Essays on the Structure of the Jewish Economy in Palestine and Israel
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Essays on The Structure of the Jewish Economy in Palestine and Israel Robert Szereszewski THE MAURICE FALK INSTITUTE FOR ECONOMIC RESEARCH IN ISRAEL The Maurice Falk Institute for Economic Research in Israel, af¬ filiated to the Kaplan School of Economics and Social Sciences, is an independent nonprofit or¬ ganization whose purpose is to encourage research, with particu¬ lar emphasis on the economy of Israel. ABOUT THE AUTHOR Robert Szereszewski was born in Poland in 1936 and came to Israel in 1949. He obtained his M.A. degree at the Hebrew Uni¬ versity of Jerusalem, and his Ph.D. (1964) from the London School of Economics. He taught at the Hebrew University in the departments of Economics and African Studies. His publications include Structural Changes in the Economy of Ghana, 1891-1911 (1965) and articles on the econo¬ mic growth of African states. Robert Szereszewski volunteered for military service shortly before the Six Day War and was killed in the battle for Jerusalem on June 5, 1967. ABOUT THE BOOK This book includes a discussion of the constancy of the economic structure in terms of industrial distribution of national product, manpower, and capital. It also presents detailed estimates of the national product and capital stock of the Jewish economy in Palestine. Finally, the book in¬ cludes a fragment which was to be the opening of Szereszewski’s projected book. It gives a glimpse of the neglected social and eco¬ nomic history of the pre-Zionist era. ESSAYS ON THE STRUCTURE OF THE JEWISH ECONOMY IN PALESTINE AND ISRAEL Essays on The Structure of the Jewish Economy in Palestine and Israel Robert Szereszewski THE MAURICE FALK INSTITUTE FOR ECONOMIC RESEARCH IN ISRAEL Jerusalem, June 1968 The Dr Emmanuel Konig Memorial Fund for the promotion of economic studies at the Hebrew University contributed towards the publication costs of this book Distributed by the ISRAEL UNIVERSITIES PRESS for the FALK INSTITUTE 17, Keren Hayesod Street lerusalem, Israel Israel Universities Press is a subsidiary publishing imprint for books, either in the original language or translations, of the ISRAEL PROGRAM FOR SCIENTIFIC TRANSLATIONS P.O. Box 7145 lerusalem Israel Published simultaneously in Hebrew and English Printed in Israel at the Daf-Chen Press, lerusalem THE MAURICE FALK INSTITUTE FOR ECONOMIC RESEARCH IN ISRAEL The Maurice Falk Institute for Economic Research in Israel is an independent non¬ profit organization whose purpose is to encourage research, with particular emphasis on the economy of Israel. The Institute ws founded in January 1964 as the successor to the Falk Project for Economic Research in Israel. The general administration of the Institute is the res¬ ponsibility of the Board of Trustees, originally nominated by the Hebrew University, Jerusalem, in consultation with the Maurice and Laura Falk Foundation of Pittsburgh, Pennsylvania. The decision of the Board to publish a study reflects its judgement that the work has met the standards of scientific research. The interpretations and conclusions of the study are, however, those of the author, and do not necessarily re¬ flect the views of other members of the Institute staff or of the Board of Trustees. Board of Trustees E. Lehmann (Chairman) A. L. Gaathon Yair Mundlak Jacob Arnon David Golomb Don Patinkin R. Bachi David Horowitz Nathan Rotenstreich Haim Barkai J. Katz Dan Tolkowsky S. N. Eisenstadt Simon Kuznets Director of Research: Don Patinkin Secretary: Hasida Nitzan Editors: Yaakov Kop, Susanne Freund PREFACE Robert Szereszewski was born in Poland in 1936. He spent much of his early childhood in German-occupied Warsaw, and was later deported to Berlin. In 1946, he reached Italy en route for Palestine. He finally came to Israel in 1949 and was educated at the Ben Shemen Youth Village and the Ohel Shem High School at Ramat Gan. After obtaining an M.A. in economics (1961) from the Hebrew Univer¬ sity of Jerusalem, and a Ph.D. (1964) from the London School of Econo¬ mics he joined the Department of Economics at the Hebrew University and gave a graduate course on economic development; at the same time he was on the staff of the University’s new Department of African Studies and lectured on the economics of West Africa. Robert Szereszewski’s major field of interest was economic growth, focussing on underdeveloped countries. He was particularly interested in the economics of West Africa and in 1963 he went on a Ford Foundation grant to Ghana where he collected the data for his doctoral thesis on “Structural Changes in the Economy of Ghana 1891-1911.” In 1965 he began research on the economic history of mandatory Palestine, at the Falk Institute. His interests now gravitated towards the problems of Israel’s economic growth. This study was already beyond its take-off stage—he