This article is arranged according to the following outline:First Temple Period
Exile and Restoration
Second Temple Period
Muslim Middle Ages
Early Modern Period
sephardim and ashkenazim
patterns of employment
resource endowment and sources of income
attitudes of and relations with the society at large
role of the jewish community organization
social stratification within the jewish community
penetration into industrial employment
maintenance of positions in the service sector of the economy
employment in the agricultural sector
the united states
Reconstruction of ancient Jewish economic conditions is greatly hampered by the paucity of available documentation. The main source of information still is the Bible; but its general orientation is either normative in the legal sections, exhortatory in the prophetic enunciations, or romanticizing in some of the historical descriptions. Thus a great deal may be learned of what the leaders believed the economic conditions ought to be rather than what they really were, the Sollen rather than the Sein. Archaeology, on the other hand, which has greatly enriched our knowledge about such realia as the utensils employed in agricultural and industrial production, the size and shape of buildings, sudden devastations by earthquakes or wars, and the like, has proved wholly inadequate in reflecting the daily economic relationships or the dynamics of economic evolution. More informative have been the documents found in the archaeological mounds, such as the el-Amarna and the Lachish Letters and the Samarian ostraca. But these documents are too few and limited to certain localities which may not warrant generalization from them to other areas and periods. Much can also be learned, however, from the vaster accumulation of materials in the neighboring civilizations (including the more recently explored Mari, Nuzi, and Ugaritic collections), provided one does not lose sight of the great differences prevailing between the respective countries and the many unique features which characterized the economy of ancient Israel as also Israelite society and culture at large. Utilizing these and other sources, as well as the combined results of many generations of intensive research by scholars, often of high competence, one may perhaps obtain some approximation of the actual economic evolution of ancient Israel after its entry into Canaan and the formation of its monarchy.
One conclusion which seems clearly to emerge from the state of knowledge today is that we must abandon the long-held assumption of both traditionalists and critical scholars that the historic evolution of ancient Israel must be explained in terms of a gradual emergence of a nomadic people into an agricultural society which was later combined with an urban civilization characterized by an increasing division of labor. This evolution, it was believed, required several centuries of slow growth. Such gradualism was used to explain not only the changing economic trends but also the general societal and religious transformations; it supposedly proved helpful even in the dating of biblical sources. It is now known, however, that the ancient Middle East, including the land of Canaan, had a fairly advanced civilization more than 2,000 years before the appearance of Israel on the historical scene. Even according to the biblical narratives, the first patriarch, Abraham – now widely accepted as an historic personality of prime magnitude – combined in his career an intimate acquaintance with his native Babylonian city of *Ur (the excavation of which has revealed its rich and ramified social stratification at the beginning of the second millennium b.c.e.) with that of Egypt, which he visited for a time and of Canaan, in which he settled. The segment of the Canaanite people which appears under the name of Phoenicians was soon drawn into the orbit of a maritime empire extending all the way to Spain. Hence even a primitive, nomadic tribe conquering one Canaanite city after another could quickly learn its methods of production and adopt its mode of living, skipping many stages of the accepted economic evolution.
It may be assumed, therefore, that very early Israel replaced nomadic cattle raising by agriculture as its dominant source of livelihood. Settlers in the formerly Canaanite cities also turned to crafts and even commerce as their primary occupation. With the establishment of a monarchy and the building of the Temple in Jerusalem there also arose a substantial royal and priestly bureaucracy. The new capitals of Jerusalem and Samaria, especially, revealed many characteristics of major urban centers where upper classes indulged in considerable luxuries in dwellings and personal attire, such as are described by Isaiah in his censure of the ladies of Jerusalem (Isa. 3:18ff.). At the same time, the old occupations of cattle raising and even the still more "primitive" activities of fishing and hunting – the latter was never a mere sport even among the Israelite kings – were never completely given up. They flourished particularly in the peripheral areas of the south and Transjordan.
This great diversity of pursuits was aided by both climatic and hydrographic conditions in the country. Despite its relatively small size, it has been found that ancient Palestine consisted of no less than 40 distinct geographic units, each with a different set of natural conditions, which not only affected the type of production but also colored the entire system of political and social life by promoting local independence, even tribalism. That is also why throughout the First Temple period Israel continued to share its land with Edomites, Moabites, Ammonites, Philistines, and some Arameans, while, beginning with a sort of "amphictyonic" alliance, its own 12 tribes gradually built up whatever unity existed later in their divided kingdom.
Although the country was dotted with many localities called cities (arim), these settlements did not resemble, as has often been assumed, the medieval and modern cities in being primarily centers of industry and commerce. While no less than 400 such "cities" existed in the territory of Israel and Judah, their population, as a rule, numbered no more than 1,000 persons and consisted principally of farmers who had banded together to live behind city walls for protection against raiders. Their livelihood was derived from cultivating their fields, vineyards, and orchards, for the most part located outside the city walls, to which they proceeded in the morning and from which they returned in the evening (note this sequence in Ps. 121:8; ii Kings 19:27). Beyond their fields and vineyards there also were some pastures where the farmers could maintain some sheep and goats, particularly for the purpose of producing milk.
Nutrition of the ancient Palestinian population was about equally divided between grain and fruit. Barley was a particularly important staple which, if the prices are deduced from better known Babylonian parallels, was at times more in demand, and even more costly, than dates. Among the fruits grapes, dates, olives, and figs loomed very large in the popular diet. Meat was always considered a luxury and was consumed by the majority of the population only on festive occasions. The cultivation of vineyards and orchards often required intensive irrigation – already practiced in the pre-Israelitic period – and years of waiting for actual production, further aggravated by certain ritualistic taboos and imposts (orlah, kilayim, bikkurim). This system presupposed investment of much capital and human labor. But the ultimate returns were quite rewarding in produce yielded by small plots of land. The quality of some ancient Israel fruits seems to have been as high as that of similar products of the Second Templeera (see below).
Industrial production, on the other hand, was usually in the hands of artisans who were often organized in clans or guilds or both. We know of villages dedicated to single crafts (i Chron. 4:14). Entire families or clans served as scribes. While there is no evidence of guild monopolies, it appears that admission to certain crafts depended on a fairly long apprenticeship and hence was beyond the reach of ordinary laborers. At the same time we also learn about royal enterprises employing, for instance, numerous potters. The frequent occurrence of potsherds bearing the imprint of la-melekh ("to the king") suggests that it might have been a trademark of royal potteries. Some scholars, however, interpret that mark as a fiscal receipt for a certain quantity of wine or oil delivered to the royal treasury in payment of taxes. No final decision can be made on this score, since the entire subject of ancient Jewish taxation is shrouded in obscurity, deepened by many unresolved controversies.
A certain number of Israelites also entered mercantile occupations. Some of them did this as "the king's merchants," especially in the days of King Solomon (i Kings 10:28). At that time the international trade of ancient Israel made rapid strides both because it was fostered by the concentrated royal power and because, ever since David's conquest of Edomite territory, Israel had gained access to Ezion-Geber-Eloth on the Red Sea (i Kings 9:26). The new open route to the Indian Ocean made Israel a very welcome ally to Hiram, king of Tyre. Even earlier some northern Israelites seem to have hired themselves out as sailors to Phoenician shipowners (this seems to be the meaning of "Dan, why doth he sojourn by the ships?" in the Song of Deborah; Judg. 5:17). But now the two kings could collaborate in sending ships both to the Indian Ocean and the western Mediterranean where the Phoenicians had long been exploiting the copper mines of Sardinia and were ultimately to establish a colony in Tartessus, Spain. A combined Phoenician-Israelite expedition to Ophir, probably located on the west coast of India or even further east, was a landmark in the history of eastern navigation.
This condition did not last, however. After Solomon's death and the ensuing partition of the country into two kingdoms, Israel lost its overlordship over the Edomites, not to regain it except for a short time under Jehoshaphat. Nor could Israel any longer exploit the copper mines and use the refinery built by Solomon in Ezion-Geber. These losses contributed to the overall decline in both the commercial and political activities of Northern Israel and Judah, which often became tributary to foreign monarchs and occasionally indulged in internecine struggles. As a result, most of the country's mercantile activities were now conducted by strangers, mainly Phoenicians and other Canaanites. The term kena'ani now became a synonym for merchant in popular parlance.
All through that period Israelite commerce was abetted by a more or less stable system of weights and measures which the country shared with other Middle Eastern nations. There was also an increasing demand for money to facilitate mercantile transactions, and even in his day Abraham purchased the cave of Machpelah for "four hundred shekels of silver, current money with the merchant" (Gen. 23:16). At first the currency circulated in the form of silver bars which had to be weighed, but soon their weight was standardized and officially marked. By the end of the First Temple era regular coins, whether first introduced in Lydia or in Babylonia, gained the ascendancy. Curiously, gold never became the main instrument of exchange. Down to the Roman period it was often considered a mere commodity, valued at so-and-so many silver shekels, although its price was steadily gaining.
Another effect of the political weakness of the two kingdoms was the relative absence of *slaves from the productive processes in the country. Even Solomon's ambitious public works, including the building of the royal palace and the Temple, required more manpower than could be supplied by slaves. Hence the royal imposition of corvée labor on hundreds of thousands of free Israelites. After Solomon's death the supply of unfree labor must have further dried up, since the country now was rarely victorious in battle and thus could recruit only a small number of slaves from among prisoners of war. On the other hand, to purchase slaves in the Phoenician slave market became increasingly unremunerative. As early as the early days of the Book of the Covenant (ninth century or before) the indemnity for a male or female slave was set at 30 shekels of silver (Ex. 21:32). Later on the price seems to have gone up to 50 or more shekels. With the prevailing high rates of interest throughout the ancient Middle East, which ranged from a minimum of 20–25% on cash loans and of 33⅓% on grain loans, up to 100% and more for more risky credit or in periods of scarcity of capital, it simply did not pay for a landowner or craftsman to acquire a slave and maintain him to the end of his life while free day laborers were readily available at very low cost. "Hebrew" slaves probably originated only from debt bondage or a condemned criminal's inability to pay the fine. But the legal restrictions on the treatment of Hebrew slaves, the enforced manumission at the end of a six-year term, and the (probably utopian) demand of the Deuteronomist that a manumitted slave should be provided by his master with means for earning a living (Deut. 15:13–14), made the possession of a Hebrew slave very irksome. It was, therefore, not for productive purposes but rather for domestic service or concubinage that a few slaves were acquired by better situated masters. However, unemployment among free labor was often so great that one or another Hebrew slave may have chosen voluntarily to forego freedom and stay on after the expiration of the six-year term.
Surplus of free labor must have grown toward the end of the First Temple period as a result of the sharp inequalities which the prophets denounced. At that time many small farmers fell into debt and, unable to earn enough to pay the high rates of interest (probably collected under some subterfuge to avoid the even more far-reaching laws against usury), lost their land. Isaiah was not alone in exclaiming: "Woe unto them that join house to house, that lay field to field, till there be no room and ye be made to dwell alone in the midst of the land" (5:8; see also Hos1. 5:10; Micah 2:1–2). The ensuing social unrest gave rise to the immortal calls for social justice by the great Israelite prophets. It also stimulated much idealistic social legislation (see below), the practical implementation of which left much to be desired. The rumblings of discontent among the masses helped to undermine the existing social order, particularly in Northern Israel with its constant revolts and assassinations of reigning monarchs. Of its ten ruling dynasties in the relatively short period of 931–721 b.c.e. all but two were replaced after the reign of one or two kings. Such instability was also ruinous for the country's economy and helped to bring about the disastrous fall of Samaria in 721 and of Jerusalem in 586 b.c.e. which spelled the end of the First Temple period.
The fall of Jerusalem marked a turning point also in the economic history of the Jews. Not only was Palestine severely devastated – the reservations voiced by some modern scholars were disproved by the widespread desolation evidenced by archaeological diggings – but a large segment, perhaps the majority, of the Jewish population either perished during the war, was deported by the Babylonians, or emigrated voluntarily. The removal of the most active members of the community, including the royal house, the priests, the great landowners, and the artisans, further aggravated the effects of the depopulation and material destruction. Like the Philistine overlords of the early Israelite tribes, many ancient conquerors saw in the exile of smiths, the main suppliers of weapons as well as of industrial and agricultural tools, the best method of disarming the conquered population. Deprived of their leadership, the Israelites who remained behind were prone to adopt some of the more primitive ways of life and thought of their pagan neighbors.
On the other hand, the exiles to Babylonia joined the ever-growing Jewish dispersion. There are reasons to believe that a number of those deported from Northern Israel by the Assyrians in 733–719 b.c.e. had continued to profess their ancestral religion on the foreign soil. Their descendants, as well as those of the Judeans deported by Sennacherib in 702, now joined the groups of the new arrivals to form a powerful new community. (Only thus can we explain why those returning from the exile half a century later included descendants of families who had lived in Northern Israelite localities before the fall of Samaria; see Ezra 2:2ff. and the commentaries thereon.) They developed a new center in and around Nippur, the second largest city in Babylonia, which was located on the "river" Chebar, or rather the canal connecting the Euphrates and the Tigris. Here, both the new and old settlers now enjoyed the distinguished leadership of Ezekiel and many former Palestinian elders. They were also supported by surviving members of the royal family after Amel Marduk ("Evil-Merodach") released the imprisoned king of Judah, Jehoiachin, and restored him to a high position at the royal court of Babel. This release, narrated in the Bible (ii Kings 25:27ff.) and confirmed also by Babylonian sources (E.F. Weidner in Mélanges Dussaud, 2 (1939), 923–35), seems to have laid the foundation for the development of the exilarchate, a remarkable institution which lent the dispersed Jews a focus of leadership, with few interruptions, for the following 2,000 years.
Besides Babylonia, Egypt also accommodated a number of Jewish communities; the best known being the Jewish military colony of *Elephantine in Upper Egypt, established perhaps as early as the seventh century by Psammetichus i to help defend the southern frontier of Egypt against Nubian raiders. Before long, Jewish settlers spread throughout the Middle East, especially after 549 b.c.e. when Cyrus and his successors founded the enormous Persian Empire, territorially exceeding in size even the later Roman Empire at the height of its grandeur. The author of the Book of Esther did not hesitate to place in the mouth of Haman, the anti-Jewish courtier in the capital of Susa, the accusation against "a certain people scattered abroad and dispersed among the peoples in all the provinces of thy kingdom; and their laws are diverse from those of every people" (3:8). Nor was Deutero-Isaiah guilty of vast exaggeration when he prophesied that "I [God] will bring thy seed from the east and gather thee from the west; I will… bring My sons from far and My daughters from the end of the earth" (Isa. 43:5–6).
This multitude of Jewish settlers appears to have been rather speedily integrated into the environmental economic structures. Despite their vivid messianic expectations, their majority followed Jeremiah's advice and built houses, took wives, and generally established themselves in their new countries on a semipermanent basis. In Babylonia, particularly, which at that time marched in the vanguard of a semicapitalistic civilization, Jews entered the stream of advanced mercantile exchanges. The people who at home had devoted itself largely to agriculture and small crafts now assumed an important role in *banking and far-flung commerce. Whether or not Jacob, the founder of the leading banking house of Egibi, was Jewish – there is some support for this hypothesis in the fact that loans were formally extended without interest, though the bankers collected the revenues from the mortgaged properties including slaves and cattle – there is no question that some Jewish landowners and businessmen wrote significant contracts with leading Babylonian capitalists. In the archives of the House of *Murashu, an important banking and warehousing firm, no less than 70 Jewish names have been identified. Some of the Jewish contracting parties, to be sure, merely undertook to raise sheep and goats in return for a specified annual delivery of cattle, butter, wool, and hides. Others obligated themselves to deliver to the firm 500 good fish within 20 days if they were provided with five nets and permits to fish in the firm's waters. But some major contracts were signed by wealthy Jewish landowners in their own right who traded with the Murashu Sons on a basis of equality.
In contrast, the Aramaic papyri of the Elephantine colony include business contracts representing rather small amounts, as was to be expected from a typical soldiers' camp which derived its main livelihood from cultivating the soil. Other Egyptian localities, particularly Migdol, Taphanhes, and Noph – mentioned by Jeremiah (44:1) and identified by scholars with Magdalos, Daphne, and Memphis in Lower Egypt – doubtless offered the Jewish settlers and other arrivals from the Asiatic mainland much wider business opportunities. Certain glimpses of such "higher" activities may be obtained from a number of other papyri which have come to light in recent decades.
In short, by acclimatizing themselves to their surroundings many Jews, especially those living in Babylonia, acquired considerable wealth and extensive political as well as business contacts with the ruling classes in the empire. They now could undertake the ambitious program of resettling thousands of their coreligionists in Palestine and to secure from the friendly Persian regime charters guaranteeing full autonomy to the reestablished community. In his original proclamation, *Cyrus himself provided that the Jews remaining behind should equip the returning exiles "with silver, and with gold, and with goods, and with beasts, beside the freewill offering for the house of God which is in Jerusalem" (Ezra 1:4). As a result, some 50,000 Jews, including approximately 7,000 slaves, left with Zerubbabel and another 5,000 later on under Ezra.
Not surprisingly, the returning Jews found the country in a chaotic state; they also encountered considerable hostility on the part of their new neighbors. To begin with, those families which, on the basis of their excellently kept genealogical records, started reclaiming the landed possessions of their ancestors evoked, as has often been the case elsewhere, the staunch resistance of the new owners. Before very long their "theocratic" leadership (a term later coined by Josephus to describe the new form of government in the Second Temple period) had to fight a protracted battle to stave off both the hostile actions of neighbors and excessive assimilation to them. For several centuries the Jewish autonomous area covered no more than some 1,200 square miles in and around Jerusalem. Cut off from the coastal region occupied by Phoenicians (as evidenced by the so-called Eshmunazarid inscriptions), they engaged in small-scale farming and petty trade and crafts. The socioeconomic difficulties encountered in the First Temple period now returned with increased severity because of the greater yoke of taxation imposed by the Persian bureaucracy, made doubly burdensome by the numerous gifts, bribes, and other "voluntary" contributions extracted by the Persian officials.
Once again the economic shortcomings brought about a state of unrest which boded ill for the future of the country. The complaints of the masses to the new governor, Nehemiah, were eloquently restated by him in his memoirs. They claimed:
"We, our sons and our daughters, are many; let us get for them corn, that we may eat and live." Some also there were that said: "We are mortgaging our fields, and our vineyards, and our houses; let us get corn, because of the dearth." There were also that said: "We have borrowed money for the king's tribute upon our fields and our vineyards. Yet now our flesh is as the flesh of our brethren, our children as their children; and, lo, we bring into bondage our sons and our daughters to be servants, and some of our daughters are brought into bondage already; neither is it in our power to help it; for other men have our fields and our vineyards" (Neh. 5:2–5).
We are told, to be sure, that Nehemiah succeeded in persuading the upper classes to renounce their claims, to restore the fields to their rightful owners, and thus to reestablish for a while the social equilibrium. But the activities of this disinterested high official, who emphasized that he "demanded not the bread of the governor, because the service was heavy upon the people" (5:18), undoubtedly could offer but temporary relief. The conditions in the city of Jerusalem were no more satisfactory. Nehemiah actually had to take measures to prevent the flight of Jerusalemites, particularly the Temple personnel, to the countryside. Yet, the prolonged era of peace within the borders of the Persian Empire made life more or less bearable in the long run, and the country could look forward to better times.
The boundaries of the autonomous Jewish state, as established under Ezra and Nehemiah, did not expand, but there was a possibility for some Jews to settle in other parts of the country on both sides of the Jordan. While fertile Galilee was still called the gelil ha-goyim ("the district of gentiles"), the Jewish minority there was becoming a substantial factor. Transjordan, too, had a growing number of Jewish settlers. Alexander the Great's conquest of western Asia and the replacement of the Persian domination by that of Ptolemies and Seleucids opened up vast new opportunities for both Palestinian and Diaspora Jews. The new pervasive Hellenistic civilization greatly encouraged exchanges between the various provinces, including those between the Jews of Palestine and their ever growing Diaspora. Legally, too, under Alexander, Ptolemy i, and Antiochus the Great, Jewish self-government, with its implied economic freedoms, received a favorable interpretation. If, in time, the new Hellenistic culture began attracting many Jewish individuals, fostered their assimilation to Greek ways of life, and thereby created deep internal cleavages within the Jewish people, the ultimate result was the Hasmonean revolt and the establishment of a new and enlarged sovereign Jewish state. In the century between 165 and 63 b.c.e. the Hasmoneans conquered all of Palestine and Transjordan, converted most of the subject population to Judaism, and established a strong and populous Jewish country with but a few enclaves of Samaritans and Hellenistic city-states along the coast and in Transjordan.
Because the Temple of Jerusalem now served as a focal point for millions of dispersed Jews, the country benefited greatly from the influx of the half-shekels, imposed annually upon all adult male Jews, and from additional gifts voluntarily added by benefactors in various lands. A wealthy Egyptian Jew by the name of Nicanor, for example, provided the Temple with a brass gate named after him which allegedly required 20 men to open or close. In addition, thousands upon thousands of pilgrims from all lands considered it a high religious duty to visit the Temple and offer their sacrifices there at least once in a lifetime. Even Egyptian Jewry, which, for historic reasons, had built an independent Jewish "Temple of Onias" in the district of Leontopolis after the outbreak of the Maccabean revolt, continued to send to Palestine groups of pilgrims, including their spiritual leaders such as the Alexandrine philosopher Philo. Some pilgrims brought along with them substantial funds they had collected for Palestine in their home communities. Naturally, the coins collected by these cosmopolitan groups, as well as those spent by them during their stay in the Holy Land, greatly differed from one another in weight and value since many municipalities issued currencies of their own. To facilitate exchanges, the Palestinian authorities arranged for the opening of money-changing establishments in all parts of Palestine, including the Temple Mount, several weeks before Passover at the height of the pilgrim season. When Jesus "overthrew the tables of the money changers" in the Temple precincts (Matt. 21:12), he merely removed a facility which the visitors from many lands greatly appreciated.
Not surprisingly some large collections aroused the cupidity of Roman officials. One of them, Lucius Valerius *Flaccus, governor of Apamea, confiscated a local collection of 100 pounds of gold on the excuse that gold was not to be transferred to what in 59 b.c.e. still was a foreign country (despite Pompey's conquest of Palestine four years before). But in fact he merely sought to line his own pocket with the seized amount. However, he was promptly accused before the Roman senate of having committed a "sacrilege" on property belonging to a temple. He escaped severe punishment only after an effective defense by Cicero, whose eloquent plea, mixing Jewbaiting with purely legal arguments, still serves as a Latin textbook in many schools today. Later, Roman legislation, however, clarified the issue by placing all funds destined for the Jerusalem Temple, and later for the Palestinian patriarchs, under the protection of the laws governing sacrilege.
Domestically, too, the economy was surging upward. Agriculture still was the mainstay of the entire social structure. Benefiting from the accumulated energies of many generations, irrigation systems were installed in new areas, stimulating the annual output. True, in time, the needs of a quickly expanding population forced the farmers to put many marginal lands under cultivation. Probably for this reason R. Yose (second century) spoke of the seed yielding on the average a fivefold return in finished products (Ket. 112a), which contrasted with much higher yields in earlier periods. But some areas still produced the ten- or fifteenfold return characteristic of ancient Italy and even higher than ones recorded both in the First Temple era and in the talmudic period (see the exaggerations cited ibid.). Once again it was barley rather than wheat which was the mainstay of the bread diet. Dates, grapes, olives, and figs continued to furnish major ingredients for both domestic consumption and the export of surpluses. Remarkably, despite the growing population and the excessive costs of transportation, Palestine was able to export both cereals and fruits. Some of its choice fruits were served at the imperial tables in Rome, notwithstanding the competition of Italy, Spain, and Greece, all of which yielded similar products. A rarer plant was the papyrus grown in the Negev, the high price of which, however, maintained by the Egyptian state monopoly, made it noncompetitive as writing material with the far less expensive parchment, and still less costly ostracon. For its part Palestine had a sort of monopoly on the balsam tree, the growing of which was largely limited to the "fat lands of Jericho." Balsam was often sold for its weight in gold. During the Roman-Jewish War of 66–70, Pliny informs us, the Jewish defenders cut down the balsam trees lest they fall into the hands of the enemy; and "there have been pitched battles in defense of a shrub" (Historia naturalis, 12, 54:113).
It is small wonder that plants were considered a vital social asset of the country and cutting them down wantonly was treated as a serious crime. The term for cutting down plants was extended metaphorically to cover infringement on the fundamentals of the Jewish law and religion. To be called a "cutter, son of a cutter" became a superlative insult. The vine, palm, and olive trees were often used as symbols of the Jewish people; they still adorn many extant Jewish graves in ancient cemeteries and catacombs. Compared with agriculture, cattle raising played a rather minor role. While sheep were still needed to provide wool and milk products, meat was a relatively minor article of consumption. According to a second-century rabbi, "a man who owns 100 shekels shall buy a pound of vegetables for his stew; 1,000 shekels, shall buy a pound of fish; 5,000 shekels, a pound of meat [it is later explained: for the Sabbath]. Only if he owns 10,000 shekels, he may put his pot on the stove every day" (Ḥul. 84a). A major consumer of cattle was the Temple with its sacrificial worship, particularly on Passover when thousands of families lined up to offer their paschal lambs. However, the total production could probably be provided by the outlying steppes in Transjordan and the south, where more intensive cultivation was impeded by the shortage of water. With this geographic differentiation also went a cultural disparity, since the cattleraising areas were removed from the main center of learning. As a result we may understand the transition from the high esteem of the shepherd in the First Temple period to the low status he held before and after the second fall of Jerusalem. Although conscious that in the Hebrew Bible God Himself was often compared to the "good shepherd," the rabbis now deprecated the shepherd not only as an illiterate person but also as a man untrustworthy to testify in court. Pigeon fanciers were likewise rejected as witnesses because they often engaged in aleatory games which were very popular throughout the Greco-Roman world.
In trade and industry the changes created by the new opportunities consisted in the main of the intensification of existing trends rather than of any change of direction or basic innovation. During most of the period the Jewish population remained cut off from the coastal area, the old Philistines and Phoenicians having been replaced by the Hellenistic city-states. Josephus' observation, "Ours is not a maritime country; neither commerce nor the intercourse which it promotes with the outside world has any attraction for us" (Against Apion, 1:60) was generally true, in spite of the Maccabeans' determined drive to the sea, which was blocked by the Roman conquest, and the presence of substantial Jewish minorities in Jaffa and Caesarea, the harbor newly founded by Herod. Yet some Jews engaged in maritime commerce, owned ships, and even participated in Mediterranean piracy. During the Jewish War of 66–70, the pirates actually threatened to reduce the supplies to the Roman legions by blockading the port of Jaffa. But the majority of Jewish merchants consisted of shopkeepers, agents, and other petty traders.
Industry, too, was conducted on a very small scale. As before, Jews often organized guilds of their own. This movement was stimulated by the growth of Greco-Roman guilds which were often endowed with special privileges by the administration. As before, some crafts were concentrated in special villages or had assigned to them special quarters in the cities. In the battle for Jerusalem, the Romans stormed "that district of the new town, where lay the wool shops, the braziers' smithies, and the clothes market" (Jos., Wars, 5:331). While the country was poor in metals, almost all of which had to be imported, it distinguished itself in the production of textiles, particularly linen. In the later price list of Emperor Diocletian the highest price was assigned to the linen produced at Beth-Shean (Scythopolis). The Dead Sea region supplied the country with a variety of minerals; it was renamed by the Romans the "Lacus Asphaltitis." Another series of industrial opportunities was created by the Temple. Because of its holiness and partial inaccessibility to laymen some tasks had to be performed by priests, so that we hear of 1,000 priests serving as skilled craftsmen at one time.
