Commentary Magazine


Jews and Money: The Myths and the Reality, by Gerald Krefetz

Getting and Spending

Jews and Money: The Myths and the Reality.
by Gerald Krefetz.
Ticknor & Fields. 267 pp. $13.95.

In October 1974, a year after the Arabs had launched the Yom Kippur War, General George S. Brown, then chairman of the Joint Chiefs of Staff, addressed a Duke University law forum. He was asked what would happen if the Arabs reimposed the oil embargo which they had lifted only a few months earlier. Brown responded that if a renewed embargo should cause real hardship, Americans might do something to “set down the Jewish influence in this country.” He then tried to explain what he meant by “Jewish influence.” The Jews, Brown said, “own, you know, the banks in this country, the newspapers.” The outcry that followed soon made General Brown regret his remarks and even deny that he meant what he had said. But the damage had been done, and not least to the General’s credibility.

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Gerald Krefetz, a business writer and a financial consultant, was one of those who wondered whether General Brown’s military intelligence was any better than his economic intelligence. For as Krefetz knew, the Jews do not own the banks of this country, or even its newspapers. Looking further into the subject, to find what has actually been written about the occupational structure and financial status of Jews, Krefetz soon discovered something that Jewish historians have been lamenting for well over a half-century: Jewish economic history, and especially American Jewish economic history, has long been neglected. Krefetz decided to do something about this, and Jews and Money is the result. It is, among other things, an attempt to explain to the likes of General Brown why Jews seem to have a talent for business and finance and why success in those fields so often appears to be theirs.

The early chapters in this book set out to demystify the Jews, to distinguish socioeconomic realities from the fevered imaginings of anti-Semites. Krefetz offers up a smattering of history and sociology, showing how Jewish culture, traditions, and values have contributed over the centuries to developing traits conducive to achievement. He mentions the discipline of delaying gratification, the stress on sobriety and moderation, the drive for education, the centrality of family and community.

Even more important than culture in determining the occupational structure of the Jews was their necessary accommodation to Gentile society. Through the centuries it was anti-Semitism that often determined the Jews’ economic place, and that explains in particular the presence of Jews in banking and other financial occupations. It is a paradox and an irony that success in those very financial occupations into which Jews had been pushed by anti-Semitic pressure soon gave rise to a new manifestation of anti-Semitism sparked by envy.

But Jews and Money addresses itself mainly not to the historical but to the contemporary financial scene. It does so by spilling forth a mass of anecdotal information about Jews in a whole variety of fields in American business: banking (domestic and international), media, entertainment, discounting, gold and gems, real estate. In addition, Krefetz relates many entertaining stories about the role of “Jewish” money in the art world, in medicine, and in law. And amid all the talk of affluence, he has even remembered the Jewish poor.

It would be pleasant to report that Krefetz has done his work well; regrettably he has not. Nevertheless, his book should be welcomed as an ambitious and courageous attempt to tackle a subject that is obsessively compelling to anti-Semites and consequently threatening to many Jews. Money, as Emerson noted long ago, is hardly spoken of in parlors without apology. When it comes to Jews and money, one is in a minefield where any rash step may endanger one’s life. Whatever his book’s shortcomings, Krefetz has managed to avoid disaster with admirable aplomb.

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Jews and Money lacks discipline and coherence, and most of all an index. The book’s pages are littered with names of businessmen and their firms, but it is well-nigh impossible to find them again when one needs them. Some names surface repeatedly, yet such repetition does not augment knowledge or enhance insight. What is worse, not all of Krefetz’s “Jewish” businessmen are even Jewish. The late Charles Bluhdorn, for instance, chairman of the board of Gulf & Western, whose name Krefetz frequently mentions and consistently misspells, denied that he was Jewish.

This raises the first fundamental problem in exploring the whole thorny question of Jews and money. One must decide who is a Jew. Once that has been settled, one needs criteria for evaluating the impact that an individual’s Jewish identity may have had on his business character and business career. How does one go about this? Apart from the highly speculative and prejudicial theories of Max Weber and Werner Sombart about the alleged Jewish proclivity for financial enterprise and the alleged compatibility of Judaism with capitalism, we do not have reliable data from which to draw valid conclusions about these questions. Business history is altogether a fairly young discipline, and Jewish business history an infant.

Gathering the requisite raw material would entail in the first place a systematic collection of biographies. Then one would want to look at an individual’s Jewishness or lack of it, to determine how his origins, his upbringing, his connections, and his loyalties may have shaped his character and personality. In pursuing such a study, one would want to consider how Jewish values and ethical traditions become internalized and embodied in behavior. A rewarding case study here might be that of Bernard Bergman, an erstwhile Orthodox rabbi and nursing-home operator, who became notorious in the 1970’s for his unlawful financial manipulations and for the abuse to which he exposed the old and the sick in his nursing home. (Krefetz devotes twelve informative but unsystematic pages to him.)

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In addition to the Jewish aspect, there is also the Gentile side of the business world in which the Jew functions. Gentile attitudes and, more importantly, Gentile behavior toward Jews affect the extent and even the nature and limits of the Jewish businessman’s financial activities.

Consider in this regard Saul Philip Steinberg, whom Krefetz cites to belie the myth of Jewish finanical power. Steinberg’s meteoric rise began in the 1960’s. He had the innovative idea of leasing computers to businesses (this was long before the advent of the microcomputer). Starting with a few thousand dollars borrowed from his father, he turned his firm, Leasco Data Processing Equipment Corporation, into a multimillion-dollar business. In 1968 he acquired Reliance Insurance Company, which had some $700 million in assets. Among them were 200 shares in Chemical Bank, the sixth largest commercial bank in the country. In 1969, when no conglomerate had yet managed to acquire a bank, Steinberg launched an attempted takeover of Chemical.

