A history of Milton Friedman’s provocative “Capitalism and the Jews” (1972-1985) Nicolas Vallois1 Cléo Chassonnery-Zaïgouche2

Very first draft, please do not quote without the authors’ permission.

Introduction

In a 1971 letter to Ralph Harris, Friedman exposed briefly the subject of his forthcoming Presidential Lecture at the Mont Pèlerin Society (MPS) at the Montreux meeting in Switzerland (1973).

I have long been interested in, and have given a number of unwritten and unpublished lectures on, “Capitalism and the Jews”—the theme being that a) no people owe so much to capitalism; b) none have done so much to destroy it by writing and political actions.3

The speech circulated as a reprint (Friedman, 1972) and Capitalism and the Jews (hereafter C&J) was eventually published in three different forms in the 1980s: in a 1984 exemplary of The Encounter, the literary and political review of Irving Kristol (Friedman, 1984); in a 1985 collective book edited among others by Kenneth Boulding and Walter Block after a Symposium held by the Fraser Institute on “Morality and the market” (Friedman, 1985); a last publication in The Freeman, a review published by The Foundation for Economic Education. Written in the early 1970s, no substantial changes occurred during the ten years of times to publication.

C&J is focused on the following paradox: in the post-war decade, political collectivism in practice has backed up, however, as an idea, it has been increasingly advocated. Jewish support for liberal ideas is analyzed as an example of such a paradox: “first, the Jews owe an enormous debt to free enterprise and competitive capitalism; second, for at least the past

1 CRIISEA, University of Picardie Jules Verne. Corresponding author, email: [email protected] 2 Centre Walras-Pareto, University of Lausanne. 3 Friedman to Ralph Harris 29/09/71, Box 87 Folder 1, MFA.

1 century the Jews have been consistently opposed to capitalism and have done much on an ideological level to undermine it” (Friedman, 1985, p.403). His essay is focuses mainly on this paradox he identified. Our objective is to analyze what role this oft repeated paradox played in Friedman’s thought.

At first, its constant combination with anecdotes and jokes, especially during oral presentation, with the crude argument in favor of free market convey the sense of a rhetorical example: free market caused Jewish economic success, not government intervention; Hence, government should not intervene, especially concerning minorities. In fact, Friedman did some research to back up his claims and send numerous letters to ask advices and comments from friends and scholars with expertise on Jewish history and sociology. Beyond the classical theme of the religious origins of capitalism, Friedman’s short text combine an attempt to theorize the relation between markets and the economic status of minorities and an intellectual reaction to the 1960s decade of American liberalism. While part of the researched topic of antisemitism in the history of economic thought, our focus is rather on Friedman’s reflexive point of view with the objective to enlighten the way he articulates C&J to its vision of economic and political theory. Besides the several versions of C&J, our main sources are Friedman’s archives (essentially correspondence on C&J) and Friedman’s account on market and discrimination in other context.

Section 1 describes how Friedman came to write C&J and what’s the arguments and sources he uses. Section 2 analyzes C&J both the political and intellectual context of the early 1970s, when C&J gets written, in relation to main discussions in economics on discrimination. A crucial element to understand how the Jews example functions in Friedman’s thought is how he analyzes Kennedy and then Johnson administration’ anti-discrimination laws and then, Affirmative Action programs led by the Nixon Administration. Section 3 is focused on the context of publication in the 1980s in relation to the renewal of neoconservative thought, especially within Jewish intellectual circles.

1. The making of “Capitalism & the Jews”

1.1. Capitalism and the Jews: a recurrent theme in Friedman’s works

2 Let’s first describe briefly the arguments of C&J. Friedman starts by analyzing each one of the two propositions of his paradox separately. He first argues that the Jews have “benefited” from capitalism and free competition—these two expressions being used as synonyms— because the system is “colour-blind”: “where there is free competition, only performance counts”. “Monopolistic systems” on the contrary open the possibility of discrimination according to arbitrary criteria such as the “colour of skin, religion, national origin or what not” (p.404). This claim is substantiated by a personal anecdote about Friedman’s participation in a banking conference and by various references to Jewish history. According to Friedman, Jews have been most prosperous throughout the history of the Diaspora in the most capitalistic places and times (such as the Netherlands in the sixteenth and seventeenth centuries, Germany in the late nineteenth and early twentieth century) whereas it is “no accident that Nazi Germany and Soviet Russia, the two most totalitarian societies in the past two thousand years […] also offers the most extreme examples of official and effective anti-Semitism” (p.405). In more recent times, Jews flourished most in sectors that have the freest entry such as law, accountancy, the movie industry and are under-represented in state-regulated sectors such as large industry or banking. A last justification comes from Israel, a country that benefited largely from the aid of capitalist countries, particularly the US (compared to the Soviet aid to Egypt) and also developed mainly from private initiative rather than collectivist politics. The second proposition about the “anti-capitalist mentality of the Jews” is justified by a few examples of Jewish anti-capitalist thinkers (Marx, Trotsky, Marcuse) and more generally by Jewish political behavior (the preference of Jews for liberalism in the US, and their over- representation in revolutionary movements). Justification for this proposition is shorter than for the first one (only two short paragraphs), but Friedman substantiates his claims here about Jewish political behavior by references to works in sociology (Glazer, 1961; Fuchs, 1956).

Friedman then seeks to solve the paradox. He first rejects the explanation proposed by the sociologist Lawrence Fuchs that this leftist mentality among Jews would be the direct consequence of Jewish religion and culture. According to Friedman, the opposition of the Jews to capitalism is only two centuries long, whereas Judaism as a religion that has existed for more than two millennia (p.407-408). Friedman then analyzes Werner Sombart’s alternative thesis that Judaism actually created capitalism (pp.408-409), published in his controversial book The Jews and Modern Capitalism (Sombart, 1913). As we shall see later in greater details, Sombart’s work is now commonly interpreted as anti-Semitic. Friedman

3 recognizes that Sombart’s book has “a highly unfavorable reception among both economic historians in general and Jewish intellectuals in particular” but “there is nothing in the book itself to justify any charge of anti-Semitism”. Friedman simply adds that he interprets “the book as philo-Semitic” (p.409). Yet it does not explain the paradox: if the Jews have created capitalism, why the “anti- capitalist mentality”? Friedman then considers two more balanced views, which he concedes, have only a limited validity to explain the paradox. The first one is Nathan Glazer’s claim in The social basis of American communism that the Jews’ over-representation among intellectuals explain also their over-representation among anti-capitalists, since intellectuals would be relatively more inclined to anti-capitalist tendencies (Glazer, 1961). Thought more credible than Fuchs’ for Friedman, his “impression” is that Jewish intellectuals are significantly more anti-capitalist than other intellectuals (p.410). He found another explanation in from Werner Cohn’s unpublished PhD dissertation (Cohn, 1956).4 According to Cohn, secularization and emancipation of the Jews has been a major component in the program of leftist parties since the early political revolutions in Europe. This would explain why that these parties have always been a “natural choice” for the Jews, contrary to right- wing parties. Yet Friedman notes that the explanation does not work in the US, in which Protestant and Puritan elites have always been pro-Semitic. Friedman here quotes Sombart to support his claim: “Puritanism is Judaism” (p.412).

According to Friedman, the fundamental explanation of the paradox comes from “the Jewish reaction to the Jewish stereotype” (p.413). Jews have always suffered from the anti-Semitic stereotype of themselves as “money-grabbing, selfish and heartless”. Hence, they would have criticized capitalism and the free-market and lauded the State and political process instead, in order to convince themselves and anti-Semites that they were actually generous, concerned with the public interest and ideals. Friedman supports this claim with a set of alleged oppositions between Jews in Israel and in the Diaspora; the former trying to do exactly the opposite of the latter in order to differentiate themselves from the stereotypes about Jews (in the Diaspora). In the conclusion, Friedman notes that this anti-capitalist “ideology of the Jews” has always been opposed to their self-interest. Yet in the West the conflict is more potential than real: they

4 In the 1984 version of the text, footnote 6 (p.76) states that the dissertation was defended at the “New School for Soviet Research” (sic) rather than at the New York-based New School for Social Research.

4 could preach “socialism as an ideal” and still benefits from capitalism as long as free-market system still operates. Hence the Jews are “in the position of the rich parlor socialists […] who bask in self-righteous virtue by condemning capitalism while enjoying the luxuries paid for by their capitalist inheritance” (p.416).

