Part 1 of this review can be found here.
The second part of Thomas Sowell’s Black Rednecks and White Liberals bears the delightful title “Are Jews Generic?” and takes the reader on a tour across several continents and millenia to examine the phenomenon of “middleman minorities”. These are minority groups who are known for engaging in middleman occupations such as merchant and money lender. Besides Jews, who are of course the prototypical case, examples include the Chinese in Malaysia, the Armenians in the Ottoman Empire, the Ibos in Nigeria, the Lebanese in Sierra Leone, the Japanese in Peru, and the Indians in Burma.
What all these middleman minorities have in common is that they were frequent targets of not just ressentment and discrimination, but also outright violence. The scale and scope of such violence tends to be much greater than that against other unpopular minority groups. As Sowell puts it,
All the blacks lynched in the entire history of the United States do not add up to as many people as the number of Chinese slaughtered by mobs near Saigon in 1782, or the Jews killed by mobs in central Europe in 1096 or in the Ukraine in 1648, much less the slaughters of Armenians by mobs in the Ottoman Empire during the First World War.
Sowell locates the main reason for the intense animosity that middleman minorities face in their misunderstood economic role: Middlemen seemingly produce nothing, so to the casual observer, the wealth acquired by middlemen seems to come from thin air, so something fishy must be going on. This of course is a very distorted picture of how the economy works. In fact, middlemen are no less productive than people who work in agriculture, manufacturing, or service jobs. As Sowell points out, no one
create[s] or destroy[s] matter, except for a few nuclear physicists. Turning iron ore into steel products is not creating a material thing but only changing its form to something that people want more. That is precisely what middlemen do when they make goods or money available earlier than otherwise through retailing, credit, or loans.
Economic value is not tied to physical objects, but to people’s subjective valuation of them. People value their time, so having a variety of goods available at a local store is far more convenient than having to drive to numerous factories and farms to pick up various consumer goods. Thus, a dozen eggs at a nearby grocery store are more valuable to the average consumer than the same dozen eggs at a distant farm, which is why it is entirely reasonable to pay a small premium for the convenience of being able to buy many different products at the same nearby location.
Failure to understand this basic economic principle has led to middlemen being widely resented even when they belong to the same ethnic group. When, in addition to that, the middlemen belong to a different ethnicity, nationality, religion, or race, this bias against middlemen is reinforced with the natural suspicion toward outsiders, often with the violent consequences tallied above.
Black Rednecks and White Liberals is an excellent book and “Are Jews Generic?” is my favourite part of it. Although the concept of middleman minorities is not new (see for example “A Theory of Middleman Minorities”), Sowell’s treatment was my first contact with the term and the concept. It explains cogently why numerous ethnic minorities have become the targets of hatred and violence not just in spite of, but because of their thrift and hard work and the great contributions they have made to the societies around them.
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