The body of this paper is the preliminary draft of an empirical dissertation chapter. That chapter compares the salience of labor market conflict in Palestine and Northern Ireland; the collective solidarity of the dominant communal bloc in each case (Ulster Protestants and Jewish Zionists); and British dependence on the dominant bloc in ruling both local territories. The second empirical chapter will trace variance in the extent of dominant group leverage over Government over time, and its correlation with subordinate group (native) alienation.
Disclaimer: The initial sections were written to wrap the draft into a conference paper, and are not nearly as fleshed out as they need to be. For example, I need to review the literature on divide-and-rule and address its strengths and weaknesses, and a proper methodology section where I justify my case selection, discuss archival research by political scientist, and describe my own research. This of course belongs in an earlier (unwritten) literature/theory/method chapter.
Question
This project begins with the empirical anomaly of a great power’s failure to arrest spirals of communal conflict in two cases -- British rule in Northern Ireland (NI) and Palestine. The conflict in Northern Ireland has claimed over three thousand deaths in a part of the world’s first democracy, the United Kingdom, where it is often thought that civic nationalism precludes ethnic conflict. The Palestine mandate was marked by bouts of Arab rioting against Jewish immigration in 1920, 1921 and 1929 and by a sustained anti-colonial revolt from 1936-1939. Its abrupt end brought a war in which three quarters of a million Palestinians became refugees and one percent of the local Jewish population died. At the most abstract level the question is why Britain seemingly failed to act as a hegemon at the local level and prevent violence, i.e. why does the thesis that a great power maintains peace in its sphere of influence not apply ceteris paribus at the local level? At the middle-range level of comparative politics, the question is why Britain failed to institutionalize an inter-communal accommodation based on a dominant coalition from both communities in either case. At a more micro-level, the question is why the state remained helpless to overcome zero sum aspects of the communal conflicts between the respective subaltern blocs that impeded the emergence of a cooperative center. The latter are primarily conflicts over unequal access to labor markets on communal lines. It is important to learn how the state’s inability to reconstruct ethnically divided labor markets feeds into its difficulties in forging a cross-communal ruling elite in an ethnically divided locale.
Rival Hypotheses
Some would suggest that Britain’s failure to keep communal peace in NI and Palestine is indicative of the sheer intractability of both conflicts. This I suggest is both politically and theoretically unacceptable. It is politically unacceptable because it is tantamount to an acceptance at face-value of British officials’ protests that they were trapped holding a line between two sets of enemies in situations which were beyond their control. Such self-exoneration glibly ignores the fact that NI and Palestine were both in some sense British artifacts, and that state policies may well feed into the nature of the communal conflicts in ways inadequately understood.
To argue that Britain could not manage conflict in NI or Palestine because it was ethnic conflict is circular. Ethnicity is a very unsatisfying independent variable, and there is no universal correlation between the degree of ethnic differences and the intensity of ethnic conflict. Thus, theoretically we are obliged to treat the nature and dynamics of the conflicts in Palestine as something to be explained, or at least accounted for theoretically, rather than as the simple cause of Britain’s problems in NI and Palestine. If we disaggregate the communal blocs in each case, it emerges that the salience of communal solidarities and antagonisms varies across class lines, and that these ethnic antagonisms are conditioned by material considerations in politically important ways.
A second putative explanation of Britain’s failure to control conflict and institutionalize ethnic accommodation is the suggestion that the State preferred to pursue tactics of divide and rule as a means of disorganizing local political forces and easing the burden of rule. This suggestion would appear unfounded for both empirical and theoretical reasons. First, colonialism as an endeavor seems to have foundered in part on the politicization of the colonies , so it is implausible to suggest that the state deliberately stoked up communal rivalries as a means of depoliticizing subordinate territories. Second, it seems that where divide and rule was practiced efficiently it was used as a means to block the emergence of ethnic solidarity by providing patronage powers to actors who would uphold the status quo, i.e. divide-and-rule was an intra-ethnic tactic. The cases of British rule in Palestine and Northern Ireland are marked by the failure of the state to effectively disrupt the degree of communal solidarity present in the respective Protestant Unionist and Jewish Zionist dominant communities.
Theoretically, the successful prosecution of divide-and-rule would require an implausible amount of local knowledge and local influence, not to mention organizational coherence, on the part of the state. In offering an alternate explanation for Britain’s mismanagement of NI and Palestine, I will start with the limited reach of the state.
Macro-theory
At an abstract level I am looking at the problems of local territorial control in an ethnically plural area. The problem posed is one of the limited reach of the state and its potential capture in the periphery by local actors. To understand how difficult it is for the state to mould local society in the manner it would prefer, we need to unpack the relationships between state departments and local actors. What local actors facilitate the state’s preference for control at low-cost, and what do these actors gain in return? The priorities and focus of central state departments lie far from the local situation. But cooperative local groups, which may offer themselves as state agents, are not dependent and obedient state functionaries. Rather they are actors with their own objectives, and considerably more knowledge of the local scene and interest in local outcomes than metropolitan state elite. It is an open question whether the state is co-opted by its local agents or the state co-opts local support. My hypothesis is that the state’s capacity to gain support from among the subordinate group varies inversely with its dependence on the support of members of the dominant group in running the local territory.
Methodology
My approach to comparing the pitfalls of Britain’s conflict management in Palestine and in Northern Ireland, and my comparison of both situations, is grounded in modern political economy. This position is at odds with much contemporary writing on ethnicity and nationalism, which privileges politics over economics in interpreting communal conflict . The method I propose is not to revert to a reductionist economic reading of ethnic conflicts. However, I do think that to the extent that specific ethnic conflicts are also distributional conflicts, the interplay of economic and political factors cannot be discounted. Indeed, I would go so far as to suggest that so long as distributional issues are part and parcel of an ethnic conflict, it does not make sense to analyze that conflict in isolation from such questions.
Therefore I wish to pursue a research method that explores the interaction of socio-economic conflict and ethnicity.
I use the term modern political economy to describe my methodological presuppositions loosely. Where concepts drawn from methodological individualism/rational choice, such as asset specificity, the collective action problem, information assymetry, time horizon, etc. are useful, I employ them willingly. However, the analysis as a whole has more in common with traditional institutionalist interpretivism than with deductive rational choice, as the assumptions of perfect information built into rational choice models of historical developments are implausible. I also find that corporate actors, like the British state, had too many contradictory impulses to have a cogent set of priorities and that attempting to lay out their conflicting priorities deductively would be of only esoteric interest. Thus it is possible that rational choice theorists will object to my opportunistic use of their concepts as metaphors. But that cannot be helped.
Theoretical Concepts
My argument is driven by three sets of theoretical concepts. First, ethnic conflict derives from price differential in the labor market across ethnic groups. The persistence of a segmented or dual labor market – members of different descent groups clustering in different occupations and at different points in a social hierarchy of occupations – in an ethnically plural society should not be viewed as a natural artifact. Rather its reproduction is a political phenomenon, which must be studied. This proposition derives from Bonacich’s split labor market theory of ethnic antagonism, which holds that ethnic antagonisms derive from a price difference for equivalent labor power across communal groups .
