Making Cheaper Labor: Domestic Outsourcing and Development in the Galilee

This article focuses on the rise of domestic outsourcing in the high-tech industry in the Galilee in northern Israel. Outsourcing has emerged as a self-proclaimed mode of development targeting Palestinian citizens of Israel. This industry has expanded significantly in the past decade, attracting lucrative funds from public and private sources, and it has received widespread acclaim. Firms in this industry tend to have ties to the Israeli security establishment, a key player in the architecture of high-tech in Israel. At the same time, a Palestinian capitalist class has coalesced around this industry, embracing the discourse of technology and globalization as forms of self-empowerment. I argue that separation—in terms of wages and physical spaces—is a core operational characteristic within this industry, yet firms simultaneously invoke development as part of their organizational cultures, particularly the integration of Palestinian labor into the Israeli economy, empowerment of women, and peacemaking. Locating the practice of domestic outsourcing within a history of subcontracting to the Galilee, I illustrate that this “new” and “innovative” industry builds on established patterns that reinscribe Palestinian workers as a cheaper labor force. These practices illustrate the intertwinement of inclusion and exclusion within neoliberal economic development as well as the mutual production of Palestinians of 1948 as subjects of Israeli capitalism and colonialism.