The various ideas, arguments and examples developed in C&J appear in many lectures, speeches and conferences throughout the 1970s. The themes of “capitalism and the Jews” have been a long-term and on-going interest of Friedman, at least since the 1960s.

The first occurrence of the argument can be trace back to Capitalism and Freedom (C&F). C&J also echoes the first example of the Chapter on “Capitalism and Discrimination”. According to Friedman, the development of capitalism and free-market allows for a progressive disappearance of the “handicaps” or discrimination. The first example that Friedman gives to support this claim is “the preservation of Jews through the Middle Ages [which] was possible because of the existence of a market sector in which they could operate and maintain themselves despite official persecution” (p.x). Then comes the same paradox as in C&J: “in spite of this historical evidence, it is precisely the minority groups that have frequently furnished the most vocal and most numerous advocates of fundamental alterations in a capitalist society” (Friedman, 1962 [1982], pp.108-9). As already mentioned, the first piece entirely devoted to the question was written for the 1972 MPS meeting.5 Friedman was however quite uncertain and wavering about choosing this topic for his Presidential Lecture. This is the reason why he asks for advice two important members of the MPS and close friends, George Stigler and Ralph Harris. He probably presented to Stigler an outline of his speech; Stigler expressed skepticism about the main thesis but encouraged him to carry on his research on the subject6. When writing to Ralph Harris, who

5 The 1972 version is very close the subsequent publications of the 1980s. Box 220 Folder 7 “Capitalism and the Jews”, 1971-1984, MFA. The reprints of the lectures seem to have circulated. For instance, in a letter dated 06/12/72, Martin Bronfenbrenner asks Friedman for several reprints of his lecture, for him and other colleagues (Brofenbrenner to Friedman, 06/12/72, Box 220 Folder 7).seems to have circulated as 6 “On the “Capitalism and the Jews” (didn’t Sombart have a book with some such title?) I have my usual misgiving: is it really so? Jews are, say, 4% of American population, and 10%, say, of our intelligentsia: are they not more than 10% of the intellectual conservatives? But in any event, I have no doubt that you can give a splendid talk, and that in the process of preparing it, you will advance your and our knowledge”. Stigler to Friedman 12/10/71, Box 220 Folder 7, MFA.

5 was MPS secretary at the time, Friedman confesses that “the natural topic would be monetary policy domestic and international”. He recognizes that the subject of C&J “is capable of being a delicate subject” and asks Harris his “frank reaction” 7.

Why was Friedman embarrassed about C&J? A first reason is the polemic and provocative tone of C&J. Friedman and his interlocutors were well aware of the polemic tone of his text. In his reply to Friedman before the Montreux conference, Harris says that he liked the idea very much but stresses that “the chief ground for doubt seemed the possibility of embarrassing Jewish members and friends”. Harris consulted Arthur Sheldon “who personally approved as much as [he] did” but recommends Friedman to have “further sounding”. 8 Friedman himself, when speaking of C&J in a conference at the B’nai B’rith Hillel Foundation (a Jewish student association) in Chicago in 1978, starts with the following precaution: “if Chicago School means anything it means recognition of variety and diversity and independence. Now, the views I am going to express tonight on the subject of Capitalism and the Jews, will I think beyond that tradition? [laughters] And I’m not sure that Hillel will be entirely happy about inviting me to express those views”. 9

In the late 1970s, the references were constant. Friedman repeated the exact same arguments and examples the next year, in a wide-ranging interview for Playboy Magazine. For instance, in a commencement talk delivered at Hebrew University of Jerusalem in 1977, Friedman depicted the narrative of “two Jewish traditions […] at war in Israel”:

a hundred-year old tradition of belief in paternalistic socialist government and rejection of capitalism and free markets; and a two thousand-year old tradition, developed out of the necessities of the Diaspora, of self-reliance and voluntary cooperation, of ingenuity in getting around government controls, of using every device of Jewish ingenuity to take advantage of such market opportunities as escaped the clumsy grasp of government officials.10

7 Friedman to Ralph Harris 29/09/71, Box 87 Folder 1, MFA. 8 Ralph Harris to Friedman 23/11/71, Box 87 Folder 1, MFA. 9 “Capitalism and the Jews”, Milton Friedman, recorded on October 15, 1978 by James H. Fox. Available at https://www.law.uchicago.edu/recordings/milton-friedman-capitalism-and- jews (consulted 10/05/18). Quote at 6’30. 10

6 In this talk, Friedman refers again to the very same anecdote about his participation to an international monetary conference. He also insists on the idea that the creation of the State of Israel would not have been possible without capitalism and private initiative: on the contrary, “if state socialism had swept the world in the twentieth century, there would be no State of Israel today”11; this idea is also to be found in an Opening Address that Friedman gave in a 1988 Symposium on American-Israeli Economic Relations. 12 The same vision appeared in “Israel’s Other War” (Newsweek, 22 August 1977, p. 57) in which he concluded “that, fortunately for Israel, the older tradition was proving the stronger.”

The Jewish case is a kind of rhetorical gimmick that Friedman uses to prove that minorities do benefit from capitalism, in the very same vein as in C&F. For instance, when speaking of Jews during his participation to Richard Heffner’s talk show The Open Mind in 1977, Friedman says:

so Jews have done best [in the free market]. And other minorities. I’m not only speaking about the Jews. If you look at the Japanese in the United States, if you look at the Blacks in the US, in every case they have done best in those are where you had the greatest degree of competition and they have done worst in those area where you had the most monopoly. 13

Another reason for Friedman’s embarrassment is his lack of knowledge in the relevant sociological and historical literature. In a 1972 letter to Nathan Glazer, the sociologist from Harvard which wrote extensively on the subject, he acknowledged both his incompetence (the subject “has led me way out of my ordinary field of specialization”) and its debt to Glazer’s work. In a further reply to Harris after the Montreux conference, Friedman expose his “real problem” to be that he has “continued doing a little work on it since [he] got back and ha[s]

11 Friedman, M. (1977d, July 4). Commencement talk, delivered at Hebrew University of Jerusalem. Collected Works of Milton Friedman Project records. Accessed February 1, 2018, from http://miltonfriedman.hoover.org/collections. Record Number 2016c21.1094. 12 “Opening Address”. In Transcript of the Symposium on American—Israeli Economic Relations, pp. 8-18. New York: American Israel Economic Corporation, 1990. Address delivered at the Symposium on American ─ Israeli Economic Relations, New York City, 5 June 1988. 13 “Milton Friedman A Nobel Laureate on the American Economy” in Richard Heffner’s Open Mind. https://www.thirteen.org/openmind-archive/public-affairs/a-nobel-laureate-on- the-american-economy/ VTR Date: May 3, 1977 ; quotation at 46’45.

7 had some criticism of it from a number of people more knowledgeable in the sociological area [he] was sticking [his] foot in”. He then expresses his overt doubt about whether he should publish it in the present form or “take the time and effort that would be involved to revise it substantially”.14 Friedman opted to wait more than ten years instead.

In 1985, Friedman acknowledges that he “did not publish this paper at the time [he] wrote it because, talking with a number of people about it […] they suggested that they were not persuaded by it; and so [he] decided [he] would have to do some more work; but [he] never did any more work” (Boulding et al., 1985, p.459). Friedman was aware of the relatively “draft” quality of the text with respects to academic standards. But while he admits having bad comments on his paper, he never ceased to believe in the main thesis of C&J. This is probably the reason why he decided to publish the essay despite the negative reviews: “as I read my paper over on the plane coming up, I felt that I really didn’t want to change very much in it. So I don’t mind having The Fraser Institute publish it in this form” (Boulding et al., 1985, p.459). This unusual long delay between lecturing, writing and actual publishing is curious, especially because the arguments within C&J has been a recurrent topic of many Friedman’s talks and conferences from at least the second half of 1960s to the 1980s. The political flavor of the reviews where it eventually gets published, The Freeman and The Encounter, as well as the publication of the collective book under the auspice of the right-wing Fraser Institute, suggests that the ultimate goal was not to produce am academic piece on the economic history of Jews in relation to a solid view of the history of capitalism.

1. 2. “Casual economic thinking” on minorities’ economic performance

The brief overview of C&J provided in the last section show that it was first and foremost a polemic essay. In the present section, we analyze further the status of Friedman’s arguments identified as “casual economic thinking” (Fleury and Marciano 2013) in relation to the anachronisms and historical fallacies and the problematic reference to Sombart, elements already criticized by Friedman’s first readers.

