Up to the eleventh century, the economic regime reigning in Western Europe is characterized by the absence of commodity production. The few cities which survived from the Roman era primarily fulfill administrative and military functions. All production is destined solely for local consumption and the seignorial domains, being sufficient to themselves, enter into contact with the wide world solely through Jewish merchants who brave its strange places.  The commercial role played by Europeans could only be passive in character. But with time aid with the continuous growth in the importation of Oriental goods, there is an incentive to produce directly for exchange. The development of trade thus stimulates native production. The production of use values progressively gives way to the production of exchange values.
Not all native products are desired by the Orient. The produc- tion of exchange values first develops in those places where a set of conditions exists for the manufacture or extraction of certain goods especially prized abroad: monopoly products. Such were the woolens of England, the cloths of Flanders, the salt of Venice, copper from Dinant, etc. In these favored places, rapidly develop those “specialized industries, the products of which were at once beyond their place of origin.” 
Trade advances from the passive to the active stage and Florentine fabrics leave to conquer the wide world. As they are much sought after, these products are at the same time the source of enormous profits. This rapid accumulation of wealth is the basis for an accelerated development of a native merchant class. Thus, “salt became a potent weapon in the hands oftheVenetians for attaining wealth and for holding peoples in subjection. From the very beginning, these islanders had made a salt in their lagoons which was much sought after by all the peoples situated on the Adriatic and which broughtVenice trading privileges, concessions, and advantageous treaties.” 
So long as Europe lived under a regime of natural economy, the initiative in commercial traffic belonged to merchants from the Orient, principally the Jews. Only some peddlers, some lowly suppliers to the chateaux of the nobles and the clergy, succeed in freeing themselves from the humble mass of serfs bound to the soil. But the development of native production makes possible the rapid formation of a powerful class of native merchants. emerging from the artisans, they gain control over them by taking over the distribution of raw materials.  Contrary to trade as conducted by the Jews, which is clearly separate from production, native trade is essentially based on industry.
Everywhere industrial development marches hand in hand with expansion of trade. “Venice had the advantage of being simultaneously one of the greatest commercial cities of the world and one of the most industrial. Its fabrics were of immense service to its traders in their relations with the Orient .... Venice arid its neighboring cities were frill of all kinds of fabrics.”  “In Italy, as in Flanders, the maritime commerce, and the inland commerce which was its continuation, resulted in the activity of the seaports: Venice, Pisa, and Genoa in the South; Bruges in the North. Then, behind the seaports, the industrial cities developed: on the one hand, the Lombard communes and Florence; on the other, Ghent, Ypres and Lille, Douai, and further inland, Valenciennes, and Brussels.” 
The woolen industry became the basis of the greatness and prosperity of the medieval cities. Cloths and fabrics constituted the most important goods in the fairs of the Middle Ages.  In that is to be seen the profound difference between medieval capitalism and modern capitalism: the litter is based on a tremendous revolution in the means ofproduction; the former reposed solely on the development of the production of exchange values.
The evolution in exchange of medieval economy proved fatal to the position of the Jews in trade. The Jewish merchant importing spices into Europe and exporting slaves, is displaced by respectable Christian traders to whom urban industry supplies the principal products for their trading. This native commercial class collides violently with the Jews, occupants of an outmoded economic position, inherited from a previous period in historical evolution.
The growing contradiction between “Christian” and Jewish trade therefore leads to the opposition of two regimes: that of exchange economy as against natural economy It was consequently the economic development of the West which destroyed the commercial function of the Jews, based on a backward state of production. 
The commercial monopoly of the Jews declined in the degree that the peoples, whose exploitation had fed it, developed. “For a number of centuries the Jews remained the commercial guardians of the young nations, to the advantage of the latter and not without open recognition of this advantage. But every tutelage becomes burdensome when it continues longer than the dependence of the ward. Entire nations emancipate themselves from the tutelage of other nations, even as individuals used to, only by means of struggle.” 
With the development of exchange economy in Europe, the growth of cities and of corporative industry; the Jews are progressively eliminated from the economic positions which they had occupied.  This eviction is accompanied by a ferocious struggle of the native commercial class against the Jews. The Crusades, which were also an expression of the will of the city merchants to carve a road to the Orient, furnished them with the occasion for violent persecutions and bloody massacres of the Jews. From this period on, the situation of the Jews in the cities of Western Europe is definitely compromised.
