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Class Transformation under the Mandate

Author(s): Talal Asad


Source: MERIP Reports, No. 53 (Dec., 1976), pp. 3-8+23
Published by: Middle East Research and Information Project
Stable URL: http://www.jstor.org/stable/3011204 .
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The class composition of the Palestinian people has undergone a radical transformation in the last century. While this is true of
the Middle East and the Third World in general, the Palestinian situation contains some unique factors. A number of studies have
been made on the effect of the Zionist occupation of Palestine in terms of land expropriation, national oppression and violation
of civil rights. [See MR nos. 41, 47] But little research has been done on the impact of the introduction of capitalism?particu?
larly in the context of the Israeli settler colonial state?on the class structure of Palestine. The Proletarianization of Palestinian
Women in Israel, by Amal Samed, [MR no. 50] offers a theoretical approach to one aspect of this important body of research.
The two articles which follow trace the economic, social and class transformation in Palestine from the Ottoman Empire through
the British Mandate and the Zionist occupation. Talal Asad focuses on the Mandate period, and Jamil Hilal concentrates on the
West Bank and Gaza since 1967. A thorough analysis is also needed of the class composition of the Palestinian refugees, for it is
these people?under Israeli occupation and in exile?who will continue to determine the political character and future of the
Palestinian struggle for national self-determination.

