Citizenship and stratification in an ethnic democracy

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Citizenship andstratification in anethnic democracyGershon Shafir & Yoav PeledPublished online: 02 Dec 2010.

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Citizenship and strati® cation in anethnic democracy

Gershon Sha® r and Yoav Peled

Abstract

A theoretical framework of multiple citizenship discourses is proposed foranalysing the transformation of the structure of ethnic relations in theyishuv and Israel. An historical overview indicates how Israel’s‘incorporation regime’ for its main ethnic and religious groups –ashkenazim, mizrachim, Orthodox-Jews, citizen and non-citizenPalestinians – was constituted through a hierarchical combination of threecitizenship discourses: a collectivist republican discourse, based on the civicvirtue of ‘pioneering’ colonization; an ethno-nationalist discourse, based onJewish descent, and an individualist liberal discourse, based on civic criteriaof membership. It is suggested that Israel’s historical trajectory hasconsisted in its gradual transformation from a colonial to a civil society, andconcomitantly in the gradual replacem ent of its republican citizenshipdiscourse by a liberal discourse. Finally, the dilemmas of its ethnic andreligious groups in choosing between the liberal and the ethno-nationalistcitizenship discourses in the current period are charted.

Keywords: Israel; Palestinians; citizenship; republican virtue; liberalism; ethno-nationalism.

I. Introduction

The 1990s have witnessed a dramatic transformation in the structure ofethnic relations in Israel. By recognizing the PLO as the legitimate repre-sentative of the Palestinian people and beginning to withdraw fromPalestinian territories it occupied in 1967, Israel began to emancipate themost subjugated of its ethnic groups. This about face was all the moreunexpected since the Israeli-Palestinian con�ict was long considered oneof the world’s most intransigent. A more careful look at Israeli societywould reveal, however, that Israel’s policy change on the Palestinianissue was part and parcel of a profound and wide-ranging process ofeconomic, social, political and cultural transformation.

In the �rst half of the 1990s the Israeli economy was growing at thepace similar to that of the East Asian tigers. Especially impressive was

Ethnic and Racial Studies Volume 21 Number 3 May 1998© Routledge 1998 0141-9870

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the number of gainfully employed people in Israel which rose by 40 percent in the decade 1986–1996, compared to 16 per cent in the US, 11 percent in Japan, and about 5 per cent each in Britain, France and Germany(Caspi 1997). Between 1975 and 1995 Israel’s GDP itself grew seven-foldand its ‘dollar product’ increased by about 600 per cent. By the end of1996 these high growth rates brought the per capita income of Israelis to$16,690, which ranked them number 21 on the international incomescale. In April 1997, in recognition of its rapid growth, Israel, togetherwith Singapore, South Korea, Hong Kong, and Taiwan, was added by theIMF to its list of developed countries.

But economic change, impressive as it may be, is only one indicator ofthe emergence of a ‘new Israel’. Among the multiple and interlockingchanges in the society one can list the decline in the prestige of the mili-tary and in the motivation to perform military service; the rush ofstudents to business and law schools; the adoption of an embryonic billof rights in the form of two constitutional laws dealing with civil rights;the disappearan ce of the Histadrut – the all-encompassing political-econ-omic umbrella labour organization – and its replacement with a muchweakened trade union-type structure; and the rise of an autonomous andself-con�dent business community.

The peace process is deeply embedded, then, in a broader liberalizationprocess, and the opposition to peace re�ects, to a large degree, people’sapprehensions about liberalization. Any serious attempt to comprehendthe character of ethnic relations in the ‘new Israel’ requires therefore abroad-based theoretical framework that would encompass both past andcurrently contending socio-economic models and their correspondingcultural visions. Such a framework can be provided, we argue, by examin-ing Israel’s competing and evolving discourses of citizenship. By ‘citizen-ship discourses’ we mean political and linguistic strategies of membershipfashioned out of alternative combinations of identities and claims.Citizenship, conventionally conceived of as a civic mechanism ofincorporation, is locked in battle, in multi-ethnic societies, with identitypolitics that seek to use particular criteria of membership as a basis forclaim-making. Thus citizenship discourses are employed in competitionover access to rights allocated by state and para-state institutions. As aresult, citizenship, instead of solely levelling status differences, can actu-ally function as a tool of strati�cation (Peled and Sha�r 1996; Sha�r 1998).

Theories of citizenship form a rich intellectual and political traditionin the history of Western political thought. Through the two and a halfmillennia of its evolution, the concept of citizenship has adapted tomultiple social transformations, so that it now comprises alternativeconceptualizations of membership and the rights that accompany it(Sha�r 1998). This heterogeneity, we shall show, is the key to the useful-ness of the concept of citizenship for the analysis of ethnic relations inIsrael. Our argument will proceed as follows: a theoretical discussion of

Citizenship in an ethnic democracy 409

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different citizenship discourses will be followed by an examination of thediscourses prevailing in Israel and their resultant ‘incorporation regime’.We shall then outline the ways in which Israel’s citizenship structure andethnic relations have been changing over time and shall conclude with anassessment of the dilemmas that are facing Israeli society in the contextof these changes.