In the beginning, the economic transformation reaches only certain important urban centers. The seignorial domains are very little affected by this change and the feudal system continues to flourish there. Consequently, the career of Jewish wealth is still not ended. The seignorial domains still offer an important field of action to the Jews. But now Jewish capital, primarily commer- cial in the preceding period, becomes almost exclusively usurious. It is no longer the Jew who supplies the lord with Oriental goods but for a certain time it is still he who lends him money for his expenses. If during the preceding period “Jew” was synonymous with “merchant,” it now begins increasingly to be identified with “usurer.” 
It is self-evident that to claim, as do most historians, that the Jews began to engage in lending only after their elimination from trade, is a vulgar error. Usurious capital is the brother of commercial capital. In the countries of Eastern Europe, where the Jews were not evicted from commerce, we encounter, as we shall see later, a considerable number of Jewish usurers.  In reality, the eviction of the Jews from commerce had as a consequence their entrenchment in one of the professions which they had already practiced previously.
The fact that Jews at different periods may have held landed property cannot serve as a serious argument in favor of the traditional thesis of Jewish historians. Far from constituting a proof of the multiplicity of the occupations of the Jews, Jewish property must be considered as the fruit of their usurious and commercial operations. 
In the business books of the French Jew Heliot of Franche-Comté, who lived at the beginning of the fourteenth century, we find vineyards mentioned among his properties. But what clearly emerges from these books is that these vineyards did not constitute the basis of an agricultural profession for Heliot but were the product of his mercantile operations. When in 1360, the king of France had again invited the Jews into his territory, the representative of the Jews, a certain Manasé, raised the problem of royal protection for the vineyards and cattle which would pass into the hands of the Jews as unredeemed securities. In Spain, in the time of great theological disputes between Jews and Christians, the latter blamed the Jews for having become wealthy as a result of their “usurious” operations. “They have taken possession of fields and of cattle .... They own three-fourths of the fields and lands of Spain.” 
The passage of property of the nobility into the hands of the Jews was a common phenomenon in this epoch. Such was the village of Strizov, in Bohemia, which had belonged to two nobles and was assigned in payment of debts to the Jews Fater and Merklin (1382). The village Zlamany Ujezd, in Moravia, was allotted to the Jew Axon de Hradic; the village Neverovo, in Lithuania, was assigned to the Jew Levon Salomic, etc.
So long as the landed property of the Jews constituted solely an object of speculation for them, it could only have an extremely precarious character because the feudal class very early succeeded in imposing a ban upon mortgaging real properties with the Jews.
It was altogether different wherever a genuine economic and social mutation took place: in those places where the Jews abandoned business in order to become real landowners. Sooner or later, they necessarily also changed their religion.
At the beginning of the fifteenth century, a Jew named Woltschko, having become the proprietor of several villages, the king of Poland exerted every effort to lead him to “acknowledge his blindness and to enter the holy Christian religion.” This fact is significant, for the kings of Poland carefully protected the Jewish religion. They would never have thought of converting Jewish merchants or bankers to Christianity. But a Jewish landowner in the Middle Ages could only be an anomaly.
This is equally true as regards the Christian usurer. This problem naturally has nothing in common with the banalities on racial peculiarities. Clearly it is foolish to claim, with Sombart, that usury constitutes a specific trait of the “Jewish race.” Usury, which as we have seen plays an important role in precapitalist societies, is almost as old as humanity and has been practiced by all races and nations. It is enough to recall the leading role played by usury in Greek and Roman societies. 
But to pose the question in this way means to invert the conditions of the problem. It is not by the “innate” capacities or the ideology of a social group that we must explain its economic position. On the contrary, it is its economic position which explains its capacities and its ideology Medieval society is not divided into lords and serf; because each of these groups originally possessed specific qualifications for the economic role which it was to play. The ideology and capacities of each class formed gradually as a function of its economic position.
The same is true of the Jews. It is not their “innate” predisposition for commerce which explains their economic position but it is their economic position which explains their predisposition to commerce. The Jews moreover constitute a very heterogeneous racial conglomeration. In the course of their history; they have absorbed a multitude of non-Semitic ethnic elements. In England, the “monopoly of usury brought them such wealth that some Christians undoubtedly went over to Judaism in order to participate in the Jewish monopoly in lending.” 
