The Economics of Jewish History

In addition to the weekly parasha and Rosh Chodesh reading, this week we also read an extra portion called Parashat Shekalim. In the weeks leading up to Purim and Pesach, there are a number of additional readings to commemorate the key events surrounding those holidays. One of these readings is Shekalim, literally “shekels”, where we recount how the Israelites had each donated a half-shekel in order to conduct a census. The Torah forbids counting souls for several reasons, including the simple fact that people shouldn’t be treated like numbers. So, each adult Israelite male gave a half-shekel (a “substitute for the soul” as the Torah says), the result being the collection of some 300,000 shekels of silver.

Silver half-shekel from the Second Temple era

In the Purim story, we read how Haman promised to pay the king 10,000 kikar of silver to finance the extermination of the Jewish people. One kikar is equivalent to 3000 shekels, meaning Haman amassed 30 million shekels for his final solution. This is an astronomical amount of money, especially back in those days. Where did Haman get it? Rav Ovadia Yosef explained: The Persian and Babylonian businessmen at the time were losing income because the Jewish exiles had come and set up their own superior businesses. The Persians and Babylonians couldn’t compete with the Jews. So, Haman told the businessmen that he can get rid of the Jews for them, and all he needed was a little financial support. They all gladly pitched in for his campaign. This is why the Megillah has Haman saying “I will pay ten thousand kikar of silver al yadei osei hamelakhah [by the hand of those who do business].” (Esther 3:9)

Without those funds, there would be no Purim story! This is one small example of how the shekel—money—drives historical events. We find that, beneath the surface, most of history is a result of economics and business. While so much of Judaism is built upon commemorating the distant past, we seldom think about the financial aspects of those ancient events. Of course, the root reasons for those events are entirely spiritual, yet the way they are brought to actualization is financial. This is hinted to by the Torah’s language itself, where the numerical value of shekel (שקל) is 430, equal to nefesh (נפש), “soul”. It is further alluded to by the Talmud where money is referred to as zuz, literally “move”. Money is the prime “mover” of history. What follows, therefore, is a look at some of the key events of Jewish history—from an economical perspective.

Welfare and Taxes

The “iron crucible” that forged the Jewish nation was Egypt. The Israelites had gone down to Egypt because Joseph became its regent, and wealthier than anyone in the world. He invited his family to join him in a foreign land and enjoy its prosperity, which he himself had generated. However, as the story continues, we read that the seven years of famine took such a toll on the Egyptians that they had no choice but to sell everything, their land, and even themselves, becoming slaves to Pharaoh (Genesis 47). Joseph presided over this set of events.

It is not surprising, therefore, that when Joseph had passed away and a new Pharaoh showed up, he could easily manipulate the Egyptian nation into hating the Israelite foreigners that “took over” the country. The people rose up and, in turn, enslaved the Israelites. Would this have happened if the Egyptian populace had not been put into servitude back in the time of Joseph? Perhaps Joseph should have used the tremendous wealth assembled during the years of abundance to provide free welfare for the people during the difficult years of famine? That way, instead of resentment they might have had gratitude. Of course, the way things worked out was always meant to happen, and engineered by God who had long before decreed that the Israelites would end up slaves. There was a spiritual reason for this (see ‘The Flood, the Tower, and Egypt: Why Were the Israelites Enslaved?’ in Garments of Light), and the way it was brought about physically was through economic factors.

Fast forward to the next major national catastrophe: the splitting of Solomon’s Kingdom. God had decreed that Solomon’s unified, prosperous kingdom wouldn’t last because of Solomon’s mistakes (I Kings 11:11). The way it came about was, once again, through financial matters. To construct the Holy Temple in Jerusalem, King Solomon had significantly raised the taxes on the nation. The Twelve Tribes were okay with this because they all wished to have a share in God’s Temple. After Solomon’s passing, the people wondered why their taxes remained so high? The Temple had been completed—along with some nice real estate for the royal family—so why were they still paying so much? They demanded of Solomon’s successor, his son Rechavam (“Rehoboam”), to lower the taxes (I Kings 12).

