Utopia Inc.

In the early 1960s, the socialists of kibbutz Ma'agan Michael debated whether to launch a company. Now they debate what to do with the profits.

One day last summer, a very young Israeli boy named Zohar rode his tricycle out onto the floor of a factory near his home. He was looking for his grandmother, one of the packers. But she wasn't there at her usual station; gone to the bathroom, apparently. So someone found a little chair for Zohar where he could wait and help his grandmother when she returned.

This factory, oddly enough, is a suitable place for small boys to visit their grandmothers. The big shed is filled with sunlight from a glass wall that looks out over some sand dunes to the Mediterranean. The machines, mostly injection molding devices, are clean and safe. And many of the workers are the age of grandparents, and seem to know one another very well. Many of them seem to know Zohar, too.

An interesting sort of factory, clearly. But also the engine room of a very profitable business, Plasson, which last year had sales of $15 million for its owners, the 550 members of a kibbutz called Ma'agan Michael on the coast of Israel."Plass" stands for plastic, "on" for the Hebrew word for power; a kibbutznik won a contest by coming up with that name about 21 years ago when Ma'agan Michael decided to go into business. It proved prophetic. Plasson now generates about 70% of Ma'agan Michael's revenues (the rest comes from the much more traditional kibbutz activity of farming), and has lifted its collective owner to a position among the richest kibbutzim in Israel. Plasson has production facilities -- partly owned and partly subcontracted -- in Italy, Venezuela, and Mexico, and its products are sold all over the world. In the United States alone, the company has conquered as much as 90% of certain segments of its market. Its crowning success came when Taiwanese imitators shamelessly started to brand their knock-offs "Plasson-type." In a keenly competitive, worldwide field, Plasson is the undisputed standard of excellence.

But the company is extraordinary in other respects as well. Allowing children on the factory floor is the least of it: The factory was designed with just that sort of thing in mind, certainly with grandparents in mind.

Yosef "Yossi" Cohen remembers how it happened. He is over 60 himself, a brawny, blue-eyed man, also a packer in the factory. "He's from our Mayflower," they say of him to visiting Americans: one of those who founded the kibbutz back in 1949, leading a band of young like-minded idealists out to the desert coast just north of the ancient Roman port of Caesarea, there to plant a Utopian garden in the wilderness. Cohen's moral authority at Ma'agan Michael is immense, and through his philosphical writings it extends across the whole of Israel's kibbutz movement.

The decision to found a factory didn't come easily to Ma'agan Michael, Cohen explains. Factories seemed to go against every kibbutz tradition and ideal.From the beginning, the kibbutz movement was uncompromisingly socialist and egalitarian. On a kibbutz, all wealth (except personal possessions) is supposed to be held in common; all work is shared according to each person's ability; all goods are distributed according to each person's need; all decision making is arrived at democratically by all members of the kibbutz.

Factories threatened those ideals, Cohen goes on. Factories meant -- what else? -- going into business, and going into business implied, in a socialist scheme of things, a whole host of evils: money-envy, bosses and workers, class hostility, alienation, and all the other dreadful consequences of capitalism. For years, then, the kibbutz movement remained basically agrarian. Only in farming -- "with the wind in our hair and the soil beneath our feet," as kibbutzniks put it -- only in this most basic of human enterprises could the kibbutz hold fast to its ideals of equality.

And Ma'agan Michael prospered as an agricultural community.Its dairies, fisheries, banana and cotton plantations, and poultry farm were among the most productive in Israel, perhaps in the world. But the kibbutz wanted to grow, both in membership and in influence in Israeli society; and there was no way it could do this without establishing a growing economy for itself. Once they had cultivated all the land, built all the chicken coops, and stocked all the ponds, agriculture could never provide such a growing economy. So they had to find some engine of economic development -- a factory.

Even so, Cohen recalls, they might never have done it, certainly not in the way they did it, if it hadn't been for the kibbutz's elderly. The founders' parents, then the founders themselves, would be getting old; and kibbutz ideology knows nothing of retirement and the "sunset years." On a kibbutz, self-worth is measured in work, in a person's contribution of labor to the community. Old people could not work indefinitely in the fields and fisheries. A factory, therefore, if it were designed to be clean and safe, would extend their productivity, and hence perhaps their very lives.

So Ma'agan Michael got itself a factory, and entered the capitalist world. Has it watered down the kibbutzniks commitment to absolute equality? Certainly not, says Yossi Cohen. The company belongs to the community as much as the land does. The community founded it, put up the money for it, provided all its personnel. Naturally, therefore, it is the community that decides what to do with its profits -- plow them back into the business or invest them in such community improvements as schooling or color television. "The entire system of the kibbutz," says Cohen, "makes anything but completely horizontal decision making impossible."

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