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Nineteen families: poverty, inequality and who rules the roost in Israel

Roni Ben Efrat illuminates inequality in today’s Israel in the current edition of Challenge Magazine (Issue 109). The following is an excerpt in which boldface emphasis is editorial:

Zionists claim that Israel arose in order to provide the Jewish people with a national home. But decade by decade, it has become ever clearer that Israel is not a state of, by and for the Jewish people. It is rather a state of, by and for a sprinkling of families, 19 in all, whose income amounts to $70 billion—88% of the national budget.

This budget is a stumbling block to the poor. All levels of education have been devastated. On the books there is universal health care, but many can’t afford to buy medicines. Israel’s socio-economic inequality, as measured by the UN Development Program’s Gini Index (0.0 = perfect equality), has worsened steadily from 0.222 in 1982 to 0.392 in 2005, making it the most unequal of Western democracies with one exception: the United States (Gini = 0.408).

Poverty is no longer confined to the jobless. The government has lowered the unemployment rate, indeed, to 7.6%, but there is a trade-off: working people make up 37% of the nation’s poor. The country’s much vaunted economic growth is way off kilter. It is high in high-tech, which supports very few, but scarce in traditional industries and services, where most people work.

This steady impoverishment of the population has not just “happened.” It has happened because of laws and decisions that sold the country’s assets to the 19 families at bargain-basement prices, all in the name of the free market. As Weinroth said to Weitz: “Power is no longer a separate entity. Money is power. Money rules all, it flows through every hidden vein of the society.”

But that’s not all. For Marx also taught us that capital has no sense of obligation. When the state gets a bit too small for it, it seeks foreign outlets. The 19 families used the state to get rich, buying up its privatized firms, and now they go cosmopolitan. Between 2001 and 2006, foreign investment in Israel grew by a factor of six, but Israeli investments abroad increased by a factor of eight. The Adva Center—whose reports are the source for all figures here unless stated otherwise—cites Nohi Dankner, whose family is among the favored 19: “I believe very much in Israel, and I believe greatly in the Israeli economy. Notwithstanding, it is clear that our development must be overseas.” Who is the “our” in “our development”? Not the unemployed, the poor, the people on the dole. What does the “our” care about the Israeli-Palestinian conflict? Or the rockets of Hamas? The “our” are invested elsewhere.

For 60 years, the 19 families stayed beneath the camouflage of Zionism, but now it’s launch time. True, in 1993 they tried to bind the Oslo Accords to a narrative about peace called the “New Middle East.” Ten years ago, in an article called “The Hidden Economic Logic of Oslo” (Challenges 51-52) we explained the Oslo initiative this way: Israel understood that unless it normalized relations with the Arab world, it would not fit into the global economy. But the 19 families no longer need a thriving Israel. Reality faced the Oslo process with difficulties. It isn’t their task to solve them. Their task is to make profits, fast and big.

… The leadership that sold itself to the 19 families—always the same leadership, whether it goes by the name of Likud or Labor or Kadima—is as deceitful as it is cruel. With one hand it impoverishes its citizens, with the other it squeezes the Palestinians.

Last June Israel celebrated 40 years of conquest. For two-thirds of its lifetime, it has occupied 3.5 million Palestinians. (Gaza must still be included: Israel hems it in by land, sea and air.) Its leaders hesitate to travel abroad, fearing arrest for war crimes. There have been innumerable opportunities to reach a fair peace with the Palestinian people, but there is neither the wisdom nor the largeness of spirit to make the needed concessions. Israel prides itself ad nauseam on the “Zionist vision,” but the moment it glimpses a chance for peace, that vision gives way to spins and gimmicks aimed at maintaining the general fraud.

The day is not far off, therefore, when the Palestinians will say, “Why, after all, should we part from you? In any case there’s not enough left to build a viable state. Forget about that, just give us our civil rights.” Then the conflict will enter a new phase. The citizens of Israel will be forced to decide: apartheid or democracy. If the Jewish population opts for apartheid, the leadership will continue to defraud, exploit and impoverish at the service of the millionaires—until catastrophe comes. The only other option would be democracy—a single democracy west of the Jordan, including reconciliation with the Palestinians. That would exorcize Mammon, along with his Zionist camouflage.

11 comments on “Nineteen families: poverty, inequality and who rules the roost in Israel

  1. Pingback: I Dream of Gini « Ten Percent

  2. LDU
    21 May, 2008

    A “Western Democracy?” It’s in the Middle East, innit?