In general, the economic situation in the country might have been tolerable, were it not for the excessive fiscal exploitation by both Herodians and Romans and their corrupt bureaucracies. Ancient governments usually placed the main tax burdens on the farmers. As a major concession Caesar reduced the state's share in the farm produce from one-third to one-quarter. However, in actual practice the publicans, who farmed the taxes against lump sums, as a rule exacted more than their due. In Jewish Palestine, moreover, according to biblical law, the farmer was also expected to set aside a first tithe to the levite, a heave offering averaging 2% to the priests, and an additional second tithe to be consumed in two out of three years in Jerusalem, and to be distributed among the poor every third year. Through the observance of the year of fallowness the farmer not only lost the crop of the seventh year but often had no incentive to cultivate the soil in the preceding year. There also was much chicanery in the collection of tithes. The total number of priests and levites seems not to have exceeded 3% of the population – it may not have exceeded 1% of the world Jewish population – and hence the 12% of the produce should have provided sufficient income for all of them. Yet the powerful priestly families used their political power to the disadvantage of their fellow priests. Josephus states that the servants of High Priest Ananias (47–59 c.e.) "went to the threshing floors and took away tithes that belonged to the priests by violence, and did not refrain from beating such as would not give these tithes to them… so that priests that of old were wont to be supported with those tithes died for want of food" (Ant., 20:181).
As a result many farmers, crushed by these combined burdens and unable to resist the state-supported publicans, often disregarded the law of tithing altogether. In consequence, they appeared suspect to the orthodox leadership. Because of the prohibition on consuming untithed food there was practically no conviviality between observant Pharisees (or Sadducees) and the am ha-areẓ ("people of the land"), creating an almost unbridgeable class division (see Ber. 47b, and the exaggerations in Pes. 49b). Economically, too, the farmers were often unable to meet their obligations and lost their properties to better situated neighbors. Although Palestine never developed latifundia comparable with those existing in contemporary Italy, the number and size of "large estates" grew from generation to generation. The concomitant evils of absentee landlordism became even more manifest now, since after the Maccabean expansion the capital, Jerusalem, was located at a considerable distance from those estates.
The great difficulties confronting the small farmer and his ensuing migration to the cities resulted in a rapid increase of the urban proletariat. Although many small towns continued to engage in a mixed economy in which agriculture still played a predominant role, the larger cities, especially Jerusalem, developed into centers of trade, industry, and governmental bureaucracy. Into such cities streamed thousands of landless peasants seeking employment as unskilled laborers at below-subsistence wages. Understandably, the role of slavery constantly diminished. Not being a conquering country, Palestine had few prisoners of war, while purchasing slaves at the prevailing high prices was even less remunerative now that a vast army of underpaid free laborers was readily available. Hebrew slavery, in particular, hedged around by a variety of legal restrictions, to all intents and purposes disappeared completely. The rabbis phrased it metaphorically: "The Hebrew slave existed only when the Jubilee Year was in force" (Kid. 20a, 69a). Gentile slavery, too, played a small role in the agricultural and industrial production and was largely limited to domestic service.
Once again economic disarray combined with other socioreligious and political conflicts to bring about a social turmoil in the country which prepared the ground for its ultimate downfall. The great Roman-Jewish War of 66–70 was an almost unavoidable consequence. With it came the destruction of the Temple and the end of its hierarchy as well as of whatever residua of national independence had still remained after 6 c.e. when Judea was incorporated into the Roman Empire as a mere subdivision of the Syrian province. Thenceforth the center of gravity of the whole people shifted more and more to the Diaspora lands.
Before the fall of Jerusalem the majority of the Jewish people had long lived outside Palestine. Yet the course of Jewish history was largely determined by the Palestinian leadership and society. Only Egypt acted in a more independent way and Alexandria, its great emporium of trade and culture, served as Jerusalem's counterpart, as it was designated by the Palestinian leaders in their letter to Judah b. Tabbai (tj, Ḥag. 2:2). Even Babylonia, upon which soon descended the mantle of leadership of the whole people, was rather inarticulate about its Jewish life until the third century c.e., when it came under the neo-Persian domination. Outside these two centers there is some information about the Jews of *Rome, owing to the preservation of numerous catacomb inscriptions, as well as occasional references, mostly in an anti-Jewish vein, in contemporary Latin letters. As to the multitude of Jews inhabiting Syria, Asia Minor, the Balkans, and North Africa west of Egypt, we are limited to stray flashes of light thrown by a few surviving inscriptions, the Pauline Epistles, and other sporadic sources. Before long, the distinction between Palestine Jewry and those of other countries became increasingly blurred as the former gradually lost their position as a majority of the Palestinian population.
Minority status understandably affected also the Jewish economic structure. Many Mediterranean communities may have owed their origin to Jewish prisoners of war taken by the Romans and sold into slavery. This was particularly true of the capital itself. To be sure, the Jews did not long remain in bondage. Because many Jewish slaves insisted upon observing the Sabbath rest commandment and abstained from consuming ritually forbidden food, they must have been uncomfortable workers and domestic servants. On the other hand, Jewish families and communities bent every effort to redeem captives, a commandment placed high in the hierarchy of values by the ancient rabbis. Roman law facilitated manumission inasmuch as freedmen retained certain connections with their patrons – whose family names they usually assumed – and performed important economic services for them. According to law, moreover, freedmen enjoyed a limited Roman citizenship, while their descendants were treated as full-fledged citizens with rights far superior to those of other citizens in the complex political structure of the empire before 312 c.e. Economically, however, such privileged citizens at first joined only the vast group of landless proletarians. Especially in Rome many of them joined the estimated 200,000 welfare clients (about a fourth of the population). In fact, Augustus singled out the Jewish welfare recipients for special favors. Taking into account their religious scruples, he allowed them to demand a double portion of the grain due them on Friday so that they would not have to violate the Sabbath. He also gave them the option of refusing oil, the other major article of consumption given away free, and to ask for money instead. In this way the Roman emperor decided a question still controversial among Palestinian rabbis as to whether "the oil of gentiles" was prohibited for Jewish consumption.
Nevertheless some former slaves and many free immigrants found ultimate employment in agriculture. Most of them had been engaged in farming at home and, wherever given the opportunity, they tilled the soil either as small farmers or as hired hands. In the major countries of their settlement, particularly Egypt and Babylonia, many of them cultivated vineyards, which they and the Greeks seem to have introduced into Egypt, and olive groves, in the planting of which their ancestors appear to have pioneered in Babylonia. They also helped produce dates and other fruits, as well as grain. Dates were particularly plentiful and inexpensive. The Palestinian rabbi Ulla upon arriving in Babylonia exclaimed: "A whole basket of dates for a zuz [28 cents] and yet the Babylonians do not study the Torah!" But after overindulging in dates, which caused him a stomach upset, he varied his epigram by saying: "A whole basket of poison for a zuz, and yet the Babylonians study the Torah!" (Pes. 88a). To facilitate their coreligionists' agricultural pursuits in competition with non-Jewish farmers, the Babylonian sages quite early suspended the obligation of Diaspora Jews to observe the years of fallowness and even the payment of levitical tithes. They included these requirements among "commandments dependent on the land" of Israel, that is, as being binding only for Palestine. Later on, under the pressure of Roman taxation and particularly after the reform of Diocletian (who instituted the collection in kind of the land tax from territorial groups (so-called iugera) regardless of the ethnic or religious differences among the owners of particular parcels of land) R. Yannai ordered even the Palestinian farmers to "go out and sow during the Sabbatical Year because of the tax" (Sanh. 26a).
Certain industrial activities, such as the brewing of beer, were also connected with *agriculture. Unlike Palestine, whose population preferred table wines, Babylonia had from ancient times consumed much beer, one variety being brewed from a mixture of barley and dates. No less than three distinguished Babylonian rabbis, *Huna, *Ḥisda, and *Papa, are recorded as having amassed considerable wealth from brewing. Jews were also active in many other crafts, and at times organized specific Jewish guilds. The crafts of tanners (see *Leather), collectors of dog dung, and copper miners were, however, considered so malodorous that the law permitted wives to sue for divorce on this ground. Nevertheless everybody knew that they were socially necessary and all that Judah ha-Nasi could say was that "the world cannot get along without either a perfumer or a tanner. Happy is he whose occupation is perfuming. Woe unto him who must earn a living as a tanner" (Kid. 4:14; 82a-b). Complaints of unethical practices by craftsmen were also heard; an example of such prejudices was the popular adage that "the best of surgeons belongs to Hell, and the most conscientious of butchers is a partner of Amalek." Judah bar Ilai, who reported this saying, also drew a line of demarcation between different types of transport workers. He contended that "most of the donkey drivers are evildoers, most of the camel drivers are honest, most of the sailors are pious." The latter's reputation may have been owing to the fact that *shipping had now become an even more important occupation than in earlier centuries. The Alexandrian Jewish guild of navicularii had become so important that even the hostile Roman administration had to extend it important privileges in 390 c.e. (Codex Theodosianus, 13, 5, 8).
Perhaps the most significant economic change, resulting from the transfer of the center of gravity to the dispersion, occurred in the much larger Jewish participation in commerce. It is a well-known sociological phenomenon that alien immigrants often turn to mercantile endeavors because they have no attachment to the foreign soil, shun isolated living among native majorities, are familiar with two or more languages and cultures, and hence are able the better to mediate between distant localities. If, as seems to have been the case, a large number of former Phoenicians and Carthaginians had joined the Jewish community via conversion, they must have brought some of their commercial skills and contacts into their new communities. Jewish slaves, if employed in their masters' businesses, must also have acquired certain aptitudes which they put to good use upon obtaining freedom. For all these reasons the number of Jewish traders, ranging from peddlers to big merchants, must have greatly increased. Yet their ratio in the Jewish population of the Diaspora need not have greatly exceeded the general mercantile ratios among the majority of peoples.
Even banking began to assume a certain role in Jewish economic life. True, would-be Jewish moneylenders faced the tremendous obstacles of the traditional Jewish anti-usury laws. In fact, some rabbis tried, on segregationist grounds, to forbid their coreligionists to lend money with or without interest even to gentiles, unless they found absolutely no other means of earning a living (bm 70b). However, there were always legal subterfuges which made loans profitable, such as high conventional fines for missing the repayment date, intervening in utilization of mortgaged properties, and the like (see, e.g., The Tebtunis Papyri, 3, 1902, ed. by B.P. Grenfell et al., 315ff., nos. 817–8; E.N. Adler, introd. to his ed. of The Adler Papyri, 1939, 5f.). In Alexandria Jewish banking may have played a certain role even in nurturing the anti-Jewish animus of the population. This is, at least, the interpretation given by some scholars to an Alexandrian merchant's warning to a friend "to beware of the Jews" recorded in a single papyrus dated 41 c.e. (Aegyptische Urkunden aus… Berlin, Griechische Urkunden, 2, no. 1079). But this explanation has been cogently disputed. There is no question, however, that Philo's relatives, Alexander and Demetrius, holding the high position of alabarchs (the meaning of this term is still controversial), could enter banking on a large scale. For example, Alexander extended to Agrippa i the substantial loan of 200,000 sesterces (about $30,000), the bulk of which he paid out to the Jewish king from his Italian branch office in Putoli-Dikaerchia (Jos., Ant., 18:160). But these were exceptions confirming the rule that the majority of Jews were still very poor and eking out a living by hard work in various occupations.
On the other hand, in the talmudic age Jewish slavery played even less of a role than before. Jewish masters, rigidly circumscribed by law, did not enjoy employing coreligionists as slaves. A popular adage had it that "he who buys a Hebrew slave acquires a master unto himself" (Kid. 20a). Certainly, as aids in production, even gentile slaves could not compete with the readily available free laborers. The Roman colonate with half-free sharecroppers tilling the soil for the landlords only developed toward the end of antiquity. Characteristically, the new Christian empire after Constantine i, which totally outlawed Jewish ownership of Christian slaves and encouraged pagan slaves to obtain freedom by conversion to Christianity, was prepared to tolerate the employment of Christian coloni by Jewish farmers (Gregory i,Epistolae, 4:21, 9:38). Even Jewish slave trading (see *Slavery and the *Slave Trade), which was to play a certain role in the early Middle Ages still, was quite insignificant.
In all these activities Jews depended even more than before on the general economic transformations which took place during the first centuries of the Christian era. The Roman Empire's semicapitalistic economy of the first two centuries increasingly gave way to a semifeudal system. The Sassanian Empire never reached the stage of relative economic freedom of the early Roman Empire. Jews, as well as their intellectual leaders, had to make constant adjustments to both economic systems through the adaptation of traditional laws by way of interpretation. As a consequence of this pliability, rabbinic legislation was to prove quite useful to the Jewish communities in their medieval pioneering. One result of the growing state controls in both empires was a certain regimentation in occupations and price structures, which also induced the Jews to organize their own zoning tariffs in transportation, supervision of weights and measures, and even setting maximum prices. Even the unfriendly Theodosius i decreed in 396 that "no one outside the Jewish faith should fix prices for Jews" – a principle upheld by his successors (Codex Theodosianus, 16, 8, 10). On the other hand, because of the ensuing commercial restrictions, customs barriers, and innumerable official fees, the exchanges between the provinces of the Roman Empire were now severely hampered. This reduction in imperial and international commerce greatly stimulated the local and regional autarky and helped to create in many parts of the empire highly diversified occupational structures, providing for most of the needs of the local populations. These developments account also for the greater diversity of occupations among Jews from the third century onward.
Economically perhaps even more important was the sharp decline in the class struggle within the Jewish community. Confronted with indiscriminate hostility on the part of many neighbors, Jews, whether rich or poor, employers or employees, had to close ranks. Since the hostile state legislation often interfered with their ability to earn a livelihood, many Jews now depended on the ramified Jewish welfare system. The economic effects of anti-Jewish riots also were quite significant. Although far from resembling medieval massacres, the occasional anti-Jewish outbreaks in the Middle Eastern cities seriously interfered with Jewish business activities. The first major anti-Jewish riot, staged by the Alexandrian mob with the support of the Roman governor Avilius Flaccus, is well described by Philo, an eyewitness. In his indictment of Flaccus, the philosopher wrote:
But cessation of business was a worse evil than plundering. The provision merchants had lost their stores, and no one was allowed, either farmer or shipper or trader or artisan, to engage in his normal occupation. Thus poverty was brought about from both quarters, both from plunder, for in one day they were dispossessed and stripped of their property, and from inability to earn a living from their normal occupations (In Flaccum, 7:57).
Even in less stormy periods the Jewish masses required the intercession of their leaders to counteract inimical measures by unfriendly officials. Under these harsh conditions the old ritualistic animosities between the learned and the illiterate am ha-areẓ paled into insignificance. In any case, the main obstacle to rapprochement between the two classes was eliminated when the levitical tithes were discontinued in the Diaspora. Differences in the study of Torah were likewise toned down by the leading Palestinian rabbi Johanan's declaration (in the name of R. Simeon b. Yoḥai) that the biblical commandment, "This book of the law shall not depart out of thy mouth" (Josh. 1:8), could be fulfilled by the mere recitation of the Shema in the morning and evening. If, because of fear that the disclosure of this statement might discourage study, the rabbis forbade its being given wide currency; the fourth-century Babylonian Raba, however, insisted that it be divulged to the public (Men. 99b; see also the anecdote about Judah ha-Nasi's reconsideration in bb 8a). In short, even illiterate Jews could now fulfill their religious duties to the satisfaction of their more learned brethren.
After the rise of Islam and its speedy expansion from southern France to India, Jewish economic life took a drastic turn. Together with the simultaneous developments in Christian Europe, *Islam's perennial antagonist, the new political and socioeconomic evolution for the first time converted a predominantly agricultural Jewish population into a people of merchants, moneylenders, and artisans. This lopsided economic stratification carried over into the modern period and was only slightly rectified in the emancipation era.
A major cause of this epochal change was the new treatment of Jews by the host nations as primarily an indispensable source of fiscal revenue for the respective governments and bureaucracies. In the declining Roman Empire and, still more, in Sassanian *Persia, Jews were often considered important objects of fiscal exploitation. This, however, was largely done by administrative chicanery within the generally oppressive taxation systems in the two empires. Jews and pagans in the Christian Roman Empire and Byzantium, and Jews and Christians in Zoroastrian *Iran may have been mere defenseless victims of arbitrary acts by rapacious officials; or, for special historic reasons, they may have been forced after the fall of Jerusalem to pay for a time a special tax, the so-called fiscus judaicus (in lieu of the old Jewish Temple tax); but they were not singled out, as a matter of principle, as a separate class of taxpayers on whose shoulders was supposed to rest the main burden of financially maintaining the existing governmental structures.
It was left to the founder of Islam to enunciate the broad general commandment: "Fight those who do not practice the religion of truth from among those to whom the Book has been brought, until they pay the tribute by their hands, and they be reduced low" (Qur'an 9:29). Later Muslim jurists and statesmen, constantly invoking this injunction of their messenger, interpreted it to mean that Jews, Christians, and for a time also Zoroastrians, as "people of the book," that is as adherents of scriptural religions, be tolerated in Muslim countries, provided they pay "tribute," that is taxes of all kinds, and are kept in a low social status without exercising any control over faithful Muslims. The latter provision (similar to Christian Rome's denial to Jews of the honos militiae et administrationis) was supposed to entrust all responsibility for the defense of the country and its administration to the Muslims, while delegating the entire fiscal burden and the task of keeping the economy alive to the infidel or "protected" peoples. Though *Muhammad himself left the details open, some extremists, such as Ash-Shafiʿī, founder of one of the four influential schools of Muslim jurisprudence, contended that a Muslim state could exact tribute to the extent of two-thirds of all his possessions from a Jewish or Christian subject.
The prevailing practice was to collect from these religious minorities a land tax of 25% of the crops and a poll tax from adult and able-bodied males. According to Abu Yusuf, Caliph Harun al-Rashid's chief fiscal expert, the Christians and Jews were divided into three income classes and paid 1 dinar, 2 dinars, and 4 dinars, respectively (Kitab al-Kharaj, 69ff. (Ar.), 187ff. (Fr.); a dinar was valued about $4 by its weight in gold, but had many times that value in purchasing power). Despite the great inflationary changes in the following three centuries, *Obadiah (Johannes), the Norman proselyte, recorded an increase by only half a dinar for each of these classes. He added that if a delinquent Jewish taxpayer died his body could not be buried unless his family or the Jewish community paid up all tax arrears (Fragment, ed. by A. Scheiber, in: ks, 30 (1954/55), 98). These basic imposts were augmented by a variety of local and individual taxes, enforced "gifts" and loans, and other services which made the life of the Jewish masses very difficult. But at least in periods of rapid economic progress, as in the ninth century, some Jews of the upper classes were able to amass sizable fortunes.
Methods of tax collection aggravated the generally arbitrary and unpredictable forms of fiscal exploitation. They were also designed to demonstrate the taxpayers' inferiority. A description preserved in an old papyrus gives an inkling of the deliberately humiliating ceremony accompanying the delivery by a representative Jew or Christian of a sum collected from his community. "Then the emir," we are told, "gives him a blow on the neck, and a guard, standing upright before the emir, drives him roughly away… The public is admitted to enjoy this show" (J. Karabacek, in Mitteilungen aus der Sammlung der Papyrus Erzherzog Rainer, 2–3, 1962, 178). Occasionally, following an old Babylonian custom, the tax receipt was stamped on the taxpayer's neck in a more or less indelible form. Needless to say, the Jews resented such excesses. However, they realized that their special taxation was the main justification for their being allowed to live in Muslim countries altogether. A Jewish family chronicle mentions that the prominent Baghdad Jewish banker, Netira, on being told by Caliph Al-Mutaḍid (c. 892) that the administration wished to eliminate all special Jewish taxes, allegedly dissuaded the ruler from such drastic action. He agreed that a reduction of the tax to its original size would be a blessing for his community, but he added, "Through the tax the Jew insures his existence. By eliminating it, you would give free rein to the populace to shed Jewish blood" (A. Harkavy, in: Festschrift Berliner (1903), 36 (Ar.), 39 (Heb.)). In the back of Netira's mind may also have loomed the danger that anyone of Al-Mutaḍid's successors might not only reinstate the taxes but also demand from the Jews the instantaneous repayment of all arrears thus accrued.
One effect of this discriminatory fiscal pressure was the constant diminution of the Jewish share in agriculture. Even after the extension of the land tax to the growing Muslim majority, many farmers were unable to meet their obligations to the state. Jewish farmers had the additional burden of the heavy poll tax paid in produce at a price arbitrarily set by the tax collector. The requirements of Jewish law, too, particularly the Sabbath rest commandment, which was much more stringent than the rest precepts of the Muslim Friday and Christian Sunday, generally made Jewish agricultural endeavor less competitive. There is evidence that in the days of Harun al-Rashid (766–809) the land flight of Palestinian farmers was so severe that the government was forced to appeal for their return under the promise of permanent tax abatement. The chances are that fewer Jews returned after having found shelter in one or another urban Jewish community. The growing disorders in the great caliphate from the tenth century on must also have induced many Jewish villagers, whose defenselessness invited attacks by marauders, to leave their landed properties – despite their great attachment to their ancestral soil attested by some geonic sources – and settle in a somewhat more secure urban Jewish quarter. Beginning in the 12th century the increasingly powerful trends toward semifeudalism throughout the Middle East further militated against Jewish farming as they did, on a larger scale, in contemporary Christian Europe.
On the other hand, new opportunities beckoned to Jews in the commercial area. The general upsurge of the Middle East economy during the first centuries of Muslim rule, the rise of great metropolitan areas such as *Baghdad and *Cairo, and, for a time, uniformity and stability of currency and relative security in travel and transportation, all stimulated the expansion of mercantile activities on the part of merchants of various nationalities. Commerce was generally held in higher esteem than agriculture among Middle Eastern Muslims, Christians, and Jews. Al-*Farabi voiced the prevailing notions that "villages are in the service of cities." While in the internal exchanges within the caliphate the Jews encountered severe competition on the part of several equally gifted mercantile groups, including Greeks, Armenians (increasingly muslimized), Syrians, and even Arabs – a popular Middle Eastern adage was to state later that one Greek could cheat two Jews, and one Armenian could cheat two Greeks – Jewish merchants had certain advantages in domestic and, even more, in international trade.
In the first place their competitors often came from regions of diverse legal systems. Most of the Christian merchants followed deep-rooted customs and traditions of the former provinces of the Byzantine Empire. The Muslims, too, were divided in their mercantile and other civil laws through the disparate teachings of their four major schools of Muslim jurisprudence and the great variations of local and regional customs. These factors were far less pronounced in the case of Jews. Although the Babylonian and Palestinian laws often differed in many significant details, a growing majority of Jews, settled in the great caliphate and adjoining countries, increasingly came under the sway of the Babylonian Talmud and its official interpretation by the geonic academies of Babylonia. At the same time the presence of Jewish communities throughout the far-flung empire and in many neighboring countries, both east and west, assured Jewish merchant travelers a brotherly reception and help in emergencies wherever they went. They could also readily establish branch offices, and engage a number of dependable local agents. Examples like those recorded in the documents preserved in the Cairo *Genizah have shown the vast geographic extension of the mercantile dealings of certain Cairo-Fostat firms. In 1115–17 one Abu ʿImran gave a power of attorney to an agent surnamed "the candle maker" to look after all his business undertakings in Sicily, *Morocco, and other localities, as well as to manage his houses in Spain and Sicily. Another businessman, Ḥalfon b. Nethanel, after returning to *Aden in 1134 from a prolonged stay in India, soon thereafter traveled to Cairo. In the following year we find him in Morocco and *Spain before his return home (H. Hirschfeld, in: jqr, 16 (1925/26), 280f.; S.D. Goitein, Speculum, 29 (1954), 186f.)
An even greater advantage accrued to Jewish merchants in the burgeoning international trade with Western Europe. Although the Carolingian Empire and its successor states were still economically quite backward, their growing landed aristocracy furnished many customers for the luxury articles imported from Eastern lands. Here Jewish traders served as important mediators in a world divided between Islam and Christendom. Few Western merchants traveled to the Middle East, despite occasional Christian pilgrimages to the Holy Land, while even fewer Arabs dared to enter the hostile Christian countries for any length of time. Jews were tolerated under both civilizations. The legal advantages arising from the uniformity of their law were even greater in this area, since Christian and Muslim laws diverged very greatly and familiarity with each other's legal systems was extremely rare. The Jews also had a linguistic advantage in being able to communicate with one another, whereas few Christians knew Arabic and still fewer Arabs could converse in Latin or any local dialect. But a few polyglot individuals could occasionally serve as interpreters. We hear of a ninth-century Jewish linguist named Sallam, apparently a native of Spain or Khazaria, who in 845 reached the "wall of Gog and Magog" in China and who allegedly was able to converse in 30 languages. Multilingual documents were also found in the Cairo Genizah. When Charlemagne decided to send an embassy to Harun al-Rashid he had to add a Jewish interpreter, named Isaac, to the mission. It turned out that the chief noble envoys died on the journey and Isaac alone returned from Baghdad, bearing gifts from the Eastern potentate to the Western emperor. In general, however, Hebrew could easily serve as the regular medium of communication among Jewish merchants under both Islam and Christendom, and by the ninth century it had become a leading international language.
In his oft-cited Kitab al-Masalik ("Book of Routes"), written in 846 and revised some 40 years later, Ibn Khurdadh bah, who held in the caliphate an office approximating that of a modern postmaster general, described the routes taken by the Jewish *Radaniya (Radhanites; a word of uncertain etymology and meaning) from northern France and southern Morocco to India and China. He wrote:
These merchants speak Arabic, Persian, Roman [Greek and Latin], the Frank, Spanish, and Slav languages. They journey from West to East, from East to West, partly on land, partly by sea. They transport from the West eunuchs, female slaves, boys, brocade, castor, marten and other furs, and swords. They take ship from Firanja [France] on the Western Sea, and make for Farama [Pelusium]… On their return from China they carry back musk, aloes, camphor, cinnamon, and other products of the Eastern countries… Some make sail for Constantinople to sell their goods to the Romans; others go to the palace of the King of Franks to place their goods… These different journeys can also be made by land (pp. 153ff.; E.N. Adler, Jewish Travellers, 1966, p. 2).
There is some reason to believe that Western Jewish merchants quite early reached even Korea and Japan.
Ibn Khurdadhbah's statement helped support what soon became a Christian ecclesiastical myth, adopted by some modern historians, about an extensive Jewish slave trade in the Middle Ages. Medieval and modern controversialists from St. Agobard, archbishop of Lyons, onward, often pointed a finger at the medieval Jews as the main slave traders who transported Christian slaves, especially from Slavonic countries, to the ever more manpower-hungry Middle East and Muslim Spain. They readily overlooked the staggering legal barriers erected against that trade by both Jewish and gentile laws. Islam and Christendom severely outlawed the possession by Jews of Muslim or Christian slaves respectively. On its part, the Talmud had long demanded that a slave acquired by a Jewish master should be circumcised, made to observe the seven Noachide commandments, and live an essentially Jewish life. If a slave refused to be converted within 12 months, he was to be freed or sold to a gentile master. Female slavery, mainly intended to serve sexual purposes, was made difficult for Jewish slaveholders by the strict prohibition on sexual relations with slave girls. Typical of the provisions of Jewish law was the following statement by the ninth-century Babylonian teacher Natronai Gaon: "If a son of Israel is caught with his slave… she is to be removed from him, sold, and the purchase price distributed among Israel's poor. We also flog him, shave his hair, and excommunicate him for 30 days" (Sha'arei Ẓedek, fol. 25a, attributed to Amram Gaon). The trade in eunuchs, so much in demand for Oriental harems, depended on whether the Jewish slave trader could acquire castrated males. Otherwise talmudic law had long included castration among the physical mutilations which entitled the slave to seek immediate release. Responsibility for a slave's hidden blemishes, both mental and physical, was greatly delimited by talmudic law and hence anyone acquiring a slave ran considerable risks. If some Jews, defying these legal difficulties, were attracted to this extremely lucrative commercial branch, they must have constituted but a minority among the international slave traders and doubtless played an even smaller role in the various domestic slave markets throughout the world of Islam. It is not surprising, therefore, to find that in the vast, populous, and affluent North African lands, hardly any reference to Jewish slave traders appears in the extant Muslim and Jewish sources of the time.