Judaism therefore consists rather of the result of a social selection and not of a “race having innate predispositions for commerce.” But the primacy of the economic and social factor does not exclude—far from it—the influence of the psychological factor.
As it is infantile to see the economic position of Judaism as the result of the “predispositions of the Jews,” just so it is puerile to consider it as the fruit of persecutions and of legal bans against exercising other professions than commerce or usury “In numerous writings on the economic life of the Jews in the Middle Ages, it is stated that they were excluded, from the very beginning, from artisanry; from traffic in goods, and that they were prohibited from possessing land property That is only a fable. In fact, in the twelfth century and in the thirteenth century, living in practically all of the great cities of Western Germany, they dwelt among the Christians and enjoyed the same civil rights as the latter .... At Cologne, during an entire period, the Jews even possessed the right to compel a Christian, who -had a claim to make against a Jew to appear before Jewish judges in order to have the matter adjudged according to Hebraic law .... It is just as false to assert that the Jews could not be admitted into the artisan guilds. True, several guilds did not admit what were termed ‘Jewish children’ as apprentices but this was not the case for all the guilds. The existence of Jewish goldsmiths and silversmiths, even in the period when the guild rules become far more severe, is sufficient proof of this. There were certainly few Jewish blacksmiths, masons, and carpenters among the artisans of the Middle Ages, but Jewish parents who gave their children into apprenticeship in these trades were very rare. Even the guilds which excluded the Jews did not do so out of religious animosity or racial hated but because the trades of usury and peddling were reputedly ‘dishonest’ .... The guilds excluded the children of Jewish businesspeople engaged in usury or peddling, in the same way that they did not accept the sons of simple laborers, carters and boatsmen, barbers, and weavers of linen into their ranks.” 
Feudal society was essentially a caste society It desired that everyone “should remain in his place.”  It fought usury by Christians just as it made it impossible for the bourgeois to attain nobility; and just as it disdained the noble who lowered himself to the practice of a trade or to engaging in business.
In 1462 the doctor Han Winter was driven from the city of Nordlingen because he practiced usury through the intermediary of a Jew.Thirty years later, in the same city; a bourgeois named Kinkel was placed in the pillory and driven from the city for having practiced the “Jewish profession.” The synod of Bamberg, in 1491, threatened to drive every Christian practicing usury; either by himself or through the intermediary of Jews, out of the Christian community. In 1487, in Silesia, it was decreed that every Christian practicing usury would be placed in the hands of the royal tribunal and punished in exemplary fashion.
So long as the feudal structure remains solid, the attitude of Christian society toward loans at interest does not change. But the deep-seated economic mutations which we have examined previously transform the conditions of the problem. Industrial and commercial development elevate banking to an indispensable role in economy The banker advancing finds to the merchant or the artisan becomes an essential element in economic development.
The treasury of the usurer, in the feudal era, fulfills the role of a necessary but absolutely unproductive reserve. “The most characteristic forms, in which usurers’ capital exists in time antedating capitalist production, are two .... The same forms repeat themselves on the basis of capitalist production, but as mere subordinate forms. They are then no longer the forms which determine the character of interest-bearing capital. These two forms are: First, usury by lending money to extravagant persons of teh higher classes, particularly to landowners; secondly, usury by lending money to the small producer who is in possession of his own means of employment, which includes the artisan, but more particularly the peasant, since under precapitalist conditions, so far as they permit of independent individual producers, the peasant class must form the overwhelming majority.” 
The usurer makes loans to the feudal lords and to the kings for their luxuries and their war expenditures. He lends to the peasants and the artisans in order to allow them to pay their taxes, rents, etc. ... The money loaned by the usurer does not create surplus value; it merely allows him to take possession of a portion of the surplus product which already exists.
The function of the banker is altogether different. He contributes directly to the production of surplus value. He is productive. The banker finances great commercial and industrial ventures. Whereas credit is essentially consumer credit in the feudal era, it becomes credit of production and of circulation in the era of commercial and industrial development.
There is consequently a fundamental difference between the usurer and the banker. The first is the credit organ in the feudal era, whereas the second is the credit organ in the era of exchange economy. Ignoring this fundamental distinction leads almost all historians into error. They see no difference between the banker of antiquity; the Jewish banker of England of the eleventh century and Rothschild or even Fugger. “Newman ... says that the banker is respected while the usurer is hated and despised, because the banker lends to the rich, whereas the usurer lends to the poor (J.W. Newman, Lectures on Political Economy, London, 1851, p.44). He overlooks the fact that the difference of two modes of production and the corresponding social orders intervenes here, and the atter is not exhausted by the distinction between rich and poor.” 
