Money lending and the origins of anti-Semitism

We study the role of economic incentives in shaping the coexistence of Jews, Catholics, and Protestants, using novel data from Germany for 1,000+ cities. The Catholic usury ban and higher literacy rates gave Jews a specific advantage in the moneylending sector. Following the Protestant Reformation (1517), the Jews lost these advantages in regions that became Protestant. We show (i) a change in the geography of anti-Semitism with persecutions of Jews and anti-Jewish publications becoming more common in Protestant areas relative to Catholic areas; (ii) a more pronounced change in cities where Jews had already established themselves as moneylenders. These findings are consistent with the interpretation that, following the Protestant Reformation, Jews living in Protestant regions were exposed to competition with the Christian majority, especially in moneylending, leading to an increase in anti-Semitism.

That is from a new AER piece by Sascha O. Becker and Luigi Pascali.


An interesting read of you have the time:

Martin Luther's later writings were often extremely anti-Semitic, as he grew frustrated with his failure to convert them. As the originator of Protestantism and translator of the German Bible, he was very influential.

Contrived moneylending hypothesis, meet Occam's razor.

This is how a sociopath responds to criticism.

So I suppose the fact Martin Luther was a stark raving antisemite had nothing to do with this?

It would also be good to do studies in Italy, where the Christian Lombards also participated in moneylending, then branched out to the rest of Europe as far away as London.

There are many counter-examples:

- Jews were expelled from England during the reign of Edward I. England was Catholic then.

- Jews were invited back to England during Cromwell's reign. England was hardcore Protestant then.

- Jews were attacked and expelled from parts of Germany during the Black Death. Those areas were Catholic then.

In Spain at the end of the 14th century several Jewish communities were annihilated. Some Jews escaped to North Africa or became Catholic (Converso). Once the Jews were Conversos they became "legal" and can continue running successful business, among them money lending.

One century later, at the end of the 15th Century there's war and famine in Spain due to the Reconquest wars against the Muslims. The Conversos still practice Jewish rites and follow Jewish customs. The Spanish Inquisition is created and its very first objective is to ensure all people that claim to be Catholic are indeed Catholic. There is economic interest since the Conversos are rich or occupy key government and ecclesiastical positions.

Mr. Tomás de Torquemada, one of the most infamous inquisitors, burns around 10K Jews in bonfire until his death in 1498. He is also behind the expulsion of 40K Jews from Spain on 1492.

Then comes the linked article: "We show (i) a change in the geography of anti-Semitism with persecutions of Jews and anti-Jewish publications becoming more common in Protestant areas relative to Catholic areas."

So, in the Reign of Castilla and Aragón (today known as Spain) there's an ongoing massacre that you may well call genocide. Somehow anti-Semitism is "more common in Protestant areas relative to Catholic areas".

I'm eager to learn about the dark side of the Reformation. The marketing pitch of "Reformation is about intellectual freedom" always seemed lazy whitewhasing.

A lot of the atrocities attributed to the Spanish are apocryphal or exaggeration.

"Reformation is about intellectual freedom"

Who ever said that? The reformation, on its own terms, was a return to the Bible, away from corruption (Sola Scriptura).

Maybe, but the widespread persecution, forced conversion, and expulsion in 1492 were very real.

Mr. Tomás de Torquemada, one of the most infamous inquisitors, burns around 10K Jews in bonfire until his death in 1498.

You're missing a decimal point or two there. The entire toll from the inquisition down to 1834 is usually put at between 2,800 and 5,000. And death sentences were carried out by royal officials, not ecclesiastical officials.

Estimates are estimates, let's go for 1,000. Does the fundamental story changes?

The attitude of Protestants and Catholics toward the Jews and the Nazis during WWII were markedly different and concurr with this finding.

Not sure that's true, or that there was any particular pattern based on religion that can actually be sorted out.

Honestly what is he talking about. On average catholic countries probably rounded up more Jews but the entire nazi movement was mostly lapsed Protestants.

