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Economics, Politics and Historiography: Hayyim D. Horowitz and the Interrelationship ofJews and CapitalismAuthor(s): Daniel GutweinReviewed work(s):Source: Jewish Social Studies, New Series, Vol. 1, No. 1 (Autumn, 1994), pp. 94-114Published by: Indiana University PressStable URL: http://www.jstor.org/stable/4467437 .

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Economics, Politics and Historiography

Hayyim D. Horowitz and the

Interrelationship of Jews and

Capitalism

Daniel Gutwein

n his essay "Theory and Praxis" (1903) the economist and Zionist activist Hayyim Dov Horowitz wrote:

Everyone today is searching for a "Zionist theory"-a complete and all-inclusive theory which will encompass all aspects of our movement and elucidate them with the prescience of the newest laws of sociology. What we need now is a "Zionist Marx" who will clarify the foundations of Zionism for us as deeply as "their Marx" explained the theory of social development and, specifically, the foundations of the "workers movement."'

The desire for a "Zionist Marx" reflected the contemporary intellectual

atmosphere-dominated by positivism and Marxism in their various forms-in which repeated attempts were made to apply scientific prin- ciples to social and moral questions.2 The Zionist intelligentsia was not indifferent to the prevailing vogue, and often presented Zionism as a scientific deduction of the objective laws dictating social life. These theoretical exigencies led to ambitious efforts to examine Jewish his-

tory-in particular, its economic and social aspects-in order to un- cover the specific forces and laws that directed and shaped Jewish life in the diaspora.

Horowitz assumed an important role in this theoretical effort, and his reference to the concept of a "Zionist Marx" is indicative of the



consciousness that guided his literary activity. In a series of writings published between 1898 and 1905, he addressed a variety of issues in the general area of political economy, while focusing specifically on Jewish economics, sociology and history. Modern scholars have shown interest in Horowitz's economic and sociological writings but have overlooked his historiographical contributions, in which he attempted to explain the economic laws that determined the social and political status of the Jews in the diaspora, particularly in their encounter with capitalism.3 Horowitz's historiographical work was clearly linked to the theory advanced by the German economist and historian Wilhelm Roscher on the interrelationship of economic, social and political factors inJewish life in the Middle Ages. Horowitz's historical studies were not merely academic in nature; rather, he used historical analysis to legitimize his political views about the future of the Jewish people. Indeed, during the 1898-1905 period, his scholarship underwent several theoretical metamorphoses paralleling, and stemming from, changes in his own political outlook.

The present study will discuss Horowitz's theory of Jewish economic and political development in the diaspora, its relationship to Roscher's thesis, and the modifications it underwent. Horowitz's works constitute one of the first and most influential steps in the development of aJewish economic historiography in the fullest sense: it not only described the economic side of Jewish life, but also ventured to analyze the course of Jewish history within the framework of an inclusive economic theory. At the same time, his theories reflect contemporary political and ideological struggles. Thus, research into Horowitz's work contributes to an under- standing not only ofJewish economic history, but also of the development ofJewish historiography and of the Zionist conception of the Jewish past.

Wilhelm Roscher and the "law of inversion"

In 1875, Wilhelm Roscher, one of the founding fathers of the Historical School in German economics, published 'The Position of theJews in the Middle Ages as seen from the Viewpoint of Economic Policy."4 In this article Roscher sought to indicate those economic factors that determined the political status of the Jews in Europe, not only in the Middle Ages but also in the modern period. The crux of Roscher's thesis was a quasi-axiom which maintained that economic development negatively influenced the political status of the Jews in medieval Europe, a consequence, according to Roscher, of the special economic function that the Jews fulfilled as a trading people.5 In the absence of an indigenous middle

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class, European commerce in the early Middle Ages gradually came to be dominated by Jewish merchants, who both preserved and improved upon the commercial techniques of the ancient world. The Jews' economic importance was also reflected in the political sphere, and the need for their almost indispensable commercial services guaranteed their various privileges. This situation, however, changed with the renewed growth of European commerce in the wake of the Crusades; Christian merchants learned commercial techniques from the Jews, who then became "ex-

pendable." This economic transformation had political ramifications, manifested in the various expulsions of theJews in the late Middle Ages.6 Roscher emphasized that the anti-Jewish persecutions of the later Middle

Ages were motivated by economic interests, being "in large measure a

product of trade jealousies." The persecutions and expulsions, as he saw it, were initiated by the emerging Christian merchant class as a means of

ousting the Jews from their economic positions with the purpose of

replacing them altogether. Beginning in the ninth century in the Medi- terranean basin, where an ancient commercial culture had been preserved, the anti-Jewish measures had spread by the end of the 1 1th century to the Germanic peoples of northern Europe, following the direction of economic development from west to east.7 Upon their expulsion from western Europe, Jews were welcomed in underdeveloped countries, such as Poland and Turkey, where the lack of a local middle class gave rise to a demand for their commercial and financial services.8 The crux of Roscher's thesis is, then, the antipodal relationship between the level of economic development in the European countries and the political status of theirJewish communities-a relationship that might be called "the law of inversion." In other words, the more highly developed the commercial culture, the worse the status of the Jews.