Of course this distinction becomes really obvious in the capitalist epoch properly so-called. But “the money-lender stands in the same relation to him [the merchant] in teh former stages of society as he does the modern capitalist. This specific relation was felt also by the Catholic universities. ‘The universities of Alcala, of Salamanca, of Ingolstadt, of Freiburg in the Breisgau, Mayence, Cologne, Treves one after another recognized the legality of interest on money for commercial loans.’ ” 
In the measure that economic development continues, the bank conquers ever more solid positions while the Jewish usurer increasingly loses ground. He is no longer to be found in the prosperous commercial cities of Flanders because the Jews, “unlike the Lombards, only practiced placement at interest and did not play the role of intermediaries in commercial operations.” 
After their elimination from commerce, a process which is accomplished in Western Europe in the thirteenth century the Jews continue to develop the business of usury in regions not yet reached by exchange economy.
In England, in the period of King Henry II (second half of the twelfth century) they are already involved up to the hilt in usury They are generally very rich and their clientele is composed of the great landed proprietors. The most famous of these Jewish bankers was a certain Aaron of Lincoln, very active at the end of the twelfth century. King Henry II alone owed him one hundred thousand pounds, a sum equal to the annual budget of the Kingdom of England at this time.
Thanks to the extremely high rate of interest-it fluctuated between 43 and 86 percent—a large number of estates of the nobility had passed into the hands of the Jewish usurers. But they had powerful associates and—exacting ones. If the kings of England supported the business of the Jews, it was because it constituted a very important source of revenue for them. All loans made with the Jews were registered in the Scaccarium Judaeorum [Exchequer of the Jews] and were assessed a tax of 10 percent in behalf of the royal treasury But this legal contribution was far from sufficient for the kings. Any pretest was good enough for despoiling the Jews and the income from their usury continually contributed to enlarging the royal treasury. It was particularly bad for the Jews to have the kings as important debtors. The rich banker Aaron of Lincoln found this out in 1187 when the King of England confiscated his property.
The dispossessed nobility would avenge itself by organizing massacres of the Jews. In 1189, the Jews were massacred in London, Lincoln, and Stafford. A year later, the nobility, led by a certain Malebys, destroyed the Scaccarium Judaeorum ofYork. The notes were solemnly burned. The Jews, besieged in the chateau, committed suicide. But the king continued to protect the Jews even after their death .... He demanded payment to himself of the sums due the Jews, by virtue of the fact that the Jews were the “slaves of his treasury.” Special employees were ordered by him to make an exact list of all the debts.
At the beginning of the thirteenth century the king granted a “Magna Carta” to the nobility which brought certain improvements in the sphere of loans. Nevertheless, in 1262 and in 1264, new disturbances broke out against the Jews. In 1290, the entire Jewish population of England, that is to say almost three thousand people, was expelled and its property confiscated.
The economic situation of the Jews of France, far more numerous than the English (one hundred thousand), was not perceptibly different from that of the English Jews. “With the accession of Philip Augustus (1180) and in the first years of his reign, the Hebrews were rich and numerous in France. Learned rabbis had been attracted to the synagogue of Paris, which, on the solemn entry of Pope Innocent at St. Denis in 1135 had already figured among the corporations of the capital at the time of the passage of the Pontiff. According to the historian Rigord, they had acquired almost half of Paris. “... Their credits were spread throughout villages, cities, and suburbs, everywhere. A great number of Christians had even been expropriated by the Jews because of debts.” 
It is mainly in Northern France that the Jews were engaged in usury. In Provence during the thirteenth century, Jewish participation in trade was still very important. The Jews of Marseilles were in regular business relations with Spain, North Africa, Sicily, and Palestine. They even owned ships, and like their ancestors of the Carolingian epoch, they imported spices, slaves, etc.
But these are only vestiges from a previous period. Usury appears to constitute the principal economic function of the Jews of France in the thirteenth century. A notary was appointed in each city for dealings in loans. The interest rate rose to 43 percent. Up to the statute of Melun (1230), which prohibited the Jews from making loans on real property; the principal clients of the Jewish bankers were the princes and lords. At the beginning of the twelfth century; the Jew Salomon of Dijon was the creditor of the greatest cloisters of France. The Count of Montpellier owed a Jew by the name of Bendet the sum of fifty thousand sous. Pope Innocent III, in a letter to the king of France, expresses indignation at the fact that the Jews are taking possession of church property, that they are seizing lands, vineyards, etc.
