Milton Friedman on the American Economy (5 of 6)
Uploaded by donotswallow on Aug 9, 2009
THE OPEN MIND
Host: Richard D. Heffner
Guest: Milton Friedman
Title: A Nobel Laureate on the American Economy VTR: 5/31/77
Below is a part of the series on an article by Milton Friedman called “Capitalism and the Jews” published in 1972.
Milton Friedman, recipient of the 1976 Nobel Memorial Prize in Economic Science, is a Senior Research Fellow at the Hoover Institution. This article is reprinted with the permission of Encounter and The Fraser Institute.
“Capitalism and the Jews” was originally presented as a lecture before the Mont Pelerin Society in 1972. It subsequently was published in England and Canada and appears here without significant revision.
IV. Why the Anti-capitalist Mentality?
How can we reconcile my two propositions? Why is it that despite the historical record of the benefits of competitive capitalism to the Jews, despite the intellectual explanation of this phenomenon that is implicit or explicit in all liberal literature from at least Adam Smith on, the Jews have been disproportionately anti-cap- italist?
We may start by considering some simple yet inadequate answers. Lawrence Fuchs, in a highly superficial analysis of The Political Be-havior of American Jews, argues that the anticapitalism of the Jews is a direct reflection of values derived from the Jewish religion and culture. He goes so far as to say, “if the communist movement is in a sense a Christian heresy, it is also Jewish orthodoxy—not the totalitarian or revolutionary aspects of world communism, but the quest for social justice through social action.” Needless to say—a point I shall return to later in a different con-nection—Fuchs himself is a liberal in the American sense. He regards the political liberalism of the Jews in this sense as a virtue, and hence is quick to regard such liberalism as a legitimate offspring of the Jewish values of learning, charity, and concern with the pleasures of this world. He never even recognizes, let alone discusses, the key question whether the ethical end of “social justice through social action” is consistent with the political means of centralized government.
This explanation can be dismissed out-of-hand. Jewish religion and culture date back over two millennia; the Jewish opposition to capitalism and attachment to socialism, at the most, less than two centuries. Only after the Enlightenment, and then primarily among the Jews who were breaking away from the Jewish religion, did this political stance emerge. Werner Sombart, in his important and controversial book, The Jews and Modern Capitalism, first published in 1911, makes a far stronger case that Jewish religion and culture implied a capitalist outlook than Fuchs does that it implied a socialist outlook. Wrote Som-bart, “throughout the centuries, the Jews championed the cause of individual liberty in economic activity against the dominating view of the time. The individual was not to be hampered by regulations of any sort. I think that the Jewish religion has the same leading ideas as capitalism . . . . The whole religious system is in reality nothing but a contract between Jehovah and his chosen people . . . . God promises something and gives something, and the righteous must give Him something in return. Indeed, there was no community of interest between God and man which could not be expressed in these terms—that man performs some duty enjoined by the Torch and receives from God a quid pro quo.”
Sombart goes on to discuss the attitude toward riches and poverty in the Old and the New Testament. “You will find,” he writes, “a few passages [in the Old Testament and the Talmud] wherein poverty is lauded as something nobler and higher than riches. But on the other hand you will come across hundreds of passages in which riches are called the blessing of the Lord, and only their misuse or their dangers warned against.” By contrast, Sombart refers to the famous passage in the New Testament that “it is easier for a Camel to go through a needle’s eye than for a rich man to enter into the Kingdom of God” and remarks, “as often as riches are lauded in the Old Testament, they are damned in the New . . . . The religion of the Christians stands in the way of their economic activities . . . . The Jews were never faced with this hindrance.” He concludes, “Free trade and industrial freedom were in accordance with Jewish law, and therefore in accordance with God’s will.”
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, 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.
A more balanced judgment than either Fuchs’ or Sombart’s with which I am in full accord is rendered by Nathan Glazer, who writes, “It is hard to see direct links with Jewish tradition in these attitudes; . . . One thing is sure: it is an enormous oversimplification to say Jews in Eastern Europe became socialists and anarchists because the Hebrew prophets had denounced injustice twenty-five hundred years ago . . . . The Jewish religious tradition probably does dispose Jews, in some subtle way, toward liberalism and radicalism, but it is not easy to see in present-day Jewish social attitudes the heritage of the Jewish religion.”