The law of inversion, in Roscher's account, lost its relevance with the rise of capitalism. In modern Europe, as the Christian middle class

grew stronger, its fear of Jewish competition decreased, while its will-

ingness to acknowledge the need to improve the Jews' political status increased. This trend, first apparent in Renaissance Italy, spread across northern Europe from west to east, following the expansion of capitalism. Change was already evident in England and the Netherlands by the 17th century; it reached France during the 1789 Revolution, and

Germany during the democratic revolutions of 1848.9 The law of inversion, however, did not lose its pertinence altogether. The aristocracy and clergy-who had not been involved in commercial activity in the Middle Ages and thus had not partaken in anti-Jewish persecution- now became the chief opponents of Jewish emancipation as part of their opposition to capitalism and the modern state.'0

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The law of inversion fits well, both theoretically and methodolog- ically, into Roscher's historiography. On a theoretical level, the claim that commercial activity in the early Middle Ages was dominated by Jews is essential to Roscher's contention regarding the extinction of

indigenous European commerce; this later argument in turn is fundamental to his analysis of medieval economic history.11 Methodolog- ically, Roscher attempted with the law of inversion to provide a

counterweight to the moral idealism of Heinrich Graetz's version of medieval Jewish history.'2 The law of inversion, however, also had

political implications. According to Roscher, the anti-Jewish policies of the Middle Ages were circumstantial, the result of particular conditions that prevailed at a specific stage of European economic

development. Persecution of the Jews, then, was not the product of

any inherent antisemitism in European-and particularly German-

society. This was consistent with Roscher's own philosemitic view that theJews deserved emancipation and were capable of integration into modern European society.13

Over the years, as Toni Oelsner has noted, Roscher's thesis became

popular among scholars and influenced the development of modern

Jewish historiography. Historians and economists, Jewish and non-Jew- ish alike, integrated Roscher's thesis into their own studies of medieval

Jewish history as well as of other aspects of European economic history of that period. This popularity stemmed from "Roscher's authority and his striking metaphors and broad formulations and generalizations," and, more importantly, it emanated from the adaptability of the thesis for political purposes: its appropriation by ideologies in which the

Jewish Question was central. Oelsner has even pointed out that despite Roscher's professed philosemitism, his emphasis on a special economic role for the Jews, "once deprived of its philosemitic and liberal guise ... could be turned into models for and instruments of the destructive Nazi 'Jewish science'," thus making Roscher no less than "the grandfa- ther" of that "science." On the other hand, "Jewish historians, proud of Jewish achievements, echoed [Roscher's] same doctrine, and even reinforced it." In this way, despite its lack of "scientific" significance, Roscher'sJewish thesis achieved the status of an historical truism.'4

The influence of Roscher's Jewish thesis can clearly be discerned in Zionist ideological debates. Roscher's law of inversion, which linked the persecution of the Jews in medieval Europe to the development of

capitalism, was of great interest to Zionist polemicists. It was through Hayyim Dov Horowitz's writings that Roscher's thesis came to exert a direct impact on Zionist politics, and, as a consequence, on Jewish historiography.

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Horowitz's version of the "law of inversion"

Horowitz was born in 1862 in Gorki in Belorussia, then part of the Russian Pale of Settlement, and raised in traditional Jewish surround-

ings. After pursuing rabbinical studies in Vienna, he moved in the late 1890s to Berlin to study economics.'5 He was introduced there to the

teachings of the Historical School, including the ideas of Roscher.16 Active in Berlin in Jewish nationalist student circles, he later continued his political involvement in the nascent Zionist movement.

One of Horowitz's major fields of interest was the influence of

capitalism on Jewish economic, social and legal history. From 1898- 1900, he published three separate works in Hebrew on these subjects; taken together, these studies comprise an organic whole that will be referred to below as Horowitz's early writings.17 Like Roscher, Horowitz

analyzed Jewish history through the prism of a general socioeconomic

theory, to whose elucidation he devoted a substantial part of his inves-

tigations. Since Horowitz's early writings also addressedJewish political questions, they encompassed his two principal spheres of interest at that time, economics and Zionism.

Horowitz's socioeconomic theory was an original amalgamation of Marxism, the Historical School, marginalism'8 and underconsumption.'9 His central conclusion was that the same laws by which the

marginalists interpreted the economic behavior of the individual also

governed the economic activity of the social organism, which the His- torical School sought to define. This, coupled with the mechanism of

underconsumption, explained, in turn, the alienation, social polariza- tion and competitive nature of capitalistic society as described by the Marxists.20

Horowitz used his socioeconomic theory as the framework for analyz- ing the economic forces that shaped Jewish history. He began with the role played by theJews in the European economy throughout the Middle

Ages.21 In the early Middle Ages the vast majority of Christians were

peasants, whereas the majority of Jews lived in towns and were engaged in commerce and crafts. Through their commercial activity, the Jews enhanced the development of a market economy in Europe, contributing in this way to the undermining of the traditional fabric of medieval society. This process had paradoxical consequences for the Jews. On the one hand, the need for commercial services and crafts increased, and as a

consequence the economic status of the Jews improved. On the other hand, the commercialization of European society attracted Christians into formerly exclusively 'Jewish" professions. Thus, the Christians became competitors of the Jews, a situation detrimental to Jewish economic and

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legal status. The gradual dissolution of the medieval corporate order

brought about the escalation of social and political conflicts, intensifying existing anti-Jewish sentiments and also provoking new resentment. This

Jew-hatred was particularly evident among those strata of European society that were most threatened by the economic transformation: peasants, aristocracy and the church. The class that made the most of the changes initiated by the Jews, the Christian merchant class, also joined the ranks of the anti-Jewish elements, resentful atJewish commercial competition.22 Consequently, the political condition of theJews in the high Middle Ages became anomalous, reflecting the vicissitudes and ambivalence of their economic status.23

Jewish economic power led European sovereigns-who were dependent on theJews' services-to grant them privileges and to protect their lives and property. On the other hand, Jew-hatred made the Jews dependent on that protection, thereby enabling those same rulers to

exploit theJews' precarious situation and, inter alia, to tax them heavily. As hatred of the Jews increased, however, the rulers' ability to protect them decreased. Pressure both from the impoverished aristocracy, whose debts to the Jews steadily increased, and from the rising middle class, which competed with the Jews, was among the factors that even-

tually brought about the various expulsions of theJews during the high Middle Ages. Expulsion was actually the culmination of another, earlier

dynamic: the migration of Jewish merchants who could not compete against their Christian counterparts. The Jewish migrants and refugees turned eastwards to the less-developed countries, which offered an arena for their economic expertise. But the same dynamic was to be

repeated: Jewish activity encouraged economic development, which undermined the traditional social structure, thus provoking hatred toward Jews and their ultimate rejection by Gentile society.24

