Credit Cooperatives in Early Israeli Statehood: Financial Institutions and Social Transformation
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Neta Ziv
In 1948, when the State of Israel was founded, 125,000 people (about one fifth of the Jewish population) were members of credit cooperative societies, which provided over 20 percent of all market financing. For several years this number continued to rise, reaching a total of 250,000 members in more than 100 credit cooperative societies. Credit associations — part of the thriving cooperative movement of early Zionism — symbolized the attempt to create a new and just Jewish society by fusing socialist and capitalist ideals. From the mid-1950s, however, in a rapid process of centralization of Israel’s capital market and financial institutions, almost all credit associations were absorbed into Israel’s commercial banks and dissolved. Today, Israel’s two largest banks (Leumi and Hapoalim) control over 63 percent of credit provision, and 90 percent of credit is provided to less than 1 percent of borrowers. The official policy of the Bank of Israel is to rule out the establishment of credit associations, credit unions or other non-bank financial institutions. In the light of current renewed interest in "social businesses," i.e., innovative business models designed to achieve desired social outcomes, this Article traces the waning of credit associations in Israel, and the role law has played in that process. Their disappearance from the capital market marked not only a change in economic policy, but also the final abandonment of the ideals which underlay the provision of cooperative financial services: mutuality, partnership and solidarity.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Article
- Introduction
- Political Economy of Supplying Money to a Growing Economy: Monetary Regimes and the Search for an Anchor to Stabilize the Value of Money
- Alternative Approaches to Money
- The Meanings of Money: A Sociological Perspective
- Central Bank Transparency: Causes, Consequences and Updates
- The Crisis of Invented Money: Liquidity Illusion and the Global Credit Meltdown
- International Financial Centers: The British-Empire, City-States and Commercially Oriented Politics
- The Jurisprudence of Global Money
- Credit Cooperatives in Early Israeli Statehood: Financial Institutions and Social Transformation
- Applied Legal History: Demystifying the Doctrine of Odious Debts
- Inventing Industrial Statistics
- The Moneylender as Magistrate: Nicholas Biddle and the Ideological Origins of Central Banking in the United States
- Coin Reconsidered: The Political Alchemy of Commodity Money
- Elements of Negotiability in Jewish Law in Medieval Christian Spain
- The Role of Lawyers in Producing the Rule of Law: Some Critical Reflections
Articles in the same Issue
- Article
- Introduction
- Political Economy of Supplying Money to a Growing Economy: Monetary Regimes and the Search for an Anchor to Stabilize the Value of Money
- Alternative Approaches to Money
- The Meanings of Money: A Sociological Perspective
- Central Bank Transparency: Causes, Consequences and Updates
- The Crisis of Invented Money: Liquidity Illusion and the Global Credit Meltdown
- International Financial Centers: The British-Empire, City-States and Commercially Oriented Politics
- The Jurisprudence of Global Money
- Credit Cooperatives in Early Israeli Statehood: Financial Institutions and Social Transformation
- Applied Legal History: Demystifying the Doctrine of Odious Debts
- Inventing Industrial Statistics
- The Moneylender as Magistrate: Nicholas Biddle and the Ideological Origins of Central Banking in the United States
- Coin Reconsidered: The Political Alchemy of Commodity Money
- Elements of Negotiability in Jewish Law in Medieval Christian Spain
- The Role of Lawyers in Producing the Rule of Law: Some Critical Reflections