But Chemical was determined to resist, as the bank’s director wrote to Steinberg, “with all the means at our command, and they might turn out to be considerable.” They were indeed. For one, Nelson Rockefeller, then Governor of New York, requested the state legislature to enact a new law to prevent the takeover of a commercial bank. Still more devastating were Chemical’s stock manipulations. Chemical had succeeded in acquiring a considerable number of shares of Leasco stock which it then unloaded on the market. By the end of the year Leasco stock had dropped to half of its value. Steinberg knew that he had been beaten.

Krefetz speculates:

Were Chemical’s actions anti-Semitic? The bank’s motivation was probably more a reaction to a parvenu than a conscious act of prejudice. Still, one cannot help recalling that within a few short years OPEC princes and Japanese trusts were openly buying American banks without significant opposition. Was it the Jew that infuriated Chemical, the act of lèse majesty, or the work of an outsider?

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One of the more beguiling aspects of Krefetz’s subject is that touching on philanthropy. Do wealthy Jews give to Jewish causes? Krefetz devotes a chapter, “Tithes That Bind,” to the question, but it is a disappointing scramble of unrelated fragments on the idea of charity in the Jewish tradition, strategies of Jewish fund-raising, statistics about Jewish giving, and so forth. Again, none of this is done systematically or well.

Like most rich people, wealthy Jews often invest their money to expand their own businesses and thus make more money. Also, like most rich people, they use their money to buy their hearts’ desires. But the Jewish rich have not been as conspicuous in their habits of consumption as anti-Semitic stereotypes would have it. (The rising middle class as a whole, and definitely not Jews alone, fits those stereotypes.) Indeed Arab consumption in the Western world has by far outstripped the capacity of the anti-Semitic imagination to depict vulgar ostentation and extravagance. Arab spenders make even William Randolph Hearst seem austere.

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Besides investing their money and spending some of it on themselves, Jews also use it to do good. They do good not only for the Jewish community, but perhaps even more so for American society at large. No one has yet tried to piece together the exact facts and figures of their phenomenal contribution to this country’s social-welfare network, its cultural institutions, and its scientific and educational establishments. In fact, some wealthy Jews give only or primarily to such institutions, scanting Jewish philanthropic needs. The late Joseph Hirshhorn, for instance, who made his fortune in gold and uranium mining, and who in his lifetime gave his enormous collection of contemporary art to the United States, was not notably a contributor to Jewish institutions.

Then there are those wealthy Jews who use their money to do what they consider to be good for America. Max Palevsky, for instance, having made his fortune in computers, has spent some of it backing Left-liberal causes, the latest being a new journal, democracy, intended to “revitalize liberalism in America.” In recent years Palevsky has distanced himself from the Jewish community, and in fact the beneficiaries of his largesse tend to be indifferent, if not overtly hostile, to Jewish interests.

What about philanthropy for Jewish causes? For some reason Jewish hospitals have always managed to attract the benefactions of Jews not otherwise committed to their coreligionists. Among the considerable number of wealthy Jews who do care—sometimes passionately—about the Jewish community, the cause of Israel is obviously at the top of their philanthropic agenda. Many—perhaps more now than formerly—attend a synagogue and contribute to its maintenance. Some give to Jewish education and Jewish cultural pursuits. Many are deeply involved in Jewish communal affairs. Some are even prepared to use their wealth and the influence it brings on behalf of Jewish interests.

Among those listed in “The Forbes Four Hundred” (Forbes, September 13, 1982) are many whose personal participation in the affairs of the Jewish community and whose philanthropy have made a difference to their local Jewish communities, to national Jewish organizations, to Judaism, Jewish culture, and scholarship in the United States, and to the vitality of Israel. To name only a few: Arthur B. Belfer (oil and real estate), Morton Blaustein (oil—inherited), Max M. Fisher (oil refining, real estate), Morton L. Mandel (Premier Industrial Corporation), Laurence A. Tisch (Loews Corporation), and Jack D. Weiler (real estate).

Yet money does not seem to go as far today as it once did. The fabled names of the past that come to mind in this connection are Sir Moses Montefiore and Baron Maurice de Hirsch, in the 19th century, and Jacob Schiff shortly thereafter—not the Rothschilds, whose money and influence were only rarely extended to aid their fellow Jews. Sir Moses Montefiore intervened on behalf of the Jews with kings, sultans, and czars, and lavished his money on Jewish causes, especially in the Holy Land. Hirsch almost singlehandedly underwrote the mass migration of the Jews from czarist Russia to the United States. Schiff’s beneficence—toward Jewish and non-Jewish philanthropic causes alike—was spectacular. And in the exercise of influence surely nothing was more spectacular than the refusal of Schiff’s firm—Kuhn, Loeb and Company—to float a loan for Russia when the war with Japan started in 1904. (Instead, Kuhn, Loeb contributed a major share toward a loan to the Japanese, which no doubt helped them to defeat Russia.)

It was czarist anti-Semitism that turned Schiff into a belligerent against the Russian regime. Those were still the days when an individual fortune could govern political destinies. Nowadays, it seems that not even the bottomless pit of Arab oil money can determine the outcome of the Iran-Iraq war.

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Timothy’s preachment that “love of money is the root of all evil” was intended to sustain the Christian tradition of asceticism and otherworldliness. The Jewish tradition, by contrast, has been leavened by temperance and this-worldliness. Koheleth’s cynical observation that “money answereth all things” is more useful as a social guide in this world than Timothy’s ethos of self-denial. In their historical encounters with the Christian world, the Jews have often found that money can mean the difference between extinction and survival.

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