The national logic of collective settlements
While some European and American leaders argued that settlements should be judged by strict economic criteria, the socialist Zionists understood that such an approach could not work in the economically unattractive conditions of Palestine.
WZO leaders accepted this view, as is evident in the strategy adopted by Arthur Ruppin (1876-1943), the head of the WZO office in Palestine, who led the settlement project of the organization. Ruppin, a German-Jewish sociologist, demographer, and political-economist, studied in Berlin and Halle and imported the ideas of German economic nationalism to the Zionist project. He understood the need to coordinate the efforts of nation building in order to use the scarce resources that the Zionist movement could muster and promoted collaboration between the WZO and the socialists. The WZO provided the capital and the socialist factions provided the Halutzim (pioneers) who established new collective settlements (Gorny and Greenberg, 1997; Kimmerling, 1983; Penslar, 1991, 2001).Agriculture was crucial in this strategy for several reasons. First, agrarian settlements were a tool to establish a claim on the land (Shilo, 1988). Second, following prevailing economic theories of the time, the country's “absorptive economic capacity” was believed to be determined by the number of its farmers (Krampf, 2010b). Third, agricultural physical labor was regarded as part of the revival of the Jewish nation and for the creation of the “New Jew” (e.g. Ruppin, 1913, 1973). The objective of the Zionist movement was not only to establish a Jewish state, but also to correct that sociological “anomaly” of the Jewish people, that is, to shift Jews from “unproductive” occupations in luftgeschaft to “productive” jobs in agriculture (Bloom, 2007, 2011).
The collective settlement strategy suited well the ideological aspirations of the Haluzim, but its implementation might owe more to its service to the national purpose: it was an instrument to drive a wedge between the Jewish and the Arab economies.
Lacking financial resources to buy their own land and lacking experience in agricultural work, the cooperative strategy was a way by which unskilled Jewish farm hands could survive the competition with the local and far more skillful Arab farmers. In free-market conditions the Jewish settlements would not have any chance of surviving, as they were far less “efficient.” Hence, the collectivist approach was also a means to create a “dual economy,” consisted of two separate Jewish and Arab sectors (Metzer, 1998; Penslar, 1991).Industrial development was still part of the Zionist project and private enterprise was therefore essential for its success. Consequently, the socialist leaders had an incentive to maintain labor relations under control. At the same time, private capital was limited and did not provide enough jobs. The solution adopted by the socialist leadership was the expansion of the responsibilities of trade unions. The General Federation of Workers in Israel, established in 1920 and known as The Histadrut (“The Federation”), became much more than merely a labor union. It also provided social services (education, health, housing, welfare) to its members, and established its own economic enterprises to secure work for its members. The Histadrut played a pivotal role in the development of a Jewish community in British-ruled Palestine, playing in many senses the role of the state.