While the economic position of the Jews of France is similar to that of the English Jews, their political situation is different. Power, which was far more divided, placed them in the hands of a multitude of princes and lords. The Jews were subjected to a host of levies and taxes which enriched the powerful. Various means were utilized in order to extract the maximum of money from the Jews. Mass arrests, ritual trials, expulsions, all of these were used as pretexts for enormous financial extortions. The kings of France expelled and admitted the Jews a number of times in order to seize their property.
The social and economic position of the Jews in Moslem Spain is not known with accuracy. There is, however, not the shadow of a doubt that they belonged to the privileged classes of the population. “Arriving in Granada,” writes a certain Isak de Alvira, “I saw that the Jews here occupy leading positions. They have divided up the capital and the province. These accursed ones are everywhere at the head of the administration. They are engaged in the collection of taxes and live in luxury while you, Moslems, are clad in rags.” In Christian Spain, in Castile, the Jews are bankers, tax farmers, quartermasters to the king. Royalty protects them as its economic and political supporters. The interest rate, lower than in other countries, is 33.3 percent at the beginning of the twelfth century In a great many cortes the nobility has struggled for a reduction in the rate of interest but has always met with the resistance of the kings. It was solely in the reign of Alphonse IX that the nobility achieved some concrete results in this sphere.
A similar situation arose in Aragon. Jehuda de Cavallera is a characteristic example of a great Jewish “capitalist” of the thirteenth century. He leased salt mines, coined money, supplied the army and possessed great estates and great herds of cattle. It was his fortune that made possible the construction of a battle fleet for the war against the Arabs.
The economic backwardness of Spain made it possible for the Jews to preserve their commercial positions longer than in England or in France. Documents of the twelfth century mention Jews of Barcelona who made voyages as far as the Bosphorus. In 1105, Count Bernard III granted a monopoly in the importation of Sicilian slaves to three Jews, merchants and proprietors of ships at Barcelona. We must await the fourteenth century, when Barcelona, according to Pirenne, will be “transformed into an enormous store and workshop,” before the Jews are completely expelled from trade. Their situation then declined to such an extent that they were compelled to pay taxes in order to be able to pass through this city “The unfortunate Israelites, far from being merchants at Barcelona, entered it like merchandise.” 
Jewish usury took on such dimensions in Aragon that serious movements against the Jews arose among the nobility and the bourgeoisie.
In Germany, the primarily commercial period extends up to the middle of the thirteenth century. The Jews bring Germany into relations with Hungary; Italy, Greece, and Bulgaria. The slave trade flourishes up to the twelfth century Thus, we are reminded in the customhouse tariffs of Walenstadt and of Coblenz that Jewish slave merchants had to pay four denars for each slave. A document of 1213 says of the Jews of Laubach “that they were extraordinarily wealthy and that they conducted a great trade with the Venetians, the Hungarians, and the Croats.”
From the thirteenth century on, the importance of the German cities grows. As elsewhere, and for the same reasons, the Jews are eliminated from commerce and turn towards the banking business. The center of gravity of Jewish usury is concentrated in the nobility. The Acts of Nuremberg show the average debt contracted with the Jews rose to 282 gulden among the city people and 1,672 among the nobles. The same is true of the 87 notes of lJIm which belonged to Jewish banking houses. Of the 17,302 gulden which they covered, 90 percent belonged to noble debtors. In 1344, the Jewish banker Fivelin loaned the Count of Zweibrücken 1,090 pounds. The same Fivelin, in collaboration with a certain Jacob Daniels, loaned 61,000 florins to the King of England, Edward III, in 1339. 
In 1451, emperor Frederick III asked Pope Nicolas V for a privilege in behalf of the Jews, “so that they could live in Austria and there make loans at interest to the great convenience of the nobility.” In the thirteenth century; in Vienna, the Jews Lublin and Nzklo are engaged in the important functions of “finance administrators of the Austrian Duke (Comites camarae ducis austriae).