Rehoboam’s elders told him to do so, but he foolishly listened to his friends instead. Not only did he fail to lower taxes, he raised them, triggering a revolution. All the tribes separated from Judah to form their own Israelite (or Ephraimite) Kingdom. The eventual result was that the northern kingdom separated from Jerusalem and inevitably drew further away from God. They became deeply idolatrous and immoral. Moreover, the two kingdoms would go on to war with each other on numerous occasions, with an unfortunate death toll. The reason? Taxes!

When the kingdom was unified in the time of David, they were strong and prosperous, able to subdue and conquer their neighbours, including the Edomites, Ammonites, and Moabites. Once fractured, they were weak and wasted resources competing with each other. This opened the door for other kingdoms to gain the upper hand. Soon, Assyria completely destroyed the northern kingdom, and its tribes were lost to history. Had Solomon not sinned, and Rehoboam not raised the taxes, Israel would have remained unified and strong. Perhaps it would have been Israel who conquered the region to establish an everlasting empire. Instead, both kingdoms were soon destroyed. The Kingdom of Judah lasted a little longer than Ephraim, but ultimately succumbed to the Babylonians. And the reason for that, too, was financial.

Temples, Tribute, and Bankruptcy

In 605 BCE, King Nebuchadnezzar defeated the Egyptians at the Battle of Carchemish, establishing Babylon as the dominant player in the Near East. On his way back, he decided to make a stop at Jerusalem. King Yehoyakim was able to save Jerusalem by promising to pay vast tributes to Nebuchadnezzar and pledging allegiance to Babylon. After three years, he stopped paying so Nebuchadnezzar came back, angry. He deposed Yehoyakim and took him back to Babylon in chains. Worse, he emptied out the entire Temple treasury and “stripped off all the golden decorations in the Temple of God—which King Solomon of Israel had made—as God had warned.” (II Kings 24:13) Nebuchadnezzar put Zedekiah on the throne of Judah as a new vassal king, but Zedekiah also “did what was displeasing to God, just as Yehoyakim had done.” (II Kings 25:19) Nine years later, Zedekiah rebelled, too, failing to pay his dues. Nebuchadnezzar came back, this time with the intent to end Judah for good. He succeeded, and the First Temple was destroyed.

Had Zedekiah (and Yehoyakim before him) kept the funds to Babylon going, the Temple would not have been touched. In fact, they didn’t have to wait too long since Babylon was soon replaced by Persia, and its King Cyrus was a very tolerant leader. The Tanakh refers to him as a mashiach, God’s anointed! (Isaiah 45:1) It was Cyrus who ended the “Babylonian Exile” and allowed the Jews to return to the Holy Land and build the Second Temple. Once again we see how, while the reasons are inherently spiritual, God’s plans are brought about through economic factors—in this case, paying tribute.

The Second Temple, too, was destroyed over money more than anything else. What is often overlooked is that Rome was in the midst of a civil war at the time. The emperor Nero (r. 54-68 CE) had wasted huge sums of money on all kinds of building projects, mostly for his own glorification. Not surprisingly, he had to raise taxes, which led to a number of rebellions across the empire. The Jews of Judea rebelled partly due to the heavy taxation (among other things), as did other provinces like Gallia Lugdunensis. The Roman rulers of Judea also provoked the Jews through various forms of mistreatment. They were well aware of the fact that Jews from all over the world donated money and gifts to be sent to the Holy Land and its Temple. On multiple occasions prior to the Great Revolt, the Romans raided the Temple coffers to steal its wealth.

Back in Rome, Nero lost all support and was either killed or killed himself. This started the “Year of the Four Emperors”, a civil war in which various leaders sought to take control of the empire. By the end of it, Rome was bankrupt. Vespasian, who was in charge of suppressing the Judean Revolt, came out on top and became the new caesar. His son Titus was left to finish the job in Jerusalem.

