Israel's "New Economy" and the Intifada: A note on the boycott campaign [part 1]
21/04/2002
by Naxos
This article is Copyleft [see below]
December 2001. At one end of London's Oxford Street the Palestine Solidarity Campaign has mounted a picket on Selfridge's department store, to persuade the management to stop selling produce from Israeli settlements in the Occupied Territories.
A similar campaign has been organised [March 2002] by Ya Basta in Italy (http://www.yabasta.it).
In this article I take these actions as the starting point for a discussion of the radical transformations that have taken place in the Israeli economy during the past decade, and Israel's very specific location within the global knowledge economy.
To Summarise:
I would argue that Israeli capitalism of today offers a precious microcosmic possibility for the study of immaterial labour in action. It is also crucial that we understand this economy, because in a real "world war" sense our futures depend on what is happening here.
In recent years the Israeli economy has undergone fundamental changes. An entirely new class composition was created by the ex-Soviet migrations of the 1990s. Markets for traditional Israeli produce became more restricted. The Internet created the conditions for transnational exports of high-value immaterial labour (knowledge) products to replace previous low-value products with high transit costs. And the nature of the new knowledge economies opened new interstitial possibilities for insertion. A new and technically skilled workforce proves capable of creating the flows of innovation that are the precondition for the survival of the large capitalist firms of this and the preceding era (head-hunting of promising new start-ups). Among other things, Israeli companies are particularly well-suited to meet the new demand for biomedical products. They also have a powerhouse of R&D represented by the Israeli Defence Force's high-tech academies. And they have a guaranteed point of entry into the US military-industrial complex by virtue of lines of communication between "Silicon Valley" and the "Silicon Wadi" of Northern Israel. More than this, Israel also exports models of behaviour - biopower - in the form of knowledges of how to limit, constrain and eventually crush dissident behaviours. This is marketed as "methods for defeating terrorism", but is in fact a set of methods for the creation and freezing of an adversarial "other".
I shall deal with each of these aspects in turn. In passing I would say that this conjunctural shift in the Israeli economy, this radical change in the composition of both class and capital in Israel, have been the necessary precondition for - and partial explanation of - the Israelis' radical break with the Palestinian labour-power which had served previous phases of production (notable in agriculture and construction). Put briefly, the inflow of Soviet ("Russian") Jews made possible the break with Palestinian labour power. And simultaneously the Soviet Jews have turned out to be the electoral bedrock of the Israeli government's "final solution" for the Palestinians.
Thus the political and economic precondition for Israel's radical break with Palestinian labour-power was the shift from traditional forms of agriculture and manufacture into the arena of immaterial labour which took place in the 1990s.
But more than that, I would argue that the Israelis' war with the Palestinians operates as a "factory of immaterial labour export possibilities". This war is, in a real sense, productive for the Israeli economy.
Calls for boycotts of Israeli produce are symbolically significant and completely worthwhile. A necessary element of ethical hygiene. They should be supported. But the way in which the campaign is framed is simple-minded to the point of naivety. We are not talking a few packets of pretzels, a crate of Jaffa oranges and a face-pack of cosmetics. Two things need to be said. First, Israel's new immaterial economy and its immaterial-labour products are organically integrated into the very highest levels of the globalised high-tech communications, military and security economy. Second, and perhaps more importantly it appears that the trade-mark Israeli model of suppression of opponents has been exported and projected onto the world stage, to become the dominant paradigm of US foreign policy.
The characteristics of this model are (a) radical negation of the Other (for several decades, in Israeli discourse the Palestinians have always and only been "the terrorists"; (b) Preventive security strikes, extending increasingly to assassination; (c) micro-level capillary monitoring of populations at all levels, and installation of administrative and technological means to that end; (d) intransigent and defiant unilateralism.
We are at a crucial turning point. After the first phase of the Afghan war world opinion seemed to be expecting a Powellisation of Israeli policy (towards negotiation). Instead we have seen a Sharonisation of American policy [Note 1].
1. The necessity of leaving the old economy.
A large part of Israel's "old economy" consisted of agricultural products. Citrus fruits in particular. "Twenty years ago Israel's main industry was oranges."
By the early 1950's, fuelled by mass immigration and large capital investments, the citrus subsector grew rapidly. Hectarage rose from 14,000 to over 40,000 hectares. With the well respected "Jaffa" label Israeli oranges and grapefruit dominated many markets. However, by the late 1970's stiff competition from Spain, Morocco and Cyprus and changing consumer tastes led to a levelling off of demand. The 1980's saw a major decline in international competitiveness and profitability with more than 20% of its planted citrus area uprooted, packing houses mothballed and volume levels falling to 1930's levels. Several factors led to Israel's decline. These included: a) rapid cost inflation in the mid 1980's; b) the strength of the $US vis ā vis European currencies; c) a rise in international shipping costs in the early 1980's; d) financial crisis within Israel's agricultural settlements. [Note 2] We may also adduce the resulting dependence on Palestinian or foreign migrant labour; the use of agricultural land for housing (eg in Jaffa); susceptibility to international trade boycotts; and the fact that water is a military resource in the Middle East. Exporting oranges is to export water.
