Racism and Anti-Semitism—Part III

The previous article described the success of Jews as business men. It should be pointed out that in the business world, Jews make up a very small percentage of the world's successful businessmen, because in the world of 6.4 billion people, Jews make up approximately .23%, or roughly 14.6 million. In terms of the number of Jews who are successful in business, the number is inordinately high; in terms of the number of successful businessmen in the world, the number of them who are Jews is extremely low.

Nevertheless, it is the Jew's success in business, especially the business of banking, that has contributed to their persecution. While it is supposedly the Jews or "Jewshness" anti-Semitism is directed against, it is actually something else, and the Jews are not the only one's hated and persecuted because of it.

A History of Business—The Court Jews

"The first examples of what would be later be called court Jews emerged during the Renaissance when local rulers used services of Jewish bankers for short-term loans. They lent money to nobles and in the process gained social influence."

According to the Jewish Encyclopedia, court Jews rose to positions close to the rulers because "they were mostly wealthy business men, distinguished above their coreligionists by their commercial instincts and their adaptability."

For example, at the Austrian Court, "Samuel Oppenheimer [1635], ... was appointed chief court factor, together with his two sons Emanuel and Wolf, and Wertheimer, who ..., devoted their time and talents to the service of Austria and the House of Habsburg: during the Rhenish, French, Turkish, and Spanish wars they loaned millions of florins for provisions, [and] munitions...."

"The court Jews, as the agents of the rulers, and in times of war as the purveyors and the treasurers of the state, enjoyed special privileges. They were under the jurisdiction of the court marshal, and were not compelled to wear the Jews' badge. They were permitted to stay wherever the emperor held his court, and to live anywhere in the German empire, even in places where no other Jews were allowed. Wherever they settled they could buy houses, slaughter meat according to the Jewish ritual, and maintain a rabbi. They could sell their goods wholesale and retail, and could not be taxed or assessed higher than the Christians."

The privileges court Jews enjoyed, obviously politically derived, was not enjoyed by other Jews. Their close association with rulers gave them political influence as well. Many of the court Jews were bankers who were also the financiers of the rulers, whose wealth was perceived as power, a power viewed frequently with suspicion or as a threat.

Jews and Banking

There is a very interesting paper, apparently in a working stage, by Huibert Schijf, "International Jewish Bankers Between 1850 and 1914," which provides some very interesting information about that period as well as some historical background.

"The phenomenon of Jewish Diasporas involved in trading routes is an old one. The cosmopolitan Jewish merchants from the 11th to 13th century in Cairo showed a variety of long-ranged contacts with merchants all around the Mediterranean and as far as India. Dealing with money and banking was also among their activities," and "business was usually part of a much wider range of commercial activities by the merchants in Cairo. ... the banker’s vocation was highly honoured in the Jewish community."

He also makes the point "There have been many minority groups in the past involved in trade and finance, and they exist today as well. Among them were - or still are - overseas Chinese in Southeast Asia, Greeks in the Black Sea, Parsis in Bombay, other Indian trade communities keeping trading routes between India and Russia in the past and Jews almost everywhere [emphasis added].... The networks of internationally operating Jewish bankers in the nineteenth century are an example to show how this worked in nineteenth century Europe."

No doubt their historical background, as well as their culture contributed to the Jews success in Banking in the eighteenth and nineteenth centuries, and the success is undeniable. Some of the more important Jewish banking families Schijf mentions include the Warburgs from Hamburg, the Oppenheims from Cologne and of course the Rothschilds with the famous five brothers from Frankfurt.

The almost incredible success of Jews in the world of Banking is extremely significant, but is almost always misrepresented. It is impossible to understand the true nature of anti-Semitism without understanding the significance of how Jews were perceived because of their success in banking. That success was the result of the same cultural values of industry and integrity that have made them successful in every business they have engaged in, but in banking it represents something much more important. While it has always been perceived as a kind of power, which it truly is, it is a power which is almost completely misunderstood.

Confusions About Power

One of the wealthiest and most politically powerful families in history were bankers, but the family was not Jewish, it was Italian—it was the family known as the Medici. Since the Medici the confusion between two kinds of power, economic power and political power, has pervaded all Western thinking, and with rare exception, the two are never separated. From the privileges bought by the court Jews' wealth to the massive political power the Medici's wealth made possible, the idea that politics and wealth are the same kind of power is tacitly assumed.

