The following letter is in reply to a question about the nature of Israel from a comrade who is a serious Marxist.
Regarding your question about whether Israel is an imperialist country (or not), there is nothing synthetic available about this that I know of. But the logic is inescapable when you look at the alternative to Israel being an imperialist power.
I will deal with the theoretical aspect of this, and then bring together evidence to back it up, from a number of sources.
From the point of view of the Leninist understanding of imperialism, there are quite a limited range of possibilities as to the nature of Israel as a capitalist state. It can be either a semi-colony or an imperialist power. Or it can occupy the kind of programmatic ‘no-man’s land’ that is highly controversial among the serious would-be Marxist left, and be designated as some kind of intermediate form of capitalism, somewhere between the two.
I am highly sceptical of the existence of this ‘intermediate’ level of capitalist development as a distinct category. In reality it generally describes countries that have composite characteristics, i.e. some of the characteristics of imperialist countries co-existing with some of those of oppressed, semi-colonial countries.
In 1982, the Spartacists used the argument about the existence of such an intermediate state to argue that Argentina was not a semi-colonial country and therefore to justify their position of defeatism on both sides in the Falklands/Malvinas war. I now think this was wrong, not because in a strictly self-determinationist sense the Falklands/Malvinas were part of Argentina (not really true), but because of the question of the ownership of the natural resources around South America by South American countries. The British claim to those resources is similar in some ways to US imperialist overlordship of oil resources in the Middle East. The British colonists there may not be oppressing a ‘native’ Argentine population, but they are the bridgehead for maintaining control of those natural resources against South America – a classic imperialist project.
In any case, the justification for their ‘plague on both your houses’ position was that Argentina was an example of a “transitional state of dependence”, and not a semi-colonial country at all. This phrase about a ‘transitional state of dependence’ does indeed come from Lenin, in Imperialism, and the full passage is as follows:
“Since we are speaking of colonial policy in the epoch of capitalist imperialism, it must be observed that finance capital and its foreign policy, which is the struggle of the great powers for the economic and political division of the world, give rise to a number of transitional forms of state dependence. Not only are the two main groups of countries, those owning colonies, and the colonies themselves, but also the diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence, typical of this epoch. We have already referred to one form of dependence—the semi-colony. An example of another is provided by Argentina.
“South America, and especially Argentina,” writes Schulze-Gaevernitz in his work on British imperialism, “is so dependent financially on London that it ought to be described as almost a British commercial colony.”  Basing himself on the reports of the Austro-Hungarian Consul at Buenos Aires for 1909, Schilder estimated the amount of British capital invested in Argentina at 8,750 million francs. It is not difficult to imagine what strong connections British finance capital (and its faithful “friend”, diplomacy) thereby acquires with the Argentine bourgeoisie, with the circles that control the whole of that country’s economic and political life.
A somewhat different form of financial and diplomatic dependence, accompanied by political independence, is presented by Portugal. Portugal is an independent sovereign state, but actually, for more than two hundred years, since the war of the Spanish Succession (1701-14), it has been a British protectorate. Great Britain has protected Portugal and her colonies in order to fortify her own positions in the fight against her rivals, Spain and France. In return Great Britain has received commercial privileges, preferential conditions for importing goods and especially capital into Portugal and the Portuguese colonies, the right to use the ports and islands of Portugal, her telegraph cables, etc., etc.  Relations of this kind have always existed between big and little states, but in the epoch of capitalist imperialism they become a general system, they form part of the sum total of “divide the world” relations and become links in the chain of operations of world finance capital.”
From Lenin – Imperialism: the Highest Stage of Capitalism.
The description of Argentina above, though it does appear to distinguish Argentina from a semi-colony, does in reality describe that nation as not really independent, but in a state of such financial bondage as to make it a subject nation of Britain, or a ‘commercial colony’ of Britain at that time. That is, to all intents and purposes, we are talking about a semi-colonial or dependent economy. There is a flaw in Lenin’s logic here in equating Argentina with Portugal, since Argentina is not shown here to oppress any other peoples.
Portugal, on the other hand, has the features of both an imperialist country – backward forms of capital export and classic colonialism, along with do-facto subjection and being a ‘British protectorate’. It represented a contradictory unity of dependence and imperialism. The term ‘sub-imperialism’ thus arguably could be applied to Portugal, it was both subordinate to the wider suzerainty of British imperialism, and had millions of colonial slaves in Africa (and earlier Brazil) which, though these colonies originated in the period of mercantile capitalism, nevertheless in the epoch of finance capital were subordinated to the latter. Thus Portuguese colonialism was an integral part of the imperialist world system, and the struggles against Portuguese colonialism in Angola, Mozambique, etc. were classic anti-imperialist struggles.