But this state of affairs could not continue indefinitely. Usury slowly destroyed the feudal regime, ruined all classes of the population, without introducing a new economy in place of the old. In contrast to capital, usury is essentially conservative. “Both usury and commerce exploit the varoious modes of production. They do not create it but attack it from the outside. Usury tries to maintain it directly in order to exploit it ever anew ....”  “Usury centralizes monetary wealth, where the means of production are disjointed. It does not alter the mode of production but attaches itself to it like a parasite and makes it miserable. It sucks its blood, kills its nerve and compels production to proceed under ever more disheartening conditions ... Usurer’s capital uses capital’s method of exploitation without its mode of production.”  Despite this destructive effect, usury remains indispensable in backward economic systems. But there it becomes an important cause of economic stagnation, as can be seen m many Asiatic countries.
If the burdcn of the usurer becomes more and more unbearable in Western Europe, it is because it is incompatible with the new economic forms. Exchange economy penetrates rural life. Industrial and commercial development of the cities deals a blow to the old feudal system in the country. A vast market opens up to agricultural products, which leads to a decided recession in the old forms of servitude, and of rents based on the natural economy. “Hardly anywhere, save in regions which were difficult of access, or very remote from the great commercial movements, did serfdom retain its primitive form. Everywhere else, if it did not actually disappear, it was at least mitigated. One may say that from the beginning of the thirteenth century the rural population, in Western and Central Europe, had become or was in process of becoming a population of free peasants.” 
Everywhere in Western Europe, and in part in Central Europe, the twelfth, thirteenth, and fourteenth centuries are the epoch of the development of Jewish usury. But economic evolution brings about its rapid decline. The definitive expulsion of the Jews took place at the end of the thirteenth century in England, at the end of the fourteenth century in France, at the end of the fifteenth century in Spain. These dates reflect the difference in the speed of economic development within these countries. The thirteenth century is an epoch of economic flowering in England. For Spain it is the fifteenth century which is the high point of the process wherein the Spanish kingdoms “developed their commerce and added to their wealth. Sheep began to cover the countryside, and in the trade with the North of Europe Spanish began to compete with English wool. The exports of wool to the Low Countries were considerably increased, and sheep-farming began to give Castile its characteristic aspect and to enrich the nobility There was also an increasing trade with the North in iron from Bilboa, olive oil, oranges and pomegranates.” 
Feudalism progressively gives way to a regime of exchange. As a consequence, the field of activity of Jewish usury is constantly contracting. It becomes more and more unbearable because it is less and less necessary. The more money becomes abundant as a result of the more intensive circulation of goods, the more pitiless becomes the struggle against an economic function which could hardly find economic justification except in a time of economic immobility, when the treasury of the usurer constituted an indispensable reserve for society.
Now the peasant begins to sell his products and to pay his lord in money The nobility in order to satisfy its growing luxury requirements is interested in freeing the peasantry and in everywhere replacing fixed rent in kind by rent in money “The transformation of rent in kind into money rent that takes place at first sporadically, then on a more or less national scale, presupposes an already more significant development of trade, urban industry; commodity production in general and therefore monetary circulation.” 
The transformation of all classes of society into producers of exchange values, into owners of money, raises them unanimously against Jewish usury whose archaic character emphasizes its rapacity The struggle against the Jews takes on increasingly violent forms. Royalty, traditional protector of the Jews, has to yield to the repeated demands of congresses of the nobility and the bourgeoisie. Besides, the monarchs themselves are increasingly compelled to dig into the treasuries of the bourgeoisie, a class which soon monopolizes the most important portion of mobile wealth. In the eyes of the kings the Jews, as a source of revenue, become less interesting (leaving out of consideration the fact that expulsion of the Jews was always an extremely profitable operation).
It is in this fashion that the Jews were progressively expelled from all the Western countries. It was an exodus from the more developed countries to the more backward ones of Eastern Europe. Poland, deeply mired in feudal chaos, became the principal refuge of Jews driven out of every other place. In other countries, in Germany, in Italy, the Jews still survived in the less developed regions. At the time of the travels of Benjamin of Tudela, there were practically no Jews in commercial centers such as Pisa, Amalfi, Genoa. On the other hand, they were very numerous in the most backward parts of Italy. Even in the Papal States, conditions were far superior for Jewish trade and banking than in the rich mercantile republics of Venice, Genoa, and Florence.
