The Global Political Economy of Israel

Looking into the 21st century, the future of Israel seems as uncertain as ever. Politically divided and regionally isolated, its economy has nevertheless continued to grow. Since 1990, the country has taken a dramatic U-turn, from being a closed welfare-warfare state, to one based on privatization and global integration. US aid and loans, which during the mid-1980s reached 20 per cent of GDP, have fallen dramatically, while foreign investment has soared. Labour unions, once a powerful force, are marginalized as business institutions become the primary focus of politics. Jonathan Nitzan and Shimshon Bichler explain this dramatic transition as part of a long-term process of capitalist development. Situating Israel within the broader regional and global political economy, they offer an innovative theoretical framework for understanding its transformation, based on a critique of capital accumulation. Tracing the country’s evolution over the past century, the authors explore the gradual but persistent progression towards a capitalization of power, a critique which is relevant not just to Israel but to all nation states. Taking into account current issues such as the ongoing conflict in the region, energy crises, inflation and recession, the politics of high-technology and the transnationalization of ownership, they offer a detailed account of one of the world’s most rapidly changing political economies, and highlight what possible course it might take in the future.