The point of this is to explore the question of a supposed ‘third’ level of capitalist development, neither imperialist nor imperialised. It does appear that this ‘third’ category does not actually exist, and that with those countries where it can be said that there is some ambiguity about which category they belong, this is not because of the existence of this ‘third’ category, but because they embody contradictory elements of both of the first two categories. That is, they are examples of combined and unequal development.
Other states that fit into similar a category as Portugal, as contradictory unities of imperialism and dependence, included Tsarist Russia, an even more classic ‘colonising semi-colony’, whose pre-revolutionary economy was characterised by a degree of dependence on French finance-capital that rivalled Portugal’s dependence on Britain. Yet Lenin and the Bolsheviks quite rightly regarded Russia as an imperialist power, and acted accordingly in the First World War.
Russia today, it should be noted, has a great deal in common with Tsarist Russia in this regard, though Russian ‘dependence’ has largely been counteracted by the statification of the economy that was originally kicked off by the Bolsheviks and continued by the massive expansion of statification under Stalin and the five year plans. The use of tools stolen from the proletariat by a section of the petty bourgeoisie that constituted itself as a state bureaucracy in semi-colonial countries, to provide a shield against, a means to escape, dependence, and allow a modern economic foundation to take shape, is something that the main Stalinist statified-capitalist regimes had in common – in China, Russia, Cuba, etc.
That is true in Russia also, where dependence co-existed with Great Russian imperialism even before October 1917. After the degeneration of the revolution and the counterrevolution in the late 1930s, when the working class was driven from power, these tools were wielded by another class, the bourgeoisie’s ‘regent’ class. Along with the re-emergence of Russia’s old imperialist domination of the smaller nations and nationalities of the former Tsarist empire, which spilled over the reduced Soviet borders into the Baltic states and Bessarabia (Moldova) by means of the secret codicils of the Stalin-Hitler pact, an element of the statified economy persisted even despite the ‘opening up’ to the market under Yeltsin, and even now protects Russia from the kind of semi-colonial servitude that was part of the makeup of Tsarist Russian imperialism, as well as Portuguese imperialism.
One point that could also be drawn from this is the need for a nuanced position regarding Russian capitalism today, taking account of this contradictory unity, in which a Great Russian imperialist component co-exists with aspects of national aspirations that reflect a legitimate defence of the Russian people against the prospect of semi-colonial servitude. This obviously is not the subject of this letter, but needs to be further elaborated elsewhere.
So there is no separate third category of capitalist development or underdevelopment, apart from that of imperialist and imperialised nations. The reason for this apparent digression is that it also provides a theoretical framework for evaluating Israel, and where it falls in the imperialist world order.
In this part of the analysis, I will include some work done by the International Socialist League of Israel, led by veteran Israeli Trotskyist Yossi Schwartz. They and their current co-thinkers of the Revolutionary Communist International Tendency (a split from Workers Power centred in Austria, but with a number of other international affiliates) hold the position that Israel is imperialist, as do the ISL’s former co-thinkers of the US-based League for the Revolutionary Party/Communist Organisation for the Fourth International.
None of these tendencies, to my knowledge, have as yet produced a synthetic document elaborating this, but there is a kind of prelude to such a document in a long article by Michael Pröbsting in issue 10 of their Revolutionary Communist magazine. I cite the relevant section in full, with notes and a couple of graphics also taken from the article:
“Israel has become a small imperialist power. We hope to deal with this issue more in detail in a future document. 35 We limit here ourselves to a brief overview. Israel has developed a powerful monopoly capital in the last decades. It has developed into a highly industrialized economy which is superior to all other countries in the region. In addition Israel has a very powerful military. It is – despite the small size of the country – the eighth largest nuclear power in the world as well as the number 10 of the world’s arms exporters. 36
Israel’s monopoly capital controls the country’s economy. According to the Bank of Israel “some twenty business groups, nearly all of family nature and structured in a pronounced pyramid form, continue to control a large proportion of public firms (some 25% of firms listed for trading) and about half of market share.” 37 These monopolies do not only dominate the domestic economy, they also lead a massive surge of capital export.
