The Discourses of Development In Mandate Palestine

Mark LeVine. Arab Studies Quarterly. Volume 17, Issue 1/2. Winter/Spring 1995.

The Palestinian-Israeli conflict has long been thought of as mainly a conflict over land. Thus its resolution involved a fundamentally political solution, that is, some form of territorial division of the area of Mandatory Palestine which today includes Israel and the Occupied Palestinian Territories. As Gershon Shafir points out in his seminal Land, Labor and the Origins of the Arab-Israeli Conflict, this understanding has generally led historians to underestimate the importance of the economic aspects of Zionist/Israeli-Palestinian relations for understanding the dynamics of the conflict.

Despite the orientation of most traditional historiography toward a political topology of the conflict it has become clear that economic motives have played a primary, though until recently subaltern, role in its genesis and perpetuation. This essay seeks to contribute to the emerging debate surrounding the economic effects of Zionist colonization efforts. The themes and subtexts of this Zionist-Arab-British debate reveal much about both Zionist and British attitudes toward the Arabs of Palestine and toward “developing” the country, with all its attendant implications vis-a-vis their understanding of the Arabs’ economic situation. I will specifically look at the aftermath of the 1929 Arab riots, an event which put Zionism in the world’s spotlight. These riots led to the first serious reappraisal of the Zionist enterprise by the British Mandatory Administration. As such, they threatened Jewish immigration and land purchases, which were the engines of renewed Jewish economic growth in the wake of the depression years of the late-Twenties. Because of the dynamic between potential growth and potential disaster, the period surrounding the 1929 riots constituted a turning point in the history of the Yishuv.

Several reports commissioned by the British Government to look into the causes of the disturbances — the most important being the Shaw, Hope-Simpson and French commissions and the Passfield White Paper — strongly suggested that Jewish colonization, against claims to the contrary, was having an overall deleterious effect on the indigenous Palestinian population of the country. The reports were very dangerous to the Zionist enterprise, as they questioned the very validity of the Jewish National Home policy by calling for restrictions on both Jewish immigration and land sales to Jews, the two primary avenues of Jewish settlement. Because of this, they automatically elicited strong reaction from the Zionist leadership.

On the economic level the leadership was able to rebut the central charges against Jewish colonization by offering well-honed arguments as to the numerous salutary effects of Jewish colonization. On the political level, the Zionists succeeded in having the main part of the Passfield White Paper revoked with the MacDonald Letter, which was written by then Prime Minister Ramsey MacDonald to Chaim Weizmann in February 1931. This letter (known to the Arabs as the “Black Letter”), essentially rescinded the Passfield White paper by absolving the Zionist movement of infringing on Arab rights, vindicating the exclusivist Zionist labor policies, and rescinding the White Paper’s restrictions on land sales and immigration. Significantly, it also recognized the obligation of the Mandatory to all Jews, not just those in Palestine; this explicit support for further Zionist colonization allowed the Jewish National Home to grow uncontained until the White Paper of 1939.

Methodological Concerns

A sophisticated analysis of the economic dimension of the Israeli-Palestinian conflict is vital for a comprehensive understanding of its history. Yet as Owen points out, “the examination of the economic history of Palestine under the Mandate presents a number of special problems”, both because of the lack of reliable data for much of the period, and more importantly for our purposes, because of the difficulty in arriving at an accurate understanding of the nature and dynamics of the inter-war Palestinian economy. When considered with the highly charged political atmosphere during the Mandate period, it is clear that, beyond merely correctly analyzing the economic data, researchers must review and critique the ideological contexts and conceptual approaches of the data and analyses which underlie their research.

In order to investigate the economic history of the mandate period thoroughly one has to begin the story much earlier. An appreciation of the dynamic of European economic penetration into the Ottoman Empire and Egypt is necessary for a correct interpretation of the later Mandate period, especially the ramifications of the all-important 1858 Ottoman Land Code, which reformed not only the tax structure but laws governing land tenure, ultimately making land purchases by Jews much easier. In fact, it is clear that by the end of the Ottoman period the dynamic of future Jewish-Palestinian relations, especially their conflictual nature, was set. That is, the struggle over land had already settled into a pattern that would last throughout the pre-state period, and it was a struggle that both sides considered “life and death”.

Because Zionism vis-a-vis Palestine was a colonization movement, key issues such as land purchases can not be fully understood outside the context of the contemporary European colonial discourse and practice, including the models provided by other projects of European overseas settlement. These models were particularly influential, as many of the early Zionist leaders had extensive colonial agricultural experience or were influenced by the German land reform movement, and thus brought with them a strong interest in the economic development of the Middle East. Out of this symbiosis of science and political ideology, termed “technocracy” by Derick Penslar, emerged a political-economic discourse in which science played a major role in both shaping and justifying the political-economic policies of the Zionist movement, and thus in the realization of Jewish national aspirations in Palestine.

Despite the importance of the late Ottoman/European high imperialist period for understanding the subsequent economic and political history of Palestine, traditional Zionist analyses of the conflict generally began in the post-World War I period. By ignoring the decades of interaction before World War I, these analyses saw the Jewish and Arab communities as autonomously developing, with little or no interaction or effect on each other’s development before the end of World War I. Concomitant with this interpretation was an understanding of the Eretz-Israeli economy as having a dual nature, with separate Zionist and Arab sectors existing independently of each other on both an analytical and practical level. This dualist concept was at the core of the Zionist (and subsequently the British) development plans for the country, for two reasons. On the practical level, the Yishuv’s socialist Zionist leadership realized early on that European Jewish immigrants could never compete with the low wages accepted by Arab workers, and thus sought to create a separate, exclusively Jewish economy. On the discursive level, by separating the two economies the Zionists could at the same time disclaim any responsibility for the numerous problems faced by the “traditional” and “stagnant” indigenous economy while offering their “modem” economy as a model for “reviving” Palestine’s economy.

As a consequence of this analytical myopia, most analyses have missed the constitutive role played by the Palestinians in shaping the Zionist enterprise in Palestine, a lacuna which has distorted the resultant “history” of the period. It will become clear in the course of this investigation that one cannot understand the economic history of the post-Ottoman period, or the political history which began with the Arab rejection of the Balfour Declaration (considered by many as the genesis of the conflict), without looking at the complex and dynamic relationship between the two communities for the forty years previous to it.