I shall not deal here with the question of the diamond trade, except to note that it lies at the heart of some of the warmongering which is destroying a good part of Africa. For example the gangster economy in Sierra Leone, and in Liberia "a major centre for massive diamond-related criminal activity, with connections to guns, drugs and money-laundering throughout Africa and considerably further afield. Diamonds are a key part of Israel's economy. [Note 3]
2. The material precondition for a new economy
The first precondition for the "new economy" is highly skilled technical labour-power. That was provided by the mass arrival of the "Russian" Jews emigrating from the Soviet Union. Coming in two distinct waves, with the second in the 1990s. Upwards of 600,000 arrived, and many of them were highly skilled personnel - doctors, lawyers, musicians, scientists and computer programmers. More than 13,000 doctors arrived in Israel, more than half of them women. The health service could only absorb 20%, leaving the rest excess to requirements and needing to be redeployed elsewhere. The "Russians" constituted 15% of the 4.5 million electorate, had their own political parties, and were notoriously hostile to any negotiation with the Palestinians.
A further 600,000 went to the USA and settled in the Los Angeles area. In 1999 an article in the Los Angeles Magazine spoke of an emerging Russian underworld in the LA region: "They come from a dog-eat-dog ëdemocracy' where the shortest books in the library are the ones on business ethics and criminal justice, they're not only tougher and slyer, but their crooks, according to our cops, are the smoothest thing since iced vodka." [Note 4] In LA there was talk of a Russian mafia, with organised gangs involved in kidnappings, financial fraud and Internet crime. Some of this talk has since been denounced as racist. However the newly emerging transnational diasporic Israelo-American nexus constituted by "the Russians" clearly invites analysis. A job for another time.
3. Conjunctural factors in the promotion of high-tech sectors
The global "knowledge economy" took off in the 1990s. Special factors applied in Israel, assuring the rapid growth of a networked society. During the Gulf War the threat of Iraqi rockets and gas/biological weapons set in place "national emergency planning", whereby communities used Internet and related technologies as a means of civil defence, thereby turning Israel into one of the world's most wired societies.
By law, all Israeli houses built since the Gulf War are required to have a secure room that can function as a shelter against terrorist attack. Israel is also dotted with "neighbourhood response centres" "Located in the basement of a community center, the command room is staffed by citizen volunteers and army conscripts. Radios and ubiquitous cell phone links, as well as homing beacons and microphones built into settlers' cars, allow travellers to be closely tracked, and let authorities know right away when trouble is developing." [Note 5]
The presence of excesses of skilled and unemployed immigrant labour was a pressure in the direction of innovation. By its nature the emerging immaterial sector of the Internet and communications was a huge, lumbering thing, open to experimentation, but most of all subject to the pressures of its own growth. In growing very big very fast it opened interstitial possibilities for small start-up companies. There was a huge need for innovation. Small start-up companies could get big very fast. And intelligent applications were required in order to clear the blockages imposed by the scale of the sector's growth.
"With revenue growth for PC chips slowing, communication chips have become the hottest growth area in the semiconductor market [...] "The driving force is the increased demand for bandwidth in every aspect of communications, whether it's home users accessing the Internet, providing a corporation, or the emerging demand in the third world. The demand is literally everywhere." [Note 6] This sector has a strong presence of start-up companies in Israel. The US-based giant Intel, suffering from the drop in demand for PC chips, moved to buy up communication-chip companies. By 2002 Intel-Israel, with 5,0005 employees in Jerusalem, Haifa and Kirya Gat, had exports of $2 billion, compared with $810m the previous year, a growth deriving from the opening of a new plant at Kiryat Gat. [Note 7] The Israeli government provided favourable terms and conditions for high-tech start-up companies, creating "technological incubators" in areas such as Yokneam. The Israeli company DSP, which has developed chips used in wireless and mobile phone communications, was recently sold to Intel for $1.6 billion. [Note 8]
At this point a large part of Israeli intervention in the high-tech sector was interstitial - seeking emerging niche possibilities within the overall growth of the sector:
For instance when "Year 2000" (Y2K) emerged internationally as a problem area, Israeli company Sapiens International [Note 9] built a Year 2000 remediation niche and staffed it almost entirely with immigrant Russian programmers. These were people who had worked for Soviet governments building computer systems for the railway, oil and auto industries. About 70 of Sapiens's 100-strong staff were emigré Soviet Jews. The firm also applied itself to another window of conjunctural opportunity - Europe's changeover to the euro currency. And it built a specialisation in converting computer systems from old languages into new languages (converting assembler code into C code). [Note 10] Remediation was a key word at this stage - upgrading and problem-solving in older computer systems.
