Capitalism and the Jews

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Overview

"This learned and suggestive little volume distills two centuries of wisdom concerning Jews and capitalism into four provocative essays. Drawing freely upon economic history, Jewish history, and the history of ideas, Jerry Muller moves deftly from European thinkers to Jewish traders and from Communists to nationalists. Along the way, he dispenses fresh insights, little known information, and much common sense concerning issues too often shrouded in myth, bigotry, ideology, and apologetics."—Jonathan D. Sarna, Brandeis University

"This book was hard to put down. It is a pleasure to read a work so provocative, so relevant, and so deeply informed."—Daniel Chirot, University of Washington

"This is a magisterial work. It traces the relation of Jews to capitalism from the early modern period to the contemporary world, placing it in the context of the development of modernity's political institutions and culture. This book will be indispensable reading for anyone interested in Jewish history, but also for those seeking to understand the overall drama of modernity."—Peter L. Berger, professor emeritus, Boston University

"This is a superb and enlightening book."—Andrei Markovits, University of Michigan

"Jerry Muller has written an indispensable book correcting myriad misperceptions about capitalism, the Jews, and the affinities between them. He treats troubling subjects such as the relation of Jews to Communism and the persistence of anti-Semitism with exceptional delicacy and common sense. If clarification could bring about correction, this compressed historical account would do much to 'repair the world.'"—Ruth R. Wisse, Harvard University

