Tomas Sedlacek, Economics of Good and Evil
Abridged and edited for readability
Let me avow it right away: I think that the Jewish religion has the same leading ideas as Capitalism. I see the same spirit in the one as in the other.
Although the Jews of the Old Testament played a key role in forming today’s Euro-American culture and economic systems, not much space has been devoted to them in either the leading textbooks of economic ideas or other economic texts. For this reason, there is no way the Old Testament could be absent from our exploration of prescientific economic viewpoints—not only because Christianity is built on it, which later had an important influence on the formation of capitalism, but also for its distinctive contribution to a change in the perception of economic anthropology.
In many areas, Jewish economic habits anticipate the development of modern economics. As early as the “dark” ages, the Jews commonly used economic tools that were in many ways ahead of their time and that later became key elements of the modern economy:
They practiced money lending, traded in many assets (…) and especially were engaged in the trading of shares on capital markets, worked in currency exchange and frequently figured as mediators in financial transactions (…), they functioned as bankers and participated in emissions of all possible forms. As regards modern capitalism (as opposed to the ancient and medieval periods) … there are activities in it which are, in certain forms, inherently (and completely necessarily) present—both from an economic and legal standpoint.
For a nation originally based on nomadism, where did this Jewish business ethos come from? Can the Hebrews truly be considered architects of the values that directed our civilization’s economic thought?
One of the things the writers of the Old Testament gave to mankind is the notion of progress. The Jewish understanding of time is linear—it has a beginning and an end. The Jews believe in historical progress, to be climaxed by the arrival of the Messiah. Hebrew religiosity is therefore strongly connected with the physical world, and those who take pleasure in worldly possessions are not a priori doing anything wrong.
The observance of God’s Commandments in Judaism leads not to some ethereal other world, but to an abundance of material goods (Genesis 49:25–26, Leviticus 26:3–13, Deuteronomy 28:1–13) (…) There are no accusing fingers pointed at those engaged in normal economic activities for the earning of material goods. There are no echoes of asceticism nor for the cleansing and spiritual effect of poverty. It is fitting therefore, that the founders of Judaism, the Patriarchs Abraham, Isaac and Jacob, were all wealthy men.
Before this linear understanding of time, a cyclical-Sisyphean perception held rule. In Gilgamesh, history does not go in any direction. Everything is cyclical repetition with minor variations, as we see in nature (the repetition of seasons, life and death, the cycle of the months, etc.). And stories take place in a strange time-loop: Gilgamesh’s story ends where it began. It could play out anywhere and any number of times, because nothing has changed since its completion and everything returns to its old routine.
The idea of progress, which would later drive the creation of science and the hope of our civilization in general, only came about due to a linear understanding of history. If history has a beginning and an end, and they are not the same point, then exploration suddenly makes sense in areas where the fruits are borne only in the next generation.
Our civilization, therefore, is especially indebted to the Hebrews for the idea of progress. However, as opposed to the original spiritual conceptions, today we perceive progress almost exclusively in an economic or technological sense. Economic progress has almost become an assumption of modern societies. We expect growth. If nothing “new” happens, we consider it an anomaly. This wasn’t always the case. As Keynes wrote almost a hundred years ago, strong growth and material progress have been with us only in the past three centuries:
From the earliest times of which we have record back, say, to two thousand years before Christ down to the beginning of the eighteenth century, there was no very great change in the standard of life of the average man living in the civilised centres of the earth. Ups and downs certainly. Visitations of plague, famine, and war. Golden intervals. But no progressive, violent change. Some periods perhaps 50 per cent better than others—at the utmost 100 per cent better—in the four thousand years which ended (say) in AD 1700 (…) At some epoch before the dawn of history—perhaps even in one of the comfortable intervals before the last ice age—there must have been an era of progress and invention comparable to that in which we live to-day. But through the greater part of recorded history there was nothing of the kind.
Despite the fact that Keynes expressed hope for the economic satisfaction of our needs most explicitly, a strong faith in the beneficial effect of material progress is professed by a majority of the key figures of economic thought of our time. This is why we must constantly grow, because we believe that we are headed toward an (economic) paradise on Earth. Because care for the soul has today been replaced by care for external things, economists have become figures of great importance in our time. They give prophetic services (macroeconomic forecasts), reshape reality (mitigate the impacts of the crisis, speed up growth), and, in the long run, provide leadership on the way to the Promised Land—paradise on Earth. Samuelson, Friedman, and many others have become passionate evangelizers of economic progress, not only within their own country but also globally.