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In the 1890s, my Eastern European Jewish ancestors emigrated to an American Jewish farming community in Woodbine, N.J., where the millionaire philanthropist Baron de Hirsch provided land, tools, and training at one of the nation’s first agricultural colleges. But within a generation, the family had settled in Philadelphia where they became accountants, tailors, merchants, and eventually, lawyers and college professors.

De Hirsch had a vision of American Jews achieving economic liberation by working the land. If he’d had a better sense of history, he would have built not an agricultural college but a medical school, because for well over a millennium prior to the settlement of Woodbine, Jews had not been farmers—not in Palestine, not in the Muslim empire, not in Western Europe, not in Eastern Europe, not anywhere in the world.

You have to go back almost 2,000 years to find a time when Jews, like virtually every other identifiable group, were primarily an agricultural people. Around A.D. 200, Jews began to quit the land. By the seventh century, Jews had left their farms in large numbers to become craftsmen, artisans, merchants, and moneylenders—the only group to have given up on agriculture. Jewish participation in farming fell to about 10 percent through most of the world; even in Palestine it was only about 25 percent. Everyone else stayed on the farms.

(Even in the modern state of Israel, where agriculture has been an important component of the economy, it’s been a peculiarly capital-intensive form of agriculture, one that employed well under a quarter of the population at the height of the Kibbutz movement, and less than 3 percent of the population today.)

The obvious question is: Why? Why did Jews and only Jews take up urban occupations, and why did it happen so dramatically throughout the world? Two economic historians—Maristella Botticini (of Boston University and Universitá di Torino) and Zvi Eckstein (of Tel Aviv University and the University of Minnesota)—have recently been giving that question a lot of thought.

First, say Botticini and Eckstein, the exodus from farms to towns was probably not a response to discrimination. It’s true that in the Middle Ages, Jews were often prohibited from owning land. But the transition to urban occupations and urban living occurred long before anybody ever thought of those restrictions. In the Muslim world, Jews faced no limits on occupation, land ownership, or anything else that might have been relevant to the choice of whether to farm. Moreover, a prohibition on land ownership is not a prohibition on farming—other groups facing similar restrictions (such as Samaritans) went right on working other people’s land.

Nor, despite an influential thesis by the economic historian Simon Kuznets, can you explain the urbanization of the Jews as an internal attempt to forge and maintain a unique group identity. Samaritans and Christians maintained unique group identities without leaving the land. The Amish maintain a unique group identity to this day, and they’ve done it without giving up their farms.

So, what’s different about the Jews? First, Botticini and Eckstein explain why other groups didn’t leave the land. The temptation was certainly there: Skilled urban jobs have always paid better than farming, and that’s been true since the time of Christ. But those jobs require literacy, which requires education—and for hundreds of years, education was so expensive that it proved a poor investment despite those higher wages. (Botticini and Eckstein have data on ancient teachers’ salaries to back this up.) So, rational economic calculus dictated that pretty much everyone should have stayed on the farms.

But the Jews (like everyone else) were beholden not just to economic rationalism, but also to the dictates of their religion. And the Jewish religion, unique among religions of the early Middle Ages, imposed an obligation to be literate. To be a good Jew you had to read the Torah four times a week at services: twice on the Sabbath, and once every Monday and Thursday morning. And to be a good Jewish parent you had to educate your children so that they could do the same.

The literacy obligation had two effects. First, it meant that Jews were uniquely qualified to enter higher-paying urban occupations. Of course, anyone else who wanted to could have gone to school and become a moneylender, but school was so expensive that it made no sense. Jews, who had to go to school for religious reasons, naturally sought to earn at least some return on their investment. Only many centuries later did education start to make sense economically, and by then the Jews had become well established in banking, trade, and so forth.

The second effect of the literacy obligation was to drive a lot of Jews away from their religion. Botticini and Eckstein admit that they have little direct evidence for this conclusion, but there’s a lot of indirect evidence. First, it makes sense: People do tend to run away from expensive obligations. Second, we can look at population trends: While the world population increased from 50 million in the sixth century to 285 million in the 18th, the population of Jews remained almost fixed at just a little over a million. Why were the Jews not expanding when everyone else was? We don’t know for sure, but a reasonable guess is that a lot of Jews were becoming Christians and Muslims.

So—which Jews stuck with Judaism? Presumably those with a particularly strong attachment to their religion and/or a particularly strong attachment to education for education’s sake. (The burden of acquiring an education is, after all, less of a burden for those who enjoy being educated.) The result: Over time, you’re left with a population of people who enjoy education, are required by their religion to be educated, and are particularly attached to their religion. Naturally, these people tend to become educated. And once they’re educated, they leave the farms.

Of course there are always exceptions. My great-grandfather raised chickens. But he did it in the basement of his row house in north Philadelphia.

