The 18 Families: Stratification in Israel

Critics of Israel's violent behavior have tended to focus on questions of ideology: to what extent is the occupation an example of traditional colonialism? Does Israeli apartheid find its roots in Zionism? How does the (historical, and ongoing) ethnic cleansing of Palestine inform the national consciousness?

These questions are certainly worth exploring, yet they often dominate the discussion at the expense of indicators which might be equally telling: who's making money, and how.

Israel is a deeply divided country. A recent report  presented to the Israeli cabinet as the country files for membership in the Organization for Economic Co-operation and Development found that the nation would be the most "unequal and poor" in the group. One-fifth of the population lives below the poverty line and only half the nation earns wages "suitable for a developed country." 

Eighteen families now control fully 60% of the equity value of all Israeli companies. Between 2005 and 2007, Israel produced more millionaires per capita than any other country. According to a recent article in the Jewish Standard, 

Top managers can earn as much as $523,000 a month, compared to the $1,440 monthly income earned by the average Israeli, according to the Adva Institute. “Israel now worships the golden calf of the free market: privatization and sink-or-swim competition,” Yossi Melman, a senior writer for Israel’s daily Haaretz, wrote in a blog for the Washington Post.

The breakdown also has a racial/ethnic dimension. In 2004, the Adva Center released a report which found that Ashkenazi Jews per capita made 136% of Israel's national average salary, while Arab-Israelis only brought in 75%. 

Israeli economist Shiv Hever with the Alternative Information Center explains the situation in some detail:
Activists are beginning to draw the lines between wealth accumulation in Israel and the state of perpetual war and occupation which characterize Israeli policy. "The occupation of Palestinians territories defines Israel's economy," argues Shiv Hever.


In her 2007 essay " Laboratory for a Fortressed World," Noami Klein described the relationship:

Israel went from inventing the networking tools of the “flat world” to selling fences to an apartheid planet. Many of the country’s most successful entrepreneurs are using Israel’s status as a fortressed state, surrounded by furious enemies, as a kind of twenty-four-hour-a-day showroom—a living example of how to enjoy relative safety amid constant war. And the reason Israel is now enjoying supergrowth is that those companies are busily exporting that model to the world. Discussions of Israel’s military trade usually focus on the flow of weapons into the country—US-made Caterpillar bulldozers used to destroy homes in the West Bank and British companies supplying parts for F-16s. Overlooked is Israel’s huge and expanding export business. Israel now sends $1.2 billion in “defense” products to the United States—up dramatically from $270 million in 1999. In 2006 Israel exported $3.4 billion in defense products—well over a billion more than it received in US military aid. That makes Israel the fourth-largest arms dealer in the world, overtaking Britain.

The stratification of Israel's economy belies the founding ideology - which many believe still influences the nation - as a socialist state built on values of egalitarianism (for Ashkenazi Jews) and difficult but basic labor. The extent to which this was ever the case is debatable, but whatever remnants of a re-distributive economy existed during Israel's first decades was swept away by the winds of neo-liberal reform, when ruling classes in most countries asserted their power in the late 1970s and 1980s. Israel's elite, intimately tied to the "West" by financial and ideological support, eagerly joined the crowd.

Perhaps they learned a little too much from the United States in the process: perpetual war means perpetual profits, no matter the cost in blood visited upon the occupied Palestinians and Israeli civilians when chickens start coming home to roost.

Focusing just a little more attention on the political economy of the conflict may help demystify it. It'll also undermine some essentialist categories that get thrown around, which end up reinforcing violent and exclusionary constructs like the state. It's not necessarily "Israel" which acts with aggression, but a segment of the elite which mobilize the state apparatus to repress the legitimate aspirations of the indigenous population - aspirations which might interfere with the smooth process of profit-making. This is not to say that even the poorest Ashkenazi Israeli is not in some way implicated - like in the United States, most benefit from stolen land. But some benefit a lot more than others. Many of Israel's poorest may also have an interest in toppling the current system, no matter how much better even the worst off in Israel are doing compared to people in Gaza and the West Bank.