General Historical and Economic Background

Zionism as a movement was created in large part in response to the continual physical, political and economic oppression of Jews. Though there was general agreement on the endziel of the movement, that is, the creation of a Jewish state which would finally bring the Jews security, the means to achieve that end and even the location of the proposed state were subject to intense debate. In general, there were two schools within the Zionist camp, political and practical Zionists, who constantly argued on the feasibility of practical settlement and development work in the country before sovereignty was attained. This investigation will deal primarily with the practical Zionists and within that group, the socialist parties. They were the groups that believed in and carried out the active settlement and development of the country; thus, they were the ones who controlled the institutions which defined the emerging polity, such as the Jewish National Fund, the Jewish Agency, the Federation of Hebrew Labor (Histadrut).

By the early 1930s, Palestine had undergone a tremendous transformation as a result of the inflow of Jewish immigrants and capital into the country. The Jewish population had grown from 50,000 in 1900 to 170,000 in 1931 (about 1/8 of the total population), the amount of land owned by Jews (out of a total area of 26,000,000 dunams) had increased by 500% during the same period, from 225,000 to 1.2 million dunams, while the amount of Jewish capital brought into the country had increased by 45 million pounds in the Twenties alone, accounting for a disproportionate 50% of government revenues in 1930.

In short, Palestine at the end of the third decade of the Twentieth Century had been transformed from a largely rural economy to one of the most developed regions of the Middle East To some extent the Palestinian Arab population benefitted from the Jewish-inspired economic growth. The standard of living of the average Palestinian Arab was much higher than in surrounding countries, as the Zionists continually pointed out in support of their contention of the benefits of Jewish colonization. Palestinian Arab agriculture and industry, adopting many aspects of Zionist intensive agriculture and industry, had expanded to many times their levels before World War I. However, the Arab population continued to be plagued by serious structural problems which in the eyes of the Zionist and British administrators hampered its “development” and “progress”. As Stein describes it, “the overwhelming majority of the agricultural population [and thus of the population as a whole] was in dire straits … In fact, the fellah’s economic condition had not appreciably improved since World War I. Peasant income decreased more than 30% from 1927-30 and from 1929-30 the drop was fifty per cent.”

Arab and British Claims Regarding the Negative Consequences of Zionist Development

The precarious economic situation of the Arabs in Palestine in the late Twenties helped create the tense atmosphere leading up to the riots of August 1929. The riots themselves broke out throughout the country in response to an argument which began after the Jews instituted a new practice of erecting a separation between the men and the women at the Walling Wall (Kotel Maaravi) in Jerusalem. This action led to large Muslim protest marches which culminated in massacres in Hebron and Safed. In response to the riots, the British Government sent the aforementioned commissions to investigate the reasons for the outbreak of violence, determine the validity of Arab accusations against Zionist colonization, and to make whatever recommendations necessary to alleviate the causes of Arab unrest.

Despite the concerted attempts by the Zionists to place the blame for the riots squarely on the shoulders of the Arabs, the British were beginning to pay heed to Arab claims that the Zionists were developing the country at their expense, specifically that Jewish immigration and land purchases were alienating them from both their jobs and their land. Thus the four resulting reports, the Shaw Commission, the Passfield White Paper of 1930, the Hope-Simpson and the French reports of 1931, all prescribed severely limiting future Jewish immigration and land purchases.

The conclusions of the four reports came closer than ever before to nullifying the Balfour Declaration, although they never suggested, as the Arabs demanded, the termination of the Mandate and creation of an independent Arab/Palestinian state on the entire territory of the Mandate. Specifically, the Shaw Commission, sent to investigate the causes of the 1929 riots, attacked the principle of Jewish labor and the control of Histadrut over granting labor certificates. More generally, it pointed out that articles 2, 6 and 11 of the Mandate obligated the British Government to protect the interests of all the inhabitants of Palestine, not just Jews. It also reached the extremely dangerous conclusion that the Arab economic depression was in large part caused by Jewish immigration, and that “at present, and with present methods of Arab cultivation, there remains no margin of land available for agricultural settlement by new immigrants with the exception of such undeveloped land as various Jewish agencies hold in reserve.”

The Hope-Simpson Report also concluded that “evidence from every possible source tends to support the conclusion that the Arab fellah cultivator is in a desperate position.” Its major impact was that it sharply revised downward the estimate of cultivable land from 10.5 to 6.5 million dunams, thus concurring with Shaw’s assessment of the lack of available cultivable land. More fundamentally, Hope-Simpson pointed out a basic contradiction between the Zionist claims of benefiting the indigenous Arab population and the exclusivist nature of Jewish land and labor policies.

The Passfield White Paper called for linking Jewish immigration to the total number of unemployed in Palestine, if necessary lowering or halting it. Further, Jewish settlement would henceforth be subject to insuring Palestinian rights, as opposed to the terms of the Mandate, which did not explicitly link the two. Finally, the French Commission, in light of the conclusions of the other reports, was supposed to resettle landless Arabs, ascertain what lands were available for close settlement by Jews, improve conditions in the center hill country, and consider proposals for draining, irrigating and otherwise “reclaiming” the land.

The Jewish Response

The Jewish responses to the Arab accusations and British reactions were immediate, and contained themes that had been developed since the pre-war period. For example, one memorandum by the Jewish Agency pointed out five objections to the Passfield White Paper, among them claiming that it misread and misinterpreted the British Mandate, changed the policies of the 1922 White Paper, tried to discredit Zionist achievements in Palestine, and betrayed a general spirit of a Government “not interested in the Jewish National Home”. Most importantly, it claimed that if the position of the fellah was worse off than it had been in 1925 it could not be due to Jewish land purchases since they only accounted for a relatively small 100,000 dunams in the previous four years.

Much of the Zionist counter arguments to the claim they were displacing the indigenous population surrounded the concept of the country’s absorptive capacity. Both the Zionists and the British agreed that the absorptive capacity of the country should be the guiding principle in determining the rate of immigration. The British understanding of the concept led them to agree with the Arabs that the country could not support continued high levels of Jewish immigration. However, in the long run its centrality in the debate over Palestine ultimately served the Zionists’ interests by reducing a central political component of the conflict to an “economic” problem, thus giving Zionist agronomists the opportunity to provide new formulas that would demonstrate the harmless, if not beneficial effects of their enterprise on the Arabs.

