Religious Norms, Human Capital, and Money Lending in Jewish European History

Circa 1000, the main occupations of the large Jewish community in Muslim Spain and of the small Jewish communities in southern Italy, France, and Germany were local trade and long-distance commerce, as well as handicrafts. A common view states that the usury ban on Christians segregated European Jews into money lending. A similar view contends that the Jews were forced to become money lenders because they were not permitted to own land, and therefore, they were banned from farming. This article offers an alternative argument which is consistent with the main features that mark the history of the Jews: the Jews in medieval Europe voluntarily selected themselves into money lending because they had the key assets for being successful players in credit markets. After providing an overview of Jewish history during 70-1492, it discusses religious norms and human capital in Jewish European history, Jews in the Talmud era, the massive transition of the Jews from farming to crafts and trade, the golden age of the Jewish diaspora (ca. 800-ca. 1250), and the legacy of Judaism.