Jews and Finance (Respectfully)

Where is there such a generalization between Jews being good financiers?

Al Capone ran his outfit with only Italian mobsters, except his accountant, who was a Jew.

This is a serious question and I mean no disrespect to those who are Jewish.

Because Jewish people are actually disproportionately good at finance. Jewish people are disproportionately wealthy and Jewish people disproportionately participate in finance careers. It’s like how Chinese people are disproportionately good at math. Sure, it’s a stereotype, but it is based on reality.

I think it’s pretty normal. Historically certain communities and ethnicities cluster around certain professions and are likely to defend their turf from other groups encroaching upon it. For example in East Africa, much like Jews in the West, commercial activities were controlled by Indians (Gujaratis). Add to that the fact that Jews as a group of people are extremely intelligent, you have a win-win.

Well, that’s a dangerous stereotype, and it has gotten Jews into trouble in the past. There are lots of reasons that Jews have gravitated to finance and tend to do well. The danger is when some people think that because two people are Jews, they are somehow coordinating some grand plan to control everything. The fact that the Bible calls Jews the “chosen people” doesn’t help to dispel this stereotype. I see three historical things as being important: 1) rabbinical Judaism (as opposed to the priestly Judaisim of biblical times) emphasizes the importance of debate and everyone thinking for oneself, as opposed to blindly accepting dogma (though there are still plenty who do that) which is beneficial for evaluating investments on merit, 2) the prohibition on Jews owning land in the middle ages promoted a centuries long-tradition of development in the professions (doctors, lawyers, financiers, artisans, etc.), because these were sources of income that could be taken with you if Christians started forcing you to move/run, 3) the medieval prohibition on charging interest only applied to Christians (who were free to *pay* interest), so banking was not a feasible profession for non-Jews early on. All of this developed a centuries-long set of practices that pointed Jews toward the professions and particularly banking. Jews got a head start in banking because Christians refused to do it. Jews also had fewer attractive alternatives, so concentrated on and developed a set of skills/cultural attitudes that supported it. Finally, Jews - while not conspiring in the way that anti-semites like to suggest - are more willing to help each other, because many times in the past, Jews have had to rely on each other in order survive persecution from others. That doesn’t mean there isn’t competition or enmity between some Jews, but that the community is smaller and that the advantages of sticking together are larger and more obvious.

Not going to comment on Jews and what is IMO a stereotype but I do have a lot of experience with the Chinese… Chinese are good at math because: 1) they work harder than Americans. They take more difficult classes, more classes, and the educational culture does not allow failure. 2) there is a higher genetic disposition to math 3) the Chinese culture does not allow failure in general compared to America So why do the Chinese come to the US to get grad degrees? Purely to obtain a job, most of the work in an American MS program they have already seen or seen at a slightly lower level. But, some don’t have the interpersonal skills to work at American companies so it does balance out slightly…

Let’s also not forget the Chinese culture does not frown upon cheating on exams. #Scoretop

The claim of Chinese genetic disposition towards math is unsubstantiated. I agree with the other points though. Somehow the question in this thread has changed from “Why are Jews perceived to be good at finance?” to “Why are Jews good at finance?”. But, I got some interesting historical information from this, so I guess it was for the better.

Genetic disposition to math?? I’d like to see the research that confirms that… Chinese culture does not allow failure? There are over 1 billion of them… are you saying that no one there has been allowed to fail? I do understand that there are suicide rates for people who feel they have failed, but surely the suicide rate is well below the failure rate. I think there’s just a large countryside that people can use to sweep failures under the rug. I do have a pet theory, which is about the chinese written language. I have always suspected that if learning to read depends on memorizing so many characters, it must teach the brain from an early age to memorize well. So cultures that use character-based written languages (as opposed to alphabets) have advantages in knowledge areas that are highly memorization-dependent. An interesting test would be to compare Chinese physicists to US/European physicists vs Chinese chemists to US/European chemists. I’ve always thought that chemistry requires more memorization, whereas physics is a little more about process.

By “not allowing failure”, he doesn’t mean that no one in China fails. He just means that failure is highly frowned upon in Chinese culture. If an American kid has mediocre academic performance, his parents might say it’s ok, because “he has other talents” or “he tried his best”. If a Chinese kid has mediocre academic performance, his parents are likely to freak out and take drastic steps (tutoring, extra homework, punishment, more supervision) to improve the kid’s performance. I have seen this many, many times. Although the theory is interesting, I don’t think Chinese language is a major causative factor in their academic performance. Chinese kids who grow up in foreign countries and who cannot read or write Chinese still do very well in school. This is because their parents retain the Chinese cultural characteristics mentioned above, even if they communicate with their kids in English or some other non-Chinese language. However, among Chinese kids outside of China, there is probably a non-causative positive correlation between the ability to read and write Chinese and academic performance. If the kids grew up in a Chinese language environment, they are more likely to have parents who are culturally very Chinese.