Under the rule of medieval Islam Jews also entered the money trade in all its ramifications in an important way. Some of them played a considerable role in the very *minting of coins. Under Caliph Abd al-Malik (695–96), for example, one Sumeir helped set up a very important monetary reform which so impressed a Jewish homilist that he placed it among the signs of the approaching Messiah (pdr, xxix, ed. by Michael Higger, in: Horeb, 10 (1948) 193f.; in G. Friedlander's English trans., p. 221). Other Jewish minters are recorded in various Muslim and Christian countries, though not in Byzantium where minting was an effective state monopoly. Some of the first coins issued by Poland in the 11th and 12th centuries bore inscriptions in the Hebrew alphabet, probably because the minter was most familiar with that script. Money changing likewise became a very widespread and profitable trade, particularly after the dissolution of the caliphate when diverse coins from various lands began appearing in all large mercantile centers. Considerable expertise was required in order to recognize defects, whether inflicted by coin clippers or by the admixture of undue amounts of alloy. Here, too, internationally experienced Jewish dealers were often in a favored position. Deposit banking also assumed a major economic role. Unlike the ancient temples and medieval churches, neither mosques nor synagogues ever served as important depositories of funds. Because of the relative absence of expulsions and large-scale massacres of Jews in Muslim countries, Jewish bankers were considered a fairly secure outlet for surplus funds which, if profitably invested, could yield substantial profits to both depositors and depositaries. To be sure, in unstable periods an arbitrary official (for instance, Al-Baridi, governor of Al-Aḥwaz) could seize the bankers' possessions, including deposits held by them for other accounts, without compensation. But the depositors running afoul a dignitary's personal greed or whim found keeping their funds at home no less risky. In general, however, the frequency and usefulness of the new methods were so great that the rabbis had to relax some ancient restrictions and alter the areas of responsibility on the part of the depositaries in order to facilitate their operations.
Similarly, the transfer of large amounts from one province to another in the vast empire and beyond its boundaries became the more imperative as carrying cash to a distant locality by land or sea became increasingly hazardous. Gangs of robbers on land were far exceeded in number and efficiency by both Mediterranean and Indian Ocean pirates. The North African coast and the extended coastline of the Arabian Peninsula served as particularly useful hideouts for corsairs. If the Talmud had objected to the method of transferring money through a deed called dioqni (derived from sign), and some medieval rabbis still opposed the bearer instrument called suftaja in Arabic (which Jews apparently helped develop jointly with the Arabs), the economic realities were such that the geonim had to yield and recognize its employment as a legitimate mercantile usage, "lest the commercial transactions of the people be nullified" (Teshuvot ha-Ge'onim, 1887, ed. by A.E. Harkavy, nos. 199, 423, 467). Ultimately, Samuel b. Hophni, head of the academy of Sura, felt impelled to write a special legal monograph on "Letters of Authorization" (Sefer ha-Harsha'ot). Nor did the *Kairouan scholar Nissim b. Jacob hesitate to use a suftaja in forwarding a gift for the support of the Babylonian academies.
Even more important, of course, was the large-scale Jewish participation in the increasingly vital credit system. Although all three major religions tried to outlaw usury – the Muslim riba being even more broadly defined than the Christian usura or the Jewish ribbit – the economic needs of credit became overwhelming. Since most loans were now extended not to impoverished farmers but rather to businessmen or government officials for use in trade or public administration, the outlawry of any kind of increment over the amounts lent lost its moral justification. Jews were in a strategic position to overcome the legal obstacles, as they were the relatively smallest group in the population and, even if observing the prohibition of charging interest to coreligionists, could engage in profitable *moneylending with the large majority of borrowers of other denominations. All sorts of legal evasions, moreover, were conceived by jurists of all groups, although this system was never quite so refined as it was to become in medieval Europe. One of the simplest expedients appeared to be a fictitious sale of income-producing property with the right of repurchase which gave the lender the opportunity of collecting the revenue of that property during the interim. The widespread commenda contract, in which the investor appeared as a partner in the enterprise, likewise offered him the opportunity of exacting the pledge that he would participate in the ultimate sale with a specified profit regardless of possible losses. It was this form of purported silent partnership with a guaranteed revenue which was most widely used to secure for the lender an income agreed upon in advance. Until today, some pious Jews still enter on a bond of indebtedness the words al ẓad hetter iska (often in abbreviated form, see *Usury) to indicate their mental reservation against the transgression of the biblical commandment.
During periods of quiet, profits derived from banking could be enormous. As a result there emerged a number of wealthy Jewish bankers, especially in the metropolitan areas of Baghdad, Cairo, *Alexandria, Kairouan, *Fez, and *Córdoba. These banking firms did not limit their activities to loans but usually engaged in related businesses such as trade in jewelry and precious metals, investment in real estate, and the like. They often had at their disposal large funds deposited with them by high government officials secreting away illicit income from briberies. Ibn al-Furat, a leading vizier of early tenth-century Baghdad, admitted having had large deposits with the two Jewish bankers Aaron b. Amram and Joseph b. Phinehas. In return, the bankers had to perform services for these officials which went much beyond ordinary business risks. For example, ʿAli ibn ʿIsa, Ibn al-Furat's more virtuous rival, did not hesitate to force his Jewish banker to advance him monthly the equivalent of $40,000 in gold for the wages of the imperial infantry. This loan was to be covered by the banker's revenue from tax farming in the province of Al-Aḥwaz. Another Jewish tax farmer, Ibn ʿAllan al-Yahudi of Baṣra, who had lent both the sultan and the famous Persian statesman Nizam al-Mulk the equivalent of $100,000, was assassinated in 1079. Sometimes the whole Jewish community was held responsible for a banker's refusal to lend money to a dignitary. In one such case, in 996, the mob attacked the entire Jewish quarter.
Less dramatic, but equally significant, was the expansion of Jewish activities in the traditional fields of handicrafts and professions. Needless to say, these occupations offered vast opportunities to many more Jews than did commerce and banking. Regrettably no exact occupational statistics can be offered, but a few extant lists show that the proportion of craftsmen considerably exceeded that of merchants, even including the petty shopkeepers and peddlers. Three such genizah lists show percentages ranging from 38.4 to 52.1 for industrial occupations, compared with 17.3 to 37.5 for commerce and banking. According to Al-Jaḥiẓ, Jews predominated in the industries of dyeing and tanning in Egypt, Syria, and Babylonia and formed the majority among the Persian and Babylonian barbers, cobblers, and butchers. Another contemporary Arab observer, Muqaddasi, contended that "for the most part the assayers of corn, dyers, bankers, and tanners are Jews; while it is usual for physicians and scribes to be Christian" (J. Finkel, ed., in: Journal of the American Oriental Society, 47, 311–34; Muqaddasi, K. Aḥsam at-taqasim, p. 183; in Le Strange's English trans. in his Description of Syria, p. 77). In fact no less than 265 different crafts are mentioned in the genizah records, showing both the extensive Jewish participation in industrial occupations and their great specialization. Gradually Jews also penetrated the medical profession, some of them achieving considerable fame as medical theorists and writers (Asaph, Israeli, *Maimonides, and others). One must add, of course, a considerable number of Jews who were employed by their own communities as rabbis, teachers, cantors, shoḥatim, sextons, and in administrative capacities, forming a sort of Jewish civil service.
This occupational diversification was greatly facilitated by the openness of Muslim society and the relatively large measure of economic equality for subjects of all faiths. The latter included much freedom of movement, except in Egypt where the traditional state-capitalistic order presupposed governmental controls over the influx of foreigners and the exit of natives. Only Egypt enacted strict regulations concerning passports. In industry, too, there was much freedom of choice. Even where industrial *guilds existed, they were neither so monopolistic nor so discriminatory in the admission of Jewish members as their counterparts in Europe. It was also possible for the autonomous Jewish communal organs to use considerable discretion in enforcing their own price controls whenever needed, supervising weights and measures, and generally policing the markets in the Jewish quarters.
It was unfortunate for the Jews and non-Jews alike that this flourishing commercial-industrial civilization sharply declined after the tenth century as a result of the caliphate's dissolution and its constant foreign and civil wars. By the time of the 13th-century *Mongolian invasions much of the grandeur of that great civilization had given way to a slow process of decay. Coming on top of the Christian *Crusades, these invasions dealt further severe blows to both the international and local commerce of the eastern lands. While Christian Europe was marching ahead on the road toward a flourishing economic structure, the eastern lands began to stagnate. Among the numerous departures were Jews, fleeing from foreign invaders as well as domestic enemies and seeking whatever uncertain shelter they could secure in Western lands. The center of world commerce now began shifting westward, with the various Italian merchant republics taking over the offensive, establishing colonies in the eastern Mediterranean and later in the Indian Ocean, and ultimately displacing the East even in the Levantine trade.
At first, to be sure, far fewer Jews lived under Christendom. Only from the 13th century on, as a result of the general upsurge of the Western nations, the Spanish reconquest, and the simultaneous sharp decline of the Eastern countries, did the center of gravity of the Jewish people slowly move to the European area. Here the far better accumulation and preservation of archival materials and the concerted efforts of generations of scholars have yielded much reliable and detailed information about general and Jewish economic developments. Jewish documents, too, such as the "starrs" of England, the records of the Laurenz parish in Cologne, the vast collection of Arabic and Hebrew documents in Toledo and other parts of Spain, the numerous notarial records, and even occasional private archives of Jewish firms, have made the study of economic Jewish history much more reliable and concrete.
Clearly, the existing trends toward the alienation of Jews from agriculture were much stronger in Europe than in the Muslim Middle East and North Africa. In certain areas the insecurity of Jewish life and the ever-present danger of massacres, expulsions, and forced conversions made landholdings far less attractive for Jews. Whenever a landowner had to depart suddenly or was otherwise obliged to dispose of his property within a very short time, forced liquidation, if not total confiscation, resulted in enormous losses. For example, two years after the expulsion of Jews from France in 1306 a Christian landlord was able to acquire 50 Jewish houses in the old and venerable community of Narbonne for the mere pittance of 3,957 livres. This transaction so aroused the ire of both the viscount and the archbishop, each of whom had special feudal rights in the city, that, to appease them, the purchaser gave an additional 5,000 livres, two houses, and a plot of land to the viscount and an unspecified, but undoubtedly large, amount to the archbishop (S. Luce, rej, 2 (1881). Of course, the Jewish exiles received nothing. Similarly, according to the court historian Andrés Bernáldez, after the promulgation of the Spanish decree of expulsion in March 1492, anyone could acquire a Jewish vineyard for a piece of cloth or linen (Historia de los Reyes Católicos (1870), 338f.). In addition to such countrywide expulsions, there were local and regional forced exiles of varying frequency. For instance, the city of *Speyer, to which Jews had originally been admitted in 1084 by Bishop Ruediger-Huozmann "in order to enhance the city's honor," subsequently often ousted them on short notice. To mention only the events of the 15th century: Jews were expelled from Speyer in 1405, readmitted in 1421, banished again in 1430, and allowed to return in 1434, to be once more evicted a year later. Yet they were there again in 1465. They became objects of renewed Episcopal legislation in 1468–72.
The first major blow of this kind came to the Jews of Byzantium as a result of Emperor *Heraclius' decree of 632 forcing all Jews to become Christians. Although incompletely carried out even in the areas which remained Byzantine after the expansion of Islam soon after, such Byzantine decrees were repeated in the following three centuries. It was truly amazing, therefore, that during his visit to the Balkans in the 1160s Benjamin of Tudela found an entire Jewish community of 200 families in the village of Crissa who "sow and reap on their own land" (Travels, pp. 12 (Heb.), 10 (Eng.)). Similar forced conversions occurred in Visigothic Spain, Merovingian Gaul, and Langobard Italy in 613–61, and were replaced in Spain by many sharply discriminatory laws against the Jews who survived or were allowed to return before the Muslim conquest of 711–2. To all intents and purposes these hostile actions put an end to all forms of organized Jewish life there and only a small Jewish remnant remained under Catholic domination in central and southern Italy. Even if not all the Jews left these countries, their ownership and cultivation of land must have practically ceased, while returning Jews may have had little incentive or opportunity to acquire new agricultural property. Similar effects were later produced by the successive expulsions of Jews from royal France, England, Spain, Portugal, various Italian states, and other parts of Christian Europe between 1182 or 1290 and 1600.
An equally important factor was the growth of European feudalism. Land now not only became the source of economic power but also the mainstay of political and military force. He who owned land exercised dominion over a multitude of peasants whether they tilled the soil as half-free sharecroppers so long as the Roman colonate persisted, or as villeins furnishing parts of their produce and corvée labor to their masters. While since Pope Gregory the Great the Church had allowed Jews to maintain Christian coloni on their land, it became increasingly awkward for Jews to be either vassals taking oaths of fealty to Christian lords, or seigneurs administering such oaths to Christian barons. Remarkably, this system persisted in Provence up to the 12th century and beyond. In Angevin England, kings also protected Jewish feudal holdings through decrees such as that issued by Richard the Lion Heart in 1190 in favor of one Isaac, son of R. Joce, and his sons or, more broadly, through the generic decree by John Lackland in 1201. It was in the royal interest to protect the Jewish holding of a "baronial state, claiming for themselves wardships, escheats, and advowsons," as did Henry iii. Even the antagonistic Edward i had to allow Jews to acquire feudal possessions if their noble owners defaulted on the payment of their debts. But the antagonisms aroused in such cases contributed to the baronial revolt against the crown in 1264–66. The barons argued that the kings selfishly promoted feudal acquisitions by Jews because through the royal overlordship over Jews noble property was thus indirectly transferred to the royal domain. Ultimately, beginning in 1269, the kings themselves had to oblige Jewish creditors to dispose of such foreclosed estates to Christian owners within a year. In short, feudalism and Jewish landholdings appeared incompatible in the long run and it was the weaker Jewish side which had to yield ground.
On the other hand, unlike under Islam, Jewish landowners were not subjected to a special land tax. "In our entire realm," declared *Meir b. Baruch of Rothenburg, "[Jews] pay not tax on land. Sometimes capitalists have tried to change this system, but when the matter was brought before us, we disallowed it" (Responsa (Prague, 1607), 50c no. 452). In other areas, however, the general land taxes became so burdensome that the Barcelona rabbi Solomon b. Abraham *Adret complained that "frequently the very best fields yield insufficient harvests to pay the royal taxes" (Responsa, 3 (Leghorn, 1778), no. 148). More universal and irksome was the ecclesiastical drive to force the Jews to pay tithes on property they acquired from Christian owners, lest the parish priests or monasteries lose the income from such lands. Finally, the Fourth Lateran *Council of 1215 insisted that these contributions be universally collected from Jews, riding roughshod over the religious scruples of some Jewish pietists who saw in such payments subsidies for the erection of churches and monasteries devoted to the worship of another faith.
Employment of Christian agricultural workers by Jews became another important issue, anti-Jewish agitators of all kinds clamoring that Jews be forced to cultivate the land with their own hands. The nobles, on the other hand, even in Mediterranean countries, often tried to eliminate Jewish landholdings altogether. Such a proposal was advanced, for instance, by the Castilian Cortes in 1329. These opponents readily overlooked the early medieval Jewish pioneering contributions to European agriculture. Coming from the more advanced Eastern countries, Jewish groups settling in the West are often still remembered in such names as Terra Hebraeaorum, Judendorf, Żydaczów, and the like. Even a Spanish name like Aliud is probably a derivative of Al-Yahud. As late as 1138 three Jews of Arles bought from Abbot Pontius of Montmajour the entire output of kermes of the district of Miramar, thus stimulating the farmers to produce that dyestuff. They were also very active in introducing the silkworm into Sicily and other Mediterranean countries.
Yet it was only the opposition of the crown which prevented general prohibitions of Jewish land ownership. Wherever such were enacted, they usually bore a local character and even these were not always fully implemented. Even in fervently anti-Jewish Germany after the *Black Death of 1348–49, the assertion of the author of the Rechtsbuch nach Distinctionen (iii. 17, 1) that "Jews are not allowed to own real property in this country" was a clear exaggeration. In the Mediterranean lands, especially, Jews continued to own and cultivate landed properties; this they did to the very end of their sojourn in Spain, Portugal, Provence, Sicily, and Naples. Their endeavors were particularly flourishing in those areas where extensive orchards and vineyards, located in the neighborhood of towns, enabled them to combine fruit production with other occupations. Queen Maria of Aragon was not wrong when in 1436 she upheld the right of *Huesca Jewry to dispose of the grain and wines produced on its property, "since the Jews of the said city for the most part live as workers and cultivators of fields and vineyards and derive a living from the latter's produce" (Baer, Urkunden, 1 (1929), pt. 1, 858f. no. 535). The city council of Haro (Faro), close to the Navarrese border, complained that Jewish and Muslim landowners in the district had in 1453 signed a covenant not to sell any land to Christians. In the council's opinion this created a threat that before long the entire land of the area would fall into the hands of infidels (N. Hergueta, in: Boletin de la Real AcademÍa de Historia, 26, 467ff.). Less exaggeratedly, a modern scholar of the rank of F. de Bofarull y Sans claimed (in his Los Judíos en el territorio de Barcelona) that between the 10th and 12th centuries one-third of all the land around Barcelona was owned by Jews. In short, Jewish agriculture never completely disappeared from the European scene and the alleged complete outlawry of Jewish landholdings throughout medieval Europe is another example of a widely accepted historical myth.
Jewish land ownership was particularly frequent in urban settlements, particularly in Jewish quarters. Understandably, wherever the Jewish population grew rapidly and its quarter could not enlarge its area, the real estate owned by a family was often subdivided into small parcels by the numerous progeny. In the Laurenz parish of Cologne a Jewish couple sold in 1322 a one-eighth and one-96th portion of "a large house" in which two other coreligionists owned another quarter and one-16th part. Thirteen years later another Jewish couple acquired a share of one-third and one-60th minus one-700th of a house from a Christian neighbor. For the most part, however, in Europe north of the Alps and the Loire Jews were rarely allowed to live long enough to create many such subdivisions over several generations.
In Europe, too, Jewish industrial occupations were far more significant. In this area early Jewish immigrants from the Middle East and North Africa, often in possession of an advanced technology, could perform many pioneering services. In 1147 Roger ii of Naples attacked Byzantine Thebes, a major center of the silk industry, and evacuated "all" Jews to southern Italy, where they helped establish a flourishing silk industry. Another trade in which Jews played a considerable role since ancient times was that of dyeing. When Benjamin of Tudela arrived in Brindisi he found there ten Jewish dyers. A particular "Jewish" dye existed in the Neapolitan kingdom. Weaving, too, had long been a prominent Jewish craft. It was partly stimulated by the biblical prohibition on *sha'atnez (mixing wool and linen) which, carried down through the ages, became an important factor in preserving Jewish tailoring and other branches of the clothing industry in many lands. Another religiously stimulated industrial craft was that of slaughtering animals according to the Jewish ritual. Even where, as in most German areas, the Christian guilds tried to suppress Jewish competition, they had to make some exceptions in favor of Jewish butchers and tailors who were permitted to produce such ritually restricted goods for the Jewish customers. Many Jewish crafts were stimulated by Jewish pawnbroking. Since most pledges consisted of articles of clothing, furniture, or jewelry which, upon the debtor's default, became the property of the pawnbroker, it was natural for him to try to refurbish the pawns for sale to the public at a higher price.
In fact, many restrictive ordinances inspired by Christian merchants made a special allowance for Jewish trade in used articles (see *Secondhand Goods). For instance, in Rome during the Counter-Reformation Jews performed a major service by acquiring secondhand clothing from the luxury-loving high clergy and nobility for resale to the masses of the population. Indirectly, such business furnished employment also to tailors, dyers, and other craftsmen.
Beyond these specially Jewish areas there were also Jewish craftsmen in almost all domains of industry, although specialization here was far less developed than in the contemporary Islamic world. In Cologne, for example, where the guilds succeeded in ultimately barring Jews from almost all industrial occupations, they still allowed them to become glaziers, probably because no other qualified personnel was available. This exception was reminiscent of the Greek glassblowers in seventh-century France who claimed to be able to produce glass as well as the Jews did. The few extant Spanish occupational statistics are very enlightening indeed. For example, the 20 Jewish families in the small town of Valdeolivas near Cuenca embraced, in 1388, six shoemakers, three tailors, one weaver, one smith, and one itinerant artisan. Some of the wealthiest of the 168 Jewish taxpayers in Talavera de la Reina shortly before the expulsion in 1492 consisted of 13 basketmakers and three goldsmiths. Jewish cobblers, tailors, blacksmiths, and harness makers also seem to have made a reasonable living there. True, in 1412–13 Castile and Aragon, in sharply anti-Jewish decrees, forbade Jews to serve as veterinarians, ironmongers, shoemakers, tailors, barbers, hosiers, butchers, furriers, rag pickers, or rag dealers for Christians. Yet the very man who inspired that legislation, Anti-Pope Benedict xiii, himself employed a Jewish bookbinder, two Hebrew scribes, and even a Jewish seam-stress-laundress for his ecclesiastical vestments. A Roman list of 1527 recorded the presence of 1,738 Jews in a population of 55,035 in the city. The more than 80 Jewish families whose occupations were recorded included about 40 Jewish tailors and a substantial number of other craftsmen. Twelve years earlier Cardinal Giulio de' Medici had urged his cousin Lorenzo to attract some of the Jewish manufacturers of saltpeter from Rome to Florence or Pisa, since "such opportunities do not occur every day." Although similar detailed data are not readily available elsewhere, it appears that wherever Jews lived in larger numbers their majority derived a livelihood from one or another craft.
In some Spanish cities there were enough Jewish craftsmen to form independent guilds. The statutes of the Jewish cobblers' guild in *Saragossa, approved by Pedro iv in 1336, offer mute testimony to the continuity of Jewish craftsmanship from the ancient associations of Jewish master artisans. When the Spanish decree of expulsion was extended to Sicily on June 18, 1492, the Christian leaders of Palermo and other cities protested that "in this realm almost all the artisans are Jews. If all of them will suddenly depart there will be a shortage of many commodities, for the Christians are accustomed to receive from them many mechanical objects, particularly iron works needed both for the shoeing of animals and for cultivating the soil; also the necessary supplies for ships, galleys, and other maritime vessels." In the north, of course, there was no opportunity for Jews to organize guilds of their own, whereas the Christian guilds in their constant drive for monopolistic control of their trades and political power in their municipalities not only sought to suppress Jewish competition but, if possible, to get rid of the Jews completely.
At the same time Jewish commercial activities played an ever-increasing role in Western Europe. There are relatively few records of Jewish *peddlers. Apart from the insecurity of roads in most European countries, aggravated by the hostility toward Jews on the part of many peasants and townsfolk – even hostile legislators often freed Jews from wearing their badges on journeys for this reason – the majority of the villeins had little cash available to purchase goods from itinerant merchants. Most of their needs were provided for by their own agricultural production and the home work of their wives and daughters in spinning, weaving, and tailoring. With the growth of the urban centers, Jewish shopkeepers increased in number wherever Jews were tolerated at all. Of course, there was a constant struggle with the growing burghers' class which wanted to monopolize whatever trade was available locally or regionally. In many cities these commercial rivals sooner or later succeeded in ousting Jews completely and even in obtaining from the royal power, whose self-interest dictated protection of Jewish tradesmen, special privileges de non tolerandis Judaeis. In England, for instance, where Henry iii's exorbitant fiscal exploitation depended on the presence of a prosperous Jewry, there was a wave of such enactments in favor of many cities in the 1230s and 1240s. In many continental localities the law restricted Jewish shopkeeping to the Jewish quarter and often forced the Jewish merchants to abstain from displaying their wares on Sundays and Christian holidays – a major burden indeed for observant Jewish shopkeepers who kept their stores closed on the Sabbath and Jewish festivals. Nevertheless economic necessity forced Jews to use all means at their disposal to earn a living from merchandising.
Jewish international trade, which in the Carolingian age had been a major incentive for Christian regimes to invite Jewish settlers, later suffered greatly from the competition of the Italian merchant republics, the prevalence of Mediterranean piracy, highway robbery on land routes, discriminatory tolls at the multitude of feudal boundaries, and special Jewish taxation. Nevertheless, many rulers still tried to maintain freedom of movement and trading for their Jewish "serfs." The major imperial privileges for German Jewry often repeated, with minor variations, the provision in the 1090 privilege for the Jews of Speyer given by Emperor Henry iv: that they "should have the freedom to trade their goods in just exchange with any persons, and that they may freely and peacefully travel within the confines of Our kingdom, exercise their commerce and trade, buy and sell, and no one shall exact from them any toll or impost, public or private" (Aronius, Regesten, 71ff., no. 170, etc.). Similar sweeping provisions were enacted by John of England in 1201 and other monarchs (J.M. Rigg, Select Pleas, 2). If in practice Jews often suffered from attacks and despoliation by local barons and arbitrary officials, this was the effect of the poorly organized governmental systems in most European countries rather than of the rulers' intent. In this respect Jews had plenty of fellow sufferers among their gentile competitors.
International fairs in particular (see *Markets and Fairs) offered many opportunities for Jewish traders to profitably exchange goods with other merchants, Jewish and non-Jewish. Even in the less hospitable northern lands they played a considerable role in the famous Champagne fairs and those of Cologne. When in the last three medieval centuries most of these fairs lost their international character and catered more to regional needs, Jews still appeared as welcome visitors even in areas from which they were generally barred. They enjoyed the special protective devices developed by many communities seeking to attract foreign trade without discriminating among the visitors according to their faith or country of origin. One important concession generally granted at fairs was the suspension of the group responsibility of merchants of the same origin for each other's misdeeds or insolvency. Such mutual responsibility affected non-Jewish burghers as well as Jews, but the process of generalization in blaming all Jews for the misconduct of any coreligionist was generally much more prevalent. Even in Mediterranean commerce, where group responsibility was less strongly stressed, Pedro iii of Aragon felt obliged to intervene in 1280 on behalf of many Jewish Levant traders, when one of their coreligionists, Isaac Cap of Barcelona, had been accused of unethical business dealings in the Middle East. The main argument advanced by the king in his epistle addressed to the Templars and Hospitalers in Jerusalem, the consuls of Pisa and Venice, and the representative of the king of Cyprus was not that other Jews should not be held responsible for Cap's actions, but that Cap had long since left Aragon. It so happened that in time Cap was able to return to Barcelona, settle his debts, and again become an honored member of his community.
Another major concession to Jewish traders was the acceptance by many regimes of the prevailing Jewish practice in respect to the so-called law of concealment. In the talmudic age the rabbis had already come to the conclusion that a merchant who had unwittingly acquired some stolen object was not to suffer complete loss in returning that object to its legitimate owner. They provided, "for the benefit of the market," that if the acquisition was proved to have been made in good faith, the owner had to compensate the merchant to the full amount of his investment. The more primitive Teuton laws, which dominated many European legislative systems, had made no such provisions in favor of the bona fide merchant. Jews, especially in areas where they were largely restricted to dealing in secondhand merchandise or lending on used pledges, could not carefully investigate the title of each seller or borrower. At times fraudulent borrowers might actually scheme to offer, through impecunious intermediaries, pledges for loans and subsequently as owners reclaim these objects without paying their debts. There were antecedents for such protection of legitimate merchants in other laws. Yet Jewish traders were in the vanguard of those clamoring for redress. Ultimately, this provision, which German antisemites often denounced as a Hehlerecht (privilege for "fences"), became a widely accepted principle in most modern mercantile laws.