Horowitz's analysis of medievalJewish history highlights a circuitous

process, conditioned by the interrelationship of the Jews' economic function and the level of economic development of the surrounding society. It was, however, a vicious circle. With each new cycle, the level of commercialization of Christian society increased, and the economic and political status of the Jews worsened. The base of the Jews' economic activity narrowed; they were gradually pushed out of their professions and ultimately they were expelled altogether. The Jews, however, managed to find new sources of income, either by developing new areas of economic activity or by immigrating to less-developed countries. The dominant factor that determinedJewish history, accord-

ing to Horowitz, was the commercial nature of the Jews' economic activity, which at every stage was more advanced than that of the

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non-Jewish population. This cyclic pattern dominated Jewish history until the nineteenth century-that is, as long as the Jews filled special economic functions. With the advent of capitalism and the general commercialization of society, the cyclic mechanism was interrupted. As

Jews lost their distinct economic role, they became redundant, a situation that ultimately made it possible to remove them from society completely. Horowitz described, then, the ever-escalating rejection of the Jews by European society as an immanent result of its adaptation to the socioeconomic dynamic of capitalism.

It would appear that Horowitz generally accepted Roscher's law of inversion. Closer scrutiny of the relationship between their respective theories, however, reveals that the conclusions each drew from that law were antithetical. The contrast becomes particularly clear in their views on the Jews' status in Europe in the age of capitalism. They both agreed that the law of inversion loses its relevance under capitalism, but for

opposite reasons. Roscher assumed that the emergence of a confident

European bourgeoisie that no longer feared Jewish competition paved the way for the integration of theJews within European society. Horowitz

argued, in contrast, that advanced capitalism marked the end of a distinctJewish role in the European economy, a process that would lead to the Jews' final rejection by European society. These contradictory conclusions were indicative of a much more basic difference between the two economists in regard to European economic history. Roscher considered commerce to be external to the medieval European econ-

omy; it was a factor introduced into it by a foreign element, the Jews.25 Therefore, the adaptation of European society to commerce in the Middle Ages necessitated the expulsions of Jews as an integral part of this process. This necessity diminished, however, as commerce became more widespread in Europe, and ultimately led to the emancipation of the Jews. To Horowitz, commerce was already inherent in medieval

European society. Accordingly, capitalism did not create a new dynamic, it merely underscored and enhanced already existing tendencies. In contrast to Roscher, Horowitz thought not only that there was no pros- pect for the integration of the Jews into European society, but also that their rejection by that society, a process that had begun in the Middle Ages, could only be radicalized as capitalism progressed.

Horowitz's "vertical dispossession" version of the

non-proletarianization theory

In 1902, Horowitz further developed his interpretation of the law of inversion by focusing on its dynamic in Jewish history in the age of

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advanced capitalism. He published his conclusions in a series of articles entitled 'The Economic Question and Its Place in our National Move- ment" in the Hebrew periodical Ha-shiloach26 and presented them in lecture-form at the all-Russian Zionist conference in Minsk.27 These articles constituted one of the earliest fully developed explications of the "non-proletarianization theory,"28 which attempted to define the laws governing the Jewish labor market in the capitalist economy. It

sought to explain the non-integration of theJews in advanced industries and their increasing employment in sweatshop manufacturing. In other words, in addition to asking if the law of inversion remained relevant, this theory examined the failure of Jews to merge into the contemporary, developed capitalist economy. In the first decade of the twentieth

century, the non-proletarianization theory-which was used to impart "scientific" legitimization to variousJewish political ideologies-became the center of a lively controversy.29 It had its greatest impact on different factions of socialist Zionists and Territorialists, who used it in their materialist interpretation ofJewish history and as a theoretical basis for a radical rejection of the diaspora on economic grounds. In order to refute these anti-diaspora conclusions, theJewish Socialist Labor Bund, for example,joined the theoretical polemic. In the course of the debate, several versions of non-proletarianization were developed. They differed from one another not only in their theoretical analysis and

empirical support, but also, and most importantly, in their political conclusions.

"The Economic Question and Its Place in our National Movement" was a summary of Horowitz's study of the economic and social condition of Russian Jewry; it was based on detailed statistics generated by the

Jewish Colonization Association on the basis of the 1898 census. Horowitz's aim in this study was to analyze the nature and causes of the extreme poverty characterizing the life of the Jewish masses in the

diaspora, especially in the Pale of Settlement.30 He concluded that this

poverty resulted from the Jewish occupational structure, which was

fundamentally different from that of Christian society.31 In contrast to the Christian population, over half of the Jews within the Pale were

engaged in crafts and over a third in commerce and finance. It was, however, the specific nature of this occupational structure that was the

key toJewish poverty. In every occupational category theJews had been forced out of the more advanced, profitable sections into those that were backward and marginally profitable. This trend was most clearly manifested in the non-integration of theJews into modern industry and their concentration in crafts production carried on in the sweatshop system. Horowitz thus explainedJewish poverty as the result of a process that dominated the Jewish economy in Russia, one that might be called

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"vertical dispossession."32 This meant the eviction of Jews from their former occupations along with their displacement into professionally inferior levels of the same branch of the economy. This process pro- gressively intensified until it reached an apotheosis: the Jews were concentrated into an ever-decreasing number of professions, competition became ever more fierce, and income fell consistently, reaching a

point at which the Jews, evicted completely from the labor market, became paupers.

