I have mentioned a few times that in Israel there are quite a few people living in collective villages (kibbutz, or kibbutzim plural). So I wanted to discuss what they are and what we can learn from them. For those who are not familiar, a kibbutz is a communal settlement. Traditionally, the members have labored together on a community farm, and shared assets and income equally.

Recently, many kibbutzim have enacted various capitalistic and individualistic reforms to retain members and remain financially viable organizations. Some have transitioned away from agriculture. Here are a few basic statistics:

As you can see from the table, Kibbutz population peaked in the 80’s and has been in modest decline since then .I got the table from an article by Ran Abramitzky about the factors that determine the degree of equality within a kibbutz. Specifically, Since many kibbutzim have abandoned the ideal of total equality, Abramitzky tried to identify what factors made the difference between those communities that retained more equality and those that became more individualistic. Here are some of his main findings:

  • Productive individuals are more likely to leave a kibbutz
  • Wealthier kibbutzim have less attrition
  • Wealthier kibbutzim are more likely to retain income equality
  • Stronger socialist ideology among members leads to more equality

Another interesting point is that even in a kibbutz with total economic equality, there is still status. High status members are given important management positions, and those who shirk are sanctioned. One of my favorite quotes from the article came from an account of how peer pressure was used to punish someone who was seen as slacking in an early kibbutz:

“Nobody said a word to him. But in the evening, in the dining hall, the atmosphere around him was such that the following morning he got up and left the [kibbutz]”

There are a few important distinctions between a kibbutz and the “tribal” model I have been exploring:

A Kibbutz Has More Members

As I have discussed here, I think there are several important levels of community. My conception of a tribal firm is limited to a small number of people that have total trust in each other and can invest in understanding how to maximize complementarity. This is limited by the number of people with whom we can have truly intimate relationships (i.e., about 2–12). A kibbutz is based on the next level up, kind of like the largest group of people that can all know each other (on average, they have about 400 members).

My reasons for focusing on the smaller level of organization are:

  1. I believe in working from the inside out, i.e., get your house in order before trying to change anything outside of that.
  2. It is harder to implement equality in a bigger group. The incentives are more diluted and it is harder to truly trust everyone in the group.
  3. I believe in the market economy. It is a great system for mediating relations between strangers. A village is an intermediate group between your core team and the nation of strangers, so perhaps it should have an intermediate economic system.

A Kibbutz is Centered on a Particular Location

Some of my ideas about a family company emerged after reading a history of the Rothschild family. The five Rothschild brothers of the second (and most successful) generation each established a “house” in a different major European city. So while I think living near your closest allies has advantages, it isn’t a prerequisite to forming a tribal firm.

Kibbutzim Have a Distinct History and Ideology

Although there is variation among kibbutzim, my impression is that a traditional kibbutz is rural, agricultural, Zionist, secular, and socialist. Since there isn’t really any ‘movement’ of tribal firms, there isn’t really any established ideology yet. But I come from an urban, professional, Mormon, capitalist background.

As I mentioned above, my motivation for looking into forms of economic collectivism comes from the inside out. I think having certain kinds of close person relationships is important for individual human development. Sharing wealth (and hence, status) with other people is a way to commit to having shared goals and, hence, increased unity. I am not trying to make a just society as much as I am searching for the ideal conditions for the individual. Thus, I am interested in finding the minimum viable product, i.e., doing something on the smallest scale possible that will satisfy the objective of providing a person with a sense of security and purpose.

Still, there is a lot to learn from the history and experience of the kibbutz movement, so I will continue to bring them up periodically.

Patent Attorney, Crypto Enthusiast, Father of two daughters