Religion, Division of Labor and Conflict: Anti-Semitism in German Regions over 600 Years

German Prez Steinmeier is displeased: "It shames me and it hurts me that anti-Semitism in Germany - especially here! - Again, more often and openly shows his grotesque grimace".

Chancellor Merkel feels the young generation must be told over and over again, "what has made the story of terrible what emanated from German soil".

The anti-Semitism commissioner of the Federal Government, Felix Klein, should be an authority on the subject but seems a little clueless and wishes to counteract:

"The anti-Semitism commissioner of the Federal Government, Felix Klein, expressed concern the increasing anti-Semitism. He told the Evangelical Press Service (epd) that the rise of such crimes was so high that he considered it "extremely alarming". According to the statistics of politically motivated crime, anti-Semitic offenses in 2018 saw an increase of almost 20 percent to 1,799 offenses (2017: 1,504), of which nearly 70 were violent. According to statistics, this is the highest level since 2006. Klein demanded: "We must now mobilize all our political and civic forces to counteract this development.""

According to German Foreign Minister Heiko Maas, who claimed it was the Holocaust that got him into politics, Anti-Semitism is

"A shame for the society that allows that" and "Many migrants have been vaccinated anti-Semitic clichés".

Had this political lightweight taken the liberty to consult history he would know better. In particular about his own people. Here are some historic quotes:

Martin Luther (1483-1546): “The Jews deserve to hang on gallows, seven times higher than ordinary thieves.” And: “We ought to take revenge on the Jews and kill them.”

Immanuel Kant (1724-1804): The Jews are by nature “sharp dealers” who are “bound together by superstition.” Their “immoral and vile” behavior in commerce shows that they “do not aspire to civic virtue,” for “the spirit of usury holds sway amongst them.” They are “a nation of swindlers” who benefit only “from deceiving their host’s culture.”

And one of the greatest German philosophers:

G. W. F. Hegel (1770-1831): Germany cannot assimilate the Jews because the Jews live an “animal existence that can only be secured at someone else’s expense.” Also: “Spirit alone recognizes spirit. They [the Jews] saw in Jesus only the man ... for He was only one like themselves, and they felt themselves to be nothing. The Jewish multitude was bound to wreck His attempt to give them the consciousness of something divine, for faith in something divine, something great, cannot make its home in a dunghill.”

Pretty strong stuff. Besides, this is not the realm in which young coathanger Heiko operates. You will find him in the ready-to-wear suit department. Brioni is out of the question.

These days, Anti-Semitism and in particular AS in recent years in Germany is typically being blamed on the far right, so-called Neonazis which is an interested misnomer as it conveniently distracts from historic facts (see Adorno, Aspekte des neuen Rechtsradikalismus). It is further held against the AfD as a political means. IOW, Jews are instrumentalized in Germany.

The following paper debunks this overly simplistic view. As so often in life, phobia, fear, hate, and discrimination have economic roots.

Religion, Division of Labor and Conflict: Anti-Semitism in German Regions over 600 Years

Anti-Semitism continues to be a widespread societal problem rooted deeply in history. Using novel city-level data from Germany for more than 1,000 cities as well as county-level data, we study the role of economic incentives in shaping the co-existence of Jews, Catholics and Protestants. 

The Catholic ban on usury.

The Catholic ban on usury gave Jews living in Catholic regions a specific advantage in the moneylending sector. Following the Protestant Reformation (1517), the Jews lost this advantage in regions that became Protestant but not in those regions that remained Catholic. 

We show that 

1) the Protestant Reformation induced a change in the geography of anti-Semitism with persecutions of Jews and anti-Jewish publications becoming more common in Protestant areas relative to Catholic areas;
2) this change was more pronounced in cities where Jews had already established themselves as moneylenders;
3) the Reformation reduced the specialization of Jews in the financial sector in Protestant regions but not in Catholic regions. 

The Protestant Reformation and its economic effect on the Jews.

We interpret these findings as evidence that, following the Protestant Reformation, the Jews living in Protestant regions lost their comparative advantage in lending. This change exposed them to competition with the Christian majority leading, eventually, to an increase in anti-Semitism.

In summary, using a combination of city-level and county-level data, we show that the Protestant Reformation induced the following changes: 

1) Jewish pogroms, the expulsion of Jews and anti-Semitic attitudes (captured by anti-Jewish publications and votes for anti-Semitic parties) worsened in regions that became Protestant compared to those that remained Catholic.
2) This increase in anti-Semitism in Protestant regions was more accentuated in regions in which Jewish moneylending had been established before the Reformation.
3) Jewish involvement in finance and banking decreased in the Protestant regions relative to the regions that remained Catholic.

We interpret these findings as evidence that with the Reformation, the Jews lost their comparative advantage in lending. This change exposed them to competition with the Christian majority and led to an increase in ethnic and religious hostility toward the Jews.

VI. Conclusion

In the debate on the determinants of anti-Semitism, economic factors have received little attention. Although there is no doubt that cultural and political factors are at play, we show that economic factors also play a role. Using data on German cities and regions over six centuries, we show that the geography of anti-Semitism is related to the geography of economic interactions between the Jewish minority and the Christian majority. The Catholic ethics of usury and higher levels of human capital with respect to the majority population gave to the Jewish minority a comparative advantage in moneylending in Catholic regions. This produced a complementarity between Jews and Christians that was broken up in Protestant areas after the Reformation. Jews were by no means sheltered from pogroms even in Catholic areas, as evidenced by the well- known pogroms after the Black Death in 1349, well before the Reformation. However, our results document that anti-Semitic acts and attitudes became relatively more frequent in Protestant areas relative to Catholic areas after the Reformation. We show that this differential effect of the Reformation is largely driven by the set of cities with documented Jewish lending activity before the Reformation and that, after the Reformation, Jews lost their prerogatives in banking and finance in Protestant Germany but not in Catholic Germany.

The effects of the division of labor on anti-Semitism.

Our findings are important for both researchers and policymakers. For researchers, they provide empirical evidence that systematically identifies the effects of the division of labor on anti-Semitism. ... For policymakers who are willing to learn from history, our results suggest that anti-Semitism, and inter-ethnic conflict more generally, does respond to economic incentives. This is an important finding in light of ongoing contemporary ethnic conflicts worldwide.

Unfortunately, you can not win voters for your political party when you blame your own society's knitting.