Israel
Michael Shalev
OXFORD UNIVERSITY PRESS
1992
Oxford University Press. Walton Street. Oxford x
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© Michael Shalev 1992
All rights reserved. No part of this publication may be reproduced,
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British Library Cataloguing in Publication Data
Data available
Library of Congress Cataloging-in-Publication Data
Shalev, Michael.
Labour and the political economy in Israel/Michael Shalev.
p. cm. — (The Library of political economy)
Includes bibliographical references and index.
1. Histadrut ha-kelalit shel ha‘ ovdim be-Erets-Yisre ’el—History.
2. Trade-unions—Israel—History. 3. Industrial relations—Israel—History.
4. Israel—Economic policy. I. Title. II. Series.
HD8660.A5H584 1992 338.95694— dc20 91-25159
ISBN 0-19-828513-2
Typeset by Graphicraft Typesetters Ltd., Hong Kong
Printed in Great Britain by Bookcraft (Bath) Ltd, Midsomer Norton, Avon
Contents
Preface vii
A Note on Language xi
List of Figures xii
List of Tables xiii
Introduction 1
Part I: The Labour Movement
1 The Histadrut 23
2 Accounting for Exclusivism: The Histadrut and the
Palestinians 32
3 Accounting for Hegemony: The Sources of Mapai’s
Supremacy 81
Part II: Labour Relations
4 Why No ‘Historic Compromise’? 133
5 From Corporatism to Crisis 186
Part III: Policy and Political Economy
6 Policy Outcomes: Dualism and Disorder 237
7 The Crisis of the State 283
Conclusions 315
Appendices 338
References 355
Index 387
Preface
My firsthand acquaintance with the subject-matter of this book
dates back twenty years, to my immigration from New Zealand to
Israel. After an interlude in Britain to complete a second degree,
I began teaching courses at the Hebrew University on the labour
market, the labour movement, and industrial relations. At the time
I had but a limited capacity to read Hebrew sources, but by
combing everything I could find in English I succeeded in present­
ing myself (in retrospect, not too convincingly) as an expert on the
Israeli scene. Meanwhile, especially after moving to the University
of Wisconsin to pursue a Ph.D. and an exciting collaboration with
Walter Korpi, my interests became increasingly focused on com­
parative labour issues within the OECD bloc. Nevertheless, on
returning to Israel in 1979, teaching responsibilities again made it
imperative that I learn more about the Israeli scene. The more I
did so, the more perplexed I became by the similarities and differ­
ences between Israel and the western nations.
While continuing in Israel the work I began abroad on com­
parative studies of strikes and public policy, I came increasingly to
ask why it was that the success of the ‘new political economy’ in
comprehending national variation between other rich capitalist
democracies could not be replicated in Israel. In particular,
although the political position and institutional structure of the
labour movement were highly reminiscent of European social demo­
cracy, Israel’s working class was deeply divided along national
and ethnic lines, large parts of its labour relations system were rent
by turbulence, and it was far from replicating the universalistic
welfare states and relative economic stability attributed to social-
democratic corporatism in Scandinavia and Austria. I began to see
that this was a puzzle which could do more than challenge the
assumptions and empirical findings of colleagues in Europe and
North America about the correlates of social democracy and neo­
corporatism. It could also help me, and other students of Israeli
society, to grasp the nature of Israel’s ‘exceptionalism’, and to
better understand why its labour movement has so disappointed
the hopes and expectations of intellectuals on the left.
viii Preface
My first forays into empirical research were aimed at assessing
the labour market implications of the unseating of the long-
entrenched Labour Party in the late 1970s.1 The initial assumption
of this research was that such a dramatic rightward swing in the
composition of government as Israel’s ‘political upheaval’ would
likely result in a major increase in unemployment and place con­
siderable strain on corporatist mechanisms of labour quiescence.
Actual developments turned out to be far more complicated and
interesting than this—although I would never have realized it
without the hard work and inspired analyses of three graduate
students with whom it was my privilege to work during this period:
Yoni Reshef, Sara Leventhal (Shartal), and above all, Lev Grin-
berg. I also continued to pursue more informally the distinctiveness
of the Israeli case by ferreting out and reinterpreting previous
research. These efforts produced mountains of notes and several
working papers, this time evaluating social policy, class voting, and
industrial conflict.
