The scholarly literature on non-Muslim minorities is highly uneven, complex, and thinly researched. This chapter is not meant to be an exhaustive historical analysis; rather the main purpose is to introduce each community and examine its overall relations with Iranian society and the state. Several patterns in state–minority relations are identified at the conclusion of the chapter.

The sources for this chapter are secondary and include publications in Armenian, Persian, and English; there are noticeable differences in the quality of the sources. Every attempt has been made to deal constructively with contradictory cases, and the strengths and weaknesses of writings about each group have been carefully assessed. New historical works on religious minorities may clarify certain events and situations. For the purpose of this study, enough information is available to shed some light on the sociopolitical condition of Armenians, Assyrians and Chaldeans, Jews, Zoroastrians, and Bahais during the twentieth century.

The Armenians

The background of the Armenians has been traced to prehistoric times, to communities living in eastern Anatolia and the outskirts of Mount Ararat. From about 500 BC, Greek and Persian sources refer to the land of “Armenia” and its people as the “Armenians.” By 70 BC, the Armenian Empire stretched from the Caspian Sea to the Mediterranean. The territory was frequently a focus of power struggle between the Roman and Parthian Empires. The Armenian Apostolic Church, an ancient and autocephalous branch of Eastern Christianity, became the church of the Armenian state circa AD 314.

The demographic and socio-economic features, discussed at length in the previous chapters, provide a clear developmental distinction between Arabs and Jews. But the prime cause of the emergence of Mandatory Palestine as a divided economy must be sought in the markets for primary factors of production – land, reproducible capital, and labor. The exchange, ownership, and allocation of land, capital, and labor services have therefore played a major role in the extensive literature dealing with the history of the Arab and Jewish communities in Palestine and with the dynamics and policy implications of their ethno-national conflict.

Historians and social scientists have long dwelt upon both general and “Palestine-specific” features underlying the segmentation of the factor markets and their inner structure, making extremely important contributions to our knowledge and appreciation of the subject. As might be expected, research in the field has not converged to a consensus description, let alone interpretation, of the complex issues involved. This chapter will neither systematically survey the literature nor offer an alternative comprehensive treatment of the subject. Rather, it will concentrate, while reflecting on relevant scholarly contributions, on the economic features that were instrumental in shaping the structure and modus operandi of the factor markets in Mandatory Palestine and in determining their allocative and distributional implications. In so doing, several unresolved questions will obviously be raised, and some tentative answers provided. Naturally enough, the discussion is divided into three sections: the first deals with land, the second with reproducible capital, and the third with labor.

Land

In considering the economics of land in the Mandate period, two interrelated issues stand out.

A. DEMOGRAPHIC AND ECONOMIC STATISTICS OF MANDATORY PALESTINE

This appendix provides quantitative documentation of the basic patterns of demographic change and economic activity in Mandatory Palestine's Arab and Jewish communities and in the country as a whole. Its objective is twofold: to present the evidence underlying a good part of the observations and analyses offered in the main text, and to serve as a convenient quantitative reference source for readers interested in the economic history of Palestine in the twentieth century. The areas covered are: population and labor (tables A. 1–A.5); output and value added by industry (tables A.6–A.18); domestic and national product (tables A.19–A.22); and investment and capital (tables A.23–A.26).

Prime sources for the material collected here are the compilations of demographic and economic figures that were collected, constructed, and published by the major “producers” of statistics in the Mandate period: the government, the Jewish Agency, the Histadrut and also individual statisticians and economists affiliated with these institutions. Other essential building-blocks are provided by a number of later studies including, among others, Sicron (1957a, b), Szereszewski (1968), and Bachi (1977), which contain systematic estimates of demographic and (mainly Jewish) economic measurements.

Some of the following tables, particularly in the demographic area, bring together data – at times slightly amended – that were scattered in various primary and secondary sources. But the major part of this appendix, namely the output, value added, and investment figures, consist of newly constructed estimates for the Arab economy, which are incorporated with analogous estimates for the Jewish economy (mostly revisions of Szereszewski's [1968] series) and for the government, into a consistent system of ethno-nationally divided accounts of production and investment for Mandatory Palestine.

It has already been noted that immigration was a major, if not the major, force making for the ethno-national mix of the country's population in the Mandate period, and certainly for the demographic and socio-economic profile of the Jewish community, let alone for its economic performance. But while it has, so far, lingered backstage, this chapter moves Palestine's (Jewish) immigration into the limelight. The discussion is divided into three parts: the first deals with Jewish international migration in a comparative framework; the second takes up Palestine's changing weight in Jewish migratory movement over time; and the third part considers the demographic and socio-economic attributes of the immigrants.

Jewish international migration

During the three decades of British rule (1919–48), about 550,000 people immigrated to Palestine; 483,000 (88 percent of the total) were Jews, and the rest (12 percent) mainly Arabs. While most Arab immigrants crossed into Palestine from neighboring countries (for example, 80 percent of the 4,000 registered immigrant Arabs in 1938–45 were recorded as originating in Jordan, Syria, and Lebanon; SAP, 1944/45, chap. 4, table 14), the vast majority (88 percent) of the incoming Jews set sail from Europe.

The major European source of migrants destined for Palestine lay in the east: about 59 percent of all the European Jewish immigrants originated in Eastern Europe, and of these, over three-quarters were from Poland. Departures for Palestine from Central Europe, which intensified considerably following the rise of Nazism, contributed 23 percent of the overall European influx, the Balkans added another 16 percent, and all the other (West and North) European countries accounted for the remaining 2 percent (Sicron, 1957b, table A8, A9; Bachi, 1977, chaps. 8, 9).

