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

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

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


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, and we’re joined again by Shir Hever. He’s an economist at the Alternative Information Center in Jerusalem, and he’s the author of the upcoming book The Political Economy of Israel’s Occupation. Thanks for joining us, Shir.


JAY: So who profits from the occupation?

HEVER: Well, the first question should be whether the occupation is profitable at all. And that argument, that Israel is actually an imperialist, colonialist state which only occupies the Palestinian territories for monetary profit, has been made. It has mostly been made by Marxists. And the argument is very valid if you look at the period between 1967 and the early ’80s.

JAY: There’s a period from ’48 to ’67 which Palestinians also consider occupation.

HEVER: Well, it’s more than occupation. It’s ethnic cleansing. It’s the deportation of about 700,000 people from their homes, including massacres and the destruction of villages. So it’s not just occupation in the sense of the occupation of the Palestinian territories of ’67, where it was a military rule imposed on a population. This was really cleansing an area from the population, from its native population. So I’m not sure if the word “occupation” is strong enough.

JAY: So when you talk about occupation, you mean after 1967, where—’cause obviously the Palestinians, the issue of occupation goes into 1948.

HEVER: Of course. But what we see in ’48 is a kind of takeover of land in a much more complete way, in order to create a Jewish state that not only rich Jewish people controlling the workforce of Palestinians—it’s not a similar situation to South Africa, for example, where a small white minority controlled a large black workforce. This was an idea to have Jews as the workforce as well. And that’s why there was such a large migration from Arab countries of Jews who would become the new workforce in this state. So Palestinians had no room at all in that. But in ’67 they felt that—the Israeli government felt they cannot repeat the same ethnic cleansing, that they’re not in a political position that allows them to simply deport all the Palestinians from the West Bank and Gaza. And they had a very famous quote, which was initially coined by Golda Meir. She said, we want the dowry but not the bride—we want the land, we want the resources, we want the water, but we don’t want the people living there, but we’re stuck with them.

JAY: Now, we talked to an Israeli historian who said that in the 1967 war there was a perceived threat that Egypt was about to attack—and it’s still, he said, a debate whether Egypt really was planning to attack or not. But one way or the other, the issue was settled within a matter of hours when Israel took out the Egyptian Air Force. And then the question is whether or not to go further. And he kind of said it was sort of an irrational moment, to go and take East Jerusalem and to go take the West Bank, that, strategically, the Army had been arguing it actually wasn’t a good thing to do.

HEVER: I don’t agree with this distinction of the Zionist movement into the rational and irrational. There is a kind of image that the Zionist movement is divided into the pragmatic, or rational, also known as the Zionist left, which is basically those Zionists who believe that Israel should have sustainable borders with a Jewish majority, and therefore they’re against Israel’s continued occupation of the ’67 territories, arguing that that would undermine Israel’s democracy; and on the other side, there is this perception of the irrational Zionism, or messianic Zionism, of those who simply believe in some kind of divine providence which will allow Jews to continue to be a majority or will continue to be in control regardless of how far you push the borders, how much territory you keep controlling, and they see Zionism as an ongoing movement to keep on getting more and more of the promised land—and the promised land goes on very far. I don’t agree to this distinction. I think this distinction serves an internal purpose within Israel, and it mostly serves to appease international criticism, because whenever there is some kind of a pressure, and maybe some governments in Europe are saying to Israel, “How do you expect us to accept when you’re violating international law like this?” And then the Israeli government would say, “If you put too much pressure on us, you are helping the messianic, crazy Zionists, and you should cooperate with us and work with us so that the pragmatic Zionists could stay in power, and that’s the only way to end the occupation.” So as long as you keep thinking that the only way to end the occupation is to engage the moderates within Israel, you only feed the status quo and the continued occupation.

JAY: Well, part of the argument given was that the occupation of the West Bank and East Jerusalem is not particularly good for Israel. And I asked you, earlier, who profits from the occupation. So why occupy the West Bank?

HEVER: I think that this level of pragmatism and irrationality exists in every part of the Zionist movement, and the same people who are supposedly rational and trying to make choices—East Jerusalem yes, but Gaza no—are also the same people who with great enthusiasm prayed at the Wailing Wall and said this would be a good time to destroy the Mughrabi neighborhood, which is a Palestinian neighborhood right next to the Wailing Wall, and build a plaza for prayers instead, and kick out all the families. So they were prone to irrational acts as well. What the Israeli government system is based upon is this concept of unofficialness, of decentralized power. Israel is very different than most Western countries because you don’t have a government decision that is later acted out by government officials. Many of the decisions are being taken on the ground by low-level clerks and officers. Also, very low-level military officers are making strategic decisions for the entire army.

JAY: For example?

HEVER: For example, the open bridge policy of 1967 was a decision that was started by a sergeant, who simply thought it would be more in the economic interests of Israel if Palestinians would be allowed to keep trading with Jordan so that they don’t compete with the Israeli farmers. So that was a sergeant making a decision, and the army adopted that decision. Also, the destruction of the Mughrabi neighborhood was also a decision of the soldiers on the ground, who wrote in their diaries, we’re not going to get permission from the government to destroy this neighborhood, because then their protocols will say that they want to destroy the neighborhood; we’ll take responsibility, to make it easier for the government. So that’s part of—and that’s something that still happens today: in the checkpoints, you can see soldiers of very low rank making life-and-death decisions.

JAY: So let’s—so the issue of—does occupying the West Bank, from a purely economic point of view, in the interests of Israel or not? In terms of the interests of the 18 families and such, why occupy it?

HEVER: In the first 20 years, the occupation was profitable. Israel took more taxes from Palestinians, then invested in their infrastructures. That was a very clear and simple, positive bottom line. And the cost of controlling the territories was very low, because not a lot of soldiers were needed. But as soon as the Palestinians started the resistance, started the first intifada, and started to organize the widespread resistance—of course, there was always resistance, but this was on a much larger scale—Israel had to increase the number of soldiers ten times, and Israel had to start building more fences around all the settlements, and special roads for the settlers, and give them armored vests and armored cars. And the meaning of that was the occupation stopped being profitable. So if you look at Israeli society as a whole and if you look at the government budget, today Israel spends about 9 percent of the annual budget of the government just on maintaining the occupation, and most of that money, about two-thirds, is just the security costs, and the other third is subsidies for colonists to come and live in the settlements. So that system is a very heavy burden on the Israeli economy as a whole. But that doesn’t mean that people don’t profit from it; that doesn’t mean that there aren’t companies that make their wealth from selling security services to the Israeli government. Perhaps a good example would be the Magal company. Magal is a former Israeli company that is now traded on Wall Street, and they’re building automated machines to build on the wall of separation, for example. And they’re also building—.

JAY: Remote-control guns and things [inaudible]

HEVER: Yeah, exactly, exactly. And they’re also building equipment for the wall between the United States and Mexico. And they were interviewed by an Israeli journalist and were asked—their CEO was asked, is building the wall with Mexico the same as building the wall in the West Bank? And he said no, it’s not the same, because the wall in Mexico is only designed to stop people, while the wall in the West Bank kills them. That is a company that analysts in the stock markets say is a good stock to buy whenever you hear there’s a terrorist attack—their stock will go up.

JAY: In the next segment of our interview, let’s talk about the political economy of the debate about a two-state solution. 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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