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.

Jews, Intellectualism, and Anti-Capitalism 

A second simple explanation is that the Jewish anti-capitalist mentality simply reflects the general tendency for intellectuals to be anti-capitalist plus the disproportionate representation of Jews among intellectuals. For example, Nathan Glazer writes, “The general explanations for this phenomenon [the attachment of the major part of the intelligentsia to the Left] are well known. Freed from the restraints of conservative and traditional thinking, the intelligentsia finds it easier to accept revolutionary thinking, which attacks the established order of things in politics, religion, culture, and society . . . . Whatever it is that affected intellectuals, also affected Jews.”^[11] Glazer goes on, however, to qualify greatly this interpretation by citing some factors that affected Jews differently from other intellectuals. This explanation undoubtedly has more validity than Fuchs’ simple-minded identification of anti-capitalism with Jewish religion and culture. As the West German example quoted earlier suggests, non-Jewish intellectuals are capable of becoming dominantly collectivist. And there is no doubt that the intellectual forces Glazer refers to affected Jewish intellectuals along with non-Jewish. However, the explanation seems highly incomplete in two respects. First, my impression is that a far larger percentage of Jewish intellectuals than of non-Jewish have been collectivist. Second, and more important, this explanation does not account for the different attitudes of the great mass of Jews and non-Jews who are not intellectual. To explain this difference we must dig deeper. 

A third simple explanation that doubtless has some validity is the natural tendency for all of us to take the good things that happen to us for granted but to attribute any bad things to evil men or an evil system. Competitive capitalism has permitted Jews to flourish economically and culturally because it has prevented anti- Se-mites from imposing their values on others, and from discriminating against Jews at other people’s expense. But the other side of that coin is that it protects anti- Semites from having other people’s values imposed on them. It protects them in the expression of their anti- Semitism in their personal behavior so long as they do it at their own expense. Competitive capitalism has therefore not eliminated social anti-Semitism. The free competition of ideas that is the natural companion of competitive capitalism might in time lead to a change in tastes and values that would eliminate social anti- Semitism but there is no assurance that it will. As the New Testament put it, “In my Father’s house are many mansions.” 

No doubt, Jews have reacted in part by attributing the residual discrimination to “the System.” But that hardly explains why the part of the “system” to which the discrimination has been attributed is “capitalism.” Why not, in nineteenth-century Britain, to the established church and the aristocracy; in nineteenth- and twentieth-century Germany, to the bureaucracy; and in twentieth-century U.S., to the social rather than economic establishment. After all, Jewish history surely offers more than ample evidence that anti-Semitism has no special connection with a market economy. So this explanation, too, is unsatisfactory. 

I come now to two explanations that seem to me much more fundamental. 

Judaism and Secularism 

The first explanation, which has to do with the particular circumstances in Europe in the nineteenth century, I owe to the extremely perceptive analysis of Werner Cohn in his unpublished Ph.D. dissertation on the “Sources of American Jewish Liberalism.” Cohn points out that: 

Beginning with the era of the French revolution, the European political spectrum became divided into a “Left” and a “Right” along an axis that involved the issue of secularism. The Right (conservative, Monarchical, “clerical”) maintained that there must be a place for the church in the public order; the Left (Democratic, Liberal, Radical) held that there can be no (public) Church at all . . . .The axis separating left from right also formed a natural boundary for the pale of Jewish political participation. It was the Left, with its new secular concept of citizenship, that had accomplished the Emancipation, and it was only the Left that could see a place for the Jews in public life. No Conservative party in Europe—from the bitterly hostile Monarchists in Russia through the strongly Christian “noines” in France to the amiable Tories in England—could reconcile itself to full Jewish political equality. Jews supported the Left, then, not only because they had become unshakeable partisans of the Emancipation, but also because they had no choice; as far as the internal life of the Right was concerned, the Emancipation had never taken place, and the Christian religion remained a prerequisite for political participation.

Note in this connection that the only major leaders of Conservative parties of Jewish or-igin—Benjamin Disraeli in England, Friedrich Julius Stahl in Germany—were both professing Christians (Disraeli’s father was convened, Stahl was baptized at age 19).

Cohn goes on to distinguish between two strands of Leftism: “rational” or “intellectual” and “radical.” He remarks that “Radical leftism . . . was the only political movement since the days of the Roman empire in which Jews could become the intellectual brethren of non-Jews . . . while intellectual Leftism was Christian at least in the sense of recognizing the distinction between ‘religious’ and ‘secular,’ radical Leftism—eschatological socialism in particular—began to constitute itself as a new religious faith in which no separation between the sacred and the profane was tolerated . . . [Intellectual-Leftism] offered [the Jews] a wholly rational and superficial admission to the larger society, [radical Leftism], a measure of real spiritual community.”

I share Glazer’s comment on these passages: “I do not think anyone has come closer to the heart of the matter than has the author of these paragraphs.”

