Economic Warfare and Economic Pressure

Economic Warfare and Economic Pressure

This is the first of a series of articles dealing with the subject of BDS. The others will in turn be dedicated to boycotts, divestment, and sanctions as means of economic warfare and/or pressure. This article deals with the overall subject.

Economic warfare is largely a twentieth-century phenomenon invented alongside collective security as a means of keeping international peace and avoiding warfare by punishing international outlaws. Sanctions are governmental trade or financial restrictions imposed to coerce another government into changing an internal or external policy that is deemed objectionable. Often they are used to signal disapproval of another government’s policies short of going to war. They are the most effective when more comprehensive, both in terms of governments applying them and the number of measures implemented. It was with the creation of the League of Nations in 1920 that economic sanctions first had the potential to become effective as the League could impose them against violators of international peace, as it did against Italy in 1935 after Mussolini’s invasion of Abyssinia (Ethiopia). The sanctions failed to deter Italy because (inexplicably) they did not include a prohibition against oil sales.

The weakest form of economic pressure is divestment. Divestment is a movement to legally or voluntarily get stockholders in targeted companies to disinvest by selling their shares. It was mostly used in two instances: against South Africa in the 1970s and 1980s, and against Northern Ireland in the 1980s. It can be used as a threat to pressure the companies invested in a particular country to adopt certain corporate practices that they would not otherwise adopt. This happened with the Sullivan Principles for companies invested in South Africa in 1977, and a similar code adopted by American companies operating in Northern Ireland in the 1980s.

Divestment theoretically works by lowering the stock prices of companies through massive sales of their stocks. In reality, it usually results in a transfer of stocks from those concerned about the particular issue to those indifferent toward it and more interested in either a long-term investment or a quick buck from buying the stocks at very low prices. Divestment is usually a stalking horse for governmental sanctions. Divestment is used as a cover for an “education” campaign that then creates pressure for enacting government trade and/or financial sanctions.

Somewhere in between is the boycott. Boycotts have almost zero chance of influencing governments in the desired direction. But they can be very effective against private corporations. This is because targeted corporations have to compete against non-targeted competitors for a share of the market. Corporations are very gun shy about adverse publicity and organized campaigns that threaten their corporate image and thereby erode their portion of the marketplace.

Jews attempted an international boycott of German goods in the 1930s in response to Nazi anti-Semitism. The boycott failed to produce the desired result for a number of reasons. First, Jews were divided between liberals, socialists and Revisionist Zionists who supported the boycott, and the World Zionist Organization, which negotiated with Nazi Germany to facilitate a mass exodus of German Jews to Palestine and transfer a portion of their wealth to benefit the Yishuv economically.

The boycott also failed because discrimination against Jews was a core policy of the Nazis and very popular with the German public. Only in the United States and Britain was there much concern about German mistreatment of Jews, but this sentiment was much weaker than the desire to avoid another war. Moreover, the boycott operated during the Great Depression when most people were not buying much in any case.

At present, there are two separate boycott movements over Palestine: the BDS movement, which is a form of economic warfare and was initiated by Palestinians in the diaspora and is largely but not exclusively supported by a collection of the anti-Israel Left and anti-Semites; and the anti-settlement boycott, initiated in Israel by Gush Shalom and in the US by Meretz USA (now PPI) and Peter Beinart. European governments are slowly moving to support the latter boycott movement.

Supporters of the limited anti-occupation boycott have an uphill battle of brand identification to differentiate themselves from the BDS movement, when both the Israeli government and conservative American Jews are interested in conflating the two. The limited boycott supporters must convince consumers in both Israel and Europe that by boycotting goods made in the settlements, they are supporting a two-state solution and peace rather than the one-state solution supported by the BDS movement. To be successful, they must come up with a catchy slogan (Beinart’s “Zionist BDS” may just reinforce the conflation), a symbol and a means of granting a seal of approval for Israeli goods not manufactured in the territories. Potentially, the BDS movement could serve as an unwitting ally by giving Israeli companies a real incentive to differentiate themselves and divest themselves of their factories in the territories. I will consider this further in the second article.

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By | 2015-07-05T14:26:30+00:00 July 5th, 2015|BDS, Blog|3 Comments


  1. Ted July 6, 2015 at 10:16 am - Reply

    Dear Thomas and All,

    This is really a bizarre statement:

    “At present, there are two separate boycott movements over Palestine: the BDS movement, which is a form of economic warfare and was initiated by Palestinians in the diaspora and is largely but not exclusively supported by a collection of the anti-Israel Left and anti-Semites.”

    Beyond your stereotyped claim of who supports the BDS Movement, what is extremely astonishing today is this: “was initiated by Palestinians in the diaspora.”

    Thomas and Partners, have you truly so little information and/or concern for factual accuracy? As we approach the 10 year anniversary of the establishment of the BDS Movement, and as that movement has grown worldwide you still remain unwilling or unable to learn about or digest who started the movement?

    Could you please attempt to read this document establishing the Palestinian BDS call and movement and tell us how many of these groups are “Palestinians in the diaspora”:

    It just continues to seem that for Partners, “Palestinians” and Palestinian-led movements like BDS remain a kind of a black box that the group is unable to understand.

    Thank you,


  2. Ted July 6, 2015 at 6:03 pm - Reply

    Dear Thomas,

    I’m going to add my point above.

    I don’t know your motivation or the reason for your lack of knowledge on this issue. Often those who oppose BDS like to describe it as a movement developed by European leftists and they seem to aim to deny Palestinians agency or to be unable to conceive of Palestinian agency. Here you have done something a bit different, yet perhaps somewhat similar, aiming to describe it as developed by Palestinians in the diaspora (Whoever you mean there, I can’t explain who you are thinking of. Some supporters of Israel in the US have only ever heard of Ali Abunimah and more recently perhaps Yosuef Munayyer, and they seem to attribute any Palestinian agency, other than that from the elderly folks in the PA, to them, or to people like them).

    Again, the list of signers of the BDS call dating from 2005 from inside the OPT and Israel is very long, far far longer than the signers from the diaspora. If you’re still confused, and want to attribute the movement to “outsiders” who don’t have in mind the opinions and interests of Palestinian in the OPT, please also look at this:

    Boycott of Israeli products: 86% support the campaign to boycott Israel and impose sanctions on it and 88% say they have stopped buying Israeli products, such as those manufactured by Tnuva or Strauss, and 64% believe that the boycott of Israeli products will be effective in helping to end the Israeli occupation.

    Looking forward to the rest of your research, insights and analysis on BDS.


  3. Ralph Seliger July 11, 2015 at 4:17 pm - Reply

    Ted is correct that the BDS movement was initiated by Palestinian civil society groups within the Territories (not in the diaspora). But he is wrong to assume that
    PPI is unaware of this fact — as demonstrated in other posts, including the recently recorded conversation with Noam Sheizaf.

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