In contrast to the British, who took a static view of the concept, the Zionists separated themselves from the Arab economy and took a more dynamic view of the country’s absorptive capacity. They claimed that it was in fact “the absorptive capacity of the people,” thus allowing them to differentiate between the capacity of the Arabs and Jews to be absorbed by the land. Moreover, they claimed that the exact absorptive capacity could be ascertained by scientific investigation, and their calculations led to the inexorable conclusion that the Zionist colonization actually increased it: “Palestine, which for centuries has been deserted and poverty stricken, has been given fresh impetus toward economic development by an influx of Jewish capital which has increased its absorptive capacity.”

Most importantly, the Zionist leadership argued that even with increased Zionist land purchases there was no displacement, physical or economic, of the old inhabitants. The basic Zionist condition of absorptive capacity was that “absorption means addition, not displacement.” Thus Arthur Ruppin, who headed the World Zionist Organization’s Palestine Office, described the goal of the Zionist movement in Palestine in 1913 as being “the creation of a closed Jewish economy in which producers and middle men will all be Jewish. This policy will not be directed against Arabs but is aimed to prevent moral decay of the Jewish settlements into a class of colonialists, exploiting cheap Arab labor instead of redeeming themselves by creating a working class and productive society.”

In general, it is hard to make a definitive judgment as to whose claims were valid, the Zionists or the Arabs/British, since different numbers produce different conclusion. While the Zionists and British in their many reports and counter-memorandums amassed a huge amount of data to support their competing assertions, perhaps Gross best summarized the difficulties in weighing competing claims, pointing out that unlike financial activities which are expressed in numbers and can be easily summarized over extended periods, legislation and bureaucratic activities are scattered over a large number of items and years and cannot be quantified and summed up. Any attempt at doing so is an inherently subjective and potentially biased process.

The Zionist Discourses of Development

As the arguments over absorptive capacity demonstrate from their first negotiations with Arabs, Zionist leaders sought to emphasize the benefits of their colonization efforts. Chaim Weizmann, in his correspondence with Emir Feisal in 1918, explained how Zionist development would not be injurious to the indigenous population but rather would “revive” Palestine’s economy without encroaching on the ownership rights of the Arab peasantry. Yehoshuah Zeeman, a Zionist economist of the period, also explained that while the Arab economy was “very primitive”, it benefitted greatly from the money from land sales to Jews and the influence of “Jewish development.”

The underlying theme of the Zionist responses was that far from hindering the development of the Arab economy in Palestine, Jewish colonization had been one of, if not the primary impetus for such development. At the very least, they felt that the economic development of Palestine made great strides since the British occupation, affecting ” … a revolution to which it would be difficult to find a parallel in history.”

From this last analysis we can see how a development ethos was inherent in the Zionist enterprise, how developing Eretz Israel was at the same time an essential component of the Zionist mission and one of its justifications. Further, Yehoshuah Zeeman’s analysis reveals how the understanding of Palestine as being undeveloped before Zionist settlement went hand-in-hand with their development ethos. Accordingly, one bulletin from 1928 reports how “before the war Palestine was a poor and backward agricultural country. This is of course still the case to a large extent, but a remarkable development has taken place which is gradually modifying the traditional life … greatly increasing its productivity and enabling it to absorb hundreds of thousands of immigrants.”

The report continues with its evidence supporting the salutary effects of Jewish development, asserting that “Jewish towns provide the fellah with a valuable market for his produce. Thousands of Arab workmen are employed in Jewish enterprises or in Government works made possible by increasing revenues derived from taxes paid by the Jewish population. Real wages for Arabs have increased fifty to fifty-five percent, and the increasing wealth is shown by the constantly increasing area of citrus plantations, representing large sums of invested capital.”

According to the Jewish Agency this development was the result of three factors. The first was the importation of 44 million British pounds, 6-8 times the amount of Arab capital before the war and that was mostly immovable property (since before the Jews no one was buying the land and its value was much lower). The second was increased taxes, which were disproportionately distributed to the Arab population [we will analyze this claim later], and the third was that the land was made liquid capital, thus allowing the fellah, long burdened by crushing debt, to extirpate himself from his burden, and use his profit to modernize his remaining agricultural holdings. In short, the Jewish Agency claimed that “the Arabs have obtained as a gift, without any productive work on their own part, a capital reserve of 30-50M pounds.” In comparison, the condition of the fellah far away from Jewish settlements and untouched by them, was “just as miserable as before.”

The Zionists also understood how vitally important it was to rebut soundly the accusation that there was little cultivable land remaining in Palestine and that continued immigration and land purchases were, therefore, inevitably hurting the Arabs. They had to demonstrate, as the Vad Leumi asserted in 1921, that there was enough land in Palestine available for intensive cultivation to satisfy the needs of the Jewish National Home without prejudicing the fights of the existing population, since this was expressly stated to be the condition for Zionist colonization in the Balfour Declaration, the terms of the British Mandate, and subsequent British White Papers.

Intensive cultivation, and a national economic plan based on it, were thus the key to achieving the country’s potentialities. Arthur Ruppin described it this way: “The Arabs have land which brings in very little because they have no money to modernize agriculture. The Jews are prepared, for part of this land, to provide the necessary capital for intensification.” Moreover, the Zionist leadership felt that “to say that the land is not ‘cultivable’ unless it can be cultivated by its poorest inhabitants and with his primitive means is to reduce the natural resources of the country and grossly underestimate its potential … The swamps would not have been termed cultivable.” Thus no harm would come to the interests of the local population from the Zionist colonization and development of Palestine.

The Role and Views of the British

The British Mandatory played several roles, some by default, in the dynamic of Arab-Jewish relations in the economic, social and political spheres. In the most general sense, without British backing, without the Balfour Declaration, Zionism in Eretz Israel would have most likely never achieved statehood, or at the very least, credibility. From the beginning Zionists felt that it was vital that the British educate the Arab masses as to the purported benefits of Zionist Colonization. When His Majesty’s Government would or could not openly oblige, the Zionists constantly used British comments to support their cases.

