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Judaism, Capitalism, and Communism

Mises Daily: Wednesday, February 13, 2013 by

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[Part 2 of "Judaism and Capitalism: Friends or Enemies?" The Lou Church Memorial Lecture in Religion and Economics, presented at the 2012 Austrian Scholars Conference (Click here for part 1)]

Let us turn then to another attempt to connect Judaism and capitalism, and this one the most significant of all, Werner Sombart’s The Jews and Modern Capitalism, which appeared in 1911. Sombart conforms to the pattern mentioned earlier that those who ascribe to the Jews primary responsibility to capitalism tend to be hostile to both Judaism and capitalism.

In Sombart’s case this is hardly surprising. Sombart began his academic career as a convinced Marxist. Though he veered to the right, he remained a socialist to the end, albeit of a peculiar kind. Like Marx, he stressed Jewish involvement in trade as the essence of capitalism: The Jews with their trader-ethic had succeeded in transforming the more static values of the Middle Ages. The broad outlines of this theory will already be familiar from our discussion of Marx’s essay; but Sombart developed the position with enormously greater learning in the Jewish sources and in Jewish history. Sombart himself says that Marx, in his essay, “looked deep into the Jewish soul”. After mentioning two other writers, he says, “What has been said about the Jewish spirit since these men (all Jews!) wrote is either a repetition of what they said or a distortion of the truth.” [1]

His favorable reference to Marx’s essay should be sufficient to suggest that Sombart was an unfriendly critic of Judaism, but Milton Friedman dissents. He writes, “Sombart’s book. . . has had in general a highly unfavorable reception. . .and, indeed, something of an aura of anti-Semitism has come to be attributed to it. . .there is nothing in the book itself to justify any charge of anti-Semitism though there certainly is in Sombart’s writing and behavior several decades later, indeed, if anything I interpret the book as philo-Semitic” [2] Friedman has I suggest been deceived by his own strong approval for the behavior and attitudes that Sombart depicts. Sombart was not praising the Jews, e.g., when he ascribed to them the trader’s mentality.

The great strength of his book is that he goes beyond the generalities to be found in Marx’s essay and offers specific evidence from Jewish religious sources and history. He points out, e.g., that though a Jew is forbidden to lend money at interest to another Jew, he is permitted, and according to some opinions required, to do so to non-Jews. Jewish law sees nothing intrinsically wrong with lending at interest: the ban on taking interest from fellow Jews stems from the bonds that ought to link fellow believers. The prohibition on taking interest from a fellow Jew is more than a negative requirement. It is a positive duty to lend money without interest to Jews in need, and free loan societies have long been part of the Jewish community.

Sombart expresses the point about taking interest from non-Jews in typically colorful language:

Now think of the position in which the pious Jew and the pious Christian respectively found themselves in the period in which money-lending first became a need in Europe, and which eventually gave birth to capitalism. The good Christian who had been addicted to usury was filled with remorse as he lay a-dying, ready at the eleventh-hour to cast from him the ill-gotten gains which scorched his soul. And the good Jew? In the evening of his days, he gazed upon his well-filled caskets and coffers, overflowing with sequins of which he had relieved the miserable Christians or Mohammedans. It was a sight which warmed his heart, for every penny was like a sacrifice which he had brought to his Heavenly Father. [3]

Sombart does not see the law regarding interest as standing alone. To the contrary, he maintains that Judaism is a religion of calculative rationality, peculiarly suited to success under capitalism:

The kinship between Judaism and capitalism is further illustrated by the legally regulated relationship---I had almost said the business-like connection, except that the term has a disagreeable connotation---between God and Israel. . .The contract usually sets forth that man is rewarded for duties performed and punished for duties neglected. . .Two consequences must of necessity follow: first, a constant weighing up of the loss and gain which any action needs must bring, and secondly, a complicated scheme of bookkeeping, as it were, for each individual person. [4]

Sombart makes clear his evaluation of Judaism and capitalism, in a passage that evidently escaped Milton Friedman’s attention:

In all its reasoning it [the Jewish religion] appeals to us as a creation of the intellect, a thing of thought and purpose projected into the world of organisms. . .destined to destroy and to conquer Nature’s realm and to reign itself in her stead. Just so does capitalism appear on the scene; like the Jewish religion, an alien element in the midst of the natural, created world; like it, too, something schemed and planned in the midst of teeming life. [5]

What is one to make of all this? The main problem with Sombart’s thesis is obvious. Though he is right that calculative rationality is integral to capitalism, this disposition is by no means peculiar to Jews. If so, capitalism cannot be considered Jewish in essence, though Sombart may well be right that certain traits of mind equipped Jews to prosper under capitalism. Sombart could hardly ignore this point; only a few years before his own book, Max Weber had issued his famous The Protestant Ethic and the Spirit of Capitalism. In that book, Weber ascribed some of the same traits that Sombart thought especially Jewish to the Puritans.

