Born in Berlin in Germany, Naftali joined the Social Democratic Party in 1911. He served in the German Army between 1911 and 1912, after which he started to work as a journalist on economic affairs, returning to the army for a spell in 1917–18 to fight in World War I. In 1921 he became editor of the economics department of the Frankfurter Zeitung, a post he held until 1926, when he became head of the economic research department of a trade union. In 1921 he also published a book, How to read the Economic Section of the Newspaper, which was a bestseller.
In 1925 he had joined the Zionism movement, and in 1931 was a delegate to the Zionist Congress. He made aliyah in 1933, initially working as a lecturer at the Technion, before becoming director general of Bank Hapoalim in 1938, a post he held until 1949. Between 1941 and 1948 he served as a member of the Assembly of Representatives.