Many of the top Israeli multinationals are based on HighTech industries, pharmaceutical etc. The Top 20 Israeli Multinationals have foreign assets of nearly 16 billion USDollars and their foreign sales were just over 35 billion US-Dollars. They have 667 affiliates abroad and their employment abroad exceeded 87,000 (Figures from the year 2010). 38
Reflecting a strengthening of Israel’s imperialist character, the stock of foreign direct investment abroad has risen much stronger in the past two decades than inward foreign investment in Israel. While FDI in Israel grew from 4.5 to 66.8 billion US-Dollars between 1990 and 2011, Israeli FDI abroad rose from 1.2 to 71.6 billion US-Dollars in the same period.39
Another reflection of the Israel’s imperialist character is the increasing global role of its monopoly capital. In The Forbes Global 2000 – a ranking of the biggest, most powerful companies in the world – 10 multinational corporations from Israel are listed. This is similar to other smaller imperialist countries which have a much longer history of imperialist development like Austria or Belgium (each 11 corporations) or Finland (12). 40
Israel’s Gross domestic product per capita is 28,611 US Dollars which is above the level of Greece and Portugal and slightly below the level of Spain (30,222). 41
According to another calculation by the United Nations, Israel Gross National Income Per Capita was slightly above the level of Italy in 2012. 42
Certainly, Israel is a rich, imperialist fortress in the poor region of the Middle East. It’s GDP per head is double as high as Turkey, five times as high as Egypt’s, six times of Jordan’s and seven times of Syria’s. 43”
(Notes to the above)
35 In our old Theses on Palestine from 1988 (which we quoted above) we stated that Israel is not an imperialist country, but is rather a “special type of semi-colony”, a unique, reactionary and highly privileged state which is dependent of the imperialist powers. The comrades from the ISL however convinced us that this has changed since then and that Israel has become a small imperialist power.
36 Stockholm International Peace Research Institute: Armaments, Disarmament and International Security, 2012, Summary, pp. 13-14
37 Quoted in Daniel Doron: Breaking Israel’s Monopolies, Wall Street Journal, October 8, 2010, http://online. wsj.com/article/SB10001424052748703440604575495710079605480.html
38 Israeli multinationals back on track after a difficult year. Report by the Manufacturers Association of Israel, The Hebrew University of Jerusalem, the Tel Aviv University and the Vale Columbia Center, 12.12.2011, pp. 1-2
39 UNCTAD: World Investment Report 2012, p. 173
40 The World‘s Biggest Companies, The Forbes Magazine, 18.4.2012, http://www.forbes.com/global2000
41 Central Bureau of Statistics (Israel): Statistical Abstract of Israel 2012, p. 1025
42 United Nations Development Programme: Human Development Report 2013. The Rise of the South: Human Progress in a Diverse World, p. 144
43 CIA: The World Factbook, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html
(text above,notes and graphics can be obtained from http://www.thecommunists.net/publications/revcom-10/)
Israel’s GDP per head is higher than that of every major semi-colonial country in the region, including Saudi Arabia. The only states in the region that exceed it are tiny states with small populations and extreme oil wealth. For instance Qatar has the highest GDP per head in the entire world, nearly triple that of the USA according to some sources. But the small oil principalities are anomalies, necessarily so because of exceptional geology. It is worth noting that Israel has a much higher GDP per head than Saudi Arabia, even though it is in only 98th place as an oil producer according to Index Mundi (http://www.indexmundi.com/g/r.aspx?c=is&v=88). Israel’s wealth does not derive from special privileges in terms of natural resources, but from its advanced, imperialist capitalism.
Israel was an imperialist country in the making from its very birth: it consolidated itself in that regard in 1967. Even in the 1947-48 war, the forces of the Yishuv were qualitatively technologically and economically superior to the semi-colonial armies that faced them, and they defeated them with ease despite also having had to fight a subsidiary war against the British colonialists, who they had used as a means to grab hold of Palestine, but to whom they were most definitely not militarily or politically subordinate. In that regard, it is possible to say that Israel was an imperialist power in the process of formation from 1948. The elements of semi-colonial economy that were present were in a sense subordinated to this and progressively overcome – the expulsion and expropriation of the Arab population – including its ruling class – and its replacement with settlers armed with advanced technologies and economic tools was also connected with the destruction of a semi-colonial economy.