It cannot be said that Sombart’s way of coping with this objection is entirely satisfactory. He writes, “I [Sombart] have already mentioned that Max Weber’s study of the importance of Protestantism for the capitalistic system was the impetus that sent me to consider the importance of the Jew. . .Puritanism is Judaism.” [6]

Sombart rightly stressed the importance for capitalism of lending money at interest, but allowing this practice is hardly peculiar to Judaism. In his great An Austrian Perspective on the History of Economic Thought, Rothbard remarks: “Calvin’s main contribution to the usury question was in having the courage to dump the prohibition altogether. . . To Calvin, then, usury is perfectly licit, provided it is not charged in loans to the poor, who would be hurt by such payment.” Rothbard continues about a later Calvinist, “The honor of putting the final boot to the usury prohibition belongs to. . . Claudius Salmasius,. . .who finished off this embarrassing remnant of the mountainous errors of the past. In short, Salmasius pointed out that money-lending was a business like any other, and like other businesses was entitled to charge a market price. . .Salmasius also had the courage to point out that there were no valid arguments against usury, either by divine or natural law.” [7] No doubt Sombart would respond by declaring Calvin and Salmasius to be Jews.

We have so far considered, and found largely wanting, attempts to connect Judaism with capitalism. But we have also to examine the views of those who find a Jewish impetus behind opposition to capitalism. Especially at the beginning of the twentieth century, a common view held that the Bolshevik Revolution was largely a Jewish enterprise.

Winston Churchill wrote in 1920, “There is no need to exaggerate the part played in the creation of Bolshevism and the actual bringing about of the Russian Revolution by these international and for the most part atheistical Jews. It is certainly a great one; it probably outweighs all others. With the notable exception of Lenin, the majority of the leading figures are Jews. Moreover, the principal inspiration and driving power comes from the Jewish leaders.”

Churchill by no means thought that all Jews were Bolsheviks. To the contrary, he contrasted the internationalist Jews behind world revolution with nationalist Jews, e.g., Zionists. “The struggle which is now beginning between the Zionist and the Bolshevik Jews is little less than a struggle for the soul of the Jewish people.” [8]

Churchill was but one of many writers of his time with similar views. As he notes in his article, he had read Nesta Webster, a once famous popular historian who studied conspiracy theories of revolution in, among other books, The French Revolution: A Study in Democracy; World Revolution; and Secret Societies and Subversive Movements. (Contrary to general belief, incidentally, she did not endorse the authenticity of the Protocols of the Learned Elders of Zion.) She was probably the foremost source for the view that communism was Jewish.

Backers of the theory, like Churchill, appealed to the fact that Jews occupied a high number of positions in the Bolshevik government. The Irish priest Father Denis Fahey published a pamphlet, The Rulers of Russia, containing long lists of Bolsheviks with Jewish-sounding names. In Germany, the Nazi writer Alfred Rosenberg sometimes read out such lists over the radio, leading to the joke that he thought that everybody named “Rosenberg” was Jewish except him. In recent years, the German writer Johannes Rogalla von Bieberstein has devoted a long book to the topic, Jewish Bolshevism: Myth and Reality [Der juedische Bolshewismus: Mythos und Realität] [9]

Before we turn to evaluate this theory, it should be noted that it is possible, however unlikely it may seem, for someone to hold this view together with the position we have earlier examined. That is, it is possible to hold Jews responsible both for capitalism and communism, its foremost antagonist. This is more than a bare possibility: Hitler, for one, believed precisely this.

The main failing of the view that connects Judaism and communism is a simple one. It confuses two questions: why, looking at the historical circumstances that led to the Russian Revolution, were many Jews attracted to revolution; and, is there anything intrinsic to Judaism that leads to support of communism?