In Northern Ireland, Catholics historically formed a later wave of migrants from the western periphery of Ulster to the industrializing northeast where the bulk of the Protestant population was concentrated. Protestant labor, I shall argue, successfully fought having its wages depressed to native levels by monopolizing more secure skilled employment in engineering, and confining Catholics largely to the vagaries of the economy in lower status textiles and construction. In Palestine, laboring Jewish immigrants with more expensive tastes were faced with the threat of displacement by Arabs whose rural support networks rendered their reservation wages lower . The major institutional elements of Zionism – collective ownership of land, the Kibbutz movement, and the central role of the General Federation of Jewish Labor in Palestine (Histadrut) – can be understood as institutions working to insulate immigrant labor from native competition.
Second, I will explain the organizational coherence of the dominant bloc in each community – Unionists and Zionists respectively – by examining economic and institutional considerations that tied the interests of both elites and masses from these communities. The geographical concentration of the dominant bloc and its cross class ties to particular economic sectors can help explain the political economy of ethnic solidarity in both cases. In particular, I will employ the notion of asset specificity, which enhances some sectors’ ability to unite the interests of capital and labor and to lobby government – geographic and sectoral concentration of the dominant population enables them to lobby government more effectively for their demands. Jeffry Frieden defines this as the extent to which a sector has sunk costs in certain activities and will fight politically to preserve these activities even when they would not be competitive in an open market or without state subsidies .
In NI, Belfast’s shipbuilding, in particular, and heavy engineering, more generally, can be characterized as ‘asset specific’. The powerful joint interest of a both labor and capital in a historically dominant sector, created a powerful and unified lobby demanding subsidization and support. In Palestine, the Zionist movement maintained organizational coherence via the concentration of land ownership in its land purchasing organizations and through its institutional role in representing immigrants to the government as the Jewish Agency.
The third theoretical area of exploration is the relationship between the state and the dominant bloc in each society. In ascertaining why British favoritism toward the dominant community alienated the subordinate community, we must ascertain how the state was institutionally biased toward the dominant bloc in each case. In each case, the state is dependent on the dominant group and this precludes the creation of any political coalition that transcends the communal division.
The state can first of all be understood, following Tilly, as a protection racket . Using this model Britain’s presence in Palestine can be understood as a capital-coercion bargain, with Jewish taxes paying for Britain’s imperial over-stretch and British power repressing Arab discontent. In Shumpeter’s theory of democracy, a governing elite secures its position by co-opting the support of a social coalition on which it rests. In NI, the Unionist regime (1920-1972) rested on the support of the Protestant working class, by subsidizing its declining industries and helping to maintain its privileged labor market position vis-à-vis Catholics. When Britain eventually assumed direct responsibility for NI in 1972, it was unable to prise the Protestant political elite from its electoral dependence on Protestant workers, and it was institutionally locked into heavy economic support to maintain Protestant employment.
The Split Labor Market
Bonacich’s split labor market theory of ethnic antagonism hypothesizes that "the economic dynamics of the meeting in the labour market between [workers deeply divided along ethnic or other primordial lines] sets in train both separatist forms of worker organization and ethnic tension". Migration or colonization can lead ethnically distinct groups with different subsistence needs and organizational experience to meet in the same labor markets. The threat that capital will displace higher priced workers with workers from a lower priced group sets off a triangular conflict between capital and two blocs of ethnically distinct workers . The rearguard action fought by more expensive labour is generally aimed at excluding the subordinate group or at relegating its members to lower positions in the laboring hierarchy. In NI, Catholics sought to migrate from the West of the province and the rest of Ireland to the industrializing areas of Belfast and its hinterland where the Ulster Protestant population were concentrated. In Palestine, settler labor met the threat of lower priced native Arab labor. The following analysis will suggest that labor market conflict between differentially priced groups of workers has been constitutive of the dynamics of communal conflict in NI and Palestine.
Sectarianism and Class Politics
Frank Wright has characterized Northern Ireland as an ‘ethnic frontier’ marked by pervasive conflict between citizen and native . Wright acknowledges that in the early stages of capitalist industrialization there is the potential for intra-working class conflict between differentially priced ‘citizen’ and ‘native’ labor. However, he suggests that ‘once long-distance labour migration became a norm, native labour ceased to be prepared to work for less than citizen labour, and equal pay for equal work became a possible basis for class solidarity between them (p.9). He further suggests that ‘citizen efforts to prevent displacement by natives only succeeded when the hostilities generalised themselves into total social crises’ (ibid.).
Contra Wright, I wish to suggest that as long as a dual labor market divided along ethnic lines persists through capitalist industrialization there is a material content to ethnic tensions. Illustrating the link between labor market conflict and total social crises, he gives the example of a displacement crisis between fine weavers in North Armagh in the 1780s. In order to counter their displacement by cheaper Catholic weavers local Protestants began to band into citizen groups and challenged the legal right of Catholics to bear arms (p.12). Tensions escalated rapidly, but the net result was that the local magistrates supported the Protestants, Catholics were subjugated, and the weavers’ piecework remained in Protestant hands. This period is important because it marks the foundation of the Loyal Orange Order which became one of the mainstays of Protestant civil society banding landlords, capitalists, and laborers in complex social ties. For my argument, it is significant that the Order arose out of a conflict over access to capital between Catholic and Protestant weavers and that Protestants were able to co-opt the force of the law in order to secure Catholic exclusion.
This is prima facie consistent with Bonacich’s split labor market theory of ethnic antagonism . In Shalev’s account of Bonacich’s argument there are four possible outcomes of a displacement threat to workers from one group by less expensive labor from another. If we call these groups (following Wright) citizens and natives, the possible outcomes are displacement of citizen labor, the depression of citizen wages to native levels, the exclusion of native labor from some sectors of the economy, or joint-organization to raise native wages to citizen levels . Wright may be correct that displacement struggles only become crises when ethnic conflict is escalated into a total social conflict, also involving control of the law and territory. However, his assertion that native labor’s refusal to accept lower wages than citizens eventually leads to class solidarity does not counter the possibility of a fundamental underlying conflict over access to jobs between both groups. The salience of labor market conflict along ethnic lines can be discounted only if members of both groups end up evenly dispersed through various sectors and levels of the economy. If, on the other hand, the conflict between differentially priced labor results in a segmented labor market where citizens hold higher paying skilled jobs and natives are confined by and large to more casual and menial work, then an underlying tension over wages and jobs remains.