Economic development was considered an integral part of the mandated territories’ progress toward independence. Yet, since Palestine was not an integral part of the British Empire in the same way as India or its African possessions, the Government was not willing to devote much money to its development. Consequently, the British did not have many specific, elaborated plans for the development of the country, and what plans they did have focused on infrastructural development (roads, railway, telegraph), afforestation and swamp drainage activities, all of which fit in perfectly with the methods and goals of Zionist development plans. In fact, there was no real need for large-scale Government sponsored development, since the Zionists were already seeing to it.

Because of British financial restraints, Zionist development discourse automatically had resonance with the British. Thus, the recommendations of the Hope-Simpson report, ostensibly critical of the Zionist movement, outlined a constructive program for the development of Palestine that included partitioning collectively-owned plots of land, developing large-scale irrigation and promoting education to help modernize the country’s agriculture. These all were in line with the general Zionist prescriptions for “improving” the lot of the Arab peasant. The Passfield White Paper similarly called for a “more methodical agricultural development with the object of ensuring a better use of the land.” Significantly, the monies that were spent by the Government were done so under the assumption that all the inhabitants of Palestine would benefit equally from such expenditures. However, as the Foreign Office explained, in order for the Jewish National Home to be successfully established, “it was impractical to guarantee that equal facilities for the development of resources of the country should be granted to persons or bodies who may be activated by other motives,” that is, to the Arabs.

Thus, in the public works sector, which was the single largest employer of Arabs in the country, the British also succumbed to Zionist pressure to increase the Jewish employment quotas, which played an important role in deterring the rapid expansion of Arab wage labor. The tensions from both sides for access to jobs — inevitable because of the dual obligation of the Government as expressed in the Mandate — was part of a larger contradiction inherent in the British rule over Palestine. Because of its pledge to the British taxpayer to spend no more than the revenues generated by the country, the Government had little money to spend developing the Arab sector, and what revenue there was came in large part from the landowning class which received its money from Zionist land purchases. It is clear, then, that the Mandatory not only viewed Jewish economic development as relieving them of their responsibility under the Mandate to develop the country, but moreover that the fulfillment of Zionist aims was the only way the Government could afford to rule the country.

Implications of the Zionist and British View of Arab Society and Its Economic Problems

A main theme underlying the similar British and Zionist understanding of the effects of Zionist development of the country was their shared belief that prior to Jewish settlement much of Palestine was “waste land” and “barren”. From the Zionist perspective this description remained valid throughout the Mandate period. On the British side, many officials realized that by the 1920s the cultivable areas of Palestine were so densely populated that “you can’t swing a cat”, as Lord Passfield described it (which accounted for the White Paper’s call to limit immigration). However, on the conceptual level, the High Commissioner of Palestine still noted in 1925 how in the space of five years the Valley of Esdraelon went from being “desolate” and uncultivable to being malaria free with twenty new Jewish villages, with other salutary developments “as plain as the eye could see”.

The Zionists similarly claimed that before Jewish colonization the land was sterile, barren and vacant, and that the cultivation that did take place was “primitive”, utilizing extensive methods of cultivation which did not bring out the productive potential of the land. Thus “the only hope for future development and to return the land to its ancient level of fertility is the influx of new energy.” The Arabs, fitting the general stereotype of the East, had no such energy, as “the indolent spirit of the East seemed to diffuse its torpid influence throughout the country.”

The solution to the centuries of torpor and stagnation was, in the Jewish Agency’s eyes, to recommend “the minimum possible interference with the free flow of capital into agriculture and the [rendering of the] execution of transfers, mortgages and leases as easy as possible,” thus allowing the traditional Arab farmers to be replaced by “more efficient” cultivators. The indigenous population could be replaced by more efficient newcomers because, as Ben-Gurion believed, “we do not recognize their [the Arabs] right to rule the country to the extent that it has not been built by them and is still awaiting its cultivators.”

For Ben-Gurion, Palestine was still undeveloped, the Arabs had shown themselves to be incapable of developing the country and thus had no right to stand in the way of the Jews. Most telling is a quote from a Britisher, Sir Martin Conway, used by the American Zionist and Supreme Court Justice Felix Frankfurter in an influential Foreign Affairs article in 1931: “We who love the simple Oriental life in its beautiful setting may be pardoned if we regard with a sigh its pulverization beneath the wheels of progress. Change is inevitable. It’s a mere accident that the Jews should happen to be its agents . … Palestine is inexorably part of the modem world. No cordon sanitaire can protect her against the penetration of the forces behind Western ideas and technology.”

Thus both the British and Zionists felt that “like the people who claim it is their heritage, the soil of Palestine has undergone centuries of ill usage and its will take much time and effort to restore its maximum productivity.” Beyond the people, “the hill country needs to be corrected of certain defects, or in other words, reclaim[ed].” The defects were the stones, rocks in the soil, wild plants, steep slopes and the superficial layers of soil, that is, everything that naturally made the hill country the hill country.

Another similarity in the British and Zionist conceptions of indigenous Palestinian agriculture was their criticism of the entire structure of Arab land tenure in Palestine. In particular, the predominant musha’a, or collective method of landholding, was disparaged as backward, unproductive, and blamed for leaving the fellah in perpetual debt to his absentee, feudal landlord. The Zionists contended that because of the socio-economic relations engendered by such collectivist landholding practices the Valley Jezreel, once the granary of Palestine, “was turned by effendis into a waste, covered with poisonous malarial marshes.” They also argued that the fellah did not really have title to much of the land. They did this not just in the purely juridical sense of the fellah not possessing a deed to the land (although this was often used to their advantage) but more interestingly, by demonstrating how “the British government’s own representative says that the fellah in the Huleh Basin [one of the primary swamp areas drained and settled by Jews] did not have long title … were cattle thieves, constantly at feud with each other, lawless by nature” and had no stable “ownership” of the land.

