A DREAM DIES IN ISRAEL : BORN SOCIALIST, REARED IN THE EGALITARIANISM OF THE KIBBUTZIM, THE JEWISH STATE FINDS THAT CAPITALIST REALITY IS ERODING ITS FOUNDING IDEALS.

IBBUTZ HAOGEN SITS IN THE HEART OF THE PLAIN OF Sharon, an hour’s drive north of Tel Aviv in rush hour. Founded in 1939 by young European idealists, it is a small green village whose manicured lawns and bucolic children disguise the fact that it is under siege from the forces of the modern world.

That world is very much in evidence when I drop in on Gary Hiller, a burly, 41-year-old former Detroiter dressed in a flannel work shirt and jeans, who is watching a satellite transmission of a game between the Detroit Red Wings and the Minnesota North Stars on his color television. Hiller, who runs the kibbutz avocado orchard, politely turns down the volume (while keeping a watchful eye on the screen) and tells me about the life of a modern-day Israeli socialist.

“When I came to Israel, I would say I was a Communist,” he recalls. “I dreamed of cutting sugar cane in Castro’s Cuba, that sort of thing. I wasn’t really a Zionist; I figured I’d spend some time here and then travel, go to Paris, that sort of thing. But then I met my wife, and, well, I never got to Paris.”

Hiller, who joined the kibbutz in 1975, describes what has happened to his community in the past few years with a good deal of perspective. By his account, most change has been bad. “In the ‘70s, the Labor Party was still in power and there was a very high work ethic here, real rah-rah stuff. Now we (the kibbutz) have huge debts, morale is way down and the work ethic has disappeared.”

Kibbutz Haogen and the state of Israel were born socialist, the children of young pioneers who arrived here during the first two decades of the 20th Century. Products of both the religious and revolutionary influences of their native Eastern Europe, the pioneers had two seemingly contradictory goals: To “normalize” the Jews by bringing them to the land of Israel and transforming them into “a nation like any other” while, at the same time, creating a utopian society that would become “a light unto the nations.”

The ideological basis for this daunting task was the doctrine of labor Zionism, a blend of Jewish nationalism and socialism. The political vehicle was the Mapai Party (forerunner of today’s Labor Party) founded by David Ben-Gurion. He and his European-born comrades were deeply influenced by the anti-Semitic stereotypes of Jews as a rootless, parasitic and unproductive people; they set out to remedy this image by creating a New Jewish Man--idealistic, unselfish, cleansed by physical toil and baptized by the sweat of his brow. And on the kibbutzim, the labor Zionists tried to erase 2,000 years of the Jewish Diaspora by re-creating what they imagined had been the pastoral purity of their ancestors, the biblical Hebrews.

The government provided the land for the kibbutzim, and Labor and a few smaller parties kicked in the start-up money. Envisioned as self-supporting agricultural collectives, almost all now are heavily subsidized by the government.

Hiller, his wife and six children are today’s kibbutzniks, legatees of an almost mythical idealism in this small country. Ten-year-old Yinon Hiller enters the living room to check the hockey game but gets instead the third degree. “Are you a socialist?” I ask him. Yinon looks blank. “Socialist?” he says. “What’s a socialist?”

ONLY A FEW YEARS AGO, MAY DAY was a major event in Israel. Schools and factories closed, newspapers shut down and tens of thousands of workers and students paraded in Tel Aviv and Haifa, waving red banners on behalf of the world’s laboring masses. Orators extolled the glorious deeds of Israel’s socialist pioneers and called for working-class solidarity.

This year nothing happened. With the national elections just six weeks off, the Labor Party chieftains sniffed the political winds and decided that displays of socialist enthusiasm could be disastrous. May Day, 1992, was celebrated only in a few Arab villages where the Communist Party remains powerful. For the vast majority of Israelis, it was just another spring day. When the teachers union asked for a holiday, it was rebuffed by the Ministry of Education and mocked in the press. Employees clocked in as usual at companies owned by Histadrut, General Federation of Workers, a union-cum-conglomerate and political bulwark of the nominally socialist Labor Party.