Abstract: These findings are consistent with the interpretation that, following the Protestant Reformation, Jews living in Protestant regions were exposed to competition with the Christian majority, especially in moneylending, leading to an increase in anti-Semitism.

Probably the case that with more competition, Jews more likely to step up intensive and exploitative practices. Nothing specific to the group just, well, if there were a religious outgroup that it was permissable to treat differently, and you weren't really very effectively regulated, most likely a religious group specializing in commerce would be exploitative to outgroup members.

At the same time as this, Protestants find they don't need them as much, so there's less effort by the authorities to restrain a backlash.

(This is all contra the implied idea that it was those bad Protestant moneylenders whipping up anti-semitism against their Jewish competition with no change in behavior by the Jewish community, the politically correct default hypothesis).

Perhaps the idea is implied because it is a well-established strategy - demonize your opponent with a pattern of hysterical claims and dehumanization, and blame them for being exploitative and the source of all woes.

Yes, the meme where "scapegoating" is common and where in these situations the "scapegoat" never ever did anything "wrong", nor is there ever a suggestion that they ever could have done anything wrong, is a well developed part of modern Western political correctness.

The mindset that nothing else could, ever, ever happen is a triumph, I guess, of the maturation and triumph in the West of the nation state as a form of government in which exploitative minorities are almost impossible to imagine. It's a "WEIRD" thing.

So, those three year old kids from Central America really are coming here to rape our daughters, sell drugs to our sons, and take everyone's high paying jobs, and then bomb a federal building?

That is weird indeed.

No, that's called a reductio ad absurdum and a strawman.

No, it's a riff. Our President is absurd; his entire being is a strawman.

But that is a funny thing for you to say, given the sweeping generalization and claims to universality in the post of yours to which I was replying.

Your President.

For sweeping generalization, you'd have to go pretty far in generalization to even close to Perhaps the idea is implied because it is a well-established strategy - demonize your opponent with a pattern of hysterical claims and dehumanization, and blame them for being exploitative and the source of all woes (e.g. in every instance where there is violence against a minority, it's "scapegoating")....

"well-established strategy" does not attempt to confer universality. And I'm not the one that called you out for a strawman. You have become tiresome.

McMike, you have always been tiresome. But what exactly did you see in my statement that "conferred universality"? You don't surely mean a touch of obvious hyperbole on "nothing else could, ever, ever happen"? No one is that literal, surely?

The behavioral change you described doesn't make sense, though. You can implement practices disliked by your clients best when you have the monopoly power. What's the use of ramping up exploitative practices right when you lost the monopoly? Christians could just go to the in-group Christian moneylenders.

The Catholic Church limited access to the Bible by, among other things, restricting translations that were readable by the laity. That may seem odd, but the Church wanted to control interpretations of scripture. The Reformation changed that. According to Martin Luther, there were no issues in the interpretation of scripture because scripture interprets itself. Sensus literalis (the literal sense) made every Protestant an expert on scriptural interpretation. Of course, this resulted in mayhem as what's literal to one isn't so literal to another. The laity soon discovered just how anti-semitic New Testament scripture actually was and is: "the Jews" were guilty of all manner of crimes against Jesus and His followers, culminating in this memorable text: "His [Jesus's] blood be on us [Jews] and on our children!" Matthew 27:25. Jesus having been crucified, His Disciples hid in a locked room for fear of "the Jews". John 20:19. That everyone in the locked room was an observant Jew, including Jesus who appeared among them, seems not to have mattered to the anonymous anti-semitic author of John.

Today's evangelical Protestants obsess over the anti-semitic passages in the New Testament, sometimes prompting the faithful to take revenge against Jews, as occurred in the recent murder in California, for the crimes committed by Jews. Anti-semitism is in plain sight every Sunday in churches throughout the Christian world, in the readings of scripture and the words spoken by pastors.

Literally every Sunday?

A few Sundays past the Gospel (Roman Catholic Mass) reading specifically stated, "Pray for those that curse you;" "Love those that hate you."

