ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The Palestinians: Casualties in Capitalism's Wake: An Essay

Updated on December 10, 2015
wingedcentaur profile image

The first step is to know what you do not know. The second step is to ask the right questions. I reserve the right to lean on my ignorance.


There is a dimension to the Israeli-Palestinian situation that is not very well known, I don't think, and therefore certainly not much discussed, as far as I know. What I'm talking about is the shee role of capitalism itself in this deterioration, the failure of the Oslo Accords.

My source for this essay will come from Naomi Klein's masterpiece, The Shock Doctrine: The Rise of Disaster Capitalism (2007).

She set the stage for this consideration this way: "The last time there was a credible prospect of peace breaking out in the Middle East was the early nineties, a time when a powerful constituency of Israelis believed that continued conflict was no longer an option. Communism had collapsed, the information revolution was beginning, and there was a widespread conviction inside Israel's business community that the bloody occupation of Gaza and the West Bank, compounded by the boycott of Israel by Arab states, was putting Israel's economic future in peril. Seeing the explosion of 'emerging markets' around the world, Israeli's corporations were tired of being held back by war; they wanted to be part of the high-profit borderless world, not penned in by regional strife. If the Israeli government could negotiate some sort of peace agreement with the Palestinians, Israel's neighbors would have to lift their boycotts, and the country would be perfectly positioned to be the Middle East free trade hub" (Klein, p.429).

Klein then went on to quote one Dan Gillerman, then president of the Federation of Israeli Chambers of Commerce (1993). "Israel could become just another state... or, it could become the strategic, logistic and marketing center of the whole region like a Middle Eastern Singapore or Hong Kong where multinational companies base their head offices... We are talking about an utterly different economy... Israel must act and fast to adjust or this once in a lifetime economic opportunity will be missed only for us to say: 'We could have'" (ibid).

We going to see something in this narrative. We are going to see the admittedly fascinating "double-edged sword" nature of capitalism. Note: Israel's business community was agitating for peace because they were excited about how they could profit from "globalization" (otherwise known as neoliberalism, Chicago School, economic rationalism, etc). We're basically talking about tighter and more extensive economic integration of the "periphery," that is, the poor countries of the Third World, with the "core," the rich countries of the First World, especially the United States. For the substantial economic players in Israel, the "conflict" with the Palestinians had the potential to become very, very "bad for business." So, let's "give peace a chance," as John and Yoko used to say.

Let's proceed.

That same year, 1993, the then Foreign Minister of Israel, Shimon Peres, explained to a group of Israeli journalists that the government was going for a 'peace of markets' with the Palestinians, as opposed to a 'peace of flags' (ibid).

Notice also: The Foreign Minister of Israel was saying that the government was going to try to make Israel indispensable to global capitalism, and in so doing, it hoped to accomplish a peace with the Palestinians --- something that decades of war, negotiation, and foreign diplomatic intervention had failed to do. In other words, by "making everybody rich," so to speak, the hope was that Israel's participation in globalization would solve the seemingly intractable political problem between Israel and the Palestinians. In still other words, the Israeli government was basing its ability to make peace with the Palestinians on its ability to "make everybody rich," that is, again, make Israel useful to global capitalism. What if something goes wrong?

A few months later, Israel's Prime Minister, Yitzhak Rabin, Shimon Peres, and the leader of the Palestinian Liberation Organization (PLO), Yasser Arafat shared the 1994 Nobel Peace Prize due to the Oslo Peace Accords. Incidentally, at the time, Arafat's bargaining position was quite weak. He had to negotiate his own return to the occupied territories (he'd been banished from them by Israel, remember). In addition to this indignity, Arafat had not, by that time, managed to secure any agreement on the eventual disposition of Jerusalem, on Palestinian refugees, Jewish settlers, or even Palestinian self-determination (ibid).

Again, despite all of his, the hope on the part of the Israeli government was that a 'peace of the market' would... you know, somehow... lead to the 'peace of flags' (ibid, pp.429-430). Incidentally, this is a familiar emotional response that capitalism brings on; that is to say, the prospect of "making everybody rich," (of course, the term 'everybody' must always be qualified) makes "everybody" think all things are possible. It goes all the way back to the beginning of the England-derived version of capitalism, anyway. Elsewhere I have argued that, in a sense, the Protestant Revolution, was a reaction to the "irrational exuberance" of a period of speculative finance that had preceded it, when the Catholic Church was selling absolution tickets like Wal-Mart coupons.