Surveying the development of industrial capitalism in Belfast (and the North-East of Ireland) in the 19th Century, Rowthorn and Wayne provide some support for my analysis. "Faced with [a] tide of cheap labour, the Protestant workers of the city fought to keep the best paid and most secure jobs for themselves" . They report that "it became virtually impossible for a Catholic to obtain skilled employment in certain industries. Thus, by 1911, though Catholics made up about 30 per cent of the population of Belfast, only 5 per cent of all skilled workers in Belfast areas were Catholic" (ibid.). I suggest, therefore, that occasional joint organization can be understood as Protestants acting to better their lot as workers with Catholic support, but that an underlying split remained in the labor market. This segmentation was maintained by many different means, including periodic expulsions of Catholics from industrial workplaces.
There is much evidence for the continued salience of labor market conflict along communal lines to be gleaned from Bew, Gibbon, and Patterson’s history of the Northern Ireland state, which focuses on the class relations within the Protestant Unionist bloc. They note that in early 1920 "growing unemployment in the engineering and linen industries and the large numbers of demobilised soldiers still out of work were creating friction within the Protestant bloc" . They note that the Ulster Unionist Labour Association (UULA) "identified the unemployment problem, especially that of Protestant ex-servicemen, with the alleged 'peaceful penetration' of Belfast industry during the war by 'tens of thousands' of Catholics from the south and west [ibid.]." The UULA began to sponsor ‘indignation meetings’ at the Shipyards to protest the displacement of loyal workers who had been at war risking their lives for King and country by Republicans from outside Ulster who sought to undo Northern Ireland’s position in the United Kingdom. A meeting in July led to the expulsion of between eight and 10,000 Catholic workers and sundry Protestant left wing trade unionists from shipyards and engineering works in Belfast . When reciprocal communal violence followed, the UULA established ‘loyalty bands’ comprised of ex-servicemen to protect Protestant areas and vigilance committees to keep Catholics from returning to work in skilled workplaces. In the context of the War of Independence in the rest of Ireland and the establishment of a local government in Northern Ireland, these groups of ex-servicemen were absorbed into the nascent state apparatus as the Ulster Special Constabulary. With some equivocation, the metropolitan British State in London provided the funding for these groups. This legal paramilitary group became the most hated and resented apparatus of the state among the subordinate Catholic minority in Northern Ireland.
Materially the effects of post-war depression in engineering and linen were shifted onto the Catholic population by their expulsion from their jobs in Belfast and Banbridge. Further employment was provided for Protestants (full time and part time) policing Catholics and marking law-and-order as communal Protestant property. Catholics were expelled and coerced because they were disloyal; any resistance was subsequently taken as further proof that they were disloyal and provided a pretext for their continued exclusion from equal participation in the social and economic life of Northern Ireland.
During World War II, the same issues were raised – the danger of skilled labor from the Irish Free State crossing the border to work in Belfast. These workers were needed in certain sectors as part of the war time boom, but this did not prevent populist unionism as representing alien infiltration by Irish Catholic workers as the source of (Protestant) unemployment in Northern Ireland. Even Labour leaders like Harry Midgley believed in the threat posed by Catholic labour. "Midgley was particularly worried that the implementation of the Beveridge proposals in Northern Ireland would lead to a ‘deluge’ of southerners, who apart from increasing competition in the labour market and arousing loyalist hostility would ‘gravitate to the disloyal element in our population and increase our political difficulties’
The real and imagined fear of displacement by Catholic workers was constant in Ulster’s history from the 18th through the 20th centuries. It also articulated to a cross-class Unionist concern to perpetuate a Protestant majority in Northern Ireland. In the words of Rowthorn and Wayne "[Protestants’] chief reaction to the idea of a self-governing Ireland was one of fear: in a society where Catholics were in a majority Protestants could only lose" . Protestant workers also knew that their industrial and trade links lay with the United Kingdom. On several levels there is a material component to the conflict between Protestants and Catholics in Northern Ireland. At the national level, a Protestant majority was essential to preserve the Union (and the autonomous Northern Ireland Government) with NI’s deep economic links to mainland Britain, and to avert the danger of reverse discrimination in a Catholic dominated state. At the micro-level of the labor market there was also a clear desire on the part of Protestant workers in key sectors to maintain their privileged access to jobs and to prevent the depression of their wage rates to lower Catholic levels.
The Zionist ‘Conquest of Labor’ and the Split Labor Market
The relationship between the Zionist movement (World Zionist Organization and the Jewish Agency in Palestine) and the General Federation of Jewish Labor in Palestine has been acerbically described by Shalev as bringing together "a settlement movement without settlers and a workers’ movement without work". In the minds of at least some British officials, including Colonial Secretary Philip Cunliffe-Lister, a key reason for Arabs refusal to acquiesce in Jewish settlement in Palestine was their exclusion from employment on plantations owned by the Palestine Land Development Corporation and from membership of the Histadrut. However, the British did not have a very subtle understanding of the material basis of the Zionist insistence on ‘Hebrew labor’ seeing it as a symbolic aim and not as an economic and political necessity.
The success of Zionism in attracting workers as immigrants to Palestine was predicated on their ability to find a livelihood there. However, working class Jewish settlers found themselves faced with competition from local migrant Arab labor. Because of their lower subsistence costs and their ability to grow their own crops as well as labor on Jewish estates, native Palestinians’ labor was far cheaper than immigrant Jewish labor. So, in the last two decades of the nineteenth century and the beginning of the twentieth, Jewish labor was displaced from privately owned citrus groves and even from the estates of the Rothschild’s Palestine Jewish Colonization Association (PICA) by Arab fellahin . Shafir has traced the process of trial and error by which the Zionist experimented with solutions to the existential dilemma of providing a livelihood for immigrant labor in Palestine[Shafir, 1996 1989 #72]. Among the solutions adopted were the closure of land markets by the concentration of ownership in the hands of Zionist purchasing organizations, particularly the Palestine Land Development Corporation, and the development of a non-market form of communal farming in the Kibbutz movement.
Shalev develops Shafir’s use of Bonacich’s theory to explain why the Jewish trade union, the Histadrut, refused to accept Arab members through the course of the British mandate for Palestine . The union was effectively a national and not a class organization dedicated to insulating Jewish labor from competition with Arab workers. The Histadrut became a major employer, an umbrella welfare organization, and a network of labor exchanges for Jewish workers in Palestine. Shalev points out that the Jewish workers were unable to completely exclude Arabs from access to the labor market and their wages were constrained by the availability of unemployed, rural and migrant Arab labor. Thus, the Palestine Jewry were forced to adopt a series of hybrid measures to secure the labor market position of settler workers without depressing their standard of living to Arab levels. The Histadrut owned a major construction conglomerate Solel Boneh, which employed only Jewish labor. It established a sick fund, Kupat Cholim, which provided the only effective form of health insurance to Jewish immigrants to Palestine. The sick fund was both a protection for workers which lowered their wage needs, and a form of union power over small businesspeople who joined to Histadrut in order to avail of health coverage. And the Union ran an efficient network of labor exchanges from which Arabs were excluded.
