FRFI 170 December 2002 / January 2003
Prefacing an important article published recently in Monthly Review (Vol 54 No 5, October 2002) Adam Hanieh, author and human rights worker in Ramallah, observes that ‘what is strikingly absent from virtually all left analysis is any discussion of class and political economy in both Israel and the Occupied Territories’, and argues that ‘without placing class at the centre of our analysis, it is difficult to develop an adequate understanding of what is happening on the ground’. He is correct to point out this absence; yet his own assessment of the class interests at stake in the second Intifada contains significant gaps and a serious misunderstanding of the role of the working class in the national liberation struggle.
Hanieh argues that the Labour Zionist movement was instrumental in creating a viable Israeli capitalism; that, much later, the Oslo process would be a key step in its development; and that the current war against the Palestinian people is a ‘logical extension of this process, aimed at creating a Palestinian canton-state’. The basis for this canton-state is a Palestinian economy highly dependent on Israel, which supports a ‘highly distorted’ class structure with ‘a capitalist class dependent on its privileged relationship with Israeli capital and a working class that has little strategic weight in the national struggle’.
The establishment of the settler state
The first part of Hanieh’s article deals with the formation and development of Israeli capital. Much of his argument is directed against those on the left who understand Israeli politics as ‘the binary opposites of the right wing Likud and the more peace-inclined Labour Party’. He demonstrates how the formation of the Israeli state was dependent on the success of the collectivist approach to land settlement led by the Labour Zionist movement and the accompanying eviction of the indigenous population. This approach, he argues, was necessary because the ‘private capitalist class of the original settler movement was weak and divided’. 1948 was one stage in the formation of the principle classes within Israel. The state had to play a directing role in capital accumulation. Hence, Hanieh argues, the Israeli economy was dominated in its early years by a small number of state-run monopolies. Finance for this came from a combination of German reparations and direct support from the Jewish diaspora. With the expulsion of the Palestinian population from the labour market it became both possible and necessary to create a Jewish working class through the large-scale immigration of Arab, African and Asian Jews – the Mezrahem.
The 1967 war
The 1967 occupation of the West Bank and Gaza, Hanieh argues, provided both new markets and a new source of cheap Palestinian labour, but one which could be better controlled since it was not resident within the Green Line (the pre-1967 border). These workers occupied the worst paid jobs, particularly in the construction industry, and allowed some of the Mezrahem to move up the job ladder. By the late 1960s five key business groups dominated the Israeli economy, four of which were controlled by the state, the Histadrut trade unions and the Labour Zionist movement. From 1967, and particularly after 1973, military production became central to the Israeli economy. This military spending, according to Hanieh, ‘was directed by the state to the key conglomerates and led to massive rates of accumulation for the core business groups while the economy as a whole suffered from stagflation’.
Here Hanieh’s analysis neglects a crucial element, the role of US imperialism. It was following the 1967 war that US imperialism finally decided that Israel would be its key ally in the Middle East and started to pump in huge quantities of aid. Drawing on Norman Finkelstein’s The Holocaust Industry (reviewed in FRFI 157), Jonathan Cook recently wrote that ‘links between American Jewry and Israel were tenuous before the 1967 War. But after Israel proved its credentials on the battlefield, the United States began rethinking Israel’s role, seeing it as a powerful client state in the region and a useful destabilising influence on its Arab neighbours that might prevent the emergence of Arab unity’. (Al Ahram Weekly 14-20 November 2002). It should be added that such aid not only had to sustain a mighty military machine, but also a privileged, near-Western standard of living for the bulk of its population, to ensure a continuous inflow of skilled Jewish immigrants on the one hand, and certainly to discourage any outflow on the other.
