Jews, Scots, Armenians, Dutch
by Gary North
Lew Rockwell, CA
Nov 13 2004
You have heard this phrase: “He can buy from a [ ], sell to a [ ],
and make a profit.
Here are the most likely choices:
Jew
Scot
Dutchman
Armenian
Why? What do these seemingly disparate groups have in common, other
than money?
Let’s begin with the least known group.
THE ARMENIANS
In 1962, I had a Jewish roommate, Roger Hartman. I didn’t know much
about Judaism back then. Roger had grown up in the area around
Fresno, California – not exactly a cosmopolitan region. His family
had later moved to San Francisco, as I recall. He told me why: “When
the Armenians moved in, the Jews moved out.” I don’t know if he
really meant this specifically about his own family, but the phrase
was obviously common among Jews in the area. Armenians are highly
competitive in commerce. They are famous as rug merchants, but their
skills go way beyond importing rugs.
I knew less about Armenians in 1962 than I do now. I’m now married to
one. But I never did forget Roger’s comment. There was, and is, a
large Armenian population in the Fresno area. The most famous
Armenian-American author, William Saroyan, was born in Fresno in
1908. My father-in-law grew up in Kingsburg, not far from Fresno.
Side note: Armenians are easily identified by their names – more
easily than any other national group. Their names usually end in -ian
or -yan. My father-in-law was an exception: Rushdoony, not
Rushdoonian. He told me why. His family had roots back to royalty in
Armenia. When the Turks conquered the country nine centuries ago,
they forced a name change on everyone, so that they could be easily
identified. They added the -ian sound. My father-in-law’s family
escaped the restriction because of the family’s royal lineage.
Anyway, that’s what he told me. As someone who read a book a day for
60 years, he knew about such things.
The Armenians are the entrepreneurs of Western Asia. This has been
true for centuries. I found it interesting that in the old “Upstairs,
Downstairs” series, when the script writers wanted to portray a rich,
aggressive, unscrupulous, social-climbing businessman, they chose an
Armenian. It may have been too politically incorrect to select a Jew,
but the decision was nevertheless believable. The character was
looked down on by the upper crust. They referred to him as a Jew, he
said. This upset him; he was proud of his Armenian heritage.
In the Soviet Union, Armenians were called the Christian Jews. There
was considerable hostility and discrimination in Moscow against
members of both groups. But, like Jews, Armenians climbed their way
to the top of the Communist Party’s hierarchy. Anastas Mikoyan was
the most prominent of them. He was the Commissar of Food Supply and
then Minister of Trade under Stalin. He was elected president in
1964, a ceremonial post. He survived. He never missed a trick. He
introduced Eskimo Pie into the USSR – one of the more productive
things ever done by a senior Soviet bureaucrat. His brother Artem
designed the MiG jet fighters. Under Gorbachev, Abel Aganbegyan
served as senior economic advisor. Yet Armenia was the smallest of
the Soviet republics, both in population and geography.
There is another shared feature with Jews. In 1915, the Turks
committed the first genocide of the twentieth century. They killed
about a million Armenians. This policy was systematic. Most people
have never heard of this event. (On the persecution, see the great
but little-known 1963 movie by Elia Kazan, America, America.)
Because World War I was going on, the Armenian genocide received
little publicity. It was concealed because the Germans and the Turks
were allies. Word did not get out, except for survivors’ accounts.
War news dominated the Western press. Also, Turkey was crucial
internationally because Turks controlled the Dardanelles, the narrow
access to the Black Sea. The Turks could seal off access from the
Russian Navy’s only warm water port. British foreign policy had long
been favorable to the Turks because of this geography: the balance of
power. So, there was no outcry from the West after the War, despite
Turkey’s former alliance with the Germans. The lesson was not lost on
Hitler, who wrote:
I have issued the command – and I’ll have anybody who utters but one
word of criticism executed by a firing squad – that our war aim does
not consist in reaching certain lines, but in the physical
destruction of the enemy. Accordingly, I have placed my death-head
formations in readiness – for the present only in the East – with
orders to them to send to death mercilessly and without compassion,
men, women, and children of Polish derivation and language. Only thus
shall we gain the living space (Lebensraum) which we need. Who, after
all, speaks today of the annihilation of the Armenians?
The famous British historian Arnold Toynbee did much of the research
on the Armenian genocide for Lord Bryce’s 1916 collection of
survivors’ accounts. My wife’s grandfather, who had a photographic
memory, has two articles in the book. It was an official publication
of the British government, but it had no political effect.