The importance of Jewish labor exclusivism to communal conflict in Palestine intensified over time, as the numbers of Jews and Arabs in the Palestinian grew over time. Private ownership of land in Tel Aviv and rapid immigration in the mid-1920s fuelled a construction boom, but the fall-off in immigration led to devastating recession from mid-1927. British investigators feared that the dislocation of Palestinian Arabs, caused in their view by Jewish land purchases, coupled with the Histadrut’s insistence on ‘Hebrew only’ labor would lead to the creation of a large Arab lumpenproletariat of dangerous magnitude. Such a possibility was, however, delayed by the rapid immigration of Jewish capitalists from Germany from 1932 through 1935, which was a huge boon to the Palestine economy, providing employment to both Arabs and Jews particularly in construction. But, when immigration slowed again, a major Palestinian uprising against British rule followed the subsequent recession. I will assess the evidence that the shelter provided by Zionist institutions to Jewish workers from the worst aspects of the recession contributed to the causes of the uprising in later sections.
I have now established the persistence of a labor market conflict between relatively more and less expensive labor from the dominant and subordinate communities in both NI and Palestine. I now turn to the reasons for the organizational unity of the dominant community in both cases.
Collective Action and the Cohesion of the Dominant Communities
The previous section outlined an economic rationale for persistent ethnic conflict between the subaltern classes in Northern Ireland and Palestine. This section examines the reasons for a high degree of communal solidarity within the Protestant Unionist and Jewish Zionist blocs in the respective cases. The Protestant community in NI collectively had an interest in preserving a Protestant majority and avoiding the possible transfer of the region from the United Kingdom to a united Ireland. But group solidarity is a collective good (or bad) and it is not clear a priori how the preferences and actions of different fragments of the Protestant bloc articulate in a manner consistent with Protestant domination and Catholic subordination. Why, for example, were Protestant capitalists not tempted to use cheaper Catholic labor to cut their production costs? Similarly, despite the shared Jewish wish for sustained immigration and state-building, how was ethnic solidarity maintained to secure that collective good?
In Northern Ireland, I will argue that the asset specificity of the heavy engineering sector gave the Protestant working class and capital an interest in lobbying government jointly for subsidization and a privileged position to do so. In addition, the regional government’s reliance on Protestant votes gave it a political stake in maintaining the jobs of Protestant workers. In Palestine, I suggest that the institutional power of the Zionist organizations accounts for the cohesion of the Jewish bloc in Palestine. The Zionist movement concentrated ownership of land in its hands and conditions consistent with Zionist settlement objectives were attached to all leases. Also the Jewish Agency’s monopoly of access to government among the Jews gave it considerable power over business interests. And, as noted above, immigrants to Palestine were in a position of substantial dependence on Zionist institutions for access to such important benefits as health care and education.
A Tale of Two Sectors – Asset Specificity in Northern Ireland
NI had a very narrow indigenous industrial base of two sectors, linen and shipbuilding, plus their associated engineering works. In this century and particularly since WW II, both have been under severe stress and lost their previously significant shares of the world market. NI had been the world’s second largest producer of linen after the Soviet Union and produced for the US market. However, in the post-war world Ulster’s textile industry seemed ill equipped to compete with cheaper output from the developing world and new synthetic fibers being produced in the West. There was a massive fall in demand for Belfast shipbuilding in the aftermath of the Korean War, when Japan and Germany both surpassed Britain in shipbuilding capacity. The loss of competitive advantage in shipbuilding led to the first major loss of jobs at Harland and Wolff shipyard in Belfast.
Why was shipbuilding in a stronger position politically to command the support of the Northern Ireland government? I invoke the concept of ‘asset specificity’ as an umbrella term to denote the absence of collective action problems for the heavy engineering sector in appealing for government aid, both because of their small number and because of their geographic concentration.
In contrast to heavy engineering, particularly shipbuilding, the linen industry was made up of a myriad of small and medium firms, many of which were going bankrupt. The technocratic belief of the time was that only a portion of such firms could survive and that there would have to be far greater concentration of firms in the sector. The industry was also dispersed geographically through much of NI. Thus, there was no effective base for the ‘linen bourgeoisie’ to overcome its own divisions and organize politically to command support for a declining sector. Undoubtedly also many of the firms were small and inefficient, and employment was being lost to this sector at a tremendous rate.
But there were other political considerations that made the NI Government more responsive to shipbuilding as opposed to linen. The linen industry had been much more susceptible historically to the vagaries of the world market, and there were frequent periods of redundancy for many of its workers. Such a casual nature of work was in marked contrast to the permanence of skilled trade unionist labour in the heavy engineering sector. The nature of the NI dual labor market was such that the shipbuilding industry was the preserve of male Protestant labour. By contrast, the proportion of Catholics in the textile mills was far higher than in engineering. Also the indigenous textile industry had been marked by a preponderance of female wage labor, both Catholic and Protestant. If the median worker in heavy engineering was a Protestant male, the median worker in a linen mill was a Catholic female.
I suggest there was a prima facie preference on the part of the NI government to subsidize footloose skilled Protestant male employment in heavy engineering for fear of its migration to Britain or its willingness to vote for the NI Labour Party. On the other hand, although the textile industry employed many Protestants and the firms owners were almost exclusively Protestant, I suggest that Stormont was less worried about the votes of female Protestant wage labor. The nature of the linen sector with its frequent lay-offs and small concerns made penetration by trade unions very tough. This meant that the NILP had little appeal for rural textile workers. There was also no rural threat to the votes of the Unionist party from Labour, and rural Protestant voters were largely conservative and in the pocket of the Unionist party. Further, out-migration of female workers whose families might have held land or other ties to the country was less likely than the migration of skilled engineering workers. Thus, textile workers held less clout politically than did shipyard men. The lack of focus on modernizing the indigenous textile industry should be understood in terms of the predominance of a religiously integrated labor force and its large concentration of female labor. The state certainly did not have the foresight to look to develop new markets for NI textile products, say at the upper end of the production cycle for textiles, although it did acquiesce in the vertical integration of the sector.
By contrast, the state subsidized heavy engineering concerns like Harland and Wolff shipyard and Short Brothers aeronautics in the Belfast. The NI Government also sought to attract foreign investment to areas outside of Belfast in order to counter the collapse of employment in the indigenous textile sector and for agricultural labor. But, Stormont was conveniently armed with a report from a planning consultant who suggested that Belfast was overcrowded and that the principal areas of development, which could provide a nice quality of life for American and British branch plant managers, should be outside the city. Yet these plants would have to be located in proximity to the Belfast docks and the airport, i.e., in the greater Belfast area. The report’s recommendation was politically convenient as the population of Belfast was religiously mixed, whereas the hinterland of Belfast was almost exclusively Protestant, and the peripheral West of NI was predominantly Catholic. So technocratic considerations dictated that the state subsidize multi-national branch plants in areas where Protestants lived. During the 1960s state subsidies for foreign direct investment looked like a successful policy with many large British based multinationals setting up shop in Northern Ireland. Most of the firms investing manufactured synthetic fibers, including Courtaulds, ICI, and Enkelon. As long as NI provided capital subsidies and there was excess demand in the world textile market, there were plenty of firms willing to invest in Northern Ireland. So, for much of the 1960s, synthetic fibers appeared to be taking the place of the indigenous linen industry.