A striking feature of C&J is the weakness of many of its empirical claims. Friedman is very

14 Friedman to Ralph Harris 30/11/72, Box 85 Folder 7, MFA.

8 far in this regard from Kuznets’ contribution two decades before on the Economic structure and life of the Jews (Kuznets, 1960). Friedman’s evidence starts by an anecdote on the monetary conference. Friedman recalls that he attended an International Monetary Conference some years ago. Participants were either top executives of the major commercial banks or invited participants and speakers (intellectuals and academics). Friedman estimates “roughly” that only 1% of the first group were Jewish, compared to 25 percent for the second. According to Friedman, this confirms the over-representation and under-representation of Jews in respectively free-market and monopolistic sectors of the society, because “banking today is everywhere monopolistic” whereas “intellectual activity […] is a highly competitive industry”. Friedman also notes that Jews used to be a major element in banking because it used to an industry with rather free entry and because of “the comparative advantage arising from the Church’s views on usury” (Friedman, 1985, pp.404-405).

The evidence provided here by Friedman is very disputable. Free entry has not been a universal characteristics of intellectual activity, at least in academia. In the US, there were many restrictions to the admission of Jews in the universities until the 1940s (Broun and Britt, 1931; McWilliams, 1949; Synnott, 1979), elements he perfectly knows from personal experiences and knowledge. The argument about usury and the Church has been deconstructed (Mell, 2017). Beyond technical details, Friedman’s empirical and historical arguments are on the whole very vague. Many cases are based merely on “impressions” and anecdotal examples that seems to serve the purpose of oral persuasion in a casual conversation. The text keeps the traces of its original oral dimension. The audio recording of the conference Friedman gave in 1978 for the Hillel B’nai B’rith Foundation reveals that Friedman was particularly good at making his non-academic audience laugh with funny remarks and casual observations. For instance, Friedman explains that Jewish success in intellectual careers was not only the result of the free competition but also of persecution: they were bounded to hide and flee very often and in order to accumulate and preserve their wealth “they accumulated brains! I notice you too are in this process of intellectual accumulation”15. Such remarks were followed by laughter and applause.

C&J could thus be understood as what Fleury and Marciano call “casual economic thinking”,

15 “Capitalism and the Jews”, Milton Friedman, recorded on October 15, 1978 by James H. Fox. Available at https://www.law.uchicago.edu/recordings/milton-friedman-capitalism-and- jews (consulted 10/05/18). Quote at 33’

9 referring to the discussion of the Becker-Posner blog. Just like Becker and Posner, Friedman was probably not interested in being “theoretically sound and correct” (Fleury and Marciano, 2013, p.271). This casual dimension is also visible in the vague generalities about Jews in the Diaspora and Jews in Israel in the end of the paper. In the 1978 conference, Friedman’s observation that contrary to Israeli Jews, “the Jews in the Diaspora were marvelous cooks” provoked lots of laughter in his Jewish student audience16. Yet these arguments were precisely the most criticized in the comments Friedman had from academic relations. “Your evidence from Israel is very weak”’, wrote for instance Stanley Fisher after reading a reprint of C&J.17 Friedman had also handwritten comments from Joseph Ben-David. The oppositions between Diasporic Jews and Israeli Jews are barred with strong negative critics such as “irrelevant”, “has changed”, “no”. 18 In a similar manner, the mere enumeration of three Jewish thinkers (Marx, Marcuse, Trotsky) to prove that Jews have always been on the Left is rather arbitrary. As Seymour Siegel points out in the discussion following the Symposium held by the Fraser Institute, Friedman quotes Marx who was a converted Jew, but refuses to acknowledge the conservative Benjamin Disraeli because he was converted (Boulding et al., 1985, p.451)

From an historian’s point of view however, many claims in C&J would appear not only as “casual thinking” but very bad historical work. This is the case for instance when Friedman argues that capitalism is at least two thousand years old and socialism only 200 years, without providing any accurate definition for both terms.19 Such broad claims allow for simplification and provide quick and general answer to “big questions” (such has the role of Jews in

16 “Capitalism and the Jews”, Milton Friedman, recorded on October 15, 1978 by James H. Fox. Available at https://www.law.uchicago.edu/recordings/milton-friedman-capitalism-and- jews (consulted 10/05/18). Quote at 47’33 17 Stanley Fisher to Friedman 10/10/72, Box 220 Folder 7, MFA. 18 The comments are written directly on the reprint of C&J ; they are signed in a following note by the nickname of “Josi”. We guess it was Joseph Ben-David, a friend of Friedman, because Ben-David was an Israeli sociologist and it might have been natural for Friedman to ask for his advice. Friedman had a very close relationship with Ben-David and used to visit him each time he came to Israel (see correspondance with Ben David, Box 20 Folder 37, MFA) 19 As pointed out in an anonymous letter to Friedman, “this kind of statement betrays a lack of historical perspective of considers earlier economic history irrelevant to this context. How does Mr F. define capitalism? Before the Reformation the Church governed the economy in the West, and its idealization of poverty, the monastic welfare system had little to do with capitalism, which flourished only across the boundaries of the Christian, Moslem and Chinese civilizations; and that capitalism differed from the modern, which began with the Reformation” Anonymous letter to Friedman undated Box 220 Folder 7, MFA.

10 capitalism). This is what the historian Cecil Roth called the “hit-or-miss” matter of Jewish economic history: the matter consists in arguing “whether offensively or defensively that the Jewish role in economic development had been all-embracing, or that after all it was insignificant”, the best example being the one of Werner Sombart’s book (Roth, 1961). As we shall see later in this section, C&J shares some common characteristics with Sombart (dogmatic history, loose generalizations). The dominant claim nowadays in Jewish economic history is that the occupational selection of Jews mainly in trade and crafts throughout their history is the result of “widespread literacy” and religious norms requiring parents to educate their sons (Botticini and Eckstein, 2005; 2012), rather than free-market and competition as suggested by Friedman.

Friedman’s fellow economists also pointed out the lack of consideration of religious factors in C&J. During the Fraser meeting, Seymour Siegel calls for a more thorough investigation of the religious element, especially on the difference between observance of Jewish religion and socialism (Boulding et al., 1985, p.433). Irving Kristol (non-economist) highlights the importance of Jewish messianism, which has always played a role in the development of sects (including christianism) and surely explains a large part of Jewish “leftism”, as his own experience suggests20. Friedman’s position about the influence of religious factors is actually contradictory, as Frankel argues in his critical comment. On the one hand, Friedman insists that Judaism as a religion is not where to find the solution of his paradox, but he also seems to support Sombart’s claim that “Jewish religion and culture implied a capitalist outlook” (Boulding et al., 1985, p.433). In a 1972 commencement talk delivered at the Hebrew University of Jerusalem, Friedman suggests that “state socialism […] violates the most basic Jewish values”21. In any cases, Friedman does not go further in this direction of studying carefully his own claims. As he recognizes himself after the conference, he does not possess

20 “I know what I felt like when I was a young Trotskyist and I felt like a member of a messianic sect”, Irving Kristol to Friedman 16/10/72, Box 220 Folder 7, MFA. 21 “State socialism, I believe, violates the most basic Jewish values: an individual’s responsibility before God for his own actions; personal charity; voluntary community; respect for diversity of opinion; an abiding faith in reason. These basic Jewish values are perverted in a system that—carried to its logical extreme—substitutes collective authority for individual conscience, antiseptic welfare administered by an impersonal bureaucracy for personal charity, compulsory conformity for voluntary cooperation, rule by either a majority or a governing elite for individual rights” Friedman, M. (1977d, July 4). Commencement talk, delivered at Hebrew University of Jerusalem. Collected Works of Milton Friedman Project records. Accessed February 1, 2018, from http://miltonfriedman.hoover.org/collections. Record Number 2016c21.1094.

11 the necessary skills in history and sociology to treat these complex questions that are however central in the theme of C&J.

1.3. The Sombart problem

Friedman’s half way between soliciting criticisms and acknowledging faulty simplification is illustrated by how he reacts to the “Sombart Problem” of his text.

Werner Sombart was one of the most influent and famous social scientist in the first part of the twentieth century, in Germany and elsewhere. He went then “from fame to near oblivion”, as argue sociologists Reiner Grundmann and Nico Stehr. The weberian thesis about the Protestant Ethic and capitalism is very weel known, while Sombart’s rival claim in The Jews and Modern Capitalism is largely neglected (Grundmann and Stehr, 2001). The collapse of Sombart’s academic influence is obviously the result of his support to the nazi regime. Sombart was the rising star of “German sociology”, i.e. a form of sociology that became dominant in Germany in 1933-1934 due to its affinities with the nazi ideology (Rammstedt, 2009).

