Capitalism and Jews

As a separate follow-up on Muller’s book, I wanted to briefly mention the frequent link in Western history between anti-capitalism and anti-Semitism. An unfortunate but repeating theme throughout the book is the close relationship between capitalism and the European Jewish population. Frequently this was a tactic used by enemies of the market to delegitimize capitalism by identifying it with a long-disliked minority. But, there is some fact behind the connection - Medieval Jews were excluded from the guilds and more respected trades. Also, the fear of having it expropriated caused them to shy away from owning land. Thus, the safest available professions became trading and lending (as the Church often prohibited Christians charging interest).

Being early beneficiaries of capitalism, European Jews improved their own lot, but at the expense of being further stigmatized. Many pogroms were half motivated by Christian borrowers who simply wanted to cancel their debts. To quote The Road to Serfdom “It is the old story of the alien race’s being admitted only to the less respected trades and then being hated still more for practicing them.” Sadly, Jews received despicable treatment from not only the simple-minded but also many of the intellectuals sited here, who served to legitimize such views. You have to hope that such views are on permanent decline, but the author points out that the are still espoused by not only Middle Eastern extremists but also from people like Mohammed Mahathir of Malaysia.

One of the frequent and nearly universal criticisms of capitalism is that economic freedom empowers disliked minority ethnic groups. The best example of this is the Jews in Europe, but there are also blacks in the American South and South Africa, the Untouchables in India, Chinese minorities in South-East Asia, and many other groups. In all of these contexts, we have seen illiberal regimes place restrictions on the market to limit the progress of the disliked group. But, in the long-run, things tend to get better and I would argue that capitalism is the main reason. When people are forced by economics to interact with people they don’t like, they’re likely to stop viewing the world in as much a racialist mindset. Within the dominant ethnic group, those who make the best business decisions instead of racially motivated decisions will tend to be the most prosperous and the racist holdouts will tend to lose out. In the long run, others will see that the more liberal tend to be the more prosperous, which will encourage them examine their own views and tend to move away from the racist mindset. A simple way of looking at it is that people are encouraged by a free market to view others by their individual ‘merits’, and this tends to lead to a decline of racism. Progress can be slow, but it definitely happens.