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Editorial Reviews

The Future of Capitalism blog
A model of clear thinking and useful information about how accurately to understand the long and complicated relationship between Jews, capitalism, and anti-Semitism. A valuable read.
— Ira Stoll
The Age
Taboos can't last—and now, a real historian has broken this one. Jerry Muller, himself Jewish and a professor at the Catholic University of America in Washington, has published a book of four essays, Capitalism and the Jews, that sets out to explain why Jews have enjoyed such exceptional success in modern capitalist societies such as ours.
— Tim Colebatch
Choice
[T]his book introduces some basic issues and ideas about Jewish economic history and can serve as a provocative starting point for learning more about the subject.
Jewish Review of Books
In the meantime, in a lean and compact volume, Muller has offered a rich and valuable history filled with insights about the character of capitalism and the sources of anti-Semitism—both of which could hardly be more timely subjects.
— Yuval Levin
Jewish Quarterly
Muller provides a refreshingly frank account of the major role of Jews on both sides of capitalism's ideological barricades. His brisk and lively book is a welcome sign that historians are moving beyond a stale preoccupation with challenging stereotypes, and are now more willing to engage candidly and directly with the economic dimension of Jewish history.
— Adam Sutcliffe
European Legacy
Although Muller examines mostly European areas, he occasionally cites examples from the United States. His book can be thus read as an attempt to deepen the mutual understanding of historical realities in Europe and North America. The strongest point of Capitalism and the Jews lies in Muller's multifocal perspective and interdisciplinary erudition.
— Pnina M. Rubesh
Outlook on Books
[T]his small book is filled with interesting material and presents its subject in a clear and lively fashion.
— Marty Roth
Organiser
The book offers an interesting and new perspective into the economic history of the Jews, which is a by-product of their religious and cultural history.
— R. Balashankar
Jewish Journal of Greater Los Angeles
Capitalism and the Jews is a work of scholarship, but it's an especially accessible and illuminating one. It is a book that every Jewish capitalist, actual or aspiring, out to read and ponder.
— Jonathan Kirsch
Enterprise and Society
Capitalism and the Jews is an important study that affords readers a lucid and extremely accessible analysis of what is no doubt a central topic in Jewish and western history. It is a welcome addition that joins recent efforts to make us more aware of the significance of the economy for our understanding of the modern Jewish experience.
— Gideon Reuveni
New York Times Book Review - Catherine Rampell
In his slim essay collection Capitalism and the Jews, Jerry Z. Muller presents a provocative and accessible survey of how Jewish culture and historical accident ripened Jews for commercial success and why that success has earned them so much misfortune. . . . While this book is ostensibly about 'the Jews,' Muller's most chilling insights are about their enemies, and the creative, almost supernatural, malleability of anti-Semitism itself. For centuries, poverty, paranoia and financial illiteracy have combined into a dangerous brew—one that has made economic virtuosity look suspiciously like social vice.
Bloomberg - Calev Ben-David
It's a subject rarely given its due in respectable circles. Yet an appreciation for market economics does run deep in Judaic tradition and helps explain the prominence of Jewish bankers, from Mayer Amschel Rothschild to Lloyd Blankfein. In concise prose free of academic jargon, Muller ticks off factors that gave Jews what he calls 'behavioral traits conducive to success in capitalist society.'
GPS - Fareed Zakaria
Muller, a noted historian, takes a fascinating look at how Jews have shaped capitalism and how capitalism has shaped the Jewish experience from medieval times to today.
New Statesman - Anthony Julius
Muller is keen to rescue from apologists, ideologues, and anti-Semites the exploration of what he describes as the Jews' 'special relationship' with capitalism. . . . This book is both scholarly and speculative, analysing the sociology and the anti-Semitic pseudo-sociology of the Jews' participation in capitalism. It will not be the last word on the subject, but it is a genuine contribution to it.
Moment Magazine - Robert Solow
A work of intellectual history. . . . Muller is acutely aware of the irony that Jews have been attacked sometimes for being the quintessence of capitalism and sometimes for being the quintessence of anticapitalism. The merit of his book is that it takes seriously the need to understand how historical circumstances bring this about.
Commentary - Steven Menashi
According to Jerry Z. Muller, professor of history at Catholic University, capitalism has been the most important force in shaping the fate of the Jews in the modern world. . . . Muller focuses squarely on the relation between them in four interlocking essays that explore, respectively, Western thinking about Jews and capitalism, the Jews' own responses to capitalism, Jewish involvement in Communist movements, and the rise of ethnic nationalism that came about as a response to capitalism's relentless march in the 19th century and onward.
The Future of Capitalism blog - Ira Stoll
A model of clear thinking and useful information about how accurately to understand the long and complicated relationship between Jews, capitalism, and anti-Semitism. A valuable read.
City Journal - Guy Sorman
In a 1972 lecture, 'Capitalism and the Jews,' Nobel laureate Milton Friedman presented a paradox: Jews 'owe an enormous debt to free enterprise and competitive capitalism,' he said, but 'for at least the past century the Jews have been consistently opposed to capitalism and have done much on an ideological level to undermine it.' According to historian Jerry Muller, Friedman's paradox may make for a great headline, but it cannot be substantiated. Only the first premise is true—there is little doubt that capitalism has benefited Jews. And as Muller shows, there is equally little doubt that Jews have excelled at developing capitalism in the West.
The Age - Tim Colebatch
Taboos can't last—and now, a real historian has broken this one. Jerry Muller, himself Jewish and a professor at the Catholic University of America in Washington, has published a book of four essays, Capitalism and the Jews, that sets out to explain why Jews have enjoyed such exceptional success in modern capitalist societies such as ours.
EH.net - Peter Temin
Muller, a historian at Catholic University, has given us four lectures on economics aspects of Jewish life in the modern world. . . . [T]hey are thoughtful and occasionally insightful.
Jewish Journal of Greater L.A. - Jonathan Kirsch
Capitalism and the Jews is a work of scholarship, but it's an especially accessible and illuminating one. It is a book that every Jewish capitalist, actual or aspiring, out to read and ponder.
Canadian Jewish News - Sheldon Kirshner
A stellar work of intellectual history.
Baltimore Jewish Times - Abe Novick
A well-documented, historical investigation into an often hidden subject that the author makes easily accessible.
National Review - Nick Schulz
If you want to understand why Jews have done phenomenally well in capitalist societies and at the same time have been some of capitalism's harshest critics, this history will help you understand.
Aid Watch blog - William Easterly
A great book.
Truthdig.com - Zachary Karabell
Jerry Z. Muller's recent book is neither a polemic nor a setup for a bad lounge joke but is instead a compelling, sober essay about an elephant that has been sitting in the middle of Western history for the past two centuries at least: Jews have been inextricably woven into the history and evolution of capitalism. . . . A fascinating history.
Haaretz - Steven Silber
[A] short book, which could be said to provide the economic background of the Jewish catastrophe of the 20th century. Muller's work, though focused on cultural and not environmental differences, might remind some readers of Jared Diamond's 'Guns, Germs, and Steel' (1997), which explains the basis for the gaps in material success among regions around the world. In both books, the authors, in laying bare the historical processes, help to disabuse readers of their prejudices.
Jewish Review of Books - Yuval Levin
In the meantime, in a lean and compact volume, Muller has offered a rich and valuable history filled with insights about the character of capitalism and the sources of anti-Semitism—both of which could hardly be more timely subjects.
Jewish Quarterly - Adam Sutcliffe
Muller provides a refreshingly frank account of the major role of Jews on both sides of capitalism's ideological barricades. His brisk and lively book is a welcome sign that historians are moving beyond a stale preoccupation with challenging stereotypes, and are now more willing to engage candidly and directly with the economic dimension of Jewish history.
European Legacy - Pnina M. Rubesh
Although Muller examines mostly European areas, he occasionally cites examples from the United States. His book can be thus read as an attempt to deepen the mutual understanding of historical realities in Europe and North America. The strongest point of Capitalism and the Jews lies in Muller's multifocal perspective and interdisciplinary erudition.
Outlook on Books - Marty Roth
[T]his small book is filled with interesting material and presents its subject in a clear and lively fashion.
Organiser - R. Balashankar
The book offers an interesting and new perspective into the economic history of the Jews, which is a by-product of their religious and cultural history.
Enterprise and Society - Gideon Reuveni
Capitalism and the Jews is an important study that affords readers a lucid and extremely accessible analysis of what is no doubt a central topic in Jewish and western history. It is a welcome addition that joins recent efforts to make us more aware of the significance of the economy for our understanding of the modern Jewish experience.
From the Publisher
"In the meantime, in a lean and compact volume, Muller has offered a rich and valuable history filled with insights about the character of capitalism and the sources of anti-Semitism—both of which could hardly be more timely subjects."—Yuval Levin, Jewish Review of Books