Horowitz emphasized that there was nothing unusual about this

process in itself; what was abnormal was the specific nature of the Jewish dispossession.33 Although only part of the general dispossession then

affecting the peasantry and petit-bourgeoisie in eastern Europe as a result of capitalization and industrialization, it was distinguished by its vertical character, which stood in contrast to the "horizontal dispossession" of the Christian population, whereby peasants abandoned their

villages and migrated to the cities, where most of them became industrial proletarians and a minority became craftsmen and merchants. Thus, the peasants mainly entered the lower levels of advanced and

developing professions, or they competed with and finally replaced the

Jewish middle class. Horizontal dispossession, then, opened new em-

ployment opportunities for the peasants, prevented their pauperization, and offered them an opportunity for economic

advancement-opportunities denied to the vertically dispossessed Jews. According to Horowitz, the vertical nature of Jewish dispossession

was rooted in the inability of theJewish petit-bourgeoisie to be absorbed into modern industry.34 This was not, though, the consequence of any circumstantial factor like legal restrictions, economic underdevelop- ment or low demand for labor. It was born of a more essential factor: the national antagonism and hostility between theJews and their neigh- bors, an antagonism with clear economic ramifications.35 As a minority, and one that was considered a "foreign element" by society at large, the Jews had been barred from all forms of production associated with land and had consequently become the European middle class. With

only a few exceptions, the government and public sectors were also closed to the Jews. Unlike the Christian middle class, the Jews found ascension to the upper class-which was essentially political in nature- blocked. Thus, national antagonism-the cause of Jewish disbarment from the land, from production, from the government and public sectors, and from politics, as well as of their repeated expulsions- turned the Jews into "eternal wanderers, travelling from one country to another, from one profession to another." This process only intensified in modern times and prevented the Jews from integrating into

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the more advanced sectors of the economy, mainly industry. One rea- son for this intensification was trade union opposition born of national

antagonism: a wariness of competition and an interest in protecting the jobs of Christian workers already employed in those sectors and

professions. Furthermore, the resulting exclusion of Jews from the

production sectors of the economy shaped the Jewish national character, which consequently preferred speculative business based on a quick turnover. This tendency, of course, only reinforced the divorce from

production activities and perpetuated the vicious circle of the Jews' vertical dispossession.

Horowitz formulated the law underlying the process of vertical dis-

possession:36 the lower the profitability of a sector in the economy and the more backward the means and modes of production it employed, the larger will be the number of Jews working in this sector. Similarly, the condition of the Jews deteriorates in direct proportion to the rate at which commerce, industry, science and technology advance. By placing the Jews in backward, deteriorating sectors of the economy, vertical dispossession, according to Horowitz, contradicted the trends in the development of modern industrial capitalism. The dependence of the Jews on retarded methods of production not only made them

economically superfluous, it also turned them into an antisocial element. Thus, in Horowitz's view, Jews were inherently hostile to economic and industrial development, which eventually denied them their sources of livelihood. He emphasized that the process of vertical dis-

possession and its consequences characterized the Jewish economy not

only in the Pale of Settlement but also in the developed capitalist, liberal West. ThoseJews who emigrated to an industrially developed, politically liberal country like England, therefore, found work mostly in sweat-

shops and failed to rise into the class of industrial workers.37 The central contention of Horowitz's version of the non-proletari-

anization theory was that vertical dispossession was the way the Jewish economy adapted-or, actually, did not adapt-to capitalism. As to its causes, Horowitz claimed that vertical dispossession was an inherent result of the national antagonism felt toward the Jews by their neigh- bors, and of the national character of the Jews, which to a large extent was determined by this antagonism. Employing this argument, Horo- witz ruled out the possibility of continued Jewish existence in the

diaspora, whether in the economically backward countries of eastern Europe or in the advanced capitalistic countries of the West. This assertion of a dichotomy between the dynamics of the Jewish economy and that of capitalism was clearly connected to Roscher's law of inversion. Just as with Horowitz's earlier writings, however, the economic

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and political conclusions of his non-proletarianization theory were opposed to Roscher's. Roscher believed that the law of inversion was born of the commercialization of Europe, which increasingly made the Jews' special economic function superfluous. In contrast, Horowitz posited that the law of inversion was a result of the barriers that the Jews, as a

persecuted minority, faced in integrating themselves into the industrial

economy, a process that only intensified with the advance of capitalism. Roscher assumed that the relations between Jews and gentiles were

dynamic, changing from positive to negative and vice versa, in tandem with the shifting economic and social conditions of the non-Jewish

surroundings. Horowitz, in contrast, assumed that these relations were, on the whole, static, of a negative nature, and that the only changes were those of degree, not of kind. For Roscher, gentile attitudes toward the Jews were determined by economic factors, which also influenced

politics. Horowitz emphasized that national and religious antagonism determined Jewish-Gentile relations; in other words, an ethnic factor was at work that had ramifications in the economic sphere.

In its premises, the vertical dispossession version of the non-proletarianization theory was opposed notjust to Roscher's law of inversion, but also to Horowitz's own early writings. In his earlier analysis, Horo- witz had explained the impossibility ofJewish integration into European society as being inherent in the dynamic of capitalism; accordingly, he was adamant in his rejection of the diaspora. In his non-proletarianization theory, this rejection became qualified. Lack ofJewish integration was presented as a consequence of ethnic conflict between the Jews and the surrounding societies that functioned as an economic factor as well; however, these conflicts, as Horowitz would later argue, might be mitigated.3 The nature of his divergence from Roscher's thesis also

changed. In his early writings, Horowitz had differed with Roscher over the nature of the economic dynamic that regulated Jewish relations with the non-Jewish world. In his non-proletarianization theory, this

argument no longer revolved around the nature of that dynamic, but, rather, around its ramifications.