In the autumn of 1983 my family and I left Israel for a sabbat­
ical year in North America, where it was my intention to start
bringing together the material I had by then accumulated into a
critical, comparatively-oriented volume on the labour movement
and industrial relations in Israel. I spent a lot of time during that
sabbatical in mastering my first personal computer and other
compelling pursuits which were only tangential to the book. One of
the barriers to making more substantial headway was the feeling
that I still had much to learn from untapped Israeli sources, espec­
ially so far as history (economic and political, as well as social) was
concerned. Eventually this disquiet led me (and most of my con­
temporaries) to take the plunge into original archival research, a
fascinating window on to Israel’s pre-sovereignty era. This done,
prodded by well-wishers and formal obligations alike, I made great
efforts to bring the book to completion; but genuine progress
awaited further opportunities to link Israeli questions to theoretical
and comparative issues of a broader kind.
Happily, these opportunities were afforded by my participation
in three stimulating collective endeavours—one a volume edited by
Baruch Kimmerling, which encouraged me to take up more sys­
tematically the relations between Jewish and Palestinian labour;
another an international study led by T. J. Pempel, which placed
the Israeli case within the intriguing problematique of single-party
Preface ix
dominance; and the third, a collection of macroscopic case studies
of national domestic policy which was the brainchild of Frank
Castles.2 It was in writing the last of these essays that I became
convinced that my study of the political economy of labour must
inevitably lead to a concern with the growing power of capital in
Israel’s political economy. The work of another graduate student,
Shimshon Bichler, was very helpful in developing this line of
analysis.
By the summer of 1988 it was possible to lay out a first draft of
the bulk of the book, but the tasks of integrating and sharpening
the individual essays and adding introductory and concluding
chapters remained daunting enough to appear insurmountable.
Thanks to the perceptive suggestions and willing emotional and
moral support of my wife, Debby Shalev, and my friend Gershon
Shafir, and with the help of the astute editorial skills of Jon
Simons, the book finally began the transition to a finished product.
This product is a different one, in my view a better one, than what
it was in my power to achieve five years ago. The freedom to
improve (and the liberty to agonize!) would not have been mine
without the support both of my publishers (specifically, Andrew
Schuller of OUP) and my colleagues. The latter deserve an espe­
cially honourable mention, for I have consistently enjoyed their
backing despite not only broken deadlines, but also my un­
abashedly critical stance towards some of their work.
In addition to those individuals already mentioned by name, in
the course of my research and writing I have also had the benefit of
the counsel of a great many other colleagues in Israel and abroad.
Limitations of both space and memory prohibit a full accounting,
but I would like to take this opportunity of expressing my gratitude
to Leah Baider, Mike Barnett, Joel Beinin, Debbie Bernstein, Bob
Brym, Naomi Chazan, Colin Crouch, Shmuel Eisenstadt, John
Goldthorpe, Nachum Gross, Shmuel Hadar, Niamh Hardiman,
Shlomo Hasson, Joan Hooper, Peter Katzenstein, Walter Korpi,
Ralph Kramer, Peter Lange, Moshe Lissak, Peter Medding,
Frances Piven, Jonas Pontusson, Ada Poraz, Marino Regini, Mar­
tin Rein, Andy Rosenhek, Dietrich Rueschemeyer, Zvi Schuldiner,
Adam Seligman, Yonathan Shapiro, Ira Sharkansky, Arie Shirom,
David Soskice, George Strauss, Sid Tarrow, Goran Therborn,
Lloyd Ulman, Samuel Valenzuela, Avraham Zloczower, and Elia
Zureik.
x Preface
I dedicate this book to my parents, Eve and Syd Silver, and my
children, Daniel, Inbal, and Avinoam. Their fate has to a very
large extent been shaped by my original decision to make Israel my
home. The Shalev and Silver families have experienced many
joyful occasions in this country, but we have also found much in its
social and political landscape which is ugly and painful. This book
is in a sense a personal attempt to come to terms with these
disappointments by better understanding them. I will be much
encouraged if it also succeeds in shedding some revelatory light for
those who are close to me.