At Histadrut headquarters on Tel Aviv’s busy Arlosoroff Street that day, a small group of right-wing activists mocked Labor by waving red flags. But the flags were red herrings: Hardly anyone, including the demonstrators in front of union headquarters, believed that there were any honest-to-God socialists in the building. Israeli socialism, once this country’s triumphant, quasi-official political and social doctrine, is an ideological orphan, unloved and rejected by the political left no less than the right. In fact, it’s dead. Even the Labor Party’s victory in the elections will not turn back the page.

Indeed, a week after Labor returned to power, largely on a pledge by now-Prime Minister Yitzhak Rabin that he had a plan for peace with the Arab states, his government moved boldly to wrest control of the nation’s health care from Histadrut. It seemed incongruous, the attack on the huge union whose HMO covers 70% of all Israelis. The union had long been a virtual extension of the party and was an economic octopus, owning businesses from banks to insurance companies to construction firms, all quasi-governmental. Ronald Reagan’s beginning his presidency by trying to shut down Wall Street would be comparable to the move that Rabin made on the Histadrut HMO.

The collapse of socialism seems remarkable in view of Israel’s brief existence--just 44 years as a state. At the time of independence in 1948, Ben-Gurion’s Mapai Party, with its socialist beliefs, was firmly in charge of the country and its resources. It established a system in which the party controlled the state and the state controlled or dominated virtually everything--land, transportation, commerce and industry, jobs, housing, labor unions, education, the radio (television was outlawed until 1968 as potentially subversive to Zionist ideals), even art and cultural events (in the mid-’60s, a public committee prevented the Beatles from performing in Tel Aviv).

The first of the kibbutzim, the agricultural collectives that formed the soul of Israel’s socialist ethos, had been established decades before independence. They were the laboratories for the new Jewish society. Dedicated kibbutzniks worked the land without pay, shared communal dormitories and meals and reared their children--the first Jews born in Israel in millennia--in the idea of selfless labor: one for all and all for the future state.

Under Ben-Gurion, the ideals of labor Zionism became a national orthodoxy. The country’s small private sector was tolerated only as a necessary evil and any quest for personal pleasure was decried as hedonistic and unpatriotic. “Ben-Gurion was not a Communist, but he borrowed heavily from them,” says Anita Shapira, a history professor at Tel Aviv University. “In his policies--centralism, control of the individual by the collective, party authority over all other systems, he was a typical Bolshevik.” Religion was treated as an anachronism, and Orthodox Jews were given no meaningful role in the country’s affairs. Holocaust victims were scorned for having gone “like sheep to the slaughter.”

The socialists used their power to impose their ideals. In the early 1950s, immigrants from post-Holocaust Europe and the Arab world flooded into the country. They were quickly classified as good or bad “human material,” based on their value in building a socialist state, and treated accordingly. Orientals (the term used for Jews from elsewhere in the Near East and North Africa) were spurned as products of a culturally and politically reactionary Middle East. The older generation of these undesirables was basically written off, and its children were encouraged to renounce their parents’ beliefs and cultures.

Conformity was rigidly enforced. There was a right way to think, act, vote and even dress. In the scouts, for example, girls were customarily subjected to skirt checks to make sure their clothing wasn’t too tight. “Except for the fact that it held free elections, Israel in the ‘50s most closely resembled a people’s republic in Eastern Europe,” Shapira says.

In 1959, Yisrael Galili, one of Israel’s leading socialists, visited the United States for the first time. Upon his return, he told his kibbutznik comrades, “I must tell you that capitalism is not going to collapse.” His opinion occasioned great surprise and even outrage among the dedicated but politically closeted ideologues.

By the mid-’60s, Ben-Gurion had retired and Israel, although still ruled by old-time socialists, had softened into something more closely resembling a West European-style social democracy. Israel’s success against its Arab enemies in the Six-Day War of 1967 accelerated the process by kicking off an economic boom and a period of Americanization. It wasn’t exactly the Age of Aquarius, but for the first time a majority of Israelis began to concentrate on improving their standard of living, even though it was considered impolite to admit it. The government retained its central role in the national economy, but labor Zionism was no longer a militant ideology.

