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Introducing Differential Wage Rates in the Kibbutz Economy: Is it the End of the Kibbutz? Theory and New Data

In: Cooperative Firms in Global Markets

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  • Ehud Satt

Abstract

In this work we analyze the effect of the recent trend of introducing differential wages in the Kibbutz economy. Note that this process is growing at a fast pace. Within less than a decade, the differential wages have become the prevailing model in the Kibbutz economy.Using the LMF theoretical model, we analyze the economic effects of that change. We find that in the short run, this process may bring stability to the Kibbutz. However, in the long run, the contrary is true. Combined with hired (outside) labor, this process will change the Kibbutz, turning it into a regular competitive firm (CMF). In this way “the final-curtain hypothesis” of the Kibbutz will come into effect. The Kibbutz, as a socio-economic phenomenon, will disintegrate about a century since its establishment.

Suggested Citation

  • Ehud Satt, 2007. "Introducing Differential Wage Rates in the Kibbutz Economy: Is it the End of the Kibbutz? Theory and New Data," Advances in the Economic Analysis of Participatory & Labor-Managed Firms, in: Cooperative Firms in Global Markets, pages 79-107, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aeapzz:s0885-3339(06)10004-6
    DOI: 10.1016/S0885-3339(06)10004-6
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