The Economic Recession (1966-1967) and the Consolidation of the Israeli Right's Economic and Social Position

• In Event: The Israeli Right and Israeli Society: Economy, Religion, and Law

Abstract

The economic recession of 1966-1967 is considered a milestone in the politico-economic history of the State of Israel. This crisis was the outcome ‘engineered’ by a deliberate government policy aimed at promoting the accelerated development of Israeli industry to better compete in the European market. However, the adopted measures spiraled out of control, leading to widespread unemployment, increasing distress, and poverty among the working class, which predominantly comprised immigrants from Asian and African countries.
During this crisis, the Israeli Right was compelled, for the first time, to articulate its standpoint on the desired economic and social policies for the state within the framework of a unified party. Gahal (Herut Liberal Bloc), established a year earlier, was a joint political platform of the Herut Movement and the Liberal Party. For the first time, economic and social issues took center stage in the political agenda of the party, partly due to Herut’s decision to create a faction within the General Federation of Labor [Histadrut] that would support its followers.
The lecture will draw on rich documentary material from internal discussions within Gahal's factions and joint institutions, as well as on primary and secondary sources reflecting the right-wing stance in the public arena. It will trace how Gahal, as the main opposition party, responded to the economic and social crisis.
The evolvement of the political consolidation of the Right was characterized by a process of diversification. Gahal became a novel interclass meeting ground: Representatives The bourgeois and petty-bourgeois circlesthat operated mainly within the framework of the General Zionists worked shoulder to shoulder with a group from among the Mizrahi-working class that trickled into Herut.
The internal debate within Gahal during the Recession period was the first step toward the consolidation of the "Double Movement," which combined capitalist and social rights principles. This dual approach laid the foundation for the economic policies of the Likud following its establishment and eventual rise to power. By analyzing this formative period, the lecture will provide insights into how the Israeli Right navigated economic and social challenges and crystallized its political and economic strategies.

Author

• Amir Goldstein, Tel-Hai college