Dependency converts Palestinian wages directly into Israeli exporter profits

Evidence

The result has been a dramatic class shift: Palestinians who were once self-employed in agriculture became wage workers in the Israeli economy. In 1967 half of economically active Palestinians were self-employed, with virtually no one from the Palestinian territories working in Israel. However, twenty years later the number of self-employed had decreased by half, and 40 percent of Palestinian workers were crossing the borders to sell their labor power to Israeli employers. This shift has paradoxically exacerbated the fragility of the Palestinian economy. When the Israeli military closes checkpoints, the Palestinian unemployment rate almost automatically surges. Moreover, when Israel allows Palestinians to work within its borders, Palestinians use increased wages to buy Israeli commodities. Given the lack of local manufacturing, Palestinians often have no choice but to buy these Israeli goods. Thus the greater purchasing power of Palestinian workers directly translates into greater trade deficits and greater profits for Israeli exporters. The grip of dependence really couldn’t be stronger. — Clara E. Mattei, Escape from Capitalism, 326

Categorization

• XREF: An almost textbook illustration of the dependency-austerity trap under colonial capitalism, echoing deeper patterns of how capital extracts surplus from dependent territories. — connects to: Israeli military orders after 1967 systematically deindustrialized the Palestinian economy. — Clara E. Mattei, Escape from Capitalism, 315; De-agrarianization turned self-employed Palestinians into wage workers in Israel, deepening dependency — Clara E. Mattei, Escape from Capitalism, 326