By Jean Shaoul
28 March 2006

The present economic, social and political conditions in Israel and Palestine are an indictment of the Zionist project and the nation state as the solution to the oppression of the Jews. The Zionist state was conceived as the answer to the problem of the European persecution of the Jews—a state where the Jews would find a safe haven, social justice and equality.

It was realised in the form of a capitalist state created by the dispossession of another people and maintained through war and repression, and social inequality at home. Indeed, it is impossible when presenting this report, to avoid pointing out that the Jewish people, sections of whom have a long history in every progressive movement, not least the international socialist movement, are now themselves widely regarded as oppressors with blood on their hands.

The Fourth International and Palestine 1948

I think it is pertinent to recall what the Fourth International said about Palestine in 1947-48. One cannot but be struck when reading its statement,Against the Stream, written nearly 60 years, how extraordinarily prescient its warning was. It insisted that Zionism was both utopian and reactionary and denounced the 1947 UN decision to partition Palestine into two tiny states.

“By partition a wedge is driven between the Arab and Jewish worker. The Zionist state with its provocative lines of demarcation will bring about the blossoming forth of irredentist (revenge) movements on either side. There will be fighting for an ‘Arab Palestine’ and for a ‘Jewish state’ within the historic frontiers of Eretz Israel (the Land of Israel). As a result, the chauvinistic atmosphere thus created will poison the Arab world in the Middle East and throttle the anti-imperialist fight of the masses, while Zionists and Arab feudalists will vie for imperialist favours.”

The Fourth International said: “The Jewish state, this gift of Truman’s and Bevin’s, gives the capitalist economy of the Zionists a respite. This economy rests on very flimsy foundations. Its products cannot compete on the world market. Its only hope is the inner market from which the Arab goods are debarred…. The continuous flow of Jewish immigrants, who would come with the remnants of their possessions, is apt to increase the circulation of goods. It will allow the bourgeois producers to dispose of their expensive wares. Mass immigration would also be a very useful means of forcing down wages which ‘weigh so heavily’ on Jewish industry. A state engaged in inevitable military conflicts would mean orders from the Hebrew Army, a source of Hebrew profits not to be underrated at all. A state would mean thousands of snug berths for Zionist veteran functionaries.”

Jewish workers would have to bear the cost in the form of high prices and heavy taxes. Separated from their Arab brothers and sisters and prevented from fighting as a united class, they would be at the mercy of their class enemies, imperialism and the Zionist bourgeoisie. As Chaim Weitzmann, who was to become the first president of the new state, said, “The Jewish state will stem the communist influence.”

In answer to the question, “And what promises does the Jewish state hold out? Does it really mean a step forward towards the solution of the Jewish problem?” the Fourth International warned, “The partition was not meant to solve Jewish misery nor is it ever likely to do so. This dwarf of a state, which is too small to absorb the Jewish masses, cannot even solve the problems of its citizens. The Hebrew state can only infest the Arab East with anti-Semitism and may well turn out—as Trotsky said—a bloody trap for hundreds of thousands of Jews.”

For the Arab feudal leaders, the UN vote for a Zionist state was a godsend, enabling them to divert the attention of the masses away from a united class struggle and any possibility of international class solidarity, with a declaration of war on the newly formed Zionist state. The military conflict and ensuing bloodshed—all in the name of anti-imperialism—also served to break up the workers’ movements in both camps, thereby weakening the working class and strengthening imperialism.

The Fourth International stressed that Zionism was a reactionary and utopian movement. It was utopian to believe that:

1. A harmonious development within an isolated and closed economy in the midst of a capitalist world is possible. Without the expansion of the economy, millions of Jewish immigrants could not be absorbed.

2. A Jewish state could exist amid the open hostility of tens of millions of Arabs, and in the face of an Arab population growing at least as fast as Jewish immigration.

3. That Israel could manoeuvre successfully between the rival imperialist powers, all of which were using Israel to further their own strategic interests in the region.

4. That anti-Semitism could be eradicated simply by granting nationality to the Jews, ignoring its social, historical and ideological roots.

It was reactionary because Zionism:

1. Serves as a support for imperialist domination by giving it the fig leaf of acting as arbiter between the Jews and the Arabs.

2. Produces a nationalist reaction on the part of the Arab masses thereby creating a racial division of the international working class, and strengthening the national “unity” of both the Jews and the Arabs.