Class Transformation

Under the Mandate

by Talal Asad

distance trade, marked agricultural specialization from one


The class situation of Arab villagers developed within a
area to another, local markets in agricultural goods and handi?
specific historical social formation, to be explained by analyz? crafts. But the peasant producer was only indirectly (or if
ing the articulation of a capitalist with a non-capitalist mode
of production which defines that social formation. In this con? directly only marginally) linked to the system of regional and
transcontinental commodity circulation.
text it is essential to recognize that' southern Syria was not
Typically village land was held jointly by the villagers (the
composed of economically self-contained units in the Ottoman
'hamula') but worked by component families whose heads
period. The rural population in what was later to become Man? were linked to one another by agnatic* ties which defined mu?
date Palestine produced not only for themselves but also for
tual obligations and customary shares to the land from one
the ruling classes: although most cultivators in general con?
sumed what they themselves produced, much of what the cul? generation to the next (the musha'a system). The families con?
stituted units of production and consumption in association
tivators produced was not consumed by them. This surplus
with each other.1 The inequalities in holding between clan
was. appropriated directly by the Ottoman state, through tax
members which might arise over time purely from within this
farmers, and later by landowners on whom the direct liability
system of property distribution do not, however, define the
for tax rested. From at least the beginning of the nineteenth
class situation of the village-cultivators. For this one must turn
century the involvement of the Ottoman empire (and in parti? to the forces and relations of the indigenous non-capitalist
cular of geographical Syria) with the market forces of Euro?
mode of production linked to the expanding European capital?
pean industrial capitalism increased the need for surplus ex? ist mode. The forces are those that generate surplus, and the
tracted from the peasant population, and served eventually to
relations are those that define the pattern of appropriating and
change the legal expression of the production relations which
facilitated that flow. *Agnaticmeansrelatedthroughmales or on the father'sside.
For centuries before this transformation, the region's 1 Cf. D. Warriner,"Land Tenure ProblemsIn the FertileCrescent"In
C. Issawi (ed.) The Economic Historyof the Middle East: 1800-1914,
economy had been characterized by urban manufacture, long- Chicago, 1966, d. 75
controlling the surplus generated. In this sense the forces and The establishment of European (British) rule over Man?
relations of production necessarily take one beyond the village date Palestine set the preconditions for the implantation of a
community. European (Jewish) capitalist sector.4 The steady growth of
In Ottoman Palestine, the more fertile areas (coastal this sector, initially maintained by European settlers and Eur?
plains, Esdraelon) were the most heavily taxed, but despite opean capital, represents a colony in the old sense (N. Amer?
this fact, also the more densely populated. Unlike other areas ica, etc.)?in the sense, that is, of a relatively autonomous ex?
subject to irregular rainfall and damaging desert winds, here tension of Europe-centered capitalism as a production system
the extreme variability of harvests was not a problem for the and a power structure. Measured in terms of population the
peasant. Hence the relative assurance of a good return for his European (Jewish) sector was always smaller than the Pales?
labor was a condition of the peasant's subjection to his ex? tinian (Arab) sector?although due to immigration it grew
ploiters?for the exploiters' ability to extract a greater surplus from about 10 per cent to 33 per cent of the total population
here rested on the higher yield of the land to which more during the Mandate period.5 But the intrinsic character of the
intensive labor could also be applied. European (British) colonial state ensured the long-term
The attempt by the Ottoman state to register titles in land economic growth of the capitalist mode of production at the
for tax purposes (begun in 1858), facilitated a pattern of expense of the non-capitalist mode, although it prevented the
change to the detriment of the cultivators. The intention was latter's complete elimination. This fundamental process is dis?
to grant the title directly to the cultivators, eliminating any guised by the political subordination of the Jewish communi?
intermediary between the Government and the small indivi? ty, equally with the Arab community, to the British Adminis?
dual owner, so that the state could appropriate the maximum tration. That is to say, the concept of a form of political conti?
tax itself. But in many cases "The villagers fearing that the nuity in Palestinian history before and after 1918 ("the two
registration was a preliminary to a call for military service, or communities were firstruled by the Ottomans and then by the
for taxation purposes, falsified the returns, registering the British?i.e., always by an alien ethnic group") covers up a real
property either in the name of the head of the tribe (clan?) or structural break represented by the Mandate. For the old indi?
in the name of a member of the family who would not be genous Jewish community6 was an integral part of a non-
liable for military service. In practice they disregarded the capitalist social formation, and the local Ottoman administra?
titles granted (the sanad tapu) and continued to farm on the tion the organ of a non-capitalist state.
musha'a system, recognizing the customary quota-holders as
the real owners."2
4 "6 Palestinewas mainlyan agriculturalcountrybeforethe
The class significance of the legal changes can only be War,and
those industrieswhich existed were of an agriculturalcharacter.The
understood when it is recognized that the Land Code of 1858 manufactureof soap in a primitiveway and wine were the only in?
was a moment in the intensification of surplus generation from dustriesestablishedon a largescale. A large numberof traditionalin?
dustries in which hand or animal power was used in the process of
peasant producers. Its superstructural, accidental character is manufacturewere also in existence, and these include oil pressing,
weavingof carpets,mats,Arab cloth and headgear,textile dyeing,and
merely illusory. In the more productive areas, especially in the glass making.
more fertile densely-populated plains, the Land Code imme? "7 Afterthe (FirstWorld)WarwhenJewishimmigrants broughtinto
the countrytheirindustrialexperienceand capital, a numberof small
