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On Society and Economics in Herzl’s Altneuland

/ By Dr Ushi Shoham Krausz /

דר אושי שוהם According to Herzl’s classic work “Altneuland” in the Palestinian state to be established, men would wear top hats and business suits while walking the streets decorated with mosques.  The women would be wearing European style hats and chattering about the latest fashions from Paris.  Names such as Max, Freidrich and yes, even Fritzcan fill the rolls.  Thus it is eminently clear that the founders would be elite personages addressed as “Herr Doctor” or “Herr Engineer”.

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Moreover, one of the especially interesting items in this novel is that Herzl never actually mentions a state for the Jewish people.  In this book he proposes a social, economic structure that is unique: A cooperative society not only from the aspect of a society of men or an “Israeli Society” but from the aspect of a cooperative business venture.

Herzl does not detail or present a final structure for his idea nevertheless there is something very interesting here.

The founders-representatives of international Jewish funds and wealthy Jewish business people would establish a stock company.  This company, which employs people, is a called reconciliation company.

What do does this mean?

The example proposed here is taken directly from the colonial history of Europe.  We are referring, for example, to the British East Indian Company formed to settle Eastern India.  This was a stock company that, in the year 1600 received from the queen of England, Elizabeth the first, a special charter granting it the exclusive trading rights in Eastern India.

This company was the major factor in the British capture of India.

The company traded, settled and also managed parts of the Indian mechanisms.

Herzl speaks of developing a similar system with slight differences.

Similar because he proposes a stock company whose purpose it was to settle an Eastern land and to establish there a thriving economy, factories and more.

However, there would be two differences.

First, there is no independent state that establishes a company to settle another country. Instead there would be appointed representatives of a people that lived for hundreds of years dispersed socially and culturally throughout the entire world.  These representatives-the wealthy business men would establish in effect a new national//social/business society by means of a completely private initiative.

However the most important point in this plan is the fact that this stock company formed by the founders is not designed to be eternally profitable for the founders.

True they are not expected to lose money.  On the contrary, Herzl emphasizes more than once the profit incentive inherent in the free market. They would not give up the profits but instead, at the right time, transfer at a fair price their shares in the national, general company that will replace the stock company

It is difficult to describe the legal standing of such a company and it is doubtful if such a model exists in the world whereby a group of citizens are associated in a socioeconomic manner and not necessarily in a national one.  It is possible however to imagine such a structure as a sort of giant cooperative open to anyone interested in joining its services.

Yes with no differences in race, creed, religion or sex.

This company would settle Palestine with the aid of the immediate recognition by Turkish Sultan who would retain control over it.

In Herzl’s literary imagination, if so, the settlement stock company would be established by benefactors and business people.  This company was meant to settle the country and cause it to flourish.


From a Business Society to an Economic Society

First of all it must be understood that Herzl’s models are neither defined nor detailed fully.  In “Altneuland” he doesn’t present an organized plan for establishing a Jewish settlement in Palestine. He speaks in prophetic terms but it is important to stress that it is a reasoned prophesy from a value standpoint.

The stock company that would establish the Jewish society would purchase land, import agricultural equipment, cattle and plants and build railroad tracks.  It would even build housing for workers.

At this point it is possible to say that this is an example of a type of Fordistic society.   

By this is meant a business society that would bring in people to work for it and would give them all the necessary conditions to live in the work area and even a salary that would not be a meager one but which would enable them to purchase the products they produce and even leave a bit of profit.

But this is not what Herzl wanted.

His plan was based on the model of Ireland in the 19th century where the lord of the manor enabled his farmers to work and in the end establish a mutual cooperative that would manage the work, buy and sell and enable the farmers to profit from their labors.

And this is what Herzl wanted.

The stock company would replace the socioeconomic structure.  The citizens of Palestine would be divided into two classes. One class would be a large cooperative association called “the new society” and it would own the shares of all of the infrastructure, the land and all property.  The second class would be everyone else living there but who did not wish to be partners in the “new society”.