Horowitz's legal-emancipationist interpretation

In 1905, Horowitz again discussed the Jewish Colonization Association's work on the Russian census, this time in a series of articles in the Yiddish

periodical Dos leben.i Whereas in 1902 he had placed a socioeconomic factor-Jewish poverty-at the center of his analysis, he now focused on a political question: to what extent were the Jews free to manage

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their own economic life and what political and legal factors determined the different nature of theJewish economy?40 Horowitz maintained that the basic conditions for normal economic development in the modern

age were freedoms of movement, occupation and residence. Accord-

ingly, the prime cause of the difficult Jewish economic situation in Russia was their legal status, the fact that they were denied these

freedoms.Jewish residence was restricted to the Pale of Settlement, and even there it was largely limited to non-rural areas. The process of

expulsion of the Jews from the villages, which reached its height in the 1880s, began with the liberation of the serfs in the 1860s; in an effort to aid the peasantry, a series of laws had been enacted that forbade the

Jews from purchasing land in various regions within the Pale and Poland.4' These restrictions circumscribed the economic basis of the rural Jewish population42 and forced the Jews to crowd into towns and

townships in increasing numbers, thus limiting their sources of income there too.43 Had the Jews been allowed freedom of residence and

occupation all over Russia, they could have improved their economic situation. In addition, their experience with capitalistic practices could have fostered the modernization of the Russian village.44 Thus, the restrictive tsarist policy vis-a-vis the Jews proved detrimental to the Russian village itself, whose modernization was hindered by a lack of

entrepreneurial elements. The same was true with regard to Jewish craftsmen, who could have contributed to the development of light industry in industrially underdeveloped Russia. Half of theJewish work-

ing force in the towns and townships of the Pale made its living in crafts.45 In spite of massive emigration, the number ofJews engaged in crafts continued to grow relative to demand, and the excess supply of

Jewish craftsmen caused widespread unemployment, leading to

pauperization and even starvation. As in his non-proletarianization theory, Horowitz once again portrayed the pathetic state ofJewish crafts as being in full retreat in the face of industry. Now, though, he stressed

political factors as forming the basis of this situation: the ubiquitous legal and administrative restrictions, and the Pale of Settlement in

particular.46 The tsarist bureaucracy hindered Jewish craftsmen even in

regions where they had formerly been permitted to settle. Thus, in the wake of the May Laws of 1882, Jewish craftsmen were evicted from

villages, and these nowjoined the already dispossessed town craftsmen in their overcrowded professions.47

The Jewish response to the insufficient sources of livelihood was

migration, inside Russia and abroad. It is noteworthy that whereas Horowitz makes only superficial mention of Jewish emigration, he discusses the phenomenon of migration within the Pale in detail.48 The

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Jews moved from the northern and western regions of the Pale to the less-crowded south and east, as well as to Poland. Pointing to this trend, Horowitz emphasized that the Jews preferred to find occupational opportunities in their professions through domestic migration within Russia. He concluded, therefore, that the only possibility for improving the economic situation of Russian Jews was to shatter the vicious legal circle in which they lived; namely, abolishing the Pale and opening up all of the Russian Empire to free Jewish settlement.49

A comparison of Horowitz's 1905 analysis with his version of the law of inversion and the non-proletarianization theory clearly reveals a fundamental theoretical shift and an ongoing process of moderation in his views. His pre-1905 analyses pointed to the dominant influence, whether direct or indirect, of economics on theJews' legal standing. By 1905, however, he had reversed his interpretation of causes and effects; he now pointed to the Jews' legal status as the factor that determined the structure of the Jewish economy. Horo- witz changed his views in regard to yet another basic aspect of

European Jewish history: the future relations between Jews and non-

Jews. In his pre-1905 analyses, he insisted that the prospects for

Jewish life in Europe were of an absolutely negative nature, that the economic and legal deterioration of European Jewry was immanent and ineluctable as a result of both their economic role and the

dynamics of capitalism. Thus, his version of the law of inversion

challenged Roscher's contention that the advance of capitalism would bring ever-greater acceptance of theJews by European society. Horowitz's non-proletarianization theory already marked a certain moderation on his part. Now, in 1902, he claimed that vertical

dispossession was not the result of any factor immanent to the capitalist dynamic; rather, it sprang from ethnic conflict between Jews and non-Jews and from the Jewish national character.

This moderation found expression in relation to Roscher's thesis, too: Horowitz now left open the possibility of Jewish integration into modern industrial society, though this would still be dependent on a

change in the economic role of the Jews. By 1905, the negative ineluc-

tability of a Jewish future in Europe had disappeared altogether, and the state of the Jewish economy was presented by Horowitz as born of circumstantial political conditions. He now assumed that no constant factor-neither the dynamics of capitalistic development, nor gentile Jew-hatred, nor even the Jewish national character-constituted an inherent obstacle to the normalization of the Jewish economy. On the

contrary, Horowitz indicated that it was actually possible to normalize the structure of the Jewish economy by improving the Jews' legal status.

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In 1905 Horowitz also changed his attitude toward Roscher's law of inversion and came to accept its premises in full. In accordance with Roscher's presupposition that the economic and legal standing of the

Jews worsened in the early stages of capitalism, Horowitz pointed to the liberation of the serfs and Russia's growing capitalism since the 1860s as the prime causes of the deterioration in the overall situation of Russian Jewry. Similarly, he accepted Roscher's contention that the

bourgeoisie gradually modified its policies toward the Jews until their eventual emancipation. Horowitz now maintained that the advance of

capitalism in Russia and the growing need for the Jews' commercial

experience would reverse tsaristJewish policies, thereby bringing about, finally, the opening up of the Pale and the normalization of the Jewish economy.

Horowitz's Jewish economic history and Zionist politics

Over the span of five years, from 1900-1905, Horowitz had gradually, but radically, changed his interpretation of the salience of the economic factor in Jewish history. A central aspect of this metamorphosis in his historical analyses was its intimate relationship to changes in his political beliefs and to the political goals he set for himself in his own role as an actor in the Jewish pubic arena during those same years.