THE DUTCH
When we think of the Dutch, we think of “Dutch Treat.” This term
applies to dates in which the woman pays her share of the evening’s
expenses. Whether the practice originated in Dutch-American circles,
I do not know, but the phrase has stuck.
The Dutch are frugal. They are legendary for this frugality. They are
good farmers, especially dairymen. They are not equally famous in
commerce, although there are highly successful Dutch-affiliated
companies. The Herman Miller Company is dominant in business chair
manufacture. The Dutch are regional: Grand Rapids, Michigan, is an
urban enclave.
In the seventeenth century, the Dutch rivaled the British in world
trade, yet their country was tiny, dug out of the sea by means of
dikes and windmills. They had money, and they had great artists. They
were also ruthless colonialists in Indonesia. They took no guff. They
fought a naval war with Cromwell’s England: two Calvinist powers
going at each other with fleets. The war continued under Charles II.
New Amsterdam became New York City in 1664.
It is one of those historical anomalies that they arrived, seemingly
out of nowhere, in the early seventeenth century. They were masters
of commerce. Their central bank actually preceded the Bank of England
(1694). They had a well organized stock exchange. They also had help
from Jews, who had been kicked out of Spain by Queen Isabella in
1492, and had fled to Antwerp and Amsterdam, where there was greater
religious liberty for them.
The Dutch reputation for frugality as consumers is an extension of
their former reputation as hard-bargaining traders. The same
legendary frugality is associated with the Scots.
THE SCOTS
In the eighteenth century, the Scots replaced the Dutch as the
world’s traders. While the English gained this reputation, the Scots
had the edge. Union with England came in 1707. From then on, the
Scots took advantage of the British colonial empire. Again, like the
Dutch a century earlier, they came out of nowhere. In 1650, Scotland
was poor, a backwater of Europe. By 1750, the Scots dominated trade
and philosophy. David Hume, Lord Kames, Adam Smith were Scots. By
1850, Scots around the world dominated invention and
entrepreneurship. From James Watt to Andrew Carnegie, the Scots
pioneered manufacturing and mass production. Arthur Herman’s book,
How the Scots Invented the Modern World (2001), tells this remarkable
story.
By 1950, the Scots were still influential as individuals, but not as
a self-conscious, well-connected group. Ronald Reagan was one of
them, and he attended a traditional Presbyterian Church, as a good
lowland Scotsman should. But we do not think of Reagan as a Scot.
While Sean Connery represents them, they are not organized
sufficiently to be represented.
THE JEWS
Like the Dutch in 1600 and the Scots in 1700, Jews in 1900 came out
of nowhere – or its cultural equivalents, Russia and Eastern Europe –
to dominate the movie industry and radio in the first half of the
century, and the economy in the second half.
The Rothschilds made their fortune under Napoleon, and other banking
houses of the late nineteenth century were Jewish-owned. But the
Morgan network was dominant in America in 1890, not Jewish investment
banks. The Rockefellers became competitors by 1910. Kuhn Loeb was not
in this league. The only Jewish-owned commercial bank of any
consequence in New York City was the Bank of the United States, which
went bankrupt in the Great Depression when the gentile bankers who
ran the Federal Reserve System refused to bail it out. The other big
banks were protected.
Jews are not legendary as tight-fisted consumers. They are not Scots
or Dutchmen. Jewish extravagance has in fact elicited envy in Europe,
especially before and after World War I. Two phrases tell the story:
“He Jewed me down.”
“A Jewish brother-in-law deal.”
Both phrases reflect retailing. “He Jewed me down” is the complaint
of a gentile wholesaler trying to sell to a Jewish retailer. “A
Jewish brother-in-law deal” reflects the consumer’s quest for a
discount. Thus, we return to the original phrase: “A Jew can buy from
a [ ] and sell to a [ ], and make a profit.”
If someone said, “He Jewed me up,” it would sound strange. That would
be the complaint of a consumer against a retailer who charged too
much. But Jews are not famous for charging too much. They are famous
for the Jewish brother-in-law deal.
Here, we see the entrepreneurial flair at work: “Buy low, sell
higher, but lower than the competition.” Recently, I bought a new
Sony digital voice recorder from Abe’s of Maine. The shipping box had
a New York City return address. Now, Abe may be a clever gentile
cashing in on a group reputation, but when it’s Abe’s of Maine, the
public gets the idea that wherever you go, you can get a Jewish
brother-in-law deal. Except in Fresno.
