Let's start at the beginning of Zionist settlement. The first (new) wave of Jewish European immigrants came to Palestine in 1882 (remember, there were Jewish people in Palestine long before Zionism who did not have nationalist interests). They bought land and built small farms, employing Jews and Arab Palestinians as laborers. Within a short period of time, however, the farms were failing financially. The Rothschilds (a rich and influential Jewish family) came in to support and also direct the economics of the agricultural project. Until 1903, Zionist colonialism on the ground looked much like the familiar model of colonialism – the farms grew into small plantations employing a large force of Arab Palestinian laborers and some Jewish laborers. The Jewish landholders eventually bought more and more land, expanding territorially.

Wait - how was it that European Jews had the opportunity to purchase land in the Ottoman Empire in the first place? Well, this was the result of changes in the mid-1800s as the Middle East was integrated into the growing capitalist system. The Ottoman Empire was weakening under increased European pressure and was no longer able to resist the encroaching European economic system. The Ottoman Land Code of 1858 changed property rights to benefit private owners over the state, and withdrew legal recognition for collective ownership. Basically, the ability for individual landowners to accumulate private property increased significantly. And the differences between social classes increased along with it. All this land that previously was just passed down from family member to family member (or collective to collective) with no paper trail suddenly had to be accounted for on the official state books. So a small class of landowners bought up nearly 3/4ths of the entire Empire, without much of the rest of the country realizing it. It wasn't long before they put it up for sale, and European Jews provided a new and expanding market. What was the social result? The first time that many Palestinians felt the effects of capitalist expansion and its new system of private property was when the land they lived and worked on was purchased by European Jews. Not a great way to start a relationship.

In 1903, the Rothschild administration ended. It was not sustainable to invest in a settlement project that wasn't making any money. Suddenly, landholders had to change the way they were doing business to be much more profitable. Gone were the Jewish laborers – who cost more than Arab Palestinian laborers and couldn't perform the work as well. Jewish workers were left unemployed throughout Palestine. While the landholders were criticized for this decision by the European Zionists, they believed their choice to be the only responsible one. Indeed, the landholders believed that the success of the Zionist project rested on the economic success of the settlements. If that meant employing Arab Palestinian labor over Jewish labor, so be it.