Capitalism on the kibbutz

Many Israeli collectives shunning system of financial equality

BOSTON GLOBE | February 26, 2007
By Matthew Kalman, Globe Correspondent

KIBBUTZ DEGANYA ALEPH, Israel -- Yoya Shapiro sat on the veranda of her house, gazing across the manicured lawn of Israel's first kibbutz, or collective farm, founded by her parents and 10 other pioneers in 1910.

It was a unique experiment in communal living, rigorous socialism, and strict egalitarianism, and it thrived for decades on a spectacular site looking out at the Sea of Galilee and the imposing Golan Heights rising from the far shore.

But last week, Shapiro joined 320 fellow kibbutzniks in a vote that finally ended the financial equality among members that was a cornerstone of the ideology hewn during those early years of agricultural labor.

With that decision, Deganya joined a growing number of the nation's 270 kibbutzim in adopting many of the trappings of free-market capitalism, including differential wages and the ability to own private property. The vote ended nearly a century in which members worked according to their ability and received food, goods, clothes, and services according to their needs. Under the new system, kibbutz members keep their salaries, but pay taxes into a fund for common services such as health, education, and cultural events, as well as a support fund for poorer members.

As of December 2006, 61 percent of kibbutzim were paying differential salaries to their members and more than 20 percent had decided to transfer ownership of kibbutz houses from the collective to the members who live in them. At Gan Shmuel, north of Tel Aviv, the kibbutz leased large tracts of agricultural land to developers for a shopping mall and McDonald's. At Ein Gedi on the Dead Sea, the kibbutz guest house is now managed by an outside company that employs kibbutz members.

The privatization process began several years ago, but the symbolic importance of the change at Deganya rekindled a debate over whether the kibbutz movement could survive the inexorable march of capitalism.

"This is the end of a phase in the ideology of the kibbutz as we have known it until now," said Shlomo Getz, director of the Institute for Research on the Kibbutz and the Co-Operative Idea at Haifa University. "It's a very big difference. The kibbutz has changed over the years, just as people mature over time, but the change we are seeing now is very dramatic.

"The kibbutzim still have some characteristics that do not exist in any other place," said Getz. "They are no longer purely socialist or communes, but there remain some unique traits, including systems of mutual help and the practical responsibility of the community to its members. I expect the next step will be to divide the ownership of the communal assets, turning members into shareholders. It has already happened in two or three places."

At Deganya , the supporters of the reforms see the changes as inevitable, but not fatal.

"I voted in favor, but reluctantly," said Shapiro, who was born a few yards from her present one-story home in 1921, in what was then British-ruled Palestine. "I've lived here all my life and I know what my parents wanted. I felt like I was doing something against them, but I also felt it was necessary. I could see that the young people like these changes, and since they are going to live here in the future longer than me, I felt I had to go along with them."

The reforms were first introduced a year ago for a yearlong trial, which was approved by more than 65 percent of the members. Last week, 85 percent voted in favor of making the change permanent.

In the early days, members worked, studied, and did their laundry together as a collective. There was no food in their homes, since they all ate in a communal dining hall. Shapiro said she used to return from cleaning the laundry with a different blouse each week, and clearly recalled the day she was first presented with clothing tagged with her own name.

Until last year, members received their income from the central kibbutz coffers, strictly budgeted according to marital status, the number of children, and special needs like health or education. The basic income was equal for the kibbutz general secretary, a farm laborer, a hotshot lawyer -- or those who didn't work at all. Most members were assigned jobs in rotation, sharing menial tasks and being voted into positions of responsibility. Some worked outside the farm, but handed their salary to the kibbutz.

Now members can earn differential incomes and manage their own bank accounts. Those who work outside keep their earnings. The kibbutz has calculated a minimum wage and anyone earning more than that is taxed at a rate of 20 percent for services including health care and education, which are still provided on a collective basis. The wealthier members also pay into a crisis fund and a health fund to support the weaker members.

"I think it will save Deganya in the short term," said Allan Shapiro, 79, Yoya's husband, who immigrated to Israel from New York in 1955. "When we voted for the trial last year I was worried that the lack of equality would threaten social solidarity among the members, but that didn't happen. Now I see the reforms have come to institutionalize changes which had already taken place."

Realizing that the kibbutz could not be sustained by agriculture alone, Deganya built its first factory in 1967 . Today, its diamond-tipped machine-tool manufacturing plant, Toolgal, provides 70 percent of the kibbutz 's revenues, alongside 300 milk cows and 200 acres of fields producing bananas, dates, wheat, avocado, corn, and soy .

Among the reasons for the reforms at Deganya was the slow exodus of younger kibbutzniks. The Shapiros' son, who left Deganya to practice law and is now a judge, is among the 50 percent of young people who have left the kibbutz. The total population of the country's kibbutzim peaked at 124,000 in 1994 and has since fallen to 115,000; as a proportion of the growing Israeli population, kibbutz residents have fallen from 4.2 percent in 1952 to 1.7 percent in 2004.

Kibbutzniks express mixed feelings about the reforms.

At Kibbutz Gvat in the Jezreel Valley, similar changes were introduced in 2004. Paz Israeli, 31, who was born at Gvat and is now kibbutz secretary, said he would have preferred things to stay the same.

"Most of the people on the kibbutz wanted the change in order to be like people in the city," said Israeli. "They wanted to get more money in the bank at the end of the month if they worked harder. People just wanted more for themselves.

"I'm an old-fashioned guy; I would have liked better to stay in the old system. There is a value to living and working in a place where there is a larger ideal than just providing for yourself. I don't think it's the death of the kibbutz," he said, "but it is transforming into something very different."