To start a new dynasty, the Flavians needed money—and Jerusalem had it. So, it wasn’t enough for them to simply subdue the Judean Revolt. The entire city was crushed and looted; the Temple torn down and stripped of all wealth. This wealth was carried back to Rome, and infamously depicted on Titus’ Arch. The Colosseum was constructed with funds from Jerusalem (not to mention Jewish slaves), and archaeologists have even deciphered an old plaque that commemorates this.

The Colosseum was built on top of the place where Nero had begun constructing a grand palace for himself. The Flavians wanted to show that they wouldn’t spend money on themselves, but rather on their citizens. As Arthur Segal points out in his article, Rome, Jerusalem, and the Colosseum, they built a massive amphitheatre to entertain the public, and the gladiatorial games were called munera, “money” or “gifts”, to show that they were investing in their people. (There is a great deal of irony here in that God had His Temple in the Holy Land torn down, and rebuilt far away in an unholy land as a stadium of idolatry, immorality, and bloodshed. God’s message was pretty clear!)

Debts and Expulsions

Throughout the Middle Ages, most of Europe was under a system of feudalism. This meant that the king officially owned all the land, but distributed plots of land among his nobles and lords, who administered them. The lower-class people who worked the land were serfs, subservient to their lord. The serfs would provide certain goods and services to their lord, who would in turn provide certain goods and services to the king. The Jews, however, were generally kept apart from this system. Jews were not serfs, but direct subjects of the king. The king could therefore do with the Jews whatsoever he wished. Extorting them through heavy taxation was one of those things.

At the same time, Christian law prohibited Christians from lending money with interest. Of course, society cannot exist without money-lending and banking. These institutions are as old as civilization itself, and vital to the advancement of both individuals and societies. For example, many of us probably pay a mortgage. This is because we do not have the liquid funds to be able to buy an entire house outright. So, the bank gives the money, which we return incrementally (plus a little extra for the bank, otherwise what’s their incentive?) This is an essential system that allows people with little money to make big moves and grow their wealth.

Today, and throughout history, banking has been criticized and often spoken of disparagingly. While there are, and have been, cases of greedy banks causing harm, generally-speaking banking is vital to societal and individual progress. Medieval kings (and modern governments) needed funds, especially because they wasted them so lavishly, so they resorted to borrowing. But no one is willing to give away money to strangers for free! Since Christian law forbid lending money with interest, the Jew was the obvious solution: borrow money from Jews, since they are outside Christian law (and outside feudal society in general). In fact, in many kingdoms, Jews were only permitted to settle in exchange for opening up banks! The “Court Jew” became a bona fide medieval institution.

This is exactly what happened in England following the conquest of William in 1066. Jews settled there, but with many restrictions on the types of work they could do. Most of them had to become either merchants or bankers. The latter were particularly successful. However, when the lords would become too indebted, and no longer felt like paying back, they could easily start an anti-Semitic pogrom and “wipe out” their debts—together with the creditors. King Edward I spent huge sums of money to finance his conquest of Wales. When he was done subduing the Welsh, he turned his attention to the Scots. By 1290, he was bankrupt and in huge debt. Solution? Cancel the loans from the Jews, and confiscate all the Jews’ wealth before kicking them out. The Edict of Expulsion was signed on the 18th of July, 1290.

This pattern repeated itself throughout the Middle Ages and across Europe. The most famous case was in Spain in 1492. The Spanish had gone bankrupt financing their Reconquista to drive the Muslims out of the Iberian Peninsula. With the last battle against the Muslims won, the Spanish turned their attention to their crippled finances—and the Jews. Sticking to the classic European playbook, they signed an edict of expulsion, cancelling debts and confiscating the Jews’ wealth before kicking them out. (Of course, it wasn’t marketed this way to the public, who only heard that the aim was to “cleanse” Iberia of the heretical Jews.)