This type of depiction of the Arabs, as “marauders” and thieves, who by their very definition did not belong to the land in the way the Zionists claimed the Jews did, was characteristic of Zionist thought. For example, Ben-Gurion contrasted the “rigid traditions and blood codes of the east” with the Jewish/Zionist abhorrence for violence: “We have resorted to force in self-defense only … [but] in that wild part of the country attack was inevitable. There was complete anarchy… “

Thus, the reason why the fellah continued to have difficulty adapting to and thus benefiting from Zionist colonization was clearly a combination of economic hardships plus the cultural backwardness of the Arabs vis-a-vis the Jews and British, “which make it more than usually difficult to change agricultural methods and which in any case means changing completely the conditions of life.” Most importantly, “the fellah can thus be raised from the depths of his present misery and transformed into a prosperous modern farmer only with the aid of Jewish immigration and settlement.”

Far from hurting the Arabs, then, Zionism was their only hope. The reason for this was that only the Jews would pay the extremely overpriced prices for Arab land that will allow the fellah to extirpate himself from debt, not to mention provide the modern agricultural techniques for him to emulate. More specifically, four conditions were deemed necessary by Zionists for modern agriculture in a “backward” Arab country: a scientific basis, industrialization, modern forms of social cooperation, and capital funds to finance rapid and audacious development. These were precisely the posited contributions of the Jewish effort to the development of Palestine, “to evade this issue is to deny the laws of change and progress.”

An Alternative Understanding of Zionist and British Development Plans

While for the most part it was not until the mid-Seventies at the earliest that so-called “revisionist” Zionist analyses of Palestinian society and its economy came to the fore, an extremely insightful contemporary critique exists in the form of an article from 1925 by Yitzhak Elazari-Volkani, a prominent member of the socialist Ha-Poel Ha-Tzair party and one of the founders of the agricultural faculty at the Hebrew University. Entitled “The Transition from Primitive to Modern Agriculture in Palestine,” his analysis provides an alternative view to the traditional Zionist critique of Arab agriculture and glorification of Zionist methods and ideology.

First of all, Elazari-Volkani points out that the profits extracted by Zionist intensive farming were in the end no greater than the “primitive” methods employed by the fellah. This was because for the latter, having to invest very little capital in modern equipment, “gross income and profit are the same thing, since he spends nothing.” His income may be low, but it is pure profit. On the other hand, the Zionists, “having neither tradition nor science, create only defective farms, half modern, intensive in expenditure and primitive in income. So our farms, from a purely economic point of view, are on a lower level than the fellah even though we’re superior from a technical point of view.” This view should be contrasted to the belief held from the beginning of non-Zionist agricultural activities, that European techniques were superior to native ways, to the point where many early Jewish colonists refused to use local tools because they saw the Palestinians as “backward and decadent.” From Elazari-Volkani’s perspective it is Zionist and not Arab agriculture which was defective.

Elazari-Volkani further points out how “when the foreign market closes the fellah dominates the home market and rapidly takes advantage of his position to raise his prices and profits. Whether in good times or bad times nothing goes to waste; everything is used for something.” This analysis conforms to that of the Hope-Simpson Report, which concluded that the plowing of the fellah was “beyond reproach, and his primitive tools are as good or better as with modem implements,” because they performed all the functions for which a combination of modern machines are required, without damaging the soil. In contrast, during periods of falling income, the Jewish farmers had to be protected by subsidies from the Jewish National Fund or other Jewish agencies in order to sustain their European standard of living.

From this description one can wonder why the fellah should have felt it necessary to adopt Zionist farming techniques, at least until it became clear that it was the only way he could compete with the Jewish sector. In view of this the author also compares Palestinian agriculture to the large farms prevalent in California citriculture at the time to the effect that “in large estates machines are an economic necessity because they take the place of hired labor, but in small ones they are an ‘implement of comfort’.” Expanding on this notion, he points out how “the European can’t accustom himself to drag a whole day after wearisome nail plowing and for the sake of comfort he flies to something more rapid in its working. The rapidity, however, has no economic value. It can only have such value if it augments the source of production.”

Finally, because the Zionist farms used implements of “comfort” as if they were implements of production (that is, able to be factored into the price of the produce) Elazari-Volkani concluded that “we spend like the farmer and earn like the fellah. There is no equilibrium in our farms and we can’t compete against him … If we’re not willing to go down to the level of the fellah we must go up to the level of the farmer.” The implications of Elazari-Volkani’s comments are, I think, clear, and coincide perfectly with Gershon Shafir’s thesis that the very nature of Zionists’ goals — to create a national home for Jews in Palestine with a European standard of living — necessitated their developing a “militarist-nationalist approach to the Palestinians during their straggle to displace them and conquer their jobs.” Consequently, they had to exclude if not destroy their local Arab competition while at the same time “produce a population with good purchasing power and a taste for nice things that will support our [expensive] method of farming.”

Elazari-Volkani’s article demonstrates how an alternative reading of the Zionist and British discourse and practice of “modern” agriculture can help us understand the inherent contradictions within the discourses of development and modernization as they played out in Mandate Palestine. Thus, the Hope-Simpson Report, for example, at the same time praised the fellah’s intelligence, discipline and agricultural skills while still concluding that he is “ignorant”. Ignorant of what? Of “better methods” of agriculture, that is, modern intensive techniques favored by the Zionists. Hope-Simpson was felicitous enough to remark that when given adequate training and the necessary preliminary capital (from land sales to Jews), the fellah would no doubt “rapidly improve his position.” This contradiction, praising and belittling Arab agriculture on the same page, clearly demonstrates the inherent tension I have already discussed in the British perception and judgment of Arab agriculture. No matter how well adapted it is, it must be defective and in need of capital-driven improvement because the British (and the Zionists) could not think in terms other than that.

Despite the Zionist and British prescription for what ailed the Arab economy — modernization and development — in reality neither these two parties nor the local Arab land-owning elite had much interest in actually improving and modernizing the Arab sector, as all three groups benefitted from the status quo. I have already mentioned how the British derived much of their revenue from taxes generated from Jewish land purchases which in turn were creating a wealthy but dependent Arab effendi class. Afraid of creating a rural lumpen proletariat, the Government felt their “main hope of containing and controlling the Arab population was through the preservation and even ossification of existing patterns of domination.”

Moreover, because of the structure of debt that bound and suffocated most Arab peasants, they were in no position to dictate the scope and pace of modernization. The Zionists were only willing to help them in one area, agricultural intensification, and that only so that they would sell the majority of their land to them. Yet even here, less than 10% of land purchases were from fellahin, the rest from absentee landlords, meaning that the vast majority of sales did nothing to improve the fellah’s lot, as he saw very little money from the transactions.

