Auschwitz meant that six million Jews were killed, and thrown on the waste-heap of Europe, for what they were considered: money-Jews. Finance capital and the banks, the hard core of the system of imperialism and capitalism, had turned the hatred of men against money and exploitation, and against the Jews. . . . Antisemitism is really a hatred of capitalism.
Ulrike Meinhof, left-wing German terrorist of the 1970s1
Capitalism and the market economy encourage racial, ethnic, and religious tolerance, while supporting a plurality of diverse lifestyles and customs. Heavily regulated or socialist economies, in contrast, tend to breed intolerance and ethnic persecution. Socialism leads to low rates of economic growth, disputes over resource use, and concentrated political power-all conditions which encourage conflict rather than cooperation. Ethnic and religious minorities usually do poorly when political coercion is prevalent. Economic collapsesusually associated with interventionismworsen the problem by unleashing the destructive psychological forces of envy and resentment, which feed prejudice and persecution.
While discrimination is present in societies of all kinds, discriminators must pay pecuniary costs for indulging their prejudices in a market setting. Even the prejudiced usually will trade with minorities; bigots attempt to oppress minorities by socializing the costs through government action, but bigots usually are less willing to bear these costs themselves. Repeated commercial interactions also increase the social familiarity of customs or lifestyles that otherwise might be found unusual or alien. Sustained economic growth alleviates political and social tensions by creating more for everybody.
The history of the Jewish people illustrates the relatively favorable position of minorities in a market setting. Hostility toward trade and commerce has often fueled hostility toward Jews, and vice versa. The societies most congenial to commercial life for their time-Renaissance Italy, the growing capitalist economies of England and the Netherlands in the seventeenth century, and the United States-typically have shown the most toleration for Jews. Ellis Rivkin, in his neglected masterpiece, The Shaping of Jewish History: A Radical New Interpretation, wrote:
Since World War II Jews and Judaism have been liberated in every country and territory where capitalism has been restored to vigorous growth-and this includes Germany. By contrast, wherever anticapitalism or precapitalism has prevailed the status of Jews and Judaism has either undergone deterioration or is highly precarious. Thus at this very moment the country where developing global capitalism is most advanced, the United States, accords Jews and Judaism a freedom that is known nowhere else in the world and that was never known in the past. It is a freedom that is not matched even in Israel. . . . By contrast, in the Soviet Union, the citadel of anticapitalism, the Jews are cowed by anti-Semitism, threatened by extinction, and barred from access to their God.2
The socialist origins of modern anti-Semitism illustrate the link between statism and the persecution of minorities. Anti-Semitism as a formal, intellectual movement arose in the middle of the nineteenth century, when Jewish conspiracy theories grew in popularity. German writers picked up on earlier anti-Enlightenment theories of a Judeo-Masonic conspiracy to rule the world. During the French Revolution, the Jews, along with the Masons, were identified as forces for liberalism, secularism, and capitalism. German writers quickly found the Jews to be a more popular target than the Masons, perhaps because they were more visible or more different. The originally Judeo-Masonic theories eventually discarded the other conspirators, such as the Templars and the Illuminati, and focused on the Jews.
Anti-Semitism in Nineteenth-Century Germany and Austria
The anti-Jewish creed was formalized by Wilhelm Marr, the German writer who coined the term anti-Semitic. In 1879 Marr published his book The Victory of Judaism over Germandom, which went through twelve editions in six years. He also founded the Antisemitic Journal, and started an Antisemitic League. Marr idolized Tsarist Russia, and earlier in his career he had been a radical socialist. The new anti-Semites who followed Marr expanded the medieval attacks on Jewish traders and usurers and developed them into a full-scale economic critique. The Jews who provoked the most anger were those who embraced cosmopolitan, Enlightenment values, and who achieved economic success.
In the second half of the nineteenth century, Germany became the first country to develop systematic anti-Semitic political and intellectual movements. In Germany, Adolf Stockers Christian Social Party (1878-1885) combined anti-Semitism with left-wing, reformist legislation. The party attacked laissez-faire economics and the Jews as part of the same liberal plague. Stockers movement synthesized medieval anti-Semitism, based in religion, and modern anti-Semitism, based in racism and socialist economics. He once wrote: I see in unrestrained capitalism the evil of our epoch and am naturally also an opponent of modern Judaism on account of my socio-political views. Stocker had revered the Prussian aristocracy since his youth.
Georg Ritter von Schonerer led the left-wing, anti-Semitic movement in Austria. Schonerers German Liberal Party, developed a lower-middle-class, anti-Semitic, anti-capitalistic platform in the 1880s. Schonerer directed his anti-Semitism at the economic activity of the Rothschilds; he advocated nationalization of their railroad assets. Later, he broadened his charges to attack Jewish merchants more generally. Hitler was an avid admirer of Schonerer, and as a young man even hung Schonerers slogans over his bed.
The growing nineteenth-century socialist movements did little to stem the anti-Semitic tide and often explicitly promoted anti-Semitism. The initial link between socialism and anti-Semitism arose through intellectual affinity. Throughout the nineteenth century, the socialist critique of capitalism and the anti-Semitic critique used the same arguments. Many socialists considered anti-Semitism to be a way station on the path toward a more consistent socialist viewpoint. The very first systematic socialist philosophers, the French Utopians of the early nineteenth century, had implicated the Jews in their critique of capitalism. French Jewry was highly commercial, financial, and capitalistic. Proudhon and Fourier, who stressed the abolition of usury, saved their most vitriolic anti-Semitic tirades for Jewish moneylenders.
