Just over a week ago, according to many, the unthinkable happened: Amir Peretz, head of the Israeli trade union federation, the Histadruth, a rank outsider in the beginning of the election campaign, won the vote for leader of the Labour Party using radical rhetoric calling for example, a big increase in the minimum wage and an end to poverty in Israel.

Overnight the political mood in Israel changed completely. It seems that the Labour Party’s continuing participation in the coalition government with Likud will not last much longer and that elections will follow soon. Suddenly from being a party that was in its last death throws, Labour has a chance of not being completely wiped out. The following morning most people talked about this victory – on the buses, in the workplaces and schools and colleges. And what is more not just Israeli Jews but also Israeli Palestinians (Sixty per cent of Peretz’s vote came from Israeli Palestinian Labour Party members) in the most downtrodden areas of Israel who commented about it. Most understand that this means that the next elections could be different from previous ones.

Why? Because for those who look to him, Peretz does not come across like other politicians. Many of these, like the present Prime Minister Sharon of the reactionary Likud party, are like giant lumbering dinosaurs who have dominated the Israeli political scene since the formation of the Israeli state. They have grown fat on the exploitation of the majority of Israeli Jews and Palestinians. They have gorged themselves on corruption, back-handers and pilfering of state revenues.

Sharon’s son, Omri, has just agreed to plead guilty to charges of false testimony and falsifying documents in connection with his father’s failed 1999 bid to become leader of Likud. The latest example of this is the Likud Education Minister Livnat – she has been accused of signing an order quadrupling the budget of the private college her mother runs from the state education budget – all this without blinking an eyelid.

Meanwhile Peretz does not use the language of the majority of politicians. He uses populist rhetoric exposing the massive wealth polarisation in Israeli society, a gulf that has become cavernous as a result of the application of neo-liberal policies over the last 15-20 years.

Endemic poverty

While the Israeli economy is currently growing last August the government reported that more than 1.5 million of the country’s 7 million population lived under the poverty line. This report stated that in 2004 33.2% of those who were 18 year olds or younger lived in poverty, up from 22.8% in 1998.

This slump in living standards is the result of both economic crisis and the vicious neo-liberal austerity measures pushed through by the former Likud prime minister and then finance minister Netanyahu. These policies meant that in 2004 the richest 30% of Israelis saw their income increase by between 5% to 6%, while simultaneously the poorest 30% saw its income drop 9% according to this government report. Netanyahu and his allies are quiet open about their policies saying, “The reforms help the rich, that is true; but eventually the poor will benefit from it as well”. But the poor are not prepared to suffer in silence waiting for some golden future.

Peretz’s attacks on poverty

Peretz talks about the poor workers, their families and the one third of Israeli children who are born into poverty in the country. He even used the phrase “working class” during his election campaign and, in response to an attack by the former Labour party leader and ex-general Barak, Peretz declared “we’ve had enough generals. What we need now is a socialist general.”

Peretz has promised that if elected he will raise the minimum wage to the equivalent of US$1000, an increase of nearly 50%. On top of this he has called for a decrease in the influence of private labour agencies in the job market in Israel; a withdrawal of the present government’s attacks on the pension system and instead in its place a state pension for everyone. However, the most important question is how these demands and many more will be won from a capitalist ruling class which has implemented vicious anti-working class policies for years now?

Peretz has been portrayed by the right-wing capitalist press as soft on security issues and attacked for being prepared to contemplate a coalition with Arab parties if he is elected. He spoke at a recent rally commemorating the assassinated former Labour leader Rabin of his wish “to return to Oslo”. By this he means the Oslo Peace Accords signed in 1993 between the PLO and the Israeli government. However, the so-called "peace process", an agreement imposed by imperialism and capitalism, never solved the real causes of the conflict and Oslo was largely discredited amongst the Israeli and Palestinian populations. The common perception is that this agreement was made between corrupt politicians with their own interests in mind and has lead to spiralling violence in the region with the working class being the main victims.

Peretz beat his nearest rival Shimon Peres, an 82 year old representative of the rich Ashkenazi elite and a long-standing leader of the Labour Party, by 42% to 40%, in a vote in which about 64,000 Labour Party members (out of 100,000) participated.

Peretz’s roots

Unlike his defeated rival, Peretz comes from a working class family of Sephardic or Mizrachi (Jews mainly from north Africa or the Middle East) origin. Born in Morocco, Peretz lived for much of his life in Sderot, one of the southern deprived "development towns", where many of Israel’s working class Sephardic Jews are dumped, and in reality, forgotten by the Israeli state. Incredibly this is the first time ever that the Labour Party has had a leader from a Sephardic – or working class - background.

