David R. Henderson  

Capitalism and the Jews

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Krugman vs. Blanchard on the S... Friedman vs. Bernanke...

My co-blogger, Arnold Kling, posted yesterday on American Jews and politics. I found the articles interesting, but I wonder if any of the Commentary writers are aware of Milton Friedman's attempt to explain why Jews, who have done so well under capitalism, are, on average, so hostile to it. I don't think Milton made a slam dunk in explaining it and, if you read his article, you'll see that he didn't think so either. I won't repeat his argument, but I do want to highlight the curious case of Werner Sombart.

Sometime in my undergrad career, I read (I can't remember where) that Werner Sombart, a German intellectual, was anti-Semitic. I had no reason to doubt that and so, every time I came across his name, I had an instinctive repulsion. I never actually tested the proposition by reading Sombart. Friedman points out why he was considered anti-Semitic and why Friedman thinks Sombart was actually a philo-Semite.

Friedman writes:

Sombart's book, I may say, has in general had a highly unfavorable reception among both economic historians in general and Jewish intellectuals in particular, and indeed, something of an aura of anti-Semitism has come to be attributed to it. Much of the criticism seems valid but there is nothing in the book itself to justify any charge of anti-Semitism though there certainly is in Sombart's behavior and writings several decades later, [this comma should be a semi-colon; otherwise the sentence makes no sense] indeed, if anything I interpret the book as philo-Semitic. I regard the violence of the reaction of Jewish intellectuals to the book as itself a manifestation of the Jewish anti-capitalist mentality. I shall return to this point later.

And he does return to the point, writing:

I interpret also in this way the attempt by Fuchs to trace Jewish "liberalism" to Jewish values and the negative reaction of Jewish critics to Sombart's book. If, like me, you regard competitive capitalism as the economic system that is most favorable to individual freedom, to creative accomplishments in technology and the arts, and to the widest possible opportunities for the ordinary man, then you will regard Sombart's assignment to the Jews of a key role in the development of capitalism as high praise. You will, as I do, regard his book as philo-Semitic. On the other hand, if you are trying your level best to demonstrate that Jews are dedicated to selfless public service in a socialist state, that commerce and money-lending were activities forced on them by their unfortunate circumstances and were wholly foreign to their natural bent, then you will regard Sombart as an anti-Semite simply reinforcing the stereotype against which you are battling. In this vein, the Universal Jewish Encyclopaedia says in its article on Sombart: "He accused the Jews of having created capitalism" (my [Friedman's] italics).

And later:

Consider, for a moment, the reaction to the anti-Semitic stereotype by a nineteenth-century English Philosophical radical steeped in Benthamite utilitarianism--by a David Ricardo, James Mill, even Thomas Malthus. Could one of them ever have termed the allegation that Jews created capitalism an accusation? They would have termed it high praise. They would have regarded widespread emphasis on rational profit calculation as just what was needed to promote "the greatest good of the greatest number," emphasis on the individual rather than the society as a corollary of belief in freedom, and so on.

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The author at Free Market Mojo in a related article titled Milton Friedman: ‘Capitalism and the Jews’ writes:
    The Jews owe an enormous debt to capitalism. The feature of capitalism that has benefited the Jews has, of course, been competition. ... [Tracked on September 5, 2009 4:22 AM]
COMMENTS (15 to date)
RL writes:

Is the goal to explain JEWISH hostility to capitalism, or "Jewish INTELLECTUAL" hostility to capitalism? If only the latter is to be explained, one would first need to demonstrate it is quantitatively distinguishable from the hostility to capitalism shown by intellectuals of all religions. Since there seems to be a greater percentage of Jews in the intellectual class, Jewish intellectual opinion often stands out.

David R. Henderson writes:

RL,
Good point. Multiple goals. Read Milton's piece.
D.

David writes:

On the accusation that Sombart was an anti-Semite: was this reaction contemporaneous to his publication, or posthumous after his support of the Third Reich was debated? On a somewhat related note, I ordered "THe Jewish Century" by Prof. Yuri Slezkine a few years ago. It describes the prominence of Russian Jews among the first generation of Bolsheviks, and what happened to them through Stalin and the emergence of the ethnic Russian totalitarian state. When published, this book received a National Jewish Book award. After I ordered it, I noticed that Amazon's algorithm tied my purchase to potential interest in other books: anti-Israel and anti-Semitic books from the farther reaches of the both left and right. So is Prof. Slezkine an anti-Semite? doubtful, but his research certainly resonated with those who are. He also makes the point that the prominence of Jews among Socialist intellectuals is similar to the prominence of Jews among nearly every single other intellectual movement of the 20th century. For every Trotsky, Chomsky and Marcuse, there's a Friedman, Mises, Rothbard, etc.