Jews are prominent in academia, law, and medicine. This has long been
the case in medicine. Jews for centuries served as physicians for
Christian and Muslim rulers. “My son, the doctor” was basic to Jewish
family advancement and even survival. Similarly, when the Czar opened
up residence in Moscow to members of the state’s symphony orchestra,
Jewish children all over Russia were seen carrying violins. A violin
was the ticket out of the ghetto.
Jews are famous for comedy. This is an odd fact about modern Jews.
Humor was frowned on in Orthodox Jewish circles for many centuries.
(“Orthodox” was a pejorative term applied to Talmudic Jews by liberal
and secular Jews in the early nineteenth century. A Talmudic rabbi
and scholar, Samson R. Hirsch, decided to accept the term and run
with it in the mid-nineteenth century.) Yet by the days of
vaudeville, Jews were prominent comedians. The most famous Russian
comic in America, Yakov Smirnoff, is a Jew. But he did not know he
was Jewish until his parents told him, when he was 13, in 1964. They
were afraid of persecution. (“What a rotten country!”) They emigrated
in 1977. Somehow, in less than half a century, Jews became
professional comics. I have never seen a book on how and why this
happened. It was as if Jews have a humor gene that had to be
suppressed by the rabbis, and when the rabbis’ influence waned, Jews
started making people laugh.
By the way, in the collection called The World’s Shortest Books,
Famous Jewish Farmers has to be included, right next to Famous
Gentile Violinists.
WHAT’S THE CONNECTION?
Half a century earlier in each case, it would have been impossible to
predict the group’s imminent dominance.
All four groups have this in common: a strong sense of the covenant.
The covenant is an Old Testament idea: Abraham’s covenant with God,
marked by circumcision. Membership in the religious community is
basic to the survival of the group.
Family and cultural ties are common to most groups, especially prior
to the Industrial Revolution. But the covenant ideal meant that God
had singled out a group to represent Him, and that He promises to
make it prosper if members obey Him. Leviticus 26 and Deuteronomy 28
are the central passages.
The lowland Scots after 1550 were Presbyterian Calvinists if they
were anything. This meant the doctrine of predestination and also a
vision of world expansion, a theology called postmillennialism. But
it took 150 years for this outlook to produce the Scottish
transformation. Why so long? I have no idea. Herman’s book begins in
1697, which is too late to answer the question.
The Dutch did not call themselves Presbyterians, but the church
structure and the theologies are so similar that it takes a
specialist to distinguish them. In the seventeenth century, there
were more Dutch postmillennialists than there are today (i.e., more
than none).
Both theologies rested on the idea of God’s covenant, which
encompasses family, church, and state. Both theologies produced an
outlook of “them vs. us, and we can beat them.”
One of the best short books on business leadership is Max DuPree’s
Leadership is an Art (1989). DuPree ran the Herman Miller Company for
many years. His father founded it. DuPree actually uses the word
“covenant” to describe the business’s key factor. He does not mean
contract. While I think the use of “covenant” is misused here,
because covenants in the Bible relate to family, church, and state,
his main point is correct: contracts are not enough.
Covenantal relationships enable participation to be practiced and
inclusive groups to be formed. The differences between covenants and
contracts appear in detail in “Intimacy” (p. 25).
The Armenians are not covenant theologians. Their tradition is that
of Eastern Orthodoxy – more mystical than judicial. Armenia was the
first nation to adopt Christianity, in either 301 or 303. They were a
warrior people for a long time, standing in the gap in 451 A.D. to
repel the Persians. The battle of Avarier is not as famous as an
anti-Persian battle in the way that Thermopylae is, but it was
important. They were invaded again and again, and they lived for 900
years under the Turks, except for the thirteenth century under the
Mongols. (My father-in-law told me that his father told him that in
the margin of the community’s heirloom Bible, there was a notation:
“Today, the Mongols passed through.”) Persecution held them together.
They have had a sense of religious solidarity, and this persisted
even after they arrived in Protestant-secular America.
Their economic success is more difficult to explain than the success
of the other three groups. This may be for lack of interest on the
part of historians and economists: fewer books on them.
The Jews were traders for centuries. Religious ties made possible a
network of international communications and transactions. They also
had their own courts and legal precedents, called “responsa.” Owning
land was difficult except in separate communities. Capital in
diamonds or gold was portable, unlike land.
