28 Nov

Moneymaking and nation-building

Posted By Politybooks

photo_1027356What has moneymaking to do with nationalism? We typically think of nation-building as a process of cultural representation. We realize that, at a practical level, national movements need money but we typically assume that people give money when they identify with the nation. From this perspective monetary transfers are secondary and dependent on prior identification.

But, as Viviana Zelizer points out, monetary transfers are also a medium through which social ties are negotiated, stitched together or dismantled (1994). Seen from this angle, fundraising mechanisms are not simply ways of maximizing resources, but also organizational tools that, when successful, bind and even create groups.

In Sinews of the Nation, I follow this lead and examine how the Irish and Zionist national movements used various monetary transactions to both raise resources and regulate their relationships with Irish Americans and Jewish Americans during the first half of the twentieth century.

The Irish and Zionist movements relied heavily on contributions of Irish and Jews in the US. Securing these funds, however, was hardly a straightforward task. First, while Irish Americans and Jewish Americans were willing to give them money, the sums they gave were insufficient.

Worse, in return for collecting charitable donations, diaspora organizations demanded a share of the money and a say in how the funds would be used in the homeland. Seeing the diaspora organizations as no more than a conduit for pumping funds into the homeland, the leadership in Ireland and Israel resisted these impositions.

To overcome this impasse, in 1920 and 1951, the Irish and Zionist leaders issued national bonds and sold them to the supporters. In purely financial terms, these bonds were unattractive, but by combining patriotic and pecuniary motivations, the Irish and Zionist leaders hoped to increase the flow of funds to the homeland and eliminate the political difficulties that were associated with conventional philanthropy.

In financial terms alone, both bonds were fairly successful. The Irish mission in the US sold more than $5 million worth of bonds to more than 300,000 subscribers in less than a year. Israel sold more than $145 million worth of bonds to almost 700,000 subscribers during the first three years of the drive. But here the similarity between the projects ends.

In the Irish case, the issue of the bonds only intensified tensions between leading Irish American organizations and the Irish mission in the US. Irish Americans leaders treated the bonds as a gift and continued to demand voice on matters of national importance.

The Irish leaders, in contrast, insisted that the Irish bond money was sovereign money and denied the Irish American leaders’ demands. As a result of these tensions, the attempt to issue a second Irish bond in the US in 1921, less than a year after the termination of the first drive, was a complete failure raising less than $700,000 of the planned $20 million.

In contrast, the Israeli bond issue successfully mediated between American and Israeli Jews. Like in the Irish case, Israeli and American Jews harbored different interpretations of the transaction.

For American Jews, on the one hand, the bond was mostly a gift. After all, if they were looking to maximize profits they could have invested in less risky and more lucrative ventures. In contrast, Israeli leaders, treated the bonds mostly as an investment and enjoyed an increase stream of dollars from the US, free from the humiliations and restrictions associated with philanthropy.

By sustaining some kind of willful misunderstanding regarding the relationships between them, the Israeli bond helped American and Israeli groups to cooperate and secured an increased flow of funds to the national project. Following the first drive, others followed, and the sale of Israel Bonds continues even today. Over the years, the Israel Bonds provided Israel with more than $31 billion – roughly a third of Israel’s external debt (Rehavi and Weingarten, 2004).

Over and above finance, the contrasting outcomes of the projects affected the development of Irish-American and Jewish-American ties to Ireland and Israel respectively. In the Irish case, the conflicts surrounding the bond project contributed to the disintegration of major Irish-American organizations, and as a result, Irish Americans were left with fewer ways to engage with Ireland.

Furthermore, these conflicts contributed to a crystallization of the differences between Irish and Irish-American communities and to a sense that the interests and preferences of these groups were not always compatible. Of course, Irish American identification with Ireland did not die off completely and during the 1960s and 1970s there was a surge in Irish American diasporic activism but nevertheless, in comparison with the pre-1920 era, the post 1920 activism pales.

In contrast, in the Jewish case, the bond provided American and Israeli Jews with an additional, important venue by which to engage each other and was instrumental in smoothing over differences between them.

Following a purchase of Israel Bonds, subscribers are invited to join a special tour of Israel and witness with their own eyes how their money works. More than a one-time purchase decision, the purchase of Israel Bond provides subscribers with an opportunity to engage Israel in an ongoing basis.

Through the Israel bonds, American Jews became not only financially invested in Israel’s future, but emotionally invested as well. The case of the bonds illustrates how fundraising mechanisms and monetary transactions can sometimes be used to embed various groups in social relations and create national attachment.

The Irish case clarifies how delicate and brittle these mechanisms are. Failure to regulate the expectations and rights that follow from various kinds of transactions can exacerbate tensions and alienate groups from the national project.

Money is obviously just one of the resources national movements secure. But by closely examining how national movements go about securing this resource, we can learn something fundamental about nation building more generally.

To succeed, national movements must reach out to other groups and enroll them and their resources. Without accomplishing this task, the nation would remain a fantasy of only a few. The process of reaching to other groups implicates various groups in complex social relationships. The challenge for nation builders is to construct institutional mechanisms that regulate these relationships.

From this perspective, nation building is not just a matter of discursively construing the nation as a cultural whole, a la Anderson’s Imagined Communities (1991), but also a matter of constructing mechanisms that allow members of heterogeneous groups, the various “fragments” of the nation in Partha Chatterjee’s terms (1993), to cooperate in the process of nation building.

Dan Lainer-Vos is assistant professor of sociology and the Ruth Ziegler Early CareerChair in Jewish Studies at the University of Southern California.