Though it might have had some things in common materially with semi-colonial economies in the early days when it was still in the process of assimilating productive technology from overseas, what was in fact involved was the rapid creation of an advanced capitalist economy modelled consciously on advanced Western capitalism. This was a process of transplantation, not organic growth, and what is again remarkable about it is that it was done not through the sustained collaboration of imperialist powers, but by a non-state (at least initially) force, the Zionist movement, which made use of various imperialist forces: Britain, the USA, Stalinist Russia and its client Czechoslovakia, without subordinating itself to any of them.
Thus the position of the RCIT/ISL is fudged, as the notion that a semi-colony can transform itself wholesale into an imperialist power while maintaining state continuity is fairly unlikely. A semi-colonial element can co-exist with an imperialist element in the same state formation: that was certainly true of Portugal, as Lenin’s imperialism made clear, and the Bolsheviks had a similar view of Tsarist Russia. But the wholesale transformation of one into the other, without leaving a trace of the past, is not feasible.
Israel was not a traditional pre-imperialist colonial power that transitioned into the imperialist epoch, but rather a new, transplanted formation whose predation and conquests were clearly, right from the very beginning, materially rooted in the most advanced capitalism available, notwithstanding some of the utopian socialist ideological window dressing that accompanied its formation. It is perfectly obvious today that Israel is a predatory imperialist power that preys upon the semi-colonial people that surround it.
It is arguable that this was clearly its direction of development since 1956, when it out-performed both British and French imperialism in its attack on the Arab peoples, only to be forced to desist by the combined opposition of the USA and USSR. But in 1967 Israel proved its imperialist nature and qualitative material superiority over the semi-colonial countries that surround it beyond all doubt.
One thing that however does give the appearance of a semi-colonial relationship involving Israel and the advanced capitalist world is Israel’s receipt of enormous economic and military aid from the West, in particular the USA. It is well known that Israel is the greatest recipient of US military and economic aid in the world today. But does this imply a semi-colonial relationship? Not necessarily. In fact, it is clear that this is not the case. As was noted in by the Washington Report on Middle East Affairs, a US-based anti-Zionist think-tank:
“Since 1992, the U.S. has offered Israel an additional $2 billion annually in loan guarantees. Congressional researchers have disclosed that between 1974 and 1989, $16.4 billion in U.S. military loans were converted to grants and that this was the understanding from the beginning. Indeed, all past U.S. loans to Israel have eventually been forgiven by Congress, which has undoubtedly helped Israel’s often-touted claim that they have never defaulted on a U.S. government loan. U.S. policy since 1984 has been that economic assistance to Israel must equal or exceed Israel’s annual debt repayment to the United States. Unlike other countries, which receive aid in quarterly instalments, aid to Israel since 1982 has been given in a lump sum at the beginning of the fiscal year, leaving the U.S. government to borrow from future revenues. Israel even lends some of this money back through U.S. treasury bills and collects the additional interest.
“In addition, there is the more than $1.5 billion in private U.S. funds that go to Israel annually in the form of $1 billion in private tax-deductible donations and $500 million in Israeli bonds. The ability of Americans to make what amounts to tax-deductible contributions to a foreign government, made possible through a number of Jewish charities, does not exist with any other country. Nor do these figures include short- and long-term commercial loans from U.S. banks, which have been as high as $1 billion annually in recent years.
“Total U.S. aid to Israel is approximately one-third of the American foreign-aid budget, even though Israel comprises just .001 percent of the world’s population and already has one of the world’s higher per capita incomes. Indeed, Israel’s GNP is higher than the combined GNP of Egypt, Lebanon, Syria, Jordan, the West Bank and Gaza. With a per capita income of about $14,000, Israel ranks as the sixteenth wealthiest country in the world; Israelis enjoy a higher per capita income than oil-rich Saudi Arabia and are only slightly less well-off than most Western European countries.
“AID does not term economic aid to Israel as development assistance, but instead uses the term “economic support funding.” Given Israel’s relative prosperity, U.S. aid to Israel is becoming increasingly controversial. In 1994, Yossi Beilen, deputy foreign minister of Israel and a Knesset member, told the Women’s International Zionist organization, “If our economic situation is better than in many of your countries, how can we go on asking for your charity?” (http://www.wrmea.org/congress-u.s.-aid-to-israel/u.s.-financial-aid-to-israel-figures-facts-and-impact.html)
It is clear that neither side of this traffic in gifts and loans regards this as akin to US aid to semi-colonial countries, which in fact receive much less than Israel.