"Muller provides a refreshingly frank account of the major role of Jews on both sides of capitalism's ideological barricades. His brisk and lively book is a welcome sign that historians are moving beyond a stale preoccupation with challenging stereotypes, and are now more willing to engage candidly and directly with the economic dimension of Jewish history."—Adam Sutcliffe, Jewish Quarterly

"Although Muller examines mostly European areas, he occasionally cites examples from the United States. His book can be thus read as an attempt to deepen the mutual understanding of historical realities in Europe and North America. The strongest point of Capitalism and the Jews lies in Muller's multifocal perspective and interdisciplinary erudition."—Pnina M. Rubesh, European Legacy

"[T]his small book is filled with interesting material and presents its subject in a clear and lively fashion."—Marty Roth, Outlook on Books

"The book offers an interesting and new perspective into the economic history of the Jews, which is a by-product of their religious and cultural history."—R. Balashankar, Organiser

"Capitalism and the Jews is an important study that affords readers a lucid and extremely accessible analysis of what is no doubt a central topic in Jewish and western history. It is a welcome addition that joins recent efforts to make us more aware of the significance of the economy for our understanding of the modern Jewish experience."—Gideon Reuveni, Enterprise and Society

"Providing a fresh look at an important but frequently misunderstood subject, this book will interest anyone who wants to understand the Jewish role in the development of capitalism, the role of capitalism in the modem fate of the Jews, or the ways in which the story of capitalism and the Jews has affected the history of Europe and beyond, from the medieval period to our own."—World Book Industry

"Muller's book can be highly recommended. Stylistically polished, accessible, informative and provocative—it is a little gem."—Jeremy Leaman, Journal of Modern Jewish Studies

"Capitalism and the Jews is a must book for our times."—Betty Mohr, Le Bon Travel & Culture