This new Israeli high-tech sector operated through the extended networks of the Jewish diaspora, seeking opportunities for fleet-footed action and innovation. In a sense the diaspora offers a metaphor for the new realities of the cybertariat within immaterial labour. Networks and connections meant that the "Silicon Wadi" which emerged in Israel became a fundamental, necessary and integrated part of the "Silicon Valley" operating in the USA.
The technology park at Yokneam, for instance, has a twinning relationship with St Louis. The American-Israel Chamber of Commerce organises trade visits of small Israeli companies to St Louis, where future trade relations are developed with the likes of Boeing. Similar trips were organised by the AICC of Minnesota, which has the four largest medical devices companies in the world (and the Israeli immaterial labour sector is developing a strong presence in biomedicals and high-tech healthcare - see below) [Note 11].
4. Israel as a military economy
Israel is a highly militarised society. Decades of war (against the British, against the Arabs, and internal war against the Palestinians) has created a powerhouse of military techniques and technologies. These include hardware (rockets, bombs, guns and ammunitions) and systems (integrated battlefield computer systems), and also the "bio-power" spin-off of the production of mindsets, philosophies and ways of being in the world.
Israel Military Industries was founded in 1933, producing munitions to fight the British. In 1990 it became a government owned corporation. A 4,000 workforce, of whom over half are engineers, scientists and technology experts. It recruits top-level skilled personnel, the product of Israel's prestige military academies. As well as traditional armaments, it also has a telecomms subdivision, IMI Telecom, which "specialises in the field of telecommunications and electronic commerce". [Note 12] Capitalising on its unique experience as a wired society geared to daily disaster mitigation and capillary counterinsurgency, it was well placed to exploit the niche offered by America's vulnerability to the attacks of September 11. On 5 February 2002 it organised an international "National Emergency Management" seminar for foreign local and national governments and private companies. In a real sense this is an Israeli export of imaterial labour. As is the output of another of its "factories" - the IMI Academy for Advanced Security and Anti-Terror Training, a large campus with an interdisciplinary team of instructors who are "all former commanders from elite Israeli security units". [Note 13]
To this extent we can say that the Israelis' war against the Palestinians is effectively a productive sector, a factory of expertises and techniques which are then marketed worldwide.
Another case in point is Krav Maga. This is a self-defence martial arts technique. Created and developed by the Israeli Army, Krav Maga is not only the official combat system of the Israeli Army, but is also taught in Israeli schools as part of the curriculum. It has a characteristically Israeli vocation of democracy: "It is our belief that everybody, no matter what age, weight, gender or body type, has the right to defend themselves and their loved ones." The method was developed to suit everyone - men, women, children, old people - as a way of saving their own lives or minimising harm from attack. It developed originally in the 1940s, in training elite units of the Hagana and Palmach, and embodies "preventive self-defence". It is a stance, a whole way of being in the world, based on objective paranoia and pre-emptive preparedness. Ariel Sharon (formerly of the Hagana) is of this school. I suggest that as well as being exported to the world as a martial arts technique, this stance is being marketed as a geopolitical product. [Note 14]
5. Israel's integration into the US military-industrial complex
The Gulf War provided moments of both tension and cooperation between Israel and the US military-industrial complex. As the price for Israeli restraint and inactivity in the face of incoming Iraqi missiles, the US and Israeli military collaborated in the production of anti-missile devices. One of these (designed to combat Katyusha missiles incoming from S. Lebanon) was the Tactical High-Energy Laser (THEL). However there are also tensions. Ehud Barak was forced by Bill Clinton to renege on a contract with China, already signed, for supply of Phalcon AWACS surveillance systems. [Note 15]
The business opportunities accruing to Israel from the September 11 attacks includes interest in a "revolutionary explosives sniffer device" - again a spin-off from Israel's war with the Palestinians. The MS-Tech company developed the "Mini-Nose for Detection" with 80% of the funding being provided by the US Department of Defense and theMinistry of Defense. Company founder Moses Shalom is also negotiating with Ion Track Instruments, which provides security systems for the perimeters of jails. [Note 16]
What is more interesting than these public manifestations of collaboration is what happens behind the scenes in universities and research institutes.