Mercantile economy therefore expelled the Jews from their last strongholds. The Jew, “banker to the nobility,” was already completely unknown in Western Europe toward the end of the Middle Ages. Here and there, small Jewish communities succeeded in maintaining themselves in certain secondary economic functions. The “Jewish banks” were no longer anything but pawnshops where it is poverty which is the borrower.
The collapse was a total one. The Jew became a petty usurer who lends to the poor of town and country against pledges of petty value. And what can he do with the securities which are not redeemed? He must sell them. The Jew became a petty peddler, a dealer in secondhand goods. Gone forever was his former splendor.
Now begins the era of the ghettos  and of the worst persecutions and humiliations. The picture of these unfortunates bearing the badge of the wheel and ridiculous costumes, paying taxes like beasts for passing through cities and across bridges, disgraced and rejected, has been implanted for a long time in the memory of the populations of Western and central Europe.
1. “The manorial domain must contain in itself all that is necessary for life. It must so far as possible buy nothing from without and must not call for external aid. It is a small world in itself and must be sufficient to itself.” N.D. Fustel de Coulanges, Histoire des Institutions Politiques de l’Ancienne France (Paris, 1888-92), vol.4, p.45.
2. Pirenne, Belgian Democracy, Its Early History, op. cit., p.91. “Copper from Dinant and Flemish cloths; owing to a merited reputation, appear to have expanded beyond the narrow confines of the city market.” Maurice Ansiaux, Traité d’Économie Politique (Paris, 1920-26), vol.1, p.267.
3. Depping, Histoire du commerce entre le Levant et l’Europe, op. cit., vol.1, p.182.
4. “Among the weavers, who sometimes work for distant markets, we see merchants becoming differentiated from the mass of artisans: these are the cloth merchants ....” Sée, Esquisse d’une Histoire Économique et Sociale de la France, op. cit., p.102.
5. Depping, op. cit., vol.1, pp.184-85.
6. Pirenne, A History of Europe, op. cit., p.227.
7. Weber, General Economic History, op. cit., p.155.
8. Roscher states: “It might well be said that medieval policy toward the Jews is almost the reverse of the general economic trend.” Roscher, Status of the Jews in the Middle Ages, op. cit., p.14.
9. Ibid., p.20. “The rule that the independent development of merchants’ capital is inversely proportioned to the degree of development of capitalist production becomes particularly manifest in the history of the carrying trade ...” K. Marx, Capital, vol.3, p.387.
10. Aloys Schulte, in his Geschichte des Mittelalterlichen Handels und Verkehrs zwischen Westdeutschland und Italien (Leipzig, 1900, p.152), claims that the Jews did not try to establish connections with the artisans as the Christian entrepreneurs did, and losing their commercial position as a result of this, they had to engage exclusively in credit. This observation is highly interesting. It shows the essence of the problem: the link of Christian trade with industry and the lack of this tie on the part of Jewish trade.
11. In a study devoted to the Jews of a German city, Halberstadt, Max Köhler states that from the thirteenth century on, “the most important profession of the Jews of Halberstadt appears to have been usury.” Dr. Max Kohler, Beiträge zur Neueren Judischen Wirtschaftsgeschichte, Die Juden in Halberstadt und Umgebung bis zur emanzipation (Berlin, 1927), p.2. Heinrich Cunow tells us in Allgemeine Wirtschaftsgeschichte (op. cit., vol.3, p.45): “Although the economic conditions of the nobility were becoming worse all the time, its military games, its orgies, its festivals, its magnificent tourneys ... did not fail to expand in the fourteenth century Poor nobles also considered it their duty to take part in them, As the necessary monetary prerequisites for this show were lacking to them, they went into debt with the Jews whose principal occupation was lending at interest ....”
12. The example of Poland again proves how infantile are the customary schema of Jewish historians who attempt to explain the commercial or usurious function of the Jews on the basis of persecutions. Who then had forbidden the Jews of Poland from becoming agriculturists or artisans? Long before the first attempts of the Polish cities to struggle against the Jews, all commerce and all banking in that country already lay in their hands.
13. This false conception of Jewish historians finds its counterpart in the proposition according to which the Jews had to abandon their “agricultural profession” because of legal bans. It is incorrect “to assert that the Jews were forbidden to own land. Wherever we find Jews doing business in the medieval cities, they are likewise the owners of their own houses. Moreover they often possessed larger pieces of land in the territory of the city Truthfully speaking, it does not appear that they cultivated these lands anywhere. As soon as land came into their hands as security, they tried to sell it. It was not because they were forbidden to keep it but simply because they had no desire to do so. We do often find in the records, however, that vineyards, orchards, flax fields, etc. belonged to Jews. The products of these lands could easily be sold.” Cunow, op. cit., vol.3, p.112.
