Politics & Ideas
Jews and Money
Capitalism and the Jews
By Jerry Z. Muller
Princeton, 272 pages
Reviewed by Steven Menashi
E
ARLY IN the Christian
era, the church fathers
found themselves com-
pelled to explain the
persistence of the Jews.
Continued Jewish fidelity to the
Mosaic law challenged the Chris-
tian teaching that the law had been
fulfilled and abolished through the
Christian faith. The famous solu-
tion devised by Augustine was that
the Jews had survived, in exile and
abjection, as witnesses to the histor-
ical authenticity of Old Testament
Steven Menashi is an
Olin / Searle fellow at Georgetown
University Law Center.
Commentary
prophecy and the error of failing to
see its fulfillment in Jesus Christ. It
must therefore have embarrassed
those who held this view when, in
modern times, Jews came to rank
among the most prosperous people
in the liberal capitalist West.
It makes sense that partisans of
the Augustinian teaching found it
necessary to question the methods
of Jewish merchants and financiers
and the influence of commerce
generally. At the same time, the
apostles of what would come to
be known as liberal capitalism
had good reason to see the Jews
as fulfilling a providential, one
might even say a chosen, mission.
Through the ingenuity of the Jews,
wrote Montesquieu in 1748 in The
Spirit of the Laws, “commerce was
able to avoid violence and main-
tain itself everywhere.” Capitalism,
even in its nascent form, “broke
through the barbarism of Europe.”
According to Jerry Z. Muller, pro-
fessor of history at Catholic Univer-
sity, capitalism has been the most
important force in shaping the fate
of the Jews in the modern world.
In 2002 he published The Mind
and the Market, a study of the idea
of capitalism in Western thought.
“Jews,” he wrote, “served as a kind
of metaphorical embodiment of
capitalism.” In his new book, Capi-
talism and the Jews, Muller focuses
squarely on the relation between
them in four interlocking essays
that explore, respectively, Western
thinking about Jews and capital-
ism, the Jews’ own responses to
capitalism, Jewish involvement in
Communist movements*, and the
rise of ethnic nationalism that came
* An early version of this section was pub-
lished in Commentary in August 1988.
49
about as a response to capitalism’s
relentless march in the 19th century
and onward.
To be sure, capitalism has affect-
ed the course of the entire modern
world, not only that of the Jews,
but “Jews have had a special rela-
tionship with capitalism,” Mull-
er explains, “for they have been
particularly good at it.” Among
Jews, economic success has been
a source of both pride and embar-
rassment. Among their neighbors,
it has prompted both affection and
abhorrence.
M
ULLER gives the impres-
sion of a long and deep
dispute, but while anti-
Semitic anticapitalists and philo-
Semitic capitalists each placed a
different gloss on the social values
of modern capitalism, all seemed to
acknowledge that the Jews carried
those values wherever they went.
Anti-Semites denounced Jews as
rootless cosmopolitans whose
commercial activities undermined
traditional ways of life, while capi-
talists praised Jews for fostering
the creative destruction and social
dynamism characteristic of free
markets. Anti-Semites condemned
Jewish merchants for promoting
self-interested egoism at the ex-
pense of Christian fellowship.
For their part, capitalists wel-
comed Jews for promoting liberal
individualism and rights of private
property against clerical establish-
ments and state regimentation of
moral norms. To the anti-Semites,
Jewish commercial influence un-
dercut the passion and vitality of
human life in favor of soulless eco-
nomic calculation. To the capital-
ists, the Jews illustrated how com-
merce could counteract socially
destructive prejudices and pas-
sions by promoting gentle manners
and civil intercourse.
German anti-Semites called
Jews Luftmenschen, “people of the
50
air,” who lacked a firm grounding in
agriculture and industry and pro-
duced nothing of material value.
Capitalist thinkers corresponding-
ly credited Jews with creating
financial innovations—letters of
exchange, the stock market, and
the strategic use of public debt—
that promoted rationalism and
efficiency in economic life.