One of the new paradigms of military thinking is C3I - command, control, communications and intelligence - operating in cyberspace. "The rapid progress in computer power and miniaturization in the 1980s and 1990s made it possible to think of introducing computers and computerized systems into every element of combat, including the complex and often incoherent environment of gound battlesÖ Every component of US military forces is now being designed and rebuilt around computerized weapons, systems, and C3I". [Note 17]
It is no surprise that the Israeli military plays a role in the development of these US military systems. Intelligence Online reported in 2000 that "The US concern Mercury ComputerSystems, a leading manufacturer of computers able to gather and analyse signal intelligence, has just signed a $1.2 million contract with Israel's defence ministry" for research collaboration. [Note 18]
Israel is known for its military academies which provide advanced research bases for the cream of the country's high-tech personnel. However this "national" personnel operates within the global context of the diaspora, and is equally at home in the military-industrial complex of the USA. A detailed search through lists of US university personnel would throw up many people who trained initially in Israel and then moved to the US to pursue further studies. One person whose research has both an Israeli and a US dimension is Professor Ouri Wolfson of the University of Chicago at Illinois. His project funding ranges between the US Air Force Office of Scientific Research and the Isaeli Academy of Sciences and Humanities. He has developed a DOMINO software, designed for tracking cars and aircraft, which was developed with the US Army Research Laboratories. Wolfson's early research was in computer science at the Technion University of Haifa. (In a civilian spin-off from this, a company has been set to provide systems for lorry freight companies to track their vehicles).
I suggest that this would be a good time to return to the 1960s US radical methodology of charting interlinking directorships between companies in order to establish the true nature of Israel's involvement in this newly-emerging global military-industrial economy. Some of this information can be gleaned from NASDAQ share flotation documents. [Note 19]
NOTES
1. Interview with Alain Joxe, Multitudes No. 7, Paris, December 2001.
2. S. Carter, Global Agricultural Marketing Management, FAO, Rome, 1997. Available on-line at http://www.fao.org.
3. "Criminal diamond trade fuels African war, UN is told", by Victoria Brittain, Guardian online edition, 13 January 2000. I cannot say whether Israeli companies are involved in the dirty side of this trade, but in 2000 the American Drug Enforcement Administration sent a team to train Israeli police in how to detect and seize money from drug dealing. Article in Intelligence Online, at http://www.indigo-net.com/intel.html. See also Note 19 below.
4. Thomas Cornay, in Los Angeles Magazine Internet edition, March 1999.
5. Eli Lehrer, in The American Enterprise Online, December 2001, p. 2.
6. "Specialty chips find their niche", by Wylie Wong, http://news.cnet.com,
5 April 1999.
7. Article at http://www.start-ups.co.il, 12 February 2002.
8. ibid.
9. The name itself suggests a vocation for globalised immaterial labour. http://www.sapiens.com
10. Article at http://www.cnn.com, 19 September 1999.
11. http://www.aiccmn.org
12. http://www.imi-israel.com
13. ibid.
14. http://www.krav-maga.com. There was a similar export of "stance" in Britain's global marketing of Margaret Thatcher's privatisation agenda in the 1990s.
15. Articles in Pravda On-line, 20 December 2001 and Arabicnews.com, 14 May 1999.
16. Dror Marom. "US Cos interested in Israel's MS-Tech explosives sniffer", http://new.globes.co.il, 18 December 2001.
17. Rochlin, Trapped in the Net, Princeton University Press, 1997. Online summary.
18. Article at Intelligence Online, at www.indigo-net.com/intel.html.
19. Where are they now? For instance, Tamir Segal, whose "Truster" technology featured in the Guardian On-line on 21 January 1998: "How much would you pay to know when people are lying to you? How about $149? Because that's what Israeli based Makh-Shevet is asking for a software package that turns your multimedia PC into a lie detector." The technology was "originally envisaged for the security forces at entry points into Israel (a military version is undergoing tests)". http://www.truster.com. And "Danny Yatom, who was forced to resign as head of Mossad last April following an abortive attempt by Israeli agents to assassinate Khaled Meshal, the political boss of Hamas, in Amman in September 1997, has switched to making a living in business." Yatom, "infamous for his creative torturing techniques and well known to many Palestinians who were tortured under his supervision" (Ghazi Saudi, article at http://star.arabia.com, November 2000) is cited in an exemplary article by Christian Dietrich, in connection with the firm Strategic Consulting Group, and its involvement in Kazakhstan, Algeria and "a large security project in Angola". Angola, significantly, is diamond country. Christian Dietrich, "Blood Diamonds: Effective African-based monopolies", in African Security Review, Vol. 10, No. 3, 2001, available at http://www.iss.co.za/Pubs/ASR/10No3/Dietrich.html.
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