From 1898 to 1900, Horowitz was active in the politics of the emerging Zionist movement. The declared aim of his early writings was to use economic-historical analysis in order to present Zionism as the only solution to the negative dynamic of Jewish life in the diaspora. Aside from their propaganda-oriented intention of suggesting a general "scientific" legitimization of Zionism, Horowitz's early writings were appar- ently meant to serve another concrete political objective: support of Herzl in his struggle against Ahad Ha-Am. Herzl's "political Zionism" concentrated on finding a solution for the distressed material condition of the Jews in the diaspora (particularly the physical danger of antisemitism) by evacuating the Jews from Europe and concentrating the

Jewish people in a territory of its own. In contrast, Ahad Ha-Am focused his "spiritual Zionism" on the distress of Judaism, as reflected mainly in assimilation, which he saw as Jewry's principal danger. The great majority of Jews, Ahad Ha-Am claimed, would continue to live in the

diaspora; thus, the main effort of Zionist politics had to be directed toward creating a "spiritual center" around which a new national and cultural Jewish identity would be formed, one that could fill the void left by the estrangement of the modern Jew from religion.5

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In his early writings, Horowitz clearly opposed Ahad Ha-Am.51 "Zi- onism," Horowitz had stressed, "cannot be just a spiritual movement whose sole aim is the creation of a 'center ofJudaism' and maintenance of our cultural wealth." Zionism would only fulfill its function if it "solves the whole of the Jewish question, not a part of it." He paraphrased a well-known maxim by Plekhanov: "If Zionism won't be political-that is, won't address both our material and our spiritual needs-then it won't be at all." In the spirit of Herzlian Zionism, Horowitz also argued that the realization of Zionism would require the movement to consider not only the aspirations of the Jews, but also the exigencies of the international political situation. In addition to these explicit pro-Herzl- ian pronouncements, the whole concept of Horowitz's early writings stands in opposition to Ahad Ha-Am's ideology. The claim that the

dynamics of capitalism makes aJewish future in the diaspora untenable was a direct challenge to Ahad Ha-Am's perception of the viability of the diaspora. Furthermore, Horowitz maintained that one of the ways that capitalist economies solve their problems of overpopulation was through migration to unsettled lands.52 Thus, he gave theoretical back-

ing to Herzl's scheme by presenting the idea of the territorial concentration of theJews as consistent with the laws of capitalist development. The centrality of this polemical raison d'etre-the support of Herzl's

struggle against Ahad Ha-Am-to Horowitz's work is underscored by the fact that between 1898 and 1900, at the height of the struggle, he

published this economic-historical interpretation of Zionism in three different Hebrew forums.

In 1902, however, Horowitz began to change his political views and

goals, a change that was reflected in his perception of the structure and

dynamics of the Jewish economy. In a series of articles in Ha-Shiloach that year, he described how the process of vertical dispossession was

turning the Jews into an insecure, passive, apathetic and dreamy body of utopianists, and observed that "this world view is counter to the Zionist idea that demands practical action from its adherents."53 In order to transform the Jews into a politically active and initiative-taking people, he recommended that the Zionist movement concentrate its activities in the "here and now"-i.e., the diaspora-and devote a special place "to raising our economic standing and repairing our material life at the present time." Horowitz argued that a precondition for

realizing Zionism was the arrest of the process of pauperization, by changing the character of Jewish dispossession from vertical to horizontal. Admitting that any reform of the Jews' economic condition in the diaspora would only be a palliative, as it could not change the

fundamentally negative dynamic of theJewish economy, Horowitz nev-

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ertheless emphasized that without improvement in the economic situation in the diaspora, "Zionism will be unable to make inroads among the masses of Jews seeking only to make a living wage." The most efficient way to improve the Jews' economic position and to educate them for common public action, he thought, would be through the

operation of Jewish cooperatives: productive, service, marketing, con-

suming and credit-supplying. Pointing to the special interest of Zionism in such projects, Horowitz proposed that the Zionist movement assume the task of encouraging the establishment of a Jewish cooperative movement. In another 1902 article, Horowitz reiterated his views re-

garding the prospects of Zionism and of the Jewish economic situation in the diaspora, arguing that it was the depressed economic condition of the Jewish people that kept them from absorbing the Zionist idea. One of Zionism's first priorities, therefore, ought to be to involve itself in schemes that were designed to improve the economic condition of

diaspora Jews.54 Horowitz's views regarding the importance of the "here and now"

work of Zionism reflected a significant transformation in his political thinking and activities. From this point on, he distanced himself from Herzlian Zionism; improved economic conditions in the diaspora became for him a necessary precondition for Zionist success. Accordingly, Horowitz sought to transfer the political and ideological emphasis of Zionism from diplomatic negotiations and settlement activity in Pales- tine to the economic rehabilitation of theJews in the diaspora. His main effort in this regard was through the encouragement of aJewish cooperative movement. In the years preceding the First World War, Horowitz became the supervisor of the saving and loan societies established in Russia by the Jewish Colonization Association and was the leading the- oretician of Jewish cooperativism.55 His version of the non-proletarianization theory, particularly the concept of vertical dispossession, supplied him with the necessary theoretical framework for the initial stage of the revision of his Zionist ideology. His analysis of non-proletarianization pointed to the Jewish national character, rather than capitalism as such, as the prime cause of the abnormal structure of theJewish economy. As such, it was this "national character" that Horowitz now sought to change by encouraging the Jewish cooperative movement.

Horowitz's 1905 analysis of the causes of Jewish destitution and

pauperism in Russia was a further sign of his gradual detachment from

political Zionism and his growing preference for economic activity in the diaspora. Anticipating liberal changes in Russian politics, Horowitz

adopted the foundations of emancipationist ideology. In contrast to his earlier analyses, he now thought it possible to fundamentally alter the

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dynamic ofJewish economic life in the diaspora and thus normalize its structure. Zionism as a solution to the Jewish problem in Russia was

replaced by reform of the legal status of Russian Jews. Chief among these reforms was the dissolution of the Pale of Settlement and the removal of other restrictive regulations to allowJews freedom of inter- nal migration within the tsarist empire. Horowitz's theory of non-proletarianization had presented the reformation of Jewish economic life in the diaspora as only a means of preparing the Jews for Zionism; now economic reform became an end in and of itself. The adoption of an

emancipatory ideology also lay at the heart of Horowitz's acceptance of the Roscher thesis, which was originally developed to explain the

probability of eventual emancipation.