  3. Ann E
    21 May, 2008

    Indeed … I think ‘Western’ reflects its own self-image and disdain for its own geography. Why else did Israel clamour to join Eurovision?

    More seriously, it is a step in the wrong direction that Arabic is being spurned as an official language. One wonders whether the current talks about the Golan Heights are a small concession and cover for the Israeli state’s larger crimes.

  4. Emmanuel
    22 May, 2008

    Inequality, not only between Jews and Arabs but also between socio-economic classes, is a serious problem in Israel and needs to be fixed. Still, how this leads to a one state solution is beyond my comprehension. The attempt to draw a direct link between the 19 rich families and the occupation is quite a stretch. So now investments by Israeli businessmen outside of Israel and outsourcing are the reason for a lack of peace?

    More seriously, it is a step in the wrong direction that Arabic is being spurned as an official language.

    By the way, Arabic has not been demoted to the status of a minor official language just yet. Likud MK Limor Livnat’s proposed bill is purely a provocation of the Arab population and hopefully it won’t become law.

    One wonders whether the current talks about the Golan Heights are a small concession and cover for the Israeli state’s larger crimes.

    Doesn’t Israel ever do anything right in your mind? If it doesn’t talk to Syria it is refusing peace. If it does talk to them, it’s just a coverup.

  5. Ann E
    22 May, 2008

    Ben Efrat is aware that occupation degrades the perpetrator society as much as the ones being occupied, and Israel has slid backwards in social and economic indicators that are too rarely discussed amid the false triumphalism and for which I applaud him for examining.

    His focus is mostly on Israel’s internal situation, and he is saying that class compounds the problem, that these 19 families lack the general Israeli population interest at heart, let alone the Palestinians. So please represent his argument carefully, otherwise its your representation that draws a long bow, not his.

    Regarding Arabic, yes it is still an official language as listed by the Israeli government so far but as DesertPeace has attested, in practise, Arabic is being increasingly suspended in such things as packaged good labels and subtitles. Culture and business are rather large and important sectors, and it seems that Arabic has in practise been spurned there. Since Israel limits trade in the OPT (especially Gaza which it is trying to strangulate economically) and the area taken as a totality (OPT + Israel) is one in which Palestinians make up half the population, this de facto, if not de jure, repudiation of Arabic constitutes cultural and linguistic violence. It only serves to erase a people’s culture and language and is unacceptable. It also raises the question of why Israeli law is not being followed.

    Unfortunately Israel’s past actions have prompted people to be extremely wary of the Israeli government. Hopes were raised and then dashed many, many times. Peace talks have so far not only yielded little, but have dramatically worsened the situation. Should Israel finally return the Golan, which it has used as a bargaining chip for so long, that is a good thing and will be duly applauded. But that does not mean that attention will be suspended regarding its larger occupations. That the two are talking is a good thing. That Israel is placing demands and decidedly unbenign conditions such as that Syria relinquish its ties to its neighbour Iran, is not, and negates its purported goodwill and demolishes naivete.

    Its also worth recalling that the very same thing happened when Israel purportedly “withdrew” from the Gaza Strip (only to tighten its occupational noose) — that is, I received a similar reaction in that “Look at what Israel has done in withdrawing settlements in Gaza, isn’t that a good thing?”. The MSM made a song and dance of a few thousand settlers emotionally refusing to leave and the Israeli Army standing their ground. Well, I applauded the illegal settlement dismantlement, but not the subsequent expansion of illegal West Bank settlements and the acts of sheer bastardry with regard to Gaza that followed. The questioning of motives and tactical considerations is entirely valid.

    If Israel were serious about peace it would be actively mobilising to re-settle the illegal settlers: 280,000 Jews who live on the West Bank, the more than 200,000 over the Green Line in Jerusalem, and 18,000 in the Golan Heights. A tough ask? Not really, considering Israel wants a million more Jews to emigrate to Israel. Withdraw illegal Jewish settlements, or end the apartheid that excludes Palestinians and other Arabs from their own land.

  6. Emmanuel
    22 May, 2008

    While it is true that the 19 families’ interests are very different from the interests of the general population in most cases, Ben Efrat’s claim that the rich families don’t have a vested interest in peace anymore is untrue. Every time there is positive news regarding peace, such as yesterday’s announcement about Israeli-Syrian talks, the stock market goes up. The richest Israelis still have much (if not most) of their investments inside Israel and they know peace would be good for the economy.

