Fluent Essays

Compare Israeli and American militarism Based on your reading and class make a comparative discussion about the role of the military, and militarism as a cultural orientation, in Israel and America. (If you are not American you may focus on a different nation). Among other things you may refer to: -          The different historical background that shaped the military and militarism as we know it today -          The similar and different challenges Israeli and American armies cope with -          The contribution of the army to integration and/or segregation in the national community -          The (dis)place of minorities in the army -          The association between military service and gender roles – within the military and beyond -          Controversies and protests against militarism You may use any additional sources.     2 Pages.  Sources attached below grinberg___paving_the_way_to_neoliberalism.pdf levi_et_al_from_obligatory_militarism_to_contractual_militarism.pdf Unformatted Attachment Preview dU for Ox 2 Paving the Way to Neoliberalism The Self-Destruction of the Zionist Labor Movement Lev Grinberg ve ni ty rsi Comparative political economists disagree on the reasons for paradigm shifts, like the interwar and postwar rise of Keynesianism, or the neoliberal transformations during the 1980s. Some attribute major policy changes to state institutional developments, domestic political processes or the emergence of new ideas, others insist that paradigm shifts are the direct result of a changing balance of class power. In our own era, the class argument goes, financialization and globalization of capital on the one hand, and the decline of organized labor on the other, have contributed to the transition to neoliberal macroeconomics. This chapter challenges the class power theory by analyzing the rise of neoliberal policies in Israel as a result of a peculiar institutional tension and political context, and the intentional action of Labor Party leaders. In short I will argue that, in addition to global tendencies, politics matter.1 In Israel as elsewhere, some scholars and commentators have explained the ascension of neoliberalism by global economic imperatives associated with capitalist interests, and the vastly eroded countervailing power of trade unions and social-democratic parties (Shafir and Peled 2002; Ram 2008). The prevailing misconception of the role of the Labor Party attributes the neoliberal shift to the political upheaval of 1977, when the Likud Party formed the governing coalition for the first time. The villain of this narrative is Benjamin Netanyahu, s2 es Pr 7 01 1 Unless otherwise stated, the term Labor Party is used throughout this chapter to denote the historic Mapai party originally formed in 1930 and its various electoral alignments and mergers with smaller labor movement parties, including the formation of the Israeli Labor Party in 1968. For further details see Aronoff (1993: figure 1). dU for Ox Lev Grinberg ty rsi ve ni who has led the Likud for most of the last two decades, and has been credited with nailing shut the coffin of Israeli social democracy (e.g. Gutwein 2010). This misinterpretation reflects Shimon Peres’ argument on November 2005, after splitting the Labor Party by forming a new Center party, when he accused Netanyahu—then Finance Minister and Likud leader—of leading Israel’s transition to “piggish capitalism.” But while Netanyahu has indeed been an important protagonist and articulator of neoliberal imageries and rhetoric, his policies were adopted within an already liberalized political economy, in which the Histadrut lost its veto powers and the state’s senior economic bureaucrats came to dominate domestic policymaking.2 It was the preceding structural and institutional changes, wrought largely by Labor Party political leaders, which made it possible for Netanyahu to propagate what Ben-Porat (Ben-Porat 2005a) has characterized as a distinctly neo-conservative ideology. Indeed, as we shall see, in 1985 none other than Shimon Peres (Israel’s Prime Minster between 1984 and 1986 and Minister of Finance 1988–90) played a pivotal role in implementing a Stabilization Plan aimed not only at halting hyperinflation but also at fundamentally liberalizing the political economy. This chapter analyzes the historical process that led to the dismantling of the institutional complex that Labor Party forefathers constructed around the Histadrut. By advancing the neoliberal project, labor political leaders in Israel were able to relieve themselves and the party of a double burden. On the one hand, the Histadrut and the economic enterprises and social services under its control were the home base of an outmoded party machine that was no longer able to deliver electoral victories in an age of post-clientilistic politics, and which tarnished the party’s public image and blocked the mobility of aspiring young politicians. On the other hand, when occupying positions of power Labor ministers found their room for maneuver in both policy and politics sharply constrained by pressure from the Histadrut to channel government aid to its failing institutions. Since 1967 