Ironically, Spain’s King Ferdinand and Queen Isabella wanted their own Court Jew, the rabbi Don Isaac Abarbanel (1437-1508), to stay behind and keep working for them! Abarbanel stood up for his people, and argued that Spain had no problem with the Jews, who were good citizens and good tax-payers. He said he could raise from the Jews a nice sum of 600,000 crowns to rescind the decree. The king and queen were about to accept when the Grand Inquisitor Torquemada intervened on religious grounds. Abarbanel, of course, refused to stay in Spain and went into exile with his people.

Most of the Sephardic Jews resettled across the Ottoman Empire, in North Africa, Turkey, southeast Europe, and the Middle East. (Fun fact: some Jews became pirates and attacked Spanish ships, both for a little revenge and to reclaim their confiscated wealth!)  It is reported that, at the time, Sultan Bayezid II said: “They tell me that Ferdinand of Spain is a wise man, but he is a fool, for he takes his treasure and sends it all to me.” He was right. After the expulsion, Spain had its short bit of glory, and then its power and influence gradually declined. In 1588, their famed armada was wiped out. Soon, they lost all overseas territories and became an afterthought in European history.

The Ottoman Empire, meanwhile, prospered and was propelled to new heights, together with their Jewish population. Don Joseph Nasi (1524-1579) is a great example of that, being appointed as the Ottoman governor of Tiberias, where he hoped to rebuild an independent Jewish state in a move predating Zionism by centuries. The nearby town of Tzfat would soon enter its Golden Age, and transform Judaism forever.

Tzfat was small and impoverished, with a small garment industry. After 1492, many Jewish garment workers kicked out of Spain settled there, joining the 300 Jews that already lived there. One of those exiles was Rabbi Yosef Saragossi (1460-1507). He revived the three synagogues in the city and opened up a yeshiva. Tzfat soon became a major centre of Jewish life and scholarship. It was there that Rabbi Yosef Karo composed the Shulchan Arukh, and there that Rabbi Moshe Cordovero and the Arizal systemized and made sense of Kabbalah, igniting a mystical revolution of Judaism.

It is interesting to follow the thread: had Christian Spain not gone bankrupt fighting Muslims (or accepted Abarbanel’s offer), and the Jews would not be expelled, would there have been a revival of Tzfat, and an explosion of Kabbalah? It is important to note that one of the reasons Tzfat’s Kabbalah spread so rapidly is because it helped Sephardic Jews deal with the catastrophe they had just lived through. The Arizal’s Kabbalah in particular is heavily based on using exile as a means to rectify the entire universe, picking up the lost sparks of Creation wherever the Jews wander. Kabbalah gave the expulsion a spiritual purpose. This is yet another example of how tightly economic development is tied to spiritual development. And the same is true for each individual.

The Sages wrote much about how important it is to be financially secure in order to be spiritually secure. A person who is poor and struggling to eat is unlikely to be able to focus on spiritual pursuits. The Talmud (Nedarim 38a) states that all the Biblical prophets, including our patriarchs, were wealthy for this reason. Being wealthy gave them the ability and independence to study, meditate, and serve the public. Moreover, it was because they were wealthy that they were respected and could spread their message. After all, few would look up to (or want to follow) a poor or unsuccessful person.

On the same page, the Talmud states the conditions required for the Shekhinah to dwell upon a person: wisdom, strength, wealth, and humility. On another page (Shabbat 92a), the Talmud gives the same list except that “humility” is replaced with “stature”. The latter means either external stature—being tall—or spiritual “stature” as in the previous list, ie. humility, the greatest of inner traits. There is a beautiful numerical equivalence here, for we started with the number 430 (the value of shekel, שקל), and this is also the sum of the values of the three qualities besides wealth! (חכם + גבור + קומה) In other words, wealth makes it much easier to pursue spiritual goals and attain wisdom, strength, and stature.

Thus, we see how deeply intertwined is our financial and spiritual fate—both as individuals, and as a nation, over our long and illustrious history.