Personal support to Hitler is not the only reason for the dismiss of Sombart’s book on the Jews. Even if Weber was not completely free from stereotypes about the Jews, he was far more nuanced in this matter than his fellow Sombart (Raphaël, 1982), whose essay is now considered as an anti-Semitic tract. Economic historian David Landes considers that Sombart’s book “should have been dismissed out of hand as a pseudo-scholarly hoax, a pedantic effort to confer, by the lavish use of polyglot footnote references, an academic respectability on arrant nonsense already current in plain German terms” (Landes, 1974, p.22). As points out historian Paul-Mendes Flohr, “the fault of his logic are so blatant, the tendentiousness of his presentation of the data so patent, that it is difficult to understand why his book was not summarily dismissed” (Mendes-Flohr, 1976, pp.93-94).

Sombart’s thesis about the Jews and modern capitalism can therefore be considered as being outside of the “academic game”, despite occasional attempts to rehabilitate the German scholar.22 Friedman’s positive reevaluation of Sombart in C&J then should be analyzed 22 See Peukert (2012), Campagnolo and Vivel (2012). More frequently, historian of ideas mention very briefly that Sombart endorsed nazism and propose purely theoretical and

12 against this background he was aware of. Following Sombart’s death in 1941, obituaries in the American Economic Review and Journal of Political Economy mentionned critically Sombart’s endorsement of the nazi regime (Rogin, 1941; Harris, 1942). The “Sombart problem” was known among economists. In 1951, Bert Hoselitz reedited an English version of The Jews and Modern Capitalism (Sombart, 1911 [1951]). Reviews of the book by academic historians expose blunt rejection of the content of the work among historians. Ellis Rivkin, whose book on The Shaping of Jewish History was cited by Friedman in C&J in a footnote (Friedman, 1985, p.417), wrote for instance that Sombart’s piece “is an important work, not for the light it sheds on the role of the Jews in the evolution of modern capitalism, but for its contribution to the development of “scientific” anti-Semitism and for its utilization of a subjective methodology peculiarly appropriate for scholarship in totalitarian societies” (Rivkin, 1952; see also Kisch, 1951).23

Friedman has been briefed by fellow scholars on this specific aspect. In the margins of C&J’s reprint, Ben-David already pinpoint the Sombart’s reference as “non-sense – not worth quoting”. He makes Friedman the following recommendation: “Leave S. [Sombart]. Take Katz, Baer”.24 An anonymous reader of C&J points that “Mr Friedman also cited Sombart’s analysis of the Jews as the creators of capitalism, but was this early early Sombart not rejected by most of his colleagues?” 25 The harshest critic of the Sombart’s reference is made by Sally Herbert Frankel. Frankel was a close friend of Friedman in the 1960’s.26 After reading a C&J’s reprint, Frankel delivers a lecture at the Oxford Centre for Postgraduate Hebrew Studies in which he severely attacks Friedman’s paper. Friedman heard about this critic, which was then published as a monograph (Frankel, 1983); Frankel also produce a critical comment in the internalist account of Sombart’s work (see for instance Gioia, 2014 who focuses on Sombart’s relationship to the German Historical School). Günther Chaloupek (1995) compares Sombart with Schumpeter on “long-term economic perspectives” and does not mention the nazi activities. 23 The re-edition of Sombart’s book by Hoselitz was actually followed by a controversy, with some historians such as Rivkin and Guido Kisch arguing that Hoselitz in his introduction did not warn the reader enough of Sombart’s erroneous views, and should have provided a comprehensive appartus of footnotes and a line-by-line refutation of Sombart’s claims (Kish, 1951; Rivkin, 1952). 24 More precisely, he recommends Tradition and Crisis by Jakob Katz (Katz, 1961 [2000]). Baer refers probably to historian Yitzhak Baer (“Capitalism and the Jews”, Box 220 Folder 7, MFA). 25 Anonymous letter to Friedman undated Box 220 Folder 7, MFA. 26 Their exchange of letters between 1960 and 1964 shows that Friedman and Frankel were very close to each other. They used to meet at MPS meetings (see correspondence with Sally Herbert Frankel, Box 27 Folder 6, MFA).

13 Fraser’s collective book (Frankel, 1985).

Like the critics mentioned previously, Frankel argues that Friedman’s both reference and reevaluation of Sombart was inadequate because he “did not realize that Sombart was using the Jews deliberately or unconsciously as a foil to promote socialist, and later national socialist ideas in the service of his fervent German patriotism” (Frankel, 1985, p.434). But Frankel goes one step beyond in considering that Friedman’s piece and Sombart’s book are actually very similar both in form and content and should be therefore equally dismissed:

Friedman uses impressionistic evidence or forms of arguments which have a striking resemblance to those used by Sombart […] Friedman as well as Sombart […] was seeking, in this way, simple explanations of political and economic circumstances which ideologically and emotionally deeply concerned them […] Some one-hundred years after Sombart accused the Jews of responsibility for modern capitalism, Milton Friedman accused them of disproportionate intellectual and political support for socialism. (Frankel, 1985, p.440)

In particular, Friedman’s solution to his paradox—the Jewish reaction to the Jewish stereotype —is “the well-known stereotype of the Salon Kommuniste […]—the rich man who hides his […] feelings of guilt for being rich by joining the communist cause” (Frankel, 1985, p.435), which was also used by Sombart.27 Friedman was probably expecting such strong negative comments on his piece, as he knew Sombart’s sulfurous reputation. In Friedman’s perspective, C&J was an attempt to turn the old stereotypes into a positive quality to say something on capitalism, while producing some thoughts on Jewish history. His double objective should be read specifically in this order of priority. In quoting Sombart, Friedman worked on traditional themes and ideas of the anti-Semitic literature and endorsed some of them. “[Antisemitism] was based on the notion that Jews were money-grabbing, grasping, selfish, keepers. But there’s nothing wrong with being money-grabbing!” says for instance Friedman in 1978 at the Hillel B’ni B’rith Foundation.28 Provocation was clearly part of the game.

27 In The Jews and Modern Capitalism, Sombart writes: “If we find so many Jews with just the opposite manner of thinking, with what one might almost call an extravagant altruistic sense, a rigorous selflessness and a zealousness against all selfishness, we may then deduce just from these reaction phenomena the existence of the indicated national characteristic” (cited in Frankel, 1985, p.440) 28“Capitalism and the Jews”, Milton Friedman, recorded on October 15, 1978 by James H. Fox. Available at https://www.law.uchicago.edu/recordings/milton-friedman-capitalism-and- jews (consulted 10/05/18). Quote at 43’.

14 Friedman separates the content of Sombart’s book, which he found “philo-Semitic” with the activities of Sombart in support to the Nazis (1984, p.76). Detached from his context and meaning, the stereotypes used by Sombart are analyzed with contemporary eyes. And this is maybe the most important aspect of Friedman’s text: its presentism. More fundamentally, the problem with C&J’s historical thesis is that it describes such notions as “capitalism” and “free market” as stable entities. Friedman associates these notions with their contemporary meaning; in doing so, he projects present ideas into his understanding of the past. Similarly, Friedman speaks throughout his paper of “discrimination” as a universal phenomenon: while medieval historians rather use the word “persecution” for the Middle Ages (Moore, 1990), it is well established that discrimination as a concept and a phenomenon can only emerge when formal equality has been granted.29 In fact, Friedman was no historian. Hence it would be wrong to read C&J as bad history. Friedman does in fact aim to talk about discrimination in its very contemporary context.

2. “Capitalism and the Jews” in context

2.1. The Unraveling of American Liberalism

C&J does not possess the main characteristics of a purely academic texts. Yet it is not completely unrelated to Friedman’s academic works and interests, especially in relation to the economics of discrimination. C&J was discussed in academic terms and can be considered as an hybrid between the polemic and an intellectual essay.

As said before, many of Friedman’s claims in C&J have weak empirical support. Yet this weakness has to be nuanced by the lack of relevant statistical data on Jewish economic history (Chiswick, 1992). It should be noted also that this lack of data is not inconsistent with Friedman’s methodological views (Cherrier, 2011). Beyond the central reference to Sombart, C&J draw extensively on academic works, especially on Nathan Glazer’s work on the sociology of American Jews. Of interest for Friedman was Glazer’s article entitled “social characteristics of American Jews, 1654-1954”, that contains many statistical data, and that Friedman used a lot when thinking of C&J. In his reply to Friedman, right after the MPS meeting, Glazer considers C&J as an interesting essay and gives Friedman an additional

29 For a history of the term and concept, see Chassonnery-Zaïgouche (2014).

15 reference on the topic (“Toward a theory of Jewish Liberalism”, by Charles Liebman)30, that Friedman discusses in his next letter to Glazer31.