What is important to note is that those who wanted to could be accepted into the “new society” without any consideration of religion, sex or race.  That is to say, despite the fact that this entire enterprise was meant to solve the problem of European Jewry, the society would be open to all regardless of race or religion or sex..

This is a most liberal vision without a doubt.

Regarding Free Initiative and a Good Life

And how do you integrate business with a free association of workers?

The establishing share holders need not be “suckers” (Herzl of course, words it differently).  Not only are they not meant to lose money or be philanthropists, they are meant to profit.

And the profits will come from the enhancement of the new settlement and from the labor of the workers.

In effect this would be the model: farmers would receive free land, would farm it, improve it and earn a living from it.

The value of the land would grow due to its cultivation and the cultivation of the wilderness and this will enable the “new society” that will inherit the stock company to obtain loans from abroad where the security would be the flourishing land.  The money obtained from these loans would be used to repay the original investors and the loans would be repaid by hard work.

Here may be seen the Herzl’s central premise: the combination of Capitalism and free enterprise with cooperative associations of workers.

We will explain.

Herzl loved the advantages of the Capitalistic system but as a son of the enlightenment movement of the 19th century he understood very well its disadvantages.

He recognized the power of Capitalism and free enterprise to create immense factories, to cultivate the wilderness and create progress.  However he did not forget the oppression of the workers, the poverty and the ignorance it could also create.

And so he tried to combine the two extremes.

Investors were invited to come, act and profit.

They could join the “new society” or become citizens of Palestine without joining.

In the event that they wished to join the select, idealistic and lovely Zionist enterprise they could profit but within certain limits.

In the end they would sell their factories to the “new society” at a nice profit and these factories would be transferred to the general public and for their benefit.

The cooperative associations would be found everywhere and operate for the benefit of their members.

In addition the means of communication could be either private or cooperative.



Recently we heard of a new initiative by ultra-religious youth.  When you call a specific number you hear a synopsis of the latest news supplied by the “system” associated with this telephone.

Actually this was Herzl’s idea.

In Altneuland it would be possible to hear news over the telephone.

It was called the telephone newspaper.

And since the new settlement would be completely new and would not be built on an older infrastructure like European cities, everything there would be clean and organized.

Thus even the telephone cables would run completely underground and the telephone company would pay the “new society” just for the rights to use the underground conduits of he infrastructure to run their cables through.

And the printed newspaper?

Indeed there would be some and one of them would represent an example for a cooperative association.

It would belong to the shareholders.

Each subscriber would become a shareholder in the newspaper and would have the responsibility, via a representative committee, for the subscriptions to the system and for establishing the style of the newspaper and its general level.

In this way the “new society” would fight the manipulation and jingoism of the press.

And what is missing?

The problem is that there are many things missing and much that Herzl simply ignores.

Perhaps due to naïveté or simply because he wished to present a utopian vision that could guide more practical people to realize his dream.

In any event, Herzl ignores the model of a national European country.  This is the type of country we recognize in which there is a defined territory within which resides a certain people who are the majority.  It is important to note that this is not the only model for a political organization that has arisen during the course of history.  However, this is the model that has developed in Europe over the last few hundred years and which is likely to change in the future.

It is possible to say therefore that Herzl presented a new model but that he is ignored today, for all sorts of reasons, by people today.  Thus a very important national feeling has been lost to many people.

This is how we were educated.

The Jews like most people wanted a national homeland for themselves.

Herzl also did not give much consideration to the Arabs.

In his view they would simply agree to everything, and most importantly they would be satisfied and grateful.  They would profit economically, educationally and sanitarily.  However, according to Herzl they had no political ambitions.  And since the new society as all land in the Middle East belonged to the Turkish sultan there was no need for an army.

Don’t forget, neither Egypt, Syria or Lebanon were political entities at the time.

There was no national-military danger.

And what is the conclusion?

This vision can appear extremely bold and innocent (at least from a social standpoint) however it contains many elements worthy of thought.  What is your opinion, for example about cancelling national democracies which characterizes most of the world of our times and replacing them with business companies- for the benefit of all?

Perhaps instead of being citizens we would become share holders being able to improve our lives.

Worth considering, no?



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