There were, however, some glitches. Firms often wanted to set-up closer to Belfast than the planners would allow. Worse still, factories could not be established fast enough to meet the needs of multi-national branch plants because of the lack of skilled construction workers and craftsmen. The irony here is that while Protestant men held high paying Government protected work in heavy engineering, Catholics were largely consigned to the vagaries of the market for construction workers. When skilled construction workers were urgently needed to build factories, none were available, because these Catholic workers were off in London and Dublin making more money with less political hassle.
Encouraging emigration was one of the considered policies of the NI government for reducing its rate of unemployment to UK levels. Brooke and other politicians were aware that if this were the stated policy it would rankle with Catholics. But, in the early sixties, grants were available to fund the emigration of NI citizens to Britain and the ‘white’ dominions of the Commonwealth. The archives reveal an anxiety that the wrong people were emigrating, i.e., some skilled and employable Protestants. But this may also have contributed to the dearth of Catholic construction workers.
I have argued that Protestants generally held more skilled jobs and Catholics were more likely to be found in menial and casual work . I have also argued that the dual labor market for Protestant and Catholic labor coincided with the sectoral division between the engineering and textile sectors and also in some part to a gender division of labor. Subsidies for industrial employment – both the existing engineering firms and to new branch plants – went largely to Protestant areas. In short, efforts to address Northern Ireland’s unemployment problems were concentrated on maintaining a Protestant majority in that province.
Collectivism and Ethnic Power
Palestine experienced intensive economic modernization in the course of the British mandate (1920-1948). Growth was driven for the most part by the impetus of large-scale Jewish immigration and capital imports . As noted above Jewish workers had an existential economic interest in insulation from labor market competition with Arabs if they were to avoid displacement and make a life in Palestine. The Zionist organizations wanted to maximize the rapid growth of Palestine’s Jewish population. The question, however, is how were the Zionist organizations and the labor movement able to constrain the choices of the burgeoning Jewish capital sector to prevent the widescale use of cheaper Arab labor in place of immigrants? The answer I will suggest lies in the institutional power of the Zionist movement under the mandate and the use of that power in a manner that favored the interests of a Jewish labor movement that was nationalist in its orientation.
The fundamental root of Jewish unity in Palestine under the auspices of the Zionist movement was collective ownership of land. The vast majority of land acquired by Jewish interests in Palestine was bought by two colonization organizations, the Palestine Land Development Company (PLDC) and the Palestine Jewish Colonization Association (PICA), particularly the former. Land acquired by the PLDC for the Jewish National Fund was treated as the inalienable property of the Jewish people and was leased only to Jewish farmers or groups establishing Kibbutzim. The Fund insisted that only Jewish labor be used on its land, and this rule was vigilantly policed by the Jewish trade union, Histadrut. This JNF succeeded in concentrating both rural and urban lands in its hands. The Zionists believed that the intensity of the recession in 1927 was caused by an inevitable collapse in property prices following intense speculation in land and property in Tel Aviv in the mid-1920s. They were careful to accumulate much of the property in Haifa prior to that city;s take off, to better manage its development and to maintain work for Jewish construction workers when the next recession came.
The Zionists were aided in their concentration of Jewish land ownership by British land legislation that precluded private individuals from purchasing of large parcels of land . The Land Transfer Ordinances were designed to prevent the alienation of land from the peasantry, but the PLDC was exempted from their provisions as a charitable institution. The legislation helped the Zionists by preventing Arab speculators from driving up the price of land in Palestine and reducing the areas the former could afford to acquire. It also precluded private Jewish interests from investing in agricultural land free from the constraints imposed by the JNF as a landlord.
The Zionist movement also held a virtual monopoly on Jewish representation to the Palestine Government. The mandate provided for a Jewish Agency in consultation with which Britain would administer Palestine. It was the Agency that nominated Jewish representatives to various business committees. This gave the JA considerable influence in securing tariff exemptions from the British for inputs required for new Jewish industries. I suggest this influence also gave the JA considerable power over Jewish entrepreneurs. Another consideration noted above was the degree to which immigrants of all classes were dependent on the sick fund of the Histadrut for health insurance. The Jewish Agency also funded an extensive education system for the Palestine Jewry on the basis of taxes, which the Yishuv was statutorily entitled to collect.
The collective social and political organization of Palestine’s Jews was in marked contrast to the fragmentation of the Arab population. The bulk of Palestinian natives were small farmers, owner-occupiers, or tenant farmers. They had no basis for collectively organizing to demand support from Government, and their economic interests were opposed to those of their erstwhile leaders. Some of the Palestinian elite defaulted on bogus mortgages in order to remove their tenants and to sell land to Jewish organizations . Those elite landowners attempting to expand their economic activity were investing heavily in the cultivation of oranges. However, the need to drill wells without restraint placed them in a position of class solidarity with the owners and managers of Jewish estates. Small peasant farmers required a clear property right in underground water if they were to irrigate their land and increase their productivity, the British thought. However, the peasants were not in any position to organize to demand such rights, especially in the face of the implacable opposition of the cross-communal citrus growing industry.
I have tried to show the institutional and economic basis of ethnic solidarity among the respective Protestant Unionist and Jewish Zionist blocs in NI and Palestine and the fragmentation of the subordinate groups in each case. In NI, I have suggested that Protestant unity was built around strong state support for the heavy engineering sector, which was narrowly concentrated geographically and in terms of ownership. NI’s governing Unionist party, which ruled from 1920-1972, was dependent on the votes of the Protestant working class to maintain its power. In Palestine, I have argued that Zionist hegemony among the Palestine Jewry was secured via the collective ownership of land and the monopoly of representation the mandate bestowed on the Jewish agency. I now turn to the question of why the British State was beholden to the dominant community in both cases.
Dog or Tail: The State and the Social Bases of Order
What was the relationship of the State to the dominant community in NI and Palestine? Should we not expect an imperial power to have sufficient autonomy from social pressures to be able to stifle the development of communal antagonisms? The State was, I argue, institutionally biased in favor of the respective Protestant Unionist and Jewish Zionist blocs. This bias was a product of state dependence on these blocs to maintain its rule. I employ two models of the social bases of politics to argue this point.
First, in Schumpeter’s theory of democracy a ruling elite forges the support of a social coalition on which it rests. The Government of NI (1920-1972) rested on the electoral support of the Protestant working class, and subsidizing their engineering jobs was central to maintaining the unity of Unionist rule in Northern Ireland. Britain subsequently found itself using state largesse to support Protestant employment and try to avoid further disorder.
Second, the relationship between the state and taxpayers can be understood as a capital-coercion bargain. The state is an organization with a comparative advantage in violence , and it uses this position to enhance the property rights of its tax base. In Palestine, where the colonial Government was cash-strapped it developed a fiscal interest in the economic development of the Jewish community, despite the systematic exclusivism of the Zionist project. British rule in Palestine can be understood as a capital-coercion bargain, with Jewish taxes paying for Britain’s imperial over-stretch and British power repressing Arab discontent.
