From Cooperative To Renewed Kibbutz

From Cooperative to Renewed Kibbutz: The Case of Kibbutz 'Galil', Israel
Author(s): Maayan Hess Ashkenazi and Yossi Katz

Source: Middle Eastern Studies, Vol. 45, No. 4 (Jul., 2009), pp. 571-592
Published by: Taylor & Francis, Ltd.
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Vol. 45, No. 4, 571-592, July 2009
From Cooperative to Renewed Kibbutz:

The Case of Kibbutz 'Gaffl', Israel
MAAYAN HESS ASHKENAZI & YOSSI KATZ
This article deals with the process of change which is taking place in t
movement of Israel, and the structural and organizational change
kibbutzim (plural of kibbutz) from the model of a cooperative kibbutz to th
of a renewed kibbutz and focuses on Kibbutz 'Galil' as a test case of a kibbutz which
has undergone drastic change against the backdrop of a serious economic crisis and
thus represents an extreme example of a kibbutz which has moved completely to the
model of a renewed kibbutz, constituting a signpost for other kibbutzim.
During the mid-1980s signs of crisis began to appear in the kibbutz movement.
From then and up to the present, this crisis atmosphere has led kibbutz members to
develop a number of ideas for change in the forms of kibbutz management. The
significance of the proposed changes has meant distancing kibbutzim from the classic
model of the 'communal society' to the model of what is termed a 'renewed' kibbutz.
This transition expresses a range of changes taking place in kibbutzim which may
include privatization of services to kibbutz members, differential salaries, private
ownership of apartments and property, etc. Despite these far-reaching changes,
communal characteristics have been preserved which have maintained the definition
of kibbutz as 'a kibbutz'. In this study, we will analyse the changes and what has
been conserved in the transition from the model of a communal kibbutz to a renewed
kibbutz. The article will focus on Kibbutz 'Galil' in the north of Israel to
demonstrate the process which characterized most of the kibbutzim of the kibbutz
movement as a result of the economic and social crises beginning in the mid-1980s
and it will deal with the causes of the crisis, the processes of change and their results.
At the beginning of the 1980s, the kibbutz movement began to experience signs of
crisis. There are many versions and explanations of the deeper reasons for the
'kibbutz crisis', including those which attribute it to the changes taking place in
Israeli society (the increase of materialistic egocentrism, careerism and the 'death' of
ideology), and others which attribute the crisis to the kibbutz itself (lack of economic
efficiency, the lack of progress in industrial and agricultural methods, in higher
education and professionalization, the failure of new settlements and youth
movements, isolation from Israeli society, and demographic depletion). But it is
generally agreed that the obvious beginning of the crisis was the financial
entanglement of certain kibbutzim and kibbutz organizations, their increasing debts
to the banks, as a result of governmental policies meant to curb inflation and a
drastic increase in the interest rate.1 In addition, the delayed signing of the 'kibbutz
ISSN 0026-3206 Print/ 1743-7881 Online/09/040571-22 2009 Taylor & Francis

DOI: 10.1080/00263200903009635
572 M. H. Ashkenazi & Y. Katz
debt agreement' (with the participation of the government, the banks and th
kibbutzim themselves), which was aimed at proposing a long-term solution to t
problem, did not end the slide, while the government of the right was not enthusiasti
about assisting in ending the crisis.2
During the first years of the crisis, 1983-86, kibbutz members generally believed
that the government would not let the kibbutzim fail, whether because they served
national and social objectives (such as settlement, immigrant absorption, securit
needs and population dispersion), or because of kibbutz control of importa
production resources, especially in agriculture. From 1985 to 1987, ill-advised
activity on the stock market and financial entanglements which gradually redu
the financial reserves of the kibbutz organizations gave the entire kibbutz movemen
a bad name. Only in the late 1980s did kibbutz members and activists begin to vi
the situation realistically. Along with continuing efforts to resolve the debt problem
attempts were begun to develop a more sustainable kibbutz lifestyle while suiti
income resources to a new economic reality.3 At the beginning, the crisis was viewed
as purely economic but it quickly became clear that it was comprehensive and
included psychological, social, ideological and demographic elements. The i
mediate social results were a drastic reduction (relative and absolute) in standard
living, demographic decrease resulting from the fact that the younger generation an
other members were leaving, a fall in the birth rate and a reduction in new member
joining kibbutzim, along with an erosion of movement leadership power and
atmosphere of despondency and loss of direction.4
The collapse of Kibbutz Beit Oren in the summer of 1987 was viewed as symbo
of the new situation and contributed to the increasing sense of crisis, feelings of los
of direction and lack of leadership.5 In an opinion poll conducted in 1995, it wa
found that 60 per cent of members of the Kibbutz Artzi and 66 per cent of th
members of the United Kibbutz Movement (TKM) would have chosen a no
kibbutz way of life if they had had to take practical considerations into account
The rapid change of attitudes in these years is reflected in the fact that three years
earlier, in 1992, comparable statistics were 53 per cent and 59 per cent respectively.
was also found that 37 per cent of Kibbutz Artzi members and 34 per cent of TK
members believed that kibbutz life had a future (while statistics for 1989 were 49 pe
cent and 48 per cent respectively). Internal conflict and expressions of lack of mutu
confidence among members became common in many kibbutzim. A sense of so
crisis could even be felt in kibbutzim which were economically stronger as well as in
those which were economically weaker.7 The economic crisis demanded a significant
reduction in expenditure and, as mentioned, a dramatic fall in the membe
standard of living and a resulting continuing demographic loss in kibb
population. In 1984, 169,000 people were living in 266 kibbutzim (mostly membe
along with temporary residents and volunteers) while in 2003 there were onl
116,200 residents.8
Against the backdrop of this crisis, new ideas were being developed in man
kibbutzim, ideas which practically involved a great departure from the principles of
the 'classic kibbutz'. In light of these increasingly far-reaching processes, on 19 May
2002, the government of Israel appointed a committee of experts with Professo
Eliezer Ben Rafael as Chair, to redefine the kibbutz. Following discussions, th
committee members reached a unanimous decision that there were two new types of
Kibbutz 'GaliV, Israel 573
kibbutz which would replace the existing definition of kibbutz in the regulations of
cooperative associations. The existing definition fit the so-called 'communal kibbutz'
and the second type would be called the 'renewed kibbutz', reflecting a range of
changes taking place in various kibbutzim, changes such as differential wages and
private ownership of housing and property. The committee intended to define the
maximal range which could be included in the term 'renewed kibbutz', with the
awareness that a meaningful basis of cooperation and equality had to exist in order
to justify the use of the term 'renewed kibbutz' and if this basis did not exist, the
settlement could not be considered a kibbutz. On 28 March 2004, the government of
Israel enacted a decision to accept the recommendations of the committee and
instructed the Minister of Industry and Commerce to act in accordance with these
recommendations.9 On the basis of the committee recommendations, on 12
December 2005 the government of Israel distributed an instructional paper issued
by the Registrar of Cooperative Associations of the Ministry of Industry and
Commerce which was aimed at assisting various kibbutzim in the transition process
from their classification as a communal kibbutz to classification as a renewed
kibbutz in accordance with the following definitions:
A communal kibbutz - A settlement association which is a separate settlement,

organized on the bases of communal ownership of assets, individual labour and
equality and cooperation in production, consumption and education.
A renewed kibbutz - A settlement association which is a separate settlement,
organized on the basis of cooperation of the general public in assets, in
individual labour, and equality and cooperation in production, consumption
and education, maintaining mutual guarantees for its members, in accordance
with the regulations of cooperative associations (mutual guarantees in the
kibbutz), 2005, and in its Articles of Association, there are provisions for one or
more of the following:
1. Distribution of allowances to members according to the extent of their

