Naomi - click here and write a clever title
Transcription of interview with Jerry Muller on April29, 2013.
Douglas Goldstein, CFP�, Financial Planner & Investment Advisor
Jerry Muller is a professor of history at the Catholic University of America. His most
recent book is called Capitalism and the Jews.
Douglas Goldstein, financial planner & investment advisor, interviewed Muller on Arutz Sheva
Radio.
Douglas Goldstein: How did you come up with the title of your book?
Jerry Muller: I know that some people have viewed the title as provocative. It actually
was not intended that way. It was simply that having written this series of interconnected
essays on the various sorts of links between capitalism and the Jews. It seem to me that
the common denominator of the essays and the real topic of the book was indeed capitalism
and the Jews and therefore, it made a lot of sense to call it that.
Douglas Goldstein: Give us a
more clear definition of capitalism and what�s the relevance to Jewish thought.
Jerry Muller: Capitalism is, like all concepts in the social sciences, a kind of ideal type,
a model that exists to one degree or another in the real historical world. One way of thinking
about it is it�s a society which is primarily commercial and that is a society in which
people sell most of what they produce including their labor and they buy most of the things
that they need. It�s a society in which there�s private property, in which goods
and service are exchanged by free individuals and in which prices and production are set
by supply and demand in the market rather than by tradition or by government edict.
Douglas Goldstein: By means of example, would you say it�s fair to say that the United
States as the predominant example today of capitalism in the world or is there another
country to look at?
Jerry Muller: There are many varieties of capitalism in the world. They have various
degrees of economic freedom of relationship between the market and the state. The United
States is often considered the paradigmatic example but there are hundreds of varieties
of capitalism around the world including indeed all of contemporary Europe. In many respects,
China is increasingly a capitalist society and of course Israel has become in time very
much a capitalist society as well.
Douglas Goldstein: What is the connection between capitalism and Jewish thought?
Jerry Muller: My book actually isn�t primarily about capitalism and Jewish thought though
some of it does deal with how Jews thought about capitalism, both pro and con. More important
than capitalism and Jewish thought, there�s always been a role in Jewish thought at least
from the time of the Roman period and from the time of Mishnah. There�s always been
a role for commerce and there�s lots of discussion of commerce and torts and so on
in the Mishnah and Gamora, but to say that there�s a discussion of commerce is not
to say that Jewish thought was capitalistic in the sense of recommending or being based
upon free markets and free exchange so there�s a good deal of that in traditional Jewish
thought in the sense of Mishnah, Gamora and subsequent development of Halakhah.
But what�s been more important for the Jews than the religious content of their thought
has been the historical position in which they found themselves from at least the beginning
of the Medieval period in Europe so roughly from 800 to 900 really to the dawn of the
modern era and then beyond and that position was one of a politically powerless minority
that often in most times and places in Medieval Europe was very much centered on certain economic
roles above all commercial roles of various sorts and the whole role of money lending
which was important in terms of the functions that Jews played in Medieval European society.
As a result, Jews entered the modern period starting with the 18th century with far more
commercial involvement, commercial experience and commercial know how than most of their
gentile counterparts in Europe. It was especially important as you move eastward in Europe that
is towards Eastern Europe and towards Russia societies that were less advanced and less
commercial than was the case in Western Europe and places like England and France. Especially
as you move into central and above all eastern Europe, Jews often were the commercial class
and so as the societies became more capitalist in the modern period in the course of 19th
and even 20th centuries, Jews with their prior experience of commerce often excelled in the
economic development of those countries.
Douglas Goldstein: Is it
a rumor that the Jews became that really because of rules of the church that prohibited church
members from lending to each other, meaning that the Jews were the only ones who could
do it or is that kind of a repainting of history?
Jerry Muller: That�s more than half truth. As European society started to become more
commercial from above 1100 odd, a credit, the lending of money, became more important
than necessary and the lending of money at interest was prohibited by the church and
as a result in order to create a situation where Christians where not involved in that
sinful activity, the activity was often relegated to those who were regarded by the church as
beyond salvation, that is to say to the Jews. There was a certain push factor there and
then from the Jewish point of view, there was a certain pull factor in a couple of ways.
