GREAT RUSSIA WITH JEWS
Developments in late nineteenth century Russia, especially in Saint Petersburg, could almost serve as a text-book illustration of Sombart's thesis. Solzhenitsyn describes how, as part of the general liberalisation under Alexander II, the Russian interior was opened to certain limited categories of Jews:
'In 1859 Jewish merchants of the First Guild were granted the right of residency in all of Russia (and the Second Guild in Kiev from 1861; and also for all three guilds in Nikolayev, Sevastopol, and Yalta) with the right of arranging manufacturing businesses, contracts, and acquiring real estate. Earlier, doctors and holders of masters degrees in science had already enjoyed the right of universal residency ... From 1861 this right was granted to "candidates of universities," university graduates, and also "to persons of free professions."' (8)
(8) Thus the English Kindle version. The French translation (p.157) gives 1861 as the date when merchants of the First Guild were allowed to live outside the pale. Nathans's account (see later footnote) confirms that the date was 1859.
The effect was almost immediate. In 1859, Evzel' Gintsburg founded a private bank in Saint Petersburg which, according to the YIVO (Encyclopedia of Jews in Eastern Europe) (9) entry on 'Banking' 'quickly assumed a leading role and represented the major European banks in Russia.' Gintsburg (also transliterated as Ginzburg, or Günsburg) was a first-guild merchant from Vitebsk, in Byelorussia. The YIVO entry on the Gintsburg family says that their fortune 'derived from profits generated by farming the lucrative state monopoly on the production and sale of distilled spirits and from provisioning the Russian army during the 1840s and 1850s'. The article on Banking continues:
'He also founded the Private Commercial Bank in Kiev, a discount bank in Odessa, and a discount and credit bank in Saint Petersburg. Without investing in the railroad, Gintsburg’s credit institutions, as well as their Russian and Western European investors, made available a considerable share of the capital required for this enterprise. His son Goratsii ['Horace' - PB] succeeded Gintsburg as the head of the I. E. Gintsburg private bank.
'Ya‘akov Poliakov, the oldest of the Poliakov brothers, who had amassed a fortune through leaseholding, which he had then successfully invested in the railroad, went on to found two leading banks in southern Russia (the Azov-Don Commercial Bank and the Don Mortgage Bank) together with his brother Shemu’el. Shemu’el also founded the Mocow Mortgage Bank. In addition to his involvement in the latter bank, Eli‘ezer Poliakov founded the first of his own banking houses in 1873. Under the leadership of Avraam Zak, the Saint Petersburg Discount and Credit Bank developed into one of Russia’s foremost credit institutions. Zak also played a prominent role as a government adviser on finance, economic, and railroad-related questions.'
(9) Available online - http://www.yivoencyclopedia.org
All this is presumably what Pipes is referring to when he says: 'the first successful commercial banks in Russia were founded only in the 1860s.'
The impact on St Petersburg society is described by Benjamin Nathans (Associate Professor of History in the University of Pennsylvania and author of Beyond the Pale: The Jewish Encounter With Late Imperial Russia):
'In a remarkably short period of time, Petersburg Jewry gave rise in Russia to a new image of the Jew as modern, cosmopolitan, and strikingly successful in urban professions such as banking, law, and journalism that were emerging in the wake of the Great Reforms. This new profile did not supplant, but rather coexisted uneasily with the enduring figure of the Russian Jew as backward, fanatically separatist and frequently impoverished.
'Despite the numerical predominance of artisans and petty traders among the city's Jewish population, it was, not surprisingly, the merchants, bankers, and financiers who caught the public eye. In no other Jewish community in Russia was there such extraordinary and visible affluence. Petersburg quickly became the address of choice for the Russian- Jewish plutocracy, many of whom played a major role in the burgeoning fields of private banking, speculation, and railroads. A Jewish resident of the capital was perhaps only slightly exaggerating when she wrote of the 1860s and 1870s, "never before or since did the Jews in Petersburg live so richly, for the institutions of finance lay to a large extent in their hands."
[...]
'In the words of a former employee of the Gintsburg bank, "A complete metamorphosis could be observed in those who left the Pale of Settlement. The tax-farmer was transformed into a banker, the contractor into a high-flying entrepreneur, and their employees into Petersburg dandies. A lot of crows got dressed up in peacock feathers. Big-shots from Balta and Konotop quickly came to consider themselves 'aristocrats' and would laugh at the 'provincials'." (10)
(10) Benjamin Nathans: 'Conflict, community and the Jews of late nineteenth century St Petersburg', Jahrbücher für Geschichte Osteuropas, Neue Folge, Bd.44, H.2 (1996), pp.178-216.
He quotes the memoirs of Pauline Wengeroff, the wife of a successful tax-farmer, herself a traditionally minded Jew who arrived in St Petersburg in the 1870s:
'Jewish banking houses were founded, as were joint-stock companies led by Jews. The stock exchange and banking took on unexpected dimensions. At the stock exchange the Jew felt in his element; there people often became rich overnight, but others were toppled just as quickly. This sort of occupation was something new in Russia. But it was taken up in a positively brilliant manner by the Jews, even by those whose only training had been in Talmud.'
This success within Great Russia, outside the Pale, was not confined to financial affairs. Solzhenitsyn again:
'Intensive growth of the Jewish timber trade began in the 1860-1870s, when as a result of the abolition of serfdom, landowners unloaded a great number of estates and forests on the market ... The 1870s were the years of the first massive surge of Jews into industries such as manufacturing, flax, foodstuff, leather, cabinetry, and furniture industries, while the tobacco industry had long since been concentrated in the hands of Jews. In the words of Jewish authors: "In the epoch of Alexander II, the wealthy Jewish bourgeoisie was ... completely loyal ... to the monarchy. The great wealth of the Gintsburgs, the Polyakovs, the Bradskys, the Zaitsevs, the Balakhovskys, and the Ashkenazis was amassed exactly at that time. ... Samuil Polyakov had built six railway lines; the three Polyakov brothers were granted hereditary nobility titles. Thanks to railway construction, which was guaranteed and to a large extent subsidized by the government, the prominent capital of the Polyakovs, I. Bliokh, A. Varshavsky and others were created."' (pp.175-60)
Power of capital and railways, two of the most important motor powers of the modernisation so many people in the nineteenth century - notably, in Russia, the Slavophiles - detested. Both in fact promoted by elements in the state anxious to bring Russia up to date and able to compete, commercially and militarily, with Europe but both closely associated with Jewish entrepreneurs only recently permitted to live and work in Russia proper. Dostoyevsky's essay, The Jewish Question, was written in March 1877, less than twenty years after St Petersburg had been opened to Jewish 'merchants of the first guild.' He is essentially identifying the Jews with what he sees as the distinguishing quality of capitalism - that selfishness, a universal human characteristic but universally regarded as a vice, was now regarded as a virtue (it's a charge that could equally - perhaps better - be launched against the theories of political economy developed in Britain, associated, justly or not, with the name of Adam Smith):
'we are approaching materialism, a blind, carnivorous craving for personal material welfare, a craving for personal accumulation of money by any means - this is all that has been proclaimed as the supreme aim, as the reasonable thing, as liberty, in lieu of the Christian idea of salvation only through the closest moral and brotherly fellowship of men.' (11)
(11) English translation at http://mailstar.net/dostoievsky.html
Dostoyevsky's friend, Konstantin Pobedonostsev, wrote to him in 1879, on the eve of the 1881 pogroms:
'What you write about the Yids is quite correct. They fill everything up, they undermine everything, and they embody the spirit of the century. They are at the root of the revolutionary-social movement and regicide. They control the periodical press, the financial markets are in their hands, the popular masses fall into financial slavery to them, they guide the principles of present-day science, seeking to place it outside Christianity. And besides this, no sooner does a question about them arise than a chorus of voices speaks out for them in the name of ‘civilisation’ or ‘toleration’ (by which is meant indifference to faith). As in Romania and Serbia, as with us - nobody dares say a word about the Jews taking over everything. Even our press is become Jewish. Russkaya pravda, Moskva, Golos, if you please - are all Jewish organs . . .' (12)
(12) Quoted in Antony Polonsky: 'The Position of the Jews in the Tsarist Empire, 1881–1905' which I think - it isn't obvious from the text I obtained off the internet - is a chapter of Polonsky's book The Jews in Poland and Russia, Oxford and Portland, Littman Library of Jewish Civilization, 2010, Volume 2: 1881–1914.
Pobedonotsev was tutor to Alexander III and to Nicholas II and was soon to become the very powerful, severe, and unpopular Procurator of the Holy Synod, a layman in charge of the government department that ran the Russian Church. As such he had considerable influence on the government reaction to the pogroms, which largely consisted of withdrawing some of the freedoms given the Jews under Alexander II and imposing new restrictions.
In the next article in this series I hope to return to consideration of the position of the Jews in the Pale of Settlement, which had become steadily more difficult throughout the century, to the pogroms themselves, to the large scale emigration that followed and the dramatic change that occurred in Jewish politics - the emergence both of Socialism and of Zionism.