Muller insists that historical cir-
cumstance, rather than any qual-
ity inherent in Judaism, explains
the capitalist inclinations of West-
ern Jewry. Yet he later calls his own
judgment into question. In his first
chapter, Muller discounts the argu-
ment of Werner Sombart, the anti-
Semitic German sociologist (1863-
1941), that the Jewish faith inclined
its adherents to capitalism because
it was given to abstraction and pro-
moted a legal-contractual concep-
tion of their relationship with God.
In his next chapter, however,
Muller explains the Jews’ facility
for commerce by making reference
to their “religious intellectualism.”
Judaism “was a religion oriented
to continuous contact with texts,”
writes Muller, which “cultivated
the habit of finding commonalities
and distinctions in arguments, and
of thinking in abstractions.” He ob-
serves that Talmudic law is “replete
with debates about economic mat-
ters, including contracts, torts, and
prices,” and even cites a passage
from the Babylonian Talmud to
demonstrate that “the rabbis had
an acute appreciation of the bene-
fits of the division of labor.”
Again in his first chapter, Muller
condemns an anti-Semitic lecture
delivered in 1930 by John May-
nard Keynes in which the econo-
mist blamed the Jews for polluting
capitalism by promoting deferred
gratification, the focus on means
over ends, which led people to dis-
count the quality and enjoyment
of life in favor of future profit. Yet
in the following chapter, Muller
explains that the Jews’ high valua-
tion of educational study “reflected
a long time horizon, in which the
economic payoff would be deferred
for years.”
Perhaps, notwithstanding the
hostility with which anti-Semites
formulated the Jewish connection
to capitalism, their arguments can-
not be so easily dismissed. For at
the very least, Judaism did provide
fertile ground for the cultivation of
modern commercial life. As a re-
ligion of laws governing worldly
conduct, Judaism does not have the
innate suspicion of commercial ac-
tivity that is among the originating
concepts of the Christian tradition,
with its Gospel account of Jesus’
rage at the money changers work-
ing on the grounds of the Temple.
Theologically, Christianity has al-
ways emphasized spiritual prepa-
ration for the afterlife rather than
earthly endeavors.
Y
ET CHRISTIANITY is also
a product of Judaism and
echoes Judaism’s teach-
ings even when it seeks to sup-
plant them. In denouncing de-
ferred gratification as the attempt
“to secure a spurious and delusive
immortality,” Keynes averred that
“it is not an accident that the race
which did the most to bring the
promise of immortality into the
heart and essence of our religions
has also done the most for the
principle of compound interest
and particularly loves this most
purposive of human institutions.”
Keynes’s caricature notwithstand-
ing, he was on to something. For
Judaism did originate the promise
of immortality—“I will make you a
great nation and I will bless you,”
God tells Abram in Genesis 12,
guaranteeing him descendants as
numerous as the stars—and that
promise remains at the heart of
Judaism's daughter religions, in-
cluding Christianity.
Politics & Ideas : February 2010
 Sombart portrayed the triumph
of capitalism as the replacement of
a concrete, particularist Christian
community with an abstract, uni-
versalistic society. But Judaism has
always stood above all for the main-
tenance of a concrete, particular-
ist community—the Jewish people.
Christianity had to spread Jewish
values as a universal faith before
they could find expression in mod-
ern liberal capitalism.
Christianity did not purport to
apply such values to the govern-
ment of society. “My kingdom is not
of this world,” Jesus tells his follow-
ers. So Christians had to borrow
from Jewish law. The early church
incorporated the Hebrew Scrip-
tures into the Christian Gospels,
though it was not at all obvious
that the Old Testament should have
been permitted to survive the New.