diately institutionalized and re-enforced pre-existing relations factoriesproducinga varietyof articlesand a few largefactoriesforthe
of dependence between indebted cultivators and debt-owning manufactureof cement,vegetableoils, flour,and stockings,were estab?
lished.
usurers (whether traders or urban notables). The registration "8 In 1927 the policy of protectinglocal industrywas initiatedand
the familiarphrase 'infantindustries'became partof the fiscallanguage
of land titles thus became an instrument for stepping-up the of Palestine. Machinery and certain raw and semi-manufactured
appropriation of the cultivator's product by his exploiters and materialsimportedforuse in productionwere freedfromduty,while in
certaincases the chargeson the finishedarticlewere increased.Whereit
not merely the occasion for legal misunderstanding and decep? is not possibleto exemptfromimportduty importedcommoditiesused
tion. in local productionand the local industryis producingfor export,a
systemof drawbacks permitsin approved cases a refundon exporta?
The decline of rural handicrafts and urban manufactories tion, representing a substantialpartof the importdutycollected on the
importedcommodities used in the locallly produced article.The wide
(notably textiles) in the face of European competition manufacturing filed now covers extractionof mineralsalts from the
throughout the nineteenth century,3 increased peasant depen? Dead Sea, food products,drinks,cigarettes,tobacco, buildingmaterials,
dence on land and hence tended to depress their competitive metal-work,furniture, textiles,leathergoods, artificialteeth, matches,
wearingapparel, and chemical and allied products.. ." PalestineRoyal
position in relation to the richer, more fertile land (the very CommissionReport(HMSO), London, 1937, pp. 208-9.
5 Some of these immmigrants settledon the land, but the vast majority
areas where large estates were most common). The capacity of swelled the urbanpopulation^ Palestine."The ruralpopulationhas in?
cultivators to yield up greater amounts of surplus, however re? creased, but its proportionof the total has decreased,from65 percent
in 1922 to 51 per cent in 1944. (. . .) The majorityof the ruralpopu?
luctantly, began to converge with the rising demand of unpro? lationare Moslem,whilethe Jewishpopulationare predominantly town
ductive urban classes for the consumption of the agricultural dwellersand account forhalfthe populationof the towns," D. Warriner
Land and Povertyin the Middle East, London, 1948, p. 55. According
product?partly directly, but also in exchange for imports to A. Granott,writingat about thistime, "Althoughdecades have pass?
from capitalist Europe. ed since the divisionof joint propertystarted,about halfthe villagesin
Palestinestill hold theirlands,at least officially,in mesha'a." The Land
In general, this movement continues throughout the first System in Palestine,London, 1952, p. 178. Most of the Arab popula?
half of the twentieth century, only becoming more intensified tion worked on the land, and apart fromsome wage-laborers(especially
on citrus farms),the majorityhad directcontrol of theirland?In the
and more complex after the First World War, with the steady variousformsof propertyrightthen prevailing.
6 Structurally,as well as culturally,the urban-basedOttoman Jews
expansion of capitalist production within Palestine, primarily were quite distinctfromthe new European colonists. Many of them
rooted in the growing community of European (Jewish) set? were state officialsand tax-farmers, togetherwith local Ottoman Mus?
tlers in a newly-created European (British) colony. lims and Christians.For example, "The (Jewish)bankerfamilyof Far-
hifwhose membershad considerableinfluenceon the economical and
2 D. Warriner, op. cit., p. 76 political life of the provincesof Damascus and Acre in the firsthalfof
3 Cf. I. M. Smilianskaya"The Disintegrationof Feudal Relations In the nineteenth century, held many villages (in Palestine as tax-
"
Syria and Lebanon in the Middle of the NineteenthCentury in C. Is? farmers)."A. N. Poliak, Feudalism in Egypt,Syria, Palestineand the
Lebanon 1250-1900, London, 1939, p. 52, n. 5. Whetherthrough
sawi (ed.), The Economic History of the Middle East: 1800-1914, trade,bankingor government,the roots of the old Jewishcommunity
Chicago,1966 lay in a non-capitalistmode of production.
There
Most writers on Palestine have tended to represent the centage on net productivity of the soil (i.e., minus cost of pro?
Mandate period in terms of the political confrontation of two duction) capital-intensive Jewish agricultural enterprises paid
national communities in which each excluded the other and proportionally less tax in relation to gross product, or even
maintained its own economy7?a political contest whose first none at all, because of comparatively high labor costs'.13 In
phase ended with with the collapse of the Mandate and the other words the lower subsistence level of the Arab peasant
establishment of a national state by one of the two autono? producer became, indirectly, a reason for the State's subsidiz?
mous, competing communities. But in order to grasp the ing the higher standard of living of the European immigrant
changing organization of Arab villagers it is necessary to begin worker in Jewish agriculture.
with a different set of concepts: the articulation of a capitalist Indirect taxation was by far the most important source of
with a non-capitalist mode of production mediated by the Government revenue. But most of this, being levied on neces?
British colonial state. It is only in terms of these concepts that sities, was regressive and tended to fall most heavily on the
apparent continuities (e.g., the state's registration of title to poorer (i.e., rural Arab) population.14 (See Table I) Further?
agricultural land, begun by the Ottomans and continued by more, the large Arab landowners, together with other non?
the British) can reveal their contradictory movements. For it productive Arab urban classes, were themselves disbursing sur?
was the British Mandate state, not the Ottoman, which consti? pluses accumulated largely through the exploitation of Arab
tuted the pre-condition for the relative and absolute growth of rural producers?and hence the indirect taxes paid by them on
the capitalist sector8 (including commercial agriculture and in? imported commodities were also, in part, a form of indirect
dustry) at the expense of the non-capitalist (mainly peasant) taxation on Arab rural labor.
sector in Palestine. In the industrial sector the Government gradually shifted
The Mandate Administration maintained a fiscal structure the weight of taxation in favor of large-scale enterprises which
which facilitated the extraction of surplus from the non- were mainly Jewish.15 This, incidentally, hastened the demise
