actually widened the areas of choice for Jewish entrepreneurs. If few of them actually built railroads, many established subcontracting enterprises that supplied the railroad industry. If very few could enter oil production, many could establish themselves in oil processing, transportation, and marketing. If the basic chemicals required large capital outlays, smaller-size operations and more specialized enterprises using basic chemicals were open for Jewish entrepreneurship. Thus a large area for Jewish entrepreneurial activity was made available and was stimulated by Russian industrialization.25
For most Jews, especially the artisans, the collapse of the Jewish economic niche in Eastern Europe meant emigration and proletarianization. For an important minority—a much larger one than among most other groups—it stood for new social and economic opportunities. In 1887 in Odessa, Jews owned 35 percent of factories, which accounted for 57 percent of all factory output; in 1900, half of the city’s guild merchants were Jews; and in 1910, 90 percent of all grain exports were handled by Jewish firms (compared to 70 percent in the 1880s). Most Odessa banks were run by Jews, as was much of Russia’s timber export industry. On the eve of World War I, Jewish entrepreneurs owned about one-third of all Ukrainian sugar mills (which accounted for 52 percent of all refined sugar), and constituted 42.7 percent of the corporate board members and 36.5 percent of board chairmen. In all the sugar mills in Ukraine, 28 percent of chemists, 26 percent of beet plantation overseers, and 23.5 percent of bookkeepers were Jews. In the city of Kiev, 36.8 percent of all corporate managers were Jews (followed by Russians at 28.9 percent). And in 1881 in St. Petersburg (outside the Pale), Jews made up about 2 percent of the total population and 43 percent of all brokers, 41 percent of all pawnbrokers, 16 percent of all brothel owners, and 12 percent of all trading house employees. Between 1869 and 1890, the proportion of business owners among St. Petersburg Jews grew from 17 percent to 37 percent.26
The “Jewish economy” was remarkable for its high rate of innovation, standardization, specialization, and product differentiation. Jewish enterprises tended to find more uses for by-products, produce a greater assortment of goods, and reach wider markets at lower prices than their competitors. Building on previous experience and superior training, utilizing preexisting “ethnic” connections and cheap family labor, accustomed to operating on low profit margins, and spurred on by (sometimes negotiable) legal restrictions, they were—as elsewhere—better at being “Jewish” than most of their new-minted and still somewhat reluctant competitors. In purely economic terms, their most effective strategy was “vertical integration,” whereby Jewish firms “fed” each other within a particular line, sometimes covering the entire spectrum from the manufacturer to the consumer. Jewish craftsmen produced for Jewish industrialists, who sold to Jewish purchasing agents, who worked for Jewish wholesalers, who distributed to Jewish retail outlets, who employed Jewish traveling salesmen (the latter practice was introduced in the sugar industry by “Brodsky himself”). In many cases, including such Jewish specialties as the marketing of sugar, timber, grain, and fish, the integrated cycle did not include production and often ended with export, but the principle was the same.27
Vertical integration is a very common Mercurian practice, used to great effect by many “middleman minorities” in a variety of locations. In late imperial Russia, where state-run industrialization did battle with a largely unreformed rural economy, experienced Mercurians were in a particularly strong position to benefit from the coming of capitalism. The official view was doubtless correct even though it was officiaclass="underline" in a world of universal mobility, urbanity, and marginality, most Russian peasants and their descendants (who embodied the “Orthodoxy” and “nationality” parts of the autocracy’s doctrine as well as the “nation” of intelligentsia nationalism) were at an obvious disadvantage compared to all literate service nomads and especially the Jews, who were by far the most numerous, cohesive, exclusive, and urban of Russia’s Mercurians. By the outbreak of the Great War, the tsar’s Jewish subjects were well on their way to replacing the Germans as Russia’s model moderns (the way they had done in much of East-Central Europe). If not for the relentless official restrictions (and the fierce competitiveness and cultural prominence of the Old Believer dissenters), early twentieth-century Russia would probably have resembled Hungary, where the business elite was almost entirely Jewish.
The same was true of the other pillar of the modern state, the professionals. Between 1853 and 1886, the number of all gymnasium students in the Russian Empire grew sixfold. During the same period, the number of Jewish gymnasium students increased by a factor of almost 50 (from 159, or 1.3 percent of the total, to 7,562, or 10.9 percent). By the late 1870s, they made up 19 percent of the total gymnasium population in the Pale of Settlement, and about one-third in the Odessa school district. As the Odessa writer Perets Smolenskin wrote in the early 1870s, “All the schools are filled with Jewish students from end to end, and, to be honest, the Jews are always at the head of the class.” When the first classical gymnasium opened in 1879 in Nikolaev (also in New Russia), 105 Jews and 38 Christians enrolled.28 And when the narrator of Babel’s “The Story of My Dovecot” passed his entrance exam to that gymnasium in 1905, old “Monsieur Lieberman,” his Torah teacher,
gave a toast in my honor in the Hebrew language. The old man congratulated my parents in this toast and said that I had vanquished all my enemies at the exam, had vanquished the Russian boys with fat cheeks and the sons of our coarse men of wealth. Thus in ancient times had David, King of Judah, vanquished Goliath, and just as I had triumphed over Goliath, so would our people by the strength of their intellect vanquish the enemies who had encircled us and were thirsting for our blood. Having said this, Monsieur Lieberman began to weep and, while weeping, took another sip of wine and shouted “Vivat!”29
The higher one moved within the expanding Russian education system, the higher the proportion of Jews and the more spectacular their triumph over the imperial Goliath and the Russian boys with fat cheeks. The share of Jewish students in the gymnasia was greater than in the Realschulen, and their share in the universities was higher than in the gymnasia (partly because many Jewish children began their education in heders, yeshivas, or at home—with or without the help of a Monsieur Lieberman). Between 1840 and 1886, the number of university students in Russia increased sixfold (from 2,594 to 12,793). The number of Jews among them grew over a hundred times: from 15 (0.5 percent of the total) to 1,856 (14.5 percent). At Odessa University, every third student in 1886 was Jewish. Jewish women represented 16 percent of the students at the Kiev Institute for Women and at Moscow’s Liubianskie Courses, 17 percent at the prestigious Bestuzhev Institute, and 34 percent at the Women’s Medical Courses in St. Petersburg.30
As elsewhere, the most popular careers were those in law and medicine. In 1886, more than 40 percent of the law and medical students at the universities of Kharkov and Odessa were Jewish. In the empire as a whole, in 1889 Jews accounted for 14 percent of all certified lawyers and 43 percent of all apprentice lawyers (the next generation of professionals). According to Benjamin Nathans, “during the preceding five years, 22% of those admitted to the bar and an astounding 89% of those who became apprentice lawyers were Jews.” Jews constituted 49 percent of all lawyers in the city of Odessa (1886), and 68 percent of all apprentice lawyers in the Odessa judicial circuit (1890). In the imperial capital, the proportion of Jewish lawyers was variously estimated at 22 to 42 percent, and of apprentice lawyers, at 43 to 55 percent. At the very top, 6 out of 12 senior lawyers chosen in the mid-1880s to lead seminars for apprentice lawyers in St. Petersburg were Jews. The wave of quotas in the 1880s succeeded in slowing down the Jewish advance in the professions but failed to halt it, partly because a growing number of Jews went to German and Swiss universities, and because some of them practiced illegally. Between 1881 and 1913, the share of Jewish doctors and dentists in St. Petersburg grew from 11 and 9 percent to 17 and 52 percent.31