Bloomberg
It's a subject rarely given its due in respectable circles. Yet an appreciation for market economics does run deep in Judaic tradition and helps explain the prominence of Jewish bankers, from Mayer Amschel Rothschild to Lloyd Blankfein. In concise prose free of academic jargon, Muller ticks off factors that gave Jews what he calls 'behavioral traits conducive to success in capitalist society.'
— Calev Ben-David
Baltimore Jewish Times
A well-documented, historical investigation into an often hidden subject that the author makes easily accessible.
— Abe Novick
National Review
If you want to understand why Jews have done phenomenally well in capitalist societies and at the same time have been some of capitalism's harshest critics, this history will help you understand.
— Nick Schulz
Haaretz
[A] short book, which could be said to provide the economic background of the Jewish catastrophe of the 20th century. Muller's work, though focused on cultural and not environmental differences, might remind some readers of Jared Diamond's 'Guns, Germs, and Steel' (1997), which explains the basis for the gaps in material success among regions around the world. In both books, the authors, in laying bare the historical processes, help to disabuse readers of their prejudices.
— Steven Silber
Truthdig.com
Jerry Z. Muller's recent book is neither a polemic nor a setup for a bad lounge joke but is instead a compelling, sober essay about an elephant that has been sitting in the middle of Western history for the past two centuries at least: Jews have been inextricably woven into the history and evolution of capitalism. . . . A fascinating history.
— Zachary Karabell
New York Times Book Review
In his slim essay collection Capitalism and the Jews, Jerry Z. Muller presents a provocative and accessible survey of how Jewish culture and historical accident ripened Jews for commercial success and why that success has earned them so much misfortune. . . . While this book is ostensibly about 'the Jews,' Muller's most chilling insights are about their enemies, and the creative, almost supernatural, malleability of anti-Semitism itself. For centuries, poverty, paranoia and financial illiteracy have combined into a dangerous brew—one that has made economic virtuosity look suspiciously like social vice.
— Catherine Rampell
Commentary
According to Jerry Z. Muller, professor of history at Catholic University, capitalism has been the most important force in shaping the fate of the Jews in the modern world. . . . Muller focuses squarely on the relation between them in four interlocking essays that explore, respectively, Western thinking about Jews and capitalism, the Jews' own responses to capitalism, Jewish involvement in Communist movements, and the rise of ethnic nationalism that came about as a response to capitalism's relentless march in the 19th century and onward.
— Steven Menashi
Fareed Zakaria GPS
Muller, a noted historian, takes a fascinating look at how Jews have shaped capitalism and how capitalism has shaped the Jewish experience from medieval times to today.
City Journal
In a 1972 lecture, 'Capitalism and the Jews,' Nobel laureate Milton Friedman presented a paradox: Jews 'owe an enormous debt to free enterprise and competitive capitalism,' he said, but 'for at least the past century the Jews have been consistently opposed to capitalism and have done much on an ideological level to undermine it.' According to historian Jerry Muller, Friedman's paradox may make for a great headline, but it cannot be substantiated. Only the first premise is true—there is little doubt that capitalism has benefited Jews. And as Muller shows, there is equally little doubt that Jews have excelled at developing capitalism in the West.
— Guy Sorman
EH.net
Muller, a historian at Catholic University, has given us four lectures on economics aspects of Jewish life in the modern world. . . . [T]hey are thoughtful and occasionally insightful.
— Peter Temin
New Statesman
Muller is keen to rescue from apologists, ideologues, and anti-Semites the exploration of what he describes as the Jews' 'special relationship' with capitalism. . . . This book is both scholarly and speculative, analysing the sociology and the anti-Semitic pseudo-sociology of the Jews' participation in capitalism. It will not be the last word on the subject, but it is a genuine contribution to it.
— Anthony Julius
Jewish Journal of Greater L.A.

