Chapter 29: The Rothschilds

**Dave Broker** (0:05)
Throughout the Middle Ages, Europe was fractured across a myriad of lands controlled by warriors bound by vassalage to different chiefs and monarchs. But in that chaotic environment, the people of Europe remained united, in spirit, it was believed, by the power of Christendom. The Roman Catholic Church connected the many peoples of the continent as the body of Christ in the world. But from the earliest days, there was a minority group among them who did not fit into that body. The Jews. As outsiders to the church community, they faced every imaginable discrimination, legal and social. They were often forced to wear clothing that made them stand out as Jews, and subsequently get ordered around by non-Jews, and generally get harassed. In the towns where they lived, they would be secluded to a particular neighborhood, or suburb, as it was called back then. But we know these neighborhoods by the Italian word for suburbs, or ghettos, or ghettos for short.
Medieval Jews were allowed to practice business, and as merchants, they were not subject to all the same laws that Christians were. Most famously, they were exempt from usury laws. They were allowed to charge interest when lending money.
As a result, they were protected by some rulers, who depended on Jewish merchants for loans. Yet, contrary to some popular opinion, this did not allow them to grow exceedingly rich, as Jews were also subject to way, way higher taxes in return for that protection. This was the case in the Free City of Frankfurt, in the Holy Roman Empire. Standing smack dab in the middle of the continent's crossroads, Frankfurt evolved as the center of trade during the transition to modernity. Coinage from across the empire wound up there, and so there was a flourishing money changing and banking sector. Jewish merchants were among the many merchants of the city who participated in this financial market.
A couple of times during the Middle Ages, Frankfurt expelled its Jewish population, only to let them back in again in the mid-15th century. Even after Frankfurt adopted Lutheranism as the Protestant Reformation divided Christian Europe in the 16th century, the Jews there remained outsiders within the city. They were confined to a one-street ghetto called the Judenstrauß, literally the Jewish street, which was meant for 500 residents but housed at least 3,000. To leave these cramped conditions required an expensive permit, and residents were subject to a poll tax, costing them double the taxes paid by local Christians. The entrance to the Judenstrauß included an official mural commissioned by the city of Frankfurt. It portrayed several Jews sucking from the teat of a sow while another eats the excrement coming out of the sow's posterior. None other than Satan himself watches the act approvingly.
Born into this humiliating and hideously anti-Semitic setting was the Rothschild family. They were fairly typical Jewish merchants in the 1500s through the 1700s, and this family may have been little more than an unremarkable footnote in an obscure academic history of Frankfurt had it not been for the Age of Revolution and Europe's transition into economic modernity.
The Industrial Revolution in Great Britain made the surprising success story of the Rothchilds possible, and the Rothchilds, in turn, made the Industrial Revolution possible across the rest of Europe. This is how it happened.
This is The Industrial Revolutions, Chapter 29, The Rothchilds.
Okay, a few administrative notes before we begin. First of all, my apologies for the delay of this episode. I have been a little sidetracked lately getting some bonus episodes recorded, and those will be coming out in a few weeks. Second, thank you so much to everyone who rated the podcast an apple over the last two weeks. We are now over 100 ratings, and the aggregate stands at 5 out of 5 stars. I really appreciate the love. Speaking of love, thank you so much to everyone who signed up as a patron of the podcast on Patreon. I am so grateful for your support. If you haven't become a patron yet, please check out patreon.com/indrevpodtoday. That link is in the episode notes for this episode too. There are many great benefits, including footnotes, for this episode and others, a monthly book review and more. Finally, new listener John has been catching up on old episodes and sent me some corrections that I want to share with you. First of all, in Chapter 14 I was saying droughtsmen rather than draftsmen, my bad. The spelling mixed me up, but I guess it makes sense if you think about the spelling of draft beer. I also mispronounced Dr. Edward Jenner's hometown. In the US we pronounce this as Berkeley, like the University of California Berkeley, but apparently in England it's pronounced Barkley. I did not know that. The other pronunciation corrections he sent me are, well, they're due to my accent. I'm from the Midwest in the United States and my accent is kind of strong, and the way we pronounce things can be a little lazy. For example, I do not say, Lazy Fair Economics. I say, Lazy Fair Economics, because that's how we say it where I'm from. When I say, Glasgow, apparently it sounds like I'm saying, Glasgow, rather than more accurate, Glasgow, and when I say, Birmingham, apparently the ham is more pronounced than I realized. The Brit would pronounce it more like, Birmingham. And then there is the Scottish capital. I've been getting this from a few people. Now I'm not Scottish, and I have a tendency to butcher a lot of Scottish words and names. And Edinburgh is one of them. I promise I am not trying to say, Edinburgh. It just kind of comes out that way. It's more like, Edinburgh. My apologies to my British listeners. I will work a lot harder to pronounce these like you do going forward. And thank you, John, for sending me these notes. I appreciate it.