Clause 61: The Pushback Blog

Because ideas have consequences

Persecution, Hard Work and the One Percent

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In late January, the venture capitalist Tom Perkins wrote a brief letter to the Wall Street Journal where he drew a comparison between the attitudes toward Jews in 1930s Germany and attitudes toward high-income people in America today:

Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its “one percent,” namely its Jews, to the progressive war on the American one percent, namely the “rich.”
— Letter to the Wall Street Journal, 24 Jan 2014,

Perkins was widely criticized for this comparison, and subsequently apologized for the specific analogy, saying:

Kristallnacht should never have been used. The Holocaust is incomparable.
— Tom Perkins, quoted in “VC Perkins: Ignore Protesters Against Silicon Valley’s Rich”, The Wall Street Journal,

Chicago businessman and investor Sam Zell pitched in this month, saying:

The 1 percent work harder, the 1 percent are much bigger factors in all forms of our society.
— Sam Zell, quoted in “Sam Zell: ‘The 1 percent work harder'”, The Chicago Tribune,,0,2270803.story

Working Hard as Justification

J. T. O’Donnell recently raised an interesting challenge to claims of working hard:

Aren’t we all guilty at times of thinking we work harder than others? And, doesn’t that make us prone to thinking we deserve more than others too?

See the problem this creates?

I think it’s very similar to a marriage. When both spouses think they are contributing more than the other, they often end up divorced.
— J. T. O’Donnell, “Do You Work Hard?…Really?…I Don’t Think So.”,

She has a point: how do you substantiate claims of who works harder? More importantly, what claim does it give you if it’s true?

I don’t think it’s fair to say that Sam Zell works harder than people I know. I do think it is accurate to say that what Sam Zell works hard at is more remunerative than the activities at which people I know work hard.

This whole argument about working hard is an unfortunate distraction. You can find a thousand people who are willing to work hard, provided there is no risk, before you find one person who is willing to take risks. Under a properly working capitalist system, the person who takes the risks will have greater returns than the people who work hard but do not take risks. The person who takes risks is the bottleneck resource. Without her, nobody makes progress.

Neither is job stress a justification. There is stress that pays $20 an hour, and stress that pays $500,000 a year. Choose your stress. Where I used to live, my polling place was a vocational school, where there was a sign that said:

If you have a job with no aggravation, you don’t have a job.

Risk-taking, Hard Work and Persecution

Perkins’ argument is more interesting, particularly in the light of European history. Yes, there is no current comparison between the current political context and the Nazi persecution of Jews after Hitler came to power in 1933. However, Hitler did not force his racial program on a hostile polity. There was more than enough of an anti-Semitic tradition extant in Germany to build upon.

Economic Roots of European Anti-Semitism

Jews had been marginalized in Europe legally, socially and economically going back to the Middle Ages. Often they were forced to find ways to make a living that the Christian population was not interested in pursuing, and they became good at these. Many kingdoms prohibited Jews from owning land, and guilds frequently closed their doors to Jews. Thus, Jews were often relegated to trading, which had lower status than farmers or artisans.

The Third Lateran Council (1179) declared anyone lending money for interest anathema; this position was restated by several subsequent popes. There was no reason to make a business of lending money without any return, and this put a brake on capital formation. Since money-lending was proscribed to European Christians, the field was left open to Jews. Somebody had to do the lending or the economic development of the West would not have occurred. The same governments that upheld the papal injunctions against money-lending had no qualms regarding living beyond their means and borrowing the difference.

Historical persecution of Jews also led them to value learning. While wealth could be confiscated by the local lord or prince, no one could take away your learning.

Thus, Jews were left very well positioned to succeed in an economy where capital was the bottleneck resource, ability to manage economic risk was a key success factor and learning was a greater asset than physical strength or personal bravery. Their successes and the means by which they attained them were often resented by their gentile neighbors.

The farmers and artisans of medieval Germany begat the farmers and craftsmen of industrial Germany. These people had a tradition of hard work, and built a reputation for industriousness throughout Europe. European kings, such as those of Poland and Hungary, settled outpost towns with Germans.

Is there any wilderness on earth which Germans could not turn into a land of plenty? Not for nothing did Russians say in the old days that “a German is like a willow tree — stick it in anywhere and it will take.”
— Alexander Solzhenitsyn, The Gulag Archipelago Volume 3, p. 400.

However, economic advances arising from commercial and industrial development increasingly exposed the Germans to situations where Jews, who did not typically perform physical labor to the extent that the gentile Germans did, used their learning and understanding of risk to pass the Germans by economically. The Germans deeply resented this (as did other European gentiles). Instead of seeing the situation in terms of the Jews taking advantage of their abilities and new economic opportunities, the Germans viewed the situation as the Jews taking advantage of the Germans.

While Jews in Germany were more integrated into society than were Jews in Poland or Russia, one should not construe that German non-Jews fully accepted them. Far from it. Jews were often subject to social disparagement, ostracism and ridicule. The program of the Pan-German League for war aims in 1914 did not see the Jews as equal Germans who would share in the spoils of victory, but as a separate tribe that could be resettled in some out-of-the-way marginal lands nobody really wanted [Woodruff D. Smith, The Ideological Origins of Nazi Imperialism, pp. 176-8].