3. As a nationalist force, acts as a break on the participation of Jewish workers in the class struggle in the rest of the world, separates them from the world proletariat, gives them their own and different goals to strive for, and above all creates illusions in the possibility of improving their lot within the framework of capitalism.

The Fourth International warned that war on neither side in the Arab-Zionist conflict bore a progressive character: it served only to obscure the class antagonisms and open the gates for nationalist excesses, weakening the proletariat and strengthening imperialism in both camps. It called on the workers of the two peoples to unite in a common front against imperialism and its agents. It warned Jewish workers that they would not be free and safe as long as they had not done away with national discrimination, isolationalism and imperialist loyalty.

What are the conditions within the Zionist state today?

Let us fast forward nearly 60 years and ask: What has been the end result of the Zionist road to the security of the Jewish people? What have been the main tendencies of development that should inform our work on perspectives?

First of all, Israel has from the beginning faced an enormous economic, social and political crisis.

It was carved out as one of five states (Israel, Palestine, Jordan, Lebanon and Syria) from the former Syrian province of the Ottoman Empire. Capitalism within such a tiny state, surrounded by hostile states, with few natural resources and little water, and unintegrated into the wider regional economy, was never economically viable. From the beginning, the Arab regimes refused to trade with Israel and boycotted those companies that did so.

It is this, in part at least, that has forced successive governments to seek to expand Israel’s borders, and thus military and settlement expenditure. This is why Israel has lurched, throughout its entire existence, from one economic crisis to another and why it has been so reliant on external support. This has inevitably affected its role internationally and at home.

In its early years, Israel was kept afloat by the Diaspora, which contributed $200 million a year before 1967 and a massive $700 million a year in the following six years. Even today, Israel receives $1.5 billion a year from private US donations. In the 1950s, German reparations money provided another important source of finance: $125 million a year before 1966. Even after the reparations money came to an end, West German aid continued at a higher level than before.

But by far the most important source of economic assistance has been the US government. While before 1967, US provided very little, at $50 million a year, this had risen to a massive $3 billion a year by 1986 (split between $1.2 billion economic and $1.8 billion military assistance), plus some $500 million a year aid from other parts of the US budget or in some cases, off-budget. It has continued at this level ever since, making Israel the highest per capita recipient of US aid in the world.

But this aid to Israel differed from most US aid. Firstly, normally US aid is tied to specific projects and the purchase of US goods and services, and overseen by the government agency, USAID. Most US aid to Israel goes straight into its Exchequer as a cash transfer. Secondly, aid is a bit of a misnomer. It usually comes in the form of loans that have interest and repayment obligations. But most of the military loans were converted into grants and the remaining military loans were “forgiven” by Congress. Only the economic aid had to be repaid with interest.

To put US aid to Israel into perspective, direct aid to Israel is more than six times all US aid to sub Saharan Africa. But even these annual $3.5 billion grants were insufficient. In 1992-96, the US stepped in to provide $10 billion in loan guarantees and a similar amount in 2002-03. Without such guarantees, Israel would have been bankrupt. Its external debt is now much greater than its GDP.

As well as rescuing the economy, the US also permitted the settlement expansion. While officially Clinton deducted the cost of settlements from the aid, he simply made equivalent amounts available as grants from other sources. Thus in effect, the US subsidised the settlements.

Ninety-nine percent of US military assistance to Israel came only after Israel became stronger than all the Arab armies, and ruled over the Palestinian population. Assistance increased after every military intervention and suppression of the Palestinians. It increased after the Oslo peace talks, and again after they collapsed. It continues today when Israel faces no military threat. Indeed, US aid is to ensure military superiority. Similarly, the US provides economic assistance to a country that has a GDP far larger than the combined GDP of its Arab neighbours, including Egypt, despite having a population of only 6 million compared to 100 million.

As well as economic assistance, the US has provided political cover for Israel at the UN. Between 1972 and 2001, it vetoed 39 resolutions in the Security Council in order to block criticisms of Israel’s policies and actions in the Occupied Territories. It used the veto threat on countless other occasions to get resolutions withdrawn or watered down. Thus the US has ensured that no action has ever been taken against Israel for its defiance of UN resolutions or its development of nuclear weapons.

What has been Israel’s quid pro quo for the US?

