The Idealistic Economic System of the Israeli Kibbutz

From the Trobriand Islanders' economic system, which took centuries to reach the state that Malinowski observed, we turn for our final example to a system that was created more or less instantaneously. The kibbutz may serve as an instructive example of the creation of economic institutions within a context of religious idealism and political necessity. The survival of the kibbutz as part of the modernizing economy of Israel shows the adaptability of economic systems. It thus serves as a bridge to the subse­quent discussion of how economic systems change.

The Israeli kibbutz is a collective settlement in which members jointly own the means of production, provide their own labor for all work, and share in the allocation of goods and services according to need. In 1971 there were 229 kibbutzim located throughout the rural areas of Israel, with some 85,000 inhabitants (2.8 percent of the Israeli population). The average population of a kibbutz is 350.

The first kibbutz, Kvutsa Degania, was founded in 1910 on the banks of the Sea of Galilee. Degania and the small communal settlements that developed later differed from the fleeting Utopian experiments that had been attempted elsewhere in that they were part of a larger struggle to es­tablish a homeland for the Jewish people. Zionists returning to Palestine at the end of the nineteenth century were faced with a desolate land and an impoverished Jewish population of little more than 25,000. All attempts at Jewish colonization through the method of private ownership and wage labor had failed, forcing the first pioneers to employ cheap Arab labor or to accept support from philanthropists abroad. The communal life even­tually was seen as the most viable way of colonizing the wastelands, de­veloping Jewish agriculture, and maintaining physical security. The kib­butzim, as they came to be called, were the vanguard of a movement that culminated in the creation of the independent state of Israel in 1949.

Though formed out of practical necessity, the kibbutzim were de­signed to fulfill the Zionist-Socialist vision of a new society. The new pio­neers sought a return to the soil and productive labor for the Jewish peo­ple, who had for so long been divorced from agricultural occupations. They were also eager to leave behind the ghetto exploitation of their East­ern European background and establish a more egalitarian society along Marxist lines. The kibbutz fulfilled these goals and over the years suc­ceeded in absorbing hordes of immigrants into the new society and fa­cilitating the transition of the Jewish people to an agricultural life.

The kibbutz is organized around the Marxian principle "from each according to his ability to each according to his needs" within the possi­bilities of the commune. A newly formed kibbutz leases nationally owned land and is provided with public funds for capital which it eventually re- pays. All means of production are owned by the group. Wages, private property, or private economic activity are not allowed. There are no class divisions between employer and employee. The administrators of the farm are democratically elected but enjoy no special privileges; all decisions on the economic and social life of the commune are made by the members themselves.

Each kibbutz is run as a single competitive farm; given the prices of inputs and outputs it faces, the kibbutz acts as a profit-oriented unit, with the major exception that, in principle, it will not hire workers. Thus labor inputs are limited to those that can be provided by the members of each kibbutz.

Profits, however, are not the only goal of the kibbutz. Most of the economic activity of the kibbutz has as its aim development of the com­munity and the country as a whole providing a decent standard of living for its members. Noneconomic considerations often govern the economic sphere. This can be seen in the following considerations:

1. Settlements are often located in new and undeveloped areas rather than in populated areas where economic prospects would be better. The locations of these new kibbutzim are often de­cided on the basis of strategic needs rather than economic viability.
2. The kibbutz does not calculate whether borrowed capital will
in every case leave a profit after interest has been paid. It is often considered sufficient if a loan develops a farm or industry, allows for the employment of older people, etc.
3. While many kibbutzim would be large enough to produce one or two commercial crops efficiently, the ideology of the kibbutz has fostered a commitment to intensive mixed farming. Pioneers were anxious to avoid specialization in export crops that would have identified them as a colonial economy. They also believed that mixed farming would allow for the distribution of risk, for rotation of crops, as well as for more equal distri­bution of labor during the year and a larger range of job oppor­tunities for members.