In the early modern period, the He-
brew Bible again informed Chris-
tian views of society, as in the Eng-
lish jurist John Selden’s The Law of
Nature and of Nations According
to the Hebrews (1640). Christians
also depended on Jews themselves,
serving as a kind of shabbos goy in
reverse, to engage in those com-
mercial activities that were socially
beneficial but religiously forbid-
den to them. In the 12th century,
the church resolved to prevent the
evil of Christian usury by allow-
ing Jews to engage in moneylend-
ing and other financial activities—
which made the Jews of Europe
contemptible, but also indispens-
able, to Christian society.
Gradually, their skills in com-
merce were acquired by the sur-
rounding Christian communities.
So it may be said that capitalism,
to some extent, Judaized Christian
life. Karl Marx made the point most
vividly in his essay “On the Ques-
tion of the Jews,” which denounced
the “Jewish spirit” of capitalism
but also argued that capitalist soci-
ety turned everyone into Jews. Un-
Commentary
B The Jews
embraced
commerce as a
result of their
treatment by the
Christian West.
Under the threat
of expropriation
or expulsion, it
made little sense
to acquire land
or immovable
goods.
der capitalism, he wrote, “money
has become a world power and the
practical Jewish spirit has become
the practical spirit of the Christian
peoples. The Jews have emancipat-
ed themselves insofar as the Chris-
tians have become Jews.”
Of course, Muller is right to ar-
gue that the Jews embraced com-
merce in part as a result of their
treatment by the Christian West.
Always under the threat of expro-
priation or expulsion, it made little
sense for Jews to acquire land or
other immovable goods; one could
more easily relocate wealth gained
from trade or finance. Politically
dispossessed, Jews employed fi-
nancial influence. As sojourners,
Paul Johnson has written, “they
had no share in or emotional com-
mitment to society as a whole and
so could watch its old traditions,
methods and institutions being
demolished without a pang.” That
made them natural innovators and
capitalist entrepreneurs.
B
Y AND LARGE, Jews em-
braced these roles. With
impressive historical detail,
Muller refutes the notion, common
to leftists eager to enlist the faith
in the cause of collectivism, that
Jews have been generally hostile to
capitalism. While Jews have been
prominent ideological spokesmen
for socialist and Communist move-
ments, those movements have en-
joyed little support among the Jew-
ish rank and file. The chief rabbi of
Moscow in the early 20th century,
Jacob Mazeh, is said to have told
Leon Trotsky, né Lev Bronstein,
“The Trotskys make the revolu-
tions, and the Bronsteins pay for it.”
Indeed, the fate of the Jews has
long been tied to the fate of capi-
talism. Jews of the early-modern
period pleaded for political tol-
eration on the grounds of the eco-
nomic benefit it would bring—and
thus the case for accepting the Jews
was often mixed with the case for
embracing commerce. In 1655 the
Dutch rabbi Menasseh Ben Israel
appealed to Oliver Cromwell, Lord
Protector of the newly formed Eng-
lish Commonwealth, to readmit the
Jews to England. England stood to
profit, he argued. “It is a thing con-
firmed, that merchandizing is, as
it were, the proper profession of
the Nation of the Jews,” wrote Ben
Israel. “They do abundantly enrich
the lands and countries of strang-
ers, where they live, not only with
what is requisite and necessary for
the life of man; but also what may
serve for ornament to his civil con-
dition.” A century later, the Jewish
philosopher Moses Mendelssohn
argued that Jews should enjoy civ-
il equality in Germany because the
merchant “is a real benefactor to
the state” and helps “to render the
comforts of life more known, and
more generally serviceable.” Anoth-
er century on, Theodor Herzl pre-
dicted that Arabs would welcome
Jewish settlement in Palestine be-
cause when the Jews brought “their
intelligence, their financial acu-
men, and their means of enterprise
51
to the country, no one can doubt
that the well-being of the entire
country would be the happy result.”
B
UT the result has not al-
ways been so happy. Not
every society wants com-
merce. Capitalism represents cer-
tain moral choices about the good
life—choices that more aristocratic,
theocratic, nationalistic, or agrar-
ian societies resolve differently. At
the birth of modern capitalism, the
Jews came to symbolize a moral
system that actually did threaten
the traditional social order.