So what does it signify? As I see it, it is a key manifestation of the phenomenon I pointed out in my draft Theses on the Jews and Modern Imperialism, of the overlapping of the ruling classes of Israel and other imperialist countries, particularly the United States, by means of a Jewish-Zionist caste within the older imperialist countries, that politically supports Israel as part of its own quasi-national project, and is even somewhat revered by important sections of the non-Jewish imperialist bourgeoisie who see it as among the most class conscious sections of its own class.
“ Empirical observation alone shows that Israel has organised bases of support within the ruling classes of several imperialist countries, centrally the United States, and those in Western Europe (including the UK). In the US, AIPAC (American-Israeli Political Action Committee) operates with great influence in both political parties; in the UK, there are powerful ‘Friends of Israel’ factions in all three major parties; the Conservative Friends of Israel in particularly embraces 80% of Tory MPs. This is a staggering level of sponsorship from the main party of the British ruling class; it is echoed in the other parties and this pro-Israel ideology has a similar level of hegemony to Cold War anti-communism among the ruling class.”
“ It is however, explained by one salient fact: Jewish overrepresentation in the US and other ruling classes. For the United States, which is the most powerful state in human history, you can easily find informed Jewish sources that place the representation of Jews among billionaires, the most powerful elements of the capitalist elite, at between 40 and 48% – nearly half (for example see http://www.jewishworldreview.com/joe/aaron101007.php3). This is the only logically coherent explanation for the power of the so-called lobby. It must be faced fearlessly by Marxists” (https://commexplor.com/2014/09/06/draft-theses-on-the-jews-and-modern-imperialism/)
The material showing the disproportionate representation of Jewish bourgeois in the US ruling class, which is also true among some of the other imperialist countries in Europe, provided a solid basis in material terms, not simply in the vulgar sense of economic interest, for this massive and again, quite disproportionate US largesse to Israel. It provides a materialist explanation for otherwise inexplicable phenomenon in the ideological sphere as shown in a recent startling opinion poll survey. Large sections of American public opinion quite openly put the interests of Israel above those assumed to be those of the United States:
“On the question of whether to support Israel’s interests even when they diverge from America’s, independents are closely divided, 48 percent to 44 percent, a bare plurality in favor of supporting Israel because of its importance as an ally and the only democracy in the region.1Republicans say yes by 67 percent to 30 percent, while 64 percent of Democrats say the U.S. must pursue its own interests over Israel’s.” (http://www.bloomberg.com/politics/articles/2015-04-15/bloomberg-politics-national-poll-finds-deep-partisan-split-on-israel-and-iran)
This concept, that the interests of Israel can take precedence over the interests of the United States does seem incredible, and on the face of it incompatible with conventional Leninist understanding of the relations of imperialist powers with each other. It is not conceivable that any appreciable section of the US body politic should hold an analogous position regarding any other power. The very idea would come under the category of ‘treason’.
How then can this be explained? Glenn Greenwald, in an article exploring these issues (https://firstlook.org/theintercept/2015/04/15/religious-fanaticism-huge-factor-americans-support-israel/) puts this down to the influence of (mainly) Evangelical Protestant religious fanaticism on the American population. But he does not explain why this particular form of Christian fanaticism, that of Christian Zionism, as opposed to other forms of Christian ideology that could equally be virulently hostile to Jews, Israel and everything to do with it, should have such influence in the USA today.
It can be explained, however, by a cogent passage from Karl Marx’s work The German Ideology:
“The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force. The class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it. The ruling ideas are nothing more than the ideal expression of the dominant material relationships, the dominant material relationships grasped as ideas.”
This is the concrete form that the inter-imperialist relationships of Israel with its partners, such as the United States, take today. Any observer of the behaviour of other imperialist countries, such as the UK and France, for example, and their relationship with Israel, can hardly fail to miss similar phenomena there also.
What we are dealing with is concrete, complex developments of imperialism that do not fit neatly into the categories that were elaborated by Lenin at the time he wrote his Imperialism. But why should Lenin have foreseen all possible variants?
The question of Israel has its unique features, and the left closing their eyes to them, and even denouncing as ‘anti-semites’ and ‘conspiracy theorists’ bourgeois thinkers like Mearsheimer and Walt who empirically describe the obvious, will not make these unique features go away. This understanding is, I would argue, compatible with Lenin’s understanding of imperialism provided it is treated as a tool to analyse concrete, living phenomena, and not an icon to be prayed to. This is true not only when analysing Israel, but also other problematic cases like Russia, as also touched on above.