capitalist sector, and its partial transfer to the expanding capi? of Arab craft manufacture which had helped to supplement
talist sector. the domestic peasant economy.16 And here, again as in the
Rural property tax, although not a major category of agricultural sector, the fiscal structure served to support the
Government revenue, was paid by and constituted a substan? differential wage-rates between Jewish (immigrant) and Arab
tial burden on the peasant producers.9 The rationalized system (native) labor obtaining in the industrial sector.17
of agricultural taxation evolved by the British Administra? It has been said that the Government of Palestine had an
tion1 ? seems to have contributed to increasing peasant indebt? extremely conservative fiscal policy.18 However that may be,
edness.11 Over the years much of this debt was transferred its two main objects of expenditure were: a)"developmental
from money-lenders to the Administration.12 It is worth not? and economic services" (i.e., the improvement of transport,
ing, incidentally, that since this tax was levied as a fixed per- communications, harbors, etc., which imparted relatively
greater value to capitalist production than to non-capitalist);
7 Thus S. N. Eisenstadt,IsraeliSociety, London, 1967, discussesthe and b) "defense" (i.e., the maintenance of a repressive state
developmentof the Jewishcommunityduringthe Mandateperiodwith apparatus, continuously and primarily directed against the
virtuallyno referenceto PalestinianArabs. In the Introductionto The
Arab Labour Force in Israel, Jerusalem,1966, Y. Ben-Porathwrites, Arab producing masses).19 (See Table II)
"In the mandatoryperiod the Jewishand Arab sectorsconstitutedvir?
tually separate economic units." (Page 1). Not entirelyinconsistent 498-500, (lt should be noted that the Ottoman AgriculturalBank has
with this view is the suggestionby other writersthat the development been criticizedfor contributingto peasant insecurityin the pre-Man-
of Jewishimmigrationproduced a spill-overeffectwhichbenefitedthe date era by lendingat an interestof 6 per cent. See A. Granott,op. cit.,
more backwardArab economy?see, for example, D. Horowitz,"Arab p. 60). In contrastto thisfamiliarpatternof peasant indebtedness,debt
Economy in Palestine" in J. B. Hobman (ed.) Palestine's Economic in the Jewishagriculturalsector largelyrepresentedproductiveinvest?
Future,London, 1946. ment.(See G. Hakimand M. Y. Hussayni,op. cit., pp. 502-4).
8 Duringthe Mandateperiodthe growthof Palestine'scapitalistsector 13 "They (Jewishagriculturalsettlements)carrya labour force,which,
is broadlycorrelatedwiththe inflowof Jewishcapital fromEurope (N. with this amount of machinery,must be greatlyin excess of labour re?
Halevi and R. Klinov-Malul,The Economic Developmentof Israel,New quirements.(. . .) No detailed analysisof the financialsheets are avai?
York, 1968, pp. 21-2), virtuallyall of which remainedwithinthe Jew? lable for 17 settlementsin the Haifa district,which were submittedto
ishsector(E. Asfour,"The Economic Frameworkof the PalestineProb? the Governmentduringthe war to justifycontinuationof the govern?
lem" in W. R. Polk, D. M. Stamlerand E. Asfour,Backdropto Tragedy, ment subsidies. (. . .) They show . . . thatthe majorityof the farmsdid
Boston, 1957, pp. 333-6). "The most significantchanges in the In? not even cover capital expenditureor rent,and none were freefrom
dustrialoriginof nationalincome is the risein the shareof manufactur? debt." D. Warriner, op. cit., pp. 69-70
ingfrom26 per cent in 1936 to 41 per cent in 1945, mainlyat the ex? 14 lt should also be noted that (a) professional,serviceand trading
pense of construction,trade and finance. Since the corresponding
figuresforthe non-Jewishsector show thatthe shareof manufacturing classes?always more heavilyrepresentedamongthe Jewishcommunity
fell from13.6 per cent to about 10.8 per cent, it is clear that thishap? than the Arab?paid no directtaxes at all (M. F. Abcarius,op. cit., p.
pened only in the Jewishsector." N. Halevi and Klinov-Malul,op. cit., 566); (b) export manufacturing Jewish-owned?were
industries?largely
p. 26 entitledto refundson taxes as describedabove in footnote4; (c) new?
9 In bad years,which were by no means rare,many cultivatorswere ly-constructedhouses and industrialbuildings?i.e. mainlythose built
unable to pay taxes, and even had to be helped by the governmentwith by the Jewishimmigrantcommunity?wereexempt fromthe payment
of the Urban PropertyTax for a periodof threeyearsimmediatelyfol?
loans for the purchase of seed grain. Nearly every one of the annual lowingcompletion(M. F. Abcarius,op. cit., p. 529).
Colonial Office Reportson the Administrationof Palestineand Trans- 15 See B. Himadeh,"industry"in S. B. Himadeh(ed.) op. cit., p. 225.
Jordancontainsentrieson the remissionof some ruraltaxationdue to
poor harvestsin particulardistricts. 16 4iAgreattransformation has taken place in the structureof enter?
10 For detailsof the Britishsystemof land revenuesee M. F. Abcarius, prises,methodsof production,and characterof production.Home in?
"The Fiscal System" in S. B. Himadeh (ed.) The Economic Organisa? dustriesproducingarticlesfor trade have almost disappeared.What re?
tion of Palestine,Beirut,1938. mains of these industriesis limited praticallyto needleworkin all its
11 "Before the (First World) War ruralindebtednessexisted but to a forms.The relativenumberof independentcraftsmenhas decreasedand
much smallerextent than that which has accumulatedsince the War," the relativenumberof artisansemployed in workshopsor factorieshas
G. Hakimand M. Y. El-Hussayni,"Monetaryand BankingSystem." in increased.Traditionalmethodsof productionare givingway to machine
S. B. Himadeh(ed.), op. cit., p. 497 production."Himadeh,op. cit., pp. 223-4.
12 Apart from moneylendersand the Government,the two major 17 Some Idea of wage differencesmaintainedby Jewishunions(all of
sourcesof short-term creditto Arab cultivatorswere creditcooperatives which vigorouslyexcluded native/Arab/members) may be gained from
in Arab villages(whose fundswere borrowedfromBarclaysBank at 6 the table taken fromStatisticalAbstractof Palestine,1937-1938, and
reproduced in S. B. Himadeh,op. cit., p. 284.
per cent and lent to membersat 9 per cent) and BarclaysBank through 18 By, e.g. R. R. Nathan,O. Grass,D. Creamer,Palestine:Problemand
its local branches(lendingat 9 per cent). "The total seasonal creditis?
sued by BarclaysBank in 1935-36 was LP 230,000, the loans to be re? Promise,Washington,1946, pp. 314-16.
paid in instalmentsfallingdue betweenthe middle of Septemberand 19 Between 1933 and 1937 the expenditureon 'defence' rose steeply
the end of December." See G. Hakim and M. Y. Hussayni,op. cit., pp. by an additional LP1,451,828, which constituted43.1 per cent of the
There
Table 1