More clearly than any other philosophy, it was Ayn Rand who defined the difference in those two kinds of power.

"Now let me define the difference between economic power and political power: economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman's tool is values; the bureaucrat's tool is fear. [Capitalism: The Unknown Ideal. "America's Persecuted Minority: Big Business"]

In a planned part of her lecture at The Ford Hall Forum, Boston, December 17, 1961, which was subsequently cut and later published in the The Ayn Rand Letter September 23, 1974, in an article called 'From My "Future File'" she describes in detail the difference between the power of wealth as embodied in the successful businesses, and political power as embodied in bureaucracies.

"A businessman's success depends on his intelligence, his knowledge, his productive ability, his economic judgment—and on the voluntary agreement of all those he deals with: his customers, his suppliers, his employees, his creditors or investors. A bureaucrat's success depends on his political pull. A businessman cannot force you to buy his product; if he makes a mistake, he suffers the consequences; if he fails, he takes the loss. A bureaucrat forces you to obey his decisions, whether you agree with him or not—and the more advanced the stage of a country's statism, the wider and more discretionary the powers wielded by a bureaucrat. If he makes a mistake, you suffer the consequences; if he fails, he passes the loss on to you, in the form of heavier taxes.

"A businessman cannot force you to work for him or to accept the wages he offers; you are free to seek employment elsewhere and to accept a better offer, if you can find it. ... A bureaucrat can force you to work for him, when he achieves the totalitarian power he seeks; he can force you to accept any payment he offers—or none, as witness the forced labor camps in the countries of full statism."

Jews, Economic Power, and Capitalism

The Jews have always been accused of have great political power, or wielding too much influence in the world, especially political influence. This is largely baseless, but when facts are asked for, it is frequently their wealth that is pointed to, implying their economic "power" is the equivalent of political "power."

There is no doubt the Jews are economically powerful. But what exactly is economic power. I again quote Rand, because she most eloquently described it. Note that the requirement for true economic power is freedom, particularly economic freedom.

"What is economic power? It is the power to produce and to trade what one has produced. In a free economy, where no man or group of men can use physical coercion against anyone, economic power can be achieved only by voluntary means: by the voluntary choice and agreement of all those who participate in the process of production and trade. In a free market, all prices, wages, and profits are determined—not by the arbitrary whim of the rich or of the poor, not by anyone's "greed" or by anyone's need—but by the law of supply and demand. The mechanism of a free market reflects and sums up all the economic choices and decisions made by all the participants. Men trade their goods or services by mutual consent to mutual advantage, according to their own independent' uncoerced judgment. A man can grow rich only if he is able to offer better values—better products or services, at a lower price—than others are able to offer.

"Wealth, in a free market, is achieved by a free, general, "democratic" vote—by the sales and the purchases of every individual who takes part in the economic life of the country. Whenever you buy one product rather than another, you are voting for the success of some manufacturer. And, in this type of voting, every man votes only on those matters which he is qualified to judge: on his own preferences, interests, and needs." [Capitalism, the Unknown Idea, "America's Persecuted Minority: Big Business"]

Why is it, then, that the Jews have been successful at becoming wealthy? The answer is simple, they are capitalists.

What is Capitalism

While Rand equates a "free market" and Capitalism, they are not exactly the same thing. The success of Capitalism, at least on any large scale, requires a free market, but a free market does not guarantee capitalism. If a society is totally free economically (something that has never been true in the history of the world), it may and probably will be capitalistic, but could choose to go the voluntary communal route. Such systems work minimally, on a small scale, at providing food, clothing, and shelter, but are incapable of sustaining or producing the benefits we associate with Western civilization with it's science, medicine, technology, and quality of life. That requires Capitalism.

Capitalism is not an economic system, it is a method of economics employed voluntarily by individuals. To understand what capitalism is, it is necessary to understand what capital is.

When a farmer harvests his grain at the end of the year, he has a choice to consume or sell or all the grain he has produced, or to consume only part of it, putting aside some of the grain to use as seed for planting the following year. If he chooses to put aside some seed grain, that is capital. Without this capital, the farmer would either not be able to plant the next year or would have to borrow seed from someone who had the foresight to preserve seed grain (with a promise to pay, as interest, some of that years harvest to the lender, for example).