Patrick R. Sullivan writes:

This is only tangentially (if at all) related, but at about 15 minutes into this video, the TV writer/producer Sherwood Schwartz
tells the story of how he was denied entry into medical school
in 1938 because he was Jewish.

In short, while completing a master's degree at USC to enhance his credentials for med school, he wrote a few jokes for Bob Hope, hoping to make a few dollars for them (Schwartz's brother was a staff writer for Hope). Hope liked them so much he offered him a job for the next season's radio program.

Schwartz explained that he hoped to be entering med school in NY at that time.

Hope said, 'Fine, let's do this...', and took a standard writer's contract out and signed it. He gave it to Schwartz, and told him to tear it up if he got accepted to the school. If not, he should sign it and show up for work at the end of the summer.

Schwartz took the contract with him to his interview, thinking he would have a very dramatic answer to the inevitable question about how dedicated was he to becoming a doctor; 'I want to be a doctor so much, if you tell me I'm accepted, I'll tear up this contract with Bob Hope right in front of you.'

At which point the interviewer took pity on him and showed him the list of names of candidates ahead of him. Jewish names. He told him the AMA decreed that only 10% of the new entrants could be Jewish, and the sons of doctors on that list more than accounted for that number.

So, the world had one less Jewish physician, but did get Gilligan's Island and The Brady Bunch.

Troy Camplin writes:

I think the Jewish intellectual hostility to capitalism is the same as the X (choose your group) intellectual hostility to capitalism. Further, I think the economically successful Jew's hostility to capitalism is the same as the economically successful X's hostility to capitalism. In the first case, it is resentment that capitalism doesn't pay them what they are convinced they are worth. In the second case, it is an attempt to prevent entry into the economy by potential competitors. Jew or Gentile, the hostility is the same, and comes from the same place.

Les writes:

I note that David uses the term "on average" when referring to Jews as a group. His is the only post that seems to understand that all Jews do not think alike.

It seems to me that Jewish opinions are by no means monolithic, but rather that Jews have opinions that are as or even more diverse than those of other groups.

There appears to be more truth to the saying "Five Jews, six opinions" than to simplistic generalizations that are so broad and sweeping that they lack face credibility.

Liam writes:

That is the first I have heard the saying, "Five Jews, six opinions" but I had to chuckle.

I had always thought the aversion to capitalism was merely a throwback from when Israel was founded since it was a very socialist society at the time. This does make me reconsider my conclusion but also makes me wonder if this trend still exists

Current writes:

Sombart was very certainly an Anti-Semite.

It must be remembered that Sombart was a socialist, so it is quite reasonable to say that he accused jews of creating capitalism.

His work though is of great _unintended_ praise to the Jewish and the English. (The English being considered sort of honorary Jews by Sombart).

Jaime Manzano writes:

My take is that Jews tend to be socialist because their religious values give high regard to charity, e.g., the good Samaritan. As a personal value, it sings. As a legal requirement, it loses as a reflection of personal worth and becomes an ordinary legal imposition. Insofar as capitalism, it seems to be a respect for agreed exchanges. God contracted with Adam, to protect and respect an apple in exchange for paradise. Adam chose the apple, prefering a free will to an unearned entitlement. It turned out just as God had designed nature and mankind.

If you want a fantastic book about why Jews seem to be such good capitalists, please read 'Thou Shall Prosper' by Rabbi Daniel Lapin.

As Lapin says, "If there is one Jewish attribute more directly responsible for Jewish success in business than any other, it is this one, Jewish tradition views a person's quest for profit and wealth to be inherently moral."

Les writes:

I think The Youngish Libertarian makes a very good point. But it applies only to some Jews.

For example, Israel was a socialist nation throughout the 20th century. Only in this 21st century has Israel prospered by dropping a lot of socialist practices and adopting more capitalistic practices.

An interesting paradox is presented by many American Jews who have prospered mightily through capitalism, but who habitually vote Democrat - even for Obama, who leans far more towards socialism and far away from capitalism.

Tim writes:

Perhaps Caplan's "Myth of the rational voter" offers an explanation for the Jewish propensity to vote left. With little expectation of their vote altering the capitalist landscape, the financial cost is expected to be zero, however they can associate with what is seen as a more socially friendly ideology.
This combined with the less secular nature of the conservative right can mean being sided to the left appears to offer only advantages at no social, intellectual or financial cost.
I wonder if the ideology on average among jews (or at least the way they vote) would shift if there were a greater threat to capitalism from their objections?

The Rage writes:

Israel is a pighole. Sorry Les, but it was barely "socialist" before and its current deregulated form has crashed. They can try and scam its current subsistance all it wants, but it is dead. Les, calling "Obama" a socialist is embarrasing. Go visit there Les, I was amazed by the poverty.