Fiscal Importance of Indirect Taxes

1933-34 1934-35 1935-36 1936-37 1937-38

Amount %of Amount % of Amount % of Amount % of Amount % of


in total in total in total in total in total
Tax LP receipts LP receipts LP receipts LP receipts LP receipts

CustomDuties 1,868,598 48.90 2,600,370 49.10 2.751,246 49.03 2,019,479 44.93 1,999,697 42.2

Excise duty
-on matches 17,740 0.47 23,817 0.46 30.933 0.55 28,136 0.63 28,552 0.6

-on salt 12,950 0.34 14,450 0.27 16,400 0.30 13,250 0.29 15,655 0.3

-on tobacco 237.812 6.23 274,055 5.18 257,694 4.60 223,585 4.97 237,551 5.0

-on wines 50,057 1.32 58,139 1.10 67,723 1.21 79,109 1.76 72,338 1.5
or spirits

Stamp Duties 70,160 1.84 105,254 1.99 124,477 2.21 88,939 1.98 98,347 2.1

Total 2,257,317 59.10 3,076,085 58.10 3,248,473 57.90 2,452,498 54.56 2,451,140 51.7

(Source: M. F. Abcarlus,"The Fiscal System" in S. B. Himadeh (ed.), The Economic Organization


of Palestine,Beirut,1938, p. 530).

Table II

Relative Importance of Expenditure on the Various Government Services, 1933-34 to 1937-38 (Actual expenditure)

1933-34 1934-35 1935-36 1936-37 1937-38

Amount % of Amount % of Amount % of Amount % of Amount % of


in total in total in total in total in total
LP expend. LP expend. LP expend. LP expend. LP expend.

