Capitalism and the jews

A series of essays on the ‘special’ relationship between Jews and capitalism emphasises the mutual benefits

By Amos Witztum, July 22, 2010
‘The Money Lenders’ by Quentin Massys, Fine Arts Museum, Bilbao

‘The Money Lenders’ by Quentin Massys, Fine Arts Museum, Bilbao

By Jerry Z Muller
Princeton University Press, £16.95

The title of this book is borrowed from a lecture given by Milton Friedman in 1972, in which he noted that, in spite of the fact that capitalism has been so good for the Jews, they seem consistently to oppose it. The implicit objective of Jerry Muller's quartet of essays is both to correct and explain Friedman's assertion and to highlight the complexity of the relationship between Jews and capitalism.

More fundamental questions raised by the book's title - How far are the basic principles underlying capitalist organisation consistent with those of Judaism? How has the historical fate of the Jews developed alongside the growth of capitalism? - remain largely unanswered.

The four essays are concerned, respectively, with the connection between elements in capitalism and antisemitism; the positive effects of capitalism and the intellectual enthusiasm for it; the anti-capitalist response; and the role of nationalism.

The first two of these seem to imply that the rise of capitalism legitimised the "Jewish activities" of money and commerce. But Muller makes hardly any serious attempt to investigate the reasons why the Jews became associated with money and commerce in the first place. The claim in chapter two that commerce is more conducive to the Jewish need to devote more time to spirituality is remarkably ill-founded.

Muller does not, however, go along with the idea that capitalism is good for the Jews because it dissociates them from communism and describes the association of Jews with communism as a "distortion". Having examined the role of Jews in communist organisations, he skates over the Jewish intellectual response to socialism yet appears to suggest that capitalism was more a natural home for Jews than was socialism.

While it is true that, for some Jews, notably the Bundists, socialism was a means of solving the "Jewish problem" within a broader universal revolution, for many others, the attraction of socialism came about because of a sense of affinity with its underlying moral values. Muller ignores altogether the development of the Zionist movement as a predominantly socialist one, a fact that seriously challenges the view of Jews and capitalism as natural bedfellows.

Instead, Muller heavily implies that capitalism as such is both good for the Jews and consistent with Jewish values - the catastrophes that befell Jews were not the result of capitalism per se but due to the rise of nationalism, which is embedded in it.

But if nationalism is an inevitable aspect of capitalism, and nationalism was harmful to the Jews, how can one argue that capitalism is good for the Jews?

One could argue that it would be good for the Jews if the problem of Jewish nationalism (ie Zionism) were to be resolved. But if Zionism was indeed the right way to reconcile Jews with capitalism, how come that most of the Zionist movement was based on socialist ideas?

Amos Witztum is a professor of economics at London Metropolitan University and the London School of Economics

Last updated: 3:16pm, February 18 2011