Northern Ireland as a Labor Based Regime
Unionist leaders like Edward Carson were extremely afraid of Bolshevism and what they saw as associated threats to the British empire in the aftermath of World War I. The Unionists created the Ulster Unionist Labour Association (UULA) as a means to purge the trade union movement in Northern Ireland of Bolsheviks and Republicans, categories the Unionists saw as coterminous . As noted above, the UULA was unsuccessful in galvanizing Protestant support until it sponsored indignation meetings to protest Catholic employment in skilled industries alongside Protestant unemployment. When historians speculate on the informal labor exchanges for Protestants run by the Orange Order, they miss the significance of the UULA in mediating the relationship between the nascent Unionist state and the Protestant working classes. In the context of the great depression in the 1930s and riots for outdoor relief aid in 1932, the nature of the relationship between the ruling Unionist party and the Protestant working class became clearer. In the early thirties the Catholic and Protestant unemployed almost united to demand relief from the state. However, the local state broke with the fiscal orthodoxy at Westminster and provided relief distributed through the UULA. The Prime Minister of NI, Sir James Craig, described the Ulster Unionist Labour Association as ‘the most wonderful organisation in Ulster’ [Quoted in Bew, 1979 #106 p.90] and later boasted that ‘The UULA won the ‘cream’ of the working class and ‘so many influential trade union leaders’ to Unionism. The NI state had been founded on a cross-class alliance of Unionist interests.
I have already noted above that the issue of what to do with demobilized Servicemen was a problem for Ulster’s elites in the aftermath of WW I. These unemployed Servicemen were effectively in a position to become criminal gangs, but instead in the context of communal violence following the expulsions of Catholics from the shipyards were absorbed into the local state as Special Constables. Having its own paramilitary force gave the Unionist Government substantial political autonomy from the metropolitan state in Britain and its generals stationed in Ulster, provided the British state would acquiesce in funding Stormont’s mode of coercion.
In World War II, populist Unionist and labor leaders were able to use the alleged flood of migrant labor to defuse Protestant anger at the Government over comparatively high levels of unemployment. The NI government repeatedly sought permission from Britain to better control the migration of skilled laborers from the Irish Free State to NI. It considered labor exchanges but these were prohibitively expensive. When the war ended, legislation was passed to continue to restrict the migration of Catholic labor from Southern Ireland into the North. The Safeguarding of Employment Act (NI) required employers obtain residence certificates from the NI Ministry of Labour in order to employ non-Northern Ireland laborers. This legislative restriction was partly a response to the Government of Ireland Act (1949) which provided for free labor migration from Ireland to Britain.
Archival material from the Commerce files of the Cabinet at the PRONI reveals a desire on the part of state officials to maintain this act. Two economists contracted to report on the problems of the Northern Ireland economy – higher rates of unemployment, lower rates of productivity, decline of chief traditional sectors – suggested that the Safeguarding of Employment Act was a major headache for employers and should be abolished [Isles and Cuthbert 1957]. The official view is that all requests for residence papers for migrant labor were granted without any problem and that abolishing the act would not significantly improve the state of the local economy. The likelihood is that the legislation, coupled with extra legal pressures from such organs as the Orange Order, the UULA, and the Ulster Special Constabulary, deterred employers from importing Southern labor. Certificates were granted for necessary skilled labor brought from Britain. Chances again are that southern skilled labor would have been cheaper than its British counterpart, but that this was politically unacceptable as it would have threatened the sectarian composition of the sectors on which the Unionist state rested.
Policy discussions of the Commerce Department from the early 1960s voice another concern with preserving the Safeguarding of Employment Act. A joint NI-GB committee was set up after an inter-Governmental meeting to discuss higher NI unemployment in 1961. The committee notes repeatedly that if the United Kingdom and the Republic of Ireland (the Irish Free State since 1949) are to join the European Economic Community, it may no longer be possible to preserve the legislation controlling Catholic migration from the Republic of Ireland to Northern Ireland.
The tacit support the Unionist state gave to Protestant workers in expelling and excluding their Catholic counterparts from skilled employment and legislative efforts to control Irish Catholic migration into Northern Ireland indicate a close relationship between the Northern Ireland Government and the Protestant masses. To maintain its electoral stranglehold on power and a perpetual Protestant majority, the politics of the Unionist Party were inherently populist. The party’s support and the demographic power of Protestants rested on the votes of working class Protestants. Two fears had to be countered: 1) that Protestants could be displaced by Catholic labour and 2) that skilled Protestant labor would migrate to Britain or further for higher wages than could be offered in Northern Ireland. The result was that the state played a peculiarly preponderant role in the economy of Northern Ireland and in its key sector engineering, particularly shipbuilding.
NI had industrialized in the 19th century based on the relatively narrow base of indigenous flax growing and linen spinning, and related engineering works for the mechanization of the linen industry. Britain’s preponderance in world trade facilitated the establishment of two major shipyards in Belfast with steel supplied from Clydeside in Scotland. However, in this century, NI was trapped riding the coattails of a declining British economy . As Britain’s share of world trade declined and other countries began to produce ships more productively, certain inherent disadvantages of NI’s industry were revealed. With a declining share of world markets for British shipbuilding overall, NI had several disadvantages vis-à-vis the rest of the British economy. Principally its energy costs were higher owing largely to the transport costs of bringing oil and coal to NI to power industry. Also the transport costs of bringing steel from mainland Britain were important. A historic advantage to Ulster in terms of industrialization had been comparatively low wages. However, through the twentieth century trade union density in Ireland – North and South – has been very high and national UK bargaining agreements on a sectoral basis set wages for industrial workers in Northern Ireland. High union density is partly due to the tendency for Irish wages to track wages in Britain. Correcting the cost structure of the NI economy by cutting wages was not an option for the NI government, as it could have led to mass migration on the part of skilled Protestant employees.
The Government of Northern Ireland was faced in the post-war years with a serious problem of unemployment, which has averaged about five per cent above the rate for the UK as a whole since the foundation of the state. Jobs were being shed in the two key sectors, linen and engineering/shipbuilding. Unemployment was a political threat at several levels. The Northern Ireland Labour Party was able to challenge Unionist hegemony by appealing to Protestant workers on class lines, and there was a danger of out-migration to Britain on the part of skilled Protestant labor, a key constituency in the Unionist coalition. Thus economic growth and unemployment were major political concerns for the Unionist elite in the period following World War II. Several important studies of the economy were commissioned, beginning with Isles and Cuthbert in the 1950s. The economic policy of the Northern Ireland Government was to use money from Britain to provide both subsidies to capital and labour – to bring NI wage rates down to be competitive in terms the cost structure of the NI economy and the demand for NI output in world markets.