II. Citizenship discourses

Three important discourses of citizenship can be identi� ed in thetradition of Western political thought: liberal, republican and ethno-nationalist. The liberal conception of citizenship accents personal liberty,that is, it views individuals, and only individuals, as the bearers ofuniversal, equal and publicly af�rmed rights. Individuals, in either theutilitarian or contractual liberal view, are the sovereign authors of theirlives who pursue their private rational advantage or conception of thegood, and are not beholden to the community. The role of politics in thisapproach remains negative: only to aid and protect individuals frominterference by governments in the exercise of the rights they inalienablypossess. In return for this protection, individuals undertake certain mini-mal political duties – pay taxes, vote periodically, obey the law, serve inthe military. Consequently, citizenship, in the liberal view, is an acces-sory, not a value in itself. What citizenship actually consists in, on thisaccount, is a bundle of rights designed to protect each individual’s privatesphere from encroachment by her/his fellow citizens and, especially, bythe state.

Liberalism’s strength lies in its ability to tolerate religious, cultural andpolitical diversity by creating a self-limiting political realm respectful ofindividual rights and an institutional framework within which polarizingdisputes are avoided by permitting the political expression of only thoseconceptions of the good that are not monopolistic. Even the moresocially conscious liberal theorists, such as Rawls, emphasize that nonotion of liberal justice may be viewed as a comprehensive moraldoctrine but only as a practical modus vivendi which allows the emer-gence of an overlapping consensus of moral principles between oppos-ing doctrines (Rawls 1971; 1993).

The liberal notion of citizenship is currently being challenged on twofronts. In the US, a civic virtue-based, republican or communitariancritique contends that citizenship should be seen as constituting a moralcommunity. Communitarians retain the ancient Greeks’ view of politicsas the hub of human existence and as life’s supreme ful�lment. Politics isa communal affair, and citizenship is an enduring political attachment.Citizens are who they are by virtue of participating in the life of theirpolitical community, and by identifying with its characteristics. Membersof this community experience, or should experience, their citizenship not

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intermittently, as merely protective individual rights, but rather as activeparticipation in the pursuit of a common good. If we amplify political lifeby demanding more from the citizen, as Old�eld’s emphasis on dutiesindicates, that citizen’s existence will be richer and will lead to a moreful� lling and morally inspired life. Active participation is the core of thecitizens’ civic virtue and the criterion entitling them to a differential shareof the community’s material and moral resources (Sandel 1982; Taylor1989; Old� eld 1990).

A third version of citizenship, one that originated in German roman-ticism and spread to Eastern Europe, roots membership in a special kindof community: the nation or ethnic group. In the ethno-natio nalist, orvölkisch, approach, citizenship is not an expression of individual rightsbut of membership in a homogenous descent group (Greenfeld 1992).This notion of citizenship expands the concept’s purview outside therealm of politics. Nations, in romantic nationalism , are all radically differ-ent from each other because their members possess distinct culturalmarkers, such as language, religion and history. Since, on this view,nations are inscribed into the identity of their members, ethnic national-ism denies the possibility of cultural assimilation (Brubaker 1992).

Of these three conceptions of citizenship, the individualist liberal oneis the most inclusive. However, it has been pointed out by critics such asGiddens (1985), Held (1989), Gorham (1992) and Tilly (1992) that eventhe meaning of liberal citizenship is not immediately revealed by itsformal characteristics alone. For civil, political and social rights with theircorresponding institutions establish not only entitlements but mechan-isms of surveillance and control and arenas of political contestation aswell. Thus, the precise meaning of citizenship and non-citizenship in eachsocial context, that is, the extent to which either of them empowers ordisempowers individual and collective members of society, is subject topolitical negotiation and struggle. Moreover, while the liberal discourseof citizenship, being the most universal, is commonly the one put forthfor legitimational purposes, the actual practice of citizenship in eachparticular society may consist of two or more discourses of citizenship,superimposed on one another (Smith 1988).

The coexistence, not only of multiple citizenship rights but also ofalternative citizenship discourses within the same society, poses anumber of sociological questions. For example, how does the multiplicityof citizenship discourses affect social strati�cation in a particular case?And, given the con�icting views of these discourses on the issues ofinclusion and exclusion, what is left of the universalis t claims made onbehalf of citizenship as full membership in society? These questions canbest be answered, we submit, if by ‘citizenship’ we understand not onlya bundle of formal rights, but the entire mode of incorporation of indi-viduals and groups into the society. For such an understanding directs ourattention to a whole gamut of speci�c social institutions and raises


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meaningful empirical questions as to the method, variety, scope anddynamics of memberships and incorporation.

The mode of incorporation, combining both formal, written principlesas well as informal social practices, has been termed by Yasemin Soysal‘incorporation regime’: a pattern of institutional practices and more orless explicit cultural norms that de�ne the membership of individualsand/or groups in the society and differential ly allocates entitlements,obligations and domination (Soysal 1994). Incorporation regimes, ingeneral, can be thought of as forming concentric circles, in which theboundaries become more rigid as one moves towards the periphery:inclusion in internal circles is based on the force of habit or custom,whereas in the outer ones it is based on force and the sanction of law.Movement towards the centre indicates social mobility, since it impliesmore rights and greater access to resources.

III. Israel’s incorporation regime

Historically, Israel’s incorporation regime was constituted through acombination of all three citizenship discourses discussed above: a collec-tivist republican discourse, based on ‘pioneering’ civic virtue, an ethno-nationalist discourse, based on Jewish descent, and an individualis tliberal discourse (Peled 1992). The combination of the three discoursesin Israeli political culture was the effect of a number of social processesthat intersected at critical historical turning points: the politicization ofJewish ethnicity in the Pale of Settlement; the legitimation of Zionism’sterritorial vision by the secularization of part of Judaism’s legacy; theseparatist Jewish colonial settlement in Palestine; the voluntarily electedinstitutions of the Zionist movement and the yishuv (Jewish communityin pre-statehood Palestine); the 1948 war and the �ight and expulsion ofthe majority of the Palestinian inhabitants; and the massive Jewish immi-gration from North Africa and the Middle East in the state’s early years.The political culture that emerged from the intersection of these socialprocesses may be analysed as a pattern of interaction between the exclu-sionary dimensions of Israel’s colonizing and nation-building practices,and the inclusionary aspects of its democratic state institutions.