The 1980s crisis
The emergence of a hyperinflationary crisis in the mid-1980s led to a change in strategy by the Israeli ruling class, Hanieh argues. The Histadrut empire was broken up and privatised; local private capital merged with global capital (often with links to the Zionist movement) and joined with elements of the state bureaucracy responsible for the privatisation process. Alongside this, foreign ownership and investment laws were relaxed to allow a fuller integration into the world economy, opening up the Israeli economy particularly to US investment whilst allowing Israeli companies in turn to invest significant amounts abroad. The Oslo agreement was to be a further step down this road. Hanieh says that significant sections of the Israeli ruling class felt that without a political settlement ‘it would be impossible to attract significant foreign investment to Israel…It would also be very difficult for Israeli companies to invest in the United States, Europe, and the so-called emerging markets’. In particular, there was a need to end the Arab boycott. Alongside this came a strategy to end Israeli dependency on Palestinian labour from the Occupied Territories through the importation of foreign workers from countries such as Thailand, the Philippines and Romania. Although they were usually ‘illegal’, the state turned a blind eye to them since, as they could easily be expelled, they were an ideal reserve army of labour. Lacking any rights, employers are able to take their passports on arrival, withhold pay and exploit them in appalling conditions. By 1996, the number of Occupied Territory Palestinians employed in Israel had fallen from 120,000 to fewer than 30,000 whilst the number of ‘illegals’ had risen to about 300,000.
A comprador bourgeoisie in the Occupied Territories
Hanieh then turns his attention to the Palestinian class structure. The aim of the Oslo agreement was ‘to keep Palestinian movement, goods, the economy and borders under Israeli control’ whilst establishing a Palestinian Authority (PA) whose prime responsibility ‘was to ensure the “security” of Israel – ie, to act as police force for the occupying force’. According to Hanieh, ‘the Palestinian economy is completely integrated into and dependent on the Israeli economy’. Israel accounts for 75% of all imports into the West Bank and Gaza and 95% of their exports; imports amount to 80% of West Bank and Gaza GDP, underlining the gross dependency on the Israeli economy.
‘In such a situation of very weak local production and high dependence on imports, the economic power of the Palestinian capitalist class does not stem from local industry or production, but is comprador in nature. Its profits are drawn from the exclusive import rights on Israeli goods, and control over large monopolies that were granted to those loyal to Arafat. The privileged relationship with Israeli capital is the defining feature of the Palestinian bourgeoisie. Since 1993, this bourgeoisie has fused with sections of the PA bureaucracy and forms a major pillar of Arafat’s rule.’
This dependence is reinforced by the fact that 60% of PA revenue comes from indirect taxes collected by the Israeli government for the PA. These derive from taxes on imports from abroad, destined for the Occupied Territories. When the Zionists decide to withhold this revenue, as they did from December 2000, the PA faces a major fiscal crisis. The other major source of PA revenue is overseas aid from the US, Europe and Arab governments which in 2001 amounted to 75% of the PA salary budget; whilst ‘the total (Occupied Territory) trade deficit is 45-50% of GDP, and this is principally financed by foreign aid’.
The decades of underdevelopment of the Occupied Territories have had a significant impact on the structure of the Palestinian working class. There is virtually no industrial working class; instead there are three broad areas of employment: within Israel itself (although this has all but disappeared since the start of the Intifada); within the public sector employed by the PA (some 25% of the total workforce), and within a private sector dominated by small family-owned businesses. The consequence, Hanieh believes, is that ‘although the Palestinian working class is large, there is no organised sector with the economic weight to place a class-based strategy at the centre of the Palestinian national liberation movement. This differs, perhaps, from the example of the anti-apartheid movement in South Africa, in which the organised working class – particularly mineworkers – were able to play a central role in the movement’. With the deliberate reduction in the dependence of the Israeli economy on Palestinian labour from the Occupied Territories, tactics such as general strikes which were employed to great effect during the first Intifada have no relevance in 2002; in Hanieh’s words ‘the concept of strikes or other labour actions are non-existent’.
Class and the Intifada
Hanieh does not develop this point at all, which is somewhat puzzling. For if it is not possible to have a working class based strategy, what is left – a strategy based on another set of class interests? And in that case, which? Hanieh points to the disastrous consequences of allowing the leadership of the struggle to remain in the hands of the comprador bourgeoisie; he is not alone in that assessment. Yet the resistance movement – Hamas, Jihad and the radical sections of the PLO – have constantly sought to avoid challenging Arafat’s leadership on the grounds that this would split the people. The trouble is that if these organisations (which are overwhelmingly based on the Palestinian working class) do not advance a strategy which puts the interests of the working class and oppressed first and foremost, then leadership will continue to come from other classes.
