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Analysis of article in Encyclopedia Judaica on "Economic history"
The article on "Economic history" can be found here. In print it takes up pages 95-138 in that volume (1972). The section headings are as follows:
- Material by S.W. Baron:
First Temple Period, 95-98
Exile and Restoration, 98-99
Second Temple Period, 99-102
Talmudic Era, 102-104
Muslim Middle Ages, 104-108
Medieval Christendom, 108-114
Economic Doctrines, 114-117
- Material by A.Kahan:
Early Modern Period, 117-127
- SEPHARDIM AND ASHKENAZIM
- ECONOMIC ENVIRONMENT
- JEWISH MIGRATION
- 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
Transition Period, 127-129
Modern Period, 129-138
- JEWISH MIGRATION
- PENETRATION INTO INDUSTRIAL EMPLOYMENT
- MAINTENANCE OF POSITIONS IN THE SERVICE SECTOR OF THE ECONOMY
- EMPLOYMENT IN THE AGRICULTURAL SECTOR
- INCOME
- WESTERN EUROPE
- EASTERN EUROPE
- THE UNITED STATES
- PALESTINE
Epilogue, 138
Brief summary of sections by Baron
First temple period
The evidence on economic activity is mostly from the OT, although the account there is often more idealistic than factual. Archaeology can be helpful, but evidence is scant and sometimes neighbouring areas can yield helpful information. It is now discounted that there was a long gradual transformation from nomads to agriculturalists. When Canaan was occupied by Israelites from Babylon, they adopted the farming techniques already in practice as well as speedily integrating with the Phoenician seafarers. The settlers turned to crafts and commerce; there was a bureaucracy, a king and a temple in Jerusalem. Settlements were small, surrounded by vineyards, orchards and pastures for sheep and goats, kept mainly for milk—meat was considered a luxury. Villages had artisans and scribes. It is unknown whether taxes were exacted by the king. There were also merchants who would travel far afield on expeditions with the Phoenicians. This collaboration ended with Solomon's death and the split into two kingdoms, with Samaria in the North; as a result the Jewish merchant class declined. Silver coinage, the shekel, had already become standard currency. Slaves, often prisoners of war, became less common except among the rich. Many Jews were unemployed or fell into debt. The resulting harsh inequalities between rich and the poor were denounced by the prophets. Clandestine loans were made to debtors, as usury was forbidden by the scriptures. Political and economic instability resulted in the fall of Samaria in 771 BCE and Jerusalem in 586 BCE.
Exile and Restoration
Following the fall of Jerusalem and the devastation of Palestine, the Jewish population was dispersed, either by deportation to Babylonia or by voluntary emigration to other parts of the Middle East. The exiled Babylonian Jews formed a strong community in Mesopotamia which gave guidance to the Jewish diaspora for two millennia. Jews became integrated in their new countries often as merchants, involved in commerce and banking. Under Cyrus resettlement in Palestine recommenced, accompanied by financial aid from outside. The return was chaotic both because of the difficulty in reclaiming lost estates and because of severe taxes imposed on settlers by the Persians. Rule by Persia did at least offer peace and prospects of improvement.
Second Temple Period
Although the Jewish state was small, once the Persians fell out of power the Jews were able to thrive under Hellenistic rule. They also settled outside the borders of the state and benefited from trading relations with the diaspora. However, Hellenisation and assimilation created a rift with Jewish customs which resulted in the Maccabean revolt in the second century BCE and the establishment of an enlarged autonomous Jewish state. The Second Temple was constructed, subsidised by taxes imposed on all adult male Jews in the diaspora. It became a place of pilgrimage from afar, which accounts for the state-organised moneychangers throughout Palestine, including the Temple Mount. Under Roman occupation in 63 BCE there were attempts to purloin some of these temple funds by Roman officials, as recounted in Cicero; the funds were later protected by Roman law. The economy was driven by farming which, with the benefits of irrigation, had become intensive. Despite the demands of a growing population and increased transport costs, it was still possible to export fruit and grain to Mediterranean countries. Great store was placed in the palm, the vine and the olive tree, which could not be cut down and became symbols of the nation. Sheep were raised for wool and meat was still a luxury: the major consumer of livestock was the Temple in the form of sacrifical cattle and lambs. As the state was cut off from the sea, mercantile possibilities were limited to shopkeeping and small trading. With few mineral resources, industry and crafts were restricted to textile production. Jews had a huge tax burden from the Herodians and Romans, which fell most harshly on farmers, who often had to ignore the tithing laws. When they fell into debt they often lost their properties: there was a disparity of class between farmers, including shepherds, and the ruling Pharisees, who distrusted them or regarded them as illiterate. As a result the population concentrated in towns. The larger cities became centres of trade and bureaucracy and attracted droves of dispossessed rural labourers. Inequities and conflicts came to a head in the Jewish-Roman war in the first century resulting in the destruction of the Second Temple and economic collapse. Palestine was subsumed in the Roman empire and the centre of gravity of the Jewish people was shifted to the diaspora.
Talmudic Era
Even prior to the fall of Jerusalem, most Jews lived outside Palestine, although it was from there that leadership came. Other centres included Babylonia, Egypt and Rome, where some written records survive. The spread of Jewish communities across the Mediterranean occurred through enslaved prisoners of war gaining their freedom. In Rome many of them were supported by welfare and had special rights such as double rations of grain on the day before the Sabbath. Many in the diaspora returned to agriculture. To alleviate the tax burden, Jewish farmers in Babylonia were permitted to forgo the usual requirement to let land lie fallow for a year. As well as other crafts, Jews became known for brewing beer in Babylonia. More significantly many turned to trading and commerce, a choice in part dictated by a lack of attachment to any particular place. Despite Jewish anti-usury laws, banking started to become important in a minor way, although moneylending was only condoned as a last resort. In the talmudic period there was relatively little slave trading or employment of Jewish slaves. Jews and their leaders also had to adapt to the transformation of the Roman economy from semicapitalist to semifeudal. This resulted in a diversification in occupations from the third century onwards. Class distinctions among Jews also disappeared: during anti-Jewish riots in the Middle East, some of them encouraged by local governors, Jews closed ranks to hold on to their livelihoods and businesses,
Muslim Middle Ages
The spread of Islam throughout the Mediterranean marked the most radical change in the economic circumstances of the Jewish people that would last until the modern period, even after emancipation: agriculture was abandoned in favour of commerce, moneylending and crafts. Although under the Romans and Persians, Jews had been subject to special taxes, particularly after the fall of the Second Temple, they had not been singled out from other groups in that respect. Under Muslim rule the Jews, Christians and Zoroastrians, because their religion was based on scriptures, were tolerated, but only on condition that they paid tribute, in the form of excessive land and poll taxes, and that their social status was kept low. For the majority of Jews, this made life very difficult, although a few did acquire wealth. Taxation was used a form of ritual humilation: burials could not take place in the case of unpaid tax; and the official deliverer of communal Jewish taxes was subject to abuse, such as being publicly branded with the receipt. Nevertheless it was considered preferable to preserve that system, rather than making room for something worse. These special taxes combined with insecurity in rural areas resulted in a decline in agriculture and a migration of Jews to cities. From the twelfth century, as in Christian Europe, semifeudalism provided an extra factor for the decline. At the same time the upsurge in the Middle Eastern economy at the beginning of Muslim rule made commerce more attractive than agriculture. Jews, along with Greeks, Armenians, Syrians and Arabs, entered competitively into domestic and international trade. They had several advantages: Jewish law was less restrictive; the widely dispersed diaspora provide numerous contacts and security; and, in view of the divide between Muslims and Christians and their own adeptness in many languages, they were uniquely placed to provide luxury goods in Western Europe from the Middle East, India and the Far East. Contemporary reports of trading in slaves or eunuchs, accepted as established fact by the medieval church, contradict both Jewish and gentile laws, in particular the Talmud; moreover references to such trading are scarce in the many contemporary sources from North Africa, where the economy was booming. Under Muslim rule in the Middle Ages, Jews started to play an important role in the money trade: minting of coins; money changing, which was profitable and widespread, particularly in view of the large number of different currencies that came into being; deposit banking, as Jews in Muslim countries were considered to have well protected property and were therefore safe guardians; transfer of large sums between different Muslim states and beyond; and most significantly as providers of credit, which now were now longer to ruined farmers but in business, trade and public administration. With the increasing demand for loans, Jews could lend large sums to borrowers from other religous denominations, the biblical prohibition on usury applying only to loans to fellow Jews. Jewish banking firms were profitable and became prominent throughout the Muslim world; they traded also in jewelry, rare metals and property and were occasionally used for high profile loans to the Caliphate, for example to cover outstanding army salaries. A much larger part of the Jewish population became craftsmen in diverse areas or turned to professional careers, including medicine; this was a consequence of the fact that Muslim society was more open and did not institute economic discrimination based on religion. From the eleventh to the thirteenth centuries with the onset of civil wars and the demise of the Caliphate, these economic advantages rapidly disappeared. The Mongol invasions and the Christian crusades marked a decline in the Muslim world as the East became unstable and commerce concentrated itself in the West, where many Jews sought refuge.
Medieval Christendom
With the decline in the East and the greater prominence of Western countries that accompanied the reconquest of Spain, the relatively small Jewish population in the Christian West gradually started increasing from the thirteenth century onwards. Details of economic conditions are particularly well documented during this period.
Land ownership and agriculture
In Christian Europe, the insecurity created by the constant threat of massacres, forced conversion or expulsion made agriculture or landholding financially unviable, as it risked a complete loss of property, which was often repurchased after expulsion at prices considerably below its true value. This insecurity started with the seventh century decree of Heraclius forcing all Jews in Byzantium to convert to Christianity, a decree that would be repeated over the following three centuries. Similar decrees were made slightly later in Spain, France and Italy, forcing most Jews to leave these countries and returning Jews to abandon any form of agirculture. Expulsions continued in France, England, Spain, Portugal and part of Italy from the late twelth century until the beginning of the seventeenth century. Feudalism in Europe was another factor militating against agriculture. Possession of land invested power with the landowner, and even though it was in the interests of kings to allow unpaid debts to be compensated for by the transfer of land to Jews, ultimately baronial self-interest and the problems with religious oaths of fealty placed Jews at a disadvantage. As opposed to Muslim-ruled countries, however, Jews were often not subject to land tax, although the church would levy tithes on properties acquired from Christians, to compensate for their loss of revenue. There was also opposition to Jews employing Christian labourers to work their land and in some areas even opposition to any kind of Jewish landholding, despite the fact that Jewish settlers in the past had introduced agricultural innovations from the East in the cultivation of orchards and vineyards. Land ownership prohibitions were usually imposed locally by barons in defiance of general crown policy. Nevertheless significant enclaves of Jewish agriculture survived in Mediterranean countries throughout the medieval period. Property ownership was more frequent in towns and cities, where individual properties were often successively subdivided between heirs, because there was no possibility of enlargement.
Crafts
Jewish settlers were repsonsible for bringing with them innovative technologies in the crafts. In the twelfth century displaced Jews from Thebes brought expertise in silk production to Southern Italy, where it evolved as part of a significant textile industry, including traditional Jewish skills of dyeing and weaving. Exceptionally Christian guilds relaxed their attempts to suppress Jewish competition by allowing Jewish butchers and tailors to provide ritual items for Jewish customers. Pawnbroking and the related refurbishment and resale of secondhand goods, including luxury clothing, became established as typical Jewish crafts. Jews were also involved in the whole range of crafts, although not to the same degree of specialisation as in Muslim countries. Nevertheless there were Jewish glassblowers, goldsmiths, harnessmakers, blacksmith, cobblers, weavers and basketmakers. In parts of fifteenth century Spain on the other hand decrees inspired by the antipope Benedict XIII forbade Jews to be veterinarians, ironmongers, shoemakers, tailors, barbers, hosiers, butchers, furriers or rag dealers; at the same time Benedict himself had Jews in his employ, including scribes, a bookbinder and a seamstress. Special skills of Jewish craftsmen were appreciated in Rome: Lorenzo de Medici received a tip from his cousin Giulio, a cardinal in the Vatican, to poach Jewish manufacturers of saltpeter from Rome. In Spain Jews formed their own independent guilds; and in Sicily a decree to expel Jews in 1492 was rejected by local Christian leaders because of the indispensability of Jewish ironmongers for provisions in farming and shipping. In Northern Europe by contrast no guilds were permitted: Christian guilds operated not only to get rid of Jewish competition but more generally of Jews.
Commerce
There are few reports of Jewish peddlers in medieval Christendom where Jews travelling in the countryside risked attack, even if they were permitted not to wear the distinguishing badge that legally had to be worn by all Jews. In towns Jews became shopkeepers wherever it was permitted. The new class of burghers activated against them and often succeeded in having rectrictions imposed: in England there were royal decrees barring Jews from certain professions in the thirteenth century; and in mainland Europe shops could not be outside the Jewish quarter. While European countries had initially been keen to benefit from the trading possibilities offered by Jewish settlers, international Jewish trade later fell into decline because of competition from Italian merchants, banditry and special taxes imposed on Jews, including highway tolls. Despite theoretically being protected by royal edict, in practice they were at the mercy of local barons and officials, just like all other merchants. Jewish traders were welcomed as participants at international fairs in European, even after these became more regional towards the end of the Middle Ages. The prevalent medieval rule, under which all Jews accountable for the misdeeds of a single rogue Jew, was also relaxed at fairs. For dealers in secondhand goods, the Talmudic "law of concealment" absolving merchants of responsibility for unwittingly reselling stolen goods was honoured; it eventually became an established principle in modern mercantile law. Although even wealthy and influential merchants were subject to having their possessions confiscated during periods of expulsion, Jewish merchants flourished in the Middle Ages, especially in Mediterranean countries.