Capitalism and the Jews is a work of scholarship, but it's an especially accessible and illuminating one. It is a book that every Jewish capitalist, actual or aspiring, out to read and ponder.
— Jonathan Kirsch
Canadian Jewish News
A stellar work of intellectual history.
— Sheldon Kirshner
Moment Magazine
A work of intellectual history. . . . Muller is acutely aware of the irony that Jews have been attacked sometimes for being the quintessence of capitalism and sometimes for being the quintessence of anticapitalism. The merit of his book is that it takes seriously the need to understand how historical circumstances bring this about.
— Robert Solow
Aid Watch blog
A great book.
— William Easterly
City Journal
In a 1972 lecture, 'Capitalism and the Jews,' Nobel laureate Milton Friedman presented a paradox: Jews 'owe an enormous debt to free enterprise and competitive capitalism,' he said, but 'for at least the past century the Jews have been consistently opposed to capitalism and have done much on an ideological level to undermine it.' According to historian Jerry Muller, Friedman's paradox may make for a great headline, but it cannot be substantiated. Only the first premise is true—there is little doubt that capitalism has benefited Jews. And as Muller shows, there is equally little doubt that Jews have excelled at developing capitalism in the West.
— Guy Sorman
Truthdig.com
Jerry Z. Muller's recent book is neither a polemic nor a setup for a bad lounge joke but is instead a compelling, sober essay about an elephant that has been sitting in the middle of Western history for the past two centuries at least: Jews have been inextricably woven into the history and evolution of capitalism. . . . A fascinating history.
— Zachary Karabell
Jewish Journal of Greater L.A.
Capitalism and the Jews is a work of scholarship, but it's an especially accessible and illuminating one. It is a book that every Jewish capitalist, actual or aspiring, out to read and ponder.
— Jonathan Kirsch
Catherine Rampell
The question of why so many Jews have been so good at making money is a touchy one. For hundreds of years, it has been fraught with suspicion, denial, resentment, guilt, self-hatred and violence. No wonder Jews and gentiles alike are so uncomfortable confronting Jewish capitalistic competence. Still, in his slim essay collection Capitalism and the Jews, Jerry Z. Muller presents a provocative and accessible survey of how Jewish culture and historical accident ripened Jews for commercial success and why that success has earned them so much misfortune…While this book is ostensibly about "the Jews," Muller's most chilling insights are about their enemies, and the creative, almost supernatural, malleability of anti-Semitism itself. For centuries, poverty, paranoia and financial illiteracy have combined into a dangerous brew—one that has made economic virtuosity look suspiciously like social vice.
—The New York Times
Publishers Weekly
In four fascinating essays, Muller (The Mind and the Market) sensitively examines how centuries of nomadism and diaspora have shaped Jewish financial life. Particularly intriguing is his essay “The Long Shadow of Usury,” which traces the roots of Jewish financial life to the time when Christians were banned from lending at interest, but Jews, following the law in Deuteronomy, were allowed to charge interest to gentiles (but not each other). Farmers and laborers could not understand the value—economic or social—of gathering and analyzing information, and Jewish usurers were cast as suspicious and parasitic figures. Muller explores why Jewish populations have been both disproportionately successful in capitalist societies and the system's loudest critics. Of paramount interest is his portrait of a people driven by exile and oppression to emphasize strong social networks, self-sufficiency, and higher education. Muller backs up his bold assertion—that capitalism has been the most important force in shaping the fate of the Jews in the modern world—with elegance and care. (Mar.)
Library Journal
Muller (history, Catholic Univ.; Adam Smith in His Time and Ours), a well-established historian of capitalism, is brave to tackle this subject, laden as much with the place of Jewish people in the markets as with the trappings and traps of anti-Semitism. Eschewing a grand narrative, Muller instead provides four essays connected by an introduction. He draws on an array of sources impressively diverse even for an intellectual historian, but the argument he works toward is difficult to discern. Two of the four essays only indirectly address Jews and capitalism as experienced by Jews in a peak epoch of capitalism, the first primarily dealing with the money-lending tradition of Jews in precapitalist Europe and the third with the high profile of Jews in Eastern European Communist parties and regimes. The second essay examines Milton Friedman's contention that Jews acted against their own self-interest when embracing socialism, and finds it unpersuasive, but the concluding section suggests that the assimilating success of European Jewish communities from the mid-19th to the mid-20th centuries fated the Holocaust. VERDICT Amorphous but stimulating essays only for the academically committed historian of modern European culture and thought.—Scott H. Silverman, Earlham Coll. Lib., Richmond, IN
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Product Details

  • ISBN-13: 9780691153063
  • Publisher: Princeton University Press
  • Publication date: 11/27/2011
  • Edition description: New Edition
  • Pages: 272
  • Sales rank: 318,268
  • Product dimensions: 4.00 (w) x 7.50 (h) x 2.23 (d)

Meet the Author

Jerry Z. Muller is professor of history at the Catholic University of America in Washington, DC. His previous books include "Adam Smith in His Time and Ours" (Princeton). His writing has appeared in the "Wall Street Journal", the "New Republic", and the "Times Literary Supplement", among other publications.

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Read an Excerpt

Capitalism and the Jews


By Jerry Z. Muller

Princeton University Press

Copyright © 2010 Princeton University Press
All right reserved.

ISBN: 978-0-691-14478-8


Introduction

Thinking about Jews and Capitalism

Capitalism has been the most important force in shaping the fate of the Jews in the modern world. Of course, one could plausibly argue that it has been the most important force in shaping the fate of everyone in the modern world. But Jews have had a special relationship with capitalism, for they have been particularly good at it. Not all of them, of course. But, whenever they have been allowed to compete on an equal legal footing, they have tended to do disproportionately well. This has been a blessing-and a curse.

