PART 1
ACROSS THE GREEN LINE: SUBURBANIZATION, PRIVATIZATION, AND THE SETTLEMENTS
1The Settlements and the Relationship between Privatization and the Occupation
Danny Gutwein
THE SETTLEMENTS ARE the meeting point and the culmination of two major processes that have shaped the character of Israeli society in the past four decades: neoliberal privatization and the perpetuation of the occupation. The underlying interdependence of privatization and occupation has comprised the political logic of the Israeli Right and informed its hegemony. The gradual liquidation of the Israeli welfare state and the commodification of its services have expanded economic inequality in Israel and exacerbated its damaging social ramifications that have disproportionately affected Israelâs lower classes. These same lower classes served as the political power base of Israelâs political Right. In order to counterbalance the detrimental effects of privatization and protect its constituents, the Right has developed a series of compensatory mechanisms that supplied partial substitutes to the commodified services that they could not afford. One of these compensatory mechanisms has been the settlements project in the Occupied Territories.
As a compensatory mechanism, the settlements worked to intensify the lower classesâ bonds with the political Right, alienated them from the Leftâthat opposed the settlementsâand created the social and political basis for the perpetuation of the Occupation. The Rightâs rhetoric, however, has constantly blurred the causal relation between occupation and privatization by separating between politics and society. This false separation, typical to neoliberal reasoning, became an essential part of the power relations that guaranteed the persistent hegemony of the Right.
Exposing the causal relation between privatization and the Occupationâbetween the systematic dismantling of the welfare state and the continuous growth of the settlements as a compensatory mechanismâshould have been at the forefront of the Israeli Leftâs political struggle against the rising hegemony of the Right. However, despite its ongoing and growing failure to enlist the support of the lower classes in its peace policy, the Leftâwhich represents mainly the established middle classesânot only abstained from exposing the relationship between privatization and the Occupation, but it further obscured it by advancing an opposing casual explanation: it is the Occupation and particularly the growing public investment in the settlements, the Left maintained that are responsible for Israelâs increasing economic and social inequalities; the obvious conclusion that the Left inferred from this inversion was that the struggle for social justice should be subjected to the struggle for peace. By this inversion, the Left has duplicated the Rightâs false separation between politics and society and used it to justify and advance its own neoliberal agenda.
The Left has repeatedly argued that the lower classesâ support for the Right, despite its avowed neoliberal policies that contradict their interests, is a result of irrational ethnoreligious Jewish sentiment that informs their support of the Occupation and the settlements. It is this irrationality on the part of the lower classes, the Left has further maintained, that renders any attempt to fight it practically impossible. The Left has adopted, then, an idealistic and patronizing interpretation that denies the economic and social basis of the Rightâs hegemony, the disproving of which is a precondition for any political struggle against the Occupation. It appears that more than positing the Occupation as a source of the social gaps in Israel, the Left has used the Occupation as an excuse for affirming the privatization regime and the economic inequality it has advanced, which, in fact, have reproduced the necessary prerequisite for the Rightâs hegemony and the continuation of the Occupation. The Leftâs paradoxical support of the neoliberal power structure that guarantees the consolidation and perpetuation of the Rightâs hegemony is inherent in the no less shortsighted support of the established middle classesâthe Leftâs political baseâof the privatization policy, which has emerged as a decisive factor in the perpetuation of the Occupation (Gutwein A).
This chapter discusses the role of the settlements as the culmination of the Israeli privatization regime and as a meeting place of the dismantling of Israelâs universal welfare state and the enduring persistence of the Occupation. It suggests a socioeconomic perspective that considers the interests of the lower and middle classes in the context of ongoing privatization and Occupation. Of course, the socioeconomic analysis proposed here highlights only a part of the complex factors that are responsible for the persistence of the Occupation. Yet its conspicuous absence from both academic and public discourseâas a reflection of the neoliberal hegemonyâadversely hinders the understanding of the interrelationship between the settlements and the Occupation on the one hand, and the continued privatization and growing inequality within Israeli society on the other, not to mention the ability to challenge it.
On the False Separation between Occupation and Privatization
The separation between politics and society that informs the Leftâs attitude toward the settlements reflects the adoption of neoliberal ideology and the erosion of social responsibility on the part of its mainly established middle-class supporters following the loss of power to the Right in 1977. The class logic that informed this separation had most glaringly been expressed in the slogan Peace Now, which became the ethos of the Israeli Left in the 1980s. The moral devotion that the Peace Now ethos instilled in the struggle against the settlements only illuminated the middle classesâ indifference to the growing social and economic inequality in Israel and to the social hardships experienced by Israelâs lower classes. Thus, the Peace Now ethos exposed the contradiction between the pious rhetoric of the Left and the class-based interests of its voters. The Peace Now ethos has further unveiled the cultural contempt of the old hegemony, mainly of the labor movement, to the coalition of the âothers,â comprised mainly of the lower classesâeither the Mizrahi (Oriental) Jews or the ultraorthodoxâwho have kept the Right in power since 1977. More than anything, the Peace Now ethos disclosed the vain frustration of the old establishment: as they lost their control over Israeli politics, they were determined to preserve their privileged status through an indirect strategy, that of circumventing politics. This strategy would gradually lead the Left to adopt a privatization policy of its own, one which transferred power from politics and the state to the market and the professional establishments, arenas where the middle classes still retained their power.