The class divide amongst Israeli Jews is also an ethnic one. The majority - although not exclusively - of Israel’s ruling class super-rich elite are from an Ashkenazi (Jews of north and eastern European descent) background. Hundreds of thousands of Sephardic Jews from Arab countries came to Israel particularly in the 1950s as a result of migration encouraged by the Israeli state and increasing persecution in the Arab states after the 1948 Arab-Israeli war.

In reality, the Israeli ruling class needed this immigration of Sephardic Jews to provide the new state with a working class for its factories, to settle on land confiscated from the Palestinians in the periphery of the country and to serve in the new Israeli army to defend the territory of the new state. The support of these new Sephardic Jewish immigrants in this role was achieved through promises of a good welfare system, jobs, an increased standard of living and safety from persecution. But when they arrived in Israel many found themselves moved from tented accommodation to caravans in the periphery of the country which eventually became the misnamed “development towns” of today - with high unemployment rates, poverty levels and absolutely inadequate social services for the numerous social problems which arose as a result. In addition their culture was often marginalised in official society as the Ashkenazi elite considered it too close to Arab culture.

Traditional party of ruling class

From the founding of the state, the traditional party of the Israeli ruling class was the Labour Party which combined a policy of a strong military and but provision of a welfare state to the Israeli Jewish majority. It was the Labour Party in government through wars against its Arab neighbours in 1956 and 1967 occupied Palestinian lands and started the process of building settlements which have vastly increased the tensions in the region. The Labour Party has also always been seen as the political party that represented most clearly the interests of US imperialism in the region.

The Labour Party relied on the votes of the Sephardic working class to elect it to power, year after year. But it ignored the conditions of its voters. A mood grew that the promises of full acceptance into Israeli society was not being provided and that Sephardic Jews were just seen as voting fodder. On top of this the inability of capitalism to continue to guarantee spending on the welfare state led to increased poverty amongst the mainly Sephardic Jewish working class – although the standard of living of and racial discrimination against Israeli Palestinians was far worse.

Begin, the leader of the reactionary Likud Party, took advantage of this and in 1977 scored a massive victory for his party in the elections on the basis of winning a majority amongst the Sephardic Jewish community, campaigning on the basis that for generations the Mizrachim had been neglected by the rich Ashkenazi elite. These voters in the main have never returned to the Labour Party since then, although Likud’s policies led it losing some of its Sephardic support to Shas, a religious Sephardic party which claimed to represent the interests of the Mizrachi working class population.

Peretz’s election is therefore an earthquake in Israeli political terms – not just because of his class and ethnic background but for the first time in decades social and economic issues are now centre stage as far as politics is concerned - and not just the politics of the corrupt politicians that inhabit the Knesset (Parliament). For the first time in years, hundreds of thousands of people, many of whom have not voted in elections for years, have lifted the heads and begun to think that some sort of change is possible. Peretz’s election has also increased Labour’s support, albeit from a low level, amongst the large number of Russian immigrants that have moved to Israel over the last 15 or so years.

Prior to Peretz’s victory the surface mood in Israel appeared demoralised and apathetic. This mood masked a burning anger at the massive attacks on working class living standards that have taken place under Likud, Labour and Likud-Labour National Unity governments over recent years. However, there was no outlet for this anger.

Moreover the mood for struggle had been held back by a series of setbacks in struggles of the Israeli working class, the most important one of which was the failure to stop the privatisation of the docks last year. Sharon’s implementation of his proposal to withdraw from Gaza was accompanied by a massive propaganda campaign for “national unity” which further suppressed any idea of independent working class consciousness or activity.

Within a minority of the ruling class – particularly some sections of industrial capital - there have been deep fears of the dangers that face the elite in Israel over the long run because of the massive disenchantment in the political system. Many socialists internationally are aware that the collapse in support for the establishment is an international phenomenon. In Israel, it exists to a greater extent than in many countries in Europe. However in a country where the ruling class relies on social cohesion and national unity to maintain a strong army against what it believes is a threat of destructions such a phenomenon is extremely dangerous. This explains the support for Peretz amongst capitalists like Benny Gaon, (who is the Labour leader’s new spokesperson on economic policy) and former heads of the Shin Beth security service, Gillon and Ayalon.

Some capitalist commentators have stated favourably that Peretz’s election represents a return to "normal" politics where there is an opposition in parliament. The reason is clear: they see the election of Peretz as Prime Minister or with a significant number of seats as a way of letting off steam from below without endangering the rule of big business.