contribution, their position or their seniority on the kibbutz;
2. Personal ownership of apartments according to the Cooperative Associa-
tion Regulations (Apartment ownership on Kibbutz), 2005.
3. Ownership of means of production by members, except for land, water, and
production quotas, on condition that control of these means of production
will not be passed on to individual members, according to regulations in the
Cooperative Association Regulations (Ownership of means of production),
2005.
According to the data of the kibbutz movement, as of 2007, there were 257
kibbutzim with 118,000 inhabitants, constituting 2 per cent of the general
population. Among these kibbutzim, approximately 60 per cent had adopted the
model of a renewed kibbutz and 40 per cent remained communal kibbutzim.
However, a process of redefining many kibbutzim is still in process and many are in
various states of change from communal to renewed kibbutz.
The process of change on kibbutzim has received attention in many studies which
have accompanied the process from its beginnings. The changes which have taken
place in the past few years have been defined by many researchers as changes i
fundamental values whose significance is a revolution in the kibbutz way of life and
change of identity.10 The conclusions of the various studies indicate that, despite th
significant changes occurring on most kibbutzim, the kibbutz revolution is not total
and kibbutzim are not completely negating their fundamental values, are not
collapsing and are not vanishing. In spite of the changes, the concept of 'kibbutz' has
not disappeared but, in recent years, has assumed a revised definition of its present
character, the 'renewed kibbutz'. The process of change towards this model h
many variations and takes place at differing paces in accordance with the nature
the community and the kibbutz economy, and this leads to the necessity
investigating the process of change closely in one of the kibbutzim where this h
taken place.
Accordingly, Kibbutz 'GaliP has been chosen as a research case study. 'Galil',
located in the north of Israel, has, during the past decade, experienced a rather
extreme shift from a cooperative kibbutz to a renewed kibbutz in a relatively short
period of time, enabling a close investigation of the change and its results as
expressed in a combination of 'new' and 'old' characteristics.
The research is based on interviews with kibbutz members and key office holders
in the past and present who took part in or experienced the process of change, in
addition to dozens of documents from the archives of the kibbutz which document
decisions pertaining to the change from its beginning to its completion, newspaper
articles which helped in obtaining a wider picture, primarily articles relating to the
economic crisis which the kibbutz experienced, and research literature which
particularly provided historical and theoretical material for a background survey of
kibbutz change.
In this research, we used a wide variety of sources available to investigate the
process of change from its beginnings, while relating to the historical background of
the kibbutz and the sequence of events which led to the change process, its results
and its wider significance while relating these to a number of criteria from various
fields which characterized the process of change on most kibbutzim, including
organizational and management patterns of kibbutz, privatization of services to
kibbutz members, and the integration of the kibbutz in its geographical environment
among others.
Kibbutz Galil was established in 1939 in the Upper Galilee. In 2006, there were 545
residents (including members).11 For the past decade, the kibbutz has experienced a
process of change from a 'cooperative kibbutz' to a 'renewed kibbutz' following a
continuing economic crisis and economic collapse.
From its establishment until September 2000, Kibbutz Galil functioned according
to the cooperative kibbutz model. In this model, the kibbutz was managed
democratically by all of its members, who were represented at a 'kibbutz assembly'
which took place once a week and discussed every topic connected to the general
operation of the kibbutz. Usually about 50 members participated in the assembly
and when important decisions were being discussed about 70-80 members came to
the assembly. At this forum, discussions were conducted about marginal as well as
critical issues and votes were taken at the conclusion of discussions. At the beginning
members raised their hands to vote, and then voting was conducted secretly at
polling tables placed at the entrance to the dining room. The kibbutz assembly was
the source of authority for all kibbutz decision makers, and kibbutz leaders acted
according to its decisions: the kibbutz secretary, the economic manager, and the
kibbutz treasurer were elected democratically at a kibbutz assembly which provided
authority for them to act. In addition to kibbutz managers, there were many
committees which were responsible for the various areas of kibbutz activity: the
agricultural committee, the educational committee, the committee responsible for the
young people of the kibbutz, the cultural committee, the consumption committee
among others. In addition there were various sub-committees, which might assume
responsibility for the celebration of a particular holiday or cultural event. This model
provided that every member would contribute according to his/her abilities and
would receive according to his/her needs: clothing, food, travelling expenses,
vacations, education, electricity, water, property taxes, health and so on. Every
kibbutz member received a fixed allowance for private expenses in accordance with
the number of people in his/her household and in return, s/he was required to work
in one of the economic branches of the kibbutz and to take part in rotating duties
(guard duty, working in the kitchen, among others) and special seasonal agricultural
work when necessary.12
Until the beginning of the 1970s, the generation of kibbutz founders was still
dominant in kibbutz management and kibbutz life was carried on with restraint,
privately and conservatively, without undue expenses devoted to raising the standard
of living.13 However, during the 1970s a process began which characterized other
kibbutzim at the time. The second generation, not constrained by the collectivist
ideology of their parents, began to attend to their own private spheres, that is, the
improvement of their living conditions, the desire to invest in furniture and
household appliances and to care for their own private gardens, and these desires
continue to exist very obviously in kibbutzim at present. Against the backdrop of
aspirations to improve their standard of living, second generation kibbutz members
demanded a rise in the members' allowances relating to living conditions. In order to
fund this rise, like many other kibbutzim of the period, the kibbutz took out loans,
but lacked the economic basis to enable the kibbutz to return them. At this time, the
beginning of the 1980s, the kibbutz had a modest parcel of land, a stable agricultural
economy which focused on growing cotton, a medium-sized successful deciduous
orchard, fish ponds, a dairy barn, chicken coops, a paper and metal factory which
had been built in the 1970s and which operated at the edge of profitability, and a
small textile factory. However, at the time the kibbutz did not operate according to
modern economic principles; there was no consideration of profit and loss nor was
the leadership able to block the pressure by the second generation for a rise in the
standard of living. One of the reasons for this was derived from the history of the
kibbutz. In actuality, from the beginning, the kibbutz was considered characterless,
with an absence of social cohesion and a lack of meaningful leadership. The original
kibbutz members had come from youth groups in Poland and Lithuania, and, from
the start, no social cohesion between the groups was established. Most of the Polish
group were urban and well educated and most of those from Lithuania came from
villages, and were mostly uneducated.14 This lack of social cohesion continued
through the years while no local leadership developed to change the situation and to
lead the kibbutz to defined social and economic goals. From the 1940s to the 196
the kibbutz had no independent right to exist except as part of the larger kibbu
movement to which it belonged, and for kibbutz members it was natural and
convenient to obey the leaders of the movement rather than to develop local
leadership. So as not to create unnecessary tension among kibbutz member
paralysis and avoidance of long-term decision making had evolved, and thus the
was no brake on the desires of the second generation who demanded that the we
kibbutz leadership raise the members' standard of living while lacking the income to
cover the expenses.
Until the political revolution of May 1977 which brought the Likud Party t
power, the understanding had developed in Mapai, the party which headed th
government, the banks and the kibbutz movement, that the government wou
actually be responsible for kibbutz loans and would find some way to redeem th
to the banks. This understanding was formulated during the years when t
government completely dominated the stock market and made sure to allocate credit
to those objectives which fitted its own priorities. The role of the banks in this system
was technical: they served as a channel for transfer of government credit, with
risk management being taken into account as it must be in a free market system. In
addition to direct credit received from the banks, kibbutzim also received cred
which was transferred from movement funds, and national and regional purchasing
organizations which they had established. With the use of this credit, guarante
were signed, termed 'sheet guarantees', in which each kibbutz guaranteed the de
of the movement funds, and, using this system, the debts of all kibbutzim. This she
guarantee gave the kibbutz financial systems and the banks the feeling that an
future crisis could be overcome. The kibbutzim became too accustomed to this
situation and it was difficult for them to begin to function according to the principles
of a market economy unless they had a profitable factory which supplied a cover for
major outlays.
The belief that the Mapai government would guarantee the increasing debts and
the demands of kibbutz members for additional allocations of allowances to increase
standards of living led to action by the kibbutz treasurer and the economic manager,
who were very dominant. The treasurer used loans to continue funding the rising
living standards of members although the kibbutz could not return them. To increase
income, the treasurer proposed adding to the small industries that already existed by
establishing a new factory to manufacture nappies. While most members remained
passive, the treasurer led the kibbutz into taking on massive loans to finance the
establishment of the new factory. The decision was confirmed at a kibbutz assembly,
at which kibbutz members participated in all decision making, but passivity and
paralysis led to the approval of the decision with no criticism of the leadership and
with no detailed information about the economic situation of the kibbutz.15
Thus, at the beginning of the 1980s, kibbutz debts totalled almost the entire
annual budget of the kibbutz. During the first half of the 1980s, inflation rose,
