Capitalism Did Not Destroy the Israeli Kibbutz - It Saved It

Besides financial successes, kibbutzim are enjoying a demographic recovery, which is important given the fact that 80 percent of them are in the periphery.

The Netafim irrigation systems plant on Kibbutz Hatzerim in the Negev.
David Bachar

I want to address the importance and value of the kibbutz movement. Historically, the kibbutzim were able to adopt and adapt themselves to modern times, without losing the backbone of their values and their ability to contribute to industry, the economy and society in Israel. Kibbutzim today constitute a picture of an entrepreneurial, ambitious and successful group.

I remember well the kibbutz of days gone by. In 1949, my wife Miriam and I were sitting with other Palmach members after the War of Independence in the small dining room of Kibbutz Yir’on, on the northern border. The education I received in the Palmach steered me toward being a kibbutznik. I knew Miriam wanted to stay on, but I informed her that I simply wasn’t capable.

I had no problem with the security-settlement ideology of the kibbutzim, which in those years essentially drew Israel’s borders. I had a problem with the kibbutz’s egalitarian-socialist approach. I believed that this method would not succeed because it is unnatural for people. I could not accept that a meeting of members would decide which profession I had to choose and in what field I had to work.

I still have friends in Yir’on. My inability to be a kibbutznik did not take away one iota of my admiration and love toward them and kibbutzim in general. Even today, when I host people in the Iscar factory in Tefen in the Galilee, I show them the dining room of my capitalist kibbutz, in which factory workers and executives sit in the same hall and eat the same food.

Meanwhile, communism has disappeared from the world, and socialism has gathered much dust. Nor is capitalism what it used to be. By the 1970s, an attitude took shape to the effect that industry befitted kibbutzim more than agriculture as a fundamental branch, and this process has picked up since then.

The kibbutzim industrialized, among other reasons, because restrictions relating to water and land, together with sophistication and advanced mechanization, made it impossible for agricultural branches to supply work for all members. Capitalism did not destroy the kibbutz but rather was absorbed into it. It renders community members less egalitarian but still supplies a safety net for weak elements within it.

Kibbutz industries totaled sales of 42.1 billion shekels ($11.1 billion) in 2014, up from 2013. Data for 2015 have not yet been released, but they will probably show a rise of 3.5 percent. Exports grew 4.9 percent, and operational profit rose 3.4 percent. All this came in a period of a general slowdown in the global industrial market. There are many and variegated companies, but over half of them finished 2014 with an operational profit of some 10 percent.

The volume of investments in kibbutz industries, which reflects optimism, grew by 12.6 percent and the rate of research and development has also grown persistently. Kibbutz industries account for 9 percent of all industry in Israel, and those industries demonstrate durability. In the great crisis of 2001 kibbutz industries were barely affected, while the damage they suffered during the big crisis of 2008 and 2009 was no more than the global average.

The inflation index of kibbutz industry is similar to that of Israeli industry. One should notice that kibbutz industry is weak in terms high-tech, which financially is Israeli industry’s strongest engine of growth. This growth, which is focused almost completely on traditional industries, is more impressive and creates many more jobs.

The bottom line is that we see that about 2 percent of the Jewish population is responsible for nearly 10 percent of Israeli industry.

There are still 260 kibbutzim in 2016 that demarcate the state’s borders and cultivate about half its agricultural lands. In the field of industry, the kibbutzim are the biggest employer in the periphery: 50,000 employees work in over 240 factories. The kibbutzim are also enjoying a demographic recovery. This recovery is especially important given the fact that 80 percent of kibbutzim are in the periphery, in the Negev and the Galilee.

In 1909, Joseph Baratz, Nahum Tanpilov, Miriam Baratz, Yosef and Chayuta Bussel and their comrades founded a small settlement on the southern edge of the Kinneret, on the lands of Umm Juni. They called their community Kvutzat Degania because of the five grains (deganim) they grew there. It was the first community from which, ultimately, the entire kibbutz movement grew. Their descendants manage today a successful enterprise for producing industrial compressors, a pesticides factory for agricultural, an industrial silicon factory, and a chocolate and pralines factory. Is that a failure? In my opinion, that’s a great success.

The writer is an industrialist and founder of the Iscar manufacturing concern.