The 1973 Yom Kippur War marked the beginning of the end for the Labor Party. Prime Minister Golda Meir and Defense Minister Moshe Dayan failed to fully anticipate the Arab surprise attack that left 3,000 Israeli soldiers dead. A generation of disillusioned combat veterans returned from the war determined to bring about a change in leadership. They were joined by Orthodox Jews tired of being relegated to the fringes of national life, and by the children of Oriental immigrants determined to avenge the humiliations of their parents. In 1977, this unlikely coalition did the unthinkable; it repudiated the faith of the founding fathers, voted the Labor Party out of office and installed the anti-socialist Likud, led by Menachem Begin. Over 15 years, the right-wing Likud, too, ran out of political capital, but when Abraham Shohat, finance minister in Prime Minister Yitzhak Rabin’s Labor cabinet, was asked this summer if victory in the elections and the defeat of Likud meant a return to socialism, he replied: “Total nonsense.”

IT HAS BEEN A PAINFUL DECLINE FOR COMMITTED ISRAELI SOCIALISTS LIKE Hiller, the Detroiter turned kibbutznik. “I still remember the night of the 1977 elections,” he says. “People were shattered. They felt as if they had lost a war.”

Now, a malaise hangs over Kibbutz Haogen. The primary cause is economic. “When we were flush, back in the ‘70s and early ‘80s, we spent a great deal of money. People traveled abroad, we bought cars and television sets and air conditioners, that sort of thing.” But in the mid-’80s, Haogen, like many other kibbutzim, began to realize that it was in serious financial trouble.

All told, Israel’s kibbutzim are $5.5 billion in the red, a staggering amount. There has been some restructuring of the debt and the government has poured in some bailout money, but finances are tight in the settlements, which began as agricultural economies but have evolved to incorporate, in many cases, light industry and tourism as well. A kibbutznik’s standard of living remains relatively high compared to that of an Israeli city dweller, but the personal funds allotted by the communal leadership of the settlements have declined by 30% in the past few years, and on some days kibbutzniks go without meat or tomatoes because they are too expensive.

How did it happen? Was socialism itself a factor? “We were irresponsible,” says Hiller dryly. “We spent too much, even when we knew we couldn’t afford it. We over-invested. And there was a real lack of accountability here. You can screw up, ruin a batch of plastic in the factory, and you’re not held responsible.”

Not only has the work ethic declined, but the kibbutz has also become less egalitarian. Theoretically, kibbutzniks held no private property. But those days are gone. “Today, the only people who can afford to travel are the ones with outside money, and that creates a lot of aggravation and tension,” Hiller says. “They get the money from inheritances and family. Technically it’s not permitted (to have income outside the communal kibbutz funds), but no one checks your bank account.”

If things are so bad, why does he stay? “It’s true that a lot of people have left,” he concedes. “It’s fashionable for kids after their army duty to travel to the U.S. for a visit--and a lot of them remain. Others, who were sent to study in universities, left for the towns. We’ve suffered a brain drain here. But the kibbutz has its good points, too. It’s a great place to raise kids, there’s good schooling and plenty of free time.”

But is it socialist? Hiller laughs. “In 1989, when the Berlin Wall went down, everyone who didn’t already know it realized that socialism was all over. That game of keeping yourself walled in just doesn’t work anymore.”

I leave Hiller’s three-bedroom apartment and walk across the well-tended lawns toward the dining hall. On the way, I pass a full-sized auditorium, an Olympic-size swimming pool, a modern health and sports facility and a clubhouse--monuments to the days when Kibbutz Haogen spent money first and asked questions later.

The dining hall, where members eat their meals together, is a cheerful place with flowers on each table. Despite austerity measures, the food, served cafeteria-style, seems plentiful. My dinner companions are Nili Hartman, a 30-something political activist, and Meream Goldberger, a peppery, gray-haired 70-year-old woman who came to Haogen with Nili’s mother from Hungary in 1944. Unlike Hiller, they are socialists with a capital S.