In recent years many kibbutzim have been turning away from an ex­clusive concern with agriculture to development of a broader economy based on industry. Because of increased efficiency in agricultural produc­tion, much of the kibbutz labor has become available for nonagricultural activities. The profitability and growth potential of industry is seen as a means of providing the kibbutz with a better chance than with agriculture to be economically self-sufficient. Industry also provides a range of skilled occupations as well as less rigorous jobs for older people no longer able to work in the fields. Nearly two-thirds of the kibbutzim have started at least one factory. Most of these factories are small scale, with an average of about 50 workers per plant. In 1968, 171 factories (producing metals, wood, plastics, agricultural machinery, irrigation pipes, and the like) ac­counted for 30 percent of kibbutz income compared to only 10 percent in 1960.

Factories are run democratically, incorporating group rather than individual decision making wherever possible. Top management officers are elected; although management training is offered, skills are usually learned on the job.- Studies have shown that these cooperatively admin­istered industrial enterprises can be as efficient or more efficient than man-agerially controlled units. A 1965 survey found that kibbutz labor was 26 percent more productive than private wage earners and that capital was invested more productively by kibbutz factories.

Future growth of kibbutz industry is threatened, however, by a severe labor shortage. At present, an estimated 50 percent of kibbutz factory workers are hired labor, an ideological anathema to kibbutz members. Some regard mergers and joint ventures with neighboring kibbutzim as a means of overcoming this problem; other solutions involve growth of the kibbutz from an average population of 350 to one of a few thousand, forming large agricultural-industrial complexes.

Almost half of the kibbutz members work in the service sector— the kitchens, laundries, schools, and so forth. The work of the kibbutz is outlined by work committees, which submit to the kibbutz an overall plan for the year; this is broken down into smaller units. Jobs are assigned by a work organizer, and in order to avoid establishing power elites the top jobs are rotated. Efforts are also made to rotate undesirable jobs. There are no wages and no material bonuses for work well done—the only in­centive is the respect of the community, the only punitive measure public opinion.

The collective consumption of the kibbutz operates under two main principles: provision of all the needs of the population, as determined col­lectively, and equal distribution regardless of what type of work the mem­ber is doing. Collective consumption encompasses all the major and minor needs of the individual and family—food, housing, clothing, medical care, culture, entertainment, vacations, full social security in illness and old age. The method of distribution varies according to the commodity involved. While items such as work clothes, toilet requirements, and cigarettes are given freely on the basis of need, housing is allocated on a more compli­cated basis—a point system based on seniority, age, health, and family status. Many kibbutzim try to allow for a degree of personal choice in items such as clothing and furnishings by specifying only a given price range for cer­tain items. Gifts from outside the kibbutz are usually allowed.

Though the kibbutz autonomously decides its living standards accord­ing to its financial situation at the time, pressures to keep up with outside trends make it difficult to lower those standards. Thus, planning of con­sumption becomes a more difficult problem than planning of production, since in consumption there is more emphasis on satisfying needs and tastes than on running a sound economic operation.

Though austerity characterized the kibbutz from its beginnings until Israeli statehood, the picture has changed considerably. Living standards rose in the 1950s, paralleling the general trend throughout the country. Today many kibbutzim are quite affluent operations. The kibbutz has suc­ceeded in keeping pace with and exceeding the very high growth rate of Israeli agriculture. Output per worker on the kibbutz has risen roughly fourfold in the past 20 years. In the early 1950s the kibbute enjoyed a seller's market, straining to feed the quickly growing population of Israel. By the end of the decade, agricultural surpluses began to grow, leading to more careful planning in the 1960s to meet home needs. Industrial crops, products for canning, and especially exports received greater stress. Though Israel is a capitalist country, its public sector—the part owned by the government, the Zionist institutions, and the Histadrut (General Federation of Labor)—account for nearly half of its gross national product (GNP). Ninety percent of the land in Israel is nationalized, belonging to the nation through a joint body of the government and the Jewish National Fund. It is leased to settlers for long terms at relatively low rents. Because of the national ownership of land and public financing, there is a high de­gree of agricultural planning. Each branch of agriculture works according to production quotas for the whole country. The government also fixes prices and is a decisive factor in determining the relationship of prices to production costs through its credit policy, interest rates, subsidies, im­port and export duties, and the like.

