Israel’s War Against Palestine: Documenting the Military Occupation of Palestinian and Arab Lands

Shir Hever: The Political Economy of Israel’s Occupation – Part II

15 July 2010

IOA Editor: This is a very important series, confirming Amira Hass’s assertions, made regularly, that Israel knows that peace just doesn’t pay.

By The Real News Network – 15 July 2010

A seven-part series on the political economy of the Israeli Occupation

Paul Jay of The Real News Network interviews Shir Hever, an Israeli economist and expert in the political economy of the Occupation whose forthcoming book is The Political Economy of Israel’s Occupation.

Part II: Israel Inflates National Security Concerns in Order to Invalidate Labor and Class Disputes


The Political Economy of Israel’s Occupation

Part I: 18 Families Control 60% of the Equity Value of All Companies in Israel

Part II: Israel Inflates National Security Concerns in Order to Invalidate Labor and Class Disputes

Part III: Israeli Elite Profited through Privatization of Public Assets – Workers Are Asked to Sacrifice

Part IV: Rational and Irrational Zionism – The Moderates and the Right

Part V: One State or Two, There Should Be Economic Justice – The Only State Now is Israel, It Has Obligations

Part VI: Israel’s Elite and the Far Right – Israel Sells Itself As ‘Frontline’ Against Islam

Part VII: The Boycott Israel Movement – The Reasons for Boycotting Israel


Shir Hever is an economic researcher in the Alternative Information Center, a Palestinian-Israeli organization active in Jerusalem and Beit-Sahour. Researching the economic aspect of the Israeli occupation of the Palestinian territories, some of his research topics include international aid to the Palestinians and Israel, the effects of the Israeli occupation of the Palestinian territories on the Israeli economy, and the boycott, divestment and sanctions campaigns against Israel. He is a frequent speaker on the topic of the economy of the Israeli occupation.


PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I’m Paul Jay, and we’re in Jerusalem. And joining us again now is Shir Hever. He’s an economist, and he’s at the Alternative Information Center in Jerusalem, and he’s the author of the upcoming book Political Economy of Israel’s Occupation. Thanks for joining us again. So in the first segment we learned that Israel had been one—considered one of the most equal countries in the world, now considered one of the more unequal. What happened?

SHIR HEVER, ECONOMIST, ALTERNATIVE INFORMATION CENTER: Well, basic infrastructure and institutions in Israel that were fighting for equality were institutions that were not only defined by their class identity but also by ethnic identity. Perhaps the most famous one is the Histadrut. The Histadrut is the federation of Israel’s labor union. But the Histadrut didn’t even allow Palestinian-Israeli citizens to join the Histadrut until the late ’60s, did not even allow Jews of Arab descent to become members of the Histadrut until the early ’60s, and until today it does not allow Palestinians from the occupied territories to become members. So the Histadrut is not only an organization for workers rights, for union empowerment; it’s also an organization for disenfranchising Palestinians and weakening Palestinian workers. And that creates a divide within the labor force. That creates more empowered workers—Jewish workers—who receive some kind of organizational support and higher wages and more benefits. But they cannot really compete with the wages of the disempowered workers that come from the lower rungs of society, or the completely rightless workers who come from the West Bank.

JAY: So workers that do not get represented in the trade unions act as a pressure to lower the wages of those that are in the trade unions, and it creates more of a split amongst the workers.

HEVER: Yes. And that split was able to undermine the welfare state in Israel and basically convince a lot of employers to hire the cheaper labor, to fire the more empowered workers. And it serves as a constant load on the Israeli social system.

JAY: Now, I understand how that can be a pressure to lower wages. But why does that lead to dropping of state programs—health care and other kinds of government-supplied social safety net?

HEVER: What makes countries able to sustain welfare programs and social programs is only if there is a strong public cry to support these programs and only if people are able to mobilize in order to protect themselves from neoliberal reform, where these programs are constantly canceled or government assets are constantly privatized. And what happens in Israel is that the workforce is divided according to ethnic or national lines, which makes it very difficult to organize joint protest.

JAY: Well, why does it even have to be joint? Why can’t the Jewish workers at the very least even just fight for themselves in terms of these social programs? What stopped them from mounting those kinds of defence?

HEVER: Well, I can give you an example, perhaps, with Netanyahu. When he was minister of finance, he was trying to break the union of the port workers, the seaport workers, who were demanding better conditions and were trying to fight the privatization of the seaports. So he said, I don’t need you; we’ll open up a seaport in Gaza, and we’ll use the Palestinian workers in Gaza to offload the cargo, and we’ll pay them a tenth of what you’re getting. And he used that argument to break their strike. Of course, when that strike was broken, he didn’t allow Palestinians to build a seaport in Gaza, citing security reasons. So he was playing both cards: the security card to disempower the Palestinians in Gaza; the economic card to break the unions in Israel.

JAY: And to what extent is there a kind of nurturing of racism in order to exacerbate this contradiction between Jewish and Arab-Palestinian workers?

HEVER: The racism is very apparent and very inherent to the labor discourse in Israel. There are people who say that “this is an Arab job”. An “Arab job” is a derogatory term used to describe a job that was not done well or not done professionally. Palestinians are considered to be lazy or disloyal workers, not very productive workers, and so on. So the racism is inherent there. But you don’t need to encourage it; you don’t need to—the government doesn’t need to create programs to teach people to be racist. Unfortunately, racism is strong enough as it is.

JAY: Why?

HEVER: Because the entire project of the state of Israel as a Jewish state is a racist project. It’s a project that every Israeli child at school, from a very early age, learns that there is a constant struggle with the native population of the land (which is, of course, not considered native; it’s considered to be some kind of invading force), the Jews have some kind of biblical right to this land, and that therefore Palestinians are—they simply have no place in this picture, only as enemies to be fought against. So the treatment of Palestinians as foreigners, as unwanted people, as a threat, is something that children study in school from a very early age.

JAY: What’s the current unemployment rate amongst Jewish Israelis, and then Palestinian Israelis?

HEVER: The total unemployment rate in Israel officially is about 7.8 percent currently, but that’s a very gross underestimation, because it doesn’t include a lot of people who have either given up on looking for jobs or who are underemployed (they can’t get enough hours to meet their needs).

JAY: And what’s the rate once you include those people?

HEVER: If you include these people, you get about 18 percent unemployment, according to various studies that were conducted. We’re only talking about Israeli citizens now. But you asked also how can we distinguish unemployment amongst Jewish Israelis as opposed to Palestinian Israelis. So Palestinian Israelis are only about 20 percent of the population, 22 percent. So if you don’t include them, unemployment drops by about 1 or 2 percent. But amongst Israeli Palestinians, unemployment rates are about double that of Jewish Israelis, which means about 14 percent official unemployment and about 36 percent unofficial.

JAY: Which makes even more pressure on everyone else’s wages. I mean, such high unemployment means even more desperate Palestinian Israelis looking for work and even more downward pressure. So if this is the case, to what extent and how sharp are the contradictions between Israeli workers, both Jewish and Palestinian, but particularly Jewish, and the 18 families? And let’s talk about that in the next segment of our interview with Shir Hever. Please join us on The Real News.

End of Transcript

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.

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