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Journal of Interdisciplinary History 30.4 (2000) 734-735



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Book Review

The Divided Economy of Mandatory Palestine


The Divided Economy of Mandatory Palestine. By Jacob Metzer (New York Cambridge University Press, 1998) 275 pp. $59.95.

This meticulous study of the dual economy of Palestine during the highly formative British mandatory period (1920-1948) represents the fruition of Metzer's research spanning two decades. Ambitious in its scope, the analysis offers a thematically designed account of the ethnonationally divided economy, using econometric methodology applied to historical data. Using this approach, the author seeks to confirm previous, largely impressionistic, accounts of the complex dynamics of the country's emerging economic separatism.

Underpinned by reconstruction of national income accounts, statistical analysis, and other quantitative documentation, Metzer traces the increasing division of economic life under British tutelage between the Jewish community and the Palestinian Arabs. The study begins with the contrasting demographic factors, those of a Western immigrant movement versus the largely agrarian features of the indigenous population. The two groups' differing access to, and use of, land, capital, and labor are explored, as is their divergence in trade patterns, both foreign and domestic. The role of the public sector in the development of the bifurcating economy is considered. Comparisons are also made on an international basis to define further the dualism of the Arabs' "traditional" economy, as opposed to the emerging "modern" Zionist economy.

Metzer's methodology is impressive. The only fundamental weakness in his approach lies with the necessity of contending with often scanty information, mainly about the Arab community, and sometimes [End Page 734] politically motivated, deliberately misleading information on both sectors. Inevitably, in some areas, fragmented evidence has forced a return to essentially impressionistic ground.

Separatism in Palestine was mainly a result of the Zionists' advantage in capital and labor and of their national ideology enshrined in a unique communal structure. Unlike in the typical colonial-settler model, land was not distributed by a colonial power, nor did the settlers treat the natives as a vast pool of cheap labor. Instead, land bought by Zionist organizations, principally the Jewish National Fund, was effectively removed from the open market by virtue of being held in perpetual trust for the Jewish people. No non-Jews could be employed on this land, which was leased to Zionist settlers. Thus, although the Jewish economy was always mixed, with a certain interplay between Jews and Arabs, a core economy was created based on Jewish exclusivity.

Of crucial importance, too, was mandatory policy, or the lack of it. Britain's "dual obligation" to uphold the distinct national goals of the Jewish community and ensure that the native people were protected also contributed to the economic rift. The generally free-market environment maintained by the mandatory power created a supportive setting for the Zionists and enabled both communities to pursue different economic agendas. Although Metzer does not dwell on the more deliberate British policies supporting Zionist endeavour, he states that these policies were not offset by attempts in certain areas (for example, education and health) to further development of the Arab economy.

In an insightful concluding postscript, Metzer considers the impressive growth of per capita income in both the Arab and Jewish economies during the Mandate and surmises that for various reasons, the Jewish build-up in Palestine was probably economically helpful to both Arabs and Jews. But material benefits aside, from its standing as a distinct, ethnonational entity in Palestine, the overall effect of the Zionist endeavour on the Arab community was negative. The concluding pages offer insights on how the Jewish-Arab dual economy concept has been transformed by Israeli statehood, the occupation of the West Bank and Gaza, the intifada, and the establishment of the Palestinian Authority.

Barbara J. Smith
London

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