The Zionist movement

The modern Jewish society in Palestine/Israel is the outcome of the Zionist movement that emerged in Eastern Europe in the last quarter of the nineteenth century. The economic ideas/views that guided Israel's early business community, party members, and leaders can therefore be tracked back to the brewing intellectual and ideological environment of Central and Eastern Europe in 1870-1939 (Alroey, 2014).

In 1897 Theodor Herzl (1860-1904) convened numerous and diverse Zionist activists and established the World Zionist Organization (WZO) as the formal body overarching the project of establishing a Jewish national home. The ambitious goal of building a Jewish homeland from scratch unavoidably raised stern economic questions: Should the Zionist project be guided by the laws of the market and rely on private enterprise, or should the emerging economy be planned and run by national bodies in order to overcome market laws (Metzer, 1979)? Should the economy be agrarian as part of the return to the land or industrial and technologically advanced as in modern nations (Krampf, 2010b; Troen, 2003)?

The first wave of Jewish immigrants to Palestine (1880—1900) was driven by a bourgeois vision of making their own farms in the “Land of the Fathers.” They established private farms but a lack of experience and harsh conditions brought them to the brink of bankruptcy, forcing them to rely heavily on turn-of-the-century Jewish financial moguls, Maurice de Hirsch and Edmond James de Rothschild, for aid. This reliance on financial aid obliged the farmers to adopt rationalized production according to market forces. The Jewish settlements were accompanied by a liberal vision of a Jewish homeland in Palestine that evolved among the Zionist intellectuals. Herzl believed that the Jewish homeland, unfettered by a powerful landlord class, would be built according to the vision of liberal Europeans.

At the beginning of the Zionist movement, socialism and Zionism offered competing visions for solving the problems faced by Jews in Eastern Europe. Many Jews and many socialists thought that the “Jewish problem” would disappear in a post-revolutionary, classless society. Changing views among socialists toward notional aspirations in Europe at the end of the nineteenth century convinced many Jewish socialists to join the Zionist movement and to advance the Jewish homeland as a socialist project that would solve the Jewish problem and also be a model for a just society. Since the Second Zionist Congress (1898), socialist factions have become a major force within the Zionist movement, and since the beginning of the twentieth century they were also the major force among Zionist immigrants to Palestine. Yet socialist Zionists were divided over the exact nature of the desirable socialist society and on the strategy of reaching the aspired goal, especially how to cooperate with non-socialist Zionists.

Two of the intellectual leaders of socialist Zionism were Nachman Syrkin (1868—1924), who got a PhD in philosophy from Berlin University, and Dov Ber Borochov (1881—1917). They represent two general trends typical in turn-of-the-century socialism. Syrkin was influenced by the Utopian socialists and the Russian reformers such as Herzen and Tolstoy and endorsed a conciliatory approach of cooperation with bourgeois Zionism and the advancement of communal forms of enterprise (Syrkin, 1935, 1939; Pilowski, 1974). Borochov represented a more orthodox Marxian view including the idea of class struggle; socialist Zionists should take part in building a capitalist economy, which when mature would lead to a socialist revolution (Borochov, 1928, 1937, 1972). Other Zionist thinkers saw the idea of cooperatives as especially fitting a society in the making. A major exponent of this view was Franz Oppenheimer (1864-1943), one of the major champions of cooperatives (1932, 1933, 1938, 1942-4).