Michael Shalev
Jerusalem,
November 1990
Notes
1. I gratefully acknowledge the financial support made available to
these studies by the Ford Foundation (through its Israel Trustees),
the Institute for the Study of Labour and Society (Tel Aviv Univer­
sity), and the Levi Eshkol Institute (Hebrew University). The major
findings of these research projects appear in Chapter 5, much of
which is based on an article originally published in Hebrew in a
journal of critical sociology edited by Deborah Bernstein and
Shlomo Swirski (Shalev, 1984). Subsequently, an abbreviated En­
glish version of this study appeared under the title ‘Labour, State and
Crisis: An Israeli Case Study’ in Industrial Relations, 23(3), Fall 1984,
362-86.
2. I wish to acknowledge the kind co-operation of both the editors and
publishers of the papers which developed out of these three projects
in allowing me to draw freely upon them in this book. Specifically,
I would like to thank Baruch Kimmerling and the State University of
New York Press for the use in Chapter 2 of material from Shalev
(1989a); T. J. Pempel and Cornell University Press for permission to
base Chapter 3 on Shalev (1990A); and Francis G. Castles and Polity
Press for allowing major portions of Shalev (1989£) to be introduced
into Chapters 6 and 7.
A Note on Language
All translations from Hebrew were made by the author. Biblio­
graphical references to publications in Hebrew have been handled
in the usual way. Titles are translated into English and marked
parenthetically as ‘in Hebrew’, whereas the names of journals
and publishing houses are transliterated. In the body of the text
Hebrew terms (except for the proper names of some institutions)
have been translated into English, in order to minimize the burden
on readers without a knowledge of Hebrew. For instance, va’ad
ovdim in Hebrew is referred to as workers’ committee, whereas we
preserve the Hebrew title of the central labour organization (the
Histadrut).
Where it was necessary to make transliterations the guiding
principle was that they should be intuitively meaningful to the
non-specialized reader. In this spirit the guttural Hebrew letter
‘chet’ is represented, in the Germanic style, by ‘ch’. An illustration
is our spelling of the name of the Cherut (Freedom) Party, often
misleadingly rendered as Herut. Our conventions were, however,
suspended in instances where there was a conflict with the custom­
ary Latin spelling adopted by authors and other persons referred to
by name. Finally, while some foreign terms in other languages have
been italicized, in order to avoid excessive use of emphasis Hebrew
transliterations—except for their very first occurrence in the text—
have not been italicized, with the exception of the index. Hebrew
terms are capitalized, however, with the exception of ‘kibbutz’, a
word which has become incorporated into standard English usage.
List of Figures
3.1 The Labour and Likud vote: 1949-88 82
3.2 The voting in Histadrut elections: 1920-89 95
5.1 Labour militancy and the business cycle in the 1960s 224
6.1 Economic performance indicators: 1960-89 240
6.2 Deterioration in economic performance after 1973: Israel and
seven OECD countries 241
6.3 The size of the welfare state: public expenditure in Israel and
seven OECD countries 242
6.4 The increase in transfers 1970-80: how 18% of GNP was
redistributed 267
7.1 Local defence procurement and profits of the big three
conglomerates: 1966-86 301
7.2 Inflation and the profits of the three largest banks: 1969-86 305
Al.l Israel’s major national and ethnic divisions, 1985 340
A2.1 The structure of the labour-movement economy 343
List of Tables
2.1 Political outcomes of competition between high- and
low-cost labour 37
6.1 Long-term indicators of strike activity, 1924-88 257
6.2 Selected fiscal indicators for three periods 266
7.1 Industry before and after the crisis of 1973 298
C.l Mechanisms of labour restraint 323
C.2 A comparison between three political-economic regimes 329
Al.l Historical shifts in Israel’s major national and ethnic divisions 341
A4.1 The parliamentary representation of Israel’s left-wing parties 352
A4.2 The representation of Israel’s left-wing parties at Histadrut
conventions 353