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I strongly encourage spirited discussion. I understand that spirited discussion can get pretty heated, and that in heated discussion people (including me) sometimes say nasty things. I prefer to keep that to a minimum, but I still allow a fair amount of it as long as the comments advance the discussion. But if your post consists of 100% pure nastiness, with no conceivable way for anybody to learn anything from it, I will usually delete it. One exception: Being very funny can compensate for a lot of nastiness, especially if it’s the kind of funny that draws the reader’s attention to a genuine flaw in someone’s reasoning. The many posts I’ve deleted over the past 48 hours were nasty without even trying to be funny.

I also strongly encourage staying on topic. I usually interpret the latter requirement as broadly as possible, so that I usually allow comments that are (in my opinion) pretty tangential as long as there’s some connection to the topic at hand. But there’s a limit. With that in mind, I deleted some comments that addressed the pros and cons of progressive taxation with no particular relevance to the point at hand. Those same comments would have been welcome in some other thread. In general, if you’re dying to talk about something that’s entirely off-topic, please either wait till I post about it, or speed up the process by sending me an email with a request for a post on that topic. (I promise nothing of course.)

(On the other hand, don’t let the above be too discouraging. As I said, tangential relevance is not ideal, but I usually let it through.)

If you go to Paul Krugman’s blog, you’ll find that a very large percentage of the comments are either nasty, devoid of content, or both. We’ve always drawn a much higher class of comments here at The Big Questions and I aim to continue that tradition.

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This was a tricky puzzle and of course you don’t have to be a crank to get it wrong. But the cranks distinguish themselves by a) repeating exactly the same arguments over and over and over and over and over, while ignoring the fact that those arguments have been clearly refuted; b) reacting with outrage when it’s suggested that if they make an argument with multiple implications, they don’t get to pick and choose which implications to accept; c) dismissing the relevance of definitive counterexamples (e.g. “You’ve made an argument that appears to apply to a country of any size. Let’s see if your argument works for a country with only one family.” “That’s totally beside the point! I never assumed the country had only one family!”), d) rejecting all arguments by analogy by observing that the analogy is imperfect, even when the imperfections of the analogy have no bearing on the argument; e) constantly changing the subject so as to deflect attention from arguments they can’t answer; f) constantly changing their definitions midstream so that everything they’ve been saying, even when it is self-contadictory, becomes true by definition; g) discerning a conspiracy when multiple people take the time to simplify the arguments in the (always vain) hope of penetrating the crank’s thick skull; h) substituting mockery for discourse; and i) repeating the same arguments over and over and over and over, while ignoring the fact that those arguments have been clearly refuted.

This year, instead of a small cadre of cranks, we’ve been visited by a single crank, one Yoram Bauman, who’s cluttered up a long comment thread with repeated instances of behaviors a) through i). It’s not just the flimsiness of his arguments that makes Yoram a crank; it’s the way he repeats those arguments while completely ignoring every objection, or, on those rare occasions when he takes note of those objections, dismissing them as coming from an “echo chamber”. It’s his habit of making two arguments that directly contradict each other within a single paragraph, and then getting miffed when someone points that out. It’s his substitution of mockery for debate. (Note to future commenters: It’s okay, now and then, to adopt a mocking tone when you’ve demolished someone’s argument. It’s not okay to adopt a mocking tone by way of ignoring an argument.) Above all, it’s his intense and total disdain for the process of intellectual discourse, as if this were all just a game and getting things right doesn’t matter.

Well, of course, this is just an online discussion, and whether we get things right probably doesn’t matter very much in the grand scheme of things. But most of us are here because we take pleasure in trying to understand something. Yoram’s entire purpose here seems to be to undermine that pleasure with his clownish (and possibly feigned) stupidity. He’s the guy at the party who pisses on the table for attention and then, when everyone edges away at the same time, accuses them of sheeplike subservience to social norms.

Enough of that! While the year was bookended by cranks, it was filled with other lively discussions worth remembering.

Here were the most-commented-upon posts of 2011:

• First, the rationality test that led off the year.
• Then, with close to 500 comments in all, there was The Man Who Can’t Be Taxed, with followups here and here and here. In retrospect I wish I’d written this one a little differently to put more emphasis on the main point: If you want to understand the burden of a tax (or of any other government policy), you must follow the goods and not the money. I illustrated this with the example of a man who hoards financial assets, but (by hypothesis) never consumes above a subsistence level, never plans to consume above a subsistence level, and has no heirs. Then if the government funds a spending program by taxing this man, the burden of the tax must fall on someone else, because government spending consumes physical resources, and he has no physical resources to sacrifice. It’s the same point I made in our end-of-the-year Christmas fable, and if you don’t think it’s a point worth making, just check out how confused some of the commenters on Bob Murphