arroba Email

Capitalism, Jewish Achievement, and the Israel Test

Originally published at The American Enterprise Insitute

Israel has become one of the most important economies in the world, and is second only to the United States in its pioneering of technologies benefitting human life, prosperity, and peace.

Like the Jews throughout history, Israel poses a test to the world. In particular, it is a test for any people that lusts for the fruits of capitalism without submitting to capitalism’s imperious moral code. Because capitalism, like the biblical faith from which it largely arises, remorselessly condemns to darkness and death those who resent the achievements of others.

At the heart of anti-Semitism is resentment of Jewish achievement. Today that achievement is concentrated in Israel. Obscured by the usual media coverage of the “war-torn” Middle East, Israel has become one of the most important economies in the world, second only to the United States in its pioneering of technologies benefitting human life, prosperity, and peace.

But so it has always been. Israel, like the Jews throughout history, is hated not for her vices but her virtues. Israel is hated, as the United States is hated, because Israel is successful, because Israel is free, and because Israel is good.

As Maxim Gorky put it: “Whatever nonsense the anti-Semites may talk, they dislike the Jew only because he is obviously better, more adroit, and more capable of work than they are.” Whether driven by culture or genes—or like most behavior, an inextricable mix—the fact of Jewish genius is demonstrable. It can be gainsaid only by people who do not expect to be believed.

Charles Murray distilled the evidence in Commentary magazine in April 2007. The Jewish mean intelligence quotient is 110, ten points above the norm. This strikingly higher average intelligence, however, is not the decisive factor in overall Jewish achievement.

What matters in human accomplishment is not the average performance but the treatment of exceptional performance and the cultivation of genius. The commanding lesson of Jewish accomplishment is that genius trumps everything else. Whatever the cause of high IQ, as Murray explains, “the key indicator for predicting exceptional accomplishment (like winning a Nobel Prize) is the incidence of exceptional intelligence… The proportion of Jews with IQs of 140 or higher is somewhere around six times the proportion of everyone else” and rises at still higher IQs.

The great error of contemporary social thought is that poverty must result from “discrimination” or “exploitation.” Because Jews tend to be overrepresented at the pinnacles of excellence, a dogmatic belief that nature favors equal outcomes fosters hostility to capitalism and leads inexorably to anti-Semitism.

The socialists and anti-Semites have it backwards. Poverty needs little explanation. It has been the usual condition of nearly all human beings throughout all history. What is precious and in need of explanation and nurture is the special configuration of cultural and intellectual aptitudes and practices—the differences, the inequalities—that under some rare and miraculous conditions have produced wealth for the world. Inequality is the answer, not the problem.

In his book Human Accomplishment Murray focused on the fact that the three-tenths of 1 percent of the world population that is Jewish has contributed some 25 percent of notable human intellectual accomplishment in the modern period. Murray cites the historical record:

In the first half of the twentieth century, despite pervasive and continuing social discrimination against Jews throughout the Western world, despite the retraction of legal rights, and despite the Holocaust, Jews won 14 percent of Nobel Prizes in literature, chemistry, physics, and medicine/physiology.

He then proceeds to more recent data:

In the second half of the twentieth century, when Nobel Prizes began to be awarded to people from all over the world, that figure [of Jews awarded Nobel Prizes] rose to 29 percent. So far in the twenty-first century, it has been 32 percent.

The achievements of modern science are heavily the expression of Jewish genius and ingenuity. If 26 percent of Nobel Prizes do not suffice to make the case, it is confirmed by 51 percent of Wolf Prizes in Physics, 28 percent of the Max Planck Medailles, 38 percent of the Dirac Medals, 37 percent of the Heineman Prizes for Mathematical Physics, and 53 percent of the Enrico Fermi Awards.

Jews are not only superior in abstruse intellectual pursuits, such as quantum physics and nuclear science, however. They are also heavily overrepresented among entrepreneurs of the technology businesses that lead and leaven the global economy. Social psychologist David McClelland, author of The Achieving Society, found that entrepreneurs are identified by a greater “need for achievement” than are other groups. “There is little doubt,” he concluded, explaining the disproportionate representation of Jews among entrepreneurs, that in the United States, “the average need for achievement among Jews is higher than for the general population.”

“Need for achievement” alone, however, will not enable a person to start and run a successful technological company. That takes a combination of technological mastery, business prowess, and leadership skills that is not evenly distributed even among elite scientists and engineers. Edward B. Roberts of Massachusetts Institute of Technology’s Sloan School compared MIT graduates who launched new technological companies with a control group of graduates who pursued other careers. The largest factor in predicting an entrepreneurial career in technology was an entrepreneurial father. Controlling for this factor, he discovered that Jews were five times more likely to start technological enterprises than other MIT graduates.

For all its special features and extreme manifestations, anti-Semitism is a reflection of the hatred toward successful middlemen, entrepreneurs, shopkeepers, lenders, bankers, financiers, and other capitalists that is visible everywhere whenever an identifiable set of outsiders outperforms the rest of the population in the economy. This is true whether the offending excellence comes from the Kikuyu in Kenya; the Ibo and the Yoruba in Nigeria; the overseas Indians and whites in Uganda and Zimbabwe; the Lebanese in West Africa, South America, and around the world; the Parsis in India; the Indian Gujaratis in South and East Africa; the Armenians in the Ottoman Empire; and above all the more than 30 million overseas Chinese in Indonesia, Malaysia, and elsewhere in Southeast Asia.

Thomas Sowell of the Hoover Institution reports that in Indonesia the Chinese were 5 percent of the population, but they controlled 70 percent of private domestic capital and ran three-quarters of the nation’s top 200 businesses. Their economic dominance—and their repeated victimization in ghastly massacres—prompts Sowell to comment: “Although the overseas Chinese have long been known as the ‘Jews of Southeast Asia,’ perhaps Jews might more aptly be called the overseas Chinese of Europe.”

As Sowell writes, these “middlemen minorities,” their “wealth inexplicable, their superiority intolerable,” typically arouse hatred from competing intellectuals. “It is not usually the masses of the people who most resent the more productive people in their midst. More commonly, it is the intelligentsia, who may with sufficiently sustained effort spread their own resentments to others.”

Capitalism overthrows theories of zero-sum economics and dog-eat-cat survival of the fittest. Thus, as in the United States (outside the academic arena), anti-Semitism withers in wealthy capitalist countries. It waxes in socialist regimes where Jews may arouse resentment by their agility in finding economic niches among the interstices of bureaucracies, tax collections, political pork fests, and crony capitalism.

Socialist or feudal systems, particularly when oil-rich and politically controlled, favor a conspiratorial view of history and economics. Anti-Semitism is chiefly a zero-sum disease.

As Walter Lippmann eloquently explained in The Good Society, capitalism opened a vista of mutually enriching enterprise with the good fortune of others creating opportunities for all. The Golden Rule was transformed from an idealistic vision of heaven into a practical agenda. From Poor Richard’s Almanack to rich Andrew Carnegie’s autobiographical parables, all were rediscovering the edifying insights of the author of Proverbs.

Judaism, perhaps more than any other religion, favors capitalist activity and provides a rigorous moral framework for it. It is based on a monotheistic affirmation that God is good and will prevail through transcending envy and hatred and zero-sum fantasies. Judaism can be plausibly interpreted as affirming the possibilities of creativity and collaboration on the frontiers of a capitalist economy.

The incontestable facts of Jewish excellence constitute a universal test not only for anti-Semitism but also for liberty and the justice of the civil order. The success or failure of Jews in a given country is the best index of its freedoms. In any free society, Jews will tend to be represented disproportionately in the highest ranks of both its culture and its commerce. Americans should celebrate the triumphs of Jews on our shores as evidence of the superior freedoms of the U.S. economy and culture.

The real case for Israel is as the leader of human civilization, technological progress, and scientific advance.

In a dangerous world, faced with an array of perils, the Israel test asks whether the world can suppress envy and recognize its dependence on the outstanding performance of relatively few men and women. The world does not subsist on zero-sum legal niceties. It subsists on hard and possibly reversible accomplishments in technology, pharmacology, science, engineering, and enterprise. It thrives not on reallocating land and resources but on releasing human creativity in a way that exploits land and resources most productively. The survival of humanity depends on recognizing excellence wherever it appears and nurturing it until it prevails. It relies on a vanguard of visionary creators on the frontiers of knowledge and truth. It depends on passing the Israel test.

Israel is the pivot, the axis, the litmus, the trial. Are you for civilization or barbarism, life or death, wealth or envy? Are you an exponent of excellence and accomplishment or of a leveling creed of frenzy and hatred?

This essay is based on George Gilder’s new book, The Israel Test.

George Gilder is author of 15 books, including the best seller Wealth and Poverty. He is a contributing writer for Wired and Forbes magazines.

George Gilder

Senior Fellow and Co-Founder of Discovery Institute
George Gilder  is Chairman of Gilder Publishing LLC, located in Great Barrington, Massachusetts. A co-founder of Discovery Institute, Mr. Gilder is a Senior Fellow of the Center on Wealth, Poverty, and Morality, and also directs Discovery's Technology and Democracy Project. His latest book, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy (2018), Gilder waves goodbye to today's Internet.  In a rocketing journey into the very near-future, he argues that Silicon Valley, long dominated by a few giants, faces a “great unbundling,” which will disperse computer power and commerce and transform the economy and the Internet.