Introduction The State of Israel established in 1948 differed the one Herzl foresaw in significant ways. However the specifics and reasons for these differences were never examined closely and they should be investigated. Such investigations will likely yield answers on how Israel should approach problems it faces today. The investigation has to be contained to a specific time period, preferably early in the life of the state, since external factors become more effective as the modern history of Israel progressed. Therefore, this investigation shall be fixed between the declaration of independence in 1948 and the beginning of the Six-Day war in 1967, which changed Israel’s foreign and economic policy as well as the mindset of the nation. This is called the formative, or heroic, period in some contexts with the dates varying . The most reasonable contrast can be made using the area Herzl made the most concrete proposals: the economic policy of the Jewish state, which Herzl set specific laws for. So, the question that should be investigated is: To what extent did the economic policies of State of Israel, between 1948 and 1967, resemble the framework set forth by Theodor Herzl in his books The Jewish State and The Old New Land and why? Historical Background Jewish Condition in Europe, 1880-1920 Mounting anti-Semitism in Europe and Russia marked the end of the 19th century. The major anti-Semitic acts started with Russian pogroms, where the violent mobs attacked Jews and their property in more than 100 communities. Even though this was not the government’s official policy, local or regional authorities condoned and cooperated with these attacks. In France, a prosecutor tried to put the entire Jewish populace on trial when he was indicting a falsely accused Jew. In all of Europe, there was hostility towards Jews from across the political spectrum at the turn of the century. Right before World War 1, anti-Semitism became a part of European political discourse. Hatred escalated so much that the First International Antisemitic Congress was convened in Dresden to fight Jews and the National Anti-Jewish Party was founded in France in 1901. Birth of Zionist Ideas In an era with such rampant racism, Theodor Herzl founded political Zionism, to find a sovereign nation for Jews , and summoned the First Zionist Congress at Basel, Switzerland with delegates from all over the world, with the largest delegation from Russia. He published The Jewish State in 1896 and proclaimed at the first congress that the Jewish state would be founded “perhaps in five years, and certainly in fifty”. His pamphlet, The Jewish State, is a prescription for policy, which explains the reasons, ways and goals of the foundation of a state and sets the basic rules and laws that, in Herzl’s opinion, should govern it. He proposes two legal corporations to execute the plan for statehood, “the Society of Jews, and the Jewish Company.” He defined “The Society of Jews [] [to] work in the domains of science and politics, which the Jewish Company will afterwards apply practically. And said “The Jewish Company will be the liquidating agent of the business interests of departing Jews and will organize commerce and trade in the new country.” So, the Company, which was realized as the Jewish Colonial Trust, was to secure the land for the state, establish the economy, manage assets left behind by the diaspora and raise the capital necessary for these endeavors since private individuals would not be able undertake this task. On the other hand, Old New Land, another one of his books, is a work more closely resembling fiction than a political pamphlet. It features characters, unlike the first book, such as Dr. Friedrich Loewenberg, Mr. Kingscourt, Reschid Bey, David Littwak and others. These characters all represent a segment of society relevant to the Jewish question and Herzl explains his utopian Jewish society through their conversations. Reasons for Foundation The main argument for the founding of a Jewish state was that the Jews were suffering in countries that played “host” for them. Herzl says that the propelling force for the establishment of the state will be the misery of the Jews. The misery in Europe and Russia was undeniable and ultimately did lead to a state. However, immigration was slow in Herzl’s time, and for that he said, “Are the sufferings of the Jews not yet grave enough?” The immigration to Israel was correlated with the degree of anti-Semitism in the country of origin. Although, Herzl was right to some extent; the situation in Western Europe was not seen as grave enough to mobilize Jews to Palestine, which can also be seen in Old New Land, where the richer segment of the populace scoffed at the idea of moving to Palestine. Most historians agree that the Holocaust was the final prompter that set the idea of an independent state for the Jews; in fact, over a 100,000 Jews moved to the area a