In many ways Zionist discourses of national redemption resembledEastern European romantic nationalism (Anderson 1983, p. 136). Seek-ing to nationalize an ancient religious community, and to legitimize itssettlement project in Palestine, secular Zionism forged the solidarity ofthe yishuv around ethnic Jewish identity. Since the establishment of thestate, the ‘Law of Return’ (1950) has guaranteed automatic citizenshipto any Jew upon immigration to Israel, without any length-of-residenceor language requirement. This law became the most important legalexpression of Israel’s self-de� nition as a Jewish state. It establishedethno-nationalist citizenship that, in principle, encompassed all Jews, and


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only Jews, by virtue of their ethnic descent. This citizenship discoursealso guaranteed the privileged position of the true keepers of the faith –religiously orthodox Jews – in Israeli society (Shapiro 1996, pp. 46–69).By the same token, it ensured the secondary citizenship status of Israel’snon-Jewish citizens.

Israel’s constitutional de�nition as a Jewish state precluded the possi-bility of adopting one of the key identifying features of a liberal state –the separation of state and religion. Instead, Jewish religion, or moreaccurately, Orthodox Jewish religion, is guaranteed an important role inthe country’s public life. This is manifested primarily in four importantareas: legal sanctioning of the observance of the Sabbath and of Jewishholidays in the public sphere; the almost exclusive jurisdiction grantedreligious courts over matters of family law; state support of religiouseducational institutions that are largely autonomous of the generaleducational system; and various privileges granted Orthodox individuals,most importantly, the exemption from military service granted Orthodoxwomen and Orthodox yeshiva students.

The privileged status of Jews and of Orthodox Jewish religion makesthe question ‘Who is a Jew?’ an important political issue. Over the years,the of�cial de�nition of ‘Jew’ has become progressively restricted andmore closely aligned with orthodox thinking. However, this restrictioncame into con�ict with the demographic aim of Zionism to produce,maintain and increase the Jewish majority in Israel. As a result, the Lawof Return was amended in 1970, so that one Jewish grandparent is nowsuf�cient to entitle a person and her/his spouse to the privileges providedby the law. Thus, it is estimated that up to 20 per cent of the immigrantsfrom the former Soviet Union in the early 1990s, and fully 60 per cent bythe mid-1990s, were not Jews by the Orthodox de�nition (Bar-Mooha1997a, 1997b; Haaretz 1997). Similarly, the Jewishness of the Ethiopianimmigrants is also questioned by the Orthodox rabbinic establishment,although in their case the questions do not refer to individuals but ratherto the community as a whole. Since marriages, divorces and burials areall under the exclusive jurisdiction of religious authorities (whetherJewish or non-Jewish), these non- and doubtful Jews run into problemswhen they come to need these services, unless they convert to Judaism.One paradoxical result of the amended Law of Return, then, is thedevelopm ent of a diverse new non-Jewish, non-Palestinian group. Thein�ux of foreign workers into Israel, that began with the intifada and wasaccelerated after the Oslo accords, is augmenting and fragmenting thisdiverse cluster even further.

Palestinians who had not �ed or been expelled from the territory ofthe State of Israel during the 1948 war were either granted, or allowedto apply for, Israeli citizenship. They were placed, however, in asystematically dependent economic, political and legal position (Lustick1980; Kretzmer 1990; Smooha 1990; Lewin-Epstein and Semyonov 1993).


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Their secondary citizenship status was formalized in 1985 in an amend-ment to the law governing elections to the Knesset. That amendmentstated:

A list of candidates shall not participate in elections to the Knesset ifits goals, explicitly or implicitly, or its actions include one of the follow-ing:(1) Negation of the existence of the State of Israel as the state of the Jewish people; (2) Negation of the democratic character of the state;(3) Incitement of racism.

Ironically, the declared purpose of this amendment was to prevent racistand anti-democratic political parties from participating in Knesset elec-tions. And, indeed, Meir Kahane’s ultra-nationalist Jewish party wasdisquali� ed in 1988 for violating clauses (2) and (3). However, judicialinterpretations of the amended law made the demand to turn Israel froma Jewish state to a state of all of its citizens, that is, to equalize the citizen-ship status of Jews and Palestinians, a violation of clause (1). Thus, theamended law reaf�rmed the liberal citizenship rights of Israel’s Palestin-ian citizens as individuals, but excluded them as a group from the core,ethno-republican citizenship reserved for Jews only (Peled 1992).