I Defence 769,048 28.4 815,996 25.3 843,942 20.0 2,220,876 36.6 1,906,895 26.1

II Administration 597,602 22.1 948,043 23.2 959,064 22.7 1,258,426 20.7 1,235,545 16.9

III Legal Services 99,985 3.7 101,839 3.1 105,151 2.4 114,893 1.9 128,680 1.8

IV Social Services 323,832 12.0 385,006 11.9 434,059 10.2 471,513 7.8 538,340 7.4

V Developmentand 914,388 33.8 1,179,126 36.5 1,893,985 44.7 2,007,794 33.0 3,488,228 47.8
economic services

Total 2,704,855 100.0 3,230,010 100.0 4,236,201 100.0 6,073,502 100.0 7,297,688 100.0

(Source: M. F. Abcarius,"The Fiscal System" in S. B. Himadeh (ed.), The Economic Organization


of Palestine,Beirut,1938, p. 546).

6
The basic pattern of income and expenditure of the non? consequence of this process for the internal organization of
productive Arab classes had largely the same general effect as Arab villages lies not in the immediate eviction of native cul?
that of the Mandate Government on the Arab peasant pro? tivators from land acquired for exclusive European settlement,
ducers?namely, it subjected them to a progressively greater or in the expulsion of native labor from European enterprise,
extraction of surplus, part of which was transferred to the although both these processes did occur, but in the way in
Jewish capitalist sector. which the capitalist mode dominated the non-capitalist mode.
The growth of European immigration and?despite some This domination was expressed in (a) the systematic flow of
fluctuations?of the European (Jewish) capitalist sector, con? surplus from the Arab peasantry to the expanding European
tributed to increases in cost which affected Arab labor adverse? community, mediated primarily by the Mandate state appara?
ly.20 Unemployment was always far higher in the Arab sector tus and the non-productive Arab classes, and (b) the political
than in the Jewish21 because despite massive immigration of tension within the alliance of Arab classes based on a subor?
European Jews, Jewish capitalist enterprises expanded fast dinate non-capitalist mode, and the conflict between the Arab
enough to absorb them, while the small segment of capitalist alliance on the one hand, and the Zionists and the Mandate
industry in the Arab sector did not grow sufficiently to take government (representing the capitalist mode) on the other.27
up the increasing numbers of unemployed coming from the The crucial determinant of the class position of Arab villagers
depressed rural areas. (Urban workers maintained close links was therefore the contradiction between the forces and rela?
with their native villages.) For a brief period, during the tions of production within a particular social formation?a
Second World War, an abnormal rise in the price of local pro? decline in the relative capacity of cultivators to generate sur?
duce caused by large military expenditure benefited landlords plus in conditions of mounting pressure from above (through
and owner-cultivators (as well as other classes in both sectors). tax, interest and rent) combined with non-market labor rela?
But even during the war-time boom, the poorest strata fared tions on the land.
The increasing extraction of surplus, determined in the
badly because of inflation.22 And in general, rising costs due
in great measure to the expansion of a tariff-assistedcapitalist final analysis by the increasing dominance of the capitalist
sector pressed heavily on the Arab working classes. (See Table mode, produced the increasing disparities in the countryside
III) Since rent was generally paid in kind,23 as a share of the which are noted by so many observers in Mandate Palestine.
total produce, a rise in the total cost of local commodity The rapid population growth which various writers cite as a
'natural' cause of deterioration in the economic condition of
prices meant a rise in the value of rent paid by tenant to land?
lord.24 Indebted owner-cultivators who pledged their harvests Arab villagers may be seen, here as elsewhere in the Third
to trader-usurers25 lost in the transaction for comparable World,28 as the individual peasant family's response to the
reasons. problem of its individual poverty.2 9 However that may be, the
Zionist colonization must be seen primarily as the steady trend of overall growth of the Arab agricultural population in
expansion of a capitalist mode of production.26 The primary relation to slightly declining area of land, and virtual lack of al?
ternative sources of gainful employment, became, under the
Mandate, a force for the intensification of surplus generation.
total Increase on all items. (See Table ll). This remarkablerise was Mounting indebtedness to the trader, and the rise in commod?
necessitatedby the Arab peasants' and workers'revoltof the 'thirties.
(See also Barbara Kalkas, "The Revoltof 1936: A Chronicleof Events" ity prices, were moments in this intensification.
in I. Abu-Lughod (ed.), The Transformationof Palestine, Evanston, The analysis so far does not assume that the accumulation
1971).
20 "Accordingly,real wages of Arab labour, in September 1937, fell of capital in the Jewish sector in Palestine is to be explained
by 10 per cent as compared withwages in 1931, whilewages of Jewish entirely, or even mainly, by the flow of surplus extracted from
labour Increasedby 10 per cent . . . Actual earningsin 1936 and 1937
decreased more than is shown by the index numbersof the daily wage the Arab sector. It merely concludes that the developing class
rates,because of periods of unemploymentand reducedhoursof work
. . . The number of Arab unemployed in seven selected towns, on
December 31, 1937, was estimatedat 21,000 and of Jewishlabourers governedneverthelessby capitalistrelationsand forcesof production.
(combiningwhole and part-timeworkers)at 12,000." S. B. Himadeh, Thus in 1948 D. Warrinerobserved: "Much is made of the distinction
op. cit., pp. 286-7. between these two types of organisation,but in fact there is littlereal
21 One immediatecause of risingArab unemploymentwas at the same differencebetween them,except in so faras the older generation,with
time the cause of fallingJewishunemployment.Thus in March 1939, some inclination to farming,prefersthe small-holdingcooperative,
The JewishFrontiernoted with satisfaction:"unemploymentamong whilethe youngergenerationprefersthe communalsettlement.The set?
Jewsat the end of 1938 was much reducedowingto the replacementof tlerson the co-operativefarmsare consideredto hold theirfarmson 49-
Arab labour in plantations,increased security measures and public year leases fromthe JewishAgency,whereasthe membersof the collec?
works . . . This year for the firsttimeonly Jewishworkersare employ? tive farmsappear to be workersonly. But since the farmerson the co?
ed in Jewishowned orange groves.There are 25,000 of them, 10,000 operativesettlementsare not freeto cultivate" or investor sell except as
morethan usual." Quoted in E. Asfour,op. cit., p. 333 dictated fromabove, they are also in the position of workersin^very
22 See A. M. Hyamson,PalestineUnder the Mandate, London, 1950, importantrespect. Minor details of the farm operationsare decided by a
comittee of the settlers,but every major decision as to production,
p. 179. technical methodsof cultivation,and financeis taken by the expertsof
23 "Cash rentsare practicallyunknownin the countryand the normal the JewishAgency." (Op. cit., p. 68). But more significantin the con?
practicein the case of lands undergroundcrops is forlandlordsto take text of Palestineis the fact that such settlementshave,fromthe begin?
a proportionof the grossyield varyingbetween one thirdand two-fif? ning, been essentiallyengaged in the productionof exchange-values
ths.VM. F. Abcarius,op. cit., p. 524. (which has drivenmany of them over the years to expand Into manu?
24 "lt seems probable thatthe cost of tenancyrenthas gone up in the facture?see D. Warriner,op. cit., pp. 70-1), and that the reproduction
country."A. Granott,op. cit., p. 294 of their means of production has always been determinedby capital.
25 The mostimportantcategorywas the money-lending merchantwho 27 N. Weinstock,"The Impact of Zionist Colonisationon Palestinian
acted as the main assemblingagency of local cereals,and grantedshort Arab Society before1948" (in Journalof PalestineStudies,Vol. Il, No.
and medium-term creditsto the peasantsat exorbitantratesof interest. 2, 1973) writes interestinglyon the nature of class contradictions
The peasants were usually compelled to pay their debts immediately among PalestinianArabs duringthe Mandate, but does not deal with
after harvest when prices were low. (See B. Veicmanas, "Internal the problem of surplus transfer.Yet it is only in the context of this