Israel prevented victories by the Palestinians and their supporters outside Israel’s own border: in Jordan in 1970, Lebanon 1976-82, as well as in the Occupied Territories. It thus helped suppress the Arab working class and maintain decrepit regimes in power. It kept the Stalinist bureaucracy in Moscow at bay during the Cold War: in 1967 and then again in 1973, it defeated Egypt and Syria, both of whom were armed and aided by the Soviet Union. In effect, Israel replaced Britain after its withdrawal “East of Suez” as the policeman of the Middle East on behalf of US imperialism.

Its frequent wars provided the US with live testing for its arms, often against Soviet weaponry. With its nuclear arsenal, Israel had weapons capable of reaching the Soviet Union. It prevented the emergence of Iraq as a nuclear power with the bombing of Iraq’s nuclear reactor in 1981.

Israel also provided valuable services as a subcontractor for the US. It has served as a conduit for US arms to regimes that the US could not be seen to be assisting: apartheid South Africa, Khomeini’s Iran during the Iran-Iraq war, and numerous military dictatorships and right-wing rebel forces, particularly in Latin America. Israel’s intelligence service, Mossad, provides Washington with intelligence gathering and can be relied upon to carry out illegal and covert operations on behalf of the US that the US itself either does not want, or be seen, to carry out. It trialled novel forms of interrogation and torture, later to be used in Iraq.

In other words, Israel acts as a mercenary for US imperialism, a situation that its own commentators have likened to “the Godfather’s messenger”. This is because Israel carries out the “dirty work” of the Godfather who “always tries to appear to be the owner of some large respectable business”. One Israeli intellectual noted that the state had gathered in three million Jews into Israel and transformed them into “parasites of America”.

Growth of anti-Semitism

Unquestionably one of the most potent factors re-igniting anti-Semitism today is the brutal methods adopted by the Israeli government. This factor has been used to considerable effect by one Middle East regime after another to whip up anti-Semitism as a diversion to obscure their own political bankruptcy. In part, this has been one of the elements that have, amid the present political confusion, encouraged the growth of Islamic fundamentalists who employ populist anti-Semitism to manipulate political discontent.

Two years ago, a leaked European Union report showed a rise in the number of attacks on Jews by European Muslim youth. It linked a rise in attacks on Jews with events in the Middle East, particularly since the start of the Intifada in September 2000 and Israel’s attack on Jenin in the West Bank in April 2003. To recognise this fact is not to endorse anti-Semitic views or to defend those who hold them. Yet, the political basis for a dangerous re-emergence of anti-Semitism among often politically uneducated second generation Arab and African immigrants cannot be ignored.

Israel itself routinely lumps together legitimate hostility to its treatment of the Palestinians with anti-Semitism. Any objective appraisal of what Israel has done is depicted as anti-Semitism. This serves a very definite purpose, in obscuring political understanding.

Breaking out of a national autarky

Zionism’s solution to its economic problems—expanding Israel’s borders—has proved to be no solution at all. That is not only because it turned Israel into an international pariah and incurred massive military costs. While in the immediate post-war period, Israel operated as a nationally regulated economy, the development of globalisation in the late 1970s rendered this impossible. Israel had to seek economic integration into the wider Middle East economy.

The policies of privatisation, economic liberalisation and drastic devaluations espoused by the Likud government after 1985 devastated much of Israel’s traditional enterprises, ruptured the nationally regulated economy, and opened it up into the international economy. Foreign institutional investors began to own an increasing proportion of the Tel Aviv stock market-quoted companies. Many of Israel’s leading high-tech companies began to have their shares listed on the New York Stock Exchange and to operate outside Israel.

These measures also changed the social composition of Israel’s business circles. The shift toward internationalisation upset the old equilibrium that had existed between big business and the military establishment, in favour of a new elite based on Israel’s high-tech sector, IT and pharmaceuticals. Peace with Israel’s Arab neighbours would end its isolation. It promised more new markets than Israel’s garrison state could ever deliver. But the price to be paid for a wider regional role and markets that would make Israel a regional economic power was some kind of deal with Arafat and the Palestinians, even if it was not the full withdrawal from the Occupied Territories and Jerusalem demanded by international conventions and UN resolutions.

That price was the 1993 Oslo Accords. As Labour party leader Shimon Peres explained in a newspaper interview in 1992: “All the world is organised like a house with two floors: in the basement the regional agreements. And on the top floor: multinational groups of companies”. He then spelt it out more clearly: “We do not want a peace between nations. We want a peace between markets.”