The first question is readily answered when one recalls the long history of anti-Jewish measures taken by the Tsarist Russian government in the nineteenth and early twentieth centuries. A similar appeal to particular circumstances would I think explain such other instances of Jewish support for socialist revolutionary groups as the historical record discloses. Absent the existence of special circumstances, there is no marked Jewish support for the overthrow of capitalism. Jerry Muller is right when he says: “Milton Friedman’s contention that Jews vilified capitalism while profiting from it is highly distorted. To the extent that Jews identified themselves with socialism, it was largely a phenomenon of eastern European Jews and their immediate descendents in the years from the late nineteenth century through the 1930s.” [10] And even if one is inclined to think the association between Jews and communism greater than Muller allows, it is clear that any such affinity has its limits. Even during the period when Jewish radicalism was at its height, most Jews were not communists, and most communists were not Jews. It would be difficult to consider the Chinese communist movement an instance of Jewish Bolshevism.

To show a close intellectual connection between Judaism and communism would require some derivation of communist ideas from Jewish religious doctrines, and that is not in the offing. True enough, radicals have appealed to Jewish texts to support their views. Michael Walzer has traced the role of the Exodus narrative on revolutionary thought: “I [Walzer] have found the Exodus almost everywhere, often in unexpected places. It is central to the communist theology or antitheology of Ernst Bloch. . . It is the subject of a book, called Moses in Red, by Lincoln Steffens, published in 1926; a detailed account of Israel’s political struggles in the wilderness and a defense of Leninist politics.” [11]Others have found in the Jewish prophets an inspiration for socialist schemes for reform of the world. A once famous book of the 1920s, A Religion of Truth, Justice, and Peace, by Isidor Singer, the editor of the Jewish Encyclopedia, argued that “the world leadership of the social justice movement [is] offered to the Jew.” [12]Singer based his argument on an appeal to the words of Amos, Isaiah, Micah, and other prophets. [13]

Walzer and Singer to the contrary notwithstanding, the claim that Judaism teaches socialism or communism as a general political program cannot succeed. The basic reason such an attempt must fail is the same one that dooms the theories that link Judaism and capitalism. The religious precepts of Judaism are meant to apply only to Jews: they do not constitute an ethical system that prescribes a best social order for all of humanity.

As Meir Tamari says, “For centuries, Jews enjoyed autonomy in many countries and maintained rabbinic codes of law which regulated and governed their economic activity, thereby preserving its specifically Jewish characteristics. The Bible and the homiletical literature established an ethical and moral framework within which Jewish communities operated. . .” I conclude, then, that although Mises radically underrated the intellectual merits of the Jewish sources, he was not far from the truth in thinking that are no direct connections to be drawn between Judaism and capitalism. [14]

Notes

[1] Werner Sombart, Judaism and Capitalism (Batoche Books, 2001[1911]), p.283.

[2] Milton Freidman, “Capitalism and the Jews”, The Freeman (October 1988), accessed here: http://www.thefreemanonline.org/columns/capitalism-and-the-jews/

[3] Sombart, pp.170-71.

[4] Sombart, p.146.

[5] Sombart, p.144.

[6] Sombart, p.174.

[7] Murray N. Rothbard, An Austrian Perspective on the History of Economic Thought: Economic Thought Before Adam Smith, Volume 1 (Edward Elgar, 1995), pp.140, 144

[8] Illustrated Sunday Herald , February 8, 1920, p.5, accessed here: http://library.flawlesslogic.com/ish.htm

[9] For a brief account of the book, see Paul Gottfried, “Odious Germans”, accessed here: http://www.lewrockwell.com/gottfried/gottfried55.html

[10] Muller, p.124.

[11] Michael Walzer, Exodus and Revolution ( Basic Books, 1985), p.4.

[12] Isidor Singer, A Religion of Truth, Justice, and Peace (Amos Society, 1924), p.4. The book included an Introductory Essay by Edward Filene and an Epilogue by Israel Zangwill.

[13] For a critical discussion of political appeals to the Jewish prophets, see Lewis Feuer, Ideology and the Ideologists (Transaction, 2010).

[14] Tamari, p.3. To anticipate an objection, the Jewish sources do not prescribe a socialist order for the Jewish community either.