reaching a peak of 445 per cent in 1984. The high rate of inflation eroded the value of
the loans, but from 1985 Israel instituted an 'economic plan' and the rate of inflation
fell significantly. However, concurrently, the real interest rate of unlinked loans
immediately rose by dozens of per cent. Like other kibbutzim, the debts of the
kibbutz doubled in a short time, and, in order to continue to function, the kibbutz
was forced to take out additional loans, so that the debt grew to hundreds of millions
of shekels, and the interest in arrears increased it. Simultaneously, at the beginning
of the 1980s, the small industries were sold to two other kibbutzim and the kibbutz
retained the nappy factory, which earned a small rate of profit and but was burdened
with high costs of raw material. Thus, the kibbutz evolved from a dull and modest
kibbutz based primarily on agriculture to a kibbutz based on a factory with a
turnover of large sums of money, and a massive and ever increasing debt on which it
was unable to make the payments.
Despite the enormous debts, the sense of security among kibbutz members did not
change and the dominant attitude among members and leadership was that, in any
case, they would not be able to return the debts and that these had become a problem
of the banks rather than of the kibbutz. The kibbutz treasurer took this attitude, as
well, and led the kibbutz according to the slogan which he coined: 'Our strength is in
our debt'.16
Meanwhile, the power and influence of the factory managers had overwhelmed
those of the economic manager and of the kibbutz secretary, and they unconsciously
behaved as though their factory could compete with the two global giants in the
nappy industry, Huggies and Pampers, which had gradually dominated world
markets.17 The factory managers were joined by the former members of an Israeli-
born youth group which had come to the kibbutz during their army service in the
1970s, and had identified the focus of kibbutz influence as the factory managers. A
strong social leadership evolved which was connected to the factory and which
further paralysed criticism of the factory's functioning. This increased the euphoria
of the kibbutz leadership regarding the ever increasing debt. Despite the debt,
kibbutz assemblies allocated large sums to continue raising the standard of living
with no connection to the economic ability of the kibbutz, resulting from the absence
of limitations, which characterized the kibbutz and the fact that kibbutz members
were carried away by the enthusiasm of the economic leadership. This situation
resulted in the construction of a new dining room at the peak of the economic crisis
in the mid-1980s, the construction of two new neighbourhoods of private homes for
a number of kibbutz members during the first half of the 1990s and the renovation of
existing neighbourhoods following demands from some members to equalize their
living conditions. In addition, members of the kibbutz enjoyed a variety of
economically wasteful leisure activities such as skiing and squash, and the kibbutz
purchased expensive equipment for these activities.18 The kibbutz also continued to
fully finance members' trips abroad, electricity and water expenses, fruit and
vegetables and daily consumer products (cleaning materials, toiletries, and so on),
and provided members with higher education, kibbutz social activities, vacations in
Israel, trips abroad to visit relatives once every five years and many other activities.
While the consumer expenses of kibbutz members were high, income was limited
as, aside from the factory whose profit rate was low, and which was burdened by
debt, the kibbutz was managed inefficiently. This lack of economic efficiency
partially stemmed from deficient utilization of human resources. Thus, following
privatization in 1999, there were 195 members of working age but only 80 of them
were employed in one of the income producing economic branches of the kibbutz, or
were earning full salaries.19 The other members were the 'hidden unemployed' in
various sectors of the kibbutz, in addition to over-employment in some areas of
kibbutz functioning and a lack of workers in jobs with low status. This led to the us
of paid workers from outside the kibbutz which began in the 1980s, and thes
workers joined volunteers and new youth groups (the last of which came to t
kibbutz in 1990). Some kibbutz members worked part time in one of the econom
branches, engaging in leisure activities for the rest of the work day. Some members
took long vacations from work to devote time to organizing kibbutz parties or event
for holidays, and some of the members did not work at all or take part in th
rotation duties.20 The employment sector was managed as a social outfit rather than
an institution based on considerations of profit and loss. Yet all members receiv
the same allowances, given equally according to the number of persons in the family
encouraging a high birthrate among kibbutz members and further increasing
members' consumer expenses.
Thus, the kibbutz entered an economic spiral which combined enormous deb
unrestrained consumption, economic inefficiency, and ideological collapse. Th
severe economic crisis was accompanied by a number of member suicides. Fro
1970, on the average of once every year and a half, a kibbutz member committ
suicide, for a total of 18 suicides, much more than either the national or the kibbutz
average.21 This may have been evidence of the lack of social cohesion which h
characterized the kibbutz for years and which had deepened with the ideologica
failure, the overwhelming dominance of the second generation, the notable rise
consumer culture among kibbutz members and the economic collapse whi
followed and which was accompanied by the lack of leadership, and absence of
initiative and sense of responsibility.
As the rise in the standard of living continued with no economic backing, in 1989
the Kibbutz debt reached hundreds of millions of shekels from a total debt of 12
billion shekels of the two kibbutz movements, the United Kibbutz Movement
(TKM) and the Kibbutz Artzi. At the end of 1989, after a full year of discussion
between the kibbutz movements, the banks and the Treasury Department, a
tripartite restructuring arrangement was reached whose main principles were:
erasure of 2 billion shekels from the debts of the kibbutzim on the part of the banks,
erasure of an additional 1.3 billion shekels on the part of the banks with funding
from the government, and the acquisition of 1.7 billion shekels for debt return to the
banking system on the part of the kibbutz movements by utilizing kibbutz movement
property and an internal loan among kibbutzim, imposing the burden of payment on
the strong kibbutzim. In addition, it was agreed that there would be a new long-term
redistribution of 6.7 billion shekels of the debt at an interest rate pegged to the index
of 4.5 per cent per year against government deposits which would be transferred to
the banking system. It was also agreed to cancel the 'sheet guarantees', an end to
the activities of movement funds to provide credit and guarantees, and the
conversion of all debts owed by the funds and the national purchasing
organizations to the debts of the individual kibbutzim. For each kibbutz, 'payment
capability' was determined, which was the sum that its means of production would
enable each kibbutz to pay annually in order to return the debt. A supervision
system by the banks was established over the annual planning of the kibbutzim
including a system of criteria that the kibbutzim were required to fulfil, such as
level of living expenses, investments, and taking out new loans. A kibbutz
arrangement headquarters was set up which was to control the implementation of
Kibbutz 'Galil', Israel 579
the arrangement and which was defined as trustee to the three sides participating
in it.
Galil entered the kibbutz arrangement while, at the same time, despite the serious
crisis, kibbutz members were investing in the improvement of their homes and care
of their gardens, sometimes very conspicuously, seemingly an expression of the
escapism which characterized a large number of kibbutz members in light of the
difficult economic situation.22
Against the backdrop of growing consumer expenses and the heavy debts, at the
beginning of 1994 discussions began at the kibbutz assembly for taking steps to save
money, to become more efficient economically and to institute differential salaries.23
These were preliminary signs of the changes which would occur on the kibbutz in the
following years. However, these discussions did not have much effect and did not
lead to a drastic reduction in kibbutz expenses or the debt, which by the mid-1990s
had reached hundreds of millions of shekels, the highest debt of any kibbutz in the
movement. Against the backdrop of these heavy debts, as part of the kibbutz debt
arrangement, in 1996, a 'supplementary kibbutz debt arrangement' was signed which
led to the erasure of many debts and to payment conditions for the rest. Some of the
debt was financed by the wealthier kibbutzim, a situation which aroused great anger
in the kibbutz movement towards Kibbutz Galil. The arrangement, which was
implemented in Galil beginning in 1997, set that as the year during which 'payment
capability' of the kibbutz to Bank Hapoalim would be determined. As it was a year
during which the factory had relatively high profits and it was this factory which
provided the source of 'payment capability' for the kibbutz, the annual debt return
payments were set at a high level.24 However, in 1998, a deep crisis affected the
factory, and management and monetary difficulties forced it to take out an
additional loan, this time from Bank Leumi. Bank Leumi sent its own representative
manager to improve factory functioning and to separate the factory from the
kibbutz, except for transfer of salaries to the few members who worked there and
rental payments for the factory building and its surroundings which were owned by
the kibbutz. In addition, the kibbutz was also suffering from a difficult year in
agriculture due to a drought which had affected the entire country. This immediately
caused cash flow problems for kibbutz daily management, including food and water
supplies, and transportation. This was an existential problem for the kibbutz.25 The
kibbutz treasurer tried to manoeuvre between increasing the credit level with Bank
Hapoalim and Mishkei Galil Elyon, the Upper Galilee kibbutz economic
corporation. In addition, in order to make economic management more efficient,
on 1 July 1996 the Committee for Change, which had been established by a
membership assembly, voted to set up a forum for both discussion and binding
decision making which would replace the kibbutz assembly and which would
constitute the basis for kibbutz management and for new organizational steps. This
group would be called the 'Council' and would be an enlarged secretariat. A decision
was also made to set up a managerial council for the nappy factory which would
include both the factory and its marketing company and would reorganize the
relations between the factory and the kibbutz.26
Dealing with the economic distress of the kibbutz and the need for kibbutz
reorganization, the economic manager turned to an external manager, an accountant
who was very experienced in this area and who had worked with many other
kibbutzim. He would function as an 'economic chair' in separating the kibbutz