While Zionist ethno-nationalism resembled other Eastern Europeannationalist discourses, Zionism, unlike them, needed to seek out a terri-tory for immigration and colonization. Thus, as a settlement movementZionism bears important similarities to other European overseascolonial societies established through territorial struggle with nativepeoples (Sha�r 1989). Like other ‘pure settlement colonies’ with theirown immigrant labouring classes (Fredrickson 1988), Zionist bodiesaimed at creating a relatively homogenous settler-immigrant population.To overcome the competition of lower-paid Arab workers, who success-fully displaced Jewish workers accustomed to a ‘European standard ofliving’, a subsidized economic sector, settling and employing only Jews,was formed. The main institutions of this vertically and horizontally inte-grated cooperative community were the Jewish National Fund and theHistadrut. These became the two pillars supporting the political predom-inance of Labor Zionism in the yishuv and in Israeli society. The‘redemptive’ pioneering activities necessitated by this new economicsector – physical labour, agricultural settlement, and military service –became the core of a new, republican conception of virtue. Thus, out ofthe Jewish-Palestinian con�ict over land and labour there emerged asecond citizenship discourse that established those committed to themoral purpose of state-formation through colonization as a virtuousrepublican community. Labor Zionism, located at the overlap betweenthe Jewish ethno-national and the republican citizenship discourses,


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enjoyed the bene� ts of both and constituted an ethno-republicancommunity.

Whereas the ethno-nationalist citizenship discourse encompassed allJews, the republican discourse divided and strati�ed them. Around thecore of the virtuous immigrant-settlers, who actively participated in theLabour movement’s colonizing and military activities, there formed aperiphery of passive citizens entitled to a smaller share of societalresources. The latter’s contribution to Zionist redemption was viewed asquantitative, rather than qualitative: by immigrating to Palestine theyhelped bring closer the day when Jews would form a majority there(Sha�r 1991). Most ashkenazi (European) immigrants, but especiallythose from Russia, Lithuania and Poland, had institutional or family tiesto the core, and were able to share in its aura of ‘pioneering’ , whether ornot they actually participated in pioneering activities (Shapiro 1976);most mizrachi (Middle Eastern and North African) immigrants wererelegated to the periphery (Swirski 1989). An ‘ethnic gap’ in politicalpower, income distribution, occupational status, and educational attain-ment between ashkenazim and mizrachim has persisted and, in somerespects, even widened, to this day (Kraus and Hodge 1990, pp. 66,68;Schmeltz et al. 1991, pp. 109–12; Nahon 1993a, 1993b; Smooha 1993;Haberfeld and Cohen 1995; Lewin-Epstein et al., forthcoming).

The republican citizenship discourse has discriminated between IsraeliJews not only on the basis of ethnicity, but also on the basis of gender.In addition to the well-known general factors that make for women’ssubjugation in Western democratic societies, Israeli Jewish women havesuffered from speci�c burdens imposed by two characteristics of Israelisociety as a colonial society: the close linkage between civic and militaryvirtue, typical of the republican discourse, which is enhanced by theArab-Israeli con�ict, and the numerical inferiority of Jews in the MiddleEast that has infused Israeli Jews with demographic anxiety. While mili-tary service is mandatory for both men and women, only men areconsidered to possess military virtue. Women, regardless of their occu-pational status, are under pressure to excel in the ‘battle of the cribs’against Palestinian women. As a result, individually, Jewish Israeliwomen enjoy fewer rights than male members of their social group in thecivil and social spheres and, collectively, they are denied full membershipin the republican political community. The emphasis on maternity aswomen’s primary contribution to the common good has had a devas-tating effect on women’s struggle for equality, even in the most egali-tarian sector of Jewish society – the kibbutz.

Jewish Israeli women have been marginalized not only by the repub-lican discourse but also by the discourse that claims the unity of all Jewsas its highest value – the ethno-nationalist discourse. The most signi�cantaspect of the non-separation of state and religion in Israel is the fact thatreligious courts enjoy almost exclusive jurisdiction over all matters of


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family law. As Jewish (and Muslim) religious law treats women as asubordinate class of persons, Israeli family law has a pronounced pro-male bias. This is manifested in marriage and divorce laws that discrim-inate against women, in a restrictive (though not prohibitive) abortionlaw, and in an unquestioned acceptance of the traditional patriarchalmodel of the family as normative (Hecht and Yuval-Davis 1978; Azmonand Izraeli 1993; Jerby 1996; Berkovitch, forthcoming).

Thus, although the ethno-natio nal discourse has provided thestrongest glue for the nation-building project of Zionism, it has alsoharboured a powerful principle of division and strati�cation. Mizrachimand Jewish women, regarded as ful�lling the demographic task of procur-ing a numerical Jewish majority, were accorded a diminished citizenshipstatus. On the other hand, Jewish religious Orthodoxy, viewed as acrucial legitimator of Zionist aspirations, was privileged in manyrespects. Orthodox Jews have not only been accepted as full citizens ofthe state, but their corporate cultural rights, typical of the pre-modernnotion of citizenship, have also been guaranteed. These guaranteesshould not be confused, however, with the recognition of minority ormulticultural rights. The cultural autonomy granted to orthodox Jewsallows them not only to lead their own autonomous life but to controlkey aspects of the life of all Jews in the country.

Israel’s liberal citizenship discourse also has its roots in the yishuvperiod. The yishuv was a democratic republican community where indi-vidual liberal rights and the formal, procedural rules of democracy wererespected. This was mandated by its semi-voluntary nature and the needto keep all Jewish social sectors within its bounds, for demographic andlegitimational purposes.

When the State of Israel was founded in 1948, a new republican civicvirtue, mamlachtiyut, was invoked to legitimate the transition to state-hood. This ethos emphasized the shift from sectoral interests to thegeneral interest, from semi-voluntarism to binding obligation, fromforeign rule to political sovereignty. Equal application of the law was ofparamount importance if the state was to assert its authority over thevarious Jewish social sectors, which had enjoyed a large degree of auton-omy in the yishuv, but also over the Palestinians, who had become aminority in Israeli territory at the conclusion of the 1948 war, and underthis principle were granted Israeli citizenship.