An example is provided by the recent Palestinian National Initiative (PNI) which was launched in June this year. This puts forward a number of demands which anti-imperialists would support. It calls for a total Israeli withdrawal from the territories occupied in 1967 as a precondition to a ‘just peace’. It condemns the ‘absence of true internal reforms’ of the PA and demands the creation of a national emergency leadership with a unified strategy based on the principle of full participation in decision-making. It insists on free, democratic elections for all institutions and political posts including the presidency, the Palestinian Legislative Council and local councils with an international presence to ensure free elections and sets out the need for restructuring government institutions with clear mandates, bylaws and responsibilities in order to guarantee transparency, accountability and lack of corruption. Alongside this it speaks of serving the ‘needs of the poor and underprivileged by developing poverty alleviation programmes through employment and social welfare schemes’.
One of the leading spokespersons for the PNI within the Occupied Territories is Mustafa Barghouti of the Palestinian Medical Relief Committee; abroad, Edward Said champions it. Said has for many years pointed to the appalling leadership Arafat and his cronies have provided, their contempt for the rights of the Palestinian masses, their willingness to capitulate at every opportunity to Israeli and US demands. But his trenchant attacks on Arafat’s leadership have been limited precisely because he has ignored the class position that underpins Arafat’s leadership, and because he has from an early point in the Intifada opposed the armed struggle. Instead he has sought a particular role for the enlightened middle class – those ‘professionals, intellectuals, teachers, doctors and so on – who have the power of expression, and the means to do so, who have still not put enough pressure on the leadership to make it responsive to the situation’.
Writing in Al Ahram just after the launch of the PNI, Said argued ‘The Initiative provides for a vision of peace with justice, co-existence and, extremely important, secular social democracy for our people that is unique in Palestinian history. Only a group of independent people well grounded in civil society, untainted by collaboration or corruption, can possibly furnish the outlines of the new legitimacy we need’. Arguing that ‘Kalshnikovs are not effective weapons when the balance of power is so lop-sided’ he suggests that ‘the major interests in Palestinian society, those that have kept life going, from the trade unions, to health workers, teachers, farmers, lawyers, doctors, in addition to all the many NGOs, must now become the basis on which Palestinian reform – despite Israel’s incursions and the occupation – is to be constructed’.
Said pins his hopes then on a secular opposition led by the radical intelligentsia and middle class. This constitutes a significant layer within the Palestinian population: its numbers were greatly augmented by the post-Oslo return of some of the Palestinian diaspora and by the proliferation of NGOs in the West Bank on which its fortunes in significant part depend. However, in order to push forward his political position, Said equates armed struggle with the Islamic organisations in order to attack both. This is both reactionary and sectarian. It is reactionary because armed struggle is the right of the Palestinian people, and it is sectarian because although Hamas and to a lesser extent Islamic Jihad have massive working class support, Said’s response is just to exclude them. What makes this more inexcusable is that Jihad and Hamas themselves have no qualms about working alongside secular organisations such as the DFLP and PFLP.
Said’s position shows the possible consequences of a position which puts the middle class in the leadership of the national liberation struggle. There is no doubt the middle class has a role to play, but not on the basis of claiming an exclusive or privileged position within the struggle. It is not clear where Hanieh stands on this. Whilst certain traditional working class tactics may not be relevant to the current stage of the Intifada – the general strike, for instance – it is quite another thing to conclude that the working class therefore can have no strategic weight in the movement. His point about the absence of an industrial working class is of no help: there wasn’t one in Vietnam, Angola or Mozambique either. This did not mean there was no working class at all: there was a substantial rural proletariat in all three countries, and in the case of Vietnam, communist leadership. The fact is that the bedrock of the Intifada is the working class and oppressed. However the forces leading the Intifada have yet to work out how to challenge Arafat and the PA’s position. This leaves the Palestinian people exposed to Arafat’s treacherous role as the representative of the dependent bourgeoisie which wants peace at almost any cost. In these circumstances, it remains true to say that the success of the Palestinian revolution crucially depends on a class-conscious Palestinian working class leadership.
Robert Clough
See Adam Hanieh’s reponse here: http://www.revolutionarycommunist.org/middle-east/palestine/582-class-forces-in-palestine-a-response-frfi-171-february-march-2003