economic system from the community. During the following months the kibbu
instituted a process to increase efficiency during which unsupervised investments an
expenses were halted and bank accounts were opened for kibbutz members. The
was a sharp drop of approximately 25 per cent in members' living expenses, from 18
to 14 million shekels per year. It was decided, for example, to cancel kibbutz funding
for visits to close family relatives abroad every five years and, for the first time, t
120 households were connected to a computerized information system indicating use
of electricity as a basis for collecting data for an eventual move to budgeting
members' use of energy.27 Until then, a large number of members had complete
ignored their energy usage and in many houses the mains electricity switches had no
been turned off for years and there were those who did not even know that th
existed.28 In addition, every member was required to find a place of permanent and
defined employment. For the first time, it was determined that members with
workplace would be considered unemployed. It was also determined that conditio
for the use of temporary workers in kibbutz economic branches would be cancelled.
It was also decided that a human resources director would be appointed who wou
assist members in planning, and would direct them to possible employment. A
member who did not work for more than a month would not receive any privileges
kibbutz membership and there would be fines levied on those who refused to
participate in rotating duties.29 The consumption committee and the economi
manager decided the kibbutz minimarket would no longer freely distribute food and
other products including vegetables and household or personal items, and tha
members would participate in the costs of leisure activities in which they participat
On the other hand, the subsidization of members' travel would be continued includ-
ing on internal flights in the sum of the price of bus tickets to the same place, full
return on bus trips anywhere in Israel and subsidization of family visits abroad. The
protocols of this meeting stated that 'the necessity for adjusting to the changes
lifestyles was raised, and the need to transfer more responsibility to the individual
his/her expenses while enabling a choice for all members which would suit his/h
needs and preferences'.30 These were a series of far-reaching decisions for kibb
members and were accompanied by feelings of great distress among them.31
As part of the reorganization process under the external economic manager, three
young members who had been born on the kibbutz were elected kibbutz secretaries,
dividing the position into thirds, with each undertaking a different area
responsibility. The three were determined to continue making the kibbutz mor
efficient and thus one of their first steps was to set up the previously mention
council, the enlarged secretariat which would take the place of the kibbutz assembly
as a decision-making body. This would create a more centralized system of kibb
management which could lead to the necessary process of change. After the kibbutz
assembly had confirmed the establishment of the 'council', it began to meet on
permanent basis from July 1998. However, this forum was not anchored in a
kibbutz regulations and thus became just another committee among the other
kibbutz committees, a kind of discussion forum with no ability to enforce it
decisions without receiving a majority of votes at a kibbutz assembly.32 Despite
weakness, one of the council's first decisions was to adopt the principles of a mo
of managerial separation of the economy and the community, a model which existed
Kibbutz 'Galil', Israel 581
at the time in other kibbutzim and which had even been recommended by the
Kibbutz Artzi, the largest kibbutz movement to which Galil belonged. An economic
managerial committee was established (parallel to the previous economic
committee) which would be responsible for managing the productive branches of
the kibbutz, including both day-to-day management and developing new economic
branches. A community directorate (parallel to the previous kibbutz secretariat)
would be responsible for the community-social life of the kibbutz. The major
difference from the past was that managerial separation would clearly determine
tools for economic evaluation on the one hand, and for determining the sources
which would provide for community life on the other. In fact, the community
budget was included in the clause 'living expenses' as termed in the past, but now
in a framework which was predetermined and calculated according to employment
of kibbutz members in the economic branches, the source of the community living
expenses budget.33 As part of this process, towards the end of 1998 a general
mapping was begun of all kibbutz activity in preparation for the establishment of
the human resources unit which was to cover the array of workplaces on the
kibbutz and to utilize kibbutz human resources rationally.34 This process was
carried out by an external advisor along with an active kibbutz member and one of
the three kibbutz secretaries during which the three met with members and
economic branch coordinators to collect the necessary information. As part of the
privatization process, members were, for the first time, advised to open private
bank accounts so that they could transfer funds which remained from their
personal allowances to their private accounts.35 A number of months after the
implementation of measures to increase efficiency in utilizing human resources, in
July 1999, work regulations between the kibbutz and the kibbutz members were
publicized which were meant to monitor the employment of members as linked to
the allowances which they received. The regulations determined that 'each member
was responsible for the support of him/herself and his/her family'36 and the
decision was approved to separate the economy from the community37 and to
implement the decision which had been reached by the council almost a year
earlier, in July 1998.
In addition, a public debate was simultaneously begun in the kibbutz assembly
regarding a document which dealt with changing kibbutz lifestyle, proposed by the
council and containing the principles of the change. The document proposed
privatizing consumption and creating a link between members' employment and
their personal allowances. These discussions took place as the economic crisis was
deepening and pressure from the banks and from other creditors was growing. The
pressure led the kibbutz directorate and the secretaries to the understanding that
kibbutz members must know that in order to overcome the deep economic difficulties
of the kibbutz, it was vital to suit the standard of living and the general level of
expenses to the real sources of income available to the kibbutz, as increasing the
existing debt would be impossible. In the discussion which took place in the kibbutz
directorate with the secretaries regarding confirmation of the kibbutz budget for
1999, it was decided to reduce community expenses sharply by 20 per cent in
comparison with the budget of 1998.38
These steps led to a reduction of living expenses in 1999 by 3.5-^ million shekels
and to the increase of income from agricultural branches. The results of the
beginning of the application of principles of change led to a significant improvemen

