A (Jewish) Capital Idea

Jerry Z. Muller, author of “Capitalism and the Jews,” will speak at CU Hillel as part of the Boulder JCC’s Festival of Books and Culture on Wednesday, November 10 at 7:00 pm. This is a review of Muller’s excellent historical analysis of the relationship between Jews and capitalism.

Capitalism and socialism are political-economic-social systems, and Jews have been strongly associated with both camps in disproportionate numbers.

Jews have occupied the leadership of left-wing organizations both in numbers and intensity beyond their demographic representation. From NGOs to the ACLU to labor unions and organizations of communists, Jews of differing levels of Jewish self-identification and in variances of ideology more or less left-wing have worked to ameliorate or end what were perceived to be injustices of capitalism.  And on the other side, Jews have been identified not only as entrepreneurs, CEOs, and financial catalysts, but even in the academic world, as purveyors of the intellectual foundation for free enterprise advocacy.

In short, Jews have been associated with correcting economic excesses (both socialist and capitalist) as well as attempts to fulfill their promises. Think of the Jewish opposition to Soviet tyranny, or the economic success of Israel and yet the fulfilling legacy of the Israeli (socialist) Kibbutzim. This is rather extraordinary. Jews are a small fraction of the world’s population, but have contributed hugely to its welfare on both sides of the major political divide.

Is this just some myopic view from a self-identified Jew whose antennae are primed to notice Jews in such roles? Or perhaps this is just some skewed view of anecdotal evidence without any basis in fact?

Jerry Z. Muller in his new book, “Capitalism and the Jews,” says no to these questions, arguing that a strong Jewish role is part and parcel of economic history. He should know. He is a professor of history at Catholic University of America and wrote the book to explain why Jews have wound up as the strongest proponents of both capitalism and communism. But while the Jewish role in anti-capitalism has been over-emphasized, the Jewish role in building capitalism has not.

As constituents of a marginalized society, practicing aspects of trade, usury and mercantilism frowned upon and even prohibited by Christian society, Jews practically invented capitalism. In its pursuit the Jews were both vilified and praised, but mostly vilified. Royal houses could not very well tax the nobility, but they could tax the Jews who gave loans to the nobility and took usury as profit, which then became a source of royal payment from noblemen in lieu of direct taxation.

On the other side, philosophers, academics, theologians and political radicals from Voltaire to Martin Luther to Karl Marx to Werner Sombart wrote and promoted scathing, vile anti-Semitic diatribes on the basis of the immorality of the Jews practicing such commerce. This was no sideshow. This was, to them, the main event. One of Marx’s most profound works was his essay on the Jews and the Jewish question because for him “Jewdom” encapsulated the nastiness of capitalism itself. (“Zur Judenfrage” or “On The Jewish Question,” Karl Marx, 1844.)

Indeed, on another side still, such thinkers as Montesquieu, David Hume, Jeremy Bentham and Benjamin Franklin praised usury while Georg Simmel noted the centrality of the Jewish role in bringing about positive economic advancement and even social relations.  As Muller writes,

… there has often been a link between philo-capitalism, and philo-Semitism, with the Jews regarded as particularly valuable because of their commercial competence.” (Page 18)

If so, then why the strong lean to the left by Jews? Muller notes that Nobel-Prize winning economist Milton Friedman’s

… contention that Jews vilified capitalism while profiting from it is highly distorted.” Muller goes on to say, “to the extent that Jews identify themselves with socialism, it was largely a phenomenon of eastern European Jews and their immediate descendents in the years from the late 19th century to the 1930s. It is true that leading socialist intellectuals were of Jewish origin–but then, so were leading proponents of capitalism.” (Page 124)

“From among the 3.3 million Jews in interwar Poland, the Communist Party garnered 5,000 members, but since the party’s membership totaled only 20,000, this miniscule number of Jews made up a quarter of its membership.” (Page 164)

So Jews largely did not support communism or socialism. The appeal of the left as a savior of the Jews was constantly overshadowed by its tyranny, specifically against its own Jewish supporters.

Still, what disposed Jews, and specifically Jews, to commerce? Muller discusses the Talmudic basis for the comparison of Judaism to Christianity on their separate favorability towards commerce. Despite the fact that the law of the Talmudic period was intended for a largely self-sufficient Jewish community, “…some broad generalizations seem valid enough. Unlike Christianity, Judaism considered poverty as anything but ennobling.” This is cited in the Babylonian Talmud. In another example, Muller goes on to say that while Christianity feared sexual inclinations, “the Talmud, in a famous passage, speaks of ‘the evil inclination,’ the yetzer hara as the basis for both family and commerce. Commerce, then, like marriage, was natural and providential.” (Pages 83-85) Hence Jews were without reservation committed to that which hindered the larger Christian society.

Muller has much more to say, and his detailed arguments are illuminating. I look forward to hearing him share his research and conclusions. You’ll want to buy the book afterwards.

About Stan Kreis

Stan Kreis has degrees in sociology, economics and accounting. Therefore he is wise, literate, financially sound and married to Kathryn Bernheimer (she would never marry anyone without such credentials). Grave marker: "the world was his oyster, unfortunately, he ate it and got stomach cramps."

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