“We have to confront capitalism with socialism, not cooperate with it,” says Hartman, whose party, Mapam, contested this year’s elections in an electoral bloc with two non-socialist parties and won seats in the new government. “Who has proved that capitalism works better? Margaret Thatcher? The Japanese? Reagan and Bush? Look what happened in Los Angeles. Those are the effects of capitalism.

“The kibbutz movement hasn’t been militant enough. We worried too much about national issues, and not enough about the class struggle. Yes, the class struggle--if you are doing it, go all the way.”

“I think Nili is one of the only young people here who even knows what the phrase class struggle means,” says Goldberger wistfully. After nearly 50 years on the kibbutz, she still considers herself “very much a Marxist,” and she blames capitalism for Haogen’s problems.

“When the Likud began to cause stock-market prices to go up in the ‘80s, it sent a signal to the youth that you could get rich without working,” she says. “I admit it, a lot of kibbutzim were tempted to play the market, and we got burned. We were naive and invested in an amateurish way.” Hartman nods in assent. “The kibbutznik began to be influenced by outside society instead of influencing it,” she says.

I ask the two women what they think of other kibbutzim renting out their facilities to urban couples for weddings and undertaking other bourgeois activities. Goldberger laughs. “Aside from prostitution, we will do anything to make money these days. We’re through being pioneers.” To emphasize the point, she repeats it in English. “We are not pioneers.”

“But we’re still socialists,” adds Hartman. “This is the only place in the world where true socialism is practiced. Only the kibbutz.”

Earlier in the week, Prof. Shapira had told me at Tel Aviv University that kibbutzniks feel history has passed them by and slapped them on the face along the way. But when I try this thesis out on Goldberger, her eyes flash with anger. “Do I feel slapped in the face? Certainly not. When I came here there were just two trees. Look around. We built a village, we created a society that has lasted for decades. People around here say the kibbutz is dying? Well, people in this dying kibbutz are still living, and pretty well, too.

“Our great failure has been in passing on our values. We believed that the principles of socialism would be transmitted to our children by the fresh air of the kibbutz, just by experiencing this kind of life.” She paused, considering all the kibbutz children who have left, including her own son, who is studying in California. Then she sighed. “Sadly, that just isn’t true.”

Eran Netzer, born and raised on Kibbutz Haogen, is one of the children who stayed. For the past year, he has headed the kibbutz committee on change, as well as worked at the Institute for Kibbutz Studies of Haifa University. His wife, Tirza, was raised on another kibbutz, Gazit. She is a classic rural beauty, with a creamy complexion and a lazy smile; he is an intense, dark-haired man, who serves as a reserve major in an elite infantry unit. As we sit in their cramped one-bedroom apartment sipping after-dinner coffee, they seemed to be the very model of the modern kibbutz couple.

Netzer has spent the past year analyzing what went wrong at Kibbutz Haogen, and he has a simple formula for reform. “What we must do now is absolutely clear--copy capitalist models,” he says. “We have to become more professional by fitting people to their jobs. We’ve got to turn profit from a dirty word to an accepted goal.”

Such ideas, however, are far from easy to implement. For one thing they are opposed by the old guard (one-third of Haogen’s 330 members are older than 70) who regard them as “bossism.” For another, the ideas tend to give people the wrong idea. “If you get people thinking only about profit, they begin to want to make a personal profit,” Netzer explains. “There are two ways people look at the kibbutz--as a way of life, or as a home. Most of the older generation have the first view; most of the younger ones, the second. People once lived on kibbutzim because they wanted to. Today, members in their 40s and 50s are simply stuck here. They don’t leave, but they leave spiritually. To bridge the gap between those who still want to sing the ‘Internationale’ and those who merely want to live in a pleasant village is very difficult.”

Maybe you should just cancel the kibbutz, divide up the property and turn this place into a suburb of Tel Aviv, I joke. Netzer nods seriously. “If that were possible, I think I’d be for it,” he says.

