Summary
De Vries’s account of the British turn, from late 1944, to “normalization” of Palestine’s diamond industry: undoing the abnormal wartime conditions — government protection, the Palestine Diamond Manufacturers’ Association monopoly, single-source supply through the syndicate — and ushering the industry toward freedom from control through a regulated transition (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.199, p.204, p.213-215).
Details
- The concept was advanced at the London conference of December 1944, months before the war’s formal end, by people in the industry and government officials who envisioned a competitive postwar economy, and was crystallized partly by the British Economic and Industrial Planning Staff set up in early 1944, in which the Ministry of Economic Warfare played a leading part; the industry, Britain’s “special native,” was to plan its own restructuring (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.204).
- Its logic answered competing pressures: Britain’s and De Beers’ commitment to Belgium’s recuperation required restraining Palestine’s expansion, while abolishing the industry was rejected because the PDMA’s monopoly and dependence were essential to restraining competition against Belgium and to absorbing ex-servicemen in Palestine (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.207-208).
- The PDMA’s own June 1945 version was attenuated regulation — “a gradual transfer to deregulation” — with manufacturers still licensed and in one association and purchasing still centralized, while the internal opposition, the merchants and eventually the Histadrut pressed for fuller liberalization (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.209-210, p.213).
- The Diamond Inquiry Committee (1945) report (December 1945, made public June 1946) set the policy: the PDMA transformed from a compulsory to a voluntary association, rough imports opened beyond the PDMA, new factories permitted, through a transition period of regulation (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.215-217).
- In Palestine deregulation mainly took the form of freer rough imports and gradual separation of importing from cutting; its deeper effects were freer importing and a freer labor process, the founding of the Palestine Diamond Exchange, a wave of factory sales, the Histadrut’s emergence as a buyer setting up diamond cooperatives, and the return of domestic home work in full force (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.217-220).
- De Vries stresses deregulation was itself a state project administered by the British, serving British goals — Belgium’s recuperation, cooperation with the cartel over Congo mining and London distribution, hampering Germany’s revival, and good relations with the Americans in the emerging Cold War — and that freeing the industry strengthened Palestine’s private sector while blurring the line between privately owned industry and the state (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.220).