In other words, and what tends to be forgotten, beneath all the rhetoric and re-branding of the Labour party as the party of peace, lay Israel’s ambition to become the economic powerhouse of the Middle East. Subcontracting to a Palestinian mini-state would enable access to EU and Arab markets, while excluding the Palestinians from Israel’s workforce and preserving a Jewish majority in Israel itself.

But such a “peace” famously initiated on the lawns of the White House in September 1993 could never be more than a chimera. It could not alleviate the appalling social conditions of the Palestinians. Indeed, it was not designed to do so. Israel closed its borders to Palestinian workers and simply replaced low-wage Palestinian workers with workers from Asia. These immigrant workers are cheaper and have even fewer rights than Palestinian workers. While their numbers may seem low, they are proportionately the highest in the world. They have had a massive impact, forcing down wages and social expenditure in Israel, and increasing poverty in Palestine.

So Oslo was bound to be resisted, despite the capitulation of the PLO.

Moreover, within Israel, Oslo was opposed by the very social forces unleashed by the expansion of Israel—the settlers and ultra-religious as well as Sharon, Netanyahu and the Likud. On their insistence, the settlements were expanded.

The collapse of the Oslo framework, the subsequent Intifada uprising in September 2000, the cost of the military suppression of the Palestinians—currently costing $1.4 billion a year—and the continued expansion of the settlements were an unmitigated disaster for Zionist capital and the Labour party. Israel plunged into its deepest ever recession as tourism, its key foreign currency earner and employer, and foreign investment plummeted.

The Greater Israel policy—the expansion of the settlements and the murderous war against the Palestinians—came at a huge cost to the Israeli working class. Firstly, Sharon appointed former International Monetary Fund staffer, Stanley Fischer, to head Israel’s central bank and his arch rival, Netanyahu, to take over at the Finance Ministry. Together they introduced a raft of market “reforms”:

* privatisations

* opening up Israel’s banking system to competition

* cuts in social benefits such as unemployment, child and insurance benefits, and income assistance

* freezing of benefit levels which are to be linked to the consumer price index, not wages, from 2006

* raising the pension age

* cuts in corporate taxes and income taxes for the rich

* anti-trade union laws, restrictions on the right to strike and a ban on strikes in the public sector.

All this was aimed less at reducing the government deficit than undermining social security and creating “labour market flexibility”. Expenditure on the armed forces and settlements, including the roads and infrastructure, increased. These measures have brought unremitting misery, unemployment and poverty to increasing numbers of workers and their families.

The price for US support for Sharon’s land grab—including the extra land seized by the security wall, even if it was not as large as he would have liked—was that Sharon had to be seen to make some minor concession to the Palestinians. Hence Sharon’s unilateral “disengagement” from Gaza—in the teeth of opposition from the ultranationalists and religious forces—for which he was re-branded by the international media as a “peacemaker”.

In reality and from an economic perspective, the pull-out is part of a drive to deepen the isolation of the Palestinians and ensure their absolute separation from Israel in a glorified militarised ghetto. Exports from Gaza have fallen by half. Sharon intended to massively curtail the use of Palestinian labour within Israel. This must in turn lead to further attacks on Israeli wages and social conditions if Israel is to compete in the world market.

As a result of all these factors—a small unviable and autarkic economy, the failure of the economic perspective that underpinned Oslo, the uprising, the military and settlement costs, cheap foreign labour, unemployment and the gutting of social welfare—Israeli workers and their families have seen their living standards plummet. The Zionist dream of a national home for the Jews and escape from oppression and persecution within Israel has turned into its opposite.

Let us consider the social conditions within Israel. First, a few statistics.

Despite some slight improvement in the economic situation over the past year as terrorist attacks have declined, unemployment is nearly 9 percent.

The latest report published by the National Insurance Institute in August 2005 shows:

* Over 1.5 million Israelis, one quarter of the 6 million population, were living below the poverty level, an increase of 119,000 over the previous year

* 23 percent of the elderly live below the poverty line

* Child poverty has increased 50 percent since 1988

* 714,000, or 1 in 5, children go hungry each and every day.

