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

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

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


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. We’re in Jerusalem with Shir Hever. He’s an economist at the Alternative Information Center in Jerusalem. He’s also the author of the book The Political Economy of the Israeli Occupation. Thanks for joining us again, Shir. So we left off talking about how sharp, to what extent is the contradiction or conflict between ordinary workers, who we’ve learned wages are kept relatively low, a great concentration of wealth, 18 families. So to what extent is there a struggle for workers’ rights here?

SHIR HEVER, ECONOMIST, ALTERNATIVE INFORMATION CENTER: There is, of course, a struggle. A lot of people feel that they have lost many of the rights they used to have in past decades. But this struggle is constantly hampered by the security argument. Whenever there is some kind of incident or pressure which relates to the political aspect, to the so-called security aspects, or to issues regarding the occupation, regarding Israel’s borders, that takes the first position in all the newspapers.

JAY: So the struggle for national identity, the struggle to defend the Jewish state trumps any of your demands as workers.

HEVER: Well, first of all, it trumps it in the media. So that means that if you want to organize a strike, for example, if you want to organize a social struggle, and if you want to get into the evening news, then you have to try to find a time when there is no clash with Palestinians struggling for their freedom, when there is no—some kind of event with international pressure on Israel to end the occupation, because if something like that would happen, then your struggle, your social struggle, will barely be mentioned in the news.

JAY: You talked in the past the workers movement here was stronger than it is now. What happened? Why?

HEVER: It was much stronger when it was easier for the workers movement to deny the aspect of the dispossession of Palestinians, when it was more acceptable in Israeli society to ignore the facts, to forget [inaudible]

JAY: What years are we talking?

HEVER: The shift is usually set at 1985. Nineteen eighty-five was a year right after about three or four years of very heavy recession in Israel, hyperinflation, the collapse of all the banking system in Israel. And that had a lot to do with the loss of Israel in the War of Lebanon of 1981. So that also shook people’s belief in the invincibility of the Israeli army. And in light of that period, the government came up with an emergency plan, and the emergency plan was basically a neoliberal reform plan, which meant beginning to privatize national assets, beginning to allow workers’ conditions to deteriorate, workers’ benefits, and to gradually cut the public sector. But what’s interesting about this is not only the reasons that brought to this reform, but also what was the effect of the reform, because that reform gave Israelis a kind of double standard of the government talking to them and saying, on the one hand, we expect you to be loyal citizens and to sacrifice yourself for the national greater good and to go to the army and serve many years in defending the homeland and so on, but on the other hand, we expect you to fend for yourself on the economic level, we’re not going to give you any more welfare, we’re not going to have any social solidarity anymore, you’re not going to be supported in times of need, and you’re not going to get all the benefits for health and social security that you used to get. Of course, people responded to that kind of cognitive dissonance, if you will, by becoming less nationally enthusiastic and less willing to sacrifice for the greater cause. So if we talked before about the importance of identity politics in Israel and the need to have a Jewish state, well, that’s nice, but people are less and less willing to actually work for that goal. What they’re more concerned of is taking care of themselves.

JAY: And to what extent did the 18 families sacrifice?

HEVER: Well, of course, that’s part of the argument, that these 18 families do not sacrifice, that it’s actually very easy in Israel today not go to the army. I didn’t go to the army. And it’s very easy for young Israelis to find ways to avoid military service. And those very wealthy people, of course, are quite reluctant to send their children in harm’s way.

JAY: And to what extent did they sacrifice economically?

HEVER: Economically, they find ways not to sacrifice. Most of the capital of these 18 families doesn’t come from their business that they did in Israel with the general public; it mostly comes from business they did with the Israeli government, because when the Israeli government is struggling under the burden of ever-amassing security costs, they fund it by privatizing government assets. So they’re selling the oil refineries that the government used to own, they sell a lot of factories that the government used to own, they sell infrastructure, they create new toll roads to replace public roads, and so on. And these families get rich by doing business with the government. So they’re actually making a profit, you can say, because of the government being more and more desperate for cash.

JAY: So the more severe the economic crisis, the better the families do, ’cause they’re picking up the assets.

HEVER: Of course, there is a limit to that. Of course, there is a moment where these families are starting to worry that they will lose their consumer basis in Israel, and then they begin to invest their capital abroad. And these 18 families are trying to shift the majority of their investments abroad, outside of Israel, because they know that Israel is a risky place for many reasons. In fact, in the recent global economic crisis, a lot of these families lost a lot of money because they invested in real estate projects in the United States and in Europe, which turned out to be a disaster.

JAY: Well, in the next segment of our interview, let’s talk more about the economics of occupation. Please join us for the next segment of our interview with Shir Hever.

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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