It was, in the end, the very “backwardness” of the fellah that forced him to sell his land to Jews, thus making it inevitable that the Zionists, the effendi class and the British would work to preserve, not abolish the status quo. Realizing this, Zionists from Vladimir Jabotinsky to Berl Katznelson, generally on opposite ends of the political spectrum, knew that “the connection between economic development and political rule is well understood,” and were therefore against the development of the Arab economy. Instead, they advocated total separation until establishment of a Jewish majority because they realized that rapprochement could strengthen the Arab economy, thus leaving them less likely to sell their land to Jews.

Other examples, “exceptions” to the supposed laissez faire British rule in Palestine, further illustrate the Zionist and British desire to support the “status quo” they constructed upon reaching Palestine. When the Mandatory wanted to make loans and mortgages available to Arab peasants the Zionists were completely against such an initiative because they realized doing so would help Palestinians retain their land. Chaim Weizmann went so far as to call the loans “life and death issues for Zionism.” The Zionists and British also strove to block the emergence of an Arab capitalist class in Palestine, which meant that the proletariat created by land sales had no indigenous capitalist sector to move into except the British-controlled public works. Yet in this sector the Government was under constant pressure from the Zionist leadership to hire more Jews.

Perhaps the most well-known example of the disparities in the treatment accorded the Zionists and Arabs by the British Government concerns the granting of concessions for the country’s natural resources, which Barbara Smith has termed in her recent study on British-Zionist relations in Mandatory Palestine “outstanding in the range and preferential treatment accorded to the Zionist movement.” The three most important concessions in Palestine — electricity, exploiting the mineral resources of the Dead Sea, and draining the Huleh — were all granted to the Zionists soon after the British occupation, and the electricity concession, known as the Rutenberg Concession, was “singularly important” so as to be subject to debate in Parliament.

This concession, which provoked violent outbursts from the Arab population, gave the Jews a monopoly on constructing the biggest electrical station in Palestine with a free hand to use the power to equip Jewish settlements. Moreover, the company could expropriate any land it deemed necessary, while no other body was permitted to distribute or sell electricity in Palestine. Thus, Arab groups were subsequently turned down for concessions to electrify Arab cities like Jaffa, and were basically forced by the British to get permission –almost never granted — from Jewish concessions to exploit their own resources.

In light of this dynamic, when Zionists like Arthur Ruppin pointed out that the Arabs “could not dream of [draining the] Basin,” or when Colonial Secretary Winston Churchill commented that “left to themselves the Arabs would never in 1,000 years take effective steps toward the irrigation and electrification of Palestine,” we must realize that the reason for this was not because of some defect or backwardness or lack of energy on their part, but because they were specifically prevented from doing so.

Perhaps no one has understood this dynamic between rhetoric and reality better than Gershon Shafir, whose Land, Labor and the Origins of the Arab-Israeli Conflict investigates how the competition for work between Arabs and Jews led to the transformation of the socialist ideology of the second aliyah pioneers into an exclusivist, militarist ideology vis-a-vis the Arabs of Palestine. Shafir’s study, as its title suggests, discusses two of the key concepts in Labor Zionism, “Hebrew Labor” and “Hebrew Land” (also known as Cibush Avodah and Karka’a, “Conquest” of Labor and Land). Generally speaking, we can equate Jewish labor, or the “Conquest of Labor”, with monopolizing the labor market in Palestine, and more specifically, with excluding Arabs from the Jewish economy. Because of this, David Ben-Gurion informs us that Hebrew labor was “not a class question, it is a Zionist question, the Zionist question.”

Despite the determination of the labor movement to exclude Arabs completely from the Jewish economy, this aspiration was not even approximately realized until the 1936 Arab boycott, which finally forced the issue. In fact, it was clear by 1910 that the Conquest of Labor would prove to be impossible to carry out. However, the Conquest of Land was quite another matter, as once land passed into Jewish hands it could much more effectively be devoted to purely Jewish employment. The implications of the exclusivist Jewish land and labor policies are clear enough, and perhaps was best summed up by Jacob Metzer, who wrote that “Jewish land was viewed as a necessary condition for making Palestine a Jewish country, but a sufficient condition only when combined with Jewish labor.” This combination led to the collective forms of agricultural settlements, the Kibbutzim and Moshavim, which were the perfect instruments for enforcing Jewish-only land and labor regulations. What is equally important for understanding the dynamics of the Israeli-Palestinian conflict is how, in transforming themselves from Hebrew workers to Hebrew laborers, that is, laboring on their own land, they also set up a whole series of oppositions between the Jewish farmer/soldier and the Arab squatter/marauder, oppositions which played a determinative role not just in Ben-Gurion’s attitudes toward the Arabs and more generally Zionist economic and political rhetoric, but in how Israelis conceive of Palestinians to this day.

Zionist Urban Development

The discourse surrounding the modernization of the agrarian sector has generally been given the most attention by scholars, hand-in-hand with the prominence given to the socialist Zionist ideology that underpinned it. However, another example of the exclusivist nature of Zionist efforts to “redeem” Palestine was the discourse surrounding the planning and building of Zionist cities. Troen informs us that “long unconsidered has been the degree to which Palestine’s urban frontier also provided a venue for alternative forms of colonization … Zionist planners made the country a laboratory for urban design.” Thus there were competing socialist and capitalist visions, and each “envisioned [cities like] Tel Aviv in terms of an integrated complex of values in which physical form not only reflected the city’s social and political characteristics but contribute to shaping them.”

Interestingly, in the design of Tel Aviv the dichotomy between modernity and traditionalism once again surfaces, but this time in the opposite direction. While both liberal and socialist Zionists drew on European aesthetic, social and political ideas in settling both the countryside and the cities, they still felt that “it was expected that even those who gained all their livelihood from industrial or commercial occupations would benefit by living in a community that had the economic and aesthetic characteristics of a traditional village.” This does not mean that they wanted to live with Arabs: “The aim was to provide a total environment, a ‘cocoon’ and a ‘hothouse’ that would create and sustain collective values.”