As suggested in the introductory chapter and demonstrated by the detailed accounts in the rest of the book, the economic fabric of Mandatory Palestine can best be fathomed in the context of a “dual economy” approach. The basic ingredients, broadly defined, of economic dualism were all shown to be major attributes of Palestine's ethno-nationally divided economy. To recapitulate, these are: persistent socio-economic gaps between the economy's advanced sector and its relatively traditional one; divergent developmental regimes within which each sector conducts its separate economic life; bilateral trade in production factors, goods, and services, whose composition is largely determined by inter-sectoral differences in endowments of physical and human resources and by disparities in production technology and in market structure. It has also been stressed that the effective constraints on intersectoral socio-economic convergence and market unification, necessary to sustain economic dualism, may have reflected ethnic (or other) segmentation, institutional rigidities, market imperfections (including discriminatory market behavior), and, in certain instances, deliberate policies of exclusion.

A well-known example of economic dualism that exhibits these entwined factors evolved in the (primarily) African settlement colonies. European settlers, whose economic activity was concentrated in labor-intensive plantations and crop farming, mining, and to a lesser extent manufacturing, were sharply distinguished from the indigenous nomadic herdsmen and peasants. However, in his study of the economic history of Kenya and Southern Rhodesia, Paul Mosley (1983) showed that the mark of a “settler economy” is not necessarily any specific economic structure, but rather a distinctive mechanism of “extra-market operations” and intervention by the colonial administration.

The roles played by the Mandatory government and by the organized Jewish community's public institutions in shaping the economy and its dualistic nature were discussed in chapter 1 in general terms, and referred to in passing throughout this volume. The present chapter seeks to supplement the above discussions, primarily by putting the economic functions of Palestine's government and (Jewish) non-government public sectors in a quantitative perspective.

The government

The scholarly literature on the British rule in Palestine, to which a number of significant additional contributions have been made in the past two decades, deals at length with the complex and conflicting factors underlying the modus operandi of the Mandatory government both as ruler and as public sector. Although they do not necessarily reach a common assessment and interpretation, the scholars working in the field seem to agree on the basic considerations that guided Britain in molding its rule and in formulating its economic institutions and policies in Palestine as a colonial power and as the League of Nations' Mandatory. These considerations are commonly identified as being derived from imperial interests in a colonial and geopolitical context, coupled with liberal (laissez-faire) attitudes in the economic sphere, on the one hand, and guided by various Palestine-specific concerns, on the other (Gross, 1984b; and chapter 1).

Britain's interests as a colonial empire led it to establish in Palestine a smoothly functioning colonial-style government based on a modern administrative, legal, and fiscal system, as well as on indigenous structures and customs. The same interests also called for government initiative and finances in developing the country's physical transport and communication infrastructure, while in other respects minimizing government intervention in economic affairs, and conducting an “open door,” largely non-discriminating, external trade policy (see chapter 5).

One country – one economy, or two peoples – two economies?

Any student of Palestine's economic history is inevitably confronted with the need to characterize the country's economy during the three decades of British rule (1919–48). At the heart of the matter lies the question whether Palestine should be viewed as a single economy or as a segmented entity, composed of two ethno-national economies, one Arab and one Jewish, coexisting under a single administrative aegis of the Mandate government.

In the uneasy history of Arab-Jewish coexistence in adversity, each of these two viewpoints had distinct and explicitly acknowledged political connotations. The “single economy” approach, adopted mainly by Arabs, was consistent with their political views and objectives, whereby Palestine was a single entity in which Jews, while entitled to individual rights, were by no means supposed to have any separate collective standing, let alone autonomy. The Jewish-Zionist position adopted the notion of a separate Jewish economy and promoted it both as a plan of action, while striving to form an autonomous body politic based on the “National Home” postulate, and as a factually justifiable distinction for reference and analysis (Metzer, 1982).

Another aspect of the debate, which has kept it alive in the scholarly literature, has to do with some methodological ambiguities as to what exactly constitutes an “economy,” and what are the practical implications of that concept. These unresolved issues have led to two broadly defined schools of thought. One approach views the unified economic administration of the Mandatory government and the economic relations between Arabs and Jews as dominating attributes warranting the treatment of Palestine as a single economy.

After World War I Palestine rapidly turned from being a loosely defined geographical area within the defunct Ottoman empire into a well-delineated territorial and administrative entity, unified by the British Mandate and its modern government. Several major developments took place under the British rule: on the one hand, Jewish immigration grew substantially, Zionist land acquisition expanded, and a thriving Jewish national community, run by self-established and officially recognized autonomous institutions, was taking form. On the other hand, partly in response to the Zionist “nation-building” aspirations and settlement, the period saw the crystallization of the Palestinian-Arab national movement and the intensification of the ethno-national conflict (which is still very much with us) between Arabs and Jews over territory, political domination, and self-determination. It follows that although the Mandate period lasted less than thirty years, it constitutes a highly significant and formative era in the history of modern Palestine.

Scholars have long been attracted to this fascinating and important chapter in the history of the country and its peoples. A large number of studies on Mandatory Palestine have appeared, addressing, among other topics, the economic scene which was a major component of the story. But since most of the scholarly work in the field was done by political historians, political scientists, and sociologists, economic issues were generally treated as part of the political and socio-political context. In this literature attention was therefore given mainly to the economic policies of the government, to their effects on Arabs and Jews, and to the political motivations and implications of the economic relations (or lack thereof) between the two peoples, specifically, their interactions in the land and labor markets.