14. Schipper, Jewish History, op. cit., vol.1, p.127.
“The Jews formed a social class very powerful because of the riches gained in industry; commerce and particularly banking operations.” Rafael Ballester y Castell, Histoire de l’Espagne (Paris, 1928), p.154.
15. “The virtuous Brutus lent money in Cyprus at eight-and-forty percent as we learn from the letters of Cicero.” Adam Smith, The Wealth of Nations, Modern Library Edition, p.94.
16. Brentano, Eine Geschichte der Wirtschaftlichen Entwicklung Englands, op. cit., vol.1, p.366.
18. If it is puerile to think that feudal society whose principle was that “everyone should remain in his place,” transformed “Jewish agriculturists” into merchants, it is obvious, however, that legal prohibitions, themselves the fruit of economic conditions, played a certain role in confining the Jews within trade.This is above all true in periods when as a result of economic changes the traditional situation of the Jews became compromised. Thus, for example, Frederick the Great was not in favor of the Jews exercising manual professions. He wanted “everyone to remain in his profession; that the Jews be aided in the exercise of commerce but that the other professions should be left to Christians.
19. Marx, Capital, op. cit., vol.3, p.697-698.
20. Ibid., pp.698. My emphasis.
21. Ibid.,p.697. My emphasis.
“In the same period, the famous theologian Medina, developing a premise which is also found in St. Thomas, acknowledges the play of supply and demand as a natural mode of determining the proper price. The Trinus Contractus, that marvel of juridical analysis which justifies the charging of interest in business loans when the money is really used as capital, is then admitted by the Italian and Spanish canonists, more enlightened than those of France, or rather situated in a more advanced social milieu. Jannet, op. cit., p.284. My emphasis.
22. Pirenne, Histoire de Belgique (Brussels, 1902-32), vol.1, p.251. My emphasis.
23. Depping, Les Juifs dans le Moyen Age, op. cit., pp.132-33.
24. Ibid., p.387.
25. Bücher tells us in his book Bevölkerung von Frankfurt am Main im XIV und XV Jahrhundert (quoted by Cunow, op. cit., vol.3, p.46) “Among the debtors to the Frankfort Jews, we find a large part of the nobility of Wetterau, Pfalz, Odenwald, etc., represented .... The Archbishop of Mainz also owed the Jews money .... It is primarily the nobility that is heavily indebted. There were few lords in the area around Frankfort whose notes and pledges were not to be found in the Jewish quarter .... Certain Christian bourgeois of Frankfort and the neighboring cities had also contracted ‘Jewish debts’ (as the report of the city council expresses itself on this subject) but the greatest part of the 279 notes with which the city council was concerned were obligations of nobles.”
26. Marx, Capital, op. cit., vol.3, p.716.
27. Ibid., p.700. My emphasis.
28. Pirenne, History of Europe, op. cit., p.237.
29. Ibid., pp.491-92.
30. Marx, Capital, op. cit., vol.3. p.926.
“This transformation of customs into money rent corresponds to the growth of mobile property .... Money becomes the readiest hallmark of wealth and begins to be preferred to natural products in evaluating the revenues of landed property. A similar evolution is noted in other countries and particularly in England where it is even more pronounced ....” Sée, Esquissse d’une Histoire Économique et Sociale de la France, pp.61-62.
31. Contrary to a rather widespread conception, the ghetto is a rather recent institution. It was not until 1462 that the Jews of Frankfort were enclosed in a ghetto. “There never was a question of such a measure in the Middle Ages. On the contrary, the Jews could select their living quarters freely and could go anywhere in the whole city at any time.” Georg Ludwig Kriegk, Frankfurter Bürgerzwiste und Zustände im Mittelalter (Frankfort, 1862), p.441.
We must not confuse Jewish quarters with ghettos. While the former are known in various epochs of Jewish history, the latter constitute an institution born of the period when the Jew becomes “a petty usurer.” Thus, in Poland, the ghetto constitutes the exception and not a rule. This did not prevent Hitlerite barbarism from “returning” the Polish Jews to the ghettos.