In his chapter titled “The Agrarian Question in Palestine,” the Israeli Marxist, Tony Cliff, once claimed that the structural economic problem in the Middle East is inseparable from the agrarian one. Cliff’s first-hand account of agrarian social relations never specifically became mainstream, but Marxists and non-Marxists alike have continued to perpetuate Cliff’s trope: social relations in the nineteenth-century Palestinian countryside were ‘feudalist,’ originating from “the heritage of the middle ages.” From the 1970s to the 1990s, scholars have repackaged this modernization narrative to make three related claims: First, that the Ottoman social formation was one of pre-capitalism, whether feudalism or sharecropping. Second, that the root of the conflict between Arab peasants and Zionists in Palestine is found in the incompatibility between Ottoman pre-capitalist and Western capitalist social relations. Third, that outside sources – e.g. the French-inspired 1858 Ottoman Land Code, British officials, or Jewish immigrants – brought capitalism to Palestine, defined by the presence of private property and free wage labor. The private papers of landowning companies, Ottoman land records, and peasant petitions provide the basis to argue for a very different answer to the agrarian question in Palestine. Incorporating secondary literature from the field of new capitalist studies, I challenge all three of the major claims outlined above: first, against the teleology that poses social relations in Palestine were pre-capitalist, I argue that these relations were wholly capitalist in the Marxian-Smithian and Weberian sense. Nineteenth-century landholding companies employed sharecropping techniques to be the most efficient form of capital accumulation and to be competitive on the global market. While familiar with forms of wage-labor, the companies chose to employ sharecropping as a strategic response to labor scarcity in the region while also viewing peasant labor as depersonalized, objectified, and ‘thing-like.’ Second, I contend that in this capitalist system, conflict was therefore not between ‘non-Western’ usufruct and ‘Western’ private property, but instead a contest over the shape of private property as entitlements, privileges, and obligations tied to rights on agricultural land – one that continues today. Third, I maintain that capitalism in Palestine evolved in much of the same way it did elsewhere, though local and global exchange. It did so at the initiative of local companies in their interaction with the world market and micro interactions between companies, peasants, and Jewish immigrants. The latter did not build, but rather inherited capitalist institutions of a particular kind in Palestine in the post-WWI era.