in economic results in 1999, which enabled a stabilization of the economic situation,
a reduction of the cash flow pressure and, for the first time in years, an operat
profit of the kibbutz even after living expenses.39
Despite this, due to differences of opinion between the economic manager and the
external manager, who also got into an argument with the manager of the factory,
the external manager resigned in August 1999,40 asserting that, considering the way
the kibbutz was managed, it would have no chance of overcoming the crisis.41 T
process of change which had been begun by the external manager was far from bein
completed. Although a more rational framework for economic management h
begun in terms of the market economy, the fundamental existential problem
remained. The process relating to the efficient use of human resources had not y
been completed. Many members and outside workers were not employed in task
which were well suited to their abilities or in positions which fulfilled econom
branch needs and, in many cases, salaries were not appropriate to the positions or to
the nature of the jobs of many members.42
The economic crisis and the attempt to acclimatize to the steps meant to increa
efficiency led to a social crisis and raised questions among kibbutz membe
regarding relations between them and the kibbutz and between other members a
themselves. Questions were often raised about legitimacy and the support of off
holders. As the economic and social crisis continued, so did suicides in the winter of
1999 and at the beginning of 2000.43
Against the backdrop of the deepening economic crisis and the need for significan
and painful changes, the three secretaries and the economic manager decided tha
new manager was needed who could lead the kibbutz into privatization. In order
reduce internal bitterness regarding the change which was being led by people from
the kibbutz, an outside professional was considered preferable.44 The secretarie
began to cooperate with a regional forum of kibbutzim in distress which had been se
up by the Upper Galilee Regional Council. In this framework, and in coordinati
with the kibbutz movement, they evaluated the possibility of working with
external 'recovery manager' who would assist the kibbutz. After investigating
number of possibilities, the secretaries decided to recommend a new external
manager to the kibbutz to direct the process of recuperation.
The new 'recovery manager' had great experience in the field of economics and in
kibbutz privatization and was considered someone who could assist the kibbutz in its
negotiation with the banks and could bring it out of the crisis. This person kn
about the particular case of Galil as he had been the government representative
the 'Complementary Kibbutz Arrangement' and he presented the kibbutz secretariat
with a detailed programme for change and recuperation. He maintained that '
stable long term economic existence for the kibbutz would be ensured only if i
reached decisions regarding far-reaching agreements and changes which were
necessary in the following areas: capital structure/debt, economic stability of
production systems and services, the necessity of supporting itself and t
independent subsistence of every member who was of working age. Only this
systemic combination which would create change in these three areas would ensu
an escape from the deep crisis in which the kibbutz had found itself for the past fe
years'.45 He also argued that the process of change had to be carried out by a
Kibbutz ValiV, Israel 583
external manager who had complete authority to act, with the approval of the
kibbutz assembly and that the process of change would have to be carried out with
the cooperation of office holders who would be subordinate to the external manager.
The steps he indicated as vital were reaching a debt agreement with the banking
system, the dependence of every economic branch of the kibbutz on the basis of
profit, or a balanced budget in real terms when relating to community services. He
also pointed to the need to change kibbutz lifestyles: ensuring a subsistence pension
for those of pensionable age and for populations recognized by the National
Insurance System, and transfer of responsibility to the member for his/her own
support, determining competitive economic salaries for every office or position,
reduction in the number of employees, and full privatization of all services except for
those which it would be decided to subsidize by uniform or progressive kibbutz taxes
derived from the income of the members. Progressive taxation would be designed to
lower the budgetary gaps between members and to enable the kibbutz to fulfil its
economic obligations and to uphold assembly decisions. He also proposed creating
separate organizational, legal and monetary frameworks for the community and
for business, the establishment of a holding company for productive branches and
property and apartment ownership on the basis of member seniority in the
kibbutz.46
The plan for change was presented to kibbutz members at a series of meeting and
discussions which took place during September 1999 among members, between
kibbutz secretaries and external representatives who were involved in the process of
change, and with representatives of kibbutzim who had been through the process of
change and described their experiences.47 Finally, a vote was taken and the decision
to accept the revolutionary plan was passed by a large majority. Most of the few who
opposed the plan were older people for whom privatization was the shattering of a
dream, and those members who did not contribute much to the kibbutz and so, for
them, the change would harm their quality of life. But those in opposition were few
as, in light of the situation, most members came to the conclusion that the change of
lifestyle was unavoidable. The opposition was weak, as one of the items voted upon
determined that 80 per cent of kibbutz members would be necessary to dismiss the
manager of the recovery plan. Due to the strength of the manager of the recovery
plan and the wide agreement of members regarding the change, the plan was
implemented within a year, and thus the change was relatively quick and many
kibbutz members were surprised at the success of its implementation.
The first step following acceptance of the proposal for change was a major attempt
to improve efficiency in human resources during which, for the first time in the
history of the kibbutz, 36 people were fired and were forced to seek new jobs. Some
months later, on 27 December 1999, kibbutz members received notice that,
beginning on 1 January 2000, consumption would be privatized, that is, payment
would be made for the following services which, up to then, had been supplied free:
dining room, laundry, hairdressing and barbers, cosmetician services and health.49
A month later, on 1 February 2000, members began to live with the new model
according to which they received salaries for their work and they paid for services
and necessities. During the first half year, this model operated on a trial basis to
enable members to get used to the new system. Members received budget reports
showing their opening balance from which there were deductions in accordance with
their expenses, including property taxes, telephone bills, television fees, dining room
expenses, laundry, car expenses, education, and so on.
After half a year, beginning in June 2000, members began to receive differential
salaries for their work in the various kibbutz branches as well as for rotating duties
(guard duty, kitchen, on-duty driver etc.)50 Internal income tax was deducted from
salaries, corresponding to national income tax, excluding tax benefits for those livin
on the northern border. A sum for National Insurance was deducted correspondi
to the accepted payment for salaried workers and each member also paid a unifo
tax to finance municipal services in the community. In addition, members began
actively pay for the real value of the products and services they used (electricit
food, laundry, property tax), except for education and health which were subsidized
according to level of income so that a member would not have to spend more than 3
per cent of his/her income for these services. In addition to municipal tax, member
paid a progressive tax. This tax was meant to support communal activities in areas of
education, health and welfare, social insurance and other areas which were defined as
part of the kibbutz 'safety net'. This tax supplied sums for subsidizing subsisten
incomes for those receiving disability pensions from National Insurance and wh
could not work. One-parent families and widow/ers received National Insuran
pensions corresponding to the national minimum wage. Members who were over
years old received pensions which were financed by rent received for the factory an
rental of apartments to non-member residents who multiplied during this perio
and in time apartment rental became a profitable area.51
As the kibbutz was privatized, in addition to the community directorate, an
economic directorate was established whose function was to manage the financi
arrangement with the banks, as well as day-to-day economic management
agriculture and of the small textile industry. Management of the factory producing
nappies and similar products was put into the hands of a council of managers which
included seven representatives, of whom two were members of the economic
directorate, and it was headed by the manager of the recovery plan.52
At a meeting of the economic directorate in February 2000, there was preliminary
discussion of a proposal by two members to build a new community neighbourh
of non-kibbutz members and it was decided to bring the subject up for discussion at
the secretariat and at the kibbutz assembly.53
At the same time, the manager of the recovery plan succeeded in reachi
agreement with the banks on a financial arrangement which would include th
following: the factory would pay the kibbutz debt; payment of the debt would
spread over a number of years; rental income from the factory to the kibbutz woul
be used to pay pensions of members of retirement age; and it was decided to bring i
an external investor for the factory as a condition for the ratification of th
arrangement.54
In accordance with the contract signed with the manager of the recovery plan
year after taking office and seven months from the active implementation o
privatization, he was to reduce his activity by one-third. The outgoing manager was
satisfied with the process of change which had been subject to his management
he maintained that the fact that, in Galil, the leaders of the change, working w
him, were all 'sons of the kibbutz' would help kibbutz members to continue to accep
the change in the long term.55
About a year after privatization and the separation of the economic sector from
the community sector, the economic sector of the kibbutz was balanced, the various
branches were profitable, the service sector was more efficient, there was no
unemployment on the kibbutz, the kibbutz was managing its debt return and for the
most part the atmosphere on the kibbutz was positive, with no crises.56 On the other
hand, the kibbutz had not succeeded in reaching a debt arrangement with the banks
and a partner had not been found for the nappy factory, due, among other factors,
to the Intifada (the Palestinian uprising) and the Israeli economic recession.
Following privatization and the separation of community and financial sectors, in
accordance with the plan for change, the secretariat and the subsequent kibbutz
assembly decided to set up a 'fund for mutual assistance'. The objective of the fund
was to grant aid to individuals and families at special times of distress or tragedies
which required special needs and great financial expense. This fund would come
from the progressive tax which was imposed on kibbutz members with privatization
and was an important mechanism for mutual aid even after privatization and the