incessant demands for state subsidies by Histadrut-owned enterprises and its private sector allies led to a fiscal crisis of the state and hyperinflation, following the liberalization of foreign currency in 1977. In this context the neoliberal roadmap offered a sound solution for state elites facing an interventionist developmental state project “gone wrong.” By drastically cutting state subsidies to Histadrut-owned enterprises, thereby ensuring their privatization, and by ending the Histadrut’s control of health insurance and occupational pensions and undermining its role and influence in collective s2 es Pr 30 7 01 2 The Histadrut, founded in 1920, is the umbrella organization of all labor-controlled institutions, including welfare services, economic enterprises, pension funds, and trade unions. For a brief description of the Histadrut see the section, “The Labor Zionist Political Economy,” and for a more detailed analysis (Grinberg 1993b; Shalev 1992). dU for Ox Paving the Way to Neoliberalism bargaining, Labor governments (or Labor ministers within coalition governments) put paid to the Histadrut’s extraordinary political and economic powers. The Stabilization Plan of 1985 propelled a gradual transition to a more technocratic era in which party politics were neutralized, and macroeconomic state agencies became the guardians of a new state project. The Labor Zionist Political Economy ty rsi ve ni The institutional history of the Zionist labor movement starts at the turn of the twentieth century with the first flows of Jewish migrants arriving in Palestine (still under Ottoman rule), and their encounter with the local Arab population that was ready to work for lower wages (Shafir 1989). They responded by establishing political organizations and agricultural unions. In 1920, following the establishment of the British mandate and mobilization of financial support from the World Zionist Organization, existing labor movement organizations were restructured around the Histadrut (Shapiro 1976). The Histadrut was established as a quasi-state institution subsidized by the Zionist movement in order to facilitate the absorption of Jewish immigrants in the absence of a Jewish sovereign state. It sought to contribute to the absorption of property less Jewish settlers while providing a valuable infrastructure for emergent labor parties. The Histadrut established its own economic enterprises, some in the form of co-operatives (in agriculture, transportation and marketing) and others managed by Histadrut bureaucrats in the framework known as the Labor Economy, which eventually spanned numerous sectors of the economy including finance, housing, manufacturing, and port services (Grinberg 1991, 1996; Shalev 1992). Many Histadrut members were not directly tied to its activities as a trade union, attracted instead by employment opportunities and a range of social services that included health, education, housing, and eventually pensions. The most important and crucial mechanism for member recruitment was the Sick Fund (Kupat Holim), which provided health services to the lion’s share of the Jewish population. In short, the Histadrut was not at all a typical umbrella organization of trade unions, it was established as a “state-in-the-making” institution, with all the typical activities a state is expected to display. The “Histadrut Trade Union Division” was organized as a labor ministry aiming to control the labor markets characterized by competition with indigenous Arab workers. The “trade union division” didn’t represent the workers, who were dependent on the Histadrut for jobs and collective agreements. The meaning of Histadrut membership was the entitlement to otherwise nonexistent social services, like health, education, housing, pension insurance, and employment. 7 01 s2 es Pr 31 dU for Ox Lev Grinberg ty rsi ve ni The Histadrut’s quasi-state apparatuses included military organizations, a bank, manufacturing and marketing enterprises, farming and transportation cooperatives, port services, sports and culture organizations, and also taxing and judicial apparatuses. Histadrut membership also granted political rights, namely voting every four years for the Histadrut Executive Committee (the Vaad Hapoel). Both this body and the Histadrut’s executive apparatus were controlled by political parties, and from 1930 by the hegemonic Mapai (Workers’ Party of Eretz Israel-Palestine), the largest political party in the Palestine Jewish community, which ruled the Histadrut in coalition with smaller labor movement parties. Mapai represented the shared interest of all strata of Jewish settlers and of the worldwide Zionist movement in the Jewish colonization of Palestine. The party succeeded in combining Zionist goals with its self-interest in maintaining and expanding its dominant position in the Jewish community through control of the Histadrut’s bureaucratic apparatus and economic enterprises (Horowitz and Lissak 1978; Shapiro 1976, 1977; Medding 1972). Following the 1933 Zionist elections, Mapai also became the dominant party in the Zionist movement, transforming the Histadrut from a sub-contractor of the World Zionist Organization into