Jews have been a conspicuous presence in the history of capitalism, both as symbol and as reality. Yet the relationship of the Jews to capitalism has received less attention than its significance merits. One reason for this relative neglect is no doubt the division of labor characteristic of modern academic research. Academic historians tend to focus on the history of a particular nation or region-while Jews were scattered across national and regional boundaries. The encounter of the Jews with capitalism confounds disciplinary boundaries as well: it is the stuff of economic history as well as of social history, of political history as well ascultural history, of the history of business, but also of the family and the nation-state. But there are other reasons for the relative neglect of the topic as well. Discussions of Jews and capitalism touch upon neuralgic subjects.

For Jews, Jewish economic success has long been a source of both pride and embarrassment. For centuries, Jewish economic success led anti-Semites to condemn capitalism as a form of Jewish domination and exploitation, or to attribute Jewish success to unsavory qualities of the Jews themselves. The anti-Semitic context of such discussions led Jews to downplay the reality of their economic achievement-except in internal conversations. Moreover, for most people, the workings of advanced capitalist economies are opaque and difficult to comprehend. When economic times are bad and people are hurting, some inevitably search for a more easily grasped, concrete target on which to pin their ill fortunes. That target has often been the Jews. Even today, some Jews regard the public discussion of Jews and capitalism as intrinsically impolitic, as if conspiratorial fantasies about Jews and money can be eliminated by prudent silence.

For economists and economic historians, the extent to which modern capitalism has been shaped by premodern cultural conceptions and cultural predispositions is a source of puzzlement at best. It simply doesn't fit into the categories in which contemporary economic historians who have adopted the armature of econometrics are predisposed to think. In recent decades, economists have added the concept of "human capital" to their kitbag, by which they mean the characteristics that make for economic success. But they prefer to think of it in terms of measurable criteria such as years of schooling. To the extent that human capital involves character traits and varieties of know-how that are not provided by formal education, it becomes methodologically elusive. Much of the reality of economic history, and of the Jewish role within it, is bound to elude those who proceed on the tacit premise that "if you can't count it, it doesn't count."

For liberals, the reality of differential group achievement under conditions of legal equality is something of a scandal, an affront to egalitarian assumptions. For it casts a shadow of doubt on the shibboleth of "equality of opportunity" If it turns out that the ability to take advantage of opportunity is deeply influenced by cultural traits transmitted in the private realm of the family and the cultural community then inequality of outcome cannot be attributed merely to legal discrimination, nor can it be eliminated by formal, public institutions, such as schools.

For nationalists, the fact that modern nationalism had fateful consequences for the Jews precisely because the Jews were so good at capitalism was itself a source of embarrassment. In the late nineteenth and twentieth centuries, many nationalist movements sought to restrict Jewish citizenship and legal equality out of the perception (partly founded) that Jews excelled at capitalist activity compared to their non-Jewish countrymen. For many nationalists, in countries from prerevolutionary Russia, to Poland, Hungary, and Germany the "real" nation was defined in good part over-and-against the Jews. When economic life was conceived of as a zero-sum game, in which the gains of some could only come at the expense of others, the gains of the Jews were made responsible for the psychic or material pains of the "authentic" members of the nation. The extent to which the fellow feeling between gentry, artisans, peasants, and industrial workers was forged in a shared and cultivated antipathy to the Jewish "other" is a part of national history that nationalists would rather forget.

For all these reasons, the exploration of Jews and capitalism has tended to be left to apologists, ideologues, and anti-Semites. This book, by contrast, tries to make sense of patterns in modern history that tend to be neglected by social scientists.

Jews were associated with trade and with the lending of money long before the rise of a recognizably modern capitalism in the seventeenth century. That association would have ongoing effects. It helps to account for the fact of disproportionate Jewish success under conditions of modern capitalism. In addition, the way in which modern, non Jewish intellectuals thought about capitalism was often related to how they thought about Jews. Those evaluations in turn affected the ways in which Jews thought about themselves, about their economic role and their position in society. Jewish intellectuals such as Moses Mendelssohn were well aware of this connection, and linked their case for civil equality for the Jews with arguments about the positive function of the economic activities in which Jews were engaged.

