Start-up Nation

But Ben-Gurion was singularly focused on building the state, by whatever means. He had no patience for experimenting with policies that he believed were simply designed to validate Marxist ideology. In his view, every policy—economic, political, military, or social—should serve the objective of nation building. Ben-Gurion was the classic bitzu’ist, a Hebrew word that loosely translates to “pragmatist,” but with a much more activist quality. A bitzu’ist is someone who just gets things done. Bitzu’ism is at the heart of the pioneering ethos and Israel’s entrepreneurial drive. “To call someone a bitzu’ist is to pay him or her a high compliment,” writes author and editor Leon Wieseltier. “The bitzu’ist is the builder, the irrigator, the pilot, the gunrunner, the settler. Israelis recognize the social type: crusty, resourceful, impatient, sardonic, effective, not much in need of thought but not much in need of sleep either.”⁵ While Wieseltier is describing the pioneering generation, his words fit those who risk all to found start-ups. Bitzu’ism is a thread that runs from those who braved marauders and drained the swamps to the entrepreneurs who believe they can defy the odds and barrel through to make their dreams happen. For Ben-Gurion, the central task was the wide dispersion of the Jewish population over what would one day become Israel. He believed that an intensely focused settlement program was the only way to guarantee Israel’s future sovereignty. Otherwise, unsettled or thinly settled areas could someday be reclaimed by adversaries, who would have an easier case to make to the international community if Jews were underrepresented in contested areas. Moreover, thick urban concentrations—in cities and towns like Jerusalem, Tiberias, and Safed—would make obvious targets for hostile air forces, which was another reason for dispersing the population widely.

Ben-Gurion also understood that people would not move to underdeveloped areas, far away from urban centers and basic infrastructure, if the government did not take the lead in settlement and provide incentives to relocate. Private capitalists, he knew, were unlikely to take on the risk of such efforts.

But this intense focus on development also produced a legacy of informal government meddling in the economy. The exploits of Pinchas Sapir were typical. During the 1960s and ’70s Sapir served at different times as minister of finance and minister of trade and industry. His style of management was so micro that Sapir established different foreign currency exchange rates for different factories—called the “100 exchange rate method”—and kept track of it all by jotting each rate down in a little black notebook. According to Moshe Sanbar, the first governor of the Bank of Israel, Sapir famously had two notebooks. “One of them was his own personal central bureau of statistics: He had people in every large factory reporting back to him on how much they sold, to whom, how much electricity was consumed, etc. And this is how he knew, well before official statistics were kept, how the economy was doing.”

Sanbar also believes that this system could have worked only in a small, striving, and idealistic nation: there was no government transparency, but “all the politicians then . . . died poor. . . . They intervened in the market, and decided whatever they wanted, but at no point did anyone pocket even one cent.”⁶

The Kibbutz and the Agriculture Revolution

At the center of the first great leap was a radical and emblematic societal innovation whose local and global influence has been wildly disproportionate to its size: the kibbutz. Today, at less than 2 percent of Israel’s population, kibbutzniks produce 12 percent of the nation’s exports.

Historians have called the kibbutz “the world’s most successful commune movement.”⁷ Yet in 1944, four years before Israel’s founding, only sixteen thousand people lived on kibbutzim (kibbutz means “gathering” or “collective,” kibbutzim is the plural, and members are called kibbutzniks). Created as agricultural settlements dedicated to abolishing private property and to complete equality, the movement grew over the following twenty years to eighty thousand people living in 250 communities, but this still amounted to only 4 percent of Israel’s population. Yet by this time the kibbutzim had provided some 15 percent of the members of Knesset, Israel’s parliament, and an even larger proportion of the IDF’s officers and pilots. One-quarter of the eight hundred IDF soldiers killed in the 1967 Six-Day War were kibbutzniks—six times their proportion in the general population.⁸