"According to Martin Luther, there were no issues in the interpretation of scripture because scripture interprets itself. Sensus literalis (the literal sense) made every Protestant an expert on scriptural interpretation."

That may explain the existence of 35,000 (give or take) christian (small-c) sects many with "pastors" that come up with whatever they want to preach on each Sunday. In that scenario, the odds are increased that there fever-swamp rabid-firebrands are out there.

Dick the presence of innumerable sects within Protestantism is a strengh and a weakness. On the positive side Economists favour competition and expanded choice. If there was just one denomination where is consumer choice? At least now there is wide menu of theologies consumers of faith can choose from , even if you restrict the market for faith just to Protestantism.
However there is one drawback with Christians dispersed between so many churches, each claiming monopoly of truth: no scale economies in donations worshippers make. This is the advantage of Islam and Hinduism. Adherents of Both faiths recognise certain sites as sacred for all, such as Mecca for Muslims and some Hindu pilgrimage centres patronized by all Hindus . These places get massive money flows. If there are a handful of sects in Protestantism they all would be fabulously rich

Rayward can seem like a strange sort of devout Christian, always hating on his neighbors and fellow Christians, until you realize, with a start, that he may be St. Rayward of the Tides, beloved in the sight of God, the last righteous man. This could be much, much bigger than this comments section. Recall, complacent class, how once the localized cult of Jesus the messianic Jew yielded to lecturing, hectoring Saul/Paul the Gentile-lover ...

Literacy rates were low in the Middle Ages, and books, before the printing press, were very expensive. Just about anyone who was literate and could afford to buy a Bible at the time could read Latin. So no, there was no conspiracy to keep the Bible away from people

Exactly the policy was Jerome screwed up enough translating the vulgate bible and there was a long history of translating Greek into Latin. Let’s not unleash complete chaos by translating this further.

There were some bad attempts at translation (e.g., Wycliffe's English Bible) and national languages at the time did not yet have standard forms so that people a hundred miles down the road had their own dialect, including in written form. It wasn't until printing was invented that standard modern languages began to emerge, and Luther's German Bible, the KJV , etc played a role in that.
By the way there were limited translations (of the NT and Psalms) done in the early Middle Ages when even many clergy were not learned in Latin. Ironically the rebirth of learning later on eliminated this trend.

higher literacy rate?

What's that got to do with Jewish money lending? Even functional illiterates seem to be able to count fairly well. Literacy, of course, is linked to the local language. Were Jews particularly adept in the written form of all the languages extant in Europe at the time or are we to believe that Latin literacy was common in the commercial world at the end of the 15th century?

In general, it seems unlikely that illiterates are going to enter into finance at a very high rate.

Jews were a minority everywhere and not all of them were literate. The protestant and Catholic majorities, even if largely illiterate, probably had more literate members in total than the Jews.

probably had more literate members in total than the Jews

Most likely, but many of those (male) persons who were some combination of either entering the church, or law, or were part of aristocratic or gentry families, and were subject to general prohibitions and cultural prejudices against usury. Neither were these men specifically urban or concentrated in their residency patterns either, or connected to a network of towns and cities internationally through Europe (unlike the early Ashkenazi Jewish network). Comparative advantage goes beyond literacy. Obviously that changes over time and lasts longer in Eastern Europe.

But that is a tangent to the idea that I believe you were suggesting literacy is not required or peripheral for success in money lending, which seems not the case.

Actually Jewish literacy rates were an extremely unique feature of the late classical period. Elementary education was regarded as compulsory by Simeon Ben Shetah and Joshua Ben Gamla (75bc to 70ad).

By about 300AD, 85-90% of Jews were literate and engaged in non agricultural trades. I am not sure of any group even close to that that early.

By about 300AD, 85-90% of Jews were literate

There are substantial numbers of historians that regard that claim as mythology. Jews were farmers in many small communities, particularly in Eastern Europe. Be that is it may, ability to speak a language isn't literacy. There were many languages in medieval Europe. It would be an exceptional person that could both speak and read and right in more than two of them, including Latin, if that.