Despite these and other legal safeguards, the general insecurity of Jewish life affected the Jewish merchants as well. A remarkable illustration is offered by the business ledgers kept during the years 1300–18 by the important mercantile firm of Héliot (Elijah) of Vesoul in Franche-Comté. These extant ledgers reveal both the firm's effective method of bookkeeping and its far-flung business interests. Principally a banking establishment endowed with vast resources, it also bought and sold merchandise of all kinds either through commenda agreements with Christian or Jewish traders, or by direct shipment of its own. It dealt in cloth, linen, and wine produced in its own vineyards. Héliot also served as a tax collector for the government. Characteristically, the ledgers also include entries relating to horses and carriages used by members of the firm for business travel as far as Germany and Flanders. Héliot was also very precise in delivering the ecclesiastical tithes to the churches, notwithstanding scruples he may have had in thus contributing to the upkeep of non-Jewish religious institutions. His career was cut short, however, when in 1322 Philip the Tall extended his decree of expulsion of the Jews from France to Burgundy as well. Two years later Héliot's house was given away to a lady-in-waiting of the queen.
In spite of all these difficulties Jewish commerce, particularly in the more friendly Mediterranean lands, frequently flourished and became another mainstay of the Jewish economy. In the 12th century a German rabbi, Eliezer b. Nathan, could assert that "nowadays we are living on commerce only" (Sefer Even ha-Ezer (Prague, 1610), 53d no. 295).
Commerce included money trade in its various ramifications, particularly moneylending. Because of their general insecurity and frequently enforced mobility, Jews under Christendom were not good risks for deposits. Unlike the Jews under Islam, they could not compete with the stability of deposits in churches or such major banks as the Banco di San Giorgio in 12th-century Genoa. Their rabbis, therefore, fell back on the talmudic regulation that treasures should be buried in the soil, which was not always feasible in the crowded Jewish quarters. Burying them out of town subjected the owner to the risk of some stranger accidentally discovering the place of burial and appropriating the treasure trove. Moreover, even accumulations of savings by Jewish communal bodies were subject to seizure by unfriendly rulers. In 1336 King John of Bohemia not only confiscated the communal "treasure trove" kept in the old synagogue of Prague but also fined the Bohemian elders for concealing its presence from him. Minting could occasionally help support a Jewish individual, especially in backward areas. But generally the manufacture of coins was a governmental enterprise, even if exercised by some local baron or city council (there were, indeed, many kinds of coins and even scrip circulated by such local rulers). On the other hand, coin clipping, whether for the purpose of reminting or for that of using the gold or silver in the fabrication of some industrial objects, was considered a major crime if indulged in by private individuals, although it was accepted as a perfectly legitimate performance on the part of governments. One such accusation of coin clipping, real or alleged, supposedly resulted in 1278–79 in the execution of 293 English Jews and was partially responsible for the decree of expulsion of 1290 (H.G. Richardson, English Jewry, 218ff.). Finally, notwithstanding the great variety of coins in circulation, money changing likewise seems to have been only a minor sideline of Jewish banking, if we are to judge from the paucity of references thereto in the extant sources.
Moneylending, however, increasingly became the lifeblood of the Jewish economy at large. It was abetted by the increasing Christian prohibition on usury which was broadly defined by Richard, son of Nigel, as "receiving, like the Jews, more than we have lent of the same substance by virtue of a contract" (Dialogus de Scaccario, trans. by C. Johnson, 99f.). It was an uphill struggle for the Church because, down to the 12th century, the clergy themselves often indulged in moneylending on interest, a practice surreptitiously pursued by some priests even later. Jews also encountered stiff competition from Lombards and Cahorsins, often styled the papal usurers for their major services in transferring ecclesiastical dues to Rome. However, Jews had the advantage of being able openly to engage in this legally obnoxious business; as a matter of fact they did it as a rule with considerable governmental support.
In fact, kings considered Jewish gains via moneylending as an increase of their own resources. This was basically the meaning of "belong to the imperial chamber," a stereotype phrase referring to Jews found in many imperial privileges in German, implying that the Jews were the "king's treasure," as they were designated in Spanish decrees. When in 1253 Elias of Chippenham left England and took along his own bonds, Henry iii prosecuted him because he had "thievishly carried off Our proper chattels." This nexus did not escape the attention of hostile observers who often blamed the princes for the excesses of their Jewish usurers. In his letter of 1208 to the count of Nevers the powerful Pope Innocent iii complained that while certain princes "themselves are ashamed to exact usury, they receive Jews into their hamlets [villis] and towns and appoint them their agents for the collection of usury" (S. Grayzel, The Church and the Jews in the 13th Century, 126f.). Although in a special pamphlet De regimine judaeorum Thomas Aquinas tried to appease the conscience of Princess Aleyde (or Margaret) of Brabant for deriving benefits from Jewish taxation largely originating from usurious income, one of his most distinguished commentators, Cardinal Tommaso Vio Cajetan, sweepingly declared that "the gain accruing to a prince from a usurer's revenue makes him an accessory to the crime." The better to control Jewish revenues, the English administration introduced in 1194 the system of public chests (*archae) into which all bonds had to be deposited, supposedly to avoid controversies between lenders and debtors. Philip ii in France tried in 1206 and 1218 to emulate the English example, as did Alfonso iv of Aragon in 1333, and in a somewhat different way Alfonso xi of Castile in 1348. But outside of England this system broke down, apparently because neither lenders nor debtors wished to comply. In any case, the Protestant clergy of Hesse was not wrong when, in its memorandum of 1538 to the landgrave, it compared the role of Jewish moneylending with that of a sponge, used by the rulers to suck up the wealth of the population via usury ultimately to be squeezed dry by the treasury.
Despite all opposition, Jewish moneylending was an imperative necessity in many areas. Because of the prevailing high rates of interest it also was a lucrative business. Emperor Frederick ii's Sicilian constitution of Melfi of 1231 restricting the permissible interest rate to 10% remained a dead letter even in his own kingdom. Somewhat more effective were the maximum rates of 20% set by certain Aragonese kings and Italian republics. But for the most part the accepted rates ranged between 33⅓ and 43⅓%, although sometimes they went up to double and treble those percentages, or more. Upon their readmission to France in 1359–60, Jews were specifically allowed to charge up to 86⅔%. Even some Silesian princes are recorded to have paid 54% to their Jewish moneylenders. In the case of the innumerable small loans by petty pawnbrokers, these high rates were justified by the lenders' overhead in receiving weekly interest payments, slow amortization, and much bookkeeping. But the Lombards who, for the most part, dealt in large credit transactions nevertheless likewise charged what the trade could bear.
So long as the economy was on the upswing the resentment against these high rates of interest was moderate. But when the European economy entered a period of deceleration in the late 13th century, further aggravated by recurrent famines and pestilences, such exorbitant charges, though economically doubly justified because of the increased risks, created widespread hostility. They were an important factor in the growing intolerance aimed at the English, French, and German Jews. Of course, expelling the Jews from the country, as England did in 1290 and France in 1306, merely meant replacing one set of moneylenders by another. Christian creditors, as a rule, charged even higher rates, partly to compensate for the increased opprobrium and sinfulness connected with their trade. As a result, Philip iv's successor, Louis x, in 1315 revoked the decree of expulsion and called the Jews back to the country as he claimed, in response to "the clamor of the people." Yet when the Jews returned under the royal pledge that they would be tolerated for at least 12 years, the popular outcry became so vehement that Philip the Tall broke his predecessor's promise and banished the Jews again in 1322. At the same time in neighboring Italy, where the grandeur of the Florentine and Genoese bankers was on the decline, Jews began to be invited by various republics to settle in their midst and to provide credit "to the needy population." These condottas, resembling formal treaties between the governments and groups of Jewish bankers, extended to the latter a variety of privileges for specified periods of time, subject to renewals. The city of Reggio (Emilia) went so far as to guarantee to the incoming Jewish bankers that, if they ever were to sustain losses from a popular riot, the city would fully indemnify them. This significant chapter in Jewish economic history, however, began drawing to a close in the latter part of the 15th century on account of the emergence of the new, rivaling institution of monti di pietà. These charitable loan banks were supposed to extend credit to the poor without any interest and thus make Jews wholly expendable. In itself this was a laudable idea and spread quickly into countries such as France from which Jews had long disappeared. At times the monti were supported by Jewish bankers themselves (for instance, by Isaac b. Jehiel of Pisa). But most of them assumed from the outset a strongly antisemitic character. They were propagated by outspoken anti-Jewish agitators and rabble rousers, especially *Bernardino da Feltre. Only in Venice, which refused admission to Da Feltre, did the Serenissima reach a compromise with the Jews by persuading them to establish the so-called banchi del ghetto which, financed entirely by Jews, were to serve an exclusively Christian clientele at nominal rates of interest. These institutions lasted until the emancipation era when, upon the entry of the French army into Venice in 1797, the Jewish community voluntarily transferred the assets of its five banks to the new republic.
Connected in many ways with banking was Jewish public service. As under Islam, the Christian rulers could not scrupulously adhere to the demands of their religious leaders to keep "infidels" out of any public office lest they exercise dominion over the faithful. Governments often had to rely on the religious minorities to provide fiscal experts whose specific experiences as taxpayers as well as businessmen could be put to good use by the treasuries for tax collection and necessary cash advances. In his petition to Alfonso iv of Aragon (before 1335), requesting the king's assistance in the collection of loans from Hospitalers, the Navarrese Jewish banker, Ezmel b. Juceph de Ablitas, boasted that Alfonso "had never received so great a service from either a Christian or a Jew as you have received from me at a single stroke" (M. Kayserling, "Das Handelshaus Ezmal in Tudela," in: Jahrbuch fuer Israeliten, 1860, 40–44).
Most widespread was the Jewish contribution to tax farming. The medieval regimes, as a rule, aided by only small, inefficient, and unreliable bureaucracies, often preferred to delegate tax collection to private entrepreneurs who, for a specified lump sum they paid the treasury, were prepared to exact the payments due from the taxpayers. Of course, the risks of undercollection were, as a rule, more than made up by considerable surpluses obtained, if need be, by ruthless methods. So indispensable were the Spanish Jewish tax farmers that the Catholic Monarchs signed such four-year contracts with Jewish entrepreneurs as late as 1491, only a year before the expulsion. Among their most prominent collectors was Abraham Seneor, officially the "rabbi of the court" or chief rabbi of Castilian Jewry, and Don Isaac b. Judah *Abrabanel. In the early days of the Christian reconquest, the services of able Jewish financiers and administrators were even more indispensable. Members of the Cavalleria and Ravaya families were particularly prominent in 13th-century Aragon. For one example, Judah b. Labi de la Cavalleria served from 1257 on as bailiff of Saragossa, from 1260 on as chief treasurer to whom all royal bailiffs had to submit regular accounts, and finally in 1275 also as governor of Valencia. Jews were also active in diplomatic service, for which their familiarity with various lands and languages made them especially qualified. In vain did Pope Honorius ii address a circular letter to the kings of Aragon, Castile, Navarre, and Portugal, warning them against dispatching to Muslim courts Jewish envoys who were likely to reveal state secrets to the Muslim enemies, since "you cannot expect faithfulness from infidels." Yet his successor, Gregory ix, generally even more insistent on the observance of all canonical provisions, conceded in 1231 and 1239 that the Portuguese and Hungarian monarchs had no workable alternative.
In other countries Jews exerted political influence more indirectly. Even in some antagonistic German principalities of the 14th and 15th centuries some Jews were called upon to provide the necessary funds for raising mercenary forces as well as to supply them with food, clothing, and other necessities. Such a combination of large-scale financing and contracting was performed, for example, by a Jewish banker, Jacob Daniels, and his son Michael for the archbishop-elector Baldwin of Trier in 1336–45. This adumbration of the future role of *Court Jews in helping build up the modern German principality was cut short, however, by the recurrent waves of intolerance which swept Germany in the last medieval centuries and resulted in the expulsion of the Jews from most German areas.
Notwithstanding these constant changes in the Jewish economic structure and the vital role played by the Jewish economic contributions for the general society, no ancient or medieval Jewish scholar devoted himself to the detailed interpretation of these economic facts and trends. No Jew wrote economic tracts even of the rather primitive kind current in Hellenistic and early Muslim letters. All Jewish rationales must therefore be deduced indirectly from the legal teachings. Even Maimonides who, in his classification of sciences, recognized the existence of a branch of science styled domestic economy, or rather the "government of the household" (a literal translation of the Greek oikonomia), did not feel prompted to produce a special monograph on the general or Jewish economic life. Speaking more broadly of political science which included that branch of learning, he declared: "On all these matters philosophers have written books which have been translated into Arabic, and perhaps those that have not been translated are even more numerous. But nowadays we no longer require all this, namely the statutes and laws, since man's conduct is [determined] by the divine regulations" (Treatiseon Logic [Millot ha-Higgayon], Arabic text, with Hebrew and English translations, by Israel Efros, 1937, 18f.). In consonance with this conception, the great codifier devoted the last three sections of his Mishneh Torah to economic matters regulated by civil law. He also often referred to economic aspects in the other 11 books, following therein the example of both Bible and Talmud. None of these normative sources, however, which always emphasized what ought to be rather than what is or was, can satisfactorily fill the lacuna created by the absence of dispassionate analytical, theoretical, and historical economic studies. From the outset we must, therefore, take account of the idealistic slant of our entire documentation. The emphasis upon ethics and psychology far outweighs that of realistic conceptualism. Only indirectly, through the use of the extant subsidiary factual source material, can we balance that normative slant by some realistic considerations.
Typical of such idealistic approaches is the biblical legislation. For example, the commandment of a year of fallowness may have resulted from the practical observation that land under constant cultivation was bound to deteriorate and to yield progressively less produce. Similar experiences led other agricultural systems to adopt the rotation of crops and other methods. But there is no hint to such a realistic objective in the biblical rationales. The old Book of the Covenant justifies the commandment by stating that in this way "the poor of the people may eat" (Ex. 23:11). The more religiously oriented Book of Leviticus, on the other hand, lays primary stress on the land keeping "a Sabbath unto the Lord" (25:2) so that it provide "solemn" rest for servants, foreign settlers, and even cattle. Similarly, the Jubilee Year was conceived as a measure of restoring the landed property to the original clan, envisaging a more or less static agricultural economy, at variance with the constantly changing realities of the then increasingly dominant urban group. No less idealistic were the provisions for the poor, particularly widows and orphans. We also recall the extremely liberal demand that, upon manumitting his Hebrew slave, the master should also provide him with some necessaries for a fresh start in life.
That these and other idealistic postulates did not represent the living practice in ancient Israel we learn from the reverberating prophetic denunciations of the oppression of the poor by the rich and other social disorders. But here again we deal with even more extravagant idealistic expectations than had been expressed by the lawgivers. In the main, the Bible reflects in part the "nomadic ideals" carried down from the patriarchal age and in part the outlook of the subsequently predominant agricultural population. But the landowning aristocracy, as well as the priesthood and royal bureaucracy often residing in Jerusalem and Samaria, and the impact of foreign relations, especially wars, shaped the actual affairs of the people to a much larger extent than normative provisions or prophetic denunciations, although the latter's long-range effects far transcended in historic importance the immediate realities.
Even the far more realistic legal compilations of the Mishnah, the Talmud, and other rabbinic letters are still in the main ethically and psychologically oriented. This remains true for most periods of Jewish history until the emancipation era. Certain economic factors are simply taken for granted. Not even Maimonides, who tried to find rationales for many biblical rituals, considered it necessary to offer any justification for such a fundamental economic fact as private versus public ownership. There only was common agreement that good fortune is bestowed upon man by God's inscrutable will, while poverty is to be borne with patience and submission to fate. Asceticism never became a major trend in Jewish socioreligious life, although certain groups and individuals practiced it as a matter of supererogation. Similarly, the postulates of communal ownership raised by the *Rechabites in the days of Jeremiah and the *Essenes toward the end of the Second Temple period were only part of their rejection of alleged departures from the purity of the old law. But they remained rather ineffectual fringe movements.
At the same time the "normative" Judaism of the majority subjected private ownership to severe limitations because of ethical requirements. From the restatement by Maimonides of talmudic law, as modified by the subsequent rabbinic literature, the following categories of property clearly emerge: "(1) public property belonging to no one and accessible to everybody for free use, e.g., deserts; (2) public property belonging to a corporate group, but open to general use, e.g., highways; (3) potentially private property belonging to no one, but available for free appropriation, namely all relinquished and some lost objects; 4) private grounds belonging to the ownerless estate of a deceased proselyte, equally open to free appropriation; (5) private grounds not yet taken over by a Jew from a gentile, open to appropriation against compensation; (6) private grounds in a walled city, open to everybody's use but not to appropriation." To these must be added the "sacred property" (*hekdesh) of the Temple of Jerusalem, which, however, did not apply to the later synagogues; objects placed outside ordinary use or sale by ritualistic law; as well as the theoretical claim of every Jew in the world to the possession of four ells of land in Palestine. Based on the assumption that forcible deprivation of land never eliminates the rights of the real owner, the latter legal fiction was of practical significance only in connection with certain technical restrictions on the formal transfer of property.
With all their emphasis on private ownership the rabbis recognized its limitations necessary for the common good. To begin with, they did not acknowledge the riparian rights of owners, but considered four ells along all shores as belonging to the community at large. They also accepted the right of expropriation for purposes of roadbuilding, the erection of city walls, and other necessary public works. A city also had a right to banish certain odiferous trades, such as that of tanning, outside its walls. Even individuals trying to sell land had to respect the neighbors' right of preemption at the price offered by strangers. In general, referring to an old tradition going back to the agricultural economics of Palestine and Babylonia, Jewish leaders placed land outside the range of ordinary commodities. During the very era of semicapitalistic prosperity under Islam, they still believed in the stability of land ownership as against the fluctuations in the value of any other property. Going beyond the advice of talmudic sages that prudent men should invest one-third of their funds in land, one-third in commerce, and keep one-third in ready cash, Maimonides, perhaps inspired by the severe business losses sustained by his own family on account of his brother David's shipwreck on a voyage to India, counseled his readers not to sell a field and purchase a house, or to sell a house and acquire a movable object. They should rather generously "aim to acquire wealth by converting the transitory into the permanent." The rabbis also greatly stressed the responsibility of relatives for one another, not only in such dire emergencies as the redemption of captives but they also generally taught that "a relative may prove to be extremely wicked, but he nevertheless ought to be treated with due compassion."
Other ethical and psychological criteria were employed in the rabbinic approximation of the doctrine of the just price, later extensively debated by the medieval Christian scholastics. No one questioned the community's right to supervise weights and measures. Any deficiency, if purely accidental, called for restitution, but if it was premeditated it was to be punished severely. Maimonides waxed rhetorical on this subject: "The punishment for [incorrect] measures is more drastic than the sanction on incest, because the latter is an offense against God, while the former affects a fellow man. He who denies the law concerning measures is like one who denies the Exodus from Egypt which was the beginning of this commandment" (Yad, Genevah 7:1–3, 12; 8:1, 20 with reference to bb 89b). The community also had the right as well as the duty to set maximum prices whenever conditions demanded it. Of course, under the general rabbinic doctrine of dina de-malkhuta dina ("the law of the kingdom is law") all market regulations by the state, including the maximum prices set by it, were to be respected by the Jews too, except when they specifically conflicted with the divinely revealed Torah. Conversely, in many areas (for instance in Majorca in 1344) the government specifically forbade the local market supervisors to interfere in any business dealings in the Jewish quarter. In any case, with their inveterate conservatism the rabbis were reluctant to accept the law of supply and demand as the determining factor in controlling prices.
A convenient psychological expedient was found in the theory of "misrepresentation" (*ona'ah). To prevent overcharges by sellers and, to a lesser extent, the taking of excessive advantage of an existing "buyers' market," the ancient sages had already established the principle that if the price paid for an object exceeded or was below its market value by one-sixth, the sale could be nullified by the injured party. This rabbinic doctrine of "misrepresentation," which seems to have inspired some related teachings of the Church Fathers and, through them, the Code of Justinian, could prove to be a serious obstacle under the freer economy of medieval Islam or modern Europe. An escape clause was opened by the rabbis, however, through their emphasis on psychology. They taught that if a seller openly declared to the purchaser that he had overcharged him by so and so much and the purchaser accepted the deal, there was no redress. Also by removing such important areas as land, slaves, and commercial deeds – the latter particularly important in transferring properties from one individual to another – from the operation of this principle, the economic realities could reassert themselves without formally altering the law. The same exception facilitated barter trade. A man could trade, for example, a needle for a coat of mail if, for some psychological reason, he preferred the needle. This was particularly true in the case of jewelry where emotional preferences might well have outweighed purely market considerations.
Among the transactions also not subject to the law of "misrepresentation" was free labor. Although the economic importance of hired workers was much greater than that of slaves, there was no comprehensive labor legislation in rabbinic law (see *Labor Law). Generally, the leaders preferred the employment of Jewish workers as a matter of ethnoreligious policy. Typical of the rabbinic attitude was Maimonides' contention that "he who increases the number of his slaves from day to day increases sin and iniquity in the world, whereas the man who employs poor Jews in his household increases merits and religious deeds" (Yad, Mattenot Aniyyim 10:17). This doctrine implied a general right to work for Jewish laborers, just as it conversely stressed everybody's duty to work in order to make a living. "Skin a carcass on the streets [the lowest type of labor], rather than be dependent on other people" was an old rabbinic watchword. Because of the primarily psychological interpretations, an employer could overtly arrange with a free laborer to do work which he could not impose upon a slave, since this was but a voluntary agreement on both sides. Similarly, the ancient protective regulation in the Bible that the payment of a daily worker's wages must not be delayed overnight could be modified by mutual agreement if a labor contract extended over a longer period. On his part, the employee was obliged to do an honest piece of work and not waste any time. Following ancient precedents, however, the rabbis allowed agricultural workers to partake of some of the grapes or grain on which they were working, though not of the fruit from orchards or vegetables from truck gardens. There also were many specific regulations concerning different categories of labor, such as shepherds. Each category had its own regulations, largely derived from age-old customs prevailing in particular localities.
The most difficult problem confronting the Jewish leaders was that of moneylending on interest. From biblical times there existed the outright prohibition, "Unto thy brother thou shalt not lend upon interest" (Deut. 23:21). Once again the approach of the ancient and medieval interpreters to that passage was based on ethics and psychology rather than economics. We are told in the same verse that "unto a foreigner [or stranger] thou mayest lend upon interest," but it did not occur to any of these interpreters to look for an economic rationale for this distinction. Under the conditions of ancient Palestine, lending money to a fellow Israelite usually meant extending credit to a needy farmer or craftsman for whom the return of the original amount plus the prevailing high interest was an extreme hardship. At the same time the foreigner, that is, the Phoenician-Canaanite merchant, as a rule borrowed money to invest it in his business for profit. Such a productive form of credit fully justified the original lender to participate in some form or other in the profits derived by the borrower.
Instead, the interpretation was always purely moralistic, namely a demand that lending to a fellow Jew had to be purely charitable, while extending credit to a non-Jew could be a businesslike proposition. Without going to the extreme of St. Ambrose who considered lending to a stranger a legitimate hostile act against an enemy (ubi ius belli ibi ius usurae), nor sharing the equally extreme view of some Jewish jurists who considered the biblical phrase, la-nokhri tashikh a commandment: "thou shalt," rather than "thou mayest," lend on interest to a stranger, most rabbis followed the talmudic rule that for segregationist reasons all but well informed scholars should abstain from moneylending to gentiles altogether. Yet they admitted that many Jews could not make a living any other way. Remarkably, not even the medieval Jewish Aristotelian philosophers quoted, as did their Christian counterparts, Aristotle's doctrine of the essential sterility of money. Whatever the theoretical justification of this point of view was, it ran counter to the daily experience of most Jewish sages that money could, in fact, earn greater increments than did land or any other movable property.
In their extremist ethico-psychological bent of mind the rabbis even outlawed such external forms of "usury" as nonmonetary gains. They taught, for example, that, unless the borrower used to do so before securing the loan, he was not entitled to greet the lender first or even to teach him the Torah. Echoing talmudic teachings Maimonides insisted that "it is forbidden for a man to appear before, or even to pass by, his debtor at a time when he knows that the latter cannot pay. He may frighten him or shame him, even if he does not ask for repayment" (Yad, Malveh ve-Loveh 1:1–3). Needless to say, only a few pietistic moneylenders could live up to these high expectations. On the other hand, economic realities, particularly in countries like medieval England, France, northern Italy, and Germany, where banking became the very economic foundation of many Jewish communities, forced the Jews to make some theoretical concessions. In his apologetic tract, Milḥemet Mitzvah of 1245, Meir b. Simon of Narbonne argued that "divine law prohibited usury, not interest… Not only the peasant must borrow money, but also the lords, and even the great king of France… The king would have lost many fortified places, if his faithful agent, a Jew of our city, had not secured for him money at a high price" (cited by Adolph Neubauer from a manuscript in Archives des missions scientifiques, 3d ser., 16, 556). Addressing his own coreligionists, a German rabbi, Shalom b. Isaac Sekel, insisted that "the reason why the Torah holds a higher place in Germany than in other countries is that the Jews here charge interest to gentiles and need not engage in a [time-consuming] occupation. On this score they have time to study the Torah. He who does not study uses his profits to support the students of the Torah" (cited by Israel Isserlein's disciple, Joseph b. Moses of Hoechstadt, in his halakhic collection, Leket Yosher, ed. by J. Freimann (1903–10), 1, 118f.).
Like their Muslim and Christian colleagues, the rabbis had to legitimize many practices aimed at evading the prohibition of usury. The ingenuity of businessmen and jurists invented a variety of legal instruments which, formally not reflecting borrowings, nevertheless secured sizable profits for the capitalist advancing cash to a fellow Jew. Called in Europe the contractus trinus, contractus mohatrae (the purchase of rents, and the like), these instruments were also employed by Jewish lenders with telling effect. It was also easy to circumvent the law by the purchase of bonds. Since deeds were generally exempted from the prohibition of usury and could be discounted below their nominal value, a lender could extend a profitable loan to a third party by using an intermediary. Agents, too, were entitled to charge a commission for securing credit for any borrower. Most importantly, the various forms of the commenda contract, which enabled a lender to appear as a silent partner in the enterprise, opened the gate very widely for "legitimate" profits by the "investor." The permission of that type of iska ("deal") became quite universal and served as the major instrument for credit transactions among Jews.
These examples of the rabbis' economic teachings, which can readily be multiplied, must suffice here. They give an inkling of the great power of halakhic exegesis which made it possible for scholars to read into the established texts of Bible and Talmud provisions, as well as limitations, to suit the changing needs of Jewish society. In this way the people's intellectual leaders were able to preserve a measure of continuity within a bewildering array of diverse customs and usages. At the same time ample room was left for individual opinions, which often sharply differed. Some interpretations were derived from the simple operation of juristic techniques which had an autonomous vitality of their own. However, in many cases the communal leaders, rabbinic and lay, often personally immersed in a variety of economic enterprises and thus acquiring much practical experience, consciously made interpretive alterations to reflect genuine social needs. Since the entire system of Jewish law operated through inductive reasoning on the basis of cases rather than the deduction from juristic principles, as advanced by Roman jurists and their medieval disciples, the sages of various countries and generations were able to maintain a certain unity of purpose and outlook among the different segments of the Jewish dispersion. They thus lent the Jewish economic rationales the same kind of unity within diversity that permeated the entire Jewish socioreligious outlook on life.
[Salo W. Baron]
The variety of place, social condition, and economic development puts any review of the economic aspects of Jewish life since the end of the 15th century beyond the reach of a simple unified framework. For this variety to be seen in a meaningful way, for an analysis of the leading features of the subject, there must be some preliminary, if crude, divisions of the subject. Yet even a simple temporal division of the developments of almost 500 years is not free from difficulty. The pace and pattern of Western economic development differed markedly from country to country and from region to region, and as a matter of course the economic situation and activities of the Jews in those countries and regions differed widely also. The striking event, the momentous date, that might symbolize a qualitative change in Western economic structure is not to be found. If there is some basis for separating the early modern economic history of the Jews from the later modern developments, it must be sought in other criteria: the basic structure and leading characteristics of the economy and the goals of the society.