Capitalism is the Jews creation. The embodiment of it is in the Talmud, way more than so called "socialism" like "some" anti-semites like to proclaim, that is found, as expected, in the New Testament and socialist hero........Jesus Christ.
We must break down Jews, the intellectual, vs the Jew the merchant or middle manager. Jewish intellectualism has created mass movements from Marxism(which interestingly, self-hating Jew Karl Marx, hated the term. He thought "communism" would destroy the Jew, never did he think the captialists/Jews would "create" a hoax communist state like they did in Russia and create branches of it around the globe creating the Cold War and profitting the capitalists greatly).

Here is a great piece:
Ron Paul is closely tied to the late Ludwig von Mises through his ideas and the institute which bears his name. Ludwig von Mises was in turn closely tied to the Jewish supremacist and organizer of World Government, Richard Coudenhove-Kalergi. Richard Coudenhove-Kalergi promoted the idea of a European Union and a pan-American Union. Rothschild and Warburg sponsored him. Coudenhove-Kalergi also stated that the Jews are a superior race which should lead the World, but that all the other races should be mixed, which according to him would result in the manifestation of the worst traits and the disappearance of the best traits in the Gentile races. Zionist British Prime Minister Benjamin Disraeli had made similar claims.

Coudenhove-Kalergi wanted the different "races" to mix in intermarriage so that the children of these unions would be inferior to their parents and would lose any sense of cultural and ethnic heritage. He wanted to then substitute a new culture of obedience and servitude among this new degenerated "race", subservience to a ruling Jewish elite. He would have the Jews remain nobly segregated and preserve them as rulers over all others. It is a fact that many of Coudenhove-Kalergi's policies have been instituted. Ron Paul is fronting for these von Misian forces.

Eustace Mullins wrote of Ludwig von Mises and Richard Coudenhove-Kalergi,


"On May 1, 1776, Adam Weishaupt issued further instructions to the Illuminati in Bavaria, 'We labour first of all to draw into our Association all good and learned writers. This we imagine will be the easier obtained, as they must derive an evident advantage from it. Next to such men we seek to gain the masters and secretaries of the Post-Offices in order to facilitate our correspondence.' The Tasso family of Bologna, later Thurn und Taxis, gained control of post offices and intelligence work in Europe and held that power for five centuries. Although these groups surfaced as charitable or fine arts organizations, their goals of anarchy were concealed in all their efforts. In the twentieth century, they culminated in the League of Nations, the United Nations, the communist Party, the Royal Institute of International affairs, the Council on Foreign Relations, the foundations, and a host of lesser groups. Count Coudenhove-Kalergi's Pan Europe Movement, with its powerful backing by aristocrats and international financiers, was represented in the U.S. by its American branch, founded by Herbert Hoover and Col. House, who were also stumping the U.S. for ratification of the League of Nations. Coundenhove Kalergi mentioned in his autobiogrphy that he had been financed by the Rothschilds and Warburgs, and in the U.S., by Paul Warburg and Bernard Baruch. He was connected with the Thurn und Taxis family. His grandfather, Count Francis Coudenhove-Kalergi, Austrian Ambassador in Paris, had married Marie Kalergi in 1850. She was one of the wealthiest heiresses in Europe, descended from the Byzantine Emperor Nikophor Phikas; in 1300, when Venice was the dominant power in the Mediterranean, Alexios Kalergis had signed the treaty which made Crete a dominion on Venice. A recent premier of Greece, Emmanuel Tsouderos, was a Kalergi.

Melchior Palyi, in 'The Twilight of Gold', reveals the power plays of the World Order in international finance, when he quotes from the Diary of Governor Emile Moreau of the Bank of France. Palyi says, 'In October, 1926, Governor Emile Moreau of the Bank of France sent his closest collaborator to London to explore the intentions of Montagu Norman, Governor of the Bank of England. Pierre Quesnay, then general manager of the Bank of France 1926-30, and Bank for International Settlements 1930-37, brought back a report which was recorded by Moreau : 'Quesnay also gives me interesting views about the ambitions of Montagu Norman and the group of financiers who surround him: Sir Otto Niemeyer, Sir Arthur Salter, Sir Henry Strakosch, Sir Robert Kindersley they are striving to make London the great international financial centre. But those close to Norman state this is not his objective ... he wants more than anything else to witness the setting up of links between the various banks of issue ... The economic and financial organization of the world appears to the Governor of the Bank of England to be the major task of the Twentieth Century. In his view politicians and political institutions are in no fit state to direct with the necessary competence and continuity this task of organization which he would like to see undertaken by central banks, independent at once of governments and of private finance. Hence his campaign in favour of completely autonomous central banks, dominating their own financial markets and deriving their power from common agreement among themselves. They would succeed in taking out of the political realm those problems which are essential for the development and prosperity of the national financial security, distribution of credit, movement of prices. They would thus prevent internal political struggles from harming the wealth and the economic advancement of nations.'

