Creation of Israel, the War of 1948 and Early Institution-Building
To begin with, there is no direct connection between the War of 1948 and the institution building that followed, because the process of institution building had already begun 30 years before the war, more or less immediately after the British army’s occupation of Palestine. There were actually some beginnings even before that during the Ottoman Empire, but the Ottomans did not allow, for good reasons from their point of view, the establishment of national institutions. This not only applied to the Jews but to the entire Muslim world. Therefore the beginnings of institutions were not called national institutions.
The extension of these very early institutions began in 1918, almost immediately after the British forces established the two-year military administration of Palestine that preceded the civil administration of 1920. This was the turning point for institution building of the Jewish community in Palestine.
The first open, democratic elections took place in 1920 and were extended to all sections of the Jewish community, numbering about 55,000-60,000 Jews. Compared to today’s situation, this would be like a middle-size town in Israel or the Palestinian territories. Nevertheless this small community was divided and subdivided between different political parties and ideological movements, between religious and ultra-religious sectors, between Oriental and European Jews, etc.
In the first decade after the establishment of British institutions, there was a very intensive effort to build Jewish institutions. The main organization to do so in terms of success and activism was the General Federation of Labor, which built the foundations for a welfare state, created educational and cultural institutions, and provided housing and services for workers. The cooperative settlements flourished, and by the mid-1930s most of the institutions of a semi-modern state already existed, including a parliamentary system with more or less regular elections, although they were sometimes postponed. The Arab Revolt of 1936 against the British and the Jews was a traumatic experience for all sides, and resulted in an election postponement. Some of the organizations established by 1936 needed more time to develop and institutionalize their activities, but in principle everything was ready for a state by this time. The revolt inspired the establishment of nationalistic semi-underground organizations, which were the last institutions developed before 1948.
The War of 1948 neither created new institutions nor altered those that already existed. Only after 15 May 1948 did the newly declared state establish such new institutions as could not develop under a foreign empire. The war itself required the full mobilization of the Jewish population and all its sources, which was very much facilitated by the fact that most institutions were already in place. Thus, the Jews were much better prepared for this war than the Arab society in Palestine.
Most of the immigrants that came to Palestine in those days (according to the quota imposed by the British) were young men and women. Immigration was planned, organized and executed by the Jewish Agency, which had two centers: one in London and one in Jerusalem.
Due to the quota there was also a high level of illegal immigration, either organized unofficially by the Jewish Agency or by the Revisionist Party, a right-wing opposition group. All in all, no more that 10 or 15 percent of the Jews that came to Palestine before 1939 were illegal immigrants. Between 1945 and 1948 most of those who attempted to immigrate were illegal, but that is another issue.
An important characteristic of the pre-state Jewish community in Palestine was the fact that a high percentage of the newcomers were young; before the Declaration of Independence in 1948, for example, the average age of the Jewish community was less than 30 years. The majority of the population consisted of young men between the ages of 16 and 30, which was also a crucial factor in the War of Independence. Israel was able to mobilize about 100,000 soldiers and to train additional young men and women as volunteers in a very short time.
The most famous unit was the Palmach squads, which consisted of various commandos and was 30-40 percent women. The British had started to train the Palmach, not against the Arabs but against the Germans during World War II. Therefore they had professional military training, as had some 30,000 Jews who had volunteered under the British army and returned in 1945. The question of whether or not to volunteer in the British army was quite controversial among the Jews, for some argued that it would be better to stay and be prepared for another possible Arab revolt. However, the Jewish Agency decided that serving in the British army took priority, for the war created an opportunity for Jews to gain military experience in a professional army. Other than this, the British government played almost no role in building Jewish institutions in Palestine. This was to a great extent due to their policy of non-interference in civil institutions, except in some economic matters or during cases of civil disorder. Two of the very few things in which they interfered, fortunately perhaps, were architecture and town planning in Jerusalem.
All Jewish institutions were subsidized by the World Zionist Organization (WZO) and therefore did not pay taxes. The Jewish Agency was not allowed to collect taxes, and the British only collected port taxes for import-export related matters.
The two main sources of income were the National Fund – money collected from all over the world (before 1939 especially in Eastern Europe and the US) – and private capital brought by Jewish citizens to Israel. The latter was by far the biggest source. The turning point in terms of quantities of capital inflows was the German Jewish immigration between 1933 and 1936 and, to a lesser extent, in 1939. Private individuals financed most of the private sector and industrial investment, while the national capital was devoted mostly to the education-culture sector, constructing agricultural settlements and defense. All three main streams in education – the Labor style of education, the national-religious and the general stream were financed (salary, facilities, etc.) and maintained by the national institution, thus most of the schools were free. High schools were semi-private institutions.
At the time, there was no ministry of planning or similar institution responsible for allocating resources or planning. The Jewish Agency handled these matters, and though its members were not necessarily Zionists, they were determined to help the Jews in Palestine. Furthermore the National Committee, a local institution established in the 1920s and elected only by the Jews in Palestine, served as a junior partner to the Jewish Agency in terms of autonomy, resources, and leadership. The most important resource – money – remained with the Jewish Agency. The National Committee, which was located only in Jerusalem, primarily dealt with welfare, agriculture and developmental issues, while the Jewish Agency had a double structure with headquarters in London, headed for a long time by Chaim Weizmann, and Jerusalem, where David Ben-Gurion became chairman in 1931. The power shifted gradually from London to Jerusalem for obvious reasons: the intense events in Palestine did not allow for decision-making to await discussions between the two cities.
In the Balfour Declaration, the British stated that they would help the Jews establish a national home within the boundaries of Palestine; they never spoke about a state. The British Mandate was very important from a legal point of view. For example, the British considered the Jewish Agency a legal institution. The Arabs in this sense were less eager to establish institutions equal to those of the Jews, and had different points of view on this matter. Honestly speaking, as far as institution building was concerned the Alagged far behind the Jews, which was one of the reasons why the legal infrastructure that the British established favored the Jewish society.