Money trade
Because of insecurity and the possibility of expulsion, deposit banking was far more difficult in Christendom than under Muslim rule. Some urban Jewish bankers resorted to the Talmudic tradition of burying valuables in the countryside. Likewise there was little minting of coinage or changing of foreign currency. Moneylending, on the other hand, became one of the mainstays of the Jewish economy. Although outlawed by Christian scriptures, the church itself had practiced moneylending until the twelfth century, and to a limited extent afterwards. The Vatican itself had its own papal usurers for transferring fund to Rome. For kings the services of Jewish moneylenders were indispensable; Jewish assets were regarded as crown property; and monarchs preferment of Jewish moneylenders was criticised by the church. At the end of the twelfth century a system of public chests was introduced In England for all bonds, a system later tried without success in France and Spain. Jewish moneylending was not only a necessity, but lucrative, with high rates of interest the norm, even among papal usurers. In the late thirteenth century, when the economy was in decline, due to recurrent famine and plague, the high rates of interest aroused general hostility and intolerance towards Jews in France, England and Germany. They were expelled from England and France. When Christian creditors charged even higher rates in France, the expulsion was revoked only to be reinstated a few years later. Meanwhile in Italy, where banking was on the decline, Jews were invited to settle to provide credit services for the population, sometimes with promises of security. In the fifteenth century, however, the charitable monti di pieta loan banks, with a firm anti-Jewish agenda, soon displaced Jewish moneylenders in Italy, except in Venice, which had its own Jewish banchi del ghetto with preferential rates for Christian borrowers, banks which lasted until the late eigteenth century.
Public service
Even though discouraged by the church, Jewish experts were often used as tax advisors and even more frequently as tax farmers, particularly in Spain. Jews also served as diplomats. Since this required familiarity with different languages and countries, even Pope Gregory IX had to concede in the thirteenth century that the monarchy in Hungary and Portugal had no other viable choice. In Germany in the fourteenth century, Jewish bankers were involved in large-scale financing of mercenaries, prototypes for later "Court Jews", although this practice stopped abruptly with the mass expulsion of Jews from Germany.
Economic Doctrines
There are no extant Jewish documents from Medieval times on economics comparable to early Muslim or Hellenistic tracts. What survives are three chapters from the Misneh Torah of Maemonides, which, with remarks in other chapters, give advice on ideal conduct, following the precedent of the Bible and Talmud. Obtaining an accurate picture of economic practises requires matching these idealistic suggestions with actual source material from the period. Biblical instructions to allow land to lie fallow every seven years or that slaves on acquiring their freedom should receive provision from their old master to start afresh were not necessarily observed, as shown by the denunciations by prophets. This idealistic way of writing lasted until the emancipation. Regarding private ownership Maemonides interpreted that under Talmudic law there were five categories of property. (1) Public property owned by noone and freely accessible to all; (2) public property such as roads belonging to a coporation but for general use; (3) private property, such as lost property, owned by noone but available to be appropriated; (4) private land, such as that of a deceased owner without heir, available to be appropriated; (5) private land not taken over by a Jew from a gentile, available to be appopriated; and (6) private land in a walled city, available for public use but not appropriation. Among other property rights was the theoretical claim of all Jews to a small portion of Palestine. These principles were interpreted by rabbis to give guidance on the purchase and sale of property, including making provisions for relatives. Advice was also given on trade regulation, including providing the correct quantities at the correct price. The law of "misrepresentation" prohibited selling at a higher price than the value, except either when the vendor had made this clear prior to sale or in a limited number of other circumstances, including transfer of property rights and hired labour. Agricultural labourers were allowed a share of the grain or grapes they were gathering, but not fruit or vegetables. Usury presented the most difficulties, as it was forbidden in the bible—"Unto thy brother thou shalt not lend on interest" except to "foreigners". The reason for this could have been economic, in that only needy Israelites would seek credit whereas wealthy Phoenician merchants would be seeking to finance business ventures, in which the lender had a right to a share in the profits; but rabbis reasoned moralistically that lending to Jews was an act of charity while lending to others was a business operation. In this case the borrower was to be kept at a distance, expecially if he was unable to pay, although that advice was not always followed. Demand from borrowers, including kings, forced Jews to make concessions to their laws on usury, particularly when banking became their primary economic activity. Charging interest was justified by the fact that generation of wealth freed more time for study of the scriptures. There were also many practical ways in which the law on usury could be sidestepped by suitable interpretation of the Bible and Talmud. Since rabbis themselves were often involved in commercial ventures, they were well placed to adapt and interpret economic principles from the scriptures to provide unified guidance for the diaspora at any given time.