Trade," in S. B. Himadeh,(ed.), op. cit., pp. 363-4). Some money-lend? problemthatthe historicaldeterminants of class alliance and struggleIn
ing merchantswho dealt with Arab peasants were Jewish,but whether Mandate Palestinecan be grasped.
they formeda significantproportionoverall is not clear. (See D. Duff, 28 See, for example, M. Mamdami,The Mythof Population Control,
Sword for Hire, London, 1934, p. 258 fora referenceto Arab peasants New York, 1972.
around Hebronin debt to Jewishmerchants). 29 This suggestionis tentative,but it may be worth notingthat the
26 This generalizationis intendedto Include the agriculturalcooper? demographicincreasewas always greaterin ruralas againsturbanareas
ive (moshav) and collective (kibbutz) which,althoughcharacterizedin in Palestine.See E. Hagopian and A.B. Zahlan, "Palestine'sArab Popu?
varyingdegreeby non-capitalistrelationsof workand consumption,are lation" in Journalof PalestineStudies, Vol. lil, No. 4, 1974.
structure of the latter (and so the class position of the Arab Arab agriculture in Israel. There are thus two major moments
peasants) cannot be understood unless it is related to the pro? in the radical transformation of the class position of Arab
cess of surplus extraction from the peasantry that necessarily villagers in Israel:
follows from the articulation of the capitalist with the non- 1. The mass expropriation of Arab land (1948-49). This is
capitalist modes of production within a single social forma? the 'booty capitalist' phase in the development of the Jewish
tion. At its most abstract the conclusion may be summarized sector in which the indigenous non-capitalist mode of produc?
as follows. In the non-capitalist mode of production the tion is destroyed. The remaining Arab villagers constituting a
productive process is unmediated (the production of values for source of cheap 'surplus' labor are forcibly sealed off in mili?
immediate consumption) or mediated by simple circulation tary reserves in the early years, and subsequently controlled
(production for the market in order to obtain other values for by the military-administered work permit system.
consumption). In the capitalist mode of production the 2. The depression of Israeli Arab agriculture. With the estab?
productive process is mediated by compound circulation (pro? lishment of Israel, the pattern of agricultural production
duction for the market in order to obtain values to exchange
changes in the major (Jewish) sector?from intensive mixed
for labor-power and the means of production in the market in
farming to the large-scale production of industrial crops.33 A
order to produce more values for the market, etc.). But the
discriminatory price structure for Arab agricultural products,
capitalist productive process is also mediated by the negotiated fewer loans, less assistance to Arab farmers and legal expropri?
'exchange' of profit tax for state-provided values. In Mandate ation of land belonging to Israeli Arabs34 further discourages
Palestine these values (externalities) were provided largely out the residual sector of traditional Arab agriculture. Relative
of surplus extracted from a sector in which production was rises in the cost of agricultural commodity production, to?
primarily non-capitalist?i.e., capable of generating surplus but gether with a proportionate drop in access to money capital by
not of accumulating it. Such accumulation as did occur in the Israeli Arabs pushes them further into a dependence on the
Arab sector remained largely in the sphere of circulation, and labor market. The Israeli economy is not massively based on
was therefore unproductive. Growth in the capitalist mode of
cheap native labor as South Africa's is,35 but it makes effec?
production inevitably meant increasing, though indirect, pres? tive use of the convenient reservoir of Arab labor. Arab work?
sure on the non-capitalist mode?both at the point of circula? ers suffer from higher unemployment,36 receive lower rates
tion (non-productive Arab urban classes) and that of produc? of pay than comparable Jewish workers.37 But the existence
tion (Arab cultivators and craftsmen). But as soon as the Brit? of an?albeit depressed?subsistence agricultural sector in the
ish Mandate, which mediated the articulation of the two Arab villages prevents the development of an otherwise greater
modes of production, gave place to the political dominance of
disparity between the living standards of Jews and Arabs in
the (Jewish) capitalist sector, and to the unmediated unity of
Israel. In other words, it serves to subsidize the low wage-rates
the social formation, the complete destruction of the non-
of Arab labor, so it cannot be allowed to disappear totally.
capitalist mode of production was inevitable. There is here
Inflationary tendencies have been present in the Israeli
again another structural rupture.
economy from 1949, despite the fact that, at least from 1955
to 1965, the share of the total wages bill has declined.38 It is
In the Mandate period the Jewish sector did not seek the effect of such pressure that drives women and children in
Arab labor but Arab land. Because of its political subordina? the Arab villages to seek wage employment. Many Arab villag?
tion to the British Administration such land could only be ac?
ers live at a higher standard than they did in the 1930s. But
quired through market exchange?a slow and politically unsat? their new inability to control their means of social reproduc?
isfactory process.30 By 1947 total Jewish holdings comprised tion is expressed in the fact that for many their labor power
only about 9-12 per cent of all cultivable soil.31 can only be productively applied to their own land after it has
During the 1948-49 war, there occurred the massive sep? first passed through an exchange relationship which is an inte?
aration of Arab labor from their directly controlled means of
gral feature not of Arab village organization but of the capital?
production. "The (UN) Conciliation Commission for Palestine ist mode of production which sustains the entire Israeli
estimated (in 1949-50) that more than 80 per cent of the terri?
society. Thus, for example, a third of the best category land in
tory ruled by Israel represented land owned or otherwise held one village was leased to a Jewish agricultural company by a
by Arab refugees, of which somewhat more than 4,574,000 large number of petty owners (land to which machinery, irriga?
dunums were cultivable."32 The political and economic cost
tion, etc., were then applied) and this company employed up
of this landlessness was transferred by military means to the to 100 villagers, many of whom were "the children of the very
neighboring Arab countries and the UN. owners of the land on which they worked."39 In this way the
From 194849 onwards, the Jewish sector (based on the
villagers' own land becomes an instrument in the hands of the
capitalist mode of production) become directly and politically capitalist for realizing their labor-power-natfa rate of exploita?
dominant within the social formation. Jewish enterprises no tion far greater than was possible when they were peasant
longer exclude Arab labor that remains behind~t>n the con? owner-producers.
trary. This new opportunity for the direct exploitation of
Arab labor is only possible by the systematic depression of 34 "More than 80 per cent of all farmingland and over 90 per cent of
the areas now cultivatedby Jewsare administeredby the (Israel Land
30 see W. Lehn, "The JewishNational Fund" (in Journalof Palestine Authority)company . . . The Israel Land Authoritychargesthe farmers
rentswhich are far less than the averageeconomic rent." S. N. Eisen-
Studies,Vol III, No. 4,1974) for'detailson land acquisitions.The Zion? stadt, op. cit., p. 79. The ILA leases land to Jewsonly. On the discrimi?
ists were evidentlynot unawarethat one of the obstaclesin the way of natory price structure,availabilityof governmentloans, etc., see the
land purchase was the patternof communal land tenureamong Arab figuresfrom Israel GovernmentYear Book reproducedin S. Jiryls,The
peasants.See forexample PalestineRoyal CommissionReport,1937, p. Arabs in Israel, Beirut,1969, pp. 156-163. On the expropriationof Is?
268 raeli Arab land, see D. Peretz, Israel and the PalestineArabs, Washing?
31 J. Ruedy, "Dynamics of Land Alienation,"in I. Abu-Lughod(ed.), ton, 1958, especiallyChapterIX.
op. cit., p. 134 35 See H. Wolpe, "Capitalism and Cheap Labour-power in South
32 J. Ruedy,op. cit., p. 135 Africa" in Economy and Society,Vol. I, No. 4, 1972.
33 S.N. Eisenstadt,IsraeliSociety, London, 1967, pp. 140-1
continuedon p. 23.
8
cw

