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Capitalism and the Jews

July 18, 2016 | By: Milton Friedman

Why are Jews socialists? Nobel laureate Milton Friedman set out to explore this question in a 1972 lecture before the Mont Pelerin Society. “Jews owe an enormous debt to free enterprise and competitive capitalism,” Friedman said. And yet, “Jews have been consistently opposed to capitalism and have done much on an ideological level to undermine it.” In “Capitalism and the Jews,” Friedman explores the dilemma of Jewish ideological opposition to the capitalist order in light of the market economy’s benefits to the welfare of the Jewish people and society at large.

Friedman offers two explanations for the contemporary Jewish suspicion of capitalism. First, Jewish attachment to Leftist economic views is a byproduct of their gaining the rights of citizenship in Europe, for it was only the political Left that supported and enabled their political emancipation. Second, anti-capitalist sentiment among Jews also results from their absorption of the anti-Semitic trope that Jews are moneylenders who put their desire to make a profit ahead of a concern for mankind. Jews attach themselves to socialism in order to convince both their anti-Semitic accusers and themselves that they are in fact public-spirited and generous, not selfish and heartless merchants. In so doing, Freidman argues, Jewish ideologues neglect any effort to understand the rational virtues of a market economy, and the human flourishing it makes possible.

Within Israel, despite all the talk of central control, the reality is that rapid development has been primarily the product of private initiative. After my first extended visit to Israel two decades ago, I concluded that two traditions were at work in Israel: an ancient one, going back nearly two thousand years, of finding ways around governmental restrictions; a modern one, going back a century, of belief in “democratic socialism” and “central planning.” Fortunately for Israel, the first tradition has proved far more potent than the second. . . .

Except for the sporadic protection of individual monarchs to whom they were useful, Jews have seldom benefited from governmental intervention on their behalf. They have flourished when and only when there has been a widespread acceptance by the public at large of the general doctrine of non-intervention, so that a large measure of competitive capitalism and of tolerance for all groups has prevailed. They have flourished then despite continued widespread anti-Semitic prejudice because the general belief in non-intervention was more powerful than the specific urge to discriminate against the Jews.

Read the lecture through the Foundation for Economic Education.


Hear the lecture through the University of Chicago Law School.

More about: Anti-Semitism and Anti-Zionism  • Jewish Political Thought  • Jews and Markets