reduction of kibbutz participation in various private expenses.57
During 2001, efficiency continued to improve and this was expressed by a
reduction in building, and the building which was carried out focused on preparing
apartments for rental, and these rentals became a profit-making branch of the
kibbutz. Dozens of new families came to live on the kibbutz as residents and thus, in
the budget of 2002, there was an expansion of clauses dealing with the municipal tax
which was used for the daily management of the community.58
From the beginning of 2002, the process of organizational change continued which
included a definition of office holders, their appointment and their terms of office.
Decisions regarding office holders had been determined in the plan for change of
October 1999 which had been implemented beginning from June 2000, but these
decisions had not been fully carried out until the beginning of 2002, when the
secretaries decided to implement them. It was determined that all public officers
would be limited to four-year terms with the possibility of reappointment or re-
election, and also with the possibility of replacement before the end of the term of
office in accordance with the results of the management committee, as there was
public interest in their effectiveness and whether they were acting according to the
rules of good governance. The two central offices of the kibbutz, as they were
defined, were the community manager and the economic manager. The community
manager was elected by kibbutz members while the economic manager was chosen
by tender by the economic directorate to be publicly approved at a kibbutz assembly
or by a vote at the polls (including all members), if the kibbutz assembly so decided.
In other words, the process of choosing an economic manager reflected the relative
autonomy of the economic directorate with regard to the general public in managing
the business sector of the kibbutz. This ensured that an economic manager who was
not acceptable to the chair and the members of the economic directorate would not
be appointed. A management committee or secretariat worked with the community
manager and was also elected directly by the members while the economic manager
worked with the economic directorate which was chosen in a similar fashion to the
economic manager. All other managerial offices were filled by tender and would be
appointed by the management committee or by the economic directorate. This
method balanced the need to include the public in the election and appointment of
office holders and the need to grant authority and flexibility of action to th
management. In addition, the method ensured transparency of decision making a
gave equal opportunity to members to run for the central offices of the kibbutz.59
additional step was discussed at a kibbutz assembly in 2002. Against the backdrop
the organizational change, the kibbutz assembly, with the encouragement of th
secretaries, began to discuss the possibility of constructing a community neighbour-
hood of non-kibbutz members, on kibbutz land,60 a very significant step for t
economic and social future of the kibbutz. It was also agreed in the secretariat and at
the kibbutz assembly to begin to advance the process of implementing privat
ownership of apartments.61 In addition, from the beginning of privatization until t
second half of 2002, 13 kibbutz members had created a variety of new economi
initiatives.62 About two years after the renewal process, the following appeared
the kibbutz newspaper of 30 June 2002: The process of change has had a clear
positive effect on the economic situation of the kibbutz . . . The process of change h
constituted the peak of economic recuperation which began in 1998 and still has not
been completed'.63 In the three years from 1999 to 2001, the period of chang
the kibbutz had a continuous operative profit in contrast to the continual deficit in
the past. Cash flow improved and enabled the kibbutz to reduce its heavy debt to th
banks.64 However, in 2002 the situation changed with the Israeli recession and again
the factory suffered losses.65 Serious competition from the internationally kno
brand names was added to the difficulties caused by the recession; the factory could
not deal with competition from the international giants and began producing a
loss.66 During the extended crisis, the technical recovery manager resigned from his
position in the kibbutz as chair of the factory but remained as representative of the
kibbutz to the banks in an effort to reach a financial arrangement which woul
resolve the kibbutz debts, and he continued to serve as a member of the council
managers of the factory.67 Due to the continuing recession and the increasin
competition of the international brands, the crisis at the factory deepened. Monetar
problems were so serious that it had difficulty releasing raw material, and bot
production and sales slumped68 until, in August 2003, the factory collapsed.
As there had not been complete managerial, monetary and legal separati
between the kibbutz and the factory, the collapse of the factory pulled the kibbutz
into bankruptcy in August 2003. The debt of the kibbutz and the factory totall
about 270 million shekels. The factory owed 1 10 million shekels and the debts of th
kibbutz, which was guarantor of the factory, totalled 160 million shekels.69 Th
debts of the kibbutz and the factory to the banks, primarily to Bank Hapoali
totalled 65 million shekels. The District Court Judge in Nazareth protected th
bankrupt kibbutz and prevented property division among the creditors.
compelled the trustee to present a recovery plan within a month.70
The court appointed an economist as trustee of the factory and as chair of th
management committee of the kibbutz for a period during which procedures w
frozen. Under his direction, the manager of the factory fired 80 workers, most
whom were outside workers, residents of Kiryat Shmona, the neighbouring town. At
the same time, the trustee began steps to bring in an outside investor for the factor
Due to the collapse, kibbutz income from the factory evaporated. This income had
included municipal taxes and monthly rental of the premises which had provided the
subsistence pensions of the older members. In addition, the progressive tax whi
Kibbutz 'Gain*, Israel 587
had been paid by kibbutz members working in the factory went unpaid. In all, the
factory closure reduced kibbutz income by 150,000 shekels per month. At least until
the debt arrangement could be completed by the trustee, various clauses dealing with
the use of the progressive tax, which had provided future savings for kibbutz
members, were cancelled. These included the fund for mutual assistance. Health,
welfare and education budgets were reduced, as were clauses relating to the
municipal tax which had been used for day-to-day kibbutz operating expenses:
infrastructure, gardening, culture and so on and the amount of progressive tax for
members was increased. These steps were arranged by the secretariat working in
cooperation with the new committee chair of the kibbutz appointed by the court as
an emergency measure to deal with the new situation for a recovery period until the
signing of a debt arrangement.71 During the following months, the kibbutz was
managed by the chair of the committee, which had been appointed by the
community manager, who had been chosen by the chair. The secretariat continued to
be responsible for daily management with budgetary limitations which were
determined by the appointed committee, acting with the approval of the community
manager. During this period, steps to improve efficiency were taken along with
reductions in consumer expenses. There were employee cutbacks and many members
were dismissed from their kibbutz jobs. In addition, the kibbutz newspaper which
had served the kibbutz for years as a forum for discussion and for information,
opinion and ideas among kibbutz members, was closed down.72 These were difficult
months of uncertainty, anxiety, and pressure for kibbutz members73 while, in the
background, there was the fear that, if the debt arrangement with the creditors was
not approved in 2004, it might lead to the dismantling of the kibbutz by the creditors
with no consideration for the community and for the members.74 The members' fears
increased in light of the fact that they were not included in decisions and regarding
obtaining an arrangement with creditors, and many felt helpless about their futures
which were left in the hands of the head of the committee, appointed by the court.75
After months of waiting and uncertainty, an arrangement with creditors was
formulated and ultimately signed on 1 November 2004.
The arrangement with creditors determined that, within 22 years, by 2025, the
kibbutz would repay its debts to creditors.76 The kibbutz would have to make
payments of 18 million shekels for two years, 200 million shekels were erased and 60
million shekels would remain as a postponed debt.77 The arrangement determined
that if the kibbutz made its two-yearly payments to redeem its debts, the postponed
debt would be cancelled. As part of the arrangement, managerial authority
was taken from kibbutz members and given to the trustee of the court to fulfil
the agreement with the creditors. The district court judge, in coordination with the
registrar of cooperative associations and the kibbutz movement, determined the
receiver. With the signing of the arrangement, a new committee chair was appointed
for the kibbutz on the part of the creditors, nominated by the District Court in
Nazareth and, subordinate to him, a community manager was appointed. The
authority of the community manager was very wide, enabling him to enact any
significant decision regarding the management of the kibbutz, without approval by
the kibbutz assembly, to fulfil the repayment of the debts. In order to do this, the
community manager transferred most of the economic branches of the kibbutz, the
orchard, the field crops, the fish ponds and the chicken coops, to external hands and
the nappy factory was also sold to a private buyer for 7.4 million shekels, with t
agreement that it would be operated for five years which would ensure that ren
fees would be paid to the kibbutz of 1 10,000 shekels per month. Only the milk cow
barn and the small textile factory remained as independent branches of the kibbutz
while the others which had been sold externally would provide a rental income to th
kibbutz in addition to the dozens of apartments on the kibbutz which had be
rented to outside residents. The principal terms of the arrangement attempted
avoid selling kibbutz land, but to sell most of the economic assets situated on th
land in order to have the rental income which would enable the kibbutz to pay
debts.78
With this arrangement, the power of the community management was greatly
reduced and its authority remained only in the management of community budgets
and decisions derived from these regarding the kibbutz area, welfare, nursing,
education, culture, and the like, but determining budgetary frameworks, economic
management, appointing managers and managing property, especially in the area of
real estate, remained purely under the authority of the trustee and the appointed
committee.
Relations between the members working within the kibbutz or outside were
determined in the creditor arrangement as relations between worker and employer,
according to the law. Thus, it was determined that each member, with no connection
to his/her place of employment, had the right to a salary and s/he would have to pay
taxes (income tax and National Insurance payments) and social deductions
according to the law. In order to care for pensioners and for needy members, it
was determined that each member would receive a minimum sum which would not
be less than the legal minimum wage for an individual and 180 per cent of minimum
wage for a couple. It was also determined that sums of money would be deposited
into members' personal pension funds. It was decided that in the framework of the