Cohn’s argument goes far to explain the important role that Jewish intellectuals played in the Marxist and socialist movement, the almost universal acceptance of “democratic socialism” by the European Jews in the Zionist movement, particularly those who emigrated to Palestine, and the socialist sentiment among the German Jewish immigrants to the United States of the mid-nineteenth century and the much larger flood of East European Jews at the turn of the century.

Yet by itself it is hard to accept Cohn’s point as the whole explanation for the anti-capitalist mentality of the Jews. In the United States, from the very beginning, the separation of church and state was accepted constitutional doctrine. True, the initial upper class was Christian and Protestant, but that was true of the population as a whole. Indeed, the elite Puritan element was, if anything, pro-Semitic. As Sombart points out in reconciling his thesis about the role of Jews in capitalist development with Max Weber’s about the role of the Protestant Ethic in capitalist development, the Protestants, and the Puritans especially, went back to the Old Testament for their religious inspiration and patterned themselves on the ancient Hebrews. Sombart asserts: “Puritanism is Judaism.”^[12] Cohn too emphasizes this phenomenon, pointing to Puritan tolerance toward Jews in the colonial era, despite their general intolerance toward other religious sects.^[13]

To come down to more recent times in the United States, Theodore Roosevelt was highly popular among the Jews partly because of his willingness to object publicly to Russian pogroms. Outside of the closely knit socialist community in New York most Jews probably were Republicans rather than Democrats until the 1920s, when first A1 Smith and then Franklin Delano Roosevelt produced a massive shift to the Democrats from both the Right and the Left. The shift from the Left betokened a weakening of the European influence, rather than being a manifestation of it. Yet despite that weakening influence, the American Jewish community, which now consists largely of second and third and later generation Americans, retains its dominant leftish cast.

The final explanation that suggests itself is complementary to Cohn’s yet not at all identical with it. To justify itself by more than the reference to the alleged role of the Jews in Christ’s crucifixion, anti-Semitism produced a stereotype of a Jew as primarily interested in money, as a merchant or moneylender who put commercial interests ahead of human values, who was money-grasping, cunning, selfish and greedy, who would “jew” you down and insist on his pound of flesh. Jews could have reacted to this stereotype in two ways: first, by accepting the description but rejecting the values that regarded these traits as blameworthy; secondly, by accepting the values but rejecting the description. Had they adopted the first way, they could have stressed the benefits rendered by the merchant and by the moneylender—recalling perhaps Bentham’s comment that “the business of a money-lender . . . has no where nor at any time been a popular one. Those who have the resolution to sacrifice the present to the future, are natural objects of envy to those who have sacrificed the future to the present. The children who have eat their cake are the natural enemies of the children who have theirs. While the money is hoped for, and for a short time after it has been received, he who lends it is a friend and benefactor: by the time the money is spent, and the evil hour of reckoning is come, the benefactor is found to have changed his nature, and to have put on the tyrant and the oppressor. It is oppression for a man to reclaim his own money; it is none to keep it from him.”^[14]

Similarly, Jews could have noted that one man’s selfishness is another man’s self reliance; one man’s cunning, another’s wisdom; one man’s greed, another’s prudence.

But this reaction was hardly to be expected. None of us can escape the intellectual air we breathe, can fail to be influenced by the values of the community in which we live. As Jews left their closed ghettoes and shtetls and came into contact with the rest of the world, they inevitably came to accept and share the values of that world, the values that looked down on the “merely” commercial, that regarded money-lenders with contempt. They were led to say to themselves: if Jews are like that, the anti-Se-mites are right.

The other possible reaction is to deny that Jews are like the stereotype, to set out to persuade oneself, and incidentally the anti-Se-mites, that far from being money-grabbing, selfish and heartless, Jews are really public spirited, generous, and concerned with ideals rather than material goods. How better to do so than to attack the market with its reliance on monetary values and impersonal transactions and to glorify the political process, to take as an ideal a state run by well-meaning people for the benefit of their fellow men?

7.   Op. cit.,p. 197.

8.   Op. cit., pp. 153,205, 209.

9.   Ibid., pp. 216, 221,222, 248.

10.   Nathan Glazer, American Judaism, pp, 135, 136, 139.

11.   The Social Basis of American Communism. pp. 166-167.

12.   Op. cit., g. 249.

13.   However, according to Abba Eban, “Jews were refused admittance into Massachusetts and Connecticut by the Puritans whose idea of religious liberty was linked to their own brand of faith. However, in liberal Maryland and in Rhode Island, where freedom of conscience was an unshakable principle, they found acceptance.” My People (New York: Behrman House, Inc., 1968).

14.   Jeremy Bentham, In Defense of Usury (1787).

PETERSON: Well, let me ask you how you would cope with this problem, Dr. Friedman. The people decided that they wanted cool air, and there was tremendous need, and so we built a huge industry, the air conditioning industry, hundreds of thousands of jobs, tremendous earnings opportunities and nearly all of us now have air […]

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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.”^[7] 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. 

Werner Sombart 

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.”^[8] 

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.”^[9] 

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.”^[10] 

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