an equal partner. Both institutions were now ruled by Mapai. The establishment of the State of Israel in 1948 and the continuation of this power-sharing triangle (substituting the new state institutions for those of the Zionist movement) created tensions between the Histadrut’s quasi-state functions and the new parallel state institutions, transforming Mapai—from the outset Israel’s ruling party—into the broker between them (Grinberg 1993a). However, Mapai was not autonomous from the Histadrut’s institutional interests, because its political power depended on control by the Histadrut apparatus over workers, public services, and capital (Medding 1972; Shapiro 1977). This dependence gradually became a source of continuing frustration for Mapai politicians. Mapai (and later the Labor Party) were machine parties, with the Histadrut serving as the home of the machine. The resultant tension between Histadrut leaders and the leaders of communal or state institutions revolved around two issues: first, government policy (e.g. conflicts over the division of functions between Histadrut and state), and second, pertaining mostly to the younger generation of Labor politicians, political ambitions, and individual career opportunities. In the period 1950–65 economic growth was fueled by capital transfers— mainly German reparations to the State of Israel—and the expansion of the consumer and labor markets as a result of massive Jewish immigration. All these were pushed forward by the construction industry, significantly subsidized by the government, which also initiated large-scale infrastructural projects. Mass immigration contributed to the relative social mobility of veterans, while depressing the wages of unskilled workers (Bahral 1965; Rosenfeld and Carmi 7 01 s2 es Pr 32 dU for Ox Paving the Way to Neoliberalism ty rsi ve ni 1976). Mapai maintained the Histadrut’s quasi-state structure and it continued to provide public services, thereby obliging the immigrants to join the Histadrut in order to become eligible for its healthcare and employment services. The Histadrut’s contribution to economic development and political stability was repaid in high direct and indirect state subsidies that facilitated the maintenance of a large bureaucratic apparatus. The foremost subsidized service was the Histadrut’s health service, but its economic activities in construction, agriculture, and industry (later including military industries), which were central elements of the state-building project, also benefited from state support (Halevi and Klinov-Malul 1968; Bichler 1991; Peri 1983; Shalev 1992). The form these subsidies took varied: some were direct outlays from ministry budgets, others took the form of machinery and raw materials donated to Israel by Germany under the reparations agreement implemented between 1953 and 1963. Yet the most important source of state subsidy followed a more indirect route. The major source of domestic investment capital in Israel was the personal savings deposited in pension or provident funds (hereafter “pension funds”), most of which were owned and managed by the Histadrut. When a program of state-sponsored industrialization was launched in 1957, the Israeli government agreed that nearly one-third of the annual accumulations of these funds would be loaned to the Histadrut for financing governmentapproved investments in the Labor Economy.3 The domination of Mapai and the Histadrut was first challenged in the 1960s when the success of the government’s policy of rapid and heavily subsidized industrialization resulted in full employment. The unions became stronger and began asserting their independence, while industrialists sought to establish a pro-business party (Grinberg 1993b; Shapiro 1991). The political response to these threats on the part of the parties whose power was based on their control of the Histadrut was the creation of an electoral block of Labor parties, known as “the Alignment.”4 In parallel, economic policy was reoriented. First the government acted in 1965 to quicken and deepen a looming recession, with the intention of disciplining both workers and employers (Shalev 1984). Then, after Israel’s victory in the 1967 war and its occupation of new territories, policies were adopted to facilitate integration of Palestinian workers into Israel’s low-skilled labor force and capture of their consumer markets by Israeli suppliers (Farjoun 1980; Semyonov and Lewin-Epstein 1987). s2 es Pr 7 01 3 Under the agreement between the government and the Histadrut, 35\% of pension fund accumulations was to be invested in the capital market. The remainder would be used to finance development projects, and in return the funds received “designated” government bonds with a guaranteed real rate of return. The Histadrut was assigned half of the development funds (and the associated debt) to use for investing in the Labor Economy (Grinberg 1991, 1993b). 4 The first block was established towards the 1965 elections, between Mapai and Ahdut Haavoda, the next towards the 1969 elections, when Rafi (Ben Gurion’s splinter faction) joined them forming the Labor Party, and in again in the same year when Mapam joined the Alignment. 