general privatization, private ownership of apartments would be carried out by the
kibbutz in accordance with seniority. This process began in November 2007 when
the chair of the appointed committee submitted to kibbutz members the location of
their apartments and the size of the plot which would be registered under their names
during the following months. Private ownership of apartments constitutes the first
stage of turning the kibbutz into a type of community settlement while caring for
needy members. The next stage which is planned is building a new neighbourhood
for outside residents.79 This plan is not derived from economic decisions but rather
from the difficulties of an ageing population and the need to rejuvenate it. The small
sum which will enter the kibbutz from the new neighbourhood will enable upgrading
of the infrastructure and will provide income from selling services offered by the
kibbutz to members: culture, education, gardening, and others. New neighbourhood
planning was halted at the beginning of 2008 as it depends on erasure of the
postponed debt. When this debt problem is resolved as planned, it will enable Galil
to become a renewed kibbutz.
The changes taking place today in kibbutzim which are in transition from communal
kibbutzim to renewed kibbutzim are not total nor are they accompanied by a
rejection of the fundamental values of kibbutz. The process of change takes different
Kibbutz 'GalW, Israel 589
forms and takes place at diffrent rates in accordance with the nature of the economic
system and the community. In the case of Kibbutz Galil, due to the economic
collapse, management was transferred to a trustee of the court who completed the
change, with maximal implementation of the model of a renewed kibbutz.
The economic branches of the kibbutz have undergone steps to make them more
efficient which have included, for the first time in kibbutz history, firing workers and
transferring most economic branches to private ownership. In order to enable a
number of community service branches to continue to function, and especially the
educational system, the kibbutz opened its gates to residents of the area and rented
apartments to non-members who paid not only for rental but also for other services
which they received from the kibbutz. The proposed new neighbourhood of non-
members which will be constructed once the problem of the postponed debt has been
resolved is expected to continue lowering the fence' between the kibbutz and its
environment, whether near or farther away. It should enable the kibbutz, whose
population is ageing, to continue to maintain the community services supplied to its
members and residents, ensuring their economic profitability.
Alongside the far-reaching changes in lifestyle and in kibbutz management,
Kibbutz Galil has remained a 'kibbutz' primarily thanks to its safeguarding of the
principle of 'mutual responsibility' among members. This principle is expressed in the
budgetary deductions from members and economic branches for the aged, for
members who have lost their ability to work and for those in need, all of whom receive
adequate living conditions within the kibbutz. Kibbutz members also elect those
responsible for community management and participate in discussions at kibbutz
assemblies and in votes for making decisions relating to the management of the
services and the economic branches which serve the community, even if their
budgetary framework has been determined. In addition, cooperative ownership of
land which has remained common property continues despite the moves to enable
private ownership of apartments, and the sale of most economic branches to external
owners.
The swift and deep changes which took place on the kibbutz con
example for understanding the essence of a process of change which man
are now involved in. The pace of change is determined by the char
economy and the community of each kibbutz. In one way or another
from the case of Kibbutz Galil, it is clear that the process towards a ren
includes innovative elements the essence of which is the application of t
of economic rationalism. In addition, Kibbutz Galil retains 'commu
the essence of which is application of the principle of mutual responsibi
among members of the community and the sharing of services and
which is owned by the state. The integration between these eleme
preserves the 'kibbutz' identity of a kibbutz throughout the move from
to a renewed kibbutz in accordance with the changing social a
circumstances of the twenty-first century.
Notes
1. A. Weber, Renewal: The Kibbutz Facing its Future (Tel Aviv: Hakibbutz Hameuchad, 1992); Y. Harel,
The New Kibbutz (Jerusalem: Keter, 1993); D. de Malach, 'The Formal Organizational Change in
Kibbutz: The Effects of Norms Which are Taken for Granted', The Inquiring Eye Series, Bookle
A (Ramat Efal: Yad Tabenkin, 1995); M. Tofel, Trends in the Process of Change in Kibbutz',
Kibbutz Research at the Turn of the Century, Booklet 15 (Ramat Efal: Yad Tabenkin, 1995). (A
in Hebrew.)
2. D. Rosolio, The Changes in Kibbutz and Kibbutz Research - The Theoretical Aspect', Kibbutz
Research at the Turn of the Century, Booklet 9 (Ramat Efal: Yad Tabenkin, 1995) (in Hebrew).
3. S. Shelsky, Changes in Kibbutz and Expressions in Research (Givat Haviva: Yad Yaari, 1997) p. 10 (in
Hebrew).
4. A. Pavin, 'Views of the Crisis in Kibbutz Newspapers', Kibbutz Research at the Turn of the Century,
Booklet 1 (Ramat Efal: Yad Tabenkin, 1992) (in Hebrew).
5. Ibid.
6. M. Palgi and S. Sand, Opinion Poll in Kibbutz Population B (University of Haifa: Institute for Study
and Research of the Kibbutz, 1995), p.50 (in Hebrew).
7. Shelsky, Changes in Kibbutz, p. 10.
8. Haaretz newspaper, 23 July 2004.
9. The Office of the Spokesman for the Ministry of Industry and Commerce, Notification to newspapers,
dated 28 March 2004.
10. Shelsky, Changes in Kibbutz, p.48; Pavin, 'Views of the Crisis'; S. Ravid, 'Is the Kibbutz Undergoing a
Change of Values? Between Change of Values and Technical Change', Kibbutz Research at the Turn of
the Century, Booklet 3 (Ramat Efal: Yad Tabenkin, 1992); A. Ben Rafael and U. Geist, 'Perceptions
of Change on Kibbutz', Kibbutz Research at the Turn of the Century, Booklet 8 (Ramat Efal: Yad
Tabenkin, 1993); A. Weber, Renewal: The Kibbutz Facing its Future (Tel Aviv: Hakibbutz
Hameuchad, 1992); Y. Harel, The New Kibbutz (Jerusalem: Keter, 1993); D. de Malach, 'The Formal
Organizational Change in Kibbutz: The Effects of Norms which are Taken for Granted', The Inquiring
Eye Series, Booklet A (Ramat Efal: Yad Tabenkin, 1995); M. Tofel, 'Trends in the Process of Change
in Kibbutz', Kibbutz Research at the Turn of the Century, Booklet 15 (Ramat Efal: Yad Tabenkin,
1995). All are in Hebrew.
11. Central Bureau of Statistics, Israel, 2006.
12. Interviews: M.S., 30 Oct. 2007; D.B.S., 20 Dec. 2007. Please note that all initials in these notes relate to
kibbutz members.
13. Interview with T.Y., 17 Nov. 2007.
14. Inter views: I.K., 27 Jan. 2008; T.Y., 17 Nov. 2008.
15. T.Y., 17 Nov. 2008.
16. Ibid.
17. Haaretz, 14 Feb. 2000; Haaretz, 13 Aug. 2003.
18. M.S., 30 Oct. 2007.
19. M.S.. 30 Oct. 2007.
20. D.B.S., 20 Dec. 2007; T.Y., 17 Nov. 2007; E.K., 27 Jan. 2008.
21. T.Y.. 17 Nov. 2007.
22. M.S., 30 Oct. 2007; Y.Y., 17 Nov. 2007.
23. Protocols of the Secretariat of the Kibbutz from 20 Jan. 1994 and 28 Jan. 1994.
24. T.Y., 4 Dec. 2007; Economic Manager, S.A., The effects of the change in lifestyles on the econo
situation of the Galilee', Internal, 30 June 2002.
25. Economic Manager, S.A. 'The effects of the change in lifestyles on the economic situation of
Galilee', Internal, 30 June 2002.
26. Protocol of the 'Committee for Change', 1 July 1997, Division 2, Bin 6.
27. Announcement from the Economic Manager, 20 Sept. 1997, Division 2, Bin 6.
28. Kibbutz member, D.B.S., 20 Dec. 2007.
29. Information Page to Members 2 from the Organization and Implementation Team, dated 15 S
1997, Division 2, Bin 6.
30. Protocol of Consumption Committee Meeting with Economic Manager, 24 Dec. 1997, 25 Dec. 1
Division 2, Bin 6.
31. Community Manager 2003-2007, M.S., 30 Oct. 2007; T.Y., 4 Dec. 2007.
32. Community Manager 2003-2007, M.S., 30 Oct. 2007.
33. The Committee for Community Management and the Secretaries to the Kibbutz Assembly, regard
discussion and confirmation of the community budget, 3 March 1999; Division 2, Bin 6.
Kibbutz ValiV, Israel 591
34. Notice of Kibbutz Secretaries Regarding the Mapping of General Activity on the Kibbutz for the
Establishment of a Human Resources Unit, 11 Dec. 1998, Division 2, Bin 6.
35. See proposal to open bank accounts in Bank Mizrahi dated 7 March 1999, Division 2, Bin 6; The
decision to open private bank accounts for members dated 28 April 1999, Division 2, Bin 6.
36. Work regulations of Kibbutz Galil issued on 7 July 1999, Division 3, Bin 6.
37. Decision to separate the economy from the community, 1 July 1999, Division 2, Bin 6.
38. Notice of the Kibbutz Directorate and the Secretaries to the Kibbutz Assembly regarding discussion
and confirmation of the community budget, 3 March 1999, Division 2, Bin 6.
39. Economic Manager, S.A., 'Effects of change in lifestyle on the economic situation of Galil', Internal,
20 June 2002.
40. Protocol of Council Meeting, 1 Sept. 1999, Division 2, Bin 6.
41. From a letter to kibbutz members which was issued by the Community Managers and the Economic
Managers summarizing kibbutz moves until the beginning of the privatization process, 1 Sept. 1999,
Division 1, Bin 46.
42. Community Manager, M.S., 30 Oct. 2007; in the past, one of the 'three kibbutz secretaries', T.Y., 4
Dec. 2007.
43. Announcement of the three secretaries: Lowering public tension after the suicide, 19 April 1999,
Division 43, Bin 1 .
44. In the past, one of the 'three secretaries', T.Y., 4 Dec. 2007.
45. Letter from Y.E. to the Secretariat of the kibbutz regarding: 'Framework proposal for a process of
kibbutz recuperation', 29 July 1999, Division 46, Bin 1.
46. Ibid.
47. Letter from the Secretariat to kibbutz members regarding the adoption of the plan for change, 1 Jan.
1999. Division 46, Bin 1.
48. T.Y., 4 Dec. 2007.
49. Announcement of the Active Directorate to members on the beginning of the privatization process in
various areas of consumption, 27 Dec. 1999, Division 2, Bin 6.
50. Announcement of the Active Directorate on return for work according to the plan tor change, 1 June
51. M.S., 30 Oct. 2007; T.Y., 4 Dec. 2007.
52. Report of the meeting of the Economic Directorate, 25 June 2000, Division 2, Bin 6.
53. Ibid.
54. Ibid.
55. Summary of meeting of the Directorate, 12 Feb. 2001.
56. Ibid.; T.Y., 4 Dec. 2007; Report from meetings of the Economic Directorate on the balance sheet for
2000 and Half-yearly Summary of 2001, dated 3 Oct. 2001.
57. Letter from the Secretariat to the members of the Management Committee the first clause of which
dealt with the discussion about establishment of a fund for mutual assistance, 22 April 2001, Division
43, Bin 1; A letter from the Secretariat to kibbutz members announcing the establishment of a fund for
mutual assistance. 4 June 2001. Division 43, Bin 1.
58. A letter from the Secretariat to the kibbutz members regaling community budgeting for 2002, 7 Jan.
59. Letter from T.Y. to the members of the Secretariat, 27 Jan. 2002.
60. Ibid.
61. Information sheet, from the Secretariat to kibbutz members, 12 May 2002.
62. S.A., Economic Secretary, 'Ettects ot the change in niestyie on tne economic simauon in vjjuii ,
Internal, 30 June 2002.
63. Ibid.
64. Ibid.; letter sent by Y.O. to the Management Committee and the Economic Directorate ot Oahl upon
completion of his term as chair of the factory, 9 Feb. 2003.
65. Ibid.
66. Haaretz, 14 Feb. 2000; Haaretz, 13 Aug. 2003.
67. Letter sent by Y.O. to the Management Committee and the Economic Directorate of the Kibbutz
upon completion of his term as chair of the factory, 9 Feb. 2003.
68. Information sheet-Tafnukim, 3 June 2003, Division 2, Bin 6.
69. Yedioth Aharonoth, 13 Aug. 2003; Haaretz, 5 Sept. 2003.
70. Yedioth Aharonoth, 13 Aug. 2003.