Jews had more rights and were better treated in Eastern Europe, especially in Poland, but also in Bulgaria and even early Russia. In the West they generally were forbidden to own land.

anti-Semitism as a form of implicit market collusion?

I would think that once the non-Jewish market participants became well established that the incentive for anti-Semitism should diminish if economic/financial factors were the real source.

Only if the cabals were no longer segregated clans and had intermixed their investments.

I would think it was a few centuries before the "it's nothing personal it's just business" ethos superceded family-based businesses.

Pretty intereting read on that subject : The Origin of Totalitarianism by Hannah Arendt

One need understand that the New Testament is a theological document not historical, but fundamentalist and evangelical Christians certainly don't view it that way. The Gospels were not written by the apostles M,M, L, and J but by anonymous authors, none of whom was an eye witness but each of whom had an ax to grind. With few exceptions (reflected in the Epistle of James - not written by the historical James, brother of Jesus), many of the early Christian writers had a supersessionist theological view (i.e., Christianity replaced Judaism, the New Testament replaced the Hebrew Bible, and Christians replaced Jews as God's chosen). Demonizing Jews served a useful purpose. Of course, Jesus's words in the New Testament are not anti-semitic. How could the Prince of Peace teach an anti-semitic message. Thus, a selective reading of the New Testament, one that omits the anti-semitic passages running throughout, gives an entirely different view, not an anti-semitic view. I am a Christian. Does that mean I too engage in a selective reading of the New Testament? Yes, it does. But a selective reading can provide a truer meaning, one closer to the historical Jesus. How do I know? Thomas Jefferson.

It is an amusement to me that so many people who profess intense scrutiny of motivations and conduct of all humans - particulary the elite and the rulers, and pretty much doubt every single thing they see, read, or hear from other people - will accept what is currently called "the bible" as infallible, authentic, and divinely transcribed verbatim from the mouth of God.

I mean, it's like they never read the assembly instructions that came with their Chinese-made TV stand.

wow devastating point McMike

Wow, gee, well thanks that's an honor.

I take it you are familiar with poorly translated instructions then

For those who have not read the Jefferson Bible, I highly recommend it (it can be purchased at Amazon). What Jefferson did was smash together the four canonical gospels chronologically and excise all of the magical/mystical parts. In other words, it's limited to the teachings of Jesus. Now, I fully understand that most Christians are drawn to the faith because of the magical/mystical parts: "And if Christ has not been raised, then our preaching is in vain and your faith is in vain." 1 Corinthians 15:14. But focusing on the teachings of Jesus puts Christianity in an entirely new light.

Indeed. And apparently uncomfortably similar to de-mythologized Buddhism.

Both of which require sustained personal effort, humility, austerity, actual sacrifice, and a rejection of materialism. So, you know, not likely to resonate without some help by the elite.

I noticed something similar in the history of the American South. Jews tended to be more popular in the South than in the North (e.g., the first 2 Jewish US senators represented slave states, and one went on to hold the 3rd through 5th most important posts in the Confederacy).

In the 1930s, Bobby Jones' Augusta National Golf Club admitted local wealthy Jewish families, but after WWII when Northern CEOs took over the club to hang out with President Eisenhower, Augusta stopped inviting Jews to join for several decades.

This is not to say that Southern elites, gentile or Jewish, generally approved of their young people socializing together in romantic settings like country clubs, since that could lead to mixed marriages. But in most Southern small towns, the local gentry looked forward to a few Jewish families moving to town and bringing their energy and urban skills.

Generally, Southern gentile elites saw their skill set as landowning, military bravery, and other aristocratic virtues and thus welcomed Jews as bringing to their communities bourgeois virtues that complemented their aristocratic ones. Northern gentile elites, who tended to be descended from Puritans who had semi-consciously mimicked Jewish virtues, found that Jews tended to get on their nerves more.

A similar thing occured with Black Businesses after Reconstruction

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