First of all, Jews had a certain relative advantage in that they tended to have much
higher levels of male literacy than the surrounding population and that was conducive to commerce.
Also in terms of Rabbinic thought at the time, they often encouraged Jews to go into commerce
and money lending rather than agriculture because they argued that commercial life and
financial life while it was demanding still left you more time than agriculture did for
Limud Torah study. There were both push and pull factors that drew the Jews into commerce
in general and into money lending in particular.
Douglas Goldstein: A lot of people blame or pointed to the Jews as the ones controlling
all the money and they got that position because of capitalism and that has led to a great
deal of anti-Semitism and perhaps extreme anti-Semitism with the Pinnacle being the
holocaust. Is there truth to this?
Jerry Muller: As with many stereotypes, there�s a grain of truth to it that gets wildly exaggerated.
In eastern Europe, not so much in Western Europe or the United States and to a lesser
degree in Central Europe, Jews in the 19th and 20th centuries were often disproportionately
involved with commercial activity in general and financial activity in particular. Rarely
was it the case that they actually controlled commerce or finance, but they were disproportionately
represented. It�s the nature of capitalism that has Joseph Schumpeter put in. It�s
a process of creative destruction, that is to say there are new institutions being created
all the time, new forms of marketing, new products, new way of producing things and
all that innovation has its downside. When you create a new way of producing things or
marketing things, it means that the people who produce things the old way or marketed
the old way, find their standard of living or even their very means of living in decline
and capitalism also has a certain amount of instability built into it. Often enough when
that instability took hold or when people experience economic crisis or even just downward
social mobility, they were looking for someone to blame for it and disproportionately represented
and disproportionately salient. So there often was a connection between anti-capitalism and
anti-Semitism.
I think that on the whole, there�s much less of that now than there was in the past
that is the tendency to play in capitalist crisis on the Jews but you still do find the
phenomenon and of course it is striking that Jews are overrepresented in American finance
and Jews have been overrepresented among economists and among distinguished economists including
the ones who have headed the federal reserve in United States.
Douglas Goldstein: You wouldn�t argue that this is the fairest connection but rather
that�s the way it goes, Jews have been involved in money for the hundreds of years. They worked
trough way up and seem to have a knack for it?
Jerry Muller: I think they have a few characteristics that tended
to make them excel at market activity. One was the fact that I alluded to already that
they simply had more experience of it and that is often pass down to one degree or another
within families or within communities, the whole notion of buying low and selling high,
the whole notion of being on the lookout for economic opportunity for places where there
are markets that are underserved or where there are some kind of demand that isn�t
being met. Of course, the fact that Jews were often excluded by in the past either by law
or by social prejudice from many areas of established economic life tended to make them
more on the lookout for new economic opportunities and that helps explain why in so many times
in places, in modern European and American or in history of the new world, Jews were
often disproportionately involved in capitalist activity.
Douglas Goldstein: How could people follow your work?
Jerry Muller: They could type Jerry Z. Muller into Google and you�ll get some there. They
could take a look at my book Capitalism and the Jews. They could look at my most recent
article in foreign affairs on capitalism and inequality. Those are probably the best ways
of starting to go about it.
Douglas Goldstein, CFP�, is the director of Profile Investment Services and the host
of the Goldstein on Gelt radio show (Monday nights at 7:00 PM on www.israelnationalradio.com.
He is a licensed financial professional both in the U.S. and Israel. Securities offered
through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried
by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company.
His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered
at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.
Disclaimer: This document is a transcription and/or an educational article. While it is
believed to be current and accurate, divergence from the original is to be expected. The original
podcast can be heard at https://sites.google.com/site/goldsteinradioshows/. All information on this website is purely
information and should not be used as the sole basis for making financial decisions.
The opinions rendered herein are those of the guests, and not necessarily those of Douglas
Goldstein, Profile Investment Services, Ltd., or Israel National News. Readers should consult
with a professional financial advisor before making any financial decisions. Please see
the complete disclaimer at https://sites.google.com/site/goldsteinradioshows/.