71. Letter sent by T.Y. to the members of Galil: Update on the plan for the community from Sept
Dec, 15 Oct. 2003.
72. Information sheet written by M.S., Community Manager, to kibbutz members, 12 Feb. 2004;
Information Sheet written by M.S., Community Manager, to kibbutz members, 29 Feb. 2004.
73. T.S., 4 Dec. 2007.
74. Letter written by 'a group of members' to kibbutz members, 23 Feb. 2004.
75. Protocol of the discussion called by about 60 kibbutz members, in the kibbutz club regarding the
status of members in the proceedings towards an arrangement with creditors, 28 Feb. 2004; Letter
written bv 'a group of members' to kibbutz members, 29 Feb. 2004.
76. M.S., 30 Oct. 2007; T.Y., 4 Dec. 2007.
77. M.S., 3O.Dec. 2007.
78. M.S., 30 March 2007; T.Y., 4 Dec. 2007; A.K., 27 May 2008; Haaretz, 24 March 2003; Haaretz, 9 May
2004.
79. Letter for Y.V., Chair of the Appointed Committee to kibbutz members, 27 Feb. 2005; M.S., 30 Oct.
2007; T.Y., 4 Dec. 2007; A.K., 27 Jan. 2008; Haaretz, 1 April 2005.

From Cooperative To Renewed Kibbutz

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From Cooperative To Renewed Kibbutz

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From Cooperative to Renewed Kibbutz: The Case of Kibbutz 'Galil', Israel

Author(s): Maayan Hess Ashkenazi and Yossi Katz

From Cooperative to Renewed Kibbutz:

ISSN 0026-3206 Print/ 1743-7881 Online/09/040571-22 2009 Taylor & Francis

A communal kibbutz - A settlement association which is a separate settlement,

1. Distribution of allowances to members according to the extent of their

kibbutzim. He would function as an 'economic chair' in separating the kibbutz

beginning of the application of principles of change led to a significant improvemen

70. Yedioth Aharonoth, 13 Aug. 2003.

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