The other slogan of the Leftââmoney for the slums, not for the settlementsââostensibly expresses an awareness of the causal relation between economic inequality and the perpetuation of the Occupation. But this slogan co-opts the politics-society relationship only to negate it, all the while revealing the class-based interests that reproduce and sustain the separation between the two. Under the guise of concern for the poor, by this slogan, the Left suggested a zero-sum game paradigm, which makes investment of money in poor neighborhoods conditional on the cessation of its flow to settlements, thus adopting the neoliberal logic that further legitimizes economic inequality and normalizes the settlements.
The Leftâs neoliberal logic of âOccupation firstâ is the underlying assumption of Adi Ophirâs introduction to the edited collection of essays, Real-Time: The Al-Aqsa Intifada and the Israeli Left (2001). According to Ophir, the Occupation is âthe starting point, the mold of power and social relationsâ in Israel (11), and its termination serves as the prerequisite for both peace and social justice. Thus, the Leftâs support for any social issue, just and worthy as it is, like opposing privatization or the raising of the minimum wage, must be âconditional upon its contribution to the struggle against the continuation of the Occupationâ (18). It seems, however, that the consecutive electoral failures of the Left suggest an alternative logic and diametrically opposite conclusion: in order to put an end to the Occupation, the social relations upon which it is based first need to be abolished; in other words, postponing the struggle against economic and social inequality affirms the very power relations that guarantee the continuation of the Occupation.
The emphasis the Left placed on the Occupation and settlements, as the main sources of the economic hardships of the lower classes, obscured the crucial role played by neoliberalism in the rise of inequality and poverty. This obfuscation, which erased the dismantling of the welfare state from the Israeli political discourse, allowed the middle classes to set the conscious conditions necessary for fostering the privatization process. The separation between Occupation and privatization blurred the fact that these two policies were merely two sides of the same coin. As a result, this separation further conceals the only real alternative to both: a policy that simultaneously resists the liquidation of the welfare state and struggles against settlements. Only a policy that would seek to provide social justice and invest in the poor neighborhoods through a universal welfare state would constitute the necessary sociopolitical preconditions for terminating the Occupation by eliminating the dependence of the lower classesâthe main reservoir of right-wing supportersâon the compensatory mechanism provided through the settlements.
The Compensatory Mechanism of the Settlements
Together, the settlement project and the growing economic inequality in Israel have served as complimentary foundations of the hegemony of the Right. Ever since its ascent to power in 1977, the Right has used Thatcher-like policies such as privatization and commodification of social services in order to liquidate the universal welfare state that used to be one of the main sources of power of the Left. Naturally, this policyâwhich turned social services from civic right into market commoditiesâinitially affected mainly Israelâs lower classes. Accordingly, in order to offset the losses it inflicted on its voters, the Right constituted a series of compensatory mechanisms, the most common of which were the sectors. The sectors are hybrid organizations that developed since the mid-1980s, combining political parties with nongovernmental organization-based service-supply systems, financed mainly by the government as well as by private donors. Employing identity politics, the sectors use their electoral power to secure for its supporters palliatives to the social services that they could not afford to acquire in the private market on an individual basis, as their purchasing power continued to dwindle. To secure their necessity, these sectoral organizations supported the dismantling of the welfare state that further expanded the vacuum that was replaced by privatized services and sectoral substitutes. This strategy stimulated the political institutionalization of the sectors, a process that has turned the Right into a coalition of rival sectoral interest groups.