In doing so the planners’ goal was to separate “clean, beautiful and healthy” Tel Aviv from Arab Jaffa, which was disordered, dirty and backward. It goes without saying that while striving to create the new and clean Tel Aviv, the Zionists never acknowledged their responsibility for creating the deplorable conditions in Jaffa by the overcrowding of Jews in the city before Tel Aviv was built, just as the British and Europeans never accounted for the effects of the 80,000 European pilgrims who had visited Jaffa by the 1880s and who commented on the town’s “orderliness” and “hygiene”. Rather, while explaining how “it seemed wrong to exchange the conditions of a European ghetto for a Middle Eastern one”; the middle class, non-socialist Zionists who built Tel Aviv believed that the solution to the “Arab problem” would be to “channel resources as quickly as possible to build the economic infrastructure of a Jewish society, a rapidly developed, modern and efficient urban and industrial society.”

It would be fruitful to conceptualize how the Arabs must have felt when looking at the Zionist-inspired development of their country. For example, Tel Aviv, which in 1908 was literally sand dunes next to the Arab town of Jaffa, within a matter of a decade was transformed into perhaps the most modern city in the Middle East (as Revusky describes it, most houses were built according to a “hyper-modern architectural style”), while Jaffa remained as it was: “There is a tremendous contrast when one leaves Jaffah and enters Tel Aviv, with its straight well-planned streets kept in meticulous cleanliness and order.” As for the “hyper-modern” lay-out of Jewish agricultural colonies, with their exact circular and rectangular designs, they must have been quite a sight to the Arabs, whose farms were completely unorganized viewed from a Western aesthetic.

An Alternative Understanding of the Arab/Palestinian Economy in Mandatory Palestine

Critiquing a prevailing discourse is not the same as developing an alternative and hopefully more accurate topology of Palestine and its history from the late Ottoman period. In order to do this we need to begin with a re-examination of the traditional view of Palestine’s economy in the late Ottoman period. It should be obvious that for the Zionists and British, Palestine was considered backward and stagnant until they arrived and began the process of modernizing the country and establishing a capitalist economy in the region. However, the transformation to capitalism, for which Palestine seemed so ill-prepared, was in fact much more complex than the Zionist or British understanding of it.

First of all, the whole notion of a self-contained Palestinian economy lying fallow and waiting for European revivification has been shown to be far off the mark. As Graham-Brown has informed us, the so-called self-contained and autonomous nature and behavior of peasant farmers in Palestine, so important for the traditional Zionist conceptualization of the Arab economy, did not exist even in the Nineteenth Century. By that time the shifting power relations within the Ottoman Empire resulting from the land and tax reforms led to a restructuring of agriculture. A whole new relationship between the owner of the productive resources — land, capital or both — and the peasant tenant/operator called sharika, or partnership, developed in which many owners “farmed out contracts” in such a way that it gave the peasants new entrepreneurial opportunities. The new economic dynamic contributed to a significant increase in exports, which Alex Scholch, after conducting a thorough study of the European consuls’ commercial reports during the period, characterized as “a remarkable economic upswing in the two-and-one-half decades following the Crimean War.”

These changes were generally the result of increased European penetration into the Empire, and were the immediate result of two things, the change in the structure of land tenure which created large landed property, and the appearance of a commercial bourgeois whose capital infiltrated into the sphere of agrarian production to a significant extent.” More specifically, Palestine produced a relatively large agricultural surplus which was marketed in neighboring countries, while even the swamps around Lake Huleh were invested in by Damascene Jews for cotton growing. This means that decades before the Zionists began to “reclaim” and bring the Huleh back to life, their “Oriental” Jewish brothers were already developing the region, using Arab laborers whom Zionists would later claim did not have long title to the land.

Thus, far from being stagnant, the changing patterns of land ownership in late Nineteenth Century Palestine not only indicate the dynamic nature of the situation, but moreover present “the clearest example of how Islamic patterns are intimately woven into the fabric of communal society, thus contradicting the functionalist-Orientalist paradigms that have historically dominated Middle Eastern scholarship.” As Ya’akov Firestone points out, they “smoothed its adjustment to final absorption into the world market centered on Western capitalism, [and were] an adaptation to deal with poor public security, benefits of scale operation, equalize economic opportunities … [all of which is] only natural in economies like the Middle East, where production is subject to such uncertainties.”

They were also very complicated, with several variations available involving different combinations of ownership of land, labor, seed and plowing stock, and involved landlords advancing the tenants necessities during the growing season, maintaining them when sick and sometimes even providing homes or raising the levels of the tenant’s share. This picture is quite different from the traditional Zionist and British view of the Arab landlord as being the very incarnation of Oriental despotism. Yet with the exception of the piece by Elazari-Volkani discussed above, it seems that there is nothing in the British or Zionist literature of the period which exhibits anything close to an appreciation of the sophistication and “rationality” underlying Arab land tenure and agriculture; it is as if they simply could not see it.

This is not to say that the fellah’s position was admirable. As a matter of fact, much of the economic expansion bypassed the peasantry, favoring the middlemen, merchants, big landowners and tax farmers, most of whom exploited the peasant producers for their own ends. Like peasants in Africa, from a more or less self-sufficient life they were compelled to adopt a new way of life in which they derived an increasing portion of their sustenance from land and equipment owned legally by others. Even more important was the expansion of a dominant commodity market fueled by Jewish immigration in which land was rapidly and decisively convened into a commodity at the very time the peasants were losing whatever control they had left over it. Yet, as we have seen, the intensive cash crop system which was offered by the British and Zionists as a solution to the fellahs’ woes in fact strengthened the hand of large landowners and therefore contributed further to their extraterritorialization. It should thus come as no surprise that the Arabs were frightened of and opposed to changes in both land ownership and agriculture because they were convinced that the changes and “improvements” in fact threatened their entire way of life, or that they fought such changes from the initial, predominantly Christian land purchases of the mid-1800s.