For Glazer, the topic was linked to the economic status of minorities in general, in relation to poverty, while the question of anti-Semitism was perceived as declining. In the early 1970s, Glazer was a well-known sociologist from Harvard University. The influential Beyond the Melting Pot (1963), written in collaboration with another important figure of the 1960s, Daniel P. Moynihan was a widely discussed book. The main thesis argues that ethnic minorities kept they ethnic identities. African American and Porto-Ricans, like all the US minorities were “assimilating”—more slowly than the immigrants but nevertheless “assimilating” despite the fact there were more dependent on welfare. The underlying hypothesis of the work is very close to what was then called the “culture of poverty” hypothesis according to which family structure and culture was responsible for poverty pattern. The book displays a firm belief in the “immigrant culture” as part of the American Creed. Moynihan wrote the chapter on Irish immigrants, another constant example used by Friedman to assess the economic success of minorities. Nathan Glazer was also known for his neoconservative turn: “from Trotkyst to social demo- crat to neoconservative”.32 Back in the 1940s, Glazer was part of the the “New York Intellec- tuals”, a group gathering young Marxists of the anti-communist left at the City College, along with Irving Kristol, Daniel Bell, and Irving Howe.33 Glazer worked in the Kennedy and John- son Administration while becoming more and more skeptic over the main “Great Society” programs. The collapse of the liberal consensus on Civil rights movement in the mid-1960s, with demands beyond formal equality and the rise of violent activism, is illustrated by the tra- jectory of Glazer who, now a middle-aged professor clashed with his radicalized students. Be- ginning in the early 1970s, and crystalizing in the book Affirmative Discrimination published in 1975, Glazer’s thought became very critical of the “Great Society” as well as affirmative implementation by the Nixon Administration. The basic argument of the book was that affir- mative action in universities and businesses went beyond mere nondiscrimination, hence be- yond the meaning of the Civil Rights Act of 1964 and the intent of the Congress.

30 Nathan Glazer to Friedman 22/09/72, Box 220 Folder 7, MFA. 31 Friedman to Nathan Glazer 11/10/72, Box 220 Folder 7, MFA. 32 “Nathan Glazer Changes His Mind, Again.” By James Traub. The New York Times, June 28, 1998. 33 See Dorman (2000) and the film “Arguing the World” for oral history of four of the “New Intellectuals”.

16 2.2. C&J and the economics of discrimination

For several reason, C&J can be compared to the Capitalism and Freedom (C&F) of the 1970s. One being its provocative tone when, for example, Friedman compares Roosevelt’s Fair employment practices legislation to the Hitler Nuremberg laws. 34 The style and purpose is very much the same. The underlying narrative about the historical role of capitalism for minorities is exactly the same. In particular, the first part of the paradox about the Jewish “benefit” from capitalism, can be seen as a confirmation of Friedman’s views on the minorities.

Friedman does not dedicate a great part of his scientific work to racial discrimination. Yet an entire chapter of C&F is devoted to it. Friedman’s contribution is important because he clearly draws policy implications based on Becker’s seminal contribution.35 When addressing racial discrimination, it is much more Friedman the “public intellectual” than the scientist who ex- presses his thoughts.36 While he clearly based his argument on economic theory. Friedman contribution to the neoclassical theory of discrimination is an extented version of Becker’s 34 “If it is appropriate for the state to say that individuals may not discriminate in employment because of color or raceor religion, then it is equally appropriate for the state, provided a majority can be found to vote that way, to say that individuals must discriminate inemployment on the basis of color, race or religion.The Hitler Nuremberg laws and the laws in the Southern states imposing special disabilities upon Negroes are both examples of laws similar in principle to FEPC” (Friedman, 1962 [1982], p.113). The Fair Employment Practice Commission (FEPC) was created during the WWII to force war industries with public contracts not to discriminate on racial or religious basis. Some of the laws were applied in the States but the generalization at a federal level was a failure (both in 1948 and 1950). 35 He was greatly involved in the supervision of Gary Becker’s dissertation on “The Economics of Racial Discrimination” defended in 1955 (See Chassonnery-Zaïgouche 2018). At a personal level, it is well documented that Friedman strongly supported and admired Becker’s career. In particular, Friedman insisted for the Economics of Discrimination to be published in 1957, after the University of Chicago Press rejected the book. “The Becker manuscript is a brilliant, original and important piece of work […] in fact, it is not a marginal manuscript. It is a firts-rate piece of work that will achive distinction and make an important impact on professional work. It eminently deserves publication. This is not a personal or exception opinion”. Friedman to Roger Shugg 30/11/56, Box 20 Folder 30, MFA. Friedman also supported Becker for membership at the MPS (Friedman to Ralph Harris, 11/12/67, Box 85 Folder 7, MFA). 36 “My vocation has been professional economics. My avocation has been public policy” wrote Friedman in the preface to his 1998 Memoirs. “I really had two lives. One was as a scientist – as an economist – and one was as a public intellectual” he adds in a 2006 interview. The two citations are quoted in Ebenstein (2014, 93).

17 taste-based model. In “Discrimination and Capitalism” (1962, 108-119), he states that a taste (or preference) for discrimination is different from a “regular” taste as the qualification “dis- criminatory” implies a value judgement on the content of the taste. This judgement stems from the fact that one does or does not share this taste. Then, Friedman enlarges Becker’s trade model by adding a specific view on individuals’ sovereignty vis-à-vis the government: even if a majority of individuals see the preference as discriminatory, the government must re- main neutral. Government should note impose taste of a majority to a minority. In this per- spective, only competitive forces are to eliminate discriminatory practices.

As a general theory of discrimination, Becker’s thesis filled a lack of formal or analytical the- orization expressed in both economics and sociology on the topic of discrimination (Fleury, 2012). He also formalizes discrimination as the result of a taste in a period of time – the 1950s – when racism was a current and shared expression of belief not condemned by the law. While the tentative was a universal theory applying to racial, gender or any discrimination, his model clearly stems from the 1950s civil rights context (Figart and Mutari, 2005, 475). While basing his arguments on Becker’s model, Friedman endorsed this universal aspect. The way he used historical examples in C&J reinforce the purpose of the text: to make an argument on the efficiency of market mechanism.

In relation to that, it is worth noting that the way discrimination was studied in economics un- derwent dramatic changes. In the early 1970s, the debate on the respective efficiency of mar- ket mechanism vs. government intervention became central as affirmative action’s policies were implemented, essentially in the wake of Nixon’s election (Yuill, 2006). Scholarship on discrimination became also “applied” as new theoretical development and new empirical tech- niques developed.37 Beside Zeman—another Chicago Ph.D. student supervised by Gregg Lewis—and Becker’s (relatively modest) empirical analysis, an early example is Kessel’s 1958 paper which circulated widely at Chicago. Entitled “Price Discrimination in Medicine”, it is a case-study of discriminating monopoly in a very specific profession. 38 Based on Kessel’s result show that the profession, as a whole, and in the case of a specific national or- ganization, was also discriminating against minorities, and especially the Jews.

While aware of the later debates, especially in the early 1970s, Friedman’s discourse on discrimination remains at a theoretical and intellectual level, i.e. in direction of a larger public 37 On the “applied age” in general see Backhouse and Cherrier (2017). In the case of discrimination, Chassonnery-Zaïgouche (2014, chapter 4 and 5). 38 On the link to monopoly theory, see also Alchian and Kessel (1962).

18 and in the context of a broader agenda. Friedman did not engage with the tremendous literature in the making on the empirical evaluation of the effects of public policies39, but rather argued affirmative action means “reverse discrimination” as a matter of principles. In this regards, he is very close to the work of Thomas Sowell. 40 At the theoretical level, there are many correspondences between C&J, chapter 7 of C&F the early Sowell’s works on discrimination, and particularly in Race and Economics, published in 1975 (Sowell, 1975). In this book, Sowell argues that the material conditions and earnings of minorities such as the blacks or the Jews does not improve during the period or “political progress”, but rather from market transactions. This argument echoes of course Friedman’s first proposition in C&J about the Jewish benefit from capitalism. Sowell makes several refer- ences to the case of the Jewish minority in the US (Sowell, 1975, p.66, p.161, p.217). In Chapter 6 on “Race and the Market”, when stating the general principle that there is more racial discrimination in regulated sectors than in unregulated ones, Sowell adopts the “Becke- rian” explanation: in unregulated sectors, profit maximization leads to employ discriminated people, who are under-paid, and therefore helps to reduce discrimination (Sowell, 1975, pp.166-168).Like Friedman, Sowell was a big opponent to affirmative action. In 1972, in re- sponse to an offer from Swarthmore College that was “actively looking for a black econo- mist”, Sowell wrote a strongly critical letter to the chairman of Swarthmore’s economics de- partment, in which Sowell attacked affirmative action policies for lowering academic quality. The letter circulated and became a sort of manifesto: “Word of this letter spread and caused it to be published in a couple of places” (Sowell, 2007, p.928). Friedman asked Sowell to re- publish his letter. 41

While C&F was a reaction to earlier 1950s context in relation to the rise of “racial

39 For an example of the contemporary debates on the efficiency of market mechanism to reduce discrimination, see the debates in the AER opposing James Gwartney and Orley Ashenfelter, among others, in the first half of the 1970s. Central reference in this debate is Donohue and Heckman (1991) who found a positive effect of anti-discrimination legislations. 40 Friedman also vigorously supported Sowell’s career, just like he did for Becker. In the 1960’s, when Sowell was thinking of leaving the academia after “ some rotten experiences at Howard and a certain disenchantment with the academic world”, Friedman encouraged him to stay in the academia: “we need as many people on the campus who are rational and black”. Friedman suggested him to go to Dartmouth college and wrote him recommandation letters. Friedman to Thomas Sowell 04/06/69, Box 33 Folder 24, MFA. 41 Friedman did not, because the letter was already published in Commentary: “Dear Milton: It was very good to learn that you are getting better and will be back in action soon. I am of course delighted that you want to republish my letter to Swarthmore and have no objection whatever. It has, however, been published in the January issue of Commentary” (Sowell, 2007, p.936-938)

19 conservatism”, the writings of C&J was reaction to the immediate 1960s and early 1970s one. 42 The MPS speech was therefore not (only) a rhetorical essay but was part of a larger intellectual agenda, in which Friedman tried to develop a long-term “Chicago-based” approach on minorities and discrimination in relation to the promotion of a “free society”. This is the reason why Friedman always insist in C&J and other related conferences that his remarks on the Jews do also apply to other minorities.43

However, the late publication of the text, in the early 1980s, provide another narrative to understand the role play by the Jewish example in Friedman’s broad agenda. While C&F originates from a counter revolution against American postwar liberals, C&J was published in the context of the strengthening of neo-conservatism in the early 1980s.

3. Beyond Capitalism & the Jews: Friedman and Neo-conservatism.

3.1. The Friedmans as the Public Intellectual

Friedman’s polite reaction to Kristol’s comments echoes the politeness of various reviewers of C&J. The critical comments Friedman had on the paper by his academic fellows suggest indeed that the discussion always maintained what Bourdieu calls the “illusio”, i.e. participants to the debate on C&J always considered the discussion as a game respecting certain conventions. In other words, Friedman was not seen as breaking academic rules. For instance, Aaron Levine provides in the Fraser Institute’s book a very mild critic of the paper, considering that “the Jewish religion foster an economic system based on freedom of entry

42 Defeated by Lyndon Johnson, Goldwater, the Republican candidate advised by Friedman, opposed the passage of the Civil Rights Act on the ground that it violates states’ rights to self- govern and business freedom. This type of argument is the basis of “racial conservatism” that become the core of the Republican Party racial creed in the 1960s – consistently “oppos[ing] federal intervention on racial issues while supporting the principle of equal opportunity” (Burstein, 1998, xxxiii). John Van Sickle and Benjamin Rogge, from Wabash College, asked Milton Friedman for a series of conferences to do just that: lectures on liberalism to counter the 1950s detournement of of the word. Which following Rose Friedman’s advice he published as a book in 1962. More than a millions copies were sold. 43 See for instance “Milton Friedman A Nobel Laureate on the American Economy” in Richard Heffner’s Open Mind. VTR Date: May 3, 1977 ; quotation at 46’45.“so Jews have done best [in the free market]. And other minorities. I’m not only speaking about the Jews. If you look at the Japanese in the United States, if you look at the Blacks in the US, in every case they have done best in those are where you had the greatest degree of competition and they have done worst in those area where you had the most monopoly”. See also the b’nai B’rith Conference at 23’; Friedman’s response to Frankel critic (Friedman, 1985-b, p.446).

20 and competition” [as suggested by Friedman] “but at the same time is decidedly opposed to unbridled capitalism” (Levine, 1985, p.426). Levine was a Jewish scholar specialized in the economic aspects of Halakha (Jewish Law). His book on Free enterprise and Jewish law: Aspects of Jewish business ethics, on which his comment on C&J is based, is a thorough examination of very specific legal text in Halakha, and is very far from very Friedman’s position (Levine, 1980). The very nuanced comment from Levine is thus surprising, as noted by Kenneth Elzinga: “I was in the peculiar position of having read Aaron Levine’s book before I read his comment on Milton Friedman’s paper; and I found myself wondering if this was really the same Aaron Levine in both cases” (Boulding et al., 1985, p.452)

It can be reasonably hypothesized that such favorable reaction were due to Friedman’s prestige, or to use Bourdieusian terms, to his “scientific capital” (Bourdieu, 1988). C&J did not cross the academic line, but it would probably have if it was not written by Friedman. When Friedman spoke and wrote about the Jews, he was clearly not positioning himself in the academic field but as a public intellectual. Friedman was probably looking for a position similar to Irving Kristol, who occupied academic positions at the University of New York, but was mostly known as a polemist. Editor of political reviews such as The Encounter (in the 1950’s) and Public Opinion, Kristol was instrumental in the publication of C&J in the mid 1980s. But Kristol already commented on the 1972 lecture at the MPS. When preparing the conference in Montreux as president of the MPS, Friedman explicitly offer to finance both the speakers and their wives personal fees to “bait” a “big fish” such as Kristol.44 Also, it is clear that Kristol’s comments were the most important in Friedman’s eyes. As seen before, he did not change much of his paper after the many critics he had on it (cf. supra); but when explaining why the paper was not immediately published, Friedman says: “talking with a number of people about it, some of whom are among the most prominent neo-conservatives I may say, they suggested that they were not persuaded by it; and so I decided I would have to do some more work” (Boulding et al., 1985, p.459). Kristol was indeed “among the most prominent neo-conservative”, and his opinion mattered for Friedman.

[WoP Part Milton and Rose Friedman’s public activism in the 1970s and 1980s: the dazzling success]

[WoP Part: Their audience were the world. The reception in the UK, cf. Hayek, is well- 44 Box/Folder 18: 6 1972, Montreux, Switzerland (general, 25th anniversary meeting)

21 known. Here another audience: Jewish intellectual, both in the US and in Israel.]

3.2. Friedman, anti-Semitism and the politics of identity

It would be wrong however to read C&J only in the context of the US debates on lasting legacies of the “melting pot” and affirmative action debates. Friedman’s position both in the academic and intellectual field when writing C&J has to be understood from his personal relation to Judaism as well as his willingness to be the “fellow traveler” of the conservative revolution worldwide, and especially in Israel. Capitalism and the Jews was indeed for Friedman not only a theoretical and political question but also obviously a political and a personal one. His interpretation of the history of Jews in academia in debates on discrimination and market benefits offer interesting parallel with how he makes use of the other minority in a discussion on discrimination against women, as explained by Chassonnery-Zaïgouche, Cherrier and Sin- gleton (2018). Again, whether in in private correspondence with Shaw Bell on gender dis- crimination or on his reflection on the discrimination he experienced at Wisconsin (Lampman, 1993), Friedman never depart from his line: yes, there was anti-Semitism (and racism and sexism) in society, and these translate into economic discrimination, but affirmative action as well as other regulation were not the solution. 45

Friedman was not an observant Jew. After a “fanatically religious phase” at the age of 12, dropped religion completely (Friedman and Friedman, 1998, p.23): “by the time of his bar mitzvah at thirteen, he had adopted a stance of “complete agnosticism”” (Ebenstein, 2007, p.9). His wife Rose came from a more Orthodox and observant background but she “came at a young age to look on religious belief as superstition” (Friedman and Friedman, 1998, p.40). Both Rose and Milton were neither part of a Jewish Community nor frequented a synagogue on a regular basis; their children were educated non-religiously, the Friedman family celebrated Christmas and not Jewish holidays (Friedman and Friedman, 1998, p.82). On the rare occasions Milton fulfilled religious obligations, it was always in very special 45 Friedman wrote to Lampman “on December 5, 1990, to share his reflections on his Wisconsin year… ‘I did not at the time regard anti-Semitism as the major factor involved in the affair and I do not now…however, a minor subtheme was indeed anti-Semitism…” (cited in Weintraub, 2014, p.120). Friedman also akcnowledges the anti-semictic factor in his autobiography written with his wife (Friedman and Friedman, 1998, p.100). More generally, Friedman recognize the importance of anti-Semitism in the academia in the pre-WW2 era (Friedman and Friedman, 1998, p.58). On the history of anti-Semitism in academia, see Reder (2000, 2002), Hamowy (2002), Chandavarkar (2000), Fiorito and Orsi (2016); and for a general and critical review of these works, see Weintraub (2012).