Despite this it appears that the issues that anger many in Israel – poverty, super-exploitation, non-existent or poor public services are under discussion once again.

Collapse of coalition government

This prospect has terrified other political parties and the most ardent neo-liberals in Israel. When Peretz threatened to pull out of the coalition government immediately after Sharon refused to meet with him within a few days to fix a date for new elections, Labour Ministers and politicians from the established parties turned on him accusing him of “rudeness” and “childishness”. Peretz followed this up by personally barging into the offices of many Labour Ministers (who are extremely reluctant to lose chauffeur driven ministerial limousines and fat pay cheques) in the coalition government and forcing them to sign letters of resignation from their posts. Most Israelis applauded him for his straightforwardness.

But ever since his election there have been catastrophist predictions by the most reactionary elements accusing Peretz of being a “Communist” or “Bolshevik”. Other newspapers replied by saying “Don’t worry he’s not a revolutionary, he is a social democrat”.

Peretz’s victory has terrified many of the political parties. From present opinion polls, it is clear that Labour will win votes (and seats) from Likud, Shas, Shinui (a secular but reactionary neo-liberal party) and Meretz (a party which portrays itself as radical on the Palestinian and "peace" issues but which has not forcibly opposed Likud’s neo-liberal agenda) with its number of seats rising from 21 to 28. Now all the political parties are engaged in a very ungraceful scramble to develop campaigns against poverty and social exclusion. Suddenly they have discovered the poor in Israel!

Peretz’s victory has led to an abatement of the vicious civil war in Likud. Opponents of Sharon’s disengagement plan grouped around Netanyahu (former Finance Minister under Sharon) have signalled that they are prepared to back Sharon as leader of the party in new elections. One of their MK’s (MPs), Michael Ratzon wrote to Sharon pledging allegiance to him and explaining the main priority was to prevent Peretz becoming Prime Minister “or we will all wake up poor on the morning after the election”.

It is undoubtedly the case that Peretz has lifted the hopes of big sections of the population. But many worker activists will remember his time as leader of the Histadruth federation during a period of quite developed class militancy. Unfortunately, he acted as a firefighter (and in some cases directly betrayed) against strikes and struggles of the working class.

Last year’s dockers’ strike against privatisation took place against the opposition of the Histadruth and its leader Peretz. In the end the lack of solidarity by the union federation opened the way for cracks in the unity of the dockers and a bad deal was signed. Following a one-day warning strike and the threat of a general strike in 2003, Peretz personally signed a rotten deal with the government on the question of pension reform and budget cuts despite the complete opposition of even the most loyal workers’ committees. And in last year’s strike by municipal workers in the poorest towns in Israel, Peretz abandoned the idea of continued action and some workers are still waiting for salaries that have not been paid for over a year.

Despite using radical rhetoric, like all populists Peretz tries to face in many directions politically. When he was leader of the Am Echad party, he sponsored a bill on an increased minimum wage, he accepted compromise on the issue and explained it away by saying that the struggle for this reform was a process that might take years. In the past he has called for capitalism with a "human face" and has supported “humane privatisation”. Since his election he has switched emphasis somewhat and come out against the most recent plans to privatise state owned Bank Leumi which he did not oppose when in the Likud government, along with other Labour Party MKs (MPs).

If he is elected to power, Peretz will come under huge pressure from big business. Without a mass movement of the working class behind him he will concede to this pressure. Already his big business backer Benny Gaon has already been quoted as saying that he has “given instructions to Peretz” to tone his policies down.

In the run-up to the general election Peretz will continue to use radical rhetoric. His main opponent Sharon will claim that he is soft on security issues and as a result Peretz may adapt his position. However, if he continues with his attacks on poverty and the oligarchy in Israel he will draw big crowds to meetings.

Members of Maavak Sotzialisti, the Israeli section of the CWI will attend these meetings and participate in the discussions amongst workers and young people in the run-up to the elections. They will support all that is positive in Peretz’s reforms and much more: a massive programme of public works, nationalisation of all privatised industries under democratic workers’ control. But above all Maavak Sotzialisti will explain to all those who have hopes in Peretz that the only way any reforms of his can be guaranteed and the lives of the majority transformed is by building a mass movement of workers and young people that, while immediately forcing concessions from the capitalist class, can prepare the way to overthrowing the capitalist system and replacing it with democratic socialism.

Committee for a workers' International publications

p128

p248 01

p304 02

imgFooter1