Naomi Klein points out that at this time, Israel simply could not afford to cut itself off from Palestinian labor for any length of time. Indeed, "its economy could no more survive without Palestinian labor than California could run without Mexicans. Roughly 150,000 Palestinians left their homes in Gaza and the West Bank everyday and traveled to Israel to clean streets, and build roads, while Palestinian farmers and tradespeople filled trucks ith goods and sold them in Israel and in other parts of the territories. Each side depended on the other economically, and Israel took aggressive measures to prevent the Palestinians from developing autonomous trade relations with Arab states" (Klein, p.431).

What Klein is telling us, there, is that Israel had maintained a kind of colonialist mercantilist relationship with the Palestinians. Israel did not want them developing business deals with Arab states that Israel would, naturally, not be allowed to participate in, given the boycott the Arab states maintained against Israel. Add to this, the fact of globalization, and you have an Israeli business community that thought it would be profitable to make peace with the Palestinians.

But there was a problem. The end of the Cold War, with the Soviet Union on the losing end, caused a problem --- not for Israel, per se, but most assuredly for the Palestinians. Also, as a penalty for losing the Cold War, Russia was compelled to undergo structural adjustment or economic "shock therapy."

Naomi Klein wrote: "[T]wo factors that contributed to Israel's retreat are little understood and rarely discussed, both related to the unique ways that the Chicago School free market crusade played out in Israel. One was the influx of Soviet Jews, which was a direct result of Russia's shock therapy experiment. The other was the flipping of Israel's export economy from one based on traditional goods and high technology to one disproportionately dependent on selling expertise and devices relating to counterterrorism" (ibid, p.430).

Expertise and devices relating to counterterrorism.

She went on to say that: "the arrival of Russians reduced Israel's reliance on Palestinian labor and allowed it to seal the occupied territories, while the rapid expansion of the high-tech security economy created a powerful appetite inside Israel's wealthy and most powerful sectors for abandoning peace in favor of fighting a continual, and continuously expanding, War on Terror" (ibid).

What we're looking at here is capitalism's tendency to devalue anything that comes in abundance, even people, according to the law of "supply and demand." Also notice that on the one hand, with the onset of the Clinton administration in Washington (the most vociferous cheerleaders of globalization, after all), Israel's leaders saw it as profitable to make peace with the Palestinians. But, as Russia was undergoing the penalty of structural adjustment for losing the Cold War, and as a result of this, seeing an "influx" of Soviet Jews entering Israel to get away from that suffering, Israel's leaders reversed themselves, now seeing it as profitable to go back to being enemies toward the Palestinians again. Not only that, but Israel's wealthy and most powerful sectors really began to rake it in when they took that show on the road, showing other governments how to "combat terrorism."

Over the course of the 1990s, roughly one million Jews left the former Soviet Union, and moved to Israel, so that now, these immigrants make up more than 18 percent of Israel's total Jewish population (ibid, pp.430-431). On March 30, 1993 the government of Israel began to implement a policy of 'closure,' sealing off the boundary between Israel and the Palestinian territories, for days or weeks at a time. "[B]etween 1993 and 2000," wrote Naomi Klein, "the Israeli settlers living in the occupied territories doubled their numbers. What had been in many places rough-hewn settler outposts were transformed into lush, fortified suburbs with their own restricted-access roads, clearly designed to be an addition to the Israeli state. During the Oslo years Israel also continued to claim key water reserves in the West Bank, feeding the settlements and diverting scarce water reserves to Israel" (ibid, p.432).

Continuing... "Many residents of the former Soviet Union who arrived in Israel penniless after seeing their life savings disappear in the shock therapy devaluations were easily lured into the occupied territories, where houses and apartments were far cheaper, and special loans and bonuses were on offer. Some of the most ambitious settlements --- such as Ariel in the West Bank, which boasts a university, a hotel and a Texas mini golf course --- aggressively recruited in the former Soviet Union, sending scouts and launching Russian-language Web sites. Ariel managed to double its population thanks to this approach, and today it stands as a kind of mini-Moscow, with store signs advertising in both Hebrew and Russian. Half its residents are new immigrants from the former Soviet Union. The Israeli group Peace Now estimates that about twenty-five thousand Israeli citizens living in illegal settlements fall into this category, and it also notes that many Russians made the move 'without a clear understanding of where they were going'" (ibid).

As you know, Israel's Zionist leadership has always presented the state of Israel as a refuge for persecuted Jews. But there's something emotionally exploitative going on here. As Russians were sent reeling from being subjected to capitalism on steroids, if you will, you had Israeli... entrepreneurs, should we call them?, going around and saying to the Russian Jews, 'Come to Israel and get away from this hardship! Come to our homeland of milk and honey!' And so on and so forth.

