Israel’s political economy can be conceptualized as the process of domestic capitalist development which is increasingly interconnected with, and embedded in the broader context of global and regional change. One of the most notable components of this process is differential accumulation ( Nitzan & Bichler , 2002) . This component entails the consolidation and rise of the ruling class in Israel, the most dominant capital groups under the control of this ruling class, and the relationship between them with the changing nature of world capitalism. This relationship can be either reinforcing or conflictual. Given the ongoing changes in capitalism both locally and globally, there is a need for the ruling class in Israel to make a shift in their approach to nationalism. This is from Zionist nationalism to one that entails regional integration and openness (Robinson, 2014; Plessner, 1999) . For a long time, Israel’s capitalism functioned as part of the broader context of superpower confrontation. It also functioned under conditions of stagnation, inflation, and war economy. These conditions necessitated the need for a strong nationalist ideology and an emphasis on ethnicity among other factors. This approach to accumulation was not sustainable and encountered various challenges. The continuous globalization of investment and trade, challenges of inflation and stagnation, and such issues as the Palestinian uprising have necessitated the need for an alternative regime in Israel ( Gordon, 2014; Robinson, 2014; Nitzan & Bichler , 2002) . This regime has been characterized by transnational accumulation and the increased integration of local capital into the global ownership circuits (Robinson, 2014). Likewise, it has also been associated with a deviation from the national consensus and its associated attributes, focus on individualism as opposed to collectivism, the decline of a welfare state in favor of sound finance, and lastly, the disintegration of organized labour as the power of businesses continue rising. With this background, this essay explores the political economy of Israel in the context of its uniqueness and classes.
The actions of any nation-state are often dominated by an amorphous group that is comprised of rule makers, state officials, and central-decision makers. This group of individuals is allegedly driven by the need to further the national interest. As a result, the group plays a vital role in the achievement of such broad macroeconomic goals as a desirable balance of payment and growth. The group is also essential in meeting such macro-political aims as social stability and military prowess. These goals are often perceived as being independent of the specific interests of numerous societal groups. Likewise, the aims of a nation-state are often conceptualized in aggregate terms. In the context of this aggregate framework, practitioners often subdivide society into economics and politics. In Israel's case, the economic system has not been able to guarantee universal welfare ( Nitzan & Bichler , 2002) . This shortcoming is associated with inefficiencies. Israel’s political system undermines this efficiency in its quest to meet such additional goals as national security. This is exacerbated by the failure to strike a balance between meeting security goals and advancing the nation’s economic growth while taking into consideration the production possibilities of the nation.
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Israel’s military expenditures are aimed at deterring the nation’s potential enemies from initiating war and ensuring that it easily achieves superiority in case of war. This justification of military spending makes it difficult to assess a military expenditure program’s success of failure. On the other hand, while the Israel society is free, democratic, peace-seeking, and focused on improving its people's quality of life just like other nations, it has been coerced into a state of being in a constant war ( Nitzan & Bichler , 2002; Nitzan & Bichler , 1996 ) . The economy is also wholly subjugated to the state. This implies that the nation’s economic goals are driven by the natural need for the state to survive. When planning for such survival, economic growth cannot be left out even if it is not one of the intended objectives. This is because economic growth acts as a means of facilitating the establishment of a solid defence system which is necessary in light of future wars. In this case, the nation is concerned with its ability to respond to the increasing challenges in the weapon market globally as well as its ability to maintain its competitive advantage and position. To achieve the two, Israel has to focus on domestic dexterity among other strategies. It should also focus on looking into the future and preparing adequately in response to this future.
The uniqueness of Israel is first driven by the fact that as opposed to other democracies, the country has been characterized by a continuous state of war. This has been initiated by the nation's hostile neighbours ( Robinson, 2014) . As a result, applying the narrative of the military-industrial complex in terms of a conspiracy by the leaders of the defence, political, and economic establishment in a bid to further their interests cannot be applied. Israel has experienced war continuously since its establishment ( Nitzan & Bichler , 1996 ) . Also, the broad nature of the war in Israel coupled with the importance of security to the nation have created a scenario whereby the various civil spheres fall within the security scope and are characterized by secrecy. Thus, beyond the political and ideological disagreements that are common in Israel, the threat to the nation’s survival as driven by the Arab-Israeli dispute cannot be overstated ( Gordon, 2014; Nitzan & Bichler , 2002) . Israel is also unique in that its founding fathers put in place an authoritarian and socialist culture. Israel's challenges are closely tied to this culture. Specifically, a socialist culture is bound to result in a statist bureaucracy. Subsequently, the statist bureaucracy dampens the people's drive to engage in private enterprise ( Plessner, 1999) . This drain's the vitality of a society consequently resulting in chronic stagnation. This is the case in Israel. For instance, the government predominates the economy making Israel one of the most socialist nations. The government’s budget exceeds the country’s gross national product (GNP). Also, various controls are instituted on the actions of private-sector companies, government officials, and individual citizens. The country is thus bound to be affected by the democratic west and the east that is centrally controlled.
Israel is unique in that, until recently, the country is unlike other capitalist societies. The nation’s history can be traced back to a trilateral relationship between three key factors. These include the pioneering elite who stamped their control via political parties, the settlement movement, and the bureaucratic classes that recognized the relationship's dominance. For instance, political parties had tremendous powers in the party state. Therefore, power and the Israeli society's historical course were anchored on its formal political sphere and was put in the hands of its political elite ( Nitzan & Bichler , 2002) . Over time, emphasis on the primary role of decision makers and politics was used in the separation of economics and politics. It was also used as a means of diverting attention from Israel’s class structure. Notably, control was seen to be wielded by former army officers and politicians. It can be argued that since the two groups were from a non-capitalist background, class conflict was not relevant in Israel. Owing to this phenomenon, Israel was viewed as a classless society. In this kind of society, it was safe to ignore such issues as the consolidation and growth of the ruling class; the capital accumulation process; resource ownership in the country; income distribution among the citizenry; the methods of legitimation and persuasion; economic power control; and lastly, the means of violence. Recent developments have resulted in increased economic integration, the creation of a business structure that is highly concentrated, a more developed and industrial mass production system, and lastly, the growth of wage earners in the urban areas.
References
Gordon, Y. (2014). When genocide is permissible. Retrieved from https://archive.fo/RPf3M
Nitzan, J., & Bichler, S. (2002). The global political economy of Israel: From war profits to peace dividends . Pluto Press.
Nitzan, J., & Bichler, S. (1996). From war profits to peace dividends: the new political economy of Israel. Capital & Class , 20 (3), 61-94.
Plessner, Y. (1999). The political economy of Israel. Retrieved from https://www.meforum.org/articles/2006/political-economy-of-israel
Robinson, W.I. (2014). The political economy of Israeli apartheid and the specter of genocide. Retrieved from https://truthout.org/articles/the-political-economy-of-israeli-apartheid-and-the-specter-of-genocide/