The settlement project best exemplifies the essential interrelationship between privatization, sectoralization, and Occupation: while the universal welfare state was liquidated in Israel proper, an alternative sectoral welfare state was constructed in the Occupied Territories. The enormous budgets and benefits that the settlement project offers in housing, education, municipal services, taxation, infrastructure, and employment have become a mechanism that compensates the lower classes for the damages inflicted upon them by the dismantling of the welfare state and the privatization of the social services in sovereign Israel. These material benefits spurred most of the migration to the settlements: when the Left lost power in 1977, there were about 5,000 settlers (Jerusalem not included); a decade later, in 1986, their number had risen roughly to about 50,000; today, it has reached about 500,000. The settlements offered the lower classes symbolic capital as well: inclusion into the new Israeli elite of the settlers. The lower classesâ political support of the Right, and their ideological identification with the vision of âGreater Israelâ blurred the economic and social motives for their migration into the settlements. The importance of the opportunities for social and economic mobility that the settlement project opened up for the lower classesâto those who emigrated to the settlements, as well as for those who remained in Israel and have not yet taken advantage of themâincreased as the ongoing privatization of the welfare state further exacerbated the growing social and economic inequality in Israel. These opportunities contributed to the eradication of the 1967 border between Israel and the Occupied Palestinian Territories more than the political and religious ideologies of Greater Israel. Thus, it was economic logic rather than ideological visions that shaped the lower classesâ hawkish views. Given the economic suffering, which were created by the privatization regime, and considering their deteriorating situation, the lower classesâ support of the Rightâin contrast to the repeated fashionable complaints of the Left regarding their âFalse consciousnessââshould be viewed as a completely ârationalâ decision. With the liquidation of the welfare state in sovereign Israel, the lower classes viewed the investment in settlements as an investment in them and their future. As such, they rejected as false the opposition between the slums and the settlements offered by the Left. The compensatory mechanism of the settlements mitigated the detrimental effects of the cutbacks in social services and their commodification, thereby facilitating the liquidation of the Israeli welfare state and intensifying the advancement of privatization, as well as bolstering the lower classesâ dependence on, and support of, the Right. Thus, just as the Occupation created the settlements, privatization created the settlers.
The compensatory mechanism of the settlements has influenced the ideologies of both the lower and middle classes. Given the close relations between social status and voting patterns in Israel, the lower classes considered the Leftâs attacks on the settlements as driven by social more than by political motives. They deemed these attacks to be an attempt on the part of the middle classes to obstruct the opportunities that the compensation mechanism of the settlements provided them to cope with the growing inequality and to improve their economic and social status. At the same time, identifying the settlements with state intervention helped the Leftsâ middle-class supporters to renounce the social-democrat commitment to a universal welfare state and gave them a âmoralâ excuse to abandon all values of social solidarity and turn to Thacherite neoliberalism. The privatization of the welfare state turned the settlements into the âpromised landâ of the lower classes and, as the border line between Israel and the Occupied territories gradually lost its political significance, privatization imparted to it a new social meaning.
The Janus face of the Occupation and the settlements, as a catalyst of privatization and as a compensatory mechanism for the lower classes from the repercussions of the liquidation of the welfare state, was also revealed in the labor market. The Occupation exposed Israelâs lower classes to an uneven competition with Palestinian workers from the Occupied Territories, whose advantage grew as they adapted to the particular demands of the Israeli labor market, all the while willing to accept lower wages than those paid to the Israeli worker. This competition was later used as a whip by which to advance the privatization of the labor market and to break up organized labor in Israel. Under the privatization regime, the Occupation not only accelerated the breakup of organized labor, but moreover it has gradually become a false alternative to unionism as defense for low-wage workers. The frequent border closures, which prevented Palestinians from regular attendance in their workplaces, reduced their profitability, on one hand, and the fears of Jewish employers to hire Palestinian workers, on the other hand, constantly increased the competitive edge of Jewish workers. The Occupation therefore contributed to transforming the Jewishness of the lower classes from a religious or national identity into a political and economic asset that granted the Jewish worker a way to counteract the structural advantage of the Palestinian worker. Maintaining this political advantage, which compensated for the decreasing of the economic competiveness of the Jewish worker, was conditioned on the continuation of the Occupation, and, thus, perpetuated the lower classesâ support for the Right. Conversely, the Left championed the âNew Middle East,â as a sort of âprivatized peace,â with abundant cheap labor that would have weakened this political competitive advantage, and consequently increased the lower classesâ aversion to peace and their alienation from the Left. The alternative to this vicious circle lies in encouraging organized labor of Israeli and Palestinian workers, thus undermining the role of the Occupation as a compensatory mechanism in the labor market. Likewise, decommodification of education in the framework of a renewed welfare state may raise the employment abilities of the lower classes. These alternatives, however, contradict the adherence of the Left middle-class supportersâ to privatization of both the labor market and the education system.
The interrelationship among the Occupation, privatization, the labor market, and Jewishness was a key factor in the rise of Shas, a sectoral party that appealed mainly to the Mizrahi religious lower classes. The widespread support Shas received in the ballots cannot be explainedâas most commentators agreeâprimarily by the limited social services it supplies. The position of its supporters in the labor market, and mainly with respect to competition with the cheap labor of Palestinians and foreign workers, points to another facet of this support: Shas identi...