Furthermore, as Naomi Klein noted, these distressed Soviet Jews were "lured" to Israel, "without a clear understanding of where they were going," namely, formerly "rough-hewn settler outposts," that were "transformed into lush, fortified suburbs with their own restricted-access roads, clearly designed to be an addition to the Israeli state." In other words, over one million Soviet Jews were tricked into making the political situation worse between the Israeli state and the Palestinian people --- from the frying pan of structural adjustment into the frying pan of Israel's occupation of the Palestinian territories. And remember, Naomi Klein told us that an escalation of problems with the Palestinian people is PRECISELY what Israel's leaders wanted because "... the expansion of the high-tech security economy created a powerful appetite inside Israel's wealthy and most powerful sectors for abandoning peace in favor of fighting a continual, and continuously expanding War on Terror."

"In the mid- and late ninetites," Klein wrote, "Israeli companies took the global economy by storm, particularly high-tech firms specializing in telecommunications and Web technology, with Tel Aviv and Haifa becoming Middle Eastern outposts of Silicon Valley" (ibid, pp.432-433).

Here's the 'kicker,' so to speak.

"When Israel's niche in the global economy turned out to be information technologies, it meant that the key to growth was sending software and computer chips to Los Angeles and London, not shipping heavy cargo to Beirut and Damascus. Success in the tech sector did not require Israel to have friendly relationships with its Arab neighbors or to end its occupation of the territories" (ibid, p.434).

Capitalism is very much a "What have you done for me lately?" economic system, that objectifies people. With this high-tech makeover of the Israeli economy, the state no longer had a need for Palestinians to "ship heavy cargo to Beirut and Damascus." Therefore, Israel had NO further 'use' for the Palestinians, and turned them away--- violently.

Incidentally, the reason the Israeli state no longer needed Palestinians in their new high-tech economy, was because many of the Soviet Jews who made the trip were highly trained scientists. "These were many of the scientists who had kept up the Soviet side of the Cold War --- and as one Israeli economist put it, they became 'the rocket fuel for [Israel's] tech industry'" (ibid, p.433).

The dot-com crash hit Israel harder than anywhere else. By June 2001 analysts were predicting that roughly three hundred Israeli high-tech firms would go bankrupt with tens of thousands of layoffs. The only reason what turned out to be an Israeli recession, hadn't been worse was because the government put in a 10.7 percent increase in military spending, partially financed by a cutback in social services (Klein, pp.434-435), which, no doubt did its part to exacerbate class tensions in Israel.

Thank you for reading.


Klein, Naomi. The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Book (Henry Holt & Company), 2007. pp.429-435


    0 of 8192 characters used
    Post Comment

    • wingedcentaur profile imageAUTHOR

      William Thomas 

      5 years ago from That Great Primordial Smash UP of This and That Which Gave Rise To All Beings and All Things!

      Thank you, wmhoward4!

      I respect the passion you obviously feel for this issue, even though our political points of view clearly differ. But I must tell you: I have been horrendously unclear (and the fault is mine, surely) if the message didn't get through that I was specifically naming capitalism as the culprit in the specific issue of the failure of the Oslo Accords, as opposed to Israel necessarily.

      Israel just happens to wield the power in this circumstance, in relation to the Palestinians; this is clearly so since Israel is sponsored by the United States.

      You know, I thought I was concentrating on what I called the "double-edged" character of capitalism: first Israel's leaders thought that the opportunities that awaited them with "globalization" made it incumbent upon them to make peace with the Palestinians, a "peace of markets;" then, due to capitalism as well, as Russia underwent shock therapy as a penalty for losing the Cold War, one million Soviet Jews left Russia and went to Israel, and one of the consequences was that Palestinian labor was no longer needed.

      I must tell you, wmhoward24, I am interested in political and economic structures of power relations, and the objective social consequences this brings about. I am not interested in personalities or a good guy/bad guy narrative of history.

      I must tell you also, this is not a mere opinion piece, which I dashed off the top of my head. It is based on the investigative reporting of journaist, Naomi Klein, author of The Shock Doctrine, which I listed as my source material.

      Finally, I must also tell you: It is a wee bit hurtful to have my thoughtful, if clumsily expressed, thesis and thinking, compared to Nazi doctrine. :D

      But thank you for reading and taking an interest!

      Take care now!

    • wmhoward4 profile image

      William A. Howard IV 

      5 years ago from Baltimore Maryland (USA)

      It is a shame to see the same arguments the Nazi's used against the Jews has been recycled here. The Devil loves to use the kind of hate in the article.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)