As understood in the context of mamlachtiyut, the uniform rule of lawdid not entail, however, a neutral, liberal state or a universal, liberalcitizenship structure. The state was to continue to be committed to thevalues of chalutziyut (pioneering) and to demand such commitment fromits citizens. Mamlachtiyut, then, was not meant to displace the pioneer-ing mobilizing ethos or abandon the settlement project; quite thecontrary, it was meant to endow them with the organizational and politi-cal resources of a sovereign state. Thus, under the legitimational guise of


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universal liberal citizenship, individuals and social groups continued tobe treated by the state in accordance with their presumed contributionsto the common good as de�ned by the Zionist project (Peled 1992).

In sum, this process of differential incorporation proceeded in anumber of stages. First, the liberal idea of citizenship functioned to sepa-rate citizen Jews and Palestinians from the non-citizen Palestinians in theoccupied territories and abroad, whether these were conceptualized asrefugees or as stateless, rightless subjects of Israel’s military occupation.Then the ethno-nationalist discourse of inclusion and exclusion wasinvoked to discriminate between Jewish and Palestinian Arab citizenswithin the sovereign State of Israel. Lastly, the republican discourse wasused to legitimize the different positions occupied by the major Jewishgroups, ashkenazim and mizrachim, men and women. The innermostgroup, consisting of Jews, enjoyed not only liberal and ethno-natio nalistrights but also the privileges of republican citizenship: participation, to agreater or lesser degree (ashkenazim more than mizrachim, men morethan women), in the de�nition of the common good of society. Thus, thetension between the exclusionary and inclusionary categories ofmembership in the yishuv and in Israeli society has been expressed in ahierarchical and fragmented citizenship structure. The state and relatedinstitutions (most importantly the Histadrut) have been mobilizingsocietal resources and dispensing rights, duties and privileges, in accord-ance with this multi-layered and complex index of memberships.

IV. The transformation of Israeli citizenship

The historical trajectory of Israel’s development since 1948 has consistedin the gradual decline of the republican discourse and the gradual trans-formation of the society from a colonial to a civil society. This trans-formation has accelerated signi�cantly since the mid-1980s, to the pointwhere it might be thought of as a ‘bourgeois revolution’. Its parallels inthe UK and the US, the Thatcherite and Reaganite ‘revolutions’, werepresented as revival movements – returning to a period that hadpreceded massive state intervention . In Israel, however, there never wasa period approximating free enterprise. So the change there is more radi-cal, even though it is not likely to go as far as it did in the UK or the US,because it has shallower roots and the opposition to it is more potent. Inthis section we shall brie�y review the interlocking changes making upthis revolution, in the areas of economic organization, ethnic relations,social welfare and constitutional law.

Historically, Israel’s Jewish, ashkenazi, state-building élite had utilizedthe republican conception of citizenship in order to legitimize the privi-leges it derived from its association with colonial settlement and itsconsequent control of the state and of other public institutions, mostnotably the Histadrut. In the mid-1960s, however, some members of this


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élite began to call for liberalization of the economy and society, in orderto remove the political and social impediments that, they felt, wereplaced on economic activity by its subjugation to the Zionist nation-building agenda. In 1976, the Democratic Movement for Change [DMC],a political party representing the professional, academic and part of thebusiness segment of this élite, had ceded from the Labor Party andgained �fteen Knesset seats (out of 120) in the general elections held inthe following year. This party drew most of its votes from the ranks ofLabor, thus allowing Likud to take power for the �rst time. (Labor lostnineteen Knesset seats in 1977, Likud gained four seats and the DMCwon �fteen.)

Initially, Likud’s efforts to liberalize the economy failed and resultedin hyper-in� ation, because it could not secure the cooperation of theHistadrut, still controlled by Labor. Only when Labor joined Likud in agovernment of national unity in 1984, was an effective policy of disin-�ation and economic liberalization, known as the Emergency EconomicStabilization Plan [EESP] of 1985, put into place. This plan aimed notonly at stabilizing the economy by bringing down the triple-digit in�ationbut went much further in transforming the Israeli economy from aprotectionist and state-centred system to a much more open, neo-liberalone (Kochan 1992). Additional actions taken in subsequent years werethe paring back of the government’s role in the capital market, easing offoreign currency regulation, elimination of many import quotas, a slowprocess of privatization, and so on (Shalev 1992). These measures tiltedthe balance from public to private interests and concerns and fromworkers’ organizations, �rst and foremost the Histadrut, to organizationsrepresenting employers and �nancial institutions.

The background to this radical change was provided by the desire toterminate the drawn-out stagnation of the Israeli economy following the1973 Arab-Israeli war. The momentum which allowed the process ofeconomic liberalization to go further than originally intended had itsroots in the ‘peace dividend’ which ensued from the peace accord withEgypt, signed in 1979. The reduction of in�ation, of the budget de�cit,and ultimately of some aspects of the state apparatus and state control,became feasible in large measure with the reduction in the share of mili-tary expenditures in the GNP, from 20 per cent in 1979 to 10 per cent inthe 1986–1988 period and close to 8 per cent in 1991 and 1992. The Iran-Iraq war and the recasting of US aid from loans to grants bolstered thisprocess even further (Ben-Zvi 1994, pp. 227–28; Brodet 1994, p. 225).