Partisan and "scientific" historiography

Horowitz's analyses of Jewish socioeconomic history provide an exam-

ple of a wider body of literature of partisan Jewish historiography that

developed in the formative years of Zionism. This historiography sought at one and the same time to revive the ancient past in order to make it the focus of an idealized modern Jewish identity and to substantiate the Zionist world view through scientific-like analyses of the recent past and contemporary events.56 As Horowitz's historical writings clearly show, however, this partisan historiography was not devoid of scientific

significance. The historical discourse that developed around these anal-

yses encouraged critical study of the economic history and sociology of the Jews and played a role in the creation of a "scientific" Jewish historiography.57

The aims of Horowitz's historiography were, first and foremost, political, and any change in his political goals provoked a parallel change in his studies ofJewish economic history and sociology. Despite this political motivation, which was reflected inter alia in a variety of

contradictory conclusions, Horowitz's writings did make a productive scholarly contribution. He was among the first to raise substantive

questions concerning the interrelationship of various socioeconomic

phenomena in Jewish life; he also developed and examined a series of

hypotheses in search of possible answers. Horowitz's pioneering role and contribution suggest not only that partisan historiography did not

necessarily conflict with critical scholarship, but also that it might even

help to open up new fields of study. Moreover, it would seem that in Horowitz's case the scientific contribution of his historiography came not in spite of its political nature, but as a result of it.

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Notes

1 AhiasaflO (1902-1903): n.p. 2 See, for example, David Thom-

son, Europe Since Napoleon (Harmondsworth, 1978), 428-55.

3 See, for example, Ephraim Kleimann's article in Divrei ha-

akademiya ha-leumit le-madaim 6

(1977): 1-12; Matityahu Mintz, Ber Borokhov (Tel Aviv, 1977), 59- 62; Shmuel Almog, Zionism and

History (New York, 1987), 219-21. 4 For the German original of the ar-

ticle, see Wilhelm Roscher, "Die

Stellung derJuden im Mittelalter, betrachtet vom Standpunkt der al-

lgemeinen Handelspolitik," Zeitschriftfiir die Gesamte

Staatswissenschaft31 (1875): 503- 26. For the English translation of the first part of the article, see HistoriaJudaica 6 (1944): 13-26; the quotes used below are from the English translation. On Roscher's thesis, see Guido Kisch, "The Jews' Function in the Medi- eval Evolution of Economic Life: In Commemoration of the Anni-

versary of a Celebrated Scholar and His Theory," HistoriaJudaica 6 (1944): 1-12; Toni Oelsner, "Wilhelm Roscher's Theory of the Economic and Social Position of the Jews in the Middle Ages: A Critical Examination," YIVO An- nual ofJewish Social Studies 12

(1958-59): 176-95; idem, "The Place of the Jews in Economic

History as Viewed by German Scholars: A Critical-Comparative Analysis," Leo Baeck Institute Year Book 7 (1962): 183-212.

5 Roscher, 14. 6 Ibid., 18-20. 7 Ibid., 20-23.

8 Ibid., 23-25. 9 Ibid., 25. 10 Ibid., 26. 11 Oelsner, "Roscher's Theory," 178-

79, 182-83. In this respect there is a similarity between Roscher's

interpretation and Pirenne's. It should be noted, however, that in contrast to the emphasis that Roscher places on Jewish commerce, Pirenne emphasized that the role of Jewish commerce in medieval Europe should not be

exaggerated: Henri Pirenne, Eco- nomic and Social History of Medieval

Europe (New York, 1937), 10-11. 12 Roscher, 13-14. 13 Oelsner, "German Scholars," 187-

88; Paul R. Mendes-Flohr, "Wer- ner Sombart's: The Jews and Modern Capitalism: An Analysis of its Ideological Premises," Leo Baeck Institute Year Book 21 (1976): 87-108.

14 Oelsner, "German Scholars," 177, 184; idem, "Roscher's Theory," 187-88. On Roscher's influence on Max Weber and Werner Somb- art, see Julius Carlebach, Karl Marx and the Radical Critique ofJu- daism (London, 1978), 214-34.

15 For Horowitz's biography, see En-

cyclopaediaJudaica, vol. 8, 989; on his economic writings, see Kleimann; on his Zionist activity, see Joseph Klausner, Opozitsiya le- Herzl (erusalem, 1960), 20-24, 51-69, 79, 95, 109, 111-12, 172, 194-95; Horowitz's fame is reflected in the fact that by 1904 an

entry on him appeared in The Jew- ish Encyclopedia, vol. 6, 507.

16 The Historical School rose to

prominence in Germany during

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the latter half of the nineteenth

century as a critique of the Classi- cal School of political economy. The former attacked the deduc- tive, abstract and static nature of the Classical School for which the abstract individual was the subject of economic activity and, conse-

quently, the object of economic

analysis. In contrast, the Histori- cal School argued that the object of economic analysis must be particular social bodies, such as the nation or the state. Together with its emphasis that economics could be understood only as part of a matrix of expressions of social life, the Historical School further claimed that the economic

activity of societies, nations and states has an historical dimen- sion. Because the historical factor acquired central importance for

comprehending the nature of economic activity, the Historical School concentrated on the study of economic history as a condition for the study of economics. On Horowitz's connection to Roscher, see Hayyim D. Horowitz, Ha-mammon (Warsaw, 1900), 22- 26. On the Historical School, see

Jacob Oser and William C. Blanchfield, The Evolution of Eco- nomic Thought (New York, 1975), 199-219; Eric Roll, A History of Eco- nomic Thought (London, 1961), 303-11; Charles Gide and Charles Rist, A History of Economic Doctrines (London, 1950), 383-409.

