Jewish economic history—too long stigmatized—opens up surprising insights into the past, and the present too.
When I began the research that would eventually lead to the publication of Money, Power, and Influence in Eighteenth-Century Lithuania—a study of the Jews’ economic past in eastern Europe—I felt as if I was swimming against the tide in the study of Jewish history. The field I was working in, Jewish economic history, had been in the doldrums since the mid-twentieth century. The use of economic motifs in the vicious anti-Semitic propaganda that led up to the Holocaust had made it a topic that many felt too hot to handle. Moreover, the rise in popularity of first social and then cultural history had opened new vistas in understanding the complexities of Jewish non-Jewish interaction in the Diaspora that seemed to render insignificant issues of the Jews’ economic life.
I was convinced that this was not the case. I believed (and still do) that the study of Jewish economic life is a key field through which to examine the relations which developed between Jews and surrounding societies. This is because an integral aspect of most economic activity is that it engages the individual in a broad network of relationships and interests. The line stretching from owner of the means of production to producer, and from there to distributor (and those servicing the market), and thence to consumer, is often a very long one. It crosses and re-crosses seemingly impenetrable social barriers of class, ethnicity, religion, and gender (not to mention physical segregation where that exists), connecting those it touches in the most natural way. The study of Jewish economic history is therefore a means of understanding one of the most important mechanisms of social integration that functioned wherever Jews lived—even in societies where their integration was frowned upon.
The study of Jewish economic life is a key field through which to examine the relations which developed between Jews and surrounding societies.
My work on the roles of Jews in the economic system of the noble estates in the Polish-Lithuanian Commonwealth bore this out most dramatically. I examined the huge estates of the very powerful Radziwiłł magnate dynasty and analyzed their economic structure using the methods of the New Institutional Historians. This group, rebelling against the high levels of abstraction used in classical economic modeling, conceives of the economic arena as a complex of social and cultural institutions. In order to understand it, they argue, it is necessary to examine not just the economic but the social and cultural forces that underpin it.
Their approach proved incredibly fruitful for me. Previous research on the magnate economy had dealt mostly with the owners of the means of production (the noble landowners) and the productive forces (the peasantry), leaving the markets to one side. But the economic institution in which the Jews were most heavily involved was the market, so my research focused on that, resulting in an entirely new analysis of the estate economy.
It soon became clear that an increasingly intense exploitation of the markets was a crucial element of the Radziwiłł administration in the eighteenth century. The incomes it brought them played a vital role in the family’s return to the peak of its power and influence after a decline in previous generations. Vital for my research was that Jews played key roles in the development of the estate marketing system, to the point of sometimes absolute dominance. More, they did so at the invitation of the Radziwiłł estate owners as a part of a conscious economic policy.
This economic integration led to higher forms of social integration—and even an improved social status for Jews. The Radziwiłłs, delighted with the increased revenues, gave their Jewish subjects support and backing that they were able to leverage into positions of (unofficial) power and influence in the estates. This new situation also affected Jewish society, where social status was increasingly determined by connections with the estate administration rather than the traditional values of learning and pedigree.
What’s more the Radziwill’s “Jewish policy” was not unique to them—all the magnate estates at this time used Jewish economic activity much as the Radziwiłłs did, and with similar results. The more I thought about it, the more I felt that this conclusion had broader implications for the history of the Polish-Lithuanian Commonwealth as a whole. It was exactly in this period that a small number of magnate families acquired the land, the wealth, and the power to become the dominant force in the running of the state (the so-called “oligarchy of the magnates”). Thus the magnates’ rise to power as a group in the eighteenth century must have been based, in part at least, on the roles Jews played in the economies of their estates. So, far from being a marginal phenomenon, Jewish economic activity in the service of the magnates was of quite central importance in the development of the Polish-Lithuanian state in this period.
Thinking even more broadly, I also concluded that there was a downside to the story of economic success I had described in the book, though it became clear only after the period I had studied. When the magnate economic system began to break down at the end of the eighteenth century, the Jews who had been so closely identified with it had nowhere to turn. As a new political, social, and economic order struggled to develop during the nineteenth century, the magnate regime was held responsible for the country’s many woes. The Jews, who were closely identified with it, took much of the blame. As a result, the nineteenth century saw the Jews pushed back to the social and economic margins of society, eventually to reach very high levels of pauperization.
And that, I feel, following recent economic developments, gives this story contemporary relevance. In our day, Jews are deeply identified with a capitalist economy, which also seems to be struggling with its own internal contradictions. In this identification with a dominant economic system, if in nothing else, they are in a position similar to that of their eastern European ancestors. Perhaps the eventual fate of Polish-Lithuanian Jewry, which had initially benefitted so much from the magnate economy but then suffered terribly in its collapse, has something to teach us today. At the very least, this lesson in Jewish economic history should prompt us to begin rethinking both the significance of the Jews’ connection with capitalism and the long-term value of the benefits it brings them.