A 2004 survey showed that a shocking 40 percent of children live in poverty, squalor and delinquency, and that another 30 percent could slip into a similar fate. Yitzhak Kadman, director of the National Council for the Child, said: “Israeli society is deluding itself if it thinks that it can give up 40 percent of its children who are the citizens of its future…. There is no chance Israeli society will be able to exist in 20 years, standing on the spindly legs of 30 percent of its children. This criminal negligence of a considerable proportion of Israel’s children who are living in poverty, sickness and neglect is going to cost the state dearly in every way.”

* The proportion of children in Israeli society fell from 39 percent in 1970 to 33 percent in 2002.

* The average number of children per family fell consistently from 2.7 in 1980 to 2.3 in 2002, while the number of single child families doubled.

* There are 50,000 abortions a year, mostly for economic reasons.

All this is in a country where its population is key to its future existence as a Jewish state.

More than 140,000 children living in Israel do not have full Israeli citizenship:

* 71 percent live in East Jerusalem

* 29 percent are children of legal foreign workers in Israel, children of immigrants of unclear status, and children from mixed marriages of Israeli Arabs and Palestinians.

In a recent poll, 80 percent of Israelis considered themselves “poor”.

The head of the National Insurance Institute, Yohanan Stessman, warned that: “Without the welfare benefits, Israeli society would fall apart and we would reach a point of civil war.” Opposition politicians have attacked the Sharon government, saying: “Poverty and inequality are becoming the country’s most serious strategic threat, not its neighbours.” Eli Yishai. the leader of Shas, one of the ultra-orthodox religious parties, said: “The government’s policies undermine the cohesion of our society,” pointing to Finance Minister Benyamin Netanyahu’s cuts in welfare spending and tax breaks that favoured the rich.

The vacuum created by the government’s retreat from welfare provision is being filled by soup kitchens, not-for-profit organisations that provide food for the poor and religious networks. Children as young as 10 have been arrested for stealing food to quell their hunger. There have been newspaper reports of single mothers in Beer Sheva, whose benefits have been cut by 40 percent, approaching supermarket managers to tell them of their plight, and their intention to fill their trolleys and make off without paying. Managers have stood by and let them do it. “There are so many, we don’t stop them,” one said.

While more than 40 percent of those defined as poor have jobs, the government is determined to see wages fall further in order to make Israel “internationally competitive”.

It is these conditions that lie behind the constant strikes and threats of industrial action. In many cases, the workers seek not so much to improve their wages and conditions but simply to get paid. It is not unknown for municipal and other public service workers, including teachers, to go unpaid for months.

These economic and social conditions also help to explain the attraction of the settlements to hard-pressed Israelis. Central government gives twice as much per capita to local government in the Occupied Territories than in Israel. Investment in housing is 5.3 times that of Israel.

According to one Israeli academic, only 50,000 settlers—out of a total 450,000 settler population in the West Bank and East Jerusalem—are hard-core expansionists. Most have moved for “quality of life considerations, tax breaks and cheaper mortgages…. Many want to leave but … nobody will buy their homes.” According to a Peace Now survey, the majority would leave if offered compensation for withdrawal.

Jewish Israeli society is not just divided between rich and poor. It is riven with divisions based on ethnicity and religion. Jews from the Middle East and North Africa have the worst-paid jobs, while Jews of European origin are generally better paid, with an average income of 1.5 times that of those from the Middle East and North Africa.

Israel is also divided along religious lines; between religious and secular Jews, as the religious authorities seek ever-increasing social control over marriage, divorce and travel on Saturday, making it all but impossible for secular Jews to live in Jerusalem.

If the situation is dire for the average Israeli, the situation is much worse for Arab Israelis:

* Average wages are less than half those of the Jews of European origin

* 42 percent of Arab families live below the poverty line

* Every second Arab child (compared with every fourth child in the general population) lives in poverty

* Unemployment is higher than average. While Jewish unemployment rose 53 percent between 1996 and 2001, it rose 126 percent for Israeli Arabs in the same period

* In 2003, the Orr Commission reported, “decades of discrimination against the Israeli Arab minority”. It found a pattern of government prejudice, neglect and discrimination against the one million or more Arab Israelis—the Palestinians who were not forced out of their ancestral homeland when the Jewish state was created in 1948. Arab municipalities are starved of cash and deprived of government-sponsored industrial development

* Educational facilities are much poorer than their Jewish counterparts

* Many long-standing communities are not recognised by the state, refused all services, including electricity and water, and their homes threatened with demolition

* Arab Israelis are more likely to be subject to verbal and physical abuse by the police and security services, and investigation and trials.