In his last chapter, Muller tries
to explain why the triumph of cap-
italism did not end anti-Jewish
hatred but in fact intensified it.
Whereas Jews once performed eco-
nomic functions Gentiles would
not, in the modern era they became
competitors with Gentiles. Given
their already formidable economic
training, Jews were bound to out-
perform other groups and to pro-
voke new resentments. Moreover,
Muller suggests, the capitalist state
weakened traditional ties and fos-
tered new forms of identification
with the political community of the
nation, which excluded other eth-
nics such as Jews.
Again, this explanation seems
at odds with an earlier part of the
book, in which Muller observes
that the Jews were most accepted
where capitalism was most firmly
established. “Both in Europe and
America, a fundamentally positive
view of commerce within the larg-
er society tended to lead to a favor-
able or at least neutral disposition
toward the Jews,” he writes. “Here
we find the greatest difference be-
tween continental European soci-
eties, on the one hand, and British
and American society on the other.”
Muller points to the influence
of Lockean liberalism in the U.S.
Anglo-American society inherited
a natural-rights tradition accord-
52
B The fate of
Western
Jewry has been
bound up with
the moral case
of capitalism.
But because
capitalism has
eclipsed its
alternatives, the
moral argument
on which it rests
is often invisible.
ing to which capitalism produces
not only a rich but also a good soci-
ety. In this view, capitalism comple-
ments religious teaching; it shows
due respect to the rights of liberty
and property with which individu-
als “are endowed by their Creator”;
and it calls forth distinctive virtues
such as honesty, diligence, sobriety,
and thrift. Capitalism thus under-
stood forms a political community
in which all are welcome who play
by the rules. Continental Europe,
by contrast, developed a more na-
tionalist tradition in which the law
expresses the spirit of a people.
Capitalism, it follows, may be a use-
ful means of organizing economic
affairs, but it must express, and be
constrained by, the national ethos.
It is no surprise that ethnic and re-
ligious minorities present greater
difficulties for such a society.
In this way, then, the fate of
Western Jewry has been bound
up with the moral case for capital-
ism and the bourgeois society. The
case is a strong one: modern capi-
talism has produced greater indi-
vidual liberty, peaceful coexistence,
social mobility, and material pros-
perity than history had previously
known. But because capitalism has
so thoroughly eclipsed its alterna-
tives, the moral argument on which
it rests is often invisible. Muller
quotes the Nobel laureate Simon
Kuznets as saying, “Given the kind
of human capital that the Jews rep-
resent, the majority in any country,
if it wished to maximize long-term
economic returns, should have not
only permitted the Jewish minor-
ity the utmost freedom, but in fact
should have subsidized any im-
provement in the economic and so-
cial performance of promising in-
dividual Jews.” Yet not every society
is interested in maximizing long-
term economic returns. Indeed, the
persecution or exclusion of Jews is
a strong sign that the moral case for
capitalism is under attack.
Capitalism and the Jews have
enjoyed a mutually beneficial re-
lationship, albeit a rocky one. “In
the long run,” writes Muller, “capi-
talism was good for the Jews. And
the Jews were good for capitalism.”
It was a relationship largely thrust
upon them; as agents of moderni-
ty, the Jews were a chosen—not a
choosing—people. As in society at
large, there was a cost to embrac-
ing capitalism because it treats re-
ligion as a private matter, divorced
from nationality and political rule.
In a sense, then, capitalism also
Christianized Judaism. It did so by
severing religious belief and wor-
ship from the national identity of
the Jews and from the laws that
are intended to govern their so-
cial conduct. Peaceful trading for
profit falls somewhat short of the
prophetic vision of a restored Je-
rusalem under divine sovereignty.
“In that day,” the book of Zechari-
ah tells us, “there shall be no more
traders in the House of the Lord.”
Of course, the House of the Lord
has yet to be rebuilt, and until it is,
Jews must still reside among the
nations. q
Politics & Ideas : February 2010