had finished collecting and digesting the basic data by early 1967. Brimming with ideas, insights, and novel interpretations, he hoped to write a book which would integrate the economic, social, and political aspects of the process which transformed a backwater of the Ottoman Empire into a modem, rapidly growing economy. But these hopes were not to be fulfilled. Robert volunteered for military service shortly before the Six Day War and was killed in the battle for Jerusalem on the evening of June 5, 1967. vii Robert Szereszewski was original in his approach and way of thought. His ideas were bold and unconventional and an argument with him was always a stimulating intellectual encounter. It is no accident that his friends often mention his views on Israel-Arab relations, a field in which it is all too easy to fall back on cliches. Robert staunchly refused to accept the current oversimplifications, and tried instead to get at the root of the problem and lay bare the causes of mutual hostility and distrust. Perhaps no words can better describe Robert’s approach to his work than those in which he mourned his teacher, Amotz Morag: He was a man who thought of economics as part of the social sciences; of economic analysis as a means of achieving results meaningful in human terms. He was particularly concerned with the social implications of all economic theory and debate.... He realized that in scientific research, especially in the social sciences, external criteria cannot be ignored; that value judgements must be made in sifting the conclusions of economic research. ... He had a very clear conception of the better society that he wanted to see in Israel, a vision governed by ideals of individual liberty, equal op¬ portunity, the fair distribution of wealth, and social and ethnic equality. It was this vision that guided him in his choice among different social and economic solutions, and he did not hesitate to cross the line many an economist is afraid to overstep—the line between the theories of resource allocation and income distribution. The Hebrew University and the Falk Institute have lost an outstanding teacher and a brilliant scholar, and his colleagues, a devoted friend. The present book is based on Robert Szereszewski’s latest work and consists of three self-contained essays written during various phases of “The the research. The leading essay, Jewish Economy in Palestine and the Structure of the Economy of Israel,” was originally given as the 1966 Bonne Memorial Lecture and was due to appear in a forthcoming volume of Scripta Hierosolymitana. It deals with an important issue which has puzzled many observers of the economic development of Palestine and Israel. This is the constancy of the economic structure in terms of the conventional measures—the industrial distribution of national product, manpower, and capital. By applying input-output technique, Robert Szereszewski shows that, despite the prima facie impression to the contrary, the economy did undergo a marked change in structural inter¬ dependence. viii The two other essays were conceived and written as technical appendixes to the study on Palestine and were completed as drafts early in 1967. They consist of detailed estimates of the national product and capital stock of the Jewish economy in Palestine. These estimates provide, for the first time, continuous series of two major economic measures for the quarter-century covering the mandatory period. Because of the inadequacy of the basic data, the series had to be built up from bits and pieces of evidence. Szereszewski’s detailed discussion of the many and varied sources that he explored will be invaluable to future students of the period. The significance of the series for the study of the country’s economic growth is considerable. Combined with the official Israeli series that begin in 1950, they give a bird’s eye view of a process now stretching over a period of more than 40 years. They also add greatly to our knowledge of the mandatory period itself; they reveal, for instance, the remarkable growth that occurred in the middle and late 1920s. The fragment, with which this volume closes was written as the first part of the introductory chapter of Robert Szereszewski’s unfinished book. Though it is only a first draft, written some time in early May 1967, we felt that it should be included in the book, since it bears the stamp of his unconventional approach and gives a glimpse of the neglected social and economic history of the pre-Zionist era. Miss Varda Lasser was Dr Szereszewski’s research assistant. Her un¬ sparing devotion was of invaluable help in preparing this book for publication. H. B. ix OTHER PUBLICATIONS BY THE AUTHOR “The Inter-Sectoral Structure of the Economy of Ghana,” Economic Bulletin of Ghana, VII (No. 2, 1963), 12-29. "The Process of Growth in Ghana,” Journal of Development Studies, I (No. 2, lanuary 1965), 123-41.