17 The works are as follows: (1) Ho- rowitz, Ha-mammon, 215-240. The book was presented to the censor for approval in 1898; for a discus- sion of the book see Kleimann. (2) Horowitz, Mi-mizrah u-mi-

maarav, 4 (1899): 79-101. (3) Ho- rowitz, Ha-tsfira, 25January 1900, 5 February 1900. The relationship between the three articles is found not only in their content but also in their reiteration of the same points in almost identical fashion. In addition, in his article in Ha-tsfira, 31 January 1900, Ho- rowitz refers to his article in Mi- mizrah u-mi-maarav.

18 A concept developed by neoclassi- cal economists since the 1870s. The marginalists emphasized the

importance to economic analysis of the concept of the amount of satisfaction obtained from the

consumption of the last unit of a

good or service. In his theory Ho- rowitz extensively used the "law of

diminishing marginal utility" that

points to the decline of the amount of satisfaction derived from the consumption of succes- sive units of the same good or service. On marginalism, see Oser and Blanchfield, 220-76.

19 An heretical economic theory de-

veloped mainly during the Great

Depression of the late 19th cen-

tury. It claimed that production in modem industrial economies is curtailed by underconsumption, a situation when manufac- ture of goods is in excess of consumer demand. Accordingly, depressions, with their accompa- nying unemployment, are caused

by the failure of consumption to

keep pace with the increase of

productive power so as to furnish a full and equable employment for this power. On un-

derconsumption, see Oser and Blanchfield, 404-12.

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20 On Horowitz's general socioeconomic theory, see Ha-mammon, 45-58, 68-81, 215-32; Mi-mizrah u- mi-maarav, 79-88.

21 Mi-mizrah u-mi-maarav, 90-99; Ha- tsfira, 28 January 1900, 29 January 1900, 30January 1900, 2 February 1900.

22 Mi-mizrah u-mi-maarav, 92-95; Ha-

tsfira, 29January 1900; Ha-mammon, 65-67.

23 Mi-mizrah u-mi-maarav, 92-97; Ha-

tsfira, 29 January 1900, 2 February 1900.

24 Ha-tsfira, 30 January 1900. 25 See note 11. 26 Ha-shiloach 9 (1902): 17-32, 130-

49, 305-30; ibid., 10 (1902): 57- 72, 110-27, 328-37, 400-12.

27 Mordekhai M. Nurok, Veidat tsionei rusia be-minsk (Jerusalem, 1963), 69-70.

28 In his remarks on the origins of the theory of non-proletarianization, Borochov claimed: "It devel-

oped in an unintended (stichi) fashion," particularly amongst Poale Zion circles; however, "its creator was the doctor H. D. Ho- rowitz (in the year 1902)." Ber Borokhov, Ktavim nivkharim, II (Tel Aviv, 1944), 204; see also Borokhov, Ktavim, II (Tel Aviv, 1958), 218. On the theory of non-

proletarianization, see my article in Shvut 14 (1990): 141-86. The two most important versions of the non-proletarianization theory are Horowitz's article in Mi-mizrah u-mi-mizrah; and Jacob Lestschinsky, Deryidisher arbeter in rusland (Vilnius, 1906).

29 On its popularity, see Borochov's remarks on "the famous non-proletarianization theory" in Borokhov, Ktavim, II, 310.

30 Ha-shiloach 10 (1902): 60. 31 Ibid., 62-72, 110-13. 32 Ibid., 114-18. 33 Ibid., 114. 34 Ibid., 331. 35 Ibid., 119-27, 110, 124. 36 Ibid., 122, 125, 328, 331. 37 Ibid., 125-26, 328. 38 See below. 39 Dos leben (Petersburg), January

1905, 105-19; February 1905, 107- 119.

40 Ibid., January 1905, 105. 41 Ibid., 111-13. 42 Ibid., 113-19. 43 Ibid., 106-108. 44 Ibid., 119. 45 Dos leben, February 1905, 107-18. 46 Ibid., 110-11. 47 Ibid., 114-15. 48 Ibid., 108-11. 49 Ibid., 118-19. 50 On the disagreement, see David

Vital, Zionism: The Formative Years (Oxford, 1982), 24-35; Ahad Ha- Am, 'The Jewish State and the

Jewish Problem," in his Ten Essays on Zionism andJudaism, (London, 1922), 32-55. Horowitz also viewed this difference in the above terms. See AhiasiaflO (1902-103): n.p.

51 Ha-tsfira, 25 January 1900, 5 Feb-

ruary 1900. 52 Ha-mammon, 71-75. 53 Ha-shiloach 10 (1902): 329, 333-

37, 400-12. 54 AhiasaflO (1902-1903): n.p. 55. EncyclopaediaJudaica, vol 8, 989;

Leksikon fun der nayer yidisher literatur 104-106.

56 Almog, 219-21. 57 The clearest example of this rela-

tionship is provided by the work of Jacob Lestschinsky, who began his study of applied Jewish sociol-

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ogy and demographics as one of the leaders of a Territorialist-So- cialist party and later became the founder of this science, mainly through his activity at YIVO. See

EncyclopaediaJudaica, vol. 11, 50- 52. The theory of non-proletarianization had a particularly important influence on the devel-

opment of this scholarship. In

spite of the fact that it was formulated to serve the needs of a politi-

cal struggle, it encouraged, through its influence on Borochov's and Lestschinsky's writings, the study ofJewish demo-

graphics and economics in historical perspective. Thus, it is

possible to consider the theory as one of the sources of "scientific"

Jewish sociology and economic

historiography.

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