Capital is usually not seed, however, but money. Money used as capital can be thought of as the, "universal seed," which can be used to produce not only grain, but any kind of food, and in fact, any kind of goods that human beings can produce, because it can be used to buy, not only any kind of seed (which farmers plant to grow food) but can be used to buy machinery and raw materials which manufacturers use to produce shoes, clothing, medicine, or any other product.

Many farmers today neither preserve nor consume what they produce, but sell it all, and buy new seed, farm equipment, or other goods with the money they get as they need them. The point is, someone still has to supply the seed (the capital), and they will make their money by charging for that seed. There are some who are in the business of supplying the universal seed (money) and make their money by charging for that seed—the charge is called interest and the supplier of that capital (seed) are called investment bankers.

Banking, in its broadest sense, includes all those involved in investing, including individuals and institutions, who supply seed money to industry and business. Investment banking is the heart of capitalism, and without it, there is no capitalism (or a severely limited version of it). Without "bankers" to supply the seed money, there would be no new businesses and existing businesses would not have access to the resources they need to expand or improve their businesses, develop new products, or even produce them. Established businesses sometimes supply their own seed money, but most require an infusion of investments to grow and develop.

Jews, Capitalism, and Western Civilization

All of what is called Western Civilization, in terms of it's high standard of living, economic prosperity, scientific, and technological development are the result of the extent to which capitalism dominated society, and since freedom, particularly economic freedom, is necessary to capitalism, those countries in the West that were the most free have been the most advanced and civilized. It is the reason the freest country in the world, The United States of America, became the most prosperous nation in history of the world.

Throughout history, Jews have always been among the worlds most successful capitalist bankers and business men, which means, they have always been among those contributing most to societies' material and cultural prosperity. It is true that the business men and bankers that made Western Civilization what it is became wealthy, and those Jews among them became wealthy as well, but that wealth was produced by creating what was of value to individuals who freely chose to use the products and services they provided. They became rich by enriching all of society. As unbelievable as it may seem, it is the Jews contribution to Western civilization that is one of the primary reasons for their persecution.

In her December 17, 1961, lecture given at The Ford Hall Forum, Boston, Ayn Rand said:

"If a small group of men were always regarded as guilty, in any clash with any other group, regardless of the issues or circumstances involved, would you call it persecution? If this group were always made to pay for the sins, errors, or failures of any other group, would you call that persecution? If this group had to live under a silent reign of terror, under special laws, from which all other people were immune, laws which the accused could not grasp or define in advance and which the accuser could interpret in any way he pleased—would you call that persecution? If this group were penalized, not for its faults, but for its virtues, not for its incompetence, but for its ability, not for its failures, but for its achievements, and the greater the achievement, the greater the penalty—would you call that persecution?" [Capitalism, the Unknown Idea, "America's Persecuted Minority: Big Business"]

Any Rand was not talking about Jews, she was talking about "American businessmen." Nevertheless, the connection between the persecution of American businessmen and the Jews is quite clear. She says:

"Whenever, in any era, culture, or society, you encounter the phenomenon of prejudice, injustice, persecution, and blind, unreasoning hatred directed at some minority group—look for the gang that has something to gain from that persecution, look for those who have a vested interest in the destruction of these particular sacrificial victims. Invariably, you will find that the persecuted minority serves as a scapegoat for some movement that does not want the nature of its own goals to be known. Every movement that seeks to enslave a country, every dictatorship or potential dictatorship, needs some minority group as a scapegoat which it can blame for the nation's troubles and use as a justification of its own demands for dictatorial powers. In Soviet Russia, the scapegoat was the bourgeoisie; in Nazi Germany, it was the Jewish people; in America, it is the businessmen." [Capitalism, the Unknown Idea, "America's Persecuted Minority: Big Business"]

What is it the bourgeoisie in Russia, the Jews in Nazi Germany, and American businessmen have in common? They are the creators of wealth, the merchants, the manufacturers, the bankers and financiers that are the economic heart of their respective nations. It might seem strange that they, of all classes, would be singled out for such prejudicial hatred and persecution, but once the nature of those who hate them is identified, it becomes clear why they are always going to be the persecuted minority.

I'll begin that identification by looking at where anti-Semitism is found in the next article in this series.