Shipbuilding was the major beneficiary of this largesse. The reasons for this are that highly skilled and unionized labor both had the options of jobs in other economies – some going to work in Germany – and were a tailor made constituency for the Northern Ireland Labour Party. The Stormont Government had always been involved in the company, ministers or civil servants controlling two of the board’s five places. The yard’s bankers knew that the Government of Northern Ireland stood as guarantor for any loans issued, and a commercial concern which would have gone bankrupt many times was kept artificially afloat. In the 1960s when there was great state largesse toward Harland and Wolff, the yard’s order books were full. Orders were plentiful because NI’s shipyard was able to use the extent of Government subsidies to tender more cheaply and undercut the rest of the UK’s shipyards. Below cost tenders helped to arrest the decline of employment in shipbuilding in the 1960s but bode ill for the future.
When Britain imposed direct rule on Northern Ireland in 1972, the metropolitan state found itself effectively locked into a deeply institutionalized pattern of support for industries employing Protestants. A combination of factors caused this support to continue through the 1970s and the first half of the 1980s. There was obviously a degree of inertia involved – the region’s new rulers did not have the local knowledge or the organizational coherence required to pull the plug on subsidies to heavy industry. They also feared the loss of skills to the NI economy that would result if engineering industries were shut down, despite their fundamental lack of competitiveness. Shipbuilding and engineering were also heavily unionized, belonging to the most part to British based unions, and the Labour government of the 1970s was most unlikely to shut down such national industries.
There were also political considerations. By 1972, Britain was already fighting a war against the Irish Republican Army. Both Conservative and Labour governments of that time were loathe to shut down ‘Protestant’ industries for fear of having to fight a war on two fronts. Britain’s desire to insulate itself from the conflict in Northern Ireland and Protestants’ seeming loyalty led it to employ large numbers of Protestant men in the expanding NI security forces, the Royal Ulster Constabulary and the Ulster Defence Regiment. In contrast, the most Britain could immediately do, to bolster Catholic life chances was to legislate liberal equality of opportunity.
Thus the State was locked into a position of reliance, or at least fear of antagonizing, the Protestant working class. It was also impossible to drive any wedge between moderate and extreme Protestants on the issue of power sharing with Catholics. The difficulty in finding Protestant moderates was in part because the electoral dynamics within the Protestant community depended on winning workers’ support, and Protestant workers’ remained in a zero-sum conflict over jobs with their Catholic counterparts. Thus Britain’s attempts to foster power-sharing in Northern Ireland failed throughout the 1970s (and into the 1980s).
Fiscal Dependence in Colonial Palestine
Why did the British acquiesce in Zionist settlement practices, if they were aware that the ‘Hebrew labor’ campaign could preclude Arab and Jewish coexistence in Palestine? Palestine was a territory of negligible economic worth, but some strategic value. The metropolitan Treasury placed constant pressure on the Colonial Office and the Palestine Government to ensure that Britain avoided any fiscal responsibility for the mandate and to recoup earlier military outlays. This pressure placed colonial administrators in the paradoxical position of having twin, but contradictory, aims of maximizing tax revenues and minimizing interference in the existing social fabric.
In Palestine, the British were able to temporarily sidestep the contradictory imperatives of colonial rule. The concentration of Jewish settlers in the coastal cities of Tel Aviv and Haifa quickly created an economy that was relatively cheap for the British to tax. The Yishuv, Jewish community in Palestine, imported many of its foodstuffs and all its fuel and raw materials from abroad, and customs revenues became the mainstay of British administration. Britain balked at the expense, and danger, of surveying the agricultural land of the country and imposing a modern individualist property rights regime in land, which might have raised the indigenous tax-base. The Palestine Government became financially dependent on an expanding Jewish economy driven by high immigration and imported capital, to the point at which state tax and education policies were reinforcing a coastal-urban-Jewish and inland-rural-Arab, spatial, cultural, and economic divide.
Budgetary data for the mandate through 1939 show that expenditure by the Palestine Government on development grew at 1.67 times the rate at which revenue grew, and spending on economic and environmental services grew at 1.2 times the rate of revenue . The provision of a telecommunications and road infrastructure is the mark of a political exchange between the Palestine Government and the Zionist Executive to enhance the overall performance of the economy. The British Palestine Government was self-consciously investing in deepening its revenue base by providing services and infrastructure that would enhance the rapid growth of the Yishuv and its economy. (Incidentally, the sale of telephone lines and services was a major source of income for the Palestine Government.)
By contrast, the relative share of expenditure on social services – health and education – declined through the inter-war years . Government spending on Arab education was far less than popularly demanded. Education was widely perceived as the only means of economic, social, and political advancement by the Palestinian Arabs, in an era of economic change and population growth . The shortage of school places fuelled the popular belief that Government was deliberately keeping the Arab people ignorant, a policy dubbed Tajhil in Arabic. . In fact, the expansion of public education was limited by budgetary constraints imposed on the education department, and also teacher shortages. But some officials were also ambivalent about the effects of mass literacy. In the official mind, the inability of civil service jobs to keep up with basic literacy was the root source of nationalism: the basic scourge of British rule in Egypt and, particularly, India . The British were caught between recognizing the paramount importance of increasing public literacy and -- viewing Arab society as static -- the dangers of expanding education too quickly .
Among the chief problems Government feared was rapid urbanization of the Arab population. Throughout the colonial world social problems were concentrated in rapidly growing cities, Fanon’s déracinée revolutionaries. The impact of increased technical knowledge would have hastened the commodification of agriculture, driving large numbers off the land and prompting the growth of an urban underclass. This fear also retarded investment in irrigation, which could have helped farmers shift from dry crop cultivation to vegetables for the burgeoning coastal economy.
From the perspective of the conservative "negative" social engineers in the Palestine government and the Colonial Office, the urbanization of the Arab population was to be avoided. A larger Arab "lumpenproletariat" in the coastal cities would have threatened a far greater level of violence than experienced during the mandate. For the British, keeping the masses rural best preserved order. At the time, the Zionists greatly resented the government’s conspiring against them to restrict land sales through a series of land transfer ordinances . But ironically the spatial nature of the communal divide probably assisted Zionist state-building efforts in Palestine.
Increasing the tax burden on the immigrants, relative to the natives, paid fiscal dividends for the Palestine Government. The fiscal benefits of immigration are borne out by the increase in revenue over time, the increasing share thereof from customs and excise, and the increasing relative share contributed by the Jewish community. Revenue grew from &1.5 million in 1921 to &5.2 million in 1935. It dipped to around &4.3 million per annum for the rest of the decade, with the slowdown of Jewish immigration and the onset of the rebellion from 1936-1939 . Notably, however, revenue fell by less than Jewish income in this period, partly because the immigrants’ relatively inelastic consumption was taxed via customs and excise. (In late 1930s Palestine there was no option of remigration for Jews as there had been in the late 1920s.)
