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This is the first comprehensive account of Israel's central labour organization, the Histadrut, and the Israeli Labour Party, which dominated politics for more than four decades. The author develops a political economy approach which draws on contemporary theories of labour movements, labour markets, and state/economy relations. In comparison with the corporatist socialist democracies of Western Europe, the Israeli case is shown to be in many ways paradoxical. Shalev demonstrates that unravelling these paradoxes provides both challenges and insights for comparative studies of the advanced capitalist democracies. At the same time, he offers students of Israeli society a critical alternative to previous scholarship on labour relations, leftwing politics, and domestic public policy. This volume provides a controversial and theoretically informed assessment of the historical record, complemented by a novel interpretation of the dramatic political and economic instability which surfaced in Israel during the 1970s.