Fair enough. My main point about “not tolerating failure” was more about the fact that we may simply see a fair amount of survivor-bias, and conclude that locking a kid away in a closet with a calculator must really work. Clearly, some kind of structure to push kids to perform is needed to get most kids to do stuff rather than watch tv or play video games all day, but it’s not clear to me that more pressure is always better. There must be a sweet spot somewhere between Tiger Mom and Hippie Dad that works. It also depends on the labor economy that kids are being raised for. One of my concerns is that in the wake of offshoring and outsourcing, the US economy may have become substantially less diverse, and that is contributing to our structural unemployment problem.

Perfectly said.

So if failure is less tolerated, and not tolerating failure works, why shouldn’t there be less failure in China?

Not sure if that is sarcasm or not. “Failure” is a relative thing. If everyone in the world suddenly became 10x as handsome, who is really handsome?

Failure is only a relative thing in an academic setting if everyone is graded on a curve…in real life, obviously everyone cannot win the Nobel. Back on topic, I think a lot of it may be just geography. For example, there are a lot of Italians and Irish who work in finance as well as cultural Jews, but fewer Scandanaivans work in finance (at least in the US). The coasts, particularly NYC, has finance. The middle does not as much. I realize that this could be a little chicken or the egg though.

Thought this was kind of cool: …there’s also the difference in referencing #s larger than 10.

The Chinese imperial government was the first in the world to implement meritocracy. During Han dynasty (about 2000 years ago), one could become a government official if one does well on state administered exams. Therefore education is seen as a tool to get ahead, resulting in the “can’t fail in school” attitude.

Oh a good racial stereotyping thread and it’s only January 7th! Let me say that I am not a huge believer in racial superiority in math or whatever. Culture is more important. Jews were persecuted because they had no homeland and therefore learned portable skills. Jews didn’t have access to traditional wealth generating things, such as manor farms, in the feudal area since they were not in charge of the countries that they lived in and therefore couldn’t be nobility in those countries. Furthermore, they lived in cities because of this and performed urban professions since they couldn’t really integrate with the Christian societies they were essentially refugees in. Having small jewish communities in major cities meant that you could have trading networks between trading families worldwide (i.e. the rothchilds). Having Jewish people in these professions begets more Jewish people in the profession. Apprenticeships etc in the old days Internships now. There is a culture push towards these types of careers. Your uncle did it, so now you should. Earlier poster was right that WASPY people didn’t want these jobs before. My rich English friends want for nothing more than to go run their family estates (farms). If you were a wealthy English person 100 years ago all you had to do was, inherit the family farm if you were the oldest and run that, joint the military, or become a preist. So if you went to Eton becoming a banker wasn’t really an option until relatively recently. Indians and Chinese, are very similar in that they two have been spread all over the world to major cities where they maintain communities that are urban and focus on urban professions such as old fashioned trading. These communities value professions and do not focus on liberal arts. This pretty much leaves only math and engineering.

It’s just like Parsis in India. Tiny refugee community that is disproportionately successful.

They’ve been doing it for hundreds of years, because it was one of the only professions they could get into. In days of old, Trades guilds blocked most Jews out of their trades. So for centuries, if you were a Jew looking for work, you didn’t have a lot of options open to you - you couldn’t be a blacksmith or a weaver, etc. Furthermore, if you were lucky enough to scrape together some money, you couldn’t buy some land with it - many cultures forbid jews from owning land. So what kind of business can you start that does require capital, but doesn’t require owning land? Banking. To quote from a paper I read that explains it nicely (though if I recall, it’s also touched on in Malcolm Gladwell’s “Outliers”): “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.” Money-lending is also explicitly mentioned in the Torah - what you can charge your kinsmen (fellow Jews) and what’s appropriate to charge a Gentile. Many, many, many stereotypes stem from the fact that if you wanted to borrow money and you went to the bank or local moneylender, the man controlling the purse strings would (more likely than not) be Jewish because - again - it was one of the only professions that was open to them. This made its way into culture (see things like ‘The Merchant of Venice’). Because of the factors mentioned above (who thinks about a banker other than when they’ve denied you money or called your loan?), the profession - and subsequently, the people associated with it - were rarely portrayed in a good light. Hope this helps people understand where the stereotypes stem from. For the full paper cited, google the search term, “EXPLAINING A STEREOTYPE: JEWS AND MONEY LENDING”. The paper is by Rabbi Robert H. Loewy and is the second result.

I hate these racist threads. Joke :slight_smile: Interesting actually. I don’t have much to add to the discussion here, but I also disagree with a “genetic predisposition”. History conditions people to what they are. And also , imo, language (as somebody pointed out with regards to Chinese language not having an alphabet). Case in point : German. It is generally established that German is a rigid language with rigid structures. For example, in German texts, it is common to have a sentence as long as a paragraph, with the verb or a part of the verb at the end (you basically need to wait for the last word to know what the sentence is about). This means that you have to be able to structure and organise your thoughts very carefully in order to make sense, and also it means that you have to be patient. This could be one of the many explanations for many things german. Don’t know if this makes sense, though.