If we accept these criteria, it is not difficult to divide the whole period into two phases. During the first, economic development and economic policy were clearly and rigidly subordinated to noneconomic considerations of the society, and there was relatively little room for activity prompted by considerations of economic rationality as determined by the individuals concerned. In the second phase economic interests were articulated more openly and clearly, and the idea of freedom of economic activity was accepted as leading to results generally beneficial to the community as a whole. The transitional period between the two phases saw fundamental changes occurring throughout society: the legal and social framework had to be adjusted to the new demands, as symbolized by the substitution of the voluntary contract for traditional, customary relationships or for relationships hitherto determined and regulated by the usage of special privileges and governmental orders. Equality before the law was established as a principle that overrode the predominant institutionally ingrained system of legal and social inequality.
This transformation took place slowly and unevenly. Decades and even centuries apart in the various regions of Europe, the process nevertheless was continued and was accompanied by major differences in the legal status, pattern of employment, and other characteristics of the various Jewish communities at each point in time. Thus, the study of the economic aspects of Jewish life over the 500 years is basically the study of the participation of the Jews in the process of economic change and of the impact of the changing conditions upon the economic and social structure of the Jews. Even within the first period, which for reasons of convenience and convention will be called the early modern one, the conditions of the Jews living in the economically advanced regions must be distinguished from conditions in the economically less developed regions of Europe. Examples of the advanced regions are the city-states and major commercial centers of Italy and the Low Countries; examples of less developed regions are the countries of Central and Eastern Europe.
The discussion here of the early modern period will be confined almost exclusively to Europe because most Jews lived there (although Jews of course lived within the boundaries of the Ottoman Empire, in the Middle East, and other areas). Although the variety and heterogeneity of the European situation make generalization hazardous, much of what was done in one part of the continent to the Jews was more or less emulated in other parts, because of the cultural affinities within Christian Europe.
The Jewish communities in Europe at the end of the 15th century were not homogeneous in the cultural sense. The two mainstreams or dominant groups were the *Sephardim, originating from the Spanish-Portuguese Jews, and the *Ashkenazim, originating from the French and German Jews. These two branches grew apart, especially from the time of the Crusades. By the end of the 15th and beginning of the 16th century, when the Sephardi Jews were finally expelled from the Iberian Peninsula, the two major "tribes" of European Jewry came into a much closer contact, one resulting not in integration of the two, but in tolerable coexistence and peripheral cross-cultural interchange. The intellectual impact of the Sephardim was noticeable primarily in one area, namely that of religious mysticism. In other areas the Ashkenazim excelled the Sephardim in the creative development of what could be termed Jewish culture.
In the area of economic and social activity, the difference between the Sephardim and Ashkenazim was profound. The Sephardim were on the average much more affluent, skilled, and better educated (at least in the secular sense) than the Ashkenazim. In comparison the Ashkenazim were not only less prosperous but less culturally influenced by the gentile environment and less successful in any attempts at finding an intellectual symbiosis between their own and the surrounding culture. Therefore, the elements of the resource endowment of the Sephardi Jews made them the more attractive group of the two for settlement and employment in any European country. The Sephardi Jews were able to bring into the new areas of their settlement highly developed skills and craftsmanship in the areas of luxury consumption and were therefore highly valued by the influential consumers of such products and services, by the nobility, gentry, and patricians – the ruling classes of the contemporary societies. From available direct and circumstantial evidence it becomes clear that some of the Sephardi Jews were able to transfer portions of their capital out of Spain and Portugal, and thus their settlement in an area was accompanied by a capital import. It is interesting to note that in most cases, as far as the Christian countries are concerned, the Sephardi Jews were attracted to and sought opportunities in the more economically advanced regions, areas with both developed trade and crafts and with a legal framework that did not hinder the economic activities of a developed money economy. These were areas actively engaged in foreign commerce in which the knowledge of commodity and money markets possessed by Sephardi Jewish merchants could be profitably utilized. An additional asset of some Sephardi Jews was their knowledge gained from family and former business connections in the Iberian Peninsula and the overseas empires of Spain and Portugal. The Jewish participation in trade with Spain, Portugal, and their colonies never ceased, contrary to the myth of a worldwide Jewish boycott of the Iberian Peninsula.
Thus it could be roughly assumed that the "territory" of the Sephardim, at least during the 16th and 17th centuries, was the city-states and commercial centers of Europe, while the "territory" of the Ashkenazim was the interior, the landmass or hinterland of Central and Eastern Europe.
The economy of city-states like Genoa, Venice, and Dubrovnik (Ragusa), or of commercial centers like Antwerp, Amsterdam, and Hamburg, was based on international and interregional trade and the exploitation of politically dependent territories where trade was carried on or which were administered by corporate bodies either in the form of trading companies or governmental agencies acting on behalf of organized mercantile interests. The main problem for the Jews, as for any group of outsiders, and even more so because of some peculiar restrictions or prejudices, was to gain entry into the organized institutions of economic activity, whether registered partnerships, trading companies, or later the commodity and money exchanges. It was difficult, if not impossible, for the Jews as newcomers to operate outside the institutional framework except in areas where their specialized skills or professions (such as medicine or science) would be recognized as exceptionally useful for the polity or economy. Thus, each outsider, including the Jews as individuals, had to fit into the preexisting economic structure and social fabric, upon neither of which he could expect to make any significant impact. The process by which the Jews were economically integrated in the city-states and commercial centers was therefore primarily the sum total of adjustments by individuals in these occupations and activities. Much depended on individual skill or wealth, with very limited room left for the collectivity of the Jews, the autonomous and organized Jewish community, to influence significantly the pattern of economic activity of its members.
The economic environment of the majority of the Ashkenazi Jews in the areas of Central and Eastern Europe differed from that in the city-states and in the major commercial areas. In the latter the Jews were restricted in terms of numbers, place of habitat, and areas of gainful employment, and formed almost exclusively an urban element concentrated in the major cities and confined largely to trade, some specialized skills, and money and lending operations. The situation of the Jews in Central and Eastern Europe, by contrast, can be described as characterized by both greater opportunities and more severe constraints. The peculiar combination is a paradox of underdevelopment and discrimination, both operating simultaneously.
There is an inherent conflict in societies with a high propensity to have rigid institutional arrangements in their economic sphere, even if within the institutions there may be provisions and conditions enabling the exercise of individual initiative. This is the conflict between such a propensity for institutional stability and the need to innovate, for it is only through innovation that the economy can grow. Within such societies it is particularly difficult for newcomers, who have to be integrated and accepted, to innovate. Outsiders are often forced to follow a circuitous road and assume greater risks to achieve their objectives. An interesting case in point is presented by the penetration of the Jews into the international *sugar trade. Apparently finding it initially difficult to enter via trade activity, Jews of Amsterdam entered the sugar plantation business in Brazil, Surinam, and the West Indies. The result was beneficial for many parties: for Amsterdam, a widening of its foreign trade; for the Jews, entrance into sugar production and sugar trade; for Europe, presumably a decrease in the price of sugar as a result of a rapid increase in supply.
In the predominantly agrarian economies of this period, a very large sector of the population was on a subsistence level and for all practical purposes outside the exchange and money economy. The money economy included the court, the nobility, gentry, and the urban classes, but only to a very limited extent the majority of the rural population, the peasants or serfs. While the areas of traditional or routine economic activity were circumscribed and regulated to an extent that made it virtually impossible for the Jews to enter the established institutions, there was a relatively wide spectrum of activities that were not institutionalized or controlled and that broadened the market or money economy. This presented a range of opportunities for individuals who possessed or were forced to have a lesser-than-average risk aversion for activities in which returns proved to be higher and for whom accordingly the returns could be higher than average.
The Jews suffered from discriminatory legislation; very seldom did their legal or social status as individuals depend upon their individual skills or the size of their personal wealth. There was no institutional arrangement by which a Jew could be integrated into his economic class or professional group. In a sense, he was the eternal outsider regardless of the economic function he performed, operating under conditions of discrimination and extreme uncertainty, dependent upon the arbitrary decisions of the rulers, and paying a high price (in the form of high taxes, bribes, ransom, etc.) for his right to be employed. Thus with the environmental conditions differing between the more advanced and less advanced countries, the ranges of opportunities and the areas of economic activity of the Jews differed, which in turn influenced the patterns of utilization of their resource endowment and their social structure.
One of the chief characteristics of Jewish economic activities in Europe during the early modern period was the relative (for this period) mobility of both capital and labor of the Jews. Even if we could consider exclusively voluntary mobility, the two other outstanding groups, the Italians and the Dutch, are in quite a different class when compared with the Jews. Thus, the migration phenomenon can be considered as one of the most significant dynamic elements of the economic and social history of the Jews. Jewish migration from the end of the 15th century was from Western to Central and Eastern Europe; this continued as the main vector until the second half of the 19th century. The eastward movement overshadowed in its intensity the "return" of the Jews to the countries of Western Europe from which they were exiled in the earlier centuries and to which they gradually returned between the 17th and 19th centuries.
The process of migration did not take the form of an even, continuous flow but proceeded through spurts and movements differing in intensity, with interruptions, reversals, and resumptions that defied regularity. It is also difficult to ascertain, apart from the general vector of the migration movement and the main routes, the average distances and time periods of the earlier phases of the migration. For the Sephardi Jews two general directions can be established: one from the Iberian Peninsula to the areas adjacent to the Mediterranean toward Italy, the Balkans, and Asian Turkey; the other toward southern France, the Netherlands, Hamburg, and England. For the Ashkenazim the direction of migration was from Western Germany over Austria toward Bohemia and Hungary, with another branch through Bohemia leading toward Poland, Lithuania, Belorussia, and the Ukraine, while the Jewish population of eastern and northern Germany consisted of primarily Austrian and Bohemian Jews and to a lesser extent of western German Jews. Many aspects of Jewish migration still await thorough investigation. Nevertheless, certain generalizations can be made on the basis of available evidence:
(1) By and large the eastward migration was in fact a movement of labor and capital from more highly developed to less economically developed countries and regions, from areas of greater availability of skilled labor and capital to areas of greater scarcity of these factors of production.
(2) The mobility of labor and capital and thereby the migration process was facilitated not only by religious identity but also by the cultural affinity of common customs and language, by the availability of established and organized Jewish communities not far from the destination of the migration route, and by the relatively high level of liquidity of capital on the part of capital owners.
(3) The significance of the migration process for the economy of the Jews was due to a large extent to the fact that through migration and mobility a more remunerative distribution of human and capital resources could be achieved over a large territory, while both cultural and economic intercourse could be maintained thanks to the continuing ties between the older and newer communities.
(4) Some of the benefits of the process of mobility accruing to the Jewish communities were congruent with the benefits to the economies of countries that absorbed the Jewish migrants, namely the import of skilled labor and capital resources to meet a strong demand.
(5) The migration process of the Jews in the eastward direction, although caused to a very large extent by economic considerations, even by the differential of economic well-being or differences in the rates of return to skills, had significant effects in other areas as well. It became a part of the "strategy for survival" either in cases of mass expulsions and exile or under conditions of a clear worsening of the legal status. Moreover, the absence of effective internal barriers supported the prevailing notion of a single, general Jewish community in Central and Eastern Europe. Leading schools drew students from far afield; famous scholars and rabbis were not bound to a particular locale; mystics and messianic claimants attracted multitudes from all over the continent.
The first reversal of the direction on a larger scale in the eastward migration took place around the middle of the 17th century during the times of the *Chmielnicki massacres in the Ukraine, the Swedish and Muscovite invasions of Poland, and the subsequent worsening of the economic situation there. The flow of refugees from Eastern Europe reached western Germany and even the Netherlands. From the middle of the 18th century, there was a small but continuous flow of Central and Eastern European Jews trying to settle in Western Europe and North America. But this early ebb of migration had a minimal effect upon the economic life of the communities that they left or the ones that they joined. It only indicated that change was possible if not imminent.
Any systematic insight into the economic activities of the Jewish population in Europe during this period requires an examination of the patterns of employment. If the chief economic characteristic of Jewish migration was the movement from more developed to less developed countries one would expect the Jews to be employed primarily not in areas of an abundant labor supply but in the economic sectors with a scarcity of labor and capital, namely trade and highly skilled crafts. Only when the employment in such areas had reached a level of saturation or was encountering barriers would we expect the migrants to turn to less remunerative employment. The great majority of the Jews was employed in sectors of the economy that were directly connected with the market. Very few operated outside the exchange and money economy, while most derived their incomes from the production and sales of goods and services. It is true that the markets differed, but it is important to bear in mind that the market psychology affected the activities of the great majority. It is therefore appropriate to begin the review of the patterns of employment with the type of employment and activity most intimately connected with the organized markets and also yielding the highest returns. The "big business" of that period was carried on by a small group of enterprising individuals who either combined or fulfilled separately the functions of wholesale merchants, bankers, and industrial entrepreneurs. Such individuals in the economically advanced countries acted mostly in their private capacity, in the economically backward countries mostly in conjunction with the government, and were termed *Court Jews.
It is impossible to measure directly the volume of international trade carried on by Jewish wholesale merchants from the 16th to the 18th century, or the share of Jewish trade in the countries they inhabited, or even the share of these countries in the total volume of international trade. Such data are not as yet available, but it should be clear that, for example, a 10% share in the Dutch trade would probably be more than a 50% share in Poland's international trade, because of the relative sizes of the trade volume of the two countries. Direct and indirect evidence indicates that the Jews were involved in the trade of precious metals, the colonial trade, and trade of products possessing a high value per unit. Only later, with the improvement of shipping technology and cheapening of transportation costs, did Jews enter the trade in grain and other bulk products, thus expanding the trade with the agrarian economies of Central and Eastern Europe.
As bankers and bill brokers in the economically developed countries, their operations did not differ from others of the profession. The two advantages that they might have possessed over some of their competitors were their ability to transfer money rapidly from one locality to another, as they had either family or business connections with members of other Jewish communities, and the extension of credits by using the savings deposited with them by members of the community. Jewish bankers' preference for short-term over long-term credit could perhaps be explained by the desire for a quicker turnover of their capital and the unwillingness to accept land or real estate as security for loans outstanding. Industrial entrepreneurship of the Jews in the developed areas was due to the availability of technical skills and business expertise in a number of craft and industry branches that the incoming Jews had brought with them.
In the less developed countries the Court Jews played a significant role, and the gradual transformation of their functions reflected the economic development of such countries as well as the contribution such individuals made to the development process. The shortage of money and the low credit standing of most European rulers and their governments were notorious. Accordingly, the initial role of the Court Jews, as the title implies, was to serve the rulers in a double capacity, as lenders of money and as suppliers of precious metals to the mint, precious stones, and other luxury items for consumption of the court. The form of payment and security given were often tax farming, toll collection, and other privileges that provided for the principal and interest of the transaction. Thus the Court Jews not only provided credit for the rulers but also performed functions in the revenue collection of the states. Two major factors contributed to the transformation of the nature of the service of the Court Jews. The first were the wars of the 17th and 18th centuries which called not only for greater monetary outlays and thus expanding demand for credits, but also for the organizational talent to supply the numerous armies in the field with weapons, ammunition, clothing, food, and fodder. The need to contract and pay for, and to deliver large bulks of necessary supplies at great distance, called for new and substantial organizational talents. The Court Jews performed well when requested to carry out the above tasks, and in the process of doing so gained new knowledge in large-scale operations requiring greater efficiency in mobilizing vast resources in relatively backward economies. In so doing the Court Jews were assisting the political interests of the rulers or of the state.
Another factor contributing to the transformation of their service was the entry of the Jews into the ranks of industrial entrepreneurs. The setting-up of mining and manufacturing industries in the economically backward countries was not a market response to a demand for such products. It was in most cases either a direct result of government action or an indirectly induced development as a result of a conscious government policy. Government policies in those countries pursued two goals: first, to develop armament industries to strengthen the countries militarily and politically in their struggles for hegemony or for the restoration of a power balance in Europe; secondly, to develop industry branches that produced import-substitutes, which meant primarily products used by the wealthy upper classes of society. The military needs on the one hand and the maintenance of a positive balance of payments on the other were mainly responsible for the state initiative and support given to early mining and manufacturing industries. Given the government financial or tax support for the industrial establishments, the critical factors were skilled labor and entrepreneurial and managerial talents. In providing technical skills the contribution of the Jews was probably inferior to the possibilities of importing skills from the advanced countries, so the primary area of their contribution, by no means exclusively Jewish, was that of entrepreneurial and managerial talent. Their previous experience in large-scale banking, military contracting, etc., provided the necessary background. The involvement in previous services for the state gave them the knowledge and political connections necessary for obtaining licenses, privileges, and often the labor force for the budding industrial enterprises. Thus the former Court Jew became an industrial entrepreneur, continuing social innovation, creating new types of economic organization, and helping to break old patterns and traditional systems. The economic significance for the Jewish community of this group of wholesale merchants, bankers, and industrial entrepreneurs consisted not only in their role in the accumulation of capital, but also and primarily in their collective role in creating employment opportunities for other Jews. The relatively large-scale operations of this entrepreneurial class gave rise to a demand for services that could be performed by other members of the community. For example, in such enterprises as supply-contracting, a system of subcontracting was established that provided income for a relatively large number of smaller-scale merchants, and even the administration of large landed estates provided employment for many innkeepers, alcohol distillers, and other self-employed members of the Jewish community.
A second area of employment, which was represented by a massive participation of the members of the Jewish community, was that of smaller-scale and retail trade and of commercial intermediaries operating with limited capital resources, in many cases not their own. In the economically more advanced centers the economic activities of this employment group were rather specialized, with heavy concentration in limited areas of the retail trade and specialized services as commercial and financial intermediaries. Here too their activities were limited by the existing institutional structure of the commercial centers. In order to compete with the more established firms or individuals, the Jewish merchants tried to deviate from the standards of goods being marketed and provided a greater variety in terms of quality for a broader range of prices. The economic effect of such – for that period – unorthodox behavior was a broadening of the market and an increase in the number of consumers attracted by a wider range of quality. In the less advanced economies of that period, the Jewish merchants had to overcome both the power of the urban guilds and the customary location of actual markets in the cities. Therefore a major area of the trade of the Jewish merchants consisted in reaching the social circle beyond the orbit of the exchange economy, the peasants. The merchants sought out the areas of a marketable surplus of agricultural products. By increasing the size of shipments from the outlying areas it was possible to decrease the costs of transportation that previously had made it unprofitable to bring these products to market.
A number of varied and interesting phenomena attended this Jewish mercantile activity. First, through their penetration of the rural areas Jewish merchants and peddlers supplied both the manor and the peasant huts with manufactured goods that were in demand, and simultaneously collected the marketable surplus of grains, flax, wool, and livestock. This twoway trade enabled the Jews to compete relatively successfully with the local merchants who conducted their trade at fixed points, primarily in the cities, and were relatively protected by their status as city dwellers and merchants. Secondly, the penetration of Jewish peddlers and merchants into the countryside enabled them to organize early, still primitive forms of a putting-out system, making use of and helping in the further development of cottage industries in the rural areas, and thus organizing and supporting a form of production in competition with the urban crafts controlled and protected by the city guilds (see *Peddling). Thirdly, the employment of Jews in innkeeping, alcohol distilling, and livestock production in the rural areas helped further to inject into the agricultural sector the elements of an exchange and money economy. The result of the activity of the Jewish small merchants in the rural areas was to encourage the production of an agricultural surplus, to stimulate the consumption of nonagricultural goods, and to foster the alienation of some part of the former agricultural labor force from the land and to channel it into the cottage industries and into transportation services, thus helping to create a nonagricultural labor force in the rural areas that depended upon wages rather than upon returns from land.
The second largest employment group within the Jewish community was that of the artisans. Given the limited size of the market and the degree of organization of the craft guilds, the Jewish artisans faced a constant struggle for the right to compete. Since they were refused admittance to the craft guilds, they suffered from the constraints imposed on non-members of the guilds and at best could count on a compromise that would allow them to continue their activity at the price of compensatory payments to the guilds. The alternative was to be restricted to the very narrow market for craft production provided by the Jewish community. Faced with this choice, the Jewish artisans accepted the conditions of higher costs of production, including the payment of compensation to the guilds, until such time as the burden of discrimination could be lessened or alternative arrangements could create new opportunities. The range of Jewish crafts was very wide, beginning with highly specialized gold- and silversmiths and jewelers, ranging to masons, carpenters, and blacksmiths, but with a heavy concentration in the clothing crafts like tailoring, cap-making, furriery, and shoemaking. This concentration indicates a reliance upon a mass market. Through this orientation toward an expanding market the survival of Jewish artisans was guaranteed and new arrangements for production and marketing were developed. The new arrangements took the form of what amounts to a putting-out system organized by Jewish merchants who provided the artisans with raw materials and occasionally with advance payments for their work. Thus, the artisans were converted almost into wage laborers. The arrangement, however, freed them from the necessity of having their own or borrowed capital tied up in stocks of raw material or finished goods and also from involvement in the process of distribution, these functions being performed by the merchants. From the end of the 16th century the artisans started to organize Jewish craft guilds. Although there is still much debate about the actual effectiveness of these Jewish guild activities, there is no doubt that their establishment was a response to a deeply felt need for collective action and for articulating their interests at least within the Jewish communities. Under such arrangements Jewish artisans were better able to survive at least until the time when modern industry posed new threats to the positions of small crafts and the putting-out system.
A description of the various employment categories within the Jewish milieu would be incomplete if it did not note that a certain part of the economically active population was employed within the Jewish community itself. This general area of employment can be divided into two groups: (1) the occupations that served the Jewish community exclusively; (2) those providing services for which an assured demand existed within the Jewish community but of which outsiders also could avail themselves. Among the first category were rabbis, schoolteachers, ritual slaughterers, scroll scribes, employees of the ritual bathhouse, and keepers of synagogues and cemeteries. The demand for the services of this group was determined largely by religious laws and customs and therefore was not very flexible. Among the other category were butchers, candlemakers, bookdealers, and prayer-shawl weavers. The demand for their employment could have been a joint demand since they were capable of providing services for non-Jews as well. Nevertheless the Jewish community had to sustain the costs of maintaining the bulk of their services when outside demand proved insufficient. The percentage of all these intracommunity services in the total of gainful employment varied for the particular communities according to their size; but there was less variation if the Jewish population of each of the countries was viewed as a unit. While smaller communities could have shared in some of the services that none alone could afford, the combined percentage of intracommunity employment, when standardized for size, was not much different from that of the larger communities. As a rule of thumb it would probably be correct to assume that at least 10% of total employment was devoted to the internal community services.
These various categories of employment constituted a wide spectrum within the Jewish communities and absorbed much of the energy of its members. In terms of the percentage of gainful employment or actual volume of labor input within the year they were probably greater than the average for the population at large for whom seasonality of agriculture reduced the volume of labor input. Apart from them, however, there existed a numerous group of unemployed or unemployable members of the community. It would be fair to assume that the primary responsibility for the support and maintenance of the unemployed or unemployable rested with the extended family which was the basic social unit within the community. Whenever the family was unable to provide such support, the community accepted such people as public charges. The three major ways in which the community met its responsibilities were through private charity; institutionalized voluntary associations organized for the purposes of providing assistance through institutions, such as hospitals, homes for incurables or the aged, and loan-societies; and through direct community support out of the taxation levied upon the tax-paying members. In accord with traditional beliefs, private charity was not only considered a responsibility but also an opportunity for the more prosperous members of the community. The activities of voluntary associations concerned with this type of welfare and social services prevented a full bureaucratization of functions, which would otherwise have been taken over entirely by the community authorities, and left thus much room for individual initiative and energy. Needless to say, neither private charity nor the work of the voluntary associations sufficed to meet the problem. Since the number of unemployed and unemployable also depended upon general economic conditions, in times of relative prosperity the economy would tend to absorb the unemployed and the community would be in a better condition to support the unemployable, while the reverse was true during periods of economic decline. Thus the role of community taxation increased at times when the tax burden was already felt most heavily. Nevertheless, the communities accepted this "welfare responsibility" either out of a sense of moral obligation or in order to mitigate the social friction and conflicts that a refusal would have entailed. It is difficult to estimate the proportion of unemployed or paupers within the Jewish communities for this period, but depending upon the economic and legal conditions of the Jews, it would be no exaggeration to estimate their number as between 15 and 25%, with a secular tendency to rise since the second half of the 17th century.
It is likewise difficult to document the employment distribution within the Jewish communities for countries scattered all over the map of Europe, although there are data for separate local communities either for irregular intervals or for single years. The employment distribution for the largest Jewish community in Europe – Poland-Lithuania – in the middle of the 18th century can roughly be reconstructed. The employment distribution differed markedly among the Jews settled in the larger cities, among those inhabiting the small towns, and among those scattered in the rural areas. In addition, the peculiarity of the settlement pattern of the Jews in Poland-Lithuania during this period was the large proportion of Jews living in rural areas, about one-third of the total Jewish population. While in the rural areas leaseholding (see *arenda), innkeeping, alcohol distilling, and ancillary agriculture were the main occupations, the mass of Jewish artisans inhabited the larger cities and smaller towns. The social structure which emerges from the approximate data reflects the following employment distribution of the Polish Jews by the middle of the 18th century: wholesale merchants, financiers, etc. – about 2–3%; small traders, including leaseholders and innkeepers – less than 40%; artisans and other urban wage earners – more than 33%; employed in intracommunity services – about 10%; unemployed and paupers – at least 15%. The most obvious conclusions that could be drawn from this employment distribution is that the vast majority of the Jews earned their livelihood from physical labor and that a substantial proportion of the population was either already living on charity or on the threshold of poverty.
The consideration of the employment distribution within the Jewish community sheds some light on the problem of the sources of Jewish income and on one particularly interesting aspect, that of resource endowment and returns to labor and capital, the factors of production. For a long time the prevailing view among historians of the period has been that capital was the more important component of the resource endowment of the Jewish community and that returns to capital were also quantitatively the more significant component of the income earned by the Jews. Needless to say, this view was more congruent with popular images than with documentary calculations. Both progress in historical research and increased sophistication of economic analysis have led to serious questioning of this view. There is no doubt that a substantial part of the capital with which the Jews operated was borrowed from non-Jews, as evidenced by the bankruptcy of the Jewish communities in Poland during the 18th century and their large debts to the nobility and clergy. It is also increasingly clear that the return to skills in the pre-industrial period was relatively higher than was initially assumed. If first the labor income derived from the goods produced by Jewish artisans and craftsmen is calculated and then the labor component of the earning in retail trade is added, the result arrived at would be a very substantial share of the total income earned by all employed. The vast majority of the Jews during this period earned the bulk of their income from labor services. The profit rate of owners of capital could be maintained only by using capital in new areas of trade and industry, thus counteracting the secular tendency of the profit rate to decline while capital was becoming relatively more abundant. The capital earnings of the members of the Jewish community were in part used, through a process of income redistribution, to maintain intracommunity services and to aid the poorer members of the community.
The income position and income level of the Jewish community depended upon prevailing economic conditions and their changes. If the Jewish community is considered as being involved in an exchange of goods and services with the community at large, the economic well-being of the Jewish community would depend not only upon its employment composition and resource endowment, but also upon the "terms of trade" of its production of goods and services with the products for which it traded with the community at large. If, for simplicity's sake, it is assumed that the Jews were producing manufactured goods and consuming food and raw materials, their prosperity or lack of it would depend to some extent upon the terms of trade between manufactured goods and raw materials. In fact, the income of the Jews depended upon the economic situation of the various countries and particularly upon conditions in the agrarian sector which provided the bulk of the consumers of the products and services produced and marketed by the Jews. Since the goods sold by the Jews were more sensitive to the income position of consumers and since prices tended to vary with regard to relatively smallchanges in the demand or supply of such goods, their income probably fluctuated even more than that of the primary product producers. At the same time the volume of consumption of the Jews was less liable to fluctuate, thus tending to underscore even more the vulnerability of their net income position.
