The Arab Palestinian labor force was angered by this new exclusive labor system – and communicated this through protests that sometimes turned ugly. Unfortunately, this backfired on them. The growing conflict between Jewish workers and Palestinian Arab workers made the landowners scared of employing Palestinian Arabs. Let's look at this construct – the more conflict there was between Jews and Palestinian Arabs, the better the labor market was for Jewish workers. So it was actually in the Jewish workers' (short-term) interest to continue the conflict. This dynamic created a new militant nationalism in these Second Aliyah settlers, an ideology that would emerge as the strongest force behind the new Jewish state.

The 'militant' piece came also from a new development on the settlements – Jewish guard service. Before the "Hebrew Labor" movement began, it was always Palestinian Arabs that had been employed as guards on plantations. After the Young Turk Revolution in 1908 (see below), the Ottoman Empire was pretty shaken, and public safety everywhere was at a low. In response, some Jewish settlers who had emigrated from the Pale of Settlement (and had formed armed self-defense groups there against the pogroms) decided to form groups in Palestine. Their militant guard service for Jewish settlements caused a significant amount of conflict between the Jewish and Palestinian Arab communities. The "soldier-settler" identity that developed formed the backbone of the new military organizations (the Haganah, and eventually, the Israeli Defense Force) and Israeli nationalism.

Much of this culminated in the Kibbutz movement – which began in 1922. This provided an all-Jewish labor force, a socialist framework, and an arrangement whereby the land was owned by the state – thus tying socialism to nationalism in a direct way and ultimately forming the basis of Israeli society. The ideological link between socialism and nationalism provided the rationale for state-ownership of land – centralizing power for the Zionist leadership in Palestine and ultimately taking it away from leaders abroad. Organized labor (which developed into a federation of trade unions and parties called the Histradut), eventually became the premier ideological force of the Jewish settlers, and led to political monopoly in pre-state Palestine and in Israel (The Labor party ruled Israel from 1948 until 1977).

Something that gets left out of this history all the time: During the "conquest of labor" stage, Jews were imported from Yemen by Zionists in Palestine to perform unskilled labor in the place of Palestinian Arabs. Though they were Jewish, they were not included in the Kibbutz settlements. These were exclusively Eastern-European institutions. Remember – Zionism developed during the same time as modern racism and embodied racist ideology in many forms. The deliberate exclusion of Mizrahi Jews from the economic opportunities arising for other Jews created inequalities that still play out in Israeli life today.