JUDAICA - Wisdom In Torah

states. Two major factors contributed to the transformation
of the nature of the service of the Court Jews. The first were
the wars of the 17th and 18th centuries which called not only
for greater monetary outlays and thus expanding demand for
credits, but also for the organizational talent to supply the numerous
armies in the field with weapons, ammunition, clothing,
food, and fodder. The need to contract and pay for, and
to deliver large bulks of necessary supplies at great distance,
called for new and substantial organizational talents. The
Court Jews performed well when requested to carry out the
above tasks, and in the process of doing so gained new knowledge
in large-scale operations requiring greater efficiency in
mobilizing vast resources in relatively backward economies.
In so doing the Court Jews were assisting the political interests
of the rulers or of the state.
Another factor contributing to the transformation of
their service was the entry of the Jews into the ranks of industrial
entrepreneurs. The setting-up of mining and manufacturing
industries in the economically backward countries
was not a market response to a demand for such products. It
was in most cases either a direct result of government action
or an indirectly induced development as a result of a conscious
government policy. Government policies in those countries
pursued two goals: first, to develop armament industries to
strengthen the countries militarily and politically in their
struggles for hegemony or for the restoration of a power balance
in Europe; secondly, to develop industry branches that
produced import-substitutes, which meant primarily products
used by the wealthy upper classes of society. The military
needs on the one hand and the maintenance of a positive balance
of payments on the other were mainly responsible for the
state initiative and support given to early mining and manufacturing
industries. Given the government financial or tax
support for the industrial establishments, the critical factors
were skilled labor and entrepreneurial and managerial talents.
In providing technical skills the contribution of the Jews was
probably inferior to the possibilities of importing skills from
the advanced countries, so the primary area of their contribution,
by no means exclusively Jewish, was that of entrepreneurial
and managerial talent. Their previous experience in
large-scale banking, military contracting, etc., provided the
necessary background. The involvement in previous services
for the state gave them the knowledge and political connections
necessary for obtaining licenses, privileges, and often
the labor force for the budding industrial enterprises. Thus
the former Court Jew became an industrial entrepreneur, continuing
social innovation, creating new types of economic organization,
and helping to break old patterns and traditional
systems. The economic significance for the Jewish community
of this group of wholesale merchants, bankers, and industrial
entrepreneurs consisted not only in their role in the accumulation
of capital, but also and primarily in their collective role
in creating employment opportunities for other Jews. The
relatively large-scale operations of this entrepreneurial class
gave rise to a demand for services that could be performed by
economic history
other members of the community. For example, in such enterprises
as supply-contracting, a system of subcontracting was
established that provided income for a relatively large number
of smaller-scale merchants, and even the administration
of large landed estates provided employment for many innkeepers,
alcohol distillers, and other self-employed members
of the Jewish community.
A second area of employment, which was represented by
a massive participation of the members of the Jewish community,
was that of smaller-scale and retail trade and of commercial
intermediaries operating with limited capital resources, in
many cases not their own. In the economically more advanced
centers the economic activities of this employment group were
rather specialized, with heavy concentration in limited areas
of the retail trade and specialized services as commercial and
financial intermediaries. Here too their activities were limited
by the existing institutional structure of the commercial
centers. In order to compete with the more established firms
or individuals, the Jewish merchants tried to deviate from the
standards of goods being marketed and provided a greater variety
in terms of quality for a broader range of prices. The economic
effect of such – for that period – unorthodox behavior
was a broadening of the market and an increase in the number
of consumers attracted by a wider range of quality. In the
less advanced economies of that period, the Jewish merchants
had to overcome both the power of the urban guilds and the
customary location of actual markets in the cities. Therefore
a major area of the trade of the Jewish merchants consisted
in reaching the social circle beyond the orbit of the exchange
economy, the peasants. The merchants sought out the areas of
a marketable surplus of agricultural products. By increasing
the size of shipments from the outlying areas it was possible to
decrease the costs of transportation that previously had made
it unprofitable to bring these products to market.
A number of varied and interesting phenomena attended
this Jewish mercantile activity. First, through their penetration
of the rural areas Jewish merchants and peddlers supplied both
the manor and the peasant huts with manufactured goods
that were in demand, and simultaneously collected the marketable
surplus of grains, flax, wool, and livestock. This twoway
trade enabled the Jews to compete relatively successfully
with the local merchants who conducted their trade at fixed
points, primarily in the cities, and were relatively protected
by their status as city dwellers and merchants. Secondly, the
penetration of Jewish peddlers and merchants into the countryside
enabled them to organize early, still primitive forms of
a putting-out system, making use of and helping in the further
development of cottage industries in the rural areas, and thus
organizing and supporting a form of production in competition
with the urban crafts controlled and protected by the
city guilds (see *Peddling). Thirdly, the employment of Jews in
innkeeping, alcohol distilling, and livestock production in the
rural areas helped further to inject into the agricultural sector
the elements of an exchange and money economy. The result
of the activity of the Jewish small merchants in the rural areas
ENCYCLOPAEDIA JUDAICA, Second Edition, Volume 6 121