22 circumstances and against Milton’s personal will.46 Friedman’s relation to (Jewish) religion were thus rather distant, though both his parents and Rose’s were observant. He lost very rapidly a large part of his Jewish education. For instance, he could neither speak nor write Hebrew47 although he learn it for his bar-mitzvah. This situation is quite common among American Jews, many of them having been assimilated and abandoned religious practices very quickly after they migrated to the US (see Chiswick, 2014).

However, the Friedmans were concerned by the fate of the Jewish community. Friedman collected numerous references on the political, social and economic situation of Jews in the Soviet Union.48 In their autobiography, Milton and Rose recall that during their trip to the Soviet Union, they went for Rosch Hashana in a synagogue in Moscow, and felt deeply saddened by the situation of Russian Jews (Friedman and Friedman, 1998, pp.287-289). Friedman’s personal concern in the Jewish community at large is also visible through his regular giving to United Jewish Appeal (UJA), the main Jewish philanthropic organization.49

In more “casual” matters, Friedman was also very familiar with American Jewish “pop culture”, as indicates his participation at the University of Chicago to “The Great Latke- Hamantasch Debate”. Participants to this ironic debate discuss the relative merits of Latke (a traditional Jewish dish served at Hanukah) and Hamantasch (cakes served during the feast of Purim); Friedman provided a humoristic contribution to this debate using equations and

46 The couple married religiously at Rose’s request, to please her parents, after Milton long refused to do so: “Rose has often remarked that I became fanatically antireligious” observes Milton in his autobiography (Friedman and Friedman, 1998, p.23). At a young age, Milton also keeps a bad memory from that the kaddish [the Jewish prayer that is traditionnally said at funeral] he had to say at his father’s death. Milton had to go during almost a year in a near-by community to meet the minyan (quorum) rule: “I was glad to see the year’s end” confesses Friedman (Friedman and Friedman, 1998, p.11). 47 Reference in Israël box 48 The Milton Friedman papers contain a whole box entitled “Soviet Jewry”, filled with surveys, press and academic articles on the subject “Soviet Jewry” Box 205 Folder 6, MFA. The material was requested by Friedman to the Academic and Professional Committee on Soviet Jewry, whose purpose was “to inform and alert the academic community about the nature and scope of the Soviet Jewish problem and, by means appropriate in a university context, to mobilize academic opinion concerning it”. Harold Lerner to Friedman undated, Box 205 Folder 6, MFA. 49 In a 1980 letter to a certain H. Lichtman who asked him whether participating to the UJA or buying Israeli bond would actually result in helping Israel, Friedman writes: “I agree with you that we do not have a good choice. Like you, I contribute to the UJA. I do not buy Israel bonds; I would rather make a straight gift than to participate in that kinf of phoney transaction” (Friedman to H. Lichtman 11/03/80, Box 197 Folder 1, MFA)

23 formula.50 When speaking at the Hillel B’nai B’rith Foundation in 1978, Friedman knew how to amuse a Jewish audience, cracking Jewish jokes to make people laugh.51 The sentence on “money-grabbing” can be understand as a joke made before an audience of Jewish students, rather than as an un-cautious use of an anti-Semitic cliché.

Friedman was well aware and wrote about anti-Semitism at several occasion. In a 1974 Newsweek column, Friedman argues that anti-Semitism played a role in the Great Depression because it was at the heart of the New York Reserve Bank’s plan not to save the Bank of United States, one the very rare Jewish bank at the time (Friedman, 1974). Interestingly, Patinkin mentions in a 1952 letter that Friedman considered Alfred Marshall as anti-Semitic.52 Friedman was also sensitive to the issue of discrimination against Sephardic Jews by Ashkenazi Jew. The problem is mentioned by Friedman in two Newsweek columns (Friedman, 1977a, 1977b).

Friedman had a good knowledge of Israel’s political and social situation, through his early correspondence with Don Patinkin in the 1950s and later on with sociologist Joseph Ben- David53. C&J’s arguments that Jews—whether in the Diaspora or in Israel—benefit from capitalism and should be in favor of free-market policies; b) Jews and all minorities should refuse affirmative action policies, were ideas Friedman wanted to promote in the Jewish intellectual community.

Some of us are accustomed to being members of an intellectual [conservative] minority, to being accused by fellow intellectuals of being reactionaries or apologists or just plain nuts.

50 A reprint of Friedman’s speech is to be found in Cernea, Ruth Fredman, ed. The Great Latke-Hamantash Debate. University of Chicago Press, 2006, pp.71-72. 51 “As you know, it is an old Jewish saying that if there are two Jews in any community there are always three synagogues!” “Capitalism and the Jews”, Milton Friedman, recorded on October 15, 1978 by James H. Fox. Available at https://www.law.uchicago.edu/recordings/milton-friedman-capitalism-and-jews (consulted 10/05/18). Quote at 7’30. 52 “I’ve been meaning to write you for some time about an amusing development of the gathering you had for us at your home just before we left. You said then that Marshall was an anti-Semite, and that all one had to do to be convinced of this was to look up the references to “Jew” in his Principles”. Patinkin actually did not find any substance to Friedman’s accusation: “when I got back to Jerusalem I did just that […] To my great surprise I found nothing corresponding to your accusation; on the contrary, I was left with the distinct impression that he had a great admiration for what he called the economic and financial capabilities of Jews” (Don Patinkin to Friedman 20/03/52, Box 31 Folder 24, MFA.) 53 Correspondence with Don Patinkin, Box 31 Folder 24, MFA. Correspondence with Joseph Ben-David, Box 20 Folder 37, MFA.

24 But those of us who are also Jewish are even more embattled, being regarded not only as intellectual deviants but also traitors to a supposed cultural and national tradition. (Friedman, 1985-a, p.401).

Even if Jewish conservative thought has always existed (Murray Friedman, 2005), historians and sociologists usually agree to consider that in the 19th and 20th century till the 1970s, some kind of informal political alliance existed between the Jews and the Left (Lipset and Everett, 1971; Liebman, 1979; Mendes, 2014; Jacobs, 2017). The second part of Friedman’s paradox, while undocumented by him, was not contradictory to historical elements. Nathan Glazer points out in his 1989 book on American Judaism the traditional importance of liberalism and socialism among Jewish Americans (Glazer, 1989). American Jews also largely participated in the fight for civil liberties (Svonkin, 1997). This alliance between the Jews and the Left is considered to have broken apart in the 1970s (Mendes, 2014; Jacobs, 2017). Relations between Jewish intellectuals and the Left were thus changing in the 1960s-1970s, when Friedman lectured and wrote about C&J. Such popular and influential figures as Friedman and Kristol were important actors of this change. By the early 1980s, the publication of C&J can be read in the context the strengthening of Jewish conservative thought, not only in the American context, but also in Israel.

3.3. Friedman and the renewal of Jewish conservative thought

Right after Friedman’s visit to Israel in 1977, the first elected government in Israeli political history led by a right-wing party launches an “economic revolution”. The revolution includes several free-market reforms, together with the liberalization of exchange controls, a decrease in import tariffs and export subsidies. But the revolution failed: both inflation and trade balance deteriorated, the government abandoned the reforms by mid-1979 (Schiffman et al., 2017). Many opponents of Friedman criticized him for the Israeli economic disaster, the most famous of this critic being probably John Kenneth Galbraith in a letter to The Times in 1978.