However, what Scholch’s and the other analyses do demonstrate is that the Arab Palestinian economy was definitely not stagnant, and that to a great extent the peasants’ problems were the result not of their “indolence” or “backwardness” but rather of the dynamic changes going on in the world and Middle Eastern economies which they, like peasants everywhere, were trying with varying degrees of success to control. In fact, the European/Zionist conception of historical “progress”, from the backward pre-capitalist peasant to the modem capitalist mode of production, was wrong. As the collection of essays in Glavanis’ The Rural Middle East demonstrates, there was no purely linear evolution; rather, the two systems existed side-by-side, with capitalist relations even conjuring pre-capitalist ones “ex nihilo”

Musha’a ownership came under perhaps the greatest criticism of any indigenous Arab institution in Palestine, as it was the bane of the British reports attempting to uncover the reasons for continued Arab “backwardness” in the face of a neighboring, more advanced Jewish economy. At one point accounting for one-half of the Arab-“owned” land in Palestine, musha’a tenure at its core involved the collective village ownership or tenancy of land, with equal participation and disbursement of shares (as opposed to parcels of land) which were rotated on a periodic basis to insure that everyone had access to the best land part of the time.

This form of ownership was a very dense and complex meshing of contractual and familial relations both to maintain some access to the land for poorer peasants and allow more prosperous members to take advantages of new opportunities offered by widening market mechanisms. However, the British and Zionists did not see the institution this way. The Johnson Crosbie Report described it as “the greatest obstacle to agrarian progress in Palestine … [because] no development will take place.” More tellingly, the Joint Survey Commission of 1928 concluded that “the system misses alike the advantages of individual [farming] and cooperatives while it remains useless to expect that the land will be weeded or fertilized, trees planted, or in a word, that any development will take place.”

Yet immediately after this, the report notes that while the gross income of the supposedly “modem” Jewish farms was two times that of the Arabs, the start up and maintenance costs were much higher, with expenditures ultimately being “quite out of proportion to income … while the Arab farmer has been long established on his land and has incurred little expenditure to develop it.” Once again, the Zionists and British cannot seem to reach the obvious conclusions from their perceptive observations (this one being fairly close to Elazari-Volkani’s): That is, that it was not in the Arabs’ interest to “develop” along the lines prescribed for them by the Zionists and British, both because their current situation, minus the pressure of Zionist land purchases, was not all that intolerable (from a non-capitalist, materialist and growth-oriented perspective), and more importantly, because “development” always wound up meaning that they were being “developed” off their lands and away from their own autonomous mechanisms for dealing with the ever-changing economic situation.

Finally, sharetenancy provided the tenants with the ability to acquire new land by rejuvenating “dead land” as active partners with their landlords, precisely the goals of the Zionist efforts. For all these reasons, sharecropping was perceived by the “irrational” Arab population as “being fairer from the point of view of the peasant.” In the end, the very institution led to the demise of large landlordism and the ascendancy of the peasantry which was the stated goal of the Zionists, but without alienating the land permanently to Jews and while remaining in line with normative Islamic shari’a practices regarding “mutual benefit and solidarity” over patterns of direct exploitation.

Thus Palestinians, though not “rational” from a Western capitalist perspective, certainly were not acting backward or irrationally, but rather were calculating from a different rationale, one looking toward realizing income in both cash and kind and bred from a completely different set of social and political-economic relationships. The Arab economy, though poor, did provide the fellah with crops for self-consumption, as well as with services provided within the family such as housing and food preparation that would be lost with the switch to intensive farming and wage labor. Thus after centuries of a relatively egalitarian, albeit subsistence lifestyle, with the encroachment of the much ballyhooed modernity came debt, unemployment, dispossession, and the like, leading one to wonder why the Arabs should have jumped at such an opportunity as the Zionists and British were presenting, not that they actually had any choice in the matter. Is there any wonder why, as Yitzhak Tabenken, the founder of the kibbutz movement put it, “the Arabs are not interested in development”?

Both the sharecropping and musha’a systems of land tenure gave a much greater degree of “security in tenure” than capitalist intensive agriculture. However, not being reflected in monetary rewards, this fact was missed by the Zionists and British in their negative evaluations of such practices. They might have seen, had they been able to look that way, that rather than being an institution symbolized by the siphoning of the surplus of landless peasants by landlords in traditional agriculture (that is, an exploitative practice that the Zionists, as enlightened colonizers, were duty bound to help eradicate), sharetenancy was more properly understood as a highly adaptive mechanism of allocating rural labor in a variety of transitional agrarian forms (that is, a rational indigenous attempt to cope with the incorporation of Palestine into the European/World economy).


As Ben-Gurion put it in a speech before the 22nd Zionist Congress, “development, population and progress” were the keys to rejuvenating Eretz Israel. As we have seen, this focus on economic aspects of Zionist colonization efforts suited the Zionists very well. This article has attempted to demonstrate the importance of examining the economic discourses prevalent in Mandate Palestine in order to reveal the ideological underpinnings of supposedly economic arguments and development plans. Without such an analysis a comprehensive understanding of the etiology of the Palestinian-Israeli conflict will remain elusive.

It is my opinion that by failing to account for the constitutive role played by the various forms of interactions between Jews and Arabs, traditional historiography has failed to present a complete picture of the etiology or perpetuation of the conflict. It has also treated the Arabs as “marginal”, an obstacle that the Zionists had to overcome to fulfill their project, as opposed to playing a significant role in the very shaping of those goals, and affecting the way Labor Zionism articulated its own identity and mission. This problem is symbolic of much of the relationship between the West and Islam in a larger sense, as each sees itself as a self-contained entity instead of seeing how the “other” was actually constitutive in its construction.

This analysis has further shown how Palestinian agriculture, and in fact the entire Palestinian understanding of what an “economy” is and what the goals of economic life are, had a different logic than the Zionist and British notions of modernization, planning, development and progress, one which was misunderstood because each of the latter two groups’ agendas did not permit them to understand the economic situation from the Arabs’ perspective. As such this analysis goes farther than those of Anita Shapira, Joseph Gorny or Barbara Smith, all of whom revealed the inherent tension between Zionist rhetoric and the practical effects of their colonization efforts, or between them and the British. Yet then they failed to explore the underlying similarities between the various Zionist schools and between the Zionists and the British in terms of diagnosing the country’s (and its population’s) problems and setting out the goals and methods for developing it. For me, the most profitable line of inquiry is no longer the debates between different Zionist parties or with the British, but rather the development discourse which was shared by all of them.