May 13, 2006

How A Kibbutz Works

Israeli kibbutzim have always struck me as quite fascinating. Here you have voluntary "socialist" communities—in which income equality is more-or-less guaranteed and all property is communal—that have persisted for most of the 20th century. (Today 120,000 members live in 268 kibbutzim across Israel; hardly a majority, but impressive all the same.) By all accounts, they're still going strong. And that raises all sorts of questions: How do they do it? How do kibbutzim manage to keep their most productive workers from leaving? How do they stop workers from shirking? And so on.

Well, lucky for me, Ran Abramitzky of Stanford wrote a nifty paper last December that looked at some of these questions. Here's a link. It appears that kibbutzim prevent people from fleeing through communal ownership of property. If a super-productive worker believes she's getting shafted by being forced to share her earnings, she can always leave, but she won't be able to take any of her belongings with her. Understandably, people are reluctant to leave. (As well, those raised on a kibbutz tend to have learned kibbutz-specific skills, such as agronomy, which also makes exit difficult.)

Beyond that, kibbutzim seem to prevent workers from shirking through "mutual monitoring" and "peer pressure," carried out through institutions such as the communal dining hall (not to mention lots and lots of gossip). They also place restrictions on people entering from the outside in order to avoid adverse selection and getting saddled with too many unproductive workers. That all makes sense.

But that doesn't mean kibbutzim can survive all manners of adversity. In fact, they've been seriously weakening of late. Between 1983 and 1995—when a bank crisis, combined with high interest rates and a collapse in farm prices, caused a major wealth shock in the kibbutzim—20 percent of kibbutz members left their communes to try their luck in the outside world. As one might expect, the individuals who left were on average more educated (54 percent of migrants had a high school diploma vs. 48 percent of stayers) and less likely to have a low-skilled occupation (13 vs. 23 percent) than the people who stayed.

Now that's not a huge difference (in fact, it's smaller than I would have expected), but it gives modest support to the notion that maintaining full income equality, especially during an economic downturn, is likely to drive out the most productive members of the community.

Anyway, after the crisis of the 1980s, many of Israel's kibbutzim actually moved away from their commitment to full income equality. 39 kibbutzim didn't change at all; but 64 kibbutzim kept most income sharing while allowing varying degrees of differential pay at the margin; and 110 kibbutzim essentially transformed themselves from socialist communes into "social democracies"—letting members keep the bulk of their own earnings, while maintaining a safety net based on income sharing.

Interestingly, Abramitzky found that a kibbutz's ideology had no effect on what level of equality it adopted after the 1980s. Many of the kibbutzim shifting away from full equality belonged to the staunchly left-wing Kibbutz Artzi Movement. For the most part, the poorer kibbutzim with the most people leaving were the ones most likely to induce lower levels of equality. And those kibbutzim that shifted away from full equality were better able to stem the flow of people leaving. (On the other hand, the wealthier the kibbutz, the better it was able to maintain high levels of equality.) Abramitzky notes that these findings run counter to "the view of Kibbutzes as primarily ideological entities." Kibbutz members are actually quite responsive to economic incentives.

It's worth noting that Abramitzky doesn't toss out ideology entirely. In an appendix, he asks why only 2.6 percent of Israelis are in a kibbutz in the first place, and argues that it's probably due to cultural factors: The early kibbutz founders came from Eastern Europe and Russia in the 1910s and 1920s and, influenced by socialist movements at home, were not reluctant to give up the privacy necessary to join a kibbutz. By contrast, later generations of settlers didn't come from the same background and were more reluctant to give up their individualism, even if the kibbutzim did offer great economic benefits. For instance, Sephardic Jewish settlers supposedly preferred the Moshav, a different type of agricultural collective that allowed each farmer to work his own land and earn his own profits, because it allowed them to maintain "traditional family structures." Whatever that might mean.

UPDATE: Okay, fixed the plural spelling. Thanks.
-- Brad Plumer 5:31 PM || ||