Published by EH.NET (March 2010)

Jerry Z. Muller, Capitalism and the Jews. Princeton, NJ: Princeton University Press, 2010. v + 267 pp. $25 (hardcover), ISBN: 978-0-691-14478-8.

Reviewed for EH.NET by Peter Temin, Department of Economics, MIT.

This small book is in the currently popular form of a lecture series. The book stretches the concept as the lectures were not given as a unit, but delivered at various conferences. They were close enough in subject to be grouped together, but they have less coherence than the format suggests. Muller, a historian at Catholic University, has given us four lectures on economics aspects of Jewish life in the modern world. The lectures are based on secondary sources, so it is not new research. Instead they are thoughtful and occasionally insightful essays of specialized interest.

The first essay is a history of the concept of usury from Aristotle to Osama bin Laden with attention to the role of Jews in money lending. The second essay is a refutation of a remark by Milton Freidman asserting that Jews were in debt to capitalism but opposed to it. Muller notes that Jews were successful in business in Western Europe and champions of socialist equality in Eastern Europe. The third essay is a survey of Jewish communists in several countries and times, concluding that most Jews were not communists and most communists were not Jews. The final essay argues that Zionism is a form of nationalism which was in turn a result of capitalism; it is an exposition of the views of Ernest Gellner.

The first essay is the longest and most interesting. It asks why the concept of usury has been so tenacious, as opposed to asking the more usual question of what effect usury laws have. Muller argues that the concept ?provides one of the most long-lived paradigms for the condemnation of market activity? (p. 17). In its restricted sense, usury refers to a specific activity, the lending of money. The more ?radical? use of the term is as a condemnation of all commerce. The opposition to trade and interest comes in turn from seeing resources as fixed. Readers will recognize this view that all wealth comes from land as the source of the Physiocratic view in the late eighteenth century and Henry George?s single-tax proposals a century later. Muller argues that the condemnation of usury went underground in the eighteenth century, only to reappear in more abstract expressions.

In his most startling assertion, Muller argues that Marx?s labor theory of value was just such an underground expression of the opposition to usury. It is a return to Aristotle in its denial of the value of commerce, and it also is a denial of Marx?s Jewish heritage ? which is how it appears in this book. This claim that Marx?s personal history determined his core economic beliefs is asserted but hardly proved. It derives indirect support from Cuddihy?s analysis in The Ordeal of Civility of how several seminal modern thinkers were influenced and troubled by their Jewish heritage. Cuddihy argues that Marx in particular was prone to using euphemisms to refer to Jews. Marx?s condemnation of usury would rank as just such a euphemism, albeit one that had damaging effects on communist policies.

Muller unhappily did not inquire more deeply into this aspect of Marxian theory. Was Marx denying his heritage? Or was he trying to preserve a non-toxic place for Jews in socialism? Was he aware of the strong effect of his Jewish background on his abstract theory? These are fascinating questions stimulated by Muller?s discussion but not pursued in this book.


John Murray Cuddihy, The Ordeal of Civility: Freud, Marx, Levi-Strauss, and the Jewish Struggle with Modernity, New York: Basic Books, 1974.

Ernest Gellner, Nations and Nationalism, Oxford: Blackwell, 1983.

Peter Temin is the Gray Professor Emeritus of Economics at the Massachusetts Institute of Technology (MIT). He is the author of ?An Elite Minority: Jews among the Richest 400 Americans,? in David Eltis, Frank Lewis and Kenneth Sokoloff, editors, Human Capital and Institutions: A Long Run View, Cambridge University Press, 2009.