Losing no time, Peretz announced Labor’s withdrawal from the national unity government. This caused the advancement of the elections to March 28, 2006 (rather than November as scheduled).
Has the Labor Party really undergone a fundamental change? At first glance it may seem so. When Shimon Peres lost in the primaries, he left along with two other leaders who had steered the party’s course for years and had been among its most public faces: Dalia Itzik and Haim Ramon. The three joined Kadima, a new party founded by PM Ariel Sharon.
When we look more closely at the reasons for the Peretz victory, however, we find that the change was not so fundamental, after all. It was less an expression of his strength than of his opponent’s weakness. Peretz overcame Peres by about 1400 votes. Two main factors helped him: first, on Election Day he commanded a well-organized team whose loyalty he had won as head of the Histadrut; second, voter participation was low by Israeli standards. Out of 100,000 registered Laborites, 62,204 voted. Of these, 42% chose Peretz and 40% Peres. The meager participation reflected the party’s morbid condition, not a social-democratic renaissance.
Shimon Peres may count it as an achievement, at least, that his participation in the Sharon government during most of 2005 intensified the divisions within the Likud, causing a split with the right-wing under Netanyahu. The establishment of Kadima will reduce the Likud to a small, unattractive party. Labor is paying too, though, for supporting Sharon. As chief architect of the Oslo Agreement, Peres had staked his image on the notion of cooperation with the Palestinian Authority (PA). Yet Sharon’s Disengagement Plan was based on a contrary idea: that there is no Palestinian partner. Nevertheless, Peres led his party into Sharon’s government to implement the Plan.
In adopting the no-partner idea, Labor nullifies its main premise. If Sharon has established unilateralism as the guiding principle, what is left for Labor to propose? Moreover, so great was the eagerness for disengagement that Labor under Peres accepted the government’s extreme neo-liberal economic line, personified in Netanyahu. The party’s willingness to sacrifice its social agenda for the sake of disengagement (and, we may add, for the sake of the separation barrier) undermined any credibility that it may once have had as a socially-minded, left-wing alternative to Sharon and Netanyahu.
Amir Peretz served as the Director-General of the Histadrut for the last decade, building a power base among the wealthier unions, especially those of the workers in the ports, the electric company, the military industries and the banks. These groups seek to ride before the wave of privatization, keeping their privileged status. With them as his potential constituency, Peretz quit the Labor Party in 1999 and founded a party called Am Ehad (“One People”). Am Ehad saw itself as a pressure group. It deliberately blurred all political positions. Its founders sought to draw the stronger unions away from both Labor and the Likud. No matter what sort of government might arise, its purpose would be to ensure the special privileges of an aristocratic section of the working class – almost entirely Jewish in composition.
Am Ehad only managed to win two seats in 1999 and three in 2003 (out of 120). Peretz concluded that he had failed. But in 2004, octogenarian Shimon Peres was elected as the Labor Party’s temporary head. In an attempt to block a political comeback by former PM Ehud Barak, Peres invited Peretz to rejoin Labor and succeed him. Peretz took the offer more seriously than Peres had intended and the two wound up as rival candidates. In the opinion polls, ironically, Peres’ popularity with the Labor rank-and-file seemed so strong that all other candidates withdrew – except the same Amir Peretz.
Peretz seeks to put the social issue at the top of Israel’s agenda, rather than the conflict with the Arabs. Such a program is more demagogic than practical. Israel is stuck up to its ears in the occupation of the Palestinian Territories. The condition of the conflict at any moment dictates more than the political agenda; it determines the vicissitudes of the Tel Aviv stock market and the appetites of foreign investors. In order to stop the cycle of bloodshed, there must be a stable arrangement with the Palestinians. This will have to include much more than the puny steps that were taken at Oslo and more than unilateral disengagements like the one from Gaza.
Although Peretz once defined himself as a supporter of the Geneva Agreement (a non-official paper signed by prominent Israelis and Palestinians), he has backed disengagement and the separation fence with all his might. As head of the Histadrut, he did precisely nothing against the ongoing closure that kept Palestinians from their jobs in Israel. In 2001-2, Am Ehad took part in the National Unity government under Sharon, which used all possible means to suffocate the Palestinians.
Recently the Peretz staff published the outlines of a political agenda. The most noteworthy idea is a proposal to lease the big settlement blocs from the Palestinians, just as the British leased Hong Kong from the Chinese. In other words, Peretz seeks to avoid a painful confrontation with the settlers. He forthrightly declares his acceptance of the national consensus that settler blocs should be annexed.
The catch is clear: In order to get the support of the Israeli public, one needs to adopt a political program that no Palestinian will accept. Peretz will not be able to circumvent this piece of reality.
Despite his many pronouncements concerning the need to raise the minimum wage and to increase working-class participation in economic decisions, Peretz is no leftist. (Professor Ze’ev Sternhall has characterized him as a right-wing Social Democrat in European terms – Haaretz 2.12.05). In the Histadrut he accepted privatization as an accomplished fact. He spearheaded the privatization of the Histadrut’s own enormous holdings, which were sold for peanuts to the big money moguls. (See 
“The Unmaking of the Histadrut” in [i[Challenge 88)
During the buildup to the Labor primaries, as if to dispel any lingering doubts about his tendencies, Peretz surrounded himself with capitalists. One of them is Benny Gaon, who carried through the privatization of Koor, a Histadrut concern that controlled a big chunk of Israeli industry.
Above all, the figure who certifies Peretz’s kosher status for business folks here and abroad is Professor Avishai Braverman, his would-be Finance Minister. Braverman served at the World Bank in Washington during the 90’s. In the last few years, as President of Ben Gurion University in Beersheba, he has conducted a campaign to attract investments to the Negev. Braverman presented himself in an interview with Yediot Aharonot as one who is supposed to “whiten” the red image of Peretz in business circles. “Today they scare everybody with Amir Peretz, saying he’s a communist. My job is to calm the middle class. Here is a chance to choose between two concepts: the social-democratic one, which is ours, and the neo-liberalism of Bibi Netanyahu. The team I put together will present a program. Once that happens, no one will be able to say that Amir Peretz intends to liquidate the free market or free competition.” (Ynet, December 17, 2005)
The Peretz candidacy will be tested in March. He was chosen to head Labor in order to return the party to power, or failing that, at least to bring about a significant improvement in its Knesset representation, which sank in 2003 to a record low of 19 seats. These aims seem more distant with each passing day.
The biggest blow that Peretz has suffered, to date, is the desertion of veteran Laborites Peres, Itzik and Ramon. The second was the loss of former PM Ehud Barak. He hasn’t bolted the party, but he recently announced to a gathering of supporters that “Kadima is proposing a more suitable platform. Five years ago,” Barak continued, “I already talked about separation from the Palestinians, and the one who does that in fact is Kadima, which implements my program.” (Yediot Aharonot December 9, 2005)
The options that will face Amir Peretz after the elections are clear: if Labor wins 20-22 seats (more than present polls suggest), he will have to choose between joining a Kadima government and going into the opposition. If he joins the coalition, this will severely erode his credibility as the bearer of a different agenda. If he goes to the opposition, he will face an ongoing struggle with the sharks in his own party, Barak at their head, who eagerly awaits his failure in hope of re-entering government.
In the short run, Amir Peretz may succeed in drawing votes from disgruntled Likud, Shas or Meretz voters who are attracted to his social agenda or feel solidarity with him because of his personal background (his family hails from Morocco). In the longer run, without a political vision, and with no real hope of effecting a fairer distribution of resources, Amir Peretz is liable to wind up as another dismal chapter in the history of the Labor Party.