Whereas reduced military expenditure permitted budgetary cuts andlowered in�ation, it also had a signi�cant impact on the military-indus-trial complex. This complex had been built up after the 1973 war and hadacted, since the late 1970s, as the driving force of Israel’s economicgrowth and as a disseminator of knowledge for advanced high technologyindustries. The complex of military industries became the main source of


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export growth, moving Israeli industry from import substitution indus-trialization to genuine export-orientation. Defence corporations in-cluded three of Israel’s top �ve corporations and had become majorearners of foreign currency. Not only did military production producerelatively high added value but it also helped to pry open doors for Israelicivilian products.

The turn towards peace and reduced purchase schedules by the Israelimilitary has adversely affected the military industries, the pro�tability ofmany private and Histadrut-owned companies producing for the military,and, �nally, the status of the military itself and of the republican citizen-ship discourse with which it was associated. While the military-industrialcomplex declined, it left a legacy of a new economic direction. The accel-erated differentiation of military and civilian high-tech production beganin Israel about half a decade before the end of the Cold War, when someof the military-trained and recruited technological and managerialmanpower moved to private and/or civilian industry as employees andentrepreneurs. The cumulative result of all these changes was that a newmodel of socio-economic development became both possible and neces-sary.

One of the most important aspects of this new model of developmenthas been the emergence of a self-con�dent business community and of acohort of politicians, academics, journalists and civil servants with similarviews. This new élite has adopted values that are more consonant with aliberal discourse of citizenship than with the ethno-republican discourseof pioneering virtue. They have been promoting liberal reforms in vari-ous areas of social life, in addition to the economy: civil rights, the elec-toral system, health care, education, mass communications, and so forth.Thus, the emergence of a ‘new Israel’ is a multifaceted phenomenon,manifested not only in the economy but in the cultural, legal, political andsocial spheres as well. No area of social life seems to be immune now fromsweeping changes that question the legacy of the formative colonial eraand its tradition of republican values and citizenship practices.

The most telling outcome of this transformation has been the reduc-tion of the Histadrut from an all-encompassing political-economicumbrella organization that embodied the values of pioneering republi-can citizenship into a weak trade union federation. The practice of collec-tive bargaining, performed mostly through the Histadrut, that ensured ameasure of equality in the distribution of income, is declining and beingreplaced with personal contracts. As a result, poverty is on the increaseand various indicators point to a growing disparity between the socialclasses (Skira Kalkalit 1996). A growing segment of the working class hascome to depend on government transfer payments in order to reach theminimum wage. The method adopted for privatizing Histadrut- andstate-owned �rms is their sale on the stock market. NotwithstandingIsrael’s socialist traditions, according to which the Histadrut’s companies


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were owned by its members, few creative ways were sought to transferpart of these properties to the membership or to public institutions.

In the sphere of social welfare there is a powerful thrust to make theprovision of social services means-tested , rather than universal (Doron1994, unpublished). Reduction of the national budget share that goes toeducation, in the 1980s, led to the emergence of ‘grey education’ –privately funded courses on school premises in neighbourho ods whereparents can afford to pay for them. Privatization of public land (currentlycomprising 90 per cent of the country’s land area) is contemplated andthe use of land leased to kibbutzim and moshavim to pay off debts seemsa �rst step in that direction. Politically, the power of political parties andtheir authority over their Knesset members is declining, due to increas-ing reliance on intra-party primary elections and the direct election ofthe Prime Minister. These new electoral methods have added to thepolitical clout of business people and concerns that can contribute topoliticians’ election campaigns, at the expense of political parties and theHistadrut. Since in Israel social class correlates very strongly with ethnic-ity, the growing class inequality that has resulted from these develop-ments translates into growing disparity between the main ethnic groups:ashkenazi Jews, mizrachi Jews and citizen Palestinians (Ben-Ami 1997).

The capstone of liberal reform was the adoption in 1992 of two consti-tutional laws (‘basic laws’): Freedom of Occupation and Human Dignityand Freedom, designed to give pride of place to civil rights within thelegal edi� ce. This legislation was appropriately viewed by legal observersas a ‘constitutional revolution’ because it expressly established the twobasic laws as standards by which future legislation (and in the case ofBasic Law: Freedom of Occupation past legislation as well) should beevaluated. In this way the principle of judicial review of primary legis-lation was introduced into Israel’s constitutional system (Barak 1992,1994; Kretzmer 1992).

It is indicative of the direction of these changes that the freedom ofeconomic activity was grounded in a constitutional law, while other butequally basic civil rights and liberties, such as the right to equality beforethe law and the freedoms of expression, religion, association and assem-bly, are yet to be constitutionally guaranteed. Efforts to introduce basiclaws that would guarantee these rights have faltered on the opposition ofthe Jewish religious parties to any constitutional legislation. Theirconcern is that such basic laws could be used to nullify much of thereligious legislation that has been passed over the past �fty years(Kretzmer 1992). The same fate was met by a proposal to enact a basiclaw guaranteeing social rights, introduced by the Histadrut. As a result,it is quite possible that Basic Law: Freedom of Occupation would be usedto undermine many of the rights currently enjoyed by Israeli workers andmuch of the country’s progressive social legislation (Ben-Yisrael 1994).

