Jews and the Advent of Capitalism

by Bennett Muraskin Discussed in this essay: Capitalism and the Jews, by Jerry Z. Muller. Princeton University Press, 2010, 267 pages. We progressive Jews like to think that Jews are predisposed by Jewish tradition and historical circumstance to embrace socialism, but Jerry Z. Muller makes a strong case that Jews have a special affinity for capitalism. Beginning in the Middle Ages (5^th to 15^th centuries), Muller observes, Jews played a large role in the world of commerce and finance in Europe. They were, in fact, pushed into that role by a dominant Christian theology that considered poverty a virtue, disdained commerce, condemned money-lending at interest, and left such activities to the “accursed” Jews. If Jews were initially forced into commercial pursuits outside the scope of feudal society, however, it suited them well: Unlike Catholicism, Jewish doctrine has no aversion to these economic activities and considers poverty to be a curse, not a source of virtue. Jews were also more urban, literate, and mobile than most Christians, and had a network of fellow Jews in other lands with whom to do business. Poland once welcomed Jews for that very reason, and in later years Jewish leaders would argue forcefully for the elimination of anti-Semitic laws on the grounds that Jewish business skills would bring prosperity to societies that welcomed them. In sum, they functioned as a quasi-capitalist class in European feudal and early modern society. Although essential to the medieval economy, the Jews were, in Christian thinking, doubly damned as Christ killers and economic parasites. This perception endured into modern times. As the Christ-killer accusation lost its potent sting due to the rise of secularism, a charge arose that was no less vicious: that the Jew was the communist destroyer of private property and national identity. How was it possible to be reviled as both capitalist exploiters and anti-capitalist revolutionaries? Muller argues that outside the tsarist empire, Jews were actually more prominent as capitalists than communists, forming the business class in the underdeveloped economies of the Hapsburg Empire (Austria, Hungary, and Rumania) and constituting a significant portion of the business class in the German empire. In the West (England, France, and the U.S.), he writes, Jews rose remarkably quickly into the middle class, and only new waves of immigration from the tsarist empire replenished the ranks of the Jewish poor. Of course, the great bulk of European Jewry lived in the tsarist empire, so these proletarian and impoverished Jews were not as anomalous as Muller suggest. Relying on the Socialist Zionist theoretician Ber Borochov, however, Muller shows that they were not classic proletarians because they were confined to small and typically declining economic sectors that were dominated by Jewish employers. Muller understands why they gravitated to socialism as a solution to their impoverishment and to anti-Semitic oppression, but he believes that in a freer, capitalist society that allowed their talents to flourish, Jews in the Old Country would have naturally risen into the middle class or higher. He offers the U.S. as the prime example of this flourishing, and creates the impression that Jews became successful through market forces alone. Muller largely ignores the role of the Jewish labor movement in improving the standard of living of Jewish immigrants and elevating their children into the middle class, and although he recognizes that Jewish social mobility was often achieved not by entering business but by entering the professions, he attributes this entry to the freedom granted by capitalist societies and minimizes the discriminatory barriers faced by Jews, as well as the political struggles that lowered those barriers. (Muller also seems to forget that Jewish doctors, lawyers, professors, journalists, writers, and other professionals are workers, too.) There is a famous quote attributed to the chief rabbi in Moscow during the Russian civil war that “the Trotskys make the revolution but the Bronsteins pay the price.” Muller believes this was a profound observation. Although most communists were not Jews and most Jews were not communists, the prominent role played by Jews like Trotsky, Zinoviev, Rosa Luxemburg, Kurt Eisner, Bela Kun etc. in the post WWI communist revolutions and uprisings provoked a horrendous anti-Semitic backlash. Muller is careful to observe that this backlash emerged from societies with strong anti-Semitism tendencies, but he argues persuasively that the vicious canard of “Judeo-Bolshevism” had an element of truth and raised violence against Jews to new levels of ferocity. This tragedy was replayed after World War II when the Soviet Union used Jewish communists (Rajk, Slansky, Rakosi, Pauker) to dominate and subdue Eastern Europe, where anti-communist and anti-Semitism were often cut from the same cloth. The irony of the fact that these Jews were alienated from the Jewish people and largely indifferent to Jewish suffering is not lost on Muller, nor that it was anti-Semitism itself that forced many Jews into the arms of the communists. Muller traces the Marxist attitude toward Jews to Karl Marx himself, whom he depicts as an anti-Semite. Muller makes a powerful case. Although converted to Lutheranism by his father while he was a boy and bereft of any Jewish education, Marx obviously knew of his Jewish origins. Not only did he fail to acknowledge them, but he vilified Jews