  7. peoplesgeography.com
    22 May, 2008

    Is that why peace talks with Syria were stalled for eight long years? Short-term fluctuations in the stock-market don’t say much in themselves. Stability is good for the economy, for Israel particularly this has been achieved by force of arms. A meaningful and just peace has actively been repudiated.

  8. Emmanuel
    23 May, 2008

    Peace talks with Syria weren’t stalled because of the 19 families. Peace talks were stalled because none of our prime ministers thought they would be able to garner parliamentary and public support for a withdrawal from the Golan and/or didn’t believe Syria would stop supporting Hizbullah and Hamas.

    My point is that the centralized power of the 19 richest families in Israel is very bad for our country, but Roni Ben Efrat has not convinced me that the conflict is one of areas where these Israeli oligarchs have such a negative impact. Do they have investments in the West Bank and the Golan that they want to keep? He hasn’t presented any data to prove his case.

    Israel has its fair share of missed opportunities for peace, but it is far from being the sole party responsible for the current situation.

  9. Ann E
    23 May, 2008

    Neither Ben Efrat’s piece or I are claiming that peace talks with Syria were stalled directly because of the 19 families, again, that’s drawing a long bow. Israeli oligarchs do not need to have investments in the West Bank and Golan, though they might, as much as have an interest in preventing economic development in the OPT with whom they might compete, as we saw in the targeting of Lebanese factories.

    Again, Ben Efrat’s main focus is Israel’s internal economic indicators, his main point is that these nineteen families hold inordinate sway in the political process: “The leadership that sold itself to the 19 families—always the same leadership, whether it goes by the name of Likud or Labor or Kadima”, to the detriment of both Israelis and Palestinians. It is true that he does not further develop the argument in this short piece but that may simply be outside the scope of his inquiry here. It would be interesting to see a more in-depth engagement that deals with the convergence between neoliberal and neoconservative policies.

    For my own views, the rising concentration of wealth does not bode well for any country that claims to be a democracy, and by way of secondary effects an impoverished populace is not a good civic climate for just negotiations with and (what are seen as) concessions to Palestinians, either. This is akin to the incidence of higher resentment against immigrants in times of economic hardship in any country. Poverty, inequality and wealth concentration do have an impact upon the peace process, with or without a deeper examination of the links between the handful of wealthy families and their political role which Ben Efrat precludes from consideration in this particular piece.

    In this light, I find the following figures of concern:

    The percentage of poor families in the working population increased from 40.6 percent to 43.1 percent. Nearly 60 percent of the ‘working-poor’ were working fulltime (Sinai 2006a, Shaoul 2006).

    42 percent of Israeli Arab families are living below the poverty line. The average wages are less than half the wages of Ashkenazi Jews. Every second Israeli Arab child lives in poverty. When in 1996 to 2001 the unemployment rate of the Jewish Israelis increased by about 53 percent, the unemployment rate of the Arab Israelis increased by 126 percent (cf. Shaoul 2006).

    80 percent of Israelis regard themselves as poor. 23 percent of the pensioners are living below the poverty line. Poverty among children increased in 1988 to 2005 by about 50 percent. Approximately one fifth of all under-age children (714.000) in Israel are suffering from hunger (cf. Shaoul 2006). 75 percent of the poor families cannot afford medicine and 70 percent are dependant on food donations (cf. Sinai 2005b).

    Nearly one third of the Holocaust survivors are living in poverty. Some of the Holocaust survivors get $ 600,- per month from the German government, whilst other Holocaust survivors receive only $ 350,- per month from the Israeli Ministry of Finance and the Holocaust survivors that immigrated to Israel after 1953 (who amount to 70 percent of the Holocaust survivors in Israel) only receive the general national pension. Nearly 20 percent of the Holocaust survivors are at the present time 86 years and older, 70 percent are older than 76 years. (cf. Medina 2007, p. 1) They are not entitled to a supplementary payment or to compensation. But the problematic economic situation of the Holocaust survivors is neither new information nor an unknown fact. As a result of the precarious situation several are in need of the help of welfare organizations, because they cannot afford to some degree their necessary medicine. (Dirk Michel and Claudia Schertges, ‘Poverty in Israel’, Social Work and Society, v. 5 (2007): 2).

  10. Emmanuel
    23 May, 2008

    I don’t dispute the statistics you present here (accept for 80% of Israelis considering themselves poor, which seems like a wild exaggeration). These are serious internal problems Israel has to resolve. I agree that they have some effect on the conflict with the Palestinians and other Arab nations, but I don’t believe it is one of the major factors.

  11. Pingback: Racist Spectacle, Class Spectacle « Ten Percent

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