Karl Marx continued the anti-Jewish polemics of the socialists. The historical association between Jews, private property, and commerce led to his well-known anti-Semitic diatribes. Marx, who sought to reconstruct society according to his master plan, detested the particularistic nature of Jewish religion and custom. Some of Marxs followers, such as Duhring and Lassalle, used anti-Semitism as a means of introducing anti-capitalist doctrine. They believed that if the public could be convinced to hate Jewish capitalists, the public would eventually come to hate non-Jewish capitalists as well.
A widely circulated nineteenth-century witticism described anti-Semitism as the socialism of fools [der Sozialismus des bloden Mannes]. It was widely recognized that the anti-Semites shared the same gripes as the socialists; the anti-Semites simply chose too narrow a target. The socialists happily accepted the spirit of anti-Semitism, provided the target was widened to the entire capitalist class. More recently, the historian Paul Johnson has noted with irony that socialism has served as the anti-Semitism of the intellectuals.3
Even when socialists opposed anti-Semitism, as later came to pass for tactical reasons, European socialist parties failed to provide effective opposition to anti-Semitic trends. Most socialists, with their dislike of capitalism, were unwilling to defend the economic activities of Jews. Socialism pretended to be a revolutionary, liberal movement but in fact embraced the conservative doctrine of concentrated state power. Most socialists supported World War I, which provided a tremendous boost to anti-Semitism, without hesitation. Later, the Nazi party, the most dedicated enemy of the Jews, was a national socialist party from the beginning.4
The actual practice of socialism has not been kind to its religious and ethnic minorities, including Jews. The Soviet government adopted consistently anti-Semitic policies. Lenin was strongly opposed to anti-Semitism, but Soviet policy reversed shortly after his death. Totalitarian states, with their inevitable economic failures, eventually need scapegoats. Economic performance rarely matches the official promises, and the subsequent privations feed social resentment; one person gains only at the expense of another. The necessities of totalitarian government, in time, override whatever nonracist feelings might be held by the leaders, and create strong pressures for political support of racism. Control over the press and rights of speech makes racist feeling relatively easy to whip up.
Soviet anti-Semitism flourished after the Second World War, as the Communist leaders were unable to resist the target that had proven so successful for Hitler. In 1953 Stalin alleged the existence of a Doctors Plot, masterminded by Jews, to poison the top Soviet leadership. Stalin died before a trial was called, but he had been planning to forcibly deport two million Jews to Siberia. The economic crimes executions of the early 1960s were directed largely against Jews.
Textbooks were rewritten either to remove the Jewish role in history, or to provide negative stereotypes of Jews. Government texts dealing with Germany and World War II mentioned neither the Jews nor the Holocaust. The Russian pogroms were reinterpreted as justified retribution for the capitalistic excesses of the Jews. The Soviet government attacked all forms of religion, but Judaism most of all.
Eastern Germany continued the earlier Nazi polemics against Jews, substituting the words Zionist or Israel for Jew, and referring to the salutary effects of progressive socialist forces, a scant difference from the earlier Nazi terminology of national socialism. Many former Nazi journalists were hired to write these anti-Zionist polemics. Similar trends came to pass throughout eastern Europe. In the early 1950s, thirteen leaders in the Czech Communist party (ten were Jewish), were accused of being Zionists, and were hanged. In 1968 the Polish media spent months debating the unmasking of Zionists in Poland, although Jews comprised less than one-fifteenth of one percent of the population. The anti-Zionist campaign was accompanied by demonstrations, arrests, surveillance, police persecution, and other typical methods of totalitarian oppression.
The contrast with the more capitalistic United States is striking. The United States started off with few Jews but attracted many Jewish immigrants with its relatively free economy and atmosphere of relative tolerance. By the 1920s, three of the four cities with the most Jews were located in the United States. New York had the largest number of Jews, and Chicago and Philadelphia were third and fourth (Budapest was second). Today Jews account for only two percent of the American population, but they account for half of the billionaires. The history of the Jews provides a stark illustration of the differences between capitalism and socialism.
1. My translation draws upon that of Paul Lawrence Rose, Revolutionary Antisemitism in Germany: From Kant to Wagner (Princeton, N.J.: Princeton University Press, 1990), p. 304.
2. Ellis Rivkin, The Shaping of Jewish History: A Radical New Interpretation (New York: Charles Scribners Sons, 1971), pp. 239-240.
3. Paul Johnson, A History of the Jews (New York: HarperCollins, 1987), p. 353.
4. European socialist attitudes toward anti-Semitism shifted in the last decade of the nineteenth century. At this time the socialists realized several truths. First, anti-Semitism was a way station to state control, but the right-wing and fascist parties were likely to capture the benefits. Second, the socialists realized that the anti-Semites (like Judaism itself, in socialist eyes) had become precisely the kind of particularist sympathy that held back the more universalist socialist ideal. These points became clearest in Germany, where most leftists had abandoned anti-Semitism by the early twentieth century. The French left, in contrast, was much slower to repudiate the ideology of racism, perhaps because French politics never polarized the way German politics did.
|Tyler Cowen is a Research Fellow at The Independent Institute, Director of the Mercatus Center and Holbert C. Harris Chair of Economics at George Mason University, and co-editor (with Eric Crampton) of the book, Market Failure or Success: The New Debate.|
This article is reprinted with permission from The Freeman, January 1997. © Copyright 1997, the Foundation for Economic Education.