Explaining A Stereotype: Jews And Money Lending

May 16, 2008

By Rabbi Robert H. Loewy


All of us have heard the comments: references to “rich Jews” or “cheap Jews.” Sometimes we hear the expression “Shylocks,” when describing someone who is a loan shark and occasionally even the verb to “Jew down” in lieu of haggling. Then there are all the jokes about Jews and money. Sometimes we even tell them ourselves. Please know, they are NOT funny.

Last year I was teaching a small class of social work students, none of whom were Jewish, about how to be sensitive to the future Jewish clients they might be serving. I began by asking the group what kinds of personal connections they had had with Jews. One student mentioned a boyhood friend and being in his home for Jewish holidays. The second mentioned her professor at LSU. The third said it was his stockbroker. Naively I at first thought it was odd that a social work student would have a stock broker, then realized it was his attempt at humor. It took a while for him to realize that it was not humorous at all.

So from where do these negative stereotypes come? Some of it actually starts with Torah, evolves into Jewish law and needs to be seen in the context of history.

This week’s portion, Behar, includes laws relating to the Sabbatical and jubilee year. On those years, the land is returned to its original owners and there are warnings about not taking advantage of others when conducting business transactions related to the Sabbatical. There are specific references to making loans with and without interest. We read in Leviticus 25:35 “If your kin, (achicha) being in straits, comes under your authority…. Do not exact neshech-advanced or tarbit- accrued interest… Do not lend your money at advanced interest, nor give your food at accrued interest.”

This text raises questions. First is the reference to Achicha- your kinsman. What about those who are not your kinsman? We will see. What is meant by these terms for interest: Neshech and Tarbit/Marbit. Neshech is related to the word “to bite,” so when borrowing with interest involved, you are putting the bite on someone or taking a bite out in advance. This is of course from the perspective of the borrower. Marbit is connected with word for “increase,” since interest increases the cost of what is borrowed.

Some say the terms are interchangeable. Others believe that Neshech is for payment with silver or a cash exchange, while Marbit is a demand for payment in food products. Keep in mind that all of this is in the context of an agricultural society during a Sabbatical year.

In the Book of Deuteronomy 23:20, there is further discussion about to whom you can and cannot make loans. We learn that you shall not take Neshech (put the bite on) your kinsman, whether regarding food or silver/money. You shall not take any form of interest. But it is different for the Nochri- the foreigner, the non-community member. From him you can take interest.

This is seemingly discriminatory, but we have to keep in mind the context of who was the Nochri as opposed to Achicha. Achicha-kinsman was the person you knew and saw. He was part of your community and there were communal obligations towards the individual in your town. The Nochri- foreigner was transient, likely in the community to do business and then move on. He borrows in order to invest in merchandise and make a profit. In the Torah time there was no moral imperative to remit loans or forgo interest for the Nochri. This was business, not a matter of need. In the context of the Ancient Near East, the same applied for Jews doing business outside of their home territory. Similarly, they would be charged interest.

Discussion continued in Talmudic times about making loans for interest and generally the rabbis followed the lines of Torah. Some forbade charging interest to the Nochri as well as the kinsman. It was for them a matter of being fair. As a proof text they would quote the Psalm verse: “Who may ascend the mountain of the Lord, Who may stand in God’s holy place? Those with clean hands” which meant one who did not charge interest.

However, most of the rabbinic authorities permitted making loans with interest as a Hetter Iska, a permissible business matter. However as opposed to seeing the making of loans as taking advantage of someone, there is a great deal of discussion about how this is to be avoided. There is even a specific rate of interest considered permissible, but beyond which it is inappropriate. You shall not oppress means taking more than 1/6 of interest on a transaction. 16% is higher than some charge cards, but lower than others.

The real stereotype develops during the Medievil Period of the 12th and 13th century among Ashkenazic Jews of Germany, France and England. As the European economies expanded, capital was needed for business ventures with a money economy evolving. Jews were forced out of many trades by the guild system. There were Christian money lenders, such as the House of Lombard in Italy. But since Jews were not restricted by Catholic Church strictures they filled a necessary role in society. This was further complicated by the secular rulers who encouraged Jews to lend money, since they received a tax or fee on the income Jews raised. Just as today, the loan business entailed risk. These were not charitable loans, but investment loans, so people could make money, part of the cost of doing business. It can also be mentioned that the nobility also employed Jews as tax collectors, another popular occupation.

So, why the antipathy towards Jews as money lenders? If you think about it, everyone loves to receive their loans, being able to purchase your house, buy the car or start your business, but no one really likes to pay up, to have to meet the interest charges. And then come the problems when you default on the loan. We think of the cruel bank, the hard hearted moneylender who took advantage of you. Of course no one asked you to take out the loan in the first place, but when it’s due there is antipathy. People delude themselves into thinking that once they have money loaned to them it is theirs.

Perhaps you recall your High School English class when you read the Merchant of Venice. This evolved into Shakespeare’s version of the stereotypical moneylender, Shylock, who wants his pound of flesh, when of course the story is much more complicated than that.

With modernity we have the evolution in the 1800s of the major Jewish investment banks, the Rothschilds in Europe and a variety of families in the United States.  Yes, the American Jewish community today is relatively affluent. We are not nearly as wealthy as some like to think, but we are certainly in a stronger financial position than many others. Some of the stereotypes about us all go back to Torah. We continue to believe and act upon the idea that our community has special obligations to our kin. Post Katrina in New Orleans we re-established an old institution, the Free Loan Society within the community for the needy. In addition we create a variety of organizations to assist our own, but none of that refers to business dealings, only situations of need.

Many of you have heard the joke about the difference between Jews and Non-Jews. “Non-Jews pay retail.” This relates to times past, not so much the present, when Jews were the shopkeepers and store owners. Everyone was family; all were related and it was understood that you had a responsibility to your kin. Everyone else pays retail and everyone else pays interest.

I think that we as a Jewish community can be rightly proud of our reputation as business people. Our success has been remarkable and exemplary. In the process we have extended ourselves in special relations with our kin. At the same time, we certainly have been caring and giving to all in need. How many stories have I heard of the Jewish shopkeeper who gave away his wares or extended credit, ran a tab! I believe that as we have become integrated into a larger society, we look upon everyone as our kinsman, our brothers. This is one of the explanations for the disproportionate level of Jewish giving to all philanthropy. The connection between being Jewish and how we use our wealth is really a point of pride, not shame. It all starts with Torah.


Leave a Reply

Your email address will not be published. Required fields are marked *