While Israel appears to have a relatively high average per capita income that places it within the top 25 countries, this is deceptive. Average income masks the enormous and ever rising inequality within Israel.

* Despite the recession, in 2003, Israel’s richest 10 percent became richer

* In 1994, top managers earned on average 30 times the minimum wage. In 2002, they earned 36 times more

* Their share of total income rose by 5.6 percent in the same period, while the share of the bottom 80 percent fell by between 0.4 percent and 0.8 percent

* Average annual income of the top 10 percent of households was about NIS 42,000, compared to NIS 3,100 for the poorest 10 percent. That is, the richest households have 14 times more income than the poorest

* The gini coefficient, a widely used statistic to measure income inequality, shows that at .38, Israel has one of the highest rates of inequality in the world, second only to the US in the advanced countries.

As elsewhere, the government’s cuts and reforms are directed at further enriching these layers. The emasculation of the labour movement has removed all constraints on them. Whereas in the 1950s, Zionism offered a level of social equality on a par with Sweden, and from the 1960s to 1980s, a standard of living that was on a par with that of the advanced countries, that perspective is in tatters. It is these economic and social conditions that have led to Israel’s political instability and shifting political alliances.

Political conditions in Israel

Once touted as the region’s only liberal democracy, political life in Israel is now in an advanced state of putrefaction. Israel faces a very real threat of civil conflict—and not just between Jews and Arabs. The rise of ultra-religious and nationalist forces after the 1967 war, largely funded by the US, played a key role in shifting Israeli politics sharply to the right, despite their small numbers. Their foremost political patron was until recently Ariel Sharon.

Israel’s political system is made up of a large number of political parties, with constantly changing alliances and new parties. At no point has the majority party ever been able to rule on its own. Coalitions are the order of the day, and the right-wing small parties therefore have enormous power.

While Labour dominated for the first 30 years, the break up of the post-war order and the expansion of Israel’s territories after the 1967 war required a different type of government. The 1977 elections brought a right-wing Likud government to power and since then it has been the dominant party, in government for 23 out of 29 years.

Consider the nature of the Likud prime ministers. Menachem Begin, as leader of the terrorist Irgun, had blown up the British Headquarters based at the King David Hotel in 1946 and orchestrated the massacre of 256 Palestinians at Deir Yassin. Yitzhak Shamir, the leader of the terrorist Stern gang, was responsible for a string of terrorist attacks, including the assassination of Lord Moyne, the British Military Governor in 1944. Ariel Sharon is an unindicted war criminal. Labour prime minister Ehud Barak led murderous raids on the PLO leadership in Tunis in the 1980s, culminating in the assassination of Abu Jihad. No other country in the world has been headed by such a series of infamous thugs.

Israel’s political and business leaders are mired in corruption. Tel Aviv has for some decades been one of the foremost money and stolen diamond laundering countries in the world. Two of the biggest business scandals in Israel’s history took place in 2005, involving money laundering and industrial espionage. Sharon and his predecessors, Ehud Barak, Benyamin Netanyahu and Yitzhak Rabin, were all under investigation for bribery and corruption but charges were never brought.

It seemed at one point when Sharon was prime minister, that he would face the prospect of indictment for bribery when he was foreign minister, in a case that also implicated his successor, Ehud Olmert, until the incoming Attorney General refused to press charges. In a separate case, Sharon’s son, as his campaign manager, is currently awaiting sentencing for illegal campaign contributions during his 1999 election to the Likud leadership.

The Labour party’s perspective is in tatters after a brief and unsustainable makeover as the party of peace by Peace Now. It was this that led them to hand over power to Sharon and Likud, then join and prop up his Likud coalition, and help it force through its military strategy of annexing much of the West Bank. It simply held its nose over Sharon’s Palestinian policy—genocide and ethnic cleansing—that supplanted the promise of a two-state solution embodied in the 1993 Oslo Accords. This is the inexorable logic of the nationalist programme that they embraced, albeit with socialist pretensions, in the early days of the last century.

These economic and social tensions have led to a political realignment. Last November, the left-talking Amir Peretz’s surprise defeat of the 82-year-old Shimon Peres in the Labour party leadership contest triggered a realignment of Israeli politics. He pulled out Labour’s cabinet members from Sharon’s coalition, already rocked by the withdrawal from Gaza, precipitating an early general election, now scheduled for March 28.