The share of revenue from customs and other indirect taxes rose throughout the mandate. From 1923-31, about a quarter of revenue derived from traditional agriculture and land taxes and around a half from customs . For 1933-40, indirect taxes increased to 88.5% of revenue, of which customs and excise alone was 57.7%. The Jewish community became the main source of revenue for the Palestine Government. Already in 1928, when Jews comprised 17% of the population, their contribution to revenue was of the order of 44% . Econometric research shows that the size of the Jewish population and Jewish per capita income affected the level of revenue positively, whereas Arab population had little effect .
Why did the state choose to rely on Jewish immigration for its revenue and not also, or instead, try to enhance and tap the indigenous tax base? The reasons become clearer if we borrow two theoretical concepts from the new institutionalist literature: 1) transaction costs or the costs of negotiating an agreement on policy and the costs of implementing policy; and 2) the discount rate or time horizon of the decision maker . The cost of taxing Jewish imports for consumption was comparatively low as they came mostly via the jetty at Jaffa and later the country’s only deepwater port at Haifa. By contrast, taxing the Arabs depended on a cumbersome process of assessment and taxation in kind on agricultural output. Bargaining costs were also reduced by the mandate’s provision for a Zionist Executive, which, given the inherent dependence of many immigrants on communal institutions and the predominance of institutional ownership of land, was able to voice a unified set of preferences in dealings with the British. Palestinian interests were by contrast extremely heterogeneous precluding the emergence of a coherent set of institutions that could deliver any form of social contract between the Arabs and the government. Palestinian Arab society was racked by what was effectively a class division between peasant farmers – owner-occupiers and tenants – and urban landlords-cum-moneylenders .
Owing to the nature of the mandate as a trusteeship, Britain was very uncertain about the length of its rule in Palestine. The government had a short time horizon. The state was prepared to invest in infrastructure for the development of the maritime Jewish capital economy, which would produce dividends in terms of increased revenue in the short run. But the prospect of future revenues from the commodification of Palestinian agriculture was insufficiently attractive. The uncertain prospects of Arab agriculture help to explain why Britain never completed a full cadastral survey as a prelude to an individualistic property rights regime in land in the densely inhabited hills. However, more rudimentary techniques were sufficient to determine land parcels in the homogeneous plains where Zionist land purchases were concentrated. The payoff from a vibrant market in artificially expensive land was an increase in registration fees, which were an important component of revenue by the 1930s .
The social and economic bases of a political-exchange between the British and the Zionist movement are, I hope, clear. The general pattern of rule was to encourage the development of an externally oriented coastal economy, via Jewish immigration, which provided a solid revenue base for the Palestine Government, on the one hand. On the other, despite numerous inquiries and reports on the changes necessary for Arab economic development, it suited the state to keep a lid on Arab social change and to stave off the problems that rapid modernization, urbanization, and politicization involved for as long as possible.
The pitfall of British rule in Palestine was that it was the short-run view it took of communal stability. Arab demographic growth coupled with the rapid growth of the coastal cities did lead to the creation of a slum dwelling Arab lumpenproletariat in the cities. In Haifa, such dislocated persons were the main constituency for radical Islamic preachers, including Izz ad-Din al-Qassam . When the Palestine economy entered a recession in mid-1935, the brunt of unemployment was borne by subaltern Arabs. The unequal impact of the recession was a partial cause of the outbreak of the 1936 revolt.
Britain’s dependence on the Zionists was also a double-edged sword. Because the nature of settlement practices was antagonistic to the native inhabitants, the immigrants required armed protection. But Britain was unable to afford to finance this directly, so instead they armed Jewish settlements. For their part, Jewish guards stoked up communal antagonisms in order to exclude Arab workers from plantations, secure employment guarding settlements from attack by the Arabs they had shut out, and to procure arms from the Government. The irony is that British reliance on auxiliary Jewish coercion facilitated the creation of a state within a state, which was ultimately to force its protector out and establish an independent state.
Conclusions – Tails that Wag Dogs
In this chapter, I have argued that Britain was unable to quell communal conflict in Northern Ireland and Palestine because of the leverage exerted over policy by the dominant blocs in each case, Protestant Unionists and Jewish Zionists. Both local blocs with which the state cooperated in attempting to rule had far greater local knowledge and cared far more deeply about local outcomes than ruling British officials. I have structured my comparison around three concepts: 1) the split labor market; 2) collective action; and 3) the social bases of states.
Following Bonacich, and her Israeli disciples, I have pursued the argument that ethnic antagonism derives from labor market conflict between relatively higher and lower priced workers from different descent groups. I have shown that the political history of Northern Ireland revolved around perpetuating a dual labor market where Protestant men monopolized skilled employment, and Catholics were largely confined to the vagaries of markets for textiles and construction services. I have also shown that the nature of Zionist settlement institutions and practices in Palestine developed in order to insulate Jewish immigrants from labor market competition with their Arab coworkers. In an era of rapid Arab proletarianization, their periodic exclusion from access to capital was a potential political time-bomb.
The reasons for the solidarity of the dominant bloc in each case were explored next. The concept of asset specificity was used to explain the political unity of Protestant labor and engineering employers in demanding state support in NI. The electoral basis of the Unionist party among the Protestant working class made the state amenable to the sectoral interests of engineering. By contrast, the textile industry was more geographically dispersed and comprised of too many firms of varying size to organize collectively. In Palestine, collective ownership of land by the Jewish National Fund was used to explain the power of the Zionist movement to enforce ethnic solidarity. The Jewish Agency shared labor’s interest in shutting out Arabs in order to maximize immigration. The international donations on which the Zionists relied also depended on sustained immigration. Arab society by contrast was extremely heterogeneous and was politically fragmented.
I then explored the nature of the political exchange between the British government and the respective dominant communities in NI and Palestine. As an autonomous region, Northern Ireland had been a labor-based regime, with the Unionist party channeling funds to the industries where Protestant workers were concentrated. Britain inherited stewardship of an economy with both a dual sector and a split labor market and continued to prop up the more politically cohesive heavy engineering sector. The state’s inability to equalize life chances for the Catholic masses allowed the IRA revolt to continue. The intensity of the IRA campaign in turn led the state to depend on Protestant workers as auxiliary coercion. The Palestine government faced twin contradictory pressures to maintain social order and to pay for itself. It sought to mediate the development of a dual economy in which Arab society remained comparatively static agrarian and self-contained, and the Government relied for its taxes on import tariffs from the burgeoning Jewish coastal economy. Naïve hopes that Arab society would develop indirectly via Jewish investment were unfounded, and the exclusion of Arab labor from access to Jewish capital continually intensified political antagonisms.
From the outside, Britain’s behavior in Northern Ireland and Palestine in bolstering the dominant blocs and helping to marginalize the Irish Catholics and Palestinian Arabs seems pathological. However, we should recognize it as the product of a political exchange between the state and the dominant community in each case, and the interest of the dominant community in marginalizing its subordinate. The political exchange between the State and the respective Protestant and Zionist blocs was asymmetrical. But remarkably, and contrary to the theories of state autonomy and hegemonic peace, power and leverage in these unequal exchanges accrued to a communal formation and not to the state.
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