as economic parasites in his notorious essay “On the Jewish Question.” That the mature Marx never repudiated these views, even after the pogroms in Russia and the emergence of a Jewish working class in England, is unforgivable. Where I part company with Muller, however, is in his failure to sufficiently recognize the role of Marxist parties and personalities, including the Marxist Jewish Labor Bund and leftwing Zionists, in combating anti-Semitism. Even Marx was a strong advocate for the extension of civil rights to Jews. Muller takes issue with the claim that physical labor, either agricultural or industrial, is more virtuous or useful than commerce or finance. He admits that the moral superiority of physical labor was once an article of faith among the maskilim of the Haskalah who were determined to make Jews more “productive.” Marxists, Zionists, and assimilationists all shared this belief. The Soviet Union encouraged Jews to become factory workers and established Jewish agricultural colonies in Crimea and Birobidzan. Jewish philanthropists financed efforts to create farming communities in Argentina and in the American West. No one was more enthusiastic about the redeeming power of physical labor than the Zionists, exemplified by the kibbutzim movement in Palestine. Muller finds merit only in the Zionist project, because it was needed to build the foundations of a functioning economy. Yet even in this case, he argues, private capital financed many of Zionism’s collectivist projects. Outside of Palestine, he believes, this collective agriculture was reactionary because, as economies develop, they require fewer farmers and manual workers and more white collar and service jobs. However, just as many Jewish reformers and revolutionaries have romanticized physical labor, Muller romanticizes capitalism as a system that inexorably leads to equal economic opportunity and prosperity. His image of capitalism does not appear to include gross inequality of wealth, housing bubbles, financial speculation, tax-dodging corporations, over-paid CEOs, underpaid Walmart workers, or sweatshops in Bangladesh. Muller is not, however, a free market fundamentalist. In response to Milton Friedman’s claim that American Jews enjoy the fruits of American capitalism yet are politically aligned against it, Muller makes the case that curbing the excesses of capitalism is not anti-capitalism. Jewish support for a social safety net, a strong public sector, and limits on corporate abuses, he believes, does not make Jews into flaming Marxists. He also points out that two of the leading American advocates for unbridled capitalism have, in fact, been Jewish — Friedman and Ayn Rand. One need look no further than the current and recent chairs of the Federal Reserve to see that support for the capitalist system is alive and well among American Jews. Essentially, Muller’s thesis is that capitalism generates positive attitudes toward Jews, whereas anti-capitalism is a close relative of anti-Semitism. August Bebel, the great German socialist, famously called anti-Semitism the “socialism of fools,” and since there are no shortages of fools in the world, this lends credence to the second part of this claim. However the validity of the first part depends on how one defines capitalism. If it works as Adam Smith theorized, Muller would be right —but it doesn’t. Broad-based prosperity and peace should dampen racial and ethnic antagonisms, but capitalist states have a history of severe economic crises and warfare. In such times, the power elite needs a scapegoat to divert popular discontent and regiment popular opinion. Too often, the Jew has played that role. Furthermore, people struck by calamities beyond their control, such as economic collapse and war, are susceptible to false solutions to their troubles. Blaming “the Jews,” an economically visible ethno/religious minority, has been a common reaction. If such calamities breed the kind of anti-capitalism that breeds anti-Semitism, isn’t the capitalist system ultimately responsible? What do we define as capitalism, anyway, these days? This is a question Muller does not adequately explore. There are mixed economies now under deeply corrosive pressures in Europe, for example, which include state-owned enterprises, strong labor movements, comprehensive government-provided health and social services, etc. There is the New Deal model in the U.S. — which communists played an important role in creating and sustaining. Whether these hybrid systems are more or less hospitable to Jews, Muller does not say, but to those who believe that Jews are most secure in societies that avoid extremes of wealth and poverty, the answer is obvious. Muller is a professor of history at Catholic University who has written books on capitalism and articles for the Wall Street Journal, Foreign Affairs, and the New Republic. This is his first attempt at a Jewish subject and he has acquitted himself well. His broad knowledge of the field is evident in the text, his acknowledgments, notes, and bibliography. For Jews on the left, it may challenge political and historical assumptions. All the more reason to read it. Bennett Muraskin is a contributing writer to Jewish Currents who conducts our “In Memoriam” column. He writes widely about secular Jewish thought and trends and is the author of Humanist Readings in Jewish Folklore and Let Justice Well Up Like Water: Progressive Jews frokm Hillel to Helen Suzman, and The Association of Jewish Libraries Guide to Yiddish Short Stories.