While Peretz won the leadership on the basis of ending the conflict with the Palestinians through a negotiated settlement and looking after the interests of ordinary Israeli families hard hit by the Sharon government, he soon began to back-pedal from his leftist rhetoric.

In relation to the Palestinians, he is now insisting that Jerusalem remains the undivided capital of Israel and that the Palestinian refugees be denied the right of return to their former homes in Israel. Such preconditions preclude any possibility of reaching an accommodation with the Palestinians.

In relation to social and economic policies, Peretz offers only minor changes to the government’s free-market policies and an increase in the minimum wage. “I don’t intend to damage the free market and competition,” he declared. “But I intend that the free market in Israel will be a market that serves people and that competition will be fair,” he continued. In other words, he presents no challenge to the basic interests of the capitalist ruling class.

Indeed, Labour’s financial spokesman, a former World Bank economist, hastened to reassure the international financial institutions at the World Economic Forum in Davos that Israel would pursue pro-market policies and would not raise taxes or increase government debt. “We will be more competitive,” he said.

When Sharon’s Likud coalition became unworkable because of settler-religious opposition to Gaza, he pulled out of the Likud party that he had helped to form in 1977 and set up theKadima party, with 14 of his Likud colleagues and several leading Labour MPs, including Shimon Peres and Haim Ramon. Kadima was, until Sharon’s stroke, widely expected to win the most seats in the next parliament, although not sufficient to rule without a coalition.

In so far as Kadima is widely portrayed as a “centrist” formation, this only reflects the extreme right-wing nature of Israeli politics. Its mission is threefold.

* First, to prevent the emergence of any domestic opposition to the annexation of much of the West Bank and East Jerusalem, for which Sharon had gained US approval behind the smokescreen of the withdrawal from Gaza.

* Second, to gain a consensus around Sharon’s right-wing economic and social agenda imposed under his Likud government.

* Third, to curb the influence of the settler movement and the ultra-religious parties that had come to dominate within Likud.

As far as big business and international commentators are concerned, these ultra right-wing forces are an obstacle to the consolidation of secure borders of the significantly expanded Israeli state, the removal of what remains of the welfare state and the rationalisation of military expenditure, much of it taken up with defending the settlers.

While Kadima has won important support from Israel’s political establishment and backing from the Bush administration, its popular support rests upon the so-called peace camp’s ability to promote illusions in Kadima’s readiness to end the military conflict. To this end, Israel’s liberal media and political establishment has stepped nobly into the breach, including the architects of Oslo, Peres and Yossi Beilin. This is despite the fact that Sharon’s perspective for “peace”—and that of all his successors in Kadima—is based on confining the Palestinians within a well-guarded and impoverished ghetto. So, far from being a solution, Kadima’s Palestinian policy is a recipe for continued conflict with the Palestinians, while its neo-liberal economic agenda promises civil strife at home.

Taken together, this means that Israeli workers have no party that represents their interests.

In short, Israel with all its cultural advantages, an educated workforce, and massive aid, is an economic and political disaster, dominated by enormous social inequality. The Israeli government does not represent the interests of the majority of the Jewish people who live in Israel, let alone the Jewish people all over the world. It is the political representative of a section of Israel’s financial elite, a corrupt and venal clique of international gangsters who operate on behalf of their masters in Washington.

The future heralds intensifying conflicts both within Israel and with the Palestinians. Furthermore, Israel’s role as a subcontractor for US imperialism means ever-greater military expenditure and attacks on its neighbours, threatening increasing political and military instability both in pursuit of its own interests and those of the US. While Israeli workers have thus far enjoyed a higher standard of living than their Arab neighbours, this is not set to continue.

All this is a far cry from the secure economic future that the Zionist dream seemed to offer the Jewish people.

This brief review has vindicated the principled approach taken by the Fourth International 60 years ago to the situation in Palestine. The conditions in Israel, Palestine and indeed the whole of the Middle East today differ in no fundamental way from the predictions made by the Fourth International.

The central lessons we must draw from this strategic experience concern the critical responsibilities of Marxists. Our task is to build independent revolutionary parties of the working class, sections of the International Committee of the Fourth International, which base themselves on implacable theoretical firmness and tell the working class the truth.

http://www.wsws.org/en/articles/2009/01/isra-j22.html

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