Profit in the Holy Land: American Capital in Mandatory Palestine

Abstract

This project examines how American financial intervention reshaped the political economy of Mandate Palestine and, in doing so, strengthened the foundations of the Zionist project. Profit in the Holy Land: American Capital in Mandatory Palestine argues that the Palestine Economic Corporation (PEC)—founded in 1926 by prominent American Jewish financiers such as Felix Warburg and Louis Marshall—served as a crucial intermediary between American capital, British colonial governance, and Zionist state-building. Presenting their work as humanitarian and “apolitical,” PEC leaders introduced U.S. capitalist methods—cooperative credit, long-term agricultural loans, and corporate-style management—that redefined development in Palestine as a moral and technical enterprise. In practice, these interventions advanced Jewish settlement, marginalized Arab participation, and integrated Palestine into a wider architecture of U.S. financial imperialism.The dissertation asks how American Jewish investors who opposed political Zionism nonetheless became central to Zionist economic development. Leaders like Warburg and Lehman, deeply shaped by the liberal ideals of the American Jewish philanthropic establishment, rejected the notion of Jewish nationalism and dual loyalty. Yet they saw investment as a means of aiding their co-religionists abroad while affirming their own identity as modern, patriotic Americans. By translating philanthropy into the idioms of American capitalism—efficiency, rationalization, and productive enterprise—they transformed moral obligation into economic opportunity. Framed as apolitical modernization, their investments allowed them to reconcile Jewish solidarity with civic loyalty, even as they established financial structures that privileged Jewish access to credit and land. In the process, they reshaped Palestine’s political economy in ways that entrenched Zionist control and deepened Arab exclusion. Drawing on archival research in New York, Jerusalem, and Cincinnati, the dissertation follows the PEC from its founding through the late 1930s, analyzing its efforts to stabilize the Yishuv’s economy amid agricultural crises, extend credit through cooperative banking institutions, and invest in industrial and urban projects around Haifa Bay. These case studies reveal how the PEC’s policies aligned with British colonial priorities while simultaneously furthering Zionist economic autonomy. Far from peripheral, American financial practices became central to the material and institutional foundations of Jewish settlement in Palestine. Ultimately, Profit in the Holy Land reframes the history of Zionist development by centering the role of American capital in producing both opportunity and dispossession. The PEC’s interventions reveal how humanitarian investment became a means of restructuring territory, labor, and ownership in ways that advanced Jewish settlement while erasing Arab claims to economic and political sovereignty. By tracing this process, the dissertation illuminates how the entanglement of capitalism and colonization in Mandate Palestine helped shape the enduring dynamics of inequality and conflict in the modern Middle East.