In short, Norman wished to see the imposition of the World Order over the financial affairs of the nations. It was this agreement among the central banks, rather than the front organization, the League of Nations, which became their final instrument of power. Crucial to these arrangements was the monetarist school, the Austrian School of Economics, an outgrowth of the Pan-Europe movement. Margit Herzfeld notes in her biography of Ludwig von Mises that he participated in Count Coudenhove-Kalergi's Pan Europe movement in 1943. He had been brought to the U.S. in 1940 by a grant from the Rockefeller Foundation of $2500 a year to work at the Natl. Bureau of Economic Research, which grant was renewed in 1943. Von Mises' pupils, Arthur Burns and Milton Friedman now expound the monetarist theory through a network of supersecret 'conservative' think tanks led by the Mont Pelerin Society. Herzfeld says that von Mises' most famous protege was the Soviet apologist Murray Rothbard."—Eustace Mullins, "The Rule of the Order", The World Order: A Study in the Hegemony of Parasitism, Chapter Eight.


Paul wants to create private gold banks, which obviously will be international and become the centralized entirely private Jewish controlled World bank Paul's bosses seek to institute as a mechanism of World control. This new Jewish monopoly on banking and gold will give World Jewry even greater control over money and it will be entirely detached from any country's government. This is the ultimate privatization of money creation and money supply which International Jewry has always sought. Even the system described in Carroll Quigley's book does not give World Jewry the power they will obtain under Ron Paul's system, which extant system has already done so much harm to the Third World and the American dollar,


"The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements, arrived at in frequent private meetings and conferences. The apex of the system was the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the worlds' central banks which were themselves private corporations. The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and the indirect injury of all other economic groups."—Carroll Quigley, Tragedy and Hope: A History of The World in Our Time, Macmillan Company, New York, (1966) p. 337.

Ron Paul was heavily promoted by the Hollywood Zionist Jew Aaron Russo, who claimed a close personal friendship with the Rockefeller family and who didn't want us to talk about "Jewish bankers". Paul's ties to leading Zionists and his promotion by gold merchants and prominent figures in the "911 truth movement" who shy away from the proven Zionist Jewish and Israeli connection to 911, has been documented by others.


This is a great piece on Ron Paul and what the real goal of the "Austrian" movement is really about. My studies also agree with this article. If it really came out about Paul and the Austrians, it would destroy America. Just as much if the real truth came out about the Soviet hoax.

Paul and his libertarians are nothing more than Rothschildian men trying to take back global finanical power from the Morgan Syndicate. Basically in otherwords, Ben Bernanke and Ron Paul are basically the same guys, but different side of the coin. The Morgan's left gold behind by 1907 after they got burned 1 to many times by the social chaos and financial damage it did. Then created the Federal Reserve to run its Syndicate eventually with the ECB. To say it wasn't a smash success is a liar. No depressions since 1941(even the "stagflation" period wasn't close to a depression even though some people like to call it that)

Paul(Who has Jewish blood in him as well),Schiff and the Jews want to destroy the Morgan syndicate. The Syndicate is beginning to fall apart as they are running near the end of their currency devaluement and private investment of their captial base, the United States of America. The US buck can't be devalued much more and the countries manufacturing base has been erroded. Deflation is getting harder and harder to stop. The Rothschilds hope they can build their gold banking empire and eventually dissolve countries into 1 world system(better than government which the article above uses) of plutocratic control. Kill as they please and destroy as they seek.

Yet, Jews will never vote for Paul in mass droves? Why not? Because we see the gap between the intellectuals and the lay Jew. Even the intellectuals don't get along how to bring 1 world dominance. Lay Jews go with progressives because they think they will protect them better. How wrong they are. Inside the progressive movement itself is anti-egalitarian ideals and fascism. As one Guenon/Evola traditionalist school friend of mine, who was once a "white liberal" said, once you lose the guilt, you see the truth.

I suspect the author of this site has ties if not in blood to the Jews as well.

What you should have a title called: Jews in everything.......

Monte writes:

NWO alert!

Ron Paul must be backmasking subliminal messages. I was listening to one of his speeches in reverse and could have sworn I heard him calling on all Jews to install parking meters on their roofs before Christmas.

David R. Henderson writes:

The Rage writes:
I suspect the author of this site has ties if not in blood to the Jews as well.

I've been found out! I'm not sure I'm tied to "the Jews" unless the story of Adam and Eve is true, in which case so is "The Rage." But I take his point: my wife and daughter are both Jews and my mentor, Clancy Smith, whom I write about in Chapter 1 of my book, The Joy of Freedom: An Economist's Odyssey, is Jewish.

Best,
David

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