Government policy over the years has been directed specifically to­ward developing agriculture, even at the expense of economic efficiency. Tariffs, subsidies, and quantitative import restrictions have been used to increase the viability of the agricultural sector. Loans have been made at low interest rates, frequently so low that the real rate of interest was nega­tive; a major part of the fixed and working capital needs of kibbutzim have been provided by the public sector. Also, public development projects such as irrigation and afforestation have been provided to the kibbutzim.

The kibbutz is run through a weekly general meeting in which mem­bers who are over high school age are entitled to vote. The general meeting elects a secretariat, including a secretary and coordinators in such areas as finance, economics, labor, education, culture, and so forth. These coor­dinators run the day-to-day operations of the kibbutz, consulting regularly with committees of elected kibbutz members.

The kibbutz system of child rearing and education, one of its most controversial aspects, aims to introduce children to the values and habits of collective life. From birth onward, children live in dormitories organized by age group. However, attachment to parents is reinforced from the be­ginning. For the first six weeks of a baby's life, the mother does not work but feeds and cares for her child. In addition, a trained nurse, who will stay with the same child through adolescence, looks after the baby. Though children generally live apart from their parents, they return to their par­ents' home after the workday ends and stay with them until bedtime.

As children grow, they are organized into groups of five or six super­vised by their nurse. Within these groups, children are taught proper eat­ing habits, cleanliness, and discipline. They are exposed systematically to a wide variety of sports, crafts, nature tours, educational games, and the like, so that all children, irrespective of parental leanings, have equal access to all forms of expression. All kibbutz children receive a full high school education. Some very large kibbutzim have schools of their own, but two or more settlements usually operate a regional boarding school from which children come home for weekends and once or twice a week.

In kibbutz society, the relationship of the family to society is com­pletely changed. It has no economic functions, since collective production and consumption have replaced the family as the basic economic unit.

Though the family raises children, its function is no longer dominant among the factors shaping collective education. The family remains at the center of communal life, however, and is still the basic unit.

The kibbutz style of life has freed women from many of the duties and chores traditionally assigned to them. The woman is no longer eco­nomically dependent on her husband and is no longer tied down to full-time care of her children. She is guaranteed equal rights in the community. Despite these freedoms, the reality of the kibbutz shows that women have to a great extent remained in subordinate roles. Though some women oc­cupy top kibbutz jobs, the majority continue to work in traditionally female-oriented jobs such as child care, education, and services (sewing, laundry, kitchen work).

Inhabitants of kibbutzim often cite the impressive fact that 80 per­cent of their youth choose to remain in the kibbutz after growing up, thus demonstrating the continued viability of the collective way of life. Yet doubts have begun to creep in as to whether increasing affluence and the disappearance of the pioneer spirit will lead to a reemergence of property instincts.

The threat exists that without a real material struggle to engage youth, communalism will give way to careerism and individualism. There also remains the question of whether the egalitarian system developed in the commune can survive too much industrial growth, with its parallel risks of managerial cliques and depersonalization.
Given the adverse political and economic circumstances in which the kibbutz movement was begun, however, it must be regarded as an unusu­ally successful experiment in creating a new type of economic system. It has allowed settiers to pursue their religious and philosophical ideals. Amer­ican visitors to a kibbutz often report that they find the prevailing sense of cooperation, community, and egalitarianism a pleasant experience.

The kibbutz economy seems to have surmounted many of the prob­lems that plagued nineteenth-century American economic experiments: Continuity from generation to generation seems assured; internal produc­tion and consumption patterns are meshed with the outside economic world; prosperity has not destroyed the idealism and social position that developed under conditions of economic hardship. "As Israel's economy has surged, the kibbutzim are becoming burgeoning industrial complexes and tourist attractions."