This process of economic, legal and cultural transformation is still


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partial, and is riled with contradictions and occasional reversals. Threedevelopm ents that seem to contradict the tendency of the state tocontract have been the nationalization of health insurance in 1994; therenewed underwriting by the state of �xed-interest non-tradable bondsfor pension funds; and the increase of state subsidies to Jewish religiousinstitutions. This appearance may be misleading, however. Nationalizingthe health insurance was a crucial measure in an effort to undermine theHistadrut, which had owned the largest health care system and providedmedical services to over 70 per cent of the population. This has led to thedecline of publicly supplied health care and to its partial privatization,and is likely to lead to much more widespread privatization in the future.The rescue of the pension funds by the state was an emergency measure,done under the threat of serious economic dislocations. Increased subsi-dies to Jewish religious institutions is a political pay-off to Netanyahu’scoalition partners, a standard Israeli practice.

In sum, the �nal decline of the republican discourse has stemmed fromchanges in the global and Israeli political and economic realities, such asthe peace accord with Egypt; the world-wide economic liberalization andthe opportunities it offered to Israeli industries; the growth of legal andcultural élites that wish to express their new in�uence through a vibrantcivil society; and so on. These changes have rendered the collectivistincorporation regime based on the republican discourse economicallycounterproductive. The ashkenazi core group, old bene� ciaries of therepublican discourse, have shifted their allegiance to the liberal discourseand to civil society. The resources they had accumulated under the collec-tivist regime enable them now to act independent ly of the state and ofthe corporatist structures which they have come to regard as obstructing,rather than supporting, their interests.

This shift, starting as a response to the in�ationary crisis and generalmalaise of the 1980s but more profoundly to the economic stagnationthat set in after the 1973 war, resulted in the adoption of a policy of wide-ranging economic liberalization. Coupled with the intifada, liberalizationreduced the willingness of the core, ashkenazi group to pay the materialand moral price for the repression necessitated by the continued exist-ence of the Israeli control system as constituted in 1967 (encompassingIsrael and the occupied territories). Furthermore, although for manyyears the bene� ciaries of state-driven and protected industrialization, theHistadrut’s job creation schemes, and the high-tech military-industrialcomplex, many industrialists have become enthusiastic supporters of thepeace process which promised to end the Arab boycott and open up theworld market for Israeli products (Money 1993). Thus, the synergy ofmilitary and moral dif�culties in putting down the intifada and the desirefor economic expansion have resulted in the Oslo accords and the onsetof decolonization in the occupied Palestinian territories (Peled and Sha�r1996; Ezrahi 1997).


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V. Dilemmas of citizenship

Since the signing of the Declaration of Principles with the PLO in Osloin September 1993, the tactical con� ict between doves and hawks overthe means of attaining security has given rise to a profound con�ictbetween neo-Zionists, who have replenished old Zionism with a funda-mentalist religious and anti-Western twist, and post-Zionists, who viewthe stage of conquest, colonization and state-build ing as over. Thesecompeting perspectives are articulated most clearly in competing citizen-ship discourses that structure, stratify and provide ideological expressionto the hopes and fears of all social groups: ashkenazim, mizrachim,Orthodox-Jews, citizen and non-citizen Palestinians.

The ashkenazi élite has outgrown the con�nes of its colonial phase ofdevelopm ent and now seeks to venture out into the world. It thus lostmuch of its interest in maintaining the primacy of republican citizenshipwith its emphasis on a strong state and on communal public-spiritedness.The declining in�uence of the republican citizenship discourse hascaused �erce competition for hegemony between the adherents of theother two discourses. These discourses – the liberal and the ethno-nationalist – now appear not as subordinate or secondary to the republi-can discourse, as they had been through most of Israel’s history, but ascomprehensive alternatives in their own right.

A central dilemma of the mostly secular ashkenazi Jews who pursuethe promise of liberal citizenship is how to address the con�ict betweentheir individual rights and the role played by Judaism in the publicsphere. The option of separating state and religion is rarely raised,because it would mean doing away with Israel’s character as a Jewishstate. Instead, a piecemeal approach of gradually eroding the religious‘status quo’ through liberal legislation and judicial action is favoured. Atthe time of writing (August 1997) a major struggle is looming overSupreme Court rulings that established the right of women and non-Orthodox Jews to serve on religious councils, the municipal bodies thatprovide Jewish religious services at the local level.

The Palestinians, both citizens and non-citizens, are also keenly inter-ested in the liberal discourse. Between 1967 and the institution of thePalestinian autonomy in the mid-1990s, the Palestinian Arab populationin the West Bank and Gaza enjoyed only heavily circumscribed rights.Of�cially, two systems of law operated in the occupied territories: mili-tary law for the Arab residents, Israeli civil law for the Jewish settlers. Infact, arbitrary and discriminatory application of the military regulationswas combined with a generally permissive attitude towards violations bysettlers (Kimmerling and Migdal 1993, p. 253). The Palestinian residents,who were in fact but not in law part of Israeli society, were deprived ofmost legal means of struggle by being de� ned as lying outside even theliberal conception of citizenship. Their actual or potential emancipation


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from direct Israeli rule has been the result of their armed uprising – theintifada – together with the liberalization of Israeli society (Peled andSha�r 1996).

Palestinians who are Israeli citizens possess individual civil and politi-cal rights, including the right to vote. In many other areas, however, suchas employment, social and educational rights, and, most importantly,membership in the core republican community, they have remainedsecond-class citizens. If the liberal discourse replaces the republican oneas the primary narrative of Israeli citizenship, this would go a long waytowards equalizing the citizenship status of Jews and Palestinians. Onekey issue, however, still divides citizen Palestinians from Jewish liberals,namely, the latter’s continued commitment to the preservation of Israel’scharacter as a Jewish state (Gavison 1995). This has led many citizenPalestinians to demand national-cultural autonomy, that is, to recast theIsraeli state as a consociational or multiculturalist democracy.