The Dutch had to learn other European languages in order to trade.
They also became skilled sailors. The country is tiny. It has few
natural resources. If they wanted to prosper, they had to trade. They
did. But they had a sense of destiny about them, which led them to
fight the Spanish in the late sixteenth century, gaining independence
in the early seventeenth. In 1689, after their defeat by the British
Navy, one of their rulers, William III, became the king of England.
“If you can’t beat ’em, join ’em.” His wife inherited England for
him. Maybe this was the original Dutch Treat.
There is another factor: separation. This means cultural separation,
but it can also mean confessional. In America, the Dutch still set up
parent-run private schools that are formally Calvinistic. When I
lived in the border town of Lynden, Washington, in 1976, there were
more children enrolled in the Christian schools than in the public
schools. The Dutch pay for their cultural and confessional
separation. Theology was sufficiently well defined that, at the
border on Sunday morning, you would see Dutch-American Calvinists
heading to Canada to worship, and Dutch-Canadian Calvinists heading
for the U.S. They were polite, hard-working, well-fed people on both
sides of the border. And on both sides, we “gentiles” labeled their
mentality: “If you aren’t Dutch, you aren’t much.” On neither side
was it wise to mow your lawn on Sunday. On the American side, only
one gas station was open for business, on a rotating basis with the
competition, to serve the needs of gentile tourists.
CONFIDENCE ABOUT THE FUTURE
Members of all four groups have seen themselves as hand-picked by God
to dominate trade. They have regarded themselves as possessing an
advantage over everyone else, either in brains, trade, or the ability
to prosper under the radar. This outlook came earliest to Jews, then
the Armenians, then the Dutch, then the Scots. Their sense of group
solidarity was not unique, but their sense of participation in a
covenant that promises economic success has been unique.
The Dutch and the Scots have lost their sense of inevitable
covenantal victory, but not their sense of frugality. They have
transferred to thrift what they once attributed to God’s covenant.
Adam Smith wrote Wealth of Nations (1776) as a manifesto of this
theological shift.
Innovation, uncertainty, cost-cutting, new markets, profit and loss:
here is the program of personal success for the entrepreneur. When
you belong to a group that will help you when you fall, which will
provide start-up capital to get you going, you have an advantage. The
Koreans have this outlook and group support in the United States. The
Koreans, more than any Asian immigrant group, are Christians:
specifically, Presbyterians. It is interesting that the dairy farming
Dutch in Southern California have sold their land to developers, who
in turn sold new homes to the Korean children of the family-run,
drive-through dairy stores of 1960. The Dutch then moved to Lynden.
That relocation process has been going on for three decades.
Without confidence in the future, the entrepreneur cannot function.
He becomes at best an investor in bonds or other fixed-income
ventures. He accepts statistically insurable risk in place of
unpredictable uncertainty. He becomes frugal, advancing himself by
means of the steady excess of income over outflow. He does not change
society through innovation.
CONCLUSION
If you can buy from a [ ], sell to a [ ], and make a profit, your
future is secure. Most people can’t.
As the free market erodes family ties, group solidarity, and
persecution, members of many groups can get in on the cornucopia. It
is clear that the Japanese have a similar mindset as the four groups,
but without the doctrine of the covenant. The Chinese are now
adopting it. The freedom to compete breaks down the barriers to
entry. But, as the free market moves westward, those who belong to
subgroups that have the same outlook as the Big Four enjoy an initial
advantage. Group solidarity fades in the face of open competition,
but this takes time. When an innovator has confidence in the future,
which includes confidence in the safety net of his family or his
confessional group, he has an advantage: less fear of failure.
Faith is then transferred to the free market itself. In Europe and
America, faith in the twentieth century was transferred from the free
market to the welfare state. The reverse process is true in Asia.
This is why Asia now has an advantage over the West: social and
racial solidarity coupled with increasing faith in the free market
and declining faith in the state, whether Communist or Fabian
socialist.
In the interim period, in between the coming of the free market and
the erosion of social and racial solidarity, confidence is on the
side of the family-based small enterprise. Asia is booming because of
this. China seems to have the unique combination. We shall see what
happens when the boom turns into recession after China’s central bank
stops creating fiat money like a drunken (non-Dutch) sailor.
November 13, 2004
Gary North [send him mail] is the author of Mises on Money. Visit