POPULAR OPPOSITION TO SADAT'S tury, and presently function as one of international capital?
ism's most effective tools in economic subjugation of Third
ECONOMIC POLICY
World countries. Normally, such "groups" are made up of

Three years after the October War and President Sadat's policy public organizations such as the World Bank or the Inter?
national Monetary Fund, but recently, as in Peru, private
of an "opening" (al-Infitah) towards the West, the Egyptian
bankers have become more deeply involved.
economy is still in trouble. The sought-after investment by One of the points the Advisory Group is sure to stress is
Western corporations and countries has hardly gone beyond
"production," one of President Sadat's favorite themes. "Pro?
projects in petroleum, tourism and banking. Even Arab capital
duction" as a "patriotic task" is one of the sticks Sadat holds
is reluctant to enter Egypt at the level Sadat wants. Finally the
over the heads of dissatisfied workers.
political payoff to Sadat for the enormous economic dispari?
ties his plans include have begun to materialize in the form he Reports are scarce, but there has been an increase of
strikes in Egypt directed against the regime. In August, for in?
fears most?strikes.
stance, tobacco workers stopped work to protest government
Sadat's plans counted on a massive influx of capital to an
intervention in union elections. Faced with repression, the
economy retrieved from the "socialism" of the Nasser years. workers' demands escalated to include a demand for Sadat's
But political insecurity, a weak infrastructure and bureaucratic
resignation.
red-tape have scared off many potential Western investors. The A larger and more important strike, perhaps the largest
Arab oil states are also investing much less than Sadat thinks
strike in the last 20 years, took place in Cairo in mid-Septem?
they should. (Sadat claims that since Egypt's victories in Octo? ber. Bus drivers went on strike to demand a pay increase, and
ber 1973 permitted the oil price hikes, therefore the oil-pro?
after they were threatened by the Prime Minister they occu?
ducing states owe lots of money to Egypt!) Sadat expected
pied one of Cairo's main bus stations. The army was sent in,
$12 billion over five years from the Gulf Authority for Devel? and according to reports at least one worker was killed and
opment in Egypt, but when it was set up this summer it was
many injured. Among the workers' demands was dissolution of
underwritten for only $2 billion. Its sponsors, Saudi Arabia,
the government-sponsored union.
Kuwait, the UAE and Qatar have also imposed political condi? Strikes are illegal in Egypt. As President Sadat pointed out
tions irksome to Sadat: the Authority has legal international
in an address to the Arab Socialist Union and the People's As?
status; its loans and bonds are not subject to expropriation,
sembly in September, a few days after the bus drivers' strike,
sequestration or seizure; its capital, loans and dividends are ex? "it is a crime to disrupt production. . . The right to strike?or
empt from taxes and local fees; its shares are exempt from cur? the strike itself?stops production." Sadat was referringto the
rency control regulations, etc. left's call for legalization of the right to strike. Although
Recalling the nineteenth century, when the debts of the
strikes will not be made legal in Egypt, economic conditions
profligate Egyptian regime were administered by creditors; are bound to lead to more of them in the future.
Sadat and the entrepreneurs who support him are making
changes in the Egyptian economy to satisfy the United States,
Sources: Foreign Broadcast Information Service, May 4, Aug
the International Monetary Fund and the World Bank, as well
as Arab investors. As Sadat stressed in an interview in August, 23, 26, 27, Sept 20, 29, Oct 6 1976; Middle East Economic
"I want to say that David and Nelson Rockefeller are my Digest, July 23, Aug 27, Sept 10, 17, Oct 15, 22 1976; New
York Times, May 3, Aug 5, Sept 21.
friends. They are my personal friends. . . Incidentally, Mc?
Namara is also my friend." David Rockefeller's Chase Manhat?
continuedfromp. 8.
tan Bank provided a $250 million loan to Egypt in October.
36 See A. Hovne, The Labour Force in Israel,Jerusalem,. 1961, p. 13
One of the changes being pushed by international bankers (SummaryTable) for Jews,and p. 30 (Table 9) for Arabs. For greater
is for a reduction of subsidies for food and other basic com? detail,see Y. Ben-Porath,op. cit., Chapter5.
37 The JewishwriterAharonCohen noted that "The wages paid to Ar?
modities, to "free up" more capital for investment. Such a ab workersneverequalled those paid to Jews,even ifthe Arab was do?
policy strikes deeply at the majority of Egypt's population al? ing the same work." Israel and the Arab World,1964, p. 530. Abner
Cohen, in a curiously worded sentence, writesthat "On the whole,
ready hard hit by inflation. On the other hand, altering the ex? their (i.e. Arab) wages are not lower than the officialrates,but they
change rate on the Egyptian pound benefits only the wealthy work harder,and sometimes,they work for longer hours." (p. 27).
38N. Halevi and R. Klinov-Malul, op. cit., p. 275 (Table 83)
Egyptians and foreign investors.
39Abner Cohen, Arab Border Villages in Israel, Manchester,1965,
The World Bank has recently set up an "Advisory Group p. 31.
for Egypt" composed of representatives from the US, Western
European countries and Arab oil states. The Group meets for
the first time in January: its formal task is to plan financing
for Egyptian development projects, and to review Egypt's $4.5 During the recent US visit of a representative of the
billion balance of payments deficit. Unofficially, however, its POLISARIO Front, discussions were held on the formation
task is to lay down to Egypt the conditions for future invest? of a Saharan Peoples Support Committee. For more infor?
ment. In a new and more sophisticated form such advisory mation on this committee, write to MERIP.
groups replace the crude interventions of the nineteenth cen-