On socialism, incentives, and kibbutzim

Mark Perry discusses the failure of socialism. Among the cardinal features he singles out is the fact that, if you allow me to translate him into engineering lingo, the system is “not robust”: all it takes for the system to fail is a few people behaving like, well, jerks. In contrast, imperfect as capitalism may be, it’s the equivalent of a piece of machinery that only works “well enough”, but keeps going and going even if severely abused — a “robust” design.

Aside from that, Perry particularly stresses the role of incentives. Now if I’m ever asked to summarize economics while standing on one foot (the Talmudic version of “give an elevator pitch”), I’d say: “Humans respond to incentives. All the rest is commentary.” I am sure Steven Levitt would like this as a summary of his bestselling “Freakonomics” series.

Periodically, people bring up the Israeli kibbutzim in this debate — socialists as an example of “socialism that works”, detractors of Israel (when speaking to conservative or libertarian audiences) as a reason to dislike Israel. Few of them actually have any familiarity with life on a kibbutz.* Unlike them, I have plenty of current and former kibbutzniks around me, and I’ve lived in a kibbutz-like community in the past.

In fact, they are remarkably similar to medieval monasteries from a socio-economic point of view, except of course for the enforced celibacy and religious orientation. Allow me to elaborate on this point a bit. For those interested in more detail, Stanford University economist Ran Abramitzky has published a number of very interesting papers on the subject just as this one and that one.

Some of the points old-school kibbutzim and monasteries (both quasi-socialist micro societies, at least historically) have in common:

  • membership is voluntary (for the first generation of kibbutzniks)
  • prospective members are strongly screened for ideological and personal compatibility
  • even when admitted, they have to go through a probation period (novitiate in monasteries, provisional member status in kibbutzim)
  • they are generally small enough that each individual member knows (almost) all the others personally, which enables:
  • a level of social control that would be unbearable to most Americans. One could go as far as to say that the economic incentive to individuals in such communities has been replaced by a social one: the approval (or censure) of fellow members.

For all the talk about them, it might be hard to believe that kibbutzim only account for a few percent of Israel’s population. Aside from speaking to the imagination, they played a larger-than-life role in Israel’s founding, and still are heavily represented in IDF combat units and in the political scene.

Considering the value that left-wingers attach to “diversity”, Dr. Abramitzky rightly points out that kibbutzim are just about the least “diverse” society one can imagine. Separate kibbutz movements existed for hardline socialists (HaKibbutz HaArtzi), moderate socialists (TAKA”M, Hebrew acronym for United Kibbutz Movement) and religious kibbutzim (HaKibbutz HaDati). Ideological rifts within a kibbutz can end, and have ended, in kibbutz splits — Ein Harod being a prominent example.

The membership of most kibbutzim were nearly wall-to-wall Ashkenazim of Central and Eastern European background — moreover, the founding gar’in (“core” [membership group]) of a kibbutz often all hailed from the same town! A few carefully vetted members of different origins might gain admission, or a like-minded group of such people might found a kibbutz of their own. A few individual kibbutzim were formed by somewhat ‘out there’ communities: Hararit, for instance, was originally founded by a group of  Transcendental Meditation devotees. (She-yihyu bri’im/”bless their hearts”.)

There are a few really large kibbutzim, such as Giv`at Brenner (secular, about 1,700) or Kvutzat Yavne (religious, about 1,100). But more typically, membership is in the range of a couple hundred — which Dr. Abramitzky points out is near the limit of the human mind’s ability to process personal relationships. Kibbutzim that grow larger than that may eventually see rifts or be weakened by attrition — or a gar`in would form and a new kibbutz would be established elsewhere.

The model of “from each voluntary and vetted member according to their abilities, to everyone according to their needs and our resources” worked, after a fashion, until the 1980s. Worldwide economic changes that made agriculture and light industry less profitable were one factor. The second (sometimes third) generation of kibbutzniks being born into a model they had not taken upon themselves voluntarily was another. Many kibbutzim started experiencing an exodus of young people, particularly the talented and ambitious ones.

The 1980s financial “Kibbutz Crisis” forced most kibbutzim to reform in order to stave off bankruptcy. Some were privatized outright and turned into community villages that just retain “Kibbutz” as part of their name. The remainder exist in one of three models:

  • kibbutz mitchadesh, or “renewing kibbutz”, where every member’s only sources of income are their own, from work or trade inside or outside the kibbutz. This is presently the dominant model;
  • kibbutz shitufi (pronounced “sheetoofee”), or “sharing kibbutz”: the old-school model rebooted (a small minority);
  • kibbutz meshulav, or “combined kibbutz”: a hybrid model with wage differentiation

A few “urban kibbutzim” have been founded in recent years, where members voluntarily associate into such a form of living in an urban setting. Some of these groups are a little weird (centering around ecological or “alternative” obsessions), others more mainstream. The key word is, however, voluntary. Such “socialism” is not scalable to a large and diverse country of inhabitants mostly by birth rather than choice.

To the extent the kibbutz/monastery form of “socialism” ever worked, it did so because it was voluntary, vetted, tightly knit, and in tune with local economic circumstances. When one or more of these factors no longer pertained, it had no choice but to transform or disappear.

(*) Footnote: a kibbutz should not be confused with a moshav, which is an agricultural community organized as a smallholders’ cooperative.