Yet the disproportionate economic success of the Jews made them a lightning rod for the discontent and resentment that was almost everywhere a product of what Joseph Schumpeter called the "creative destruction" that was part and parcel of capitalist dynamism. By that he meant the displacement of older forms of production, consumption, and styles of life by new forms, created by capitalist innovation. Added to this source of animus was the fact that the development of capitalism went hand in hand with the rise of the modern nation-state, which, in much of the Old World, took the form of an ethnic nationalism that defined Jews as outside the national community. That led to new, more modern forms of anti Jewish animus, rooted less in religious difference than in the resentment of Jewish economic success. And that in turn led a small but salient minority of Jews to embrace Communism, the most radical form of anticapitalism. That embrace had fateful consequences of its own. And finally it led a growing portion of Jewry to conclude that in an age of capitalism and nationalism, Jews needed a nation-state of their own.

Thus the interlocking themes of the four essays that make up this book, which traverse the boundary between general and Jewish history, and between intellectual, economic, and political history. They aim to show the relevance of the experience of the Jews to the larger themes of modern European history: of the development of capitalism, Communism, nationalism, and fascism. And while focused on modern Europe, they also deal with the effects of these phenomena beyond Europe, including the United States and Israel.

When social scientists set out to explain the relationship of the Jews to capitalism, they frequently make use of the notion of Jews as a "diasporic merchant minority" That concept provides an indispensable though ultimately unsatisfactory framework for understanding the relationship between Jews and modern capitalism. Since their dispersion from the Land of Israel-a dispersion that began when the Jews still had a sovereign state-Jews have lived as a diaspora, a minority in the Roman Empire, then in Christian Europe and in the lands of Islam. Though by no means a merchant people for much of their history they became one in medieval Christendom. Like other diasporic merchant minorities-the Armenians, or the Greeks, or overseas Chinese-they developed transregional trading networks, as well as the skills and cultural dispositions conducive to trade. Such minorities are characterized by the combination of specialized economic competence and political powerlessness.

Yet the category of diasporic merchant minority is by itself inadequate to grasp the significance of the Jews in Christian Europe. For the Jews were permitted to engage in otherwise stigmatized economic activities, especially the lending of money at interest, because of their peculiar place in Christian theology. As the community from which Christ sprang, they were to be tolerated. In Christian eyes, it was the narrative of the Old Testament that provided the warrant for Jesus' role in the scheme of salvation. The Jews, as the people of the Old Testament, were to survive to provide tangible evidence of the historical depth of the Christian narrative, and eventually to provide testimony at the second coming of Christ. But the failure of the Jews to recognize Jesus as God was a testament to their blindness, their spiritual malformation. According to Augustine and later Christian theologians, Jews were to be tolerated in Christian Europe-as those of other faiths were not. But their status had to be sufficiently inferior to serve as a reminder to them and to good Christians of the Jews' spiritual decrepitude. For Christianity the Jew was the Other, but he was the Other within, both in the sense that Jews lived in the midst of Christians and that the Jews' Book (which Christians believed the Jews had misunderstood) was part of the core narrative of Christian history.

Jews thus had a cultural significance, a radioactive charge, that was not characteristic of merchant minorities elsewhere. It was the confluence of their religious status as tolerated but despised outsiders, together with their economic role as merchant minority that was so fraught. The association of the Jews with the lending of money at interest was only possible because they were beyond the community of the saved. And the association of money with a theologically stigmatized minority cast an aura of suspicion around money and moneymaking.

Had there been no Jews in Europe, the spread of capitalism would still have led to anticapitalist movements as well as to nationalist ones. But the Jews' premodern commercial experience, together with their emphasis on literacy, predisposed them to do disproportionately well in modern capitalist societies, where success increasingly depended on commercial acumen and book-learning. Anticapitalist thought would stigmatize capitalism by borrowing the conceptual categories of Christian anti-Semitism and the traditional condemnation of usury, of making money with money. The attempt of European states to modernize-which meant becoming literate, capitalist societies-gave rise to ethnic nationalism, which once again conceived of the Jews as outsiders.

In the face of their increasing exclusion from the ethnically defined community of the nation, Jews responded in three ways.