33 dU for Ox Lev Grinberg The Dual State Institutionalized after 1967 ty rsi ve ni Post-1967 economic and political developments quickly destabilized the shaky prewar balance between the three vertices of the ruling triangle formed by the Histadrut, the Labor Party, and the state. The Occupation turned out to be a historical turning point that was followed by deepening state subsidy of Histadrut companies and services, and its extension to large enterprises in the private sector. The integration of Palestinian workers effectively created a lower caste of cheap and unorganized non-citizen laborers (Semyonov and Lewin-Epstein 1987). At the same time new flows of foreign capital were inaugurated (Arnon 1981), mainly aid from the USA, which effectively financed the purchase of imported weaponry (Bichler 1991). In the interregnum until the next major Arab-Israeli war in October 1973, armaments evolved into Israel’s leading industry (Blumenthal 1984; Peri 1983; Barkai 1987). The Labor Economy invested mainly in this area and profited considerably from its deep subsidization. This success was ensured both by political connections with the ruling party and a policy of recruiting senior executives from among high-ranking military veterans, who had close connections with senior military commanders (Maman 1997; Peri and Neubach 1985). The Defense Ministry covertly collaborated with managers and workers in the arms sector, who pressured the government to expand their subsidization (Aharoni 1991b). The Ministry succeeded in claiming an increasing share of the state budget while escaping from the restraints imposed on civilian state agencies by the Treasury. It also played a central role in expanding economic activity by virtue of the army’s responsibility for administering the Occupied Territories (Grinberg 1993a, 2008). As a result of these developments, the state’s prewar objective of using the market and budgetary discipline of a recession to transform power relations between employers, employees, and the state, was turned on its head. After 1967 the balance of power would not shift again for nearly two decades, because the relative autonomy of the state vis-à-vis powerful economic interests was lost due to the internal rift between the two competing state agencies (Ministry of Finance and Defense) and the coalitions they built with powerful economic actors. The military establishment (the armed forces and the Ministry of Defense) was ready to cooperate with the Histadrut, still the dominant quasi-state institution. The Histadrut supported the military government in regulating the employment of Palestinian day workers, while, as noted, the Labor Economy became one of the main domestic armaments suppliers. At the same time, organized workers in public services—the backbone of the Histadrut in its trade union role—were empowered by the split in the labor market, owing to their immunity from competition with Palestinian workers (Grinberg 1991; Farjoun 1980). 7 01 s2 es Pr 34 dU for Ox Paving the Way to Neoliberalism ty rsi ve ni Under these new structural conditions, the autonomy enjoyed by both the Histadrut and the military establishment made the ruling party virtually redundant as a source of legitimacy and control of people and resources. Under these circumstances, the old Mapai component of the labor movement parties (not yet consolidated into the Labor Party) retained only one main source of power, its continued control of the Finance Ministry. In 1968 the Mapai Minister of Finance introduced a new program of investment subsidies for the Labor Economy called the Financial Plan. The motive was to respond to pressure from top Labor Economy managers for increased state aid, in the hope of offsetting the Defense Ministry’s autonomous system of capital subsidies. As in the past, the plan guaranteed positive real returns to pension fund investments in “designated,” non-negotiable government bonds. However, in 1968 the government began to provide “inflation insurance,” which, in a context of rising inflation, introduced a growing element of subsidy into Histadrut investments in the Labor Economy. (Seeking to secure other political allies, the Ministry of Finance also began offering subsidized non-indexed loans to other groups, including homeowners and private investors.) In another move designed to appease the Histadrut, over the next decade the share of pension accumulations reserved for the Labor Economy was gradually increased.5 Many of the internal tensions within the newly established Labor Party, including those publicized after 1973 as “corruption scandals,” were related to conflicts over allocation of subsidized loans to Histadrut-owned enterprises (Yadlin 1980). At the same time, the Treasury’s commitment to subsidizing these and other non-indexed loans meant that borrowers benefitted from the growing inflation. This became the main source of the government’s swelling budget deficits and internal debt in the 1970s (State Comptroller 1977: 111–12, 1980: 50). es Pr Liberalization and Inflation s2 The October 1973 “Yom Kippur War” spelled the end of rapid growth ... Purchase answer to see full attachment