This episode did not stop Friedman’s legacy on the renewal of Jewish conservatism. Friedman never again participated directly—as he did for the Likud in 1977—in the elaboration of political reform, despite a close relationship to Netanyahou. This intellectual legacy was probably more sustainable and successful, and it can be traced back to his relation to his relation with Daniel Doron and his think-tank Israel Center for Social and Economic

25 Progress (hereafter ICSEP).

Daniel Doron is an Israeli political activist and translator. He studied economics and sociology at the Hebrew University in Jerusalem and soon became influenced by Friedrich Hayek and Friedman. Doron wrote many articles in the Israeli press advocating for free- market reforms. In 1983, Doron founded ICSEP, a think tank which pursue many activites focused on economic ideas. The ICSEP also has an educational ambition, and run economic classes both in high school and in universities. Friedman is a major source of influence for ICSEP. The Center has an American-associated organization called Friends of the Israel Center for Social and Economic Progress, in which Friedman actively contibuted. Friedman’s participation to ICSEP bears a relation to C&J. As for Friedman, promoting free- market ideas in Israel was a way to counter-balance the second part of C&J’s paradox, i.e. the historical association of Jews with the Left. In a 1990 letter to Tad Taube, Friedman regrets that right-wing think-tanks such as ICSEP are “greatly outnumbered and outfinanced by the institutions that are on the other side of the picture. That is in turn simply a continuation of the historical tendency for Jews to be on the left”. 54 Also, in both C&J and in his participation to ICSEP, an important motivator for Friedman was the underlying presence of Irving Kristol who were instrumental in the founding of the think-tank.55.

Friedman’s correspondence with Doron reveals that the former was very actively contributing to the activities of the Center. He used directly his prestige to promote ICSEP. At the demand of Doron, Friedman wrote laudatory blurbs that are still displayed at the front-page of the Center’s website, along with Binyamin Netanyahu’s quotes about ICSEP.56 In many letters,

54 Friedman to Tab Taube 12/03/90, Box 197 Folder 3, MFA. 55 Friedman to William Simon 14/03/90, Box 197 Folder 3, MFA. 56 “The Israel Center is like a breath of fresh air in a stale, overcrowded, overheated seminar room. In a small country of great promise that is being literally strangled by too large and intrusive a government, granting too many subsidies, imposing too many rules and regulations, and paying too much attention to narrow political interests at the expense of broader economic issues -the Center not only preaches but, more important, documents the virtues of establishing free markets for free men, the only combination that has ever enabled countries to achieve both freedom and prosperity. Is deserves the support of all of us who are deeply committed to the survival of a strong and healthy Israel” Friedman to Daniel Doron 22/09/86, Box 197 Folder 2, MFA. A short version of this quote is displayed on the Center’s website: http://icsep.org.il/. See also Friedman to Daniel Doron 03/01/95, Box 197 Folder 2: “Daniel Doron has consistently been farsighted in his evaluation of the Israeli economy. Israel would be far stronger today is he has been listened to and his advice acted upon”

26 Friedman actively participated in fundraising.57 Doron considerably helped spread Friedman’s ideas in Israel and elsewhere. He dealt with the Hebrew translation of Free to Choose,. Interestingly, Doron sought also to diffuse Sowell’s thesis about minorities and the free market. He sent some of Sowell’s works to Israel Keisar, the Secretary General of the Hisdatruth, the main trade union in Israel. After Keisar pointed out that “the conditions and circumstances prevailing in Israel are rather different than those prevailing in North Carolina”, Doron insisted on the significance of Sowell’s research: “if we ignore these lessons which Sowell claims are universal only because of the false assumption that they are applicable only to “North Carolina” […] we might find it difficult to extricate ourselves from the process of deterioration which our economy is undergoing”. 58

After the 1977 episode with the Begin government, Friedman never intervened directly in Israeli politics. It seems that Friedman remained cautious toward Israeli politics. Several years later in 1997, Doron asked Friedman to write a letter to the Israeli Finance minister to convince him of the necessity of a financial reform.59 Friedman refused to do so, arguing that he knew too little of Israeli affairs.60 Yet a year before, Friedman wrote to Benyamin Netanyahou, to congratulate him for his victory and to encourage him to pursue free-market reforms.61 In his reply to Friedman, Netanyahou confirmed that he had “a detailed program to privatize, de-monopolize and deregulate” and that he “shall invite Daniel Doron and other to contribute”. 62 Doron served indeed as an economic advisor in the Netanyahou government.

Friedman’s success in the re-birth of Jewish conservatism can also be associated or explained by the rise of the neoconservative movement. Murray Friedman argues that some Jewish intellectuals played an important role in the formation of neo-conservatism in the US. Both Kristol and Glazer are described by Murray Friedman as important actors of that political trend. As seen before, there is network between Friedman, Glazer and Kristol regarding the writing and publication of C&J, and the dissemination of the essay can be associated with the American neocons. It should be noted however that Friedman was rather cautious toward the

57 Friedman to Doron 22/09/86, 21/07/87, Box 200 Folder 2; Friedman to Doron 21/01/87, Box 200 Folder 3, MFA. 58 Israel Keisar to Daniel Doron, 21/04/86, Box 197 Folder 3, MFA. Daniel Doron to Israel Keisar, 29/04/86, Box 197 Folder 3, MFA. 59 Daniel Doron to Friedman 21/08/97, Box 197 Folder 2, MFA. 60 Friedman to Daniel Doron 02/09/97, Box 197 Folder 2, MFA. 61 Friedman to Benyamin Netanyahou 06/06/96, Box 197 Folder 3, MFA. 62 Benyamin Netanyahou to Friedman 30/07/96, Box 197 Folder 3, MFA.

27 label “neocons”, which was not necessarily in his opinion associated with a defense of free markets, but rather with foreign policy concerns (Boulding et al., 1985, p.455). Friedman rarely took position in foreign policy and geopolitical matters, even in discussion pertaining to Israel. For instance, we found almost no discussion of the Israeli-Palestinian conflict in the correspondence with Doron, except a few allusive references.63 In Friedman’s perspective, the solution of every problems, including geopolitical ones such as the conflict in Israel, was the free-market.64

Friedman’s intellectual success about the Jews and minorities can also be associated to the gradual transition of the main US Jewish organizations such as the Anti-Defamation League (ADL) or the American Jewish Committee (AJC) toward conservatism. As noted earlier, the Jews and particularly these agencies played an important role in the fight for civil rights and against discrimination in the post-WW2 context (Svonkin, 1997; Friedman, 2005; Mendes, 2014; Jacobs, 2017). The informal alliance between Jewish organisations and anti- discrimination fights gradually collapsed in the late 1960s, following the 6 Day Wars and the Kippur War: “The radicals identified themselves with the efforts of people of color around the world to overthrow colonial rule and seize power. In this superheated atmosphere, Israel came to be seen as an outpost of Western imperialism in the Middle East. American Jews were perceived as part of the oppressive white power structure – merchants and landlords exploiting poor inner-city blacks” (Murray Friedman, 2005, p.101). In this tensed context, the Jewish Defense League—a self-defense and right-wring organization—was created in 1968. Traditional US Jewish organizations such as ADL and AJC started to attack affirmative action policies in the 1970s (Murray Friedman, 2005, pp.225-231). When reflecting on their own experience of discrimination, the Friedmans develop the same heroic narrative against affirmative action, that several organization and many intellectuals were advocating at the turn of the 1970s:

There was prejudice and discrimination, yes; but they were handicaps that could be overcome, not impenetrable fortress walls. (Friedman and Friedman, 1998, 63 Another exception: Friedman discusses the Iraqi war in a mail to Doron 31/07/06, Box 197 Folder 3, MFA. 64 “I have always believed that if Israel has followed the Hong Kong pattern of policy instead of the socialist pattern of policy, it would today have more than twice the population and would be carrying on joint economic activities on a wide scale with its Arab neighbors” Friedman to Doron 04/11/04, Box 197 Folder 3, MFA.

28 p.31)

Conclusion

During my whole career, I have considered myself somewhat of a schizophrenic, which might be a universal characteristic. On the one hand, I was interested in sci- ence sine qua science, and I have tried—successfully I hope—not to let my ideo- logical viewpoints contaminate my scientific work. On the other, I felt deeply con- cerned with the course of events and I wanted to influence them so as to enhance human freedom. Luckily, these two aspects of my interests appeared to me as per- fectly compatible. (Friedman 1993, quoted in Cherrier 2011, p.335)

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