Consociationalism, of course, is a communal rather than a liberalarrangement. Moreover, since many aspects of Palestinian culture areinformed by Islam, their demand for cultural autonomy could lead to anunbridgeable rift between Palestinians and Jewish liberals, who havebecome very impatient with religion. The key issue now between theJewish majority and Arab minority, then, is whether the latter will gainthe option of liberal citizenship, that is, integrating as individuals into thestate, that will be rede�ned as belonging to all of its citizens, or else berecognized as a national minority with corresponding effective multi-cultural citizenship rights.

As long as the republican discourse predominated, the politicalef� cacy of groups that were excluded or marginalized by it was necess-arily limited: they could tilt the political balance by providing the supportneeded by a particular section of the core group to prevail politically(religious Zionists and Mapai in 1948–1977; mizrachim and Likud in1977; citizen Palestinians and Labor in 1992), but they could neverbecome dominant themselves. Consequently, these outer groups couldnot take the political initiative, and the rewards they gained fromsupporting sections of the core group were inevitably frustratingly small.

The coalition that elected Benjamin Netanyahu as Prime Minister inMay 1996 was made up of such excluded and marginalized Jewish groupsas mizrachim, religious Zionists, and haredim (ultra-orthodox Jews). Thiscoalition that had crystallized around the ever more religiously articulatedethno-national discourse narrowly defeated the rival coalition, made upprimarily of ashkenazi and citizen Palestinian adherents of liberalism.

Some adherents of the ethno-national discourse, primarily thereligious Zionist settlers of Gush Emunim, have been trying to claim therepublican mantle of ‘pioneering’ and drape it in a religious garb.However, since the intifada they have come to be regarded by most ofthe original bearers of republican virtue, who had been quite ambivalent


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about them in the past, as usurpers. The battle over decolonization of theoccupied territories, which rages primarily between these two groups, hasalready claimed the life of Yitzhak Rabin, an archetypical representativeof the original bene� ciaries of the republican discourse.

For mizrachim, the (Jewish) state that has traditionally treated themas secondary to ashkenazim is assuming ever-growing importance now,as the republican discourse continues to decline. They seek in the stateprotection against the adverse effects of economic liberalism and an af�r-mation of their privileged status as Jews in the society. They cling evermore strongly to the ethno-national discourse of citizenship, increasinglyinfusing it with religious content and, to a lesser extent, with the demandfor the protection and extension of social citizenship rights. It is not clearwhether a mizrachi secular cultural alternative to religious identi� cationis available, but it is obvious that the ful�lment of social rights throughmembership in religious institutions, in a manner similar to funda-mentalism in other Middle Eastern countries, does not allow class inter-ests to be properly expressed or defended. This was strikingly attested towhen, in July 1997, Shas, the religious mizrachi party, cast the crucialvotes against the proposed Basic Law: Social Rights.

While the settlers and the mizrachim share an essentially traditional-ist outlook and oppose liberalization, the former are interested primarilyin keeping the occupied territories, whereas the latter are more eager topreserve the state as both a provider of welfare services and the primaryavenue of social mobility open to them. Their haredi allies are interestedneither in territory nor in the state, but rather in maintaining the Jewishcharacter of public life in Israel, which is the basis of their privileges andwhich they see being threatened by liberalization and by the use of civiccriteria of membership. Thus, this ethno-natio nal coalition, no less thanthe liberal one, is subject to internal tensions and contradiction.

Given the acrimony of the normative struggle and the con�ict over thecentrality of the institutions that dispense citizenship rights and duties –the market place and judicial system for the liberals, the welfare state andreligious institutions for the proponents of ethno-nationalism – the battlebetween them appears sometimes to assume the character of a total war.The question is whether a single universal and ‘assimilationist’ liberalcitizenship, extended to groups that previously did not enjoy its fullbene� ts, would become the dominant model, or ethno-nation alistcitizenship, by absorbing themes previously associated with the compet-ing discourses, such as republican pioneering and social citizenship,would prevail. The most likely outcome is that another incorporationregime of multiple citizenships will emerge. But how fragmented thisregime will be depends mostly on the future of the peace process.

The peace process, especially the future of the occupied Palestinianterritories, is the axis around which liberals and ethno-nation alistscontend. The outcome of their struggle will therefore affect not only


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Israeli society itself and the respective identity, membership, and rightsof ashkenazim, mizrachim, Orthodox Jews, women, citizen and non-citizen Palestinians, but the future of the entire Middle East. As theforces that shape Israeli society are becoming more global, the prospectsof the liberals to win are improving, for the more minimal demands ofliberal citizenship cohere better with international trends than either therepublican or the ethno-national discourses. Even the ethno-nationalistcamp is led by leaders, including Netanyahu, who are committed to aliberal economic vision. It would be very dif�cult to square this visionwith the intervention ist state and repressive military practices requiredfor maintaining the occupation and defending Jewish settlers on the WestBank.

Acknowledgements

This article is based on our forthcoming book, Between Colonialism andDemocracy: The Multiple Faces of Israeli Citizenship. We would like tothank Boaz Neumann, Meir Shabat and Amit Ron for their researchassistance, and the Israel Science Foundation, the Joint Committee onthe Near and Middle East of the U.S. Social Science Research Counciland the American Council of Learned Societies for their �nancial assist-ance. Finally, we would like to thank the three anonymous referees fortheir comments and helpful suggestions.

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Documents

Citizenship and stratification in an ethnic democracy