Of approximately 555,000 self-identified Jews living under the Kaiser in 1914, about 100,000 served in defense of the Reich and 12,000 laid down their lives []. However, this did not necessarily influence the opinions of Germans. Regiments were drawn geographically, and a soldier from rural Pomerania or Bavaria could easily serve the full four years without being mixed with Jewish soldiers from Hamburg or Berlin. Non-Jewish Germans often did not necessarily give German soldiers of Jewish faith credit for their participation, preferring to remember the trader or banker who profited during the war. A record of honorable service in the Kaiser’s army would offer no protection from the Nazis.

Economic Forces after 1918

After 1918, Central Europe was filled with defeated nations who were suffering profound economic contraction and emergent nations whose prospects were little better. The reduced economic prospects heightened competition, and social and philosophical forces caused people to gather together along “ethnic” lines, ignoring whatever integration of Jews and non-Jews had already occurred. The economic situation, in short, got nasty as people found themselves competing to divide a smaller pie.

This condition was not limited to Germany, and exhibited some curious effects. In Hungary, for example, there was the curious phenomenon of educated people making the running in anti-Semitic agitation:

When a university graduate went to a business to look for a job, he usually found that if there were openings, he was either not trained for them or not willing to accept them for fear of a loss of prestige. … When such positions were unavailable, the frustrated applicant was likely to blame his unemployment on the discriminatory attitude of a Jewish owner.

A similar scenario obtained in the case of the civil service. … Hungarian university graduates often submitted applications only to find the ranks of officialdom so hopelessly overinflated as to permit no increase, and found it convenient to blame their failure on those Jews (relatively few in number) who had gotten there first. The frustrated Hungarian aspirants, who would rather live in Budapest on handouts from friends and relatives than take a job in the provinces or learn a practical, perhaps even a manual, profession, formed the core of right-wing anti-Semitic thinking. It is a tragic irony that the educated sector of the population was most inclined to find emotional hatred the best substitute for logic and reason.
— E. Garrison Walters, The Other Europe: Eastern Europe to 1945, p. 216.

In Germany, the racial overtones of competition were already well established by 1920. The destruction of savings and pensions in the inflation of 1923 was followed by the progressive proletarianization of craftsmen and shopkeepers through the twenties.

The Jews became the embodiment, on a scale unprecedented in history, of every ill besetting state and society in the final stage of the Weimar Republic. … Yet the main charge against the Jews was that they dominated such spheres as banking, business, real estate, brokerage, money-lending and cattle-trading.
— Richard Grunberger, The 12-Year Reich: A Social History of Nazi Germany 1933-1945, p. 15.

The Grounds for Comparison

The Kristallnacht pogrom of November 1938 signaled a turning point. Prior to this, although the legal oppression of the Jews was continually ratcheted up, the regime maintained a weakly plausible deniability regarding brutality and murder. The pogrom marked the point where what had been a cold war against the Jews turned organized, methodical and violent. It was no longer possible to pretend that those taking the lead in such attacks were hotheads who were exceeding their orders.

There is no stretch of the imagination by which the current situation in America can legitimately be compared to Kristallnacht. Even the name of the latter is itself a relatively sanitized euphemism for the reality on the street. Much more than glass was broken that night: at least 91 Jews died as an immediate result of the violence, with about 30,000 being interned in concentration camps.

Direct comparisons between our intellectual climate and that of Germany in 1938 are not supportable, but what about the Germany of 1928? Here there is evidence upon which to build an argument supporting comparisons. The government was not in the racial hatred business, but there were an abundance of very loud people with influence and access, calling for the people to take retribution on a subset of their number for imagined wrongs and a large segment of the polity predisposed to respond favorably to this message.

It is true that politics were much more violent in Germany, with all parties having to maintain paramilitary organizations to prevent intimidation of their own supporters while attempting to incite fear among their opponents. We do not have a similar situation here at this time. However, this is not a necessary precondition for the identification and prosecution of campaigns against supposed enemies of the people.

The economic stereotyping of Jews as parasites blended with wounded national pride, the Volksgemeinschaft ideal, romanticism of an idealized rural and pre-industrial past and a search for scapegoats into a particularly noxious cocktail. The message that “you have been betrayed, victimized by others” fell on fertile ground after the unrewarded sacrifices of the Great War and the ruinous economic dislocations of 1923 and 1931. People living in Germany at that time at least did not have the well-documented historical example of what a modern, cultured, industrial nation is capable of becoming. We don’t have that excuse.

Often the Jews who were rounded up between 1935 and 1942 would be made to perform physical labor, as degrading as could be found, as part of their punishment for being Jews. The locals who were organizing this would say something like, “Now you Jews are doing an honest day’s work.” Nor was this atavistic attitude limited to racial targets.

Obligatory training camps for entrants into the learned professions were instituted, with a similar end in view. Press photographs of junior barristers scrubbing the floor on such a course at one of these camps and captioned ‘Labour is an indispensable method of education’ carried the implication that, however well-tutored, these Herren Referendare were not acquainted with work as the man-in-the-street was and were now being forcibly familiarized with it for their own good.
— Grunberger, p. 47.

Sweat Equity

Which brings us back to the original topic: the belief that only those who perform hard labor are deserving of the fruits of production. This is the root of economic errors such as the labor theory of value.

Large numbers of people in urbanized, modern economies must be familiar with basic principles and proof against being manipulated by unscrupulous demagogues who play on envy, ignorance and irrationality. If these people are allowed to succeed in setting up their game of Let’s You and Him Fight, all of us will lose not only our standards of living but our liberty.


Written by srojak

February 17, 2014 at 11:32 pm

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