Tirza breaks into the conversation: “Of course you’d be for it. Except for the old-timers, everyone here would vote for it in a minute.”

I nod in the direction of the small bedroom, where the Netzers’ year-old son is asleep. “Do you think he’ll grow up to be a kibbutznik?” I ask.

Eran pauses, but Tirza shakes her head decisively. “He won’t,” she says.

“How do you know?”

She looks at her husband for a long moment, a look of guilty defiance, then she turns to me and says, “Because within a few months, we’re planning to leave. We want to be independent.”

THE NETZERS’ DESIRE FOR PERSONAL independence and comfort reflects contemporary Israeli society. By Western standards, Israelis remain remarkably patriotic--youngsters volunteer for dangerous combat units in record numbers and men as old as 50 serve a month or more each year in the military reserves--but few harbor any nostalgia for the self-denial of the old days.

In the late 1970s and early ‘80s, the stock market boomed and so did inflation, at one point reaching an annual rate of 800%. As a result, Israelis went on a gigantic shopping spree, spending their money before its value was eaten by inflation. Automobiles, which in 1967 were so rare that they were accorded the respectful term privates , became commonplace. So did color televisions, VCRs, hot tubs and all the other trappings of Western materialism.

The Likud regime never directly attacked the socialist economic empire centered on the Histadrut. Instead, it killed it with kindness. “Ironically, the period between 1977-’84, after the Likud came to power, was a time when the Histadrut economy seemed to flourish,” says Sever Plocker, chief economic editor of Yediot Aharonot, Israel’s leading daily newspaper.

“It was 1984 when all the problems began. After 1977, the Histadrut unrealistically decided that there must be more and more investment, more and more expansion in order to demonstrate the strength of the Labor Party,” he says.

Caught up in the Begin-era boom, the Histadrut over-invested. Then, in 1985, when the government drove down inflation, the labor federation was faced with debts it couldn’t pay. “We decided that rational economics means allowing failing industries to fail,” says David Brodet, Israel’s director of the budget under the Likud and now under Labor. Many of these were Histadrut companies, which had grown accustomed to massive infusions of government bailout money.

“When the government began to practice a sensible economic policy, all the cracks were revealed,” Plocker recalls. The “workers economic sector”--the Histadrut enterprises--found themselves billions of dollars in the red, with no bottomless government pocket to draw from. Drastic cutbacks became necessary. In 1985, the Histadrut, through the various enterprises, employed 25% of the Israeli work force; today, it employs 15%.

Even more dramatically, the federation began to privatize. During the past few years, Hevrat Ovdim, the Histadrut holding company, has been forced to sell control of its own enterprises, keeping roughly a 20% share in companies that it once owned lock, stock and barrel. In selling, it abandoned not only the notion of an independent “workers economic sector,” but the socialist ideology behind it.

“Today,” says Plocker, “the Histadrut sector is more business-oriented than the private sector.”

Politicians, in Labor as well as the Likud, all talk about privatization--until it comes to their own interests. “The problem today is not socialism, it’s statism,” says Daniel Doron, who heads the Israel Center for Social and Economic Progress, a Jerusalem-based think tank aimed at educating politicians about capitalism. “Everyone sucks from the government teat. The Likud was a statist party. Labor is, too. There’s no difference between them anymore. They all want to take in taxes and then distribute goodies.”

“The politicians make the right noises, but they don’t really understand,” Doron says. “Talking to them about economics is like talking about sex to a eunuch. They’ve heard about it, but they’ve never really done it.”

The state remains Israel’s largest employer and retains a substantial hold on the economy, providing pensions, education subsidies and other hallmarks of socialism.

Nevertheless, says Doron: “Despite resistance, statism is breaking up. First came the rhetoric, which is now largely anti-socialist and anti-government. Now the problem is institutional change. It’s been slow and painful, but the pace of privatization will increase because the present situation is not viable. We see the old statist system dying now, an avalanche in slow motion. Socialism in Israel is a dead horse that the politicians don’t know how to dismount.”