The secular trend of the economic well-being of the Jewish community in Europe varied from country to country, making it difficult to establish a general trend that would fit all countries during identical periods. The most general trend in the economic conditions of the Jews, and one that helps to explain the historical direction of the migration process, is the continuous improvement of their economic status and income level in Eastern Europe until the middle of the 17th century when the decline set in. About the same time, actually after the recovery following the Thirty Years' War in Germany (1618–48), a slow process of improvement of the economic conditions favorable to the Jews started in Central and Western Europe. While the 18th century reinforced the two diametrically opposed tendencies, the reversal of the migration pattern became discernible. The dependence of the Jews upon the economic conditions of the country and the particular society is self-explanatory. What is less clear, however, is the existence of significant differences in the attitude of different social groups toward the Jews behind the facade of a generalized "attitude."
The pattern of economic and especially social relations between Jews and non-Jews remained almost unchanged throughout most of the early modern period. These relations were initially established to a very large extent upon the basis of the expected or actual utility of the Jews to the interests of particular social groups. The similarities and differences of economic interests of the social groups and their relative political strength played a decisive role in shaping the constraints upon the economic activity of the Jews. The following social groups might be differentiated: the crown and the nobility; the gentry; the merchants, with differentiation between the more advanced and backward countries; the craftsmen; and the peasants. From the outset it should be noted that the Jews had no economic counterpart to some of the social groups (crown and nobility, gentry, peasants) and thus no problem of economic competition could enter into the relationship. In the cases of the craftsmen and merchants, however, the problem of direct competition created almost an a priori presumption of an antagonistic relationship.
For the crown, the Jews were either a source of revenue or a vehicle of economic development in the areas of foreign trade, money and credit, and later manufacturing industry. The dependence of the Jews upon the crown allowed them to be considered both as a pliable instrument of government policies and as an important source of money income, fully compensating for the distaste or religious resentment generally felt toward the Jews. In the countries where the upper nobility shared in the power of the government, the economic convenience and money incomes from the Jews derived by the nobles employing them on the large private estates or in the discharge of the nobility's public offices rivaled the gains derived by the crown. The attitudes of the gentry toward the Jews were somewhat more ambiguous than that of the nobility. The Jews served the gentry as middlemen in the sale of their agricultural surplus and as suppliers of manufactured goods on terms more favorable than other merchants would customarily offer. In addition they often served as a source of credit for the money-hungry, debt-ridden gentry. Like the nobility, the gentry preferred in many cases to have the Jews act as a buffer between them and the peasantry, so that for the opportunity of employment and income the Jews often assumed the role of the gentry's agent in the economic exploitation of the peasantry and in effect became the scapegoat of the justified wrath of the peasants. The presence of the Jews as a threat of competition to the urban dwellers was useful to the gentry in resisting the merchants' demands for economic and political privileges, which the gentry were loathe to give up or to share. The gentry, therefore, appeared as a defender of the Jews and of their activities as traders and craftsmen. The ambiguity in the gentry's position arose mainly in connection with their role as debtors who were quite unwilling to live up to their obligations.
With respect to the merchants, a distinction has to be made between the advanced and the economically backward countries. In the economically advanced countries, the merchants during this period had already given up many of their special privileges in exchange for the legal protection of the business contract. The existing institutions and organizational forms of trade allowed a certain degree of competition; and the merchants as a group did not feel terribly threatened by an influx of newcomers, as long as the newcomers subscribed to the generally accepted rules of business conduct, were subject to the common jurisdiction, and were contributing to the expansion of trade. Therefore, even if the Jewish merchants were not socially accepted, they were tolerated as performing the same social function as the merchants in general. In contrast, the merchants in the economically backward countries were hostile for a number of reasons: (1) the occupation of merchants was circumscribed by sets of special privileges and regulated by the guild organizations in the areas of entry, business behavior of the guild members, and the nature of the markets; (2) the merchants in those countries subscribed very strongly to the erroneous notion that there is at each point in time a given volume of business, and the admission of more people into the profession will only reduce the share everyone already enjoys; (3) the fear of competition, which might lead to a decrease of the profit rate, made the merchants hostile to newcomers in general and particularly to the Jews who were outside their jurisdiction; (4) many of the merchants in the less developed countries were themselves ethnically of foreign stock and by keeping the conspicuous Jews out they tried to mollify the popular impression that trade was almost exclusively in the hands of foreigners. Thus the merchants in such countries did their best, wherever they could, to limit the occupations of the Jews, trying to eliminate competition from the most lucrative areas of trade and from the conventional channels of trade.
The social group that felt subjectively most threatened by competition from the Jews were the artisans who relied even more than the merchants upon benefits derived from old privileges and the guild organization. They tried to augment their incomes by following monopolistic practices, by regulating entry into guilds, setting a long time period for apprenticeship, prescribing the production process in detail, and trying to control the market. The artisan guilds in urban areas were relatively powerful, closed corporate bodies, quite effective in controlling urban crafts. As a social group the artisans had a much narrower outlook than the merchants, were much more under the influence of the Church, and resentful and suspicious of outsiders. During this period the Jewish artisans did not succeed in being incorporated into the general guilds and had to operate outside the Christian guild organization. Attempts to set up guilds of Jewish artisans were numerous and always argued for on the basis of the need for organization for successful competition or income maintenance. Needless to say, the artisans, the plebeian masses of the cities, quite often linked their struggle against competition from Jewish craftsmen and traders to the social struggle against the gentry and urban patricians. Thus anti-Jewish sentiment often accompanied particular forms of the class struggle of the urban plebeians.
The attitudes of the peasantry to the Jews did not matter in terms of the policies toward the Jews, except in cases of peasant wars and uprisings. Nor could the peasants prevent Jews from acting on behalf of the crown, gentry, and nobility. Nevertheless they affected some of the economic activities of the Jewish traders and artisans and were of importance in the social sphere since the peasants constituted the vast majority of the population. There is no doubt that in the situations in which the Jews acted as economic agents for the landowners they were strongly resented by the peasants. But even in the many instances when the Jews helped to bring the peasants into the money economy the attitude was not one of unqualified gratitude. This was due to the fact that the peasants' entry into and participation in the money economy was accompanied by rising demands for incomes on the part of both the landowners and the state at the expense of the peasants. In a sense, with peasant incomes rising, rents and taxes tended to rise accordingly. It would probably not be incorrect to conclude that in spite of tangible benefits provided for the peasants by some economic activities of the Jews, the peasants did not differentiate among the various roles played by the Jews in the rural economy. They were certainly either unable or unwilling to distinguish between different categories of Jews, a trait which they share with other social groups. The Jew was the stranger who, in the eyes of the peasants (as well as of the artisans), was suspected of undermining the traditional order. That old order was one that the peasants did not like, but they were too conservative to substitute another for it because of all the accompanying uncertainties. The Jews, in turn, especially those that settled in the rural areas, were perhaps only a notch above the peasants economically, but they were separated from the peasants by a cultural gulf that could not be bridged. Thus suspicion on the one side was reciprocated by contempt from the other.
To the extent that the relations between some groups of the general community and various social groups within the Jewish community appeared to the contemporaries as antagonistic, and to the extent that the legal framework and policies of many European states were discriminatory, there existed a strong tendency within the Jewish community to engage in self-defense. In addition, there manifestly existed a desire to free themselves of the fetters of restrictions and controls imposed by the state, guilds, and other existing corporate bodies. But the latter attitude did not lead necessarily to a laissez-faire attitude even in areas of autonomous choice. The Jews' demand for freedom of trade or for the free exercise of one's skills in crafts and manufacturing did not include a demand for the abolition of regulations by the Jewish community itself of the economic activity of its members. The adoption of such an attitude would clearly clash with existing economic realities and with the basic tenet of governmental policy toward the Jews, which was accepted, willingly or unwillingly, by the Jewish communities. The point of departure of governmental policies was the principle, explicitly stated or implicitly assumed, of collective responsibility of the community for the acts of its members. In order for the Jewish community to discharge this responsibility at least a modicum of autonomy had to be granted in areas of taxation and civil law.
Seen in historical perspective, the measures of self-regulation and control by the autonomous authorities of the Jewish community over the economic activities of their members were perhaps only minor alterations in the general framework of the economic life of the Jews, which was determined largely by the conditions of the economy and major policies of the state. Nevertheless, the details and alterations seem to have been important since they apparently influenced the well-being of many and helped minimize some effects of discrimination. In general the spirit in which particular adjustments and arrangements were made was one of pragmatic realism. Broadly it coincided with the abolition of the restriction upon Jews charging interest to their coreligionists, a move that officially sanctioned a usage originating much earlier than the beginning of the 17th century. The basic criteria for community control appear to be in the same spirit: (1) maximum economic effectiveness for the community, the collectivity as the sum of its members; (2) conformity with traditional standards of justice and welfare; (3) minimal interference with individual initiative; and (4) continuity of religious traditions and maintenance of the existing authority structure, social order, and economic stratification.
Among the most outstanding examples of community activity as a self-regulatory agency influencing the economic life of its members, the following may be mentioned: (1) The right to accept new settlers enabled communities at least to some extent to regulate and direct the flow of migration. By granting or refusing the "right of entry" in the community (which was tantamount to the right of habitat and employment in a certain locality; see *Ḥerem ha-Yishuv), the communal authorities were able to exercise a degree of control upon the supply of labor and the extent of competition for employment and business opportunities. (2) The community had the right of enforcing the principle of *ḥazakah – of seniority or preferential option granted in the bidding or negotiation of a new contract to the previous partner over his competitors. This was a rule that benefited the previous or current party over any new entrant and effectively limited competition among Jewish businessmen. (3) There was a right and obligation to guarantee the solvency of the members of the community in business transactions whenever such guarantee were required or requested. In practice such guarantees helped members of the community avail themselves of business opportunities and strengthen their credit position, but in some cases the community, by indicating the limits of credit, was both protecting itself and preventing its members from engaging in high-risk operations. (4) There was a right to distribute the tax burden of the community among its members both for the purposes of poll tax payments and for its intracommunity needs (see *Taxation).
The paradox of the situation is that most of the cited examples appear to be in conflict with the liberal idea of granting freedom of economic activity to individuals. It is, however, congruent with the conviction that for a minority to survive as a distinct group it has to place the interests of group survival above the short-run interests of the individual members. It is also plausible that when the state was regulating economic life and practicing economic discrimination, an autonomous group could not afford a laissez-faire practice and still maintain its identity and internal cohesion. In fact, when during a later period the state started to withdraw from the positions of control and regulation, the Jewish communities also had to give up most of their regulatory functions under the pressure of the individual members in order to survive at least as voluntary associations. But during the period under consideration the Jewish community organization was still very strong in enforcing its control over an economically heterogeneous and socially stratified population.
Since the Jewish community was differentiated in respect to economic functions, it would be well to inquire into the pattern of social stratification among the Jews during this period. The society at large was hierarchically organized, and the social conditions of its members were largely predetermined either by birth (by hereditary status) or by the role and functions assigned to them by prevailing custom or by the state. There was no perfect identity, however, between the stratification of the society at large and the Jewish community for the simple reason that the Jews were excluded from land ownership and were therefore lacking the equivalent of the nobility, gentry, and serf-peasantry. Within the Jewish community there was the equivalent of three large groups which had their counterparts in the society at large, namely: the equivalent of the urban patricians, the equivalent of the small producers (craftsmen) and middlemen (merchants), and the wage earners and paupers.
The first group, in terms of wealth, was represented by rich merchants and entrepreneurs engaged in international and interregional trade, in ownership of industrial establishments, in banking and moneylending, as court factors, tax farmers, etc. In terms of social prestige this group also included famous rabbinical scholars and book publishers, although the last two categories were far inferior in terms of wealth. The second group, representing the majority of the Jewish population, included all the owners of some capital, in the form of tools or stocks of goods, to which their own or family labor was applied and who employed a small number of workers. They were the ones who, like the vast majority of the first group, came into direct contact with the market and were exposed to all the irregularities of the early, imperfect markets of the time. Although social mobility from this group into the upper stratum was not prevented by any legal means, the dichotomy between the two groups was noticeable both in the economic and the social spheres, and the grievances voiced by this group against the upper stratum are a clear witness to the cleavage existing between them. The third group included wage earners engaged in crafts, trade, transportation, services (including domestics), and a large number of unemployables for whom the community had to provide a livelihood. While social mobility from the third group into the second was a possibility, the "plebs" of the community constituted a distinct group, inferior not only in terms of income, but also in education and skills and separated by many social and cultural barriers from the ones who were economically independent.
While the intergroup mobility was limited by economic factors and perhaps also by some cultural factors, intragroup mobility was much more free and frequent; and in this respect the Jewish community was ahead of its times in comparison with the society at large. There were also special reasons why the tensions among the various groups and social classes were dampened and less explosive than in the society at large. Two reasons were especially significant: first, the generally oppressive attitudes of the society at large, which apart from exceptional cases and special situations was hardly in a mood to differentiate among the various categories and groups within the Jewish community; secondly, the institutionalized system of welfare within the Jewish community acted as a form of income redistribution and provided for the most basic needs of its indigent members. But even this mitigation of the internal tensions could not eliminate the intensity of the discord and the deep resentment that existed among the various social groups within the community, contrary to the superficial impressions of casual outside observers who were convinced that the Jewish community was a model of internal harmony and solidarity. The internal conflicts were at times so intense that external, governmental authorities were called upon to take sides and intervene either to strengthen the forces of authority within the community or to curb the arbitrariness of the decisions and limit the authority of the ruling bodies. The various intellectual and religious movements within the Jewish community also exhibited strong social overtones and in some cases revealed the strength of subterranean resentments and open protest on the part of the lower classes of the community.
The real power in the community was located in the hands of the upper social group, and the wealthy occupied offices of consequence and social prestige. Although Jewish communities strongly resented the appointment of officers by government authorities – which guaranteed office-holding for the wealthiest – as an interference in community affairs, the system of electing officers (who were often personally responsible for the fiscal obligations of the community) no less favored the election of the rich, the ones who could afford the burden of office. Wealth became almost a prerequisite for office and could be augmented by holding office, since offices provided access to information and opportunities that could be turned to business advantage by their holders. In part, some of the power of the wealthy elite was exercised because of the economic dependence of members of the community directly employed or indirectly influenced by the elite. The relatively large-scale business operations by the members of the elite provided employment opportunities for agents, salesmen, domestics, etc., which assured the elite of the support of the dependents in community affairs. The symbol of the autonomy of the Jewish communities was their right to elect their spiritual leaders, the rabbis. The communities viewed any attempt by governmental authority to appoint rabbis as an assault on their right of religious autonomy. Nonetheless, the power of the spiritual leaders was more important in maintaining the continuity of tradition and is to be seen more in their role as mitigators in internal conflicts than in the internal policies or the routine economic activities of the community. It was left to the business elite to regulate and supervise the economic activities of the community. In cases where a conflict arose between the spiritual leaders and the upper stratum in the community, the real power, that of the elite, usually asserted itself. In the communities in which the power of office was shared by the upper stratum with representatives of the middle group, the important decisions were usually left to the "patrician" families. An important result of the existing social stratification during this period was the degree of stability provided by community leadership recruited basically from one social group. In a period when all other societies were hierarchically organized, the Jewish community could hardly afford to be organized according to any other principle.
The transition between the "old" conditions and the "new" was neither smooth nor short. It spanned two distinct periods, which differed markedly from one another in respect to the general framework of economic activity, the prevailing ideologies, and the social groups that made the important decisions. The transition reflected the change in social and economic development, in this sense exhibiting both its revolutionary aspects regarding some institutions and individuals and its evolutionary aspects of piecemeal transformation of other institutions, habits, and activities. The major characteristics of the transition in the economic sphere included acceleration in the accumulation of tangible assets (capital) as well as the possibility and willingness to transfer increasing amounts of capital from one area of economic activity to another. This phenomenon was accompanied by the development of technology, which provided labor-saving mechanical devices for the production of goods, and in turn became a strong force in creating the demand for new capital and for new skills.
Concurrent with these economic changes were new developments in generally held beliefs and opinions. Among the many, some must be singled out for their significance. Especially important was the rise of secularism at the expense of traditional religious and theological views. The turn toward secularism put man in the center of the universe and assumed that he was able and willing to subordinate the forces of nature to serve him. This led both to the development of a more generalized utilitarian approach and, with the weakening of earlier dogmatic attitudes, to the development and penetration of scientific thought, thus providing the basis for innovations and inventions in the field of technology. The spread of the idea of egalitarianism was another important element in the change of social thought. While not a characteristic feature of the period, the fact that man in the abstract was now at the center of the universe, led egalitarianism to challenge the basic premises of a hierarchical society in which the accidents of birth largely determine the social position of individuals. Though egalitarianism was not yet successful during the period of transition in securing the political and social participation of a broad spectrum of the populace, it at least achieved the legitimization of merit and achievement rather than birth as the leading criteria for joining the social elite. The change of criteria was of utmost importance, while the implementation of the principle could proceed only slowly if the social fabric was not to be torn by revolution. If ideas of secularism and egalitarianism are to be intellectually tenable and socially effective, equality before the law is perhaps the first necessary step. Thus the establishment of a new legality based not upon divine law or the will of the sovereign but upon the consensus of the governed led to new forms of individual freedom and to social responsibilities or disciplines being shared by all citizens or inhabitants of the particular countries. That social discipline required the resolution of conflicts within a legal framework was obvious, and for the framework to be effective it had to approach universality and offer equitable treatment to all.
The transition period in Western Europe dates from about the middle of the 18th century until after the Napoleonic Wars, and in Eastern Europe runs from the Napoleonic Wars until the third quarter of the 19th century. The distinction and the lack of overlap in time is important to the extent that the Western European experience could have been considered as a model of the future economic and social development of Eastern Europe. However, if a comparison were made of the situation in Western Europe with that of Eastern Europe during a particular point in time, more striking contrasts than similarities would be found. At a time when the economies of Western Europe were caught up in the process of economic growth, those of Eastern Europe during the same period were in a state of relative stagnation in which the process of economic development either did not get off the ground or was arrested by the prevailing political regime. While in the West the end of the 18th and the beginning of the 19th century witnessed new economic opportunities for its indigenous population and for immigrants, the Jews included, the wholesale bankruptcy of the Jewish community organizations of Poland in the second half of the 18th century and the economic plight of the majority of the Polish and Russian Jews around the turn of the 19th century were examples of the different situations of the Jewish communities in various countries at those times.
How did the Jews fare under the conditions which were defined as the transition period? There is no doubt that the initial benefits were considerable since they signified the changed status of the Jews. Even in the absence of equal civil rights or true emancipation they meant an increased sense of personal security, a decrease in arbitrariness, and a greater recourse to the prevailing law of the land. It is possible to describe, rather than measure, the economic effects of these transitional changes upon the activities of the Jews in two distinct areas, labor and capital.
The loosening of restrictions affecting places of habitat or work made it possible for labor to move more freely in search of markets with higher earnings. Thanks to the relaxation of restrictions, on entering particular professions Jews could avail themselves of training opportunities or enter educational institutions with hopes for upward social mobility and higher incomes. The rising demand for new types of employment, spurred by the accelerated pace of economic development, provided possibilities for absorption of at least a part of the relatively large groups of unemployed members of the Jewish communities in the labor market. The greater degree of personal safety and security of their assets had a number of effects upon Jewish owners of capital. There was a reduction of the size of reserves previously kept as personal insurance against various emergencies. The size of such reserves for Jewish merchants was variously estimated as up to a third of their wealth. By reducing the reserve it was possible to devote a larger part of the total wealth to productive use. The improvement of the legal position of the Jews increased the amount of credit that could be extended to them without excessive risks on the part of the lenders. This development in turn probably led to a decrease in the rates of interest at which Jews could borrow. Added security and new opportunities enabled the Jewish owners of capital to use it in a number of areas (real estate, industry) hitherto closed to them, thus increasing both the returns and effectiveness of capital. The removal of some discriminatory regulations (such as double taxation), which previously increased the costs for Jews of carrying on economic activities and affected the size of their income, had the effect of increasing their disposable income and could have led to simultaneous growth in, or to a redistribution of the shares of, consumption and savings. In some cases an increase of savings (or investment) could be expected; in other cases an increase of consumption or an increase in family size could follow. With regard to the last, it is clear that even partial removal of some discriminatory rules applied to the Jews, like restriction on settlement, on marriage, and the like (see, e.g., *Familiants Laws), resulted in an increase in the birth rate and population growth.
The transition period can be characterized as the beginnings of consideration of the "Jewish problem" as a matter of social and national policies for the states and societies in Europe, in contradistinction to earlier preoccupation with fiscal interests, Church concerns, or narrowly defined group competition. The growing concern of the state with the economic activity of the Jews was exhibited in various attempts by governments to influence such activity. Some attempts could be classified as representing a policy of "productivization" of Jews and attempts to change the social composition of the Jewish population. Interesting examples of such policies, perhaps in part also inspired by physiocratic thought, were the attempts to settle Jews on the land by "enlightened absolutist" regimes such as those of *Joseph ii in Austria and Alexander i in Russia. It is immaterial here that such attempts were completely unsuccessful, either because the schemes were insufficiently prepared and financed or because they were sabotaged by the bureaucracy that was to administer them. The disappointments of tens of thousands of Jews and the sufferings of thousands who participated in the failing experiments are also not at issue. The important feature was the clearer realization that in part, at least, government policies were responsible for the peculiarities of Jewish economic activities or social structure and that state policies – as a part of the social and legal framework of Jewish activity – had to be brought in line with or adjusted to the economic changes that were taking place. Therefore, while during the transition period, government-sponsored agricultural colonization in southern Russia resulted in settling on land only a few thousand Jewish families and failed abysmally in Austria, it nevertheless raised by implication the problem of legal tenancy and ownership of land for Jews. This in turn resulted in the subsequent development of a small but socially diverse farming element in the Jewish communities of Eastern Europe during the 19th century.
Whatever the impact of the changing economic and social conditions on the economic activities of the Jews, during the transition period the Jewish communities had to face an imminent, fundamental change. For the Jewish communities the problem was how to continue as a distinct group in the general society, not under conditions of forced separation but under those of free choice by their members. For the first time within the general period under consideration, it became possible for larger numbers of Jews to break away culturally and socially from the Jewish community, even while maintaining their religious beliefs, and to be accepted by the community at large. Social acceptance was offered to a small but influential minority of the Jews as remuneration for cultural assimilation. The price to pay was basically severance of their relations with the rest of the Jewish community and the abandonment of the active desire to perpetuate this community. Under the circumstances, the offer of social acceptance was a tempting one since it involved social advancement by the criteria of the community at large. That not every social group would accept its Jewish counterpart even at the price of cultural assimilation was obvious, but during the transition period personal or narrow group interests were strong and the fight for universal civil rights still very much ahead. The situation presented a challenge to the Jewish communal authority and called for surrender of its traditional power of exclusive representation of the Jews and of its power of *taxation. The weakening of the authority of the Jewish community organization could also be traced to the growing unwillingness of the more affluent groups in the community to subject themselves to income redistribution in favor of the poor. Poor relief was "scaled down" from a duty concept to one of discretionary charity, and paupers were "encouraged" to find employment. Although the full impact of the newly created situation of defining one's identity, under conditions of relatively free choice, was to be felt during a later period, the difficulties and problems thus created – psychological and social – were already becoming apparent during the transition period.
The main features of the development of the economy of the Jews during the modern period are patterns of migration, penetration into areas of industry, maintenance of a strong position in the area of services, and very limited involvement in agriculture. Decades ago economic historians were engaged in a debate about the role of the Jews in the development of capitalism, some trying to define the historically objective role of the Jews as active agents of capitalist development. Now with historical hindsight the discussion would probably be conducted and conclusions reached within a different framework. The implicit notion that capital was abundant in the Jewish sector of the economy would now be refuted and therefore the logic of portraying the Jews as "objectively acting" on behalf of a capitalist order would be rejected. It would probably be accepted, however, that an order of economic liberalism is one that provides greater opportunities for any minority, the Jews included, than an alternative economic system based upon a different ideology and set of political principles. An impersonal market and a high degree of division of labor may create alienation and other social ills, but by not requiring that the commodities produced have any other labels than the price tag, the free market works against discrimination. A competitive market may injure high-cost producers or cause unemployment, but its principles were compatible with the ideas of social and cultural pluralism. The relatively favorable response of Jews and other minorities to the liberalization of the economic order was based primarily on an expected reduction in discrimination. However, while a liberal economic order provided the Jews with opportunities, it could not provide them with a right to work, to compete on equal terms, to the same extent that such a "right" was traditionally enjoyed by the various classes of the majority population. In addition, the phase of economic liberalism as a chief characteristic of the capitalist system was neither a permanent feature nor a very longlasting one, nor even one universally followed in all countries experiencing the capitalist type of economic growth.
In most countries of Eastern Europe the capitalist stage of development coincided with a rise of nationalism, which at various points exhibited a discriminatory attitude toward the Jews in general or toward some social groups within the Jewish community, in attempts to promote the interests of the ethnic majority. Tariff policies against foreign goods were accompanied not infrequently by discriminatory taxation imposed upon "foreigners" within the country, meaning national minorities. In the multi-national states of Eastern Europe there were ample opportunities for labeling various minorities as "foreign," "alien," and so on. Under such conditions it could hardly be expected that the Jewish masses, who were adversely affected by discriminatory policies, would consider the capitalist economic system as more desirable or attractive than an alternative promising them the "right to work."
It is against the background of insufficient employment opportunities and discrimination that the process of migration has to be viewed. The pattern of Jewish migration, of spatial mobility of labor, during the modern period differed in many respects from previous migration patterns. The general direction was westward, from Eastern Europe to the West, and from Europe overseas. As a matter of fact, the migration from Western Europe overseas was more than made up for by an influx of Jews from the East. This general direction of the migration was significant as a movement from less rapidly developing countries to more rapidly developing ones. In terms of its time dimension the inter-country migration was intensified during the 19th century and reached its peak during the decade prior to World War i. But apart from the inter-country migration, of very considerable significance was the intra-country migration from the less urbanized areas to the more urbanized areas, a development that increased the degree of concentration of the Jewish population in large urban and metropolitan areas, with their developed industry, trade, and other social or cultural characteristics. Both the domestic and international migration and the pattern of settlement of the Jews contributed to urban concentration and had an impact upon the social and economic structure of the Jewish population. While it is tempting to assign the role of prime mover in Jewish migrations to purely economic causes, it would be erroneous to omit political elements such as discriminatory legislation, violent antisemitism, pogroms, and revolutions. Political upheavals and governmental policies influenced the pace of the migration process, but could not stop it for any appreciable length of time (the case of the Soviet Union being an exception).
What were the characteristic features and effects of the migration process as a whole and of its various forms? The migration process started as soon as the Jewish population could rise above the level of poverty and isolation to which it had deteriorated in Eastern Europe by the end of the 18th and first half of the 19th century and regain its age-old habits of mobility. In terms of numbers, the migration stream from continental Europe during the 100 years preceding World War ii accounted for approximately 4,000,000 individuals, of which over 70% went to the United States, about 10% each to South America and Palestine, and the rest to Britain, Canada, South Africa, Australia, and other countries. Thus, in view of the fact that the North American continent absorbed three-quarters of the total international (or overseas) migration, the characteristics of this migration may be assumed as the most typical.
The available data indicate that the migration was a family one (of whole families, even if separated by a one- or two-year period) rather than of single individuals; that it was a migration for settlement and not for work, saving, and return; and that it was a migration involving a relatively very high percentage of skilled workers. With respect to the last characteristic, only the data can be relied upon and little investigation beyond these can be done: the explanation of this phenomenon can only be surmised. It is logical to assume that the process of overseas migration required payment of transportation costs, in other words some amount of savings, and thus could not involve paupers. Therefore, it is logical to assume that the migrants were either members of the industrial labor force, or entrants into the labor force who already had acquired skills, or individuals who acquired particular skills in anticipation of their migration, having made an investment over and above their transportation costs or borrowed in anticipation of future returns. It was in large measure due to the industrial skills and some working habits of the migrants that their future relative success can be explained.