They migrated to countries in which nationalism was defined liberally, rather than by religious or ethnic criteria. That meant, above all, emigrating westward from Russia, where the great bulk of world Jewry was located as of 1880-westward to Austria-Hungary, to Germany to France and to Britain, and above all, to the United States, until it closed its doors to further mass immigration in 1924. In liberal countries-even in incipiently liberal countries, like the late Habsburg Empire-Jews tended to embrace liberalism, and a program of integration into the dominant culture. While some hoped for complete assimilation and amalgamation, by and large Jews sought to acculturate to the host society without complete assimilation. But the border between liberal forms of nationalism and illiberal, ethnic forms was a shifting one, and Jews repeatedly discovered that liberalizing and welcoming political cultures could turn illiberal and hostile. That is what happened in Hungary, Austria, Germany, France, and even, though in a more diluted manner, in the United States.

The second response of Jews was therefore to embrace socialist movements that promised to end invidious distinctions based on origin. Most socialists attributed the hold of anti-Semitism to capitalism itself, so that eliminating capitalism was understood as a formula for eliminating anti-Semitism. The most radical and uncompromising of these movements was Communism.

The third major response, by Jews who remained committed to some form of Jewish continuity, was Zionism. That movement drew much of its cogency from an analysis that claimed that universalist ideologies would prove a chimera. It argued that the deep-seated otherness with which the Jews were regarded in Christian and post-Christian societies would manifest itself in an increasingly nationalist era in both anticapitalist and antisocialist forms. So the early Zionist theorist, Moshe Leib Lilienblum, warned in 1883. Lilienblum claimed that cosmopolitans and ethnic nationalists, capitalists and socialists, freethinkers and orthodox Christians would all find reasons to despise the Jews. For each ideological group, finding that there were Jews in the opposite camp, proceeded to identify its social or national enemy with the Jews in general. In the Zionist analysis, the Jews would continue to be defined as "other"-when they were capitalists and when they were socialists, when they were assimilationist and when they were nationalist, when they were religious and when they were secular. The only solution was for the Jews to have a state of their own.

The four essays that comprise this volume explore these intertwined phenomena from a variety of perspectives. "The Long Shadow of Usury" examines the way in which the traditional linkage between Jews and money continued to be reflected in thinking by modern European intellectuals about capitalism and about the Jews. As we will see, an affirmative approach toward capitalism often went together with a measure of sympathy toward the Jews, while antipathy to commerce and antipathy to the Jews typically went hand in hand. While the first chapter explores how major non Jewish intellectuals looked at capitalism and the Jews, the second chapter, "The Jewish Response to Capitalism," examines the other side of the coin. It takes as its launching point a lecture by the late libertarian economist Milton Friedman, who puzzled over his observation that so many Jews had been antipathetic to capitalism despite the fact that capitalism had been good for the Jews. The chapter deals with the reality of disproportionate Jewish economic success in capitalist societies, with the awareness by leading Jewish thinkers about the interconnection between capitalism and Jewry, and their interpretations and frequent affirmations of that link. Others of Jewish origin, however, reacted to capitalism and to modern anti-Semitism by embracing the most extreme form of anticapitalism, namely Communism. The fateful consequences of that embrace, which most historians have failed to appreciate, is the subject of the third chapter, "Radical Anticapitalism: The Jew as Communist." The last chapter, "The Economics of Nationalism and the Fate of the Jews in Twentieth-Century Europe," explores the relevance of the work of the late social theorist Ernest Gellner for understanding modern Jewish history. At the beginning of the twentieth century the links between capitalism, nationalism, and the fate of the Jews had been explored by socialist Zionists, most notably Dov Ber Borochov Gellner revived these themes at century's end, offering what seems to me the single most illuminating analysis of their relationship. He traced the link between capitalist economic development and the rise of nationalism; explained that it was precisely the Jews' traditional status as a diasporic merchant minority that led to their economic success; and showed why that placed European Jewry in particular peril in the era of ethnic nationalism.

(Continues...)



Excerpted from Capitalism and the Jews by Jerry Z. Muller Copyright © 2010 by Princeton University Press. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

INTRODUCTION: Thinking about Jews and Capitalism 1
CHAPTER ONE: The Long Shadow of Usury Capitalism and the Jews in Modern European Thought 15
CHAPTER TWO: The Jewish Response to Capitalism Milton Friedman's Paradox Reconsidered 72
CHAPTER THREE: Radical Anticapitalism The Jew as Communist 133
CHAPTER FOUR: The Economics of Nationalism and the Fate of the Jews in Twentieth-Century Europe 189
Acknowledgments 219
Notes 225
Index 255

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