Three further points need to be emphasized in connection with the migration problem. First, given the nature of the family ties within the Jewish community, the financing of migration took place within the extended family of the immigrants and was later also subsidized by the earnings of the immigrants, often virtually out of their first savings. Secondly, prior to the end of the 19th century there were already in operation well-organized voluntary associations that assisted in the migration process. In their absence the economic and psychological costs of migration would have been considerably higher. Thirdly, by organizing voluntary associations of mutual assistance, in part copying the models from Eastern Europe, the immigrants were able to help the new arrivals more effectively. Some relatively small part, probably not more than about 3% of the total of the migration movement, was financed and assisted by funds donated or collected on behalf of the migration, especially in the presence of an ideological or programmatic background. The two most outstanding examples were Palestine and the agricultural settlements in Argentina.
The primary effect of both the intraregional and international migration of the Jews was to decrease the competition for employment opportunities where such were scarce and provide a higher return for the migrants where their labor and skills were in greater demand. Thus while the income of the migrants increased in comparison with their previous income level, the income level of those who remained behind did not fall. However, it must be admitted that the movement of millions of people within a few generations deprived the established Jewish communities of a young, enterprising, and skilled element. This movement had a number of demographic, economic, and cultural repercussions on the European Jewish communities. It is difficult to pinpoint such effects, but it certainly affected the age structure of the European communities by removing some of the middle groups (age groups 20–40 in particular). It also perhaps affected adversely the growth rate of the Jewish population in Europe, although it would be difficult to predict what that rate would have been under worse economic conditions in the absence of migration. In terms of its impact upon the social structure, it probably increased the economic polarization within the Jewish communities since neither the rich nor the very poor contributed to the migration stream. In another sense the migration movement contributed to a greater stability within the Jewish communities since it absorbed much of the unruly and nontraditionally inclined element of the community. Last but not least, the migration movement contributed to an activated exchange among Jewish communities, with a money transfer to Eastern Europe that not only subsidized further migration but supported relatives and community institutions, and that was in part compensated by an export of cultural and spiritual services from Europe to the areas of new settlement.
Some assessment must be made of the conditions that enabled Jews to penetrate into industrial employment and maintain their position in the areas of services under conditions of modern industrialization. What adjustment was required on their part to attain their goals? Here we are concerned with entrepreneurial activities in the industrial sector as well as the transformation of handicraft employment into small-scale and larger-scale industrial employment. This entrepreneurial activity is not being considered here in terms of "Jewish contributions" to the development of this or that country, or the amassing of wealth by individuals of Jewish descent. It is beyond the purview of this account to dwell upon the Rothschilds in England and France, on the German-Jewish bankers, or on mining magnates in Africa or South America. In addition, a distinction should be made between large-scale and small-scale entrepreneurs. While a few Jews entered industrial entrepreneurship via high finance, the banking system, etc., the multitude consisted of small-scale industrial entrepreneurs who were recruited mostly from the ranks of craftsmen and merchants, previously engaged in the putting-out system. They were subordinate to and dependent upon the large-scale industrial establishments because they could hardly compete with large-scale industrial firms in the production of goods and had therefore either to become suppliers to the large firms of some specialized goods or producers of market goods that were outside the assortment manufactured by large-scale industry. Given the scarcity of capital in the social milieu from which the small-scale producers or entrepreneurs were recruited, their proximity to industrial centers and markets was absolutely crucial. Small-scale industrial firms did not possess the capital to carry large stocks, and a quick turnover was their only mode of survival. A great deal of flexibility in product-mix and in assuring sources of demand was required to keep the enterprises in operation. They also required a labor force skilled but not overly specialized and with relatively few employment alternatives to accept a less-than-regular employment. This was a typical solution for economic branches that operated with a basically backward technology at low levels of productivity, low wages, and long hours of work, in what were fringes of the consumer goods industries. It was due to the declining role of handicraft production, which was suffering from industrial competition, that this type of industrial employment was acceptable to Jewish industrial job seekers.
Jewish entrepreneurs did, however, play an important role in providing gainful employment for large numbers of Jews. It may be assumed that for a Jewish entrepreneur there existed a "psychological income" in providing employment for other Jews, whether he did so for reasons of greater familiarity and cultural affinity or because it was considered a "good deed" in cases when discrimination in favor of Jewish employees increased his operational costs. Those costs, in turn, depended upon the nature of the labor supply and the distribution of skills within the Jewish labor force and within the total population. If the costs of hiring Jewish labor were less than or equal to those of hiring other members of the labor force, it can be assumed that there were no costs in the discrimination in favor of employing Jews. As will be seen from a number of examples, the employment pattern of Jewish labor by Jewish entrepreneurs did not in fact impose additional costs upon the employers. There were, however, two other obstacles that had to be overcome in order to have the employment of a Jewish labor force reach a significant level. The first constraint was the assumed or real strength of the religious taboo against work on the Sabbath, regardless of whether the taboo was expressed in the behavior of workers or in the attitudes of the entrepreneurs. The second constraint was the assumed animosity of non-Jewish workers and foremen toward Jewish co-workers. There is no doubt that such constraints upon the entrepreneurs were real, especially in the later part of the 19th century in Eastern Europe.
The cases of a few industries in Europe and one in the U.S. are instructive since they provide a broad spectrum of employment opportunities created by Jewish entrepreneurs for Jewish workers. One is the *textile industry in Russian Poland in which Jewish spinners, weavers, and other textile workers were predominantly employed in the smaller-scale enterprises, while the larger-scale factories refrained from employing them. Second is the case of the forestry trade, in which few Jewish workers and laborers could compete successfully with the low-paid peasants seeking off-season employment in lumbering. Therefore, thousands of Jews were employed in this industry by Jewish firms as overseers in the forests, sawmills, and transportation of the products, much of the output being destined for export or railroad construction. Thus, the demand for trained personnel with a degree of familiarity with the operation and quality standards in forestry and with some clerical skills attracted many Jewish workers and employees. While such a combination of skills was rare in the general labor force, and the wages and salaries accepted by the Jewish workers were generally low, there was hardly any cost of discriminating in favor of Jewish employment in the forestry trade. In the third case, the sugar and oil industries may be subsumed under one type of employment. Neither in sugar-beet growing nor in the processes of sugar refining were Jews represented. The same is true for the oil industry located outside the Jewish *Pale of Settlement. The Jews could compete neither with the peasants and local oil-workers nor with the highly skilled specialists in sugar and oil refining. The areas of employment for Jews provided for them by Jewish entrepreneurs were those of distribution and trade. Thus, thousands of Jews were employed as clerical personnel, salesmen, and sales agents in the trade networks of both the sugar and oil industries. The outstanding case of industrial employment provided by Jewish entrepreneurs for Jewish workers in the U.S. is the garment industry. The levels of skill brought over by the Jewish immigrants, the relatively low wage schedule of the garment industry, and the relatively small scale of the operations of the firms led to a high concentration of Jewish workers, with the industry as a whole serving as a massive source of employment.
The above examples illustrate some of the patterns of the penetration by Jews into areas of industrial employment. They are indicative of the manner in which masses of former artisans and pauperized elements of the Jewish community could join the ranks of industrial workers and employees. As in other societies, child labor and long-term apprenticeship were the chief means of skill-acquisition for the poor. Although the capital-goods industries were virtually closed for both Jewish entrepreneurs and workers alike, industrial employment concentrated in consumer goods industries signified the adjustment to modern, industrial society and injected a new dynamism both in the social relations within the Jewish communities and with the community at large.
The service sector includes employment in trade, transportation and communication, public and private services, and the liberal professions. For the huge segment of the Jewish population previously employed in it, largely in trade and particularly commodity trade, the problem of economic survival within this sector became absolutely essential. During the early period of industrialization when massive investments are made in the build-up of physical industrial capital – primarily in construction and equipment and in some of the services of the social overhead type such as railroad and road building – the majority of the services are not recipients of capital. It is only when the basic capital in industry is created, and both the producers' goods and consumers' goods branches are producing at relatively high levels of productivity, that the demand for services increases on the part of a population whose general level of income has risen very substantially. The fact that Jews were heavily concentrated in the service sector in countries whose pace of development was slow, whose market growth was sluggish, and whose levels of personal income were among the lowest in Europe, did not augur well for service employees. It was, therefore, not so much a matter of historical foresight but a lack of viable alternatives that kept large masses of Jews within this sector during the early stages of industrialization. It was the gradual process of commercialization of agriculture that provided outlets for the commodity trade and thus for service employment for the Jews who were living in rural areas or small towns. Urbanization provided other opportunities for employment in trade and also in other services; but paradoxically the process of urbanization and the development of service opportunities in the large cities significantly undercut or substituted the service functions previously performed in small towns. The process of urbanization was accompanied by the development of a more dense transportation network which created direct links between the big cities and the hinterland, decreasing transportation and travel costs and making the big city and rural areas accessible to one another. The result was that many of the services concentrated in the small towns could no longer be performed at the prices offered in the big cities where economies of scale were more likely; and the decline of small towns under the conditions of a competitive market followed. The problem for Jewish service employment was whether the opportunities available to Jews in the big cities were sufficient to compensate or substitute for the disappearance of such opportunities in the small towns and also allow for the rate of Jewish population increase. The answer for Eastern Europe appears to have been negative, for Western Europe positive. In the U.S. there was a secular trend of employment growth in the service sector for the Jews. In Eastern Europe the crisis of the small towns remained a continuous problem, especially exacerbating for the Jews when coupled with discriminatory policies of limiting access or prohibiting the influx of Jewish service employees in such branches as the civil service, central government or municipal services, and public transportation. In countries that did not openly follow discriminatory policies, the solution of the service employment problem for the Jews became very much dependent upon both the general pace of economic development and the urbanization process.
The diversity of service employment makes it very difficult to estimate the degree of substitution of one type of employment for another or the mobility of individuals from one category to another within this sector. The required educational background differed substantially; and substitution or transfers were possible probably at the lower levels of skills in which literacy could be considered the predominant, if not the universally sufficient, prerequisite. Internal mobility within the service sector was much less frequent at higher levels of specialization and especially when the specific training presupposed a higher level of schooling. The explanation of the continuity of a high proportion of Jewish employment in the area of services would be incomplete if two other factors were overlooked. The first was the opening up of opportunities in the liberal professions; the second was the continued demand for special services generated within and performed expressly for the Jewish communities. The first phenomenon, entry into the free professions, was a result of the reduced effectiveness of discriminatory policies toward Jews in the area of secondary and higher education relative to the areas of the public services. Educational opportunities that provided employment possibilities in the free professions became attractive avenues of social and economic advancement for the Jewish middle class, previously employed primarily in commodity trade. Therefore, with employment in the public sector and in the civil service very much restricted and curtailed for eligible Jewish candidates, the typical employment pattern was in the private service sector, including health services, educational services, and legal services. In addition, the private service sector provided employment opportunities for a certain number of educated individuals as salaried employees, such as bookkeepers, legal clerks, and pharmacist's assistants.
The demand for services by and for the Jewish communities continued during this period, although the process of secularization tended to shift the demand from the purely religious areas to those of education, health, and social services. Attempts to maintain a general cultural and not only an exclusively religious identity helped to sustain the demand for educational services. Meanwhile, the pattern of settlement in urban and metropolitan areas created a demand for the development of a communication network by which some of the cultural needs could be met and thus supported the activities of the press, theater, literary activities, and the like. Given the fact that public services in the area of health for the total population were highly inadequate and that the Jewish population received even less than a proportionate share of those, the demand for health and social services provided within and by the Jewish community was very strong. This stimulus was instrumental in the provision of such services either on a private basis or as a part of the welfare activities carried on by the community authorities for needy members.
Farming played a very subordinate role in the employment structure of the Jewish population during this period and its share in total employment was relatively small. It is not difficult to provide an explanation for this phenomenon. During the 19th century and later, agriculture in Europe was a declining industry, releasing rather than attracting labor. In addition, previous discriminatory policies prevented land ownership and restricted land tenure for Jews to the extent that farming as a skill did not develop within the Jewish milieu. Although the lifting of some of the most severe restrictions rendered farming a plausible alternative to the precarious positions of small-town traders or artisans, a number of circumstances mitigated against a mass influx of Jews into farming. Land was becoming relatively expensive in Eastern Europe, and the returns to both capital and labor in agriculture were relatively small. Settlement on large land tracts and the establishment of colonies required sizable capital outlays and a degree of organizational effort beyond the available resources and authority of the organized Jewish communities. The pattern of individual settlement in a dispersed manner was discouraged on the one hand by religious and traditional attitudes, since it typically involved a high degree of cultural isolation, and on the other hand by an often hostile rural environment, suspicious of any aliens settling in its midst. Within the Jewish milieu or as part of Jewish folklore, the stigma of boorishness or coarseness was associated with Jewish farmers, characteristics of a low prestige status, not so much in economic terms as in general cultural ones.
Outside of Europe, however, two types of development have to be considered: (1) countries of rapidly developing agriculture in which the employment of Jews in this sector of the economy was not significant, the United States and Canada being prime examples; (2) countries in which the employment share of agriculture was higher than in most of Europe, the specific cases being Palestine and Argentina.
With respect to the first group, two factors might explain the relatively low share of agriculture in the employment distribution. The foremost was the greater attraction that employment opportunities had for immigrants in the industrial and service sectors coupled with the preference for urban settlement, which provided additional security to the immigrants as members of their own ethnic communities. The second was the timing of the large migration streams, which took place after the closing of the so-called "agricultural frontier." In the case of Palestine and Argentina there was an induced process in which some noneconomic variables were of utmost importance. In Palestine the ideological aspect, the Zionist idea, motivated a relatively high percentage of the immigrants to settle on land, beginning with the last decades of the 19th century; farming became as much a way of life as a profession. In Argentina a substantial segment of the immigration was sponsored by adherents of agricultural colonization schemes who induced agricultural employment by paying the transportation costs and providing land for agricultural group settlement in the name of ideas of "productivization" of unskilled and unemployed members of the Jewish community. However, the long-term trend both in Palestine, later the State of Israel, and in Argentina was the relative decrease of farm employment under the impact of industrialization and urbanization.
Given the employment structure of the Jewish population during the modern period, what could be said about the level and distribution of income within this population?
At the beginning of the period, and in a number of countries during most of the period, the average income of the Jews was below that of the population at large, including the peasants. However, the level of income increased both as a result of the total increase of incomes in Europe in general and because of the impact of migration, which, given its direction from economically less prosperous areas to economically more prosperous ones, had a net impact of increasing the average income level of the Jewish population. In addition, because of its composition as an increasingly urbanized population and one concentrated in the industrial and service sectors of the economy, its income during the 100 years preceding World War ii probably increased at a higher rate than the average income of the total population of the countries they lived in. As a rule of thumb it would not be incorrect to assume that the average income level of the Jewish population by the end of the period reached a level that was higher than the average for farmers and industrial workers, although probably not above the level of the skilled stratum of industrial workers and salaried employees. Another way of saying this is that Jewish income was at about the average level of the urban population. The level of Jewish income fluctuated around the general upward trend. The fluctuations were pronounced, first because of the relatively large proportion of self-employed, a social group whose income is less stable than that of salaried workers and employees; secondly, because of the impact of exogenous factors such as wars and major upheavals during which the property of the Jews was much more vulnerable than that of other population groups (e.g., the forced mass exile of Russian Jews from the war zones in World War i and the wave of pogroms in the Ukraine (1918–21), during which property was either destroyed, expropriated, or simply taken away by force from its rightful owners). Thirdly, during the downturns of the business cycle, Jews as a minority group usually suffered more than the average member of the society at large. But notwithstanding such fluctuations, the general trend of Jewish income growth on a global scale was upward.
How was this income distributed, and what were the basic determinants of its distribution? Both tendencies to increase and to decrease the income inequality were at work, and it would be very difficult to measure the separate effects with any degree of precision. Following intuitive judgment it would be sensible to assume that in the countries in which the impact of discrimination against Jews was the strongest, income inequality within the Jewish community was probably more pronounced than in the countries that followed a more liberal policy toward the Jews. That income inequality within the Jewish community led to tensions, internal struggle, and organized activities of one social group against the other is obvious. That the divergency of interests led to the development of different ideologies and as such intensified the divisive tendencies in the community is no surprise, being a reflection within the Jewish milieu of what was taking place within the population at large. It is also true that the internal struggles within the Jewish communities during the last decades of the 19th century and beginning of the 20th century made a considerable contribution toward reforming the community authorities toward their democratization and modernization. They thereby became much more responsive to the needs of their members. But whatever generalizations are attempted in order to bring under a common denominator the economic and social trends prevailing during the modern period, the significant differences of the developmental patterns of the Jewish communities can be better understood only upon a closer examination of at least the major Jewish communities. The ones selected for further scrutiny are the Western European, the Eastern European, the U.S., and the Palestine Jewish communities.
The economic development of Western European Jewish communities during the modern period can be generally characterized by their successful attempt to join the middle class. Their problems roughly paralleled the problems of the middle class in Europe, in the sense that they enjoyed apparent well-being and security under normal conditions and discovered the precariousness of their position in times of crisis. Western Europe, following the example of England, experienced the industrial revolution around the middle of the 19th century and was busily involved in adjusting its institutional structure to fit the new economic order. Since the institutional adjustment was more complicated while vestiges of the older order had to be destroyed, eliminated, or transformed, and the state played a much more decisive role in the process of economic transformation on the European continent than in England, there was a greater degree of politization of economic issues than in England. The politization of economic issues provided a specific impetus for the activities of the middle class and had a profound impact upon the activities and attitudes of the Western European Jews.
At a time when new economic opportunities were being created in Western Europe, the Jewish population of those countries was relatively sparse and the Jews constituted a negligible percentage of the total population. Therefore, there was within the Jewish communities very little of the fierce competition for relatively scarce economic opportunities which characterized the situation of the Eastern European Jews. The process of urbanization and concentration of the Jewish population in Western and Central Europe started relatively early, but proceeded gradually, largely undisturbed by outside political factors. Migration, both internal and overseas, by the less prosperous members of the Jewish communities helped to achieve the aims of both the migrants as economic opportunities in the new centers of industry and the drive to penetrate into the middle class. The gradualism of the process of economic growth resulted in strengthening commerce, helped to develop among the Western European Jews a preference for independent economic activity. Economic integration of the Jews in Western European society meant self-employment in trade, finance, industry, and the free professions and not in manual labor. This process was facilitated by their utilization of the opportunities provided by the educational system and the marked decrease in discriminatory attitudes and policies.
The groundwork for the development of more liberal attitudes toward the Jews and for the readiness of the Jews to take advantage of the new economic and social opportunities was laid by the Enlightment (*Haskalah) and its impact on the Jewish milieu. Originally the new opportunities and social acceptance were offered to the upper strata of Jewish communities for the price of language assimilation and severance of their ties with the Jewish community. The upper strata of the Jews found the conditions acceptable and acted accordingly. When the opportunities to join the middle class became available to a larger number of Western European Jews and after they joined the political struggle of the middle class for broader suffrage, the problem of emancipation and of their civil rights was raised by the members of the Jewish middle class. Emancipation and civil rights for Jews meant a further integration of the Jews with the society, not within the concept of a Christian state but within a modern, secularized state. In the latter case language assimilation of the Jews was considered an insufficient prerequisite. The existence of Jewish Orthodoxy both as a symbol and major characteristic of their culture was considered a serious obstacle to real integration. Thus at the roots of the religious Reform movement which spread from Germany, there were both the changing patterns of employment among the Jews and the desire for cultural assimilation. As a result the gradual adjustment of religious rituals to modern conditions and some relaxation of the Orthodox law, which previously supported the exclusiveness and guarded the separation of the Jews from their environment, gained in appeal to the majority of the Western European Jews. An interesting by-product of the changes in the social position and cultural attitudes was the growing gulf between the Western European and East European Jews. The cultural ties were becoming looser and the sense of a common destiny weaker.
The penetration of the Jews into the middle class was a slow process which marked the second half of the 19th century. Its success over the period was unmistaken, but not necessarily continuous and certainly not without problems. It was challenged first by a wave of nationalism at the end of the century, when it became clear that the new social order in Europe could not guarantee the universal fulfillment of the rising expectations in the short run. The new wave of nationalism exhibited antisemitic aspects which gained currency among members of the European middle class. The *Dreyfus affair and other manifestations of antisemitism had a profound impact upon some members of the Western European Jewish communities and forced them to rethink and revise their notions of social and cultural integration. Although the majority continued to behave according to previously established patterns, a minority turned to solutions of either cultural pluralism or Jewish nationalism as the more satisfactory for the long run. A greater need was also felt for the maintenance of Jewish cultural (including religious) continuity and for closer ties with other Jewish communities. The net result was a somewhat decreased atomization of the Western European Jewish communities and their activities as well as the development of new cultural and economic institutions which strengthened the sense of Jewish identity and were instrumental in the moments of crises that lay ahead.
To explain the economic activities of the Jewish communities in Eastern Europe during the third quarter of the 19th century and until World War ii in purely economic terms, in terms of the market opportunities, demand for products, and labor supply would not only be a difficult task but provide incomplete and sometimes misleading answers. Since so much more is known about the economic conditions of this period, the interaction of the economic and extra-economic factors, be they political, legal, or psychological, is keenly felt. The outstanding characteristic of the other factors was the existence of a measure of discrimination against the Jews that was much more intense in this part of the world than elsewhere. Thus, in spite of the progress of a modern market economy, in spite of the process of industrialization that took place there, there was a strong residue of discrimination that limited the benefits of economic progress for the Jews and affected their economic activities. One rather striking example is to be found in the exile of Jews from the rural areas of Russia in the 1880s. The process of urbanization that took place as a result of industrial development is a familiar phenomenon and one that affected Jews in the rural areas. But there is a qualitative difference between a process that creates new opportunities in urban areas and draws labor away from the rural areas, and a mass exile that uproots tens of thousands and forcibly transplants them in a new economic and social environment with no visible means for their economic survival and with no economic alternatives since the demand for their labor or service is absent. Apart from such major catastrophes, the conditions of discrimination included a whole chain of minor calamities which created an atmosphere of uncertainty and determined the behavior of large masses of the Jewish population in Eastern Europe. Thus, the development of a capitalist society in Eastern Europe, while creating new economic opportunities was, as far as the Jews were concerned, accompanied by unsettling features that were constantly threatening to destroy the benefits bestowed by the economic progress. It is, therefore, proper to emphasize that the economic and social conditions of the majority of the Jews in Eastern Europe were influenced by a number of external constraints, one of which was the Pale of Settlement in Russia. The existence of the Pale limited the mobility of most of the Jews and virtually excluded them from some of the more important regions and dynamic centers of industry, trade, and public life and often forced them to accept opportunities that could be described as second best. The existence of legal and economic discrimination made the process of social mobility much more difficult and expensive for the Jews. The limitations on entering areas of employment, professions, public service, and education decreased their chances of fully contributing to the process of economic development and benefiting from it. While the advancement of the industrialization process destroyed some of the traditional areas of Jewish economic activity and created new ones, the process itself was erratic and did not allow for the formation of long-term expectations or less costly adjustments. Thus, while on the whole the Jewish population benefited from the process, growing in size and slowly improving in income position, the accompanying hardships were burdensome and unsettling. Given the relatively slow pace of economic progress of the regions of concentrated Jewish population in Eastern Europe (western part of the Russian Empire, northeastern part of the Hapsburg Empire, and Romania), coupled with the existence of discriminatory policies, these regions were primarily involved in the migration of Jews to Western Europe and America. But although emigration had the function of a safety valve, it could not counteract the impact of the industrialization process, which, while injecting a new dynamism in the economic and social sphere, affected the life of the Jewish communities by creating new areas of internal conflicts and threatening to destroy the traditional values built up through centuries of relative cultural isolation. To the extent that they represented breaks with previous traditions and emphasized the existence of new opportunities, the very processes of industrialization and urbanization raised the level of expectations of the Jewish masses and made them more aware of their relationship to the outer world. This led to the development of new patterns of thought, increased sensitivity to the conditions of discrimination, and a more intensive search for new solutions to the specific problems of the Jews. The awareness of common specific problems was demonstrated not only in the economic but also in the cultural sphere. In spite of some tangible returns to the cultural assimilation of groups of Jews, until the end of the period a cultural homogeneity of the Jewish population in Eastern Europe was preserved. This culture embraced the basic elements of traditional moral and religious values with an addition of modern elements developed during the period following the Enlightenment in Eastern Europe. While the symbiosis of the elements of the traditional culture with those of a secular, modern, and nationally oriented one was by no means harmonious, the tensions had a culturally stimulating effect. It was a period of very intensive cultural activity and creativity by the Eastern European Jews, marked by the revival and modernization of Hebrew literature and development of modern Jewish literature in Yiddish. Cultural activities, in addition to rudimentary religious training and bare literacy, penetrated and affected the Jewish lower classes which had previously been excluded from most of their cultural heritage.
The period between the two world wars witnessed a number of new developments in Eastern Europe that were of major significance for the Jewish population. The most important events were the Russian Revolution and the establishment of new national states in the region on the ruins of the two large empires that had long dominated the political scene in Eastern Europe prior to World War i. The positive effect of the political changes was the granting of citizenship and civil rights to the Jews in the new states. On the negative side were the growth of nationalism of the dominant ethnic groups and the continuation of de facto discrimination against the Jews in most countries. Coupled with the difficult economic conditions in those countries, which were even more aggravated by government interference in the economic sphere, the precarious power balance in Europe, and the impact of the economic depression of the late 1920s and 1930s, this worsened rather than improved the economic conditions of the Jewish population.
In the Soviet Union, after an initial gain resulting from the granting of civil rights and the abolition of the Pale of Settlement by the democratic government of 1917, the period of the civil war inflicted heavy population losses upon the Jews, particularly in the Ukraine. The three outstanding features of Soviet policy toward the Jews were the following: (1) The isolation of Soviet Jews from the Jewish communities abroad and the slow but consistent policy of destruction of their cultural autonomy, institutions, and organized forms of communal life, leaving cultural assimilation as the solution to their problems as individuals. (2) The destruction of the small town, the former locus of economic activity of the majority of Russian Jews as a result of the forced industrialization drive and the mobilization of human resources to build up the industrial base of the country. This policy led to a mass migration from the western parts of the Soviet Union (Belorussia and the Ukraine) to the metropolitan areas and new centers of industrial activity. (3) Since education became one of the major vehicles of social advancement and was made available in the first instance to the urban population, a large proportion of the Jewish population took advantage of the opportunities and a marked shift in the employment pattern as well as in the professional composition took place. The Jews entered en masse into industrial employment and various service branches, all of which were nationalized and under the centralized control of the government. Although the social and economic advancement of the Jews in the Soviet Union should not be disputed, it raised two grave issues: one of cultural assimilation and the loss of group identity of the Jews, of their existence as a distinct cultural or religious entity; and the second, of their dependence as a group or as individuals upon the decisions lodged in the hands of the supreme policy makers of the country. The gravity of both issues arose, however, in a later period, following World War ii.
The chief characteristic of the development of the Jewish community in the United States during the late 19th and early 20th century was its rapid numerical growth by comparison with other Jewish communities. The growth occurred primarily as a result of the immigration of the Jews, rather than because of the birth rate of the Jewish population per se. The attraction of the U.S. for Jewish immigrants could be explained both in terms of a wage level relatively higher than in Europe as well as an open immigration policy, and the lack of specific anti-Jewish discrimination. However, the pace of immigration cannot be explained only in terms of increasing attraction. The impetus to immigration of the Jews can be traced to events in the European countries of their origin, and the influence of the turns of the business cycle in the United States on the size of the immigration stream can be demonstrated. During the modern period there were two streams of Jewish immigration, one of Western European Jews and the other involving almost entirely Eastern European ones. Each of these streams, although different in terms of its occupational or professional endowment, was faced by similar problems of economic integration and general acculturation with the environment.
While the German Jews arrived with the experience of language assimilation, a weakened sense of culture traditions, and the articulated desire to join the middle class, the Eastern European Jews arrived with industrial skills and the expressed willingness to be employed in any sector of the economy where opportunities were available, but without the experience of previous cultural assimilation. In addition, they transferred some of their habits of group behavior from their European environment. There was, therefore, among Jewish immigrants from Eastern Europe a strong preference for settling in compact masses for reasons of economic and psychological security. At the time of the first waves of mass immigration from Eastern Europe, the Western European Jews (mostly immigrants from Germany) had already acquired in the U.S. a basically middle-class or quasi-middle-class status and their pattern of employment reflected a high percentage of self-employment and concentration in the area of services. The mass influx of Eastern European Jews changed for at least two generations the social composition of the Jewish community in the United States. It became a predominantly industrial and labor-oriented community concentrated in major cities. The symbiosis of the two elements, the German and the East European, was ridden by conflicts and prejudices, by distinctions in wealth and status, the latter being derived from the degree of "Americanization" or the duration of residence in the U.S. The German Jews, often in the role of employers of the recent immigrants, especially in the garment industry, tried to maintain the social distance between themselves and the immigrants arriving from the culturally most backward areas of Europe. Faced with the model of success presented by the German Jews, the East European immigrants could not avoid aspiring to positions of social and economic advancement. While they accepted their status as manual workers and laborers as inevitable, and drew from it a number of conclusions, expressed by their political orientation, trade union activities, and so on, they actively sought an improvement in the economic position and status for their offspring. Thus, while the process of acculturation of the immigrants took time, the gradual social advancement of some was counterbalanced by the successive waves of immigration swelling the ranks of the Jewish industrial working population. It was not until after World War i and the harsh restrictions against East European immigration that the process of penetration into the service sector and self-employment category became much more visible.
The rapid growth of the economy, the decline of agriculture, and changes in industrial structure, accompanied by a sustained, relatively high level of income, made it possible for the service sector to develop. Aided by the availability of educational opportunities, the almost exclusively urban Jewish population found outlets for its employment in the service sector, and the percentage of employment as unskilled labor, domestic service, or low-paid industrial employment declined. It would be wrong to assume that the shift in employment and the resulting improvement in the income position of the Jews in the United States before World War ii took place in the total absence of discrimination. There was in fact a whole range of discriminatory attitudes operating against the Jews, as against many other ethnic groups representing relatively recent immigration. There was, however, a major difference between the U.S. and Europe in that discrimination was a de facto attitude rather than a de jure, statutory, or legal arrangement; that it was a private matter rather than one of public policy. Like other groups of European origin, the Jews were relatively successful in minimizing the effects of discrimination, first by improving their economic position and second by using political power derived from their numbers and concentration in some major urban centers of the country. In addition, discrimination was met by the Jews with an almost atavistic reflex of communal activity. The Jewish community developed a time-honored self-defense mechanism against discrimination in the form of institutions designed to meet specific needs of individuals or groups within the community. In the absence of organized communal authorities, recognized either by the outside world or by the Jews themselves, or representing their collective interests, the role of voluntary associations and institutions was even more significant for the discharge of group responsibilities and for the maintenance of whatever cohesion was possible within the Jewish community.
The numerical growth and economic advancement of the United States' Jewish community resulted in a change in the relationships among Jewish communities in the world, the U.S. Jewish community becoming an important source of economic assistance for the others. In a certain sense the bonds between American and European Jews provided a community of interest and purpose for the various groups of American Jewry, giving expression to their Jewish identity. At a time when the process of language assimilation was in progress, and the commonalty of cultural concerns was diminishing, the "foreign aid" of American Jews provided them with a much-needed psychological satisfaction and helped to maintain their identity. This process turned out to be of particular importance for the subsequent developments during and after World War ii.
While the first systematic attempts of organized mass colonization in Palestine go back to the 1870s and 1880s, a marked acceleration of the immigration stream occurred at the beginning of the 20th century, primarily as a result of the growth of a modern nationalist movement making immigration and settlement in Palestine the cornerstone of its ideology. The more organized manner of immigration and settlement, in part directed by a long-term national vision, led to the establishment of a social infrastructure within and for the Jewish population in Palestine, and to the establishment of modern social, economic, and educational institutions in an otherwise primitive and backward country. The introduction of modern institutions was accompanied by a striking attempt to modernize agriculture, a successful undertaking that integrated the need for economic modernization with the ideological factor of the need to recover the land, producing a sizable agricultural sector within the Jewish community in Palestine. The fact that the agricultural sector embraced a variety of organizational forms of production, that alongside private agriculture a cooperative and even a communal network of farms was created, was of considerable importance for the further development of the economy. The ideas of cooperation were also applied to other sectors of the economy: in industry, construction, and the services. Such enterprises had to reconcile private and social criteria in their decisionmaking and had to accept procedures for social control, arrangements that provided a particular atmosphere for economic activity within the Jewish community.
The continuous numerical growth of the Jewish population, resulting from successive immigration waves and natural population increase, and the emotional intensity of the issues connected with its development and its role among Jewish communities in the world often obscured the interesting pattern of economic and social development of the Jewish community in Palestine. An important feature of the Jewish population in Palestine was its relatively homogeneous cultural background since the majority of immigrants came from Eastern Europe. It possessed or created a full array of industrial, agricultural, and service skills at various levels, coupled with a level of education that was compatible with, if not excessive of, the existing level of skills. The economic activities of the Jewish population were conducted under conditions of virtual absence of discriminatory policies, apart from restrictions on immigration, particularly during the interwar period. This in turn created a basically stable economic structure; the employment distribution did not change drastically with time. There was relatively less income inequality than within other Jewish communities because skills were distributed differently. The level of income of the Jewish population in Palestine provided for the consumption needs of the population, with investment funds either imported by private investors from abroad, borrowed abroad, or provided as a form of nonreturnable transfers (gifts) from other Jewish communities to the Jewish community in Palestine.
While the above characteristics appear to portray the main features of economic and social conditions of the Jewish community in Palestine until World War ii, they obviously do not convey the dynamics of the process of economic development per se. A more detailed treatment of this subject would have to include the economic relationships with the majority of the population, the Arabs; the extent of self-sufficiency achieved within the Jewish community; and the economic relations with the foreign markets to which some of the products of Jewish labor, land, and capital were exported and from which income was derived (see *Israel, State of, Economic Affairs).
The interwar period that ended with the catastrophe of World War ii, an event in the history of the Jews whose dimensions and consequences our present generation is still unable to perceive let alone define, was marked by the following characteristics: (1) the forced separation and isolation of one of the largest Jewish communities, namely that in the Soviet Union, from the rest of world Jewry; (2) the growth of the Jewish population in the United States and its relative economic strength in comparison with Jewish communities elsewhere created a new element in the balance and relationship between Jewish communities and indicated a future trend; (3) the economic situation of the European Jews, and especially of the East European communities, which worsened since economic and political uncertainty had become the norm even before the rise of Fascism and Nazism; (4) the rise of Nazism which created a direct danger to Jewish life and property in Central Europe, and the spread of discriminatory policies modeled upon the early legislation of Nazi Germany which became a real threat to a large part of European Jewry; given the limited opportunities for migration, the European Jewish population did not possess any real alternatives; (5) the growth of the Jewish community in Palestine which became an important cultural factor in the life of other Jewish communities, but its small relative size and the severe limitations imposed by the British upon Jewish immigration kept it from having a larger impact and from contributing toward a solution of European Jews' distress.
Therefore, prior to World War ii, the Jewish communities found themselves at a crossroad, with the direction of their future fate and development depending upon exogenous, primarily political forces. The tragic results of World War ii have left most of Europe virtually without Jews. There are now two major communities: that of the United States and that of the State of Israel, to shape the future of the Jews as a national entity. This situation of the Jewish communities, recovering from the physical disaster and psychological shock of World War ii, made the economic relationship between the American Jewish community and the State of Israel one of the cornerstones of a policy of survival. The economics of the Jews, apart from the parochial interests of economists and economic historians, was geared toward the survival of the group during most of its recorded history.
general: Baron, Social2, with extensive documentation. first temple period – exile and restoration: M. Weber, Ancient Judaism (1952); A. Bertholet, A History of Hebrew Civilization (1926); M. Lurie, Studien zur Geschichte der wirtschaftlichen und sozialen Verhaeltnisse im israelitisch-juedischen Reiche (1927); D. Jacobson, The Social Background of the Old Testament (1942); Pedersen, Israel; E. Ginzberg, Studies in the Economics of the Bible (1932 = jqr, 22 (1910/11)); I. Mendelsohn, in: basor, 80 (1940), 17–21; S. Daiches, The Jews in Babylonia in the Time of Ezra and Nehemiah (1910). second temple period–talmudic era: S. Yeivin (ed.), Ha-Misḥar ve-ha-Ta'asiyyah (1937); V. Tcherikover, Hellenistic Civilization and the Jews (1966); L. Herzfeld, Handelsgeschichte der Juden des Altertums (18942); Juster, Juifs; A. Buechler, The Economic Conditions of Judaea after the Destruction of the Second Temple (1912); Krauss, Tal Arch; E. Lambert, in: rej, 51 (1906), 217–44; 52 (1906), 24–42; D. Farbstein, Recht der unfreien und der freien Arbeiter nach juedisch-talmudischem Recht (1896); Neusner, Babylonia; J. Newman, The Agricultural Life of the Jews in Babylonia between the Years 200 c.e. and 500 c.e. (1932). muslim middle ages: S.D. Goitein, A Mediterranean Society, 1: Economic Foundations (1967); Fischel, Islam; Hirschberg, Afrikah; Ashtor, Toledot; Ashtor, Korot; M. Wischnitzer, A History of Jewish Crafts and Guilds (1965); R. Levy, An Introduction to the Sociology of Islam, 2 vols. (1929–31); C. Cahen, in: Studia Islamica, 3 (1955), 93–115. medieval christendom: G. Caro, Sozial-und Wirtschaftsgeschichte der Juden im Mittelalter, 2 vols. (1908 –1920); Schiper, Yidishe Geshikhte, 4 vols. (1930); idem, Toledot ha-Kalkalah ha-Yehudit, 2 vols. (1935–36); idem, Wirtshaftsgeshikhtefun di Yidn in Poyln (1926); M. Hoffmann, Der Geldhandel der deutschen Jude bis zum Jahre 1350 (1910); I. Abrahams et al. (eds.), Starrs and Jewish Charters Preserved in the British Museum, 3 vols. (1930–32); H.G. Richardson, English Jewry under Angevin Kings (1960); Baer, Spain; Roth, Italy; A. Milano, Vicende economiche degli Ebrei nell'Italia meridionale ed insulare durante il medioevo (1954); J. Starr, Jewsin the Byzantine Empire, 641 – 1204 (1939). economic doctrines: S.W. Baron (ed), in: Essays on Maimonides (1941, photo-offset, 1966), 127–264; S. Bernfeld et al. (eds.), Die Lehren des Judentums (excerpts from primary sources), 3 vols. (n. d.); S. Ejges, Das Geld im Talmud (1930); E. Cohn, in: Zeitschrift fuer vergleichende Rechtswissenschaft, 18 (1905), 37–72; S. Eisenstadt, Ein Mishpat (1931), lists numerous, economically relevant, juristic monographs.
Economic history emerged in the late nineteenth century as an academic field devoted to the study of past economic phenomena and processes. Since then it has undergone significant changes in terms of its thematic and theoretical concerns, analytical methodologies and language, and the spatial and temporal scales in which it is framed. Distinctive national and regional approaches and traditions can be identified that reflect the different and changing social systems and ideologies across the world as well as the diverse forms of training and disciplinary affiliations of the economic historians themselves.
The Emergence of Economic History
As an academic discipline, economic history first emerged in Western Europe and North America, specifically, in Britain, Germany, and the United States. Although publications that, more or less, incorporated economic history go back to the eighteenth century, the phrase "economic history" apparently first appeared in a book title in the work of a German scholar, Von Inama-Sternegg, published in 1877 and 1879, Über die quellen der deutschen wirtschaftsgeschichte and Deutsche Wirtschaftsgeschichte, covering the Middle Ages. The first academic appointment in economic history was made at Harvard University in 1892 and went to a British scholar, William Ashley. The work of the early economic historians focused on either general economic development or specific sectors and processes, especially agriculture, commerce, and industrialization.
But the emerging field exhibited different regional and national tendencies. Although neoclassical models dominated, Marxist perspectives had a lot more appeal to European economic historians, especially in Germany, than to those in America. German historical economists mainly saw economic development in terms of stages and they emphasized the inductive rather than the deductive method. In Britain, the political economists who turned to economic history stressed issues of distribution, especially prices and wages. For their part, American economic historians showed a strong preference for quantitative approaches. Their studies increasingly focused on business history and business cycles, thanks in part to the relative abundance of statistics from census data and governmental and private agencies. In fact, the subsequent growth of economic history in these countries and elsewhere in the world was tied to the increasing capacity and needs of governments to produce and consume statistical data. Also critical was the expansion of, and rising disciplinary specialization in, the universities, the improvement of library collections and archives, the establishment of economic history societies and journals, and the production of large-scale surveys and other bibliographic resources.
Many of the pioneer economic historians were men, but the field also included some remarkable women, such as Eileen Power in Britain, who was at the center of the Economic History Society and the London School of Economics until her death in 1940, and Katherine Coman in the United States, who published an influential economic history text, Industrial History of the United States, in 1905. Unfortunately, the important contributions of these women were ignored as the discipline became more male dominated, particularly after World War II, as the concerns and constituencies of the discipline narrowed, although corrective studies have appeared in more recent years.
Economic History in Asia, Latin America, and Africa
By the 1940s economic history had become an established discipline not only in Western Europe and North America, but also in other parts of the world. In Japan, Tokuzo Fukuda, who studied in Germany and tried to apply the German theory of economic stages to Japan, published the first treatise on Japanese economic history in 1900. In the next few decades, besides economic stage theory, Japanese economic history was dominated by historical materialism. Analytical focus shifted from commercial activities to rural and local economic history, whereas externally much attention was paid to the economic history of England, seen as the classical homeland of capitalism (see, for example, Komatsu). In China, which became officially communist from 1949, the Marxist approaches became even more pervasive, although Marx's notion of the "Asiatic mode of production" was disavowed. Chinese economic historians were preoccupied with two issues: first, the question of transition from "feudalism" to "capitalism," and second, the contradictory but ultimately destructive impact of Western imperialism on China's economy.
For formerly colonized regions and countries the question of imperialism and the challenges of internalizing their economic history loomed large, affecting everything from periodization to the themes and theories selected for analysis. In India, for example, economic historiography, which began to flourish following independence in 1947, had to grapple with the validity of the division between "ancient India" and "modern India," designating the periods before and after European conquest, a periodization based largely on political events rather than on economic processes. In the early postindependence years, Indian economic historians, notwithstanding differences in the topics or periods of focus, displayed two main tendencies: first, a nationalist orientation in which the stable and productive character of early Indian economic and social institutions were emphasized and by implication at least the destructive impact of British rule was indicted, and second, a spatial concentration on the economic history of North India at the expense of other regions.
Periodization proved even more problematic for Latin American economic history, given the region's complex histories of European and African settlement and relations with the indigenous peoples. The region's economic historians, whether those influenced by neoclassical models of international trade, Marxist categories and stages of development, or dependency perspectives on underdevelopment and unequal exchange, largely took an external view of the region's economies as indicated by the preponderance of studies on the export sector. The emphasis on export rather than on the domestic economy began to shift in the mid-1950s, but there was continued concentration on the "modern" sector to the neglect of the "traditional" one.
The development of African economic history was a post-independence phenomenon, in which scholars grappled with various sets of generalizations made about African economic history. Geographically, the "Africa" discussed was largely confined to "sub-Saharan" Africa; thematically, there was excessive focus on trade and exchange systems, especially external trade, rather than on domestic production. Historically, the precolonial period was depicted as a static "traditional" backdrop to changes introduced by colonialism. Theoretically, there was the ubiquitous use of dichotomous models, in which change was often depicted as the abrupt substitution of one ideal type by its opposite—"traditional–modern" societies, "subsistence–market" economies, or "formal–informal" sectors. Various approaches vied for analytical preeminence, including neoclassical development theory, and dependency and Marxist paradigms.
The Rise of Cliometrics or the New Economic History
At the turn of the 1960s a "new economic history," sometimes referred to as cliometrics or econometric history, emerged in the United States. The new approach involved the systematic application of economic theory and quantitative methods to economic history. It was facilitated by the existence of a large stock of quantitative data produced by various agencies, advances in computer technology that fostered the collection of large historical samples, and a new generation of economic historians keen to apply statistical and mathematical models and counterfactual arguments for more precise measurements of economic developments and relationships. The need for economic and statistical skills meant that cliometricians were increasingly recruited from economics rather than from history departments, and they tended to concentrate on topics with measurable variables and more recent historical periods on which adequate quantitative data was available. One effect was that fewer economic historians were located in history departments, whereas in economics departments their distinctiveness apparently dwindled.
Prominent among the new economic historians were Robert Fogel and Douglas North, who won the Nobel Prize for Economics in 1993. Initially, they both focused on the effects of changes in the price of transportation—Fogel on the railroads and North on shipping—and on the economic impact of slavery on the American South. In both cases and on many other topics their results challenged and sometimes overturned conventional historiographical wisdom. For example, it was demonstrated that the economic impact of the railroads was minimal and the alleged stagnation of the antebellum South was a myth. Fogel later turned his attention to the complex connections between nutrition, health, and productivity, and North concentrated on studying the role of institutions and organizations in economic growth.
Cliometric history had its critics in the American academy. Some charged that because of its hypothetical models, which could not be verified, and "antiempiricistic" and "antipositivistic" methods, it was not history but "quasihistory" (Redlich). But unlike the situation in Europe, where Fogel lamented the new economic history was not initially practiced, it became increasingly dominant among American economic historians. However, the frontier of cliometrics did expand beyond the United States. Writing in 1978 Donald McCloskey enthused, "Cliometrics has at least begun in the histories of Canada, Mexico, Brazil, Australia, Japan, China, India, Russia, West Africa, Israel, Italy, France, Central Europe, the Low Countries, Scandinavia, Ireland, and England" (p. 25). In an extensive survey, Nicholas Crafts provided interested examples in cliometric history ranging from unemployment in interwar Britain to comparisons between Britain and the United States centered on the Habakkuk debate on technological progress, the Kuznets curve on patterns of income distribution, and demographic transitions.
Nevertheless, cliometrics moored firmly in neoclassical principles remained predominantly an American school and preoccupation. The distinguished British economic historian A. K. Cairncross implored the cliometricians to bear in mind constantly "the contrast between the sharp outlines of their concepts and the fuzziness of real life categories and between the certainties of their conceptual relationships and the uncertainties of the data" (p. 178). He concluded that in his view "there is scope for econometric methods of analysis, complete with models and counterfactuals, in some but not by any means all situations that economic historians encounter" (p. 180). From the 1990s, the call for a reunion between the old qualitative and the new quantitative economic history, between narrative and statistics, words and numbers, became louder. One prominent pioneer called for a "post–New Economic History" and urged his fellow economic historians to reintegrate themselves with other historians by changing their methods: "Historians are the synthesizers of social science. Our goal should be to help them to incorporate our insights into their developing syntheses. To do this we must make our models adaptable, more portable, and more human" (Sutch, pp. 277–278).
In an extensive review and prognosis of European economic and social history, Charles Tilly and colleagues proclaimed,
As we peer into the futures of economic and social history, our most general message is quite simple: it is time to de-economize economic history and re-economize social history. The de-economization of economic history should include the analysis of rights, power, coercion, state action, and related "institutional" factors; it does not entail the abandonment of economic analysis, but its broadening from a single-minded application of free-market models. The re-economization of social history should include new treatments of the interdependence among different forms of production and reproduction, both material, biological, and social. It should challenge the surprising recent tendency either to treat the three as separate spheres or to reduce all of them to artifacts of discourse. In this limited but crucial sense, we call for the revival of materialist social and economic history [italics in original]. (p. 647)
Late-Twentieth-Century Developments in Economic History
Economic theory and economic history have increasingly had to deal with new intellectual currents in economics, principally feminist economics, environmental economics, and the new institutional economics. Feminist economists have sought to liberate neoclassical economics from its positivist Cartesian trap, to broaden its analytical and thematic scope from a preoccupation with the rational choices of individual economic man, and to study how humans, both men and women, in interaction with each other and the environment, provide for their own needs and survival. They have tried to infuse gender in both macroeconomics and microeconomics, to strip neoclassical economics of its universalism and timelessness, as well as its normative and prescriptive certainties, to challenge stylized facts and dichotomies, and to make women and gender relations in all economic activities visible, by grounding economic analysis in concrete societies and histories that are invariably marked by inequalities, discrimination, exploitation, and struggle inscribed by the social and spatial constructions and hierarchies of gender, class, and place.
Environmental economics evolved out of diverse intellectual and ideological roots in the 1970s and 1980s in the context of growing concerns for sustainable development. Environmental economists seek to analyze the impact of economic activity on the environment and the influence of the environment on economic activity and human welfare by reformulating familiar neoclassical concepts, and occasionally inventing new, "greener" ones. And so they talk of the need to internalize externalities, that is, to account for the environmental effects of economic activity, to incorporate environmental factors in social cost–benefit analysis. They see environmental "resources" and "services" as "commodities" with consumptive, nonconsumptive, existence and bequest values, and discuss the preservation of natural environments in terms of their value as collective or public goods, and their expected utility or option value for future generations. A series of sophisticated methods and techniques has been devised to give monetary values to the environmental "commodities" and to measure the costs of environmental damage and degradation, and the impacts of market and policy failures and of investment projects and programs.
A key premise of the new institutional economics is that institutions matter, that economic change and development are products of both the institutional environment and the institutional arrangement. Studies inspired by the institutional perspective range from those that focus on the broad range of factors that have shaped the institutional environment, including the state, culture, and ideology, to those that concentrate on specific institutional arrangements, such as how changing regimes of property rights and transaction costs affect each other and economic performance. There is a lively debate on what constitutes an institution. Institutions are said to exist as a means to reduce transaction and information costs so that markets can operate efficiently, and markets themselves are regarded as institutions that interact with other social, political, and cultural institutions in the process of economic growth and change.
These new approaches offered opportunities for economic history to gain new analytical models and insights. They were welcomed by economic historians who believe that historical economic phenomena and processes are inseparable from cultural, political, social institutions, and the physical environments in which they occur, and the hierarchies and struggles inscribed by gender, class, and other social markers. Thus, economic history became increasingly more interdisciplinary.
Interdisciplinarity had long characterized economic history in the global South thanks to the paucity of statistical data and the pressing demands of development. According to Anthony Hopkins, a renowned economic historian of West Africa, African economic historians have always had a generous definition of economic history, one which embraces anthropology and political history as well as economics, which can be attributed to the youthfulness of the subject, the fortunate failure of any one school of thought to impose its dominance, and the diversity of evidence.
Economic historians of other regions appear to be moving in this direction. Readings on European economic history suggest growing interest in reconnecting economic, social, and political history. Before econometric history spread from the United States in the 1960s and specialization led to fragmentation of the discipline, one writer recalls, "few people then doubted that economic history included social history." (Barker, p. 25). Now the discipline seems to be returning to some of its roots and using new sources, including oral sources, which "can fill many gaps and much enrich our understanding of ordinary folk's social conditions and personal priorities" (Barker, p. 27).
The winds of change seem to be blowing even to the United States, as several commentators have noted. In a major intervention on the development of the American economy during the late nineteenth century, when corporate capitalism rose to prominence, James Livingston makes a compelling argument for bringing social analysis into American economic history:
At a higher level of argument it … follows that economic events are explicable only by reference to the social relations within which they appear—by reference, that is, to historically specific contexts of production and exchange.… We can see that the social and cultural context of economic change is not what the new economic historians have assumed it to be—an "exogenous factor" that can safely be ignored in building quantitative models of economic behavior and growth. (p.71)
Similar trends are apparent in Asian economic historiography. In China, for example, social and economic historians have been developing new paradigms, divorced from Western neoclassical models and communist models, both of which were based on simplistic dualisms and shared a vision of the benefits of commercialization (Huang, pp. 335–336).
A survey of the Eleventh International Economic History Congress held in 1994 confirms these developments toward the broadening of economic history. It shows that only one session was devoted to cliometrics and that the new economic history papers altogether accounted for about 20 percent of the whole congress program and were mainly given by North American scholars. Most of the papers took into account the role played by noneconomic factors and reflected "the influence of other kinds of histories, in particular social history, and other social sciences such as sociology, management and organization studies, and political science" (Subacchi, p. 607).
See also Capitalism ; Communism ; Economics ; Historiography ; Marxism .
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Paul Tiyambe Zeleza
R. M. Hartwell identified three phases in the historiography of economic history: the pre-1914 era, when the discipline had a close relationship with economics; an interim period to the 1960s, which was heavily history-orientated, with much study of particular sectors and industries; and the post-1960s, when there was greater recognition of the value of interdisciplinary approaches and, at the same time, a reassertion of the value of economic theory. Of the early practitioners in Hartwell's first two phases, Toynbee, Tawney, Unwin, Seeley, and Clapham, among others, all made important contributions. Toynbee's study of the industrial revolution remained a classic for several generations and inspired many of his successors to explore in greater depth, locally and nationally, the impact of industrialization and economic development.
The relationship to theoretical and even to applied economics has always been ambiguous, though it has been greatly strengthened by ‘cliometrics’, which, introduced from the USA in the 1960s, applied economic modelling to historical problems. Perhaps the most successful instance by an American scholar, Mokyr, was a detailed analysis of the Irish Famine during the 1840s. An interesting spin-off, again imported from the USA, was the development of counter-factual history which derived its raison d'être from the concept of ‘social savings’ achieved in the economy had developments either been delayed or not taken place at all. Using this method, Hawke was able to show that railways had a more limited impact on the mid-19th-cent. economy than previously supposed, while Von Tunzelmann contradicted the view that the introduction of steam power greatly accelerated British industrialization much before the 1820s. Even the counter-factual horse, as conceived by F. M. L. Thompson, has featured in a debate about transport in the Victorian and Edwardian age.
Social history emerged powerfully in the 1960s with the work of E. J. Hobsbawm, E. P. Thompson, and G. Rudé, who, among others, articulated Marxist or quasi-Marxist views of both social and economic development. Thompson's Making of the English Working Class influenced a generation of social historians, not only of 18th- and 19th-cent. Britain, but also of the early modern period, and in much of this work the economic context of social change was closely addressed. There was also sustained interest in the 20th cent., notably in the impact of war and peace on social change. In the related fields of historical demography and historical sociology, quantification has played a more critical role. P. Laslett in his study of The World We Have Lost was one of the most influential of those adopting a sociological approach, while E. A. Wrigley and M. Anderson were among several pioneering computer analysis to produce important studies on the historical demography of Britain during the 18th and 19th cents.
Economic historians have generated and sustained many major debates about the nature and impact of economic change in Britain, including such issues as the origins and timing of agricultural change and of industrialization, the role of various sectors in generating and sustaining economic growth during the era of early industrialization, the impact of industrialization, the standard of living during the industrial revolution, the role of overseas investment and trade on the 19th-cent. economy, the failure of entrepreneurship in later Victorian Britain, the effects of the two world wars on the British economy, and problems of adjustment in the international economy since 1945.
The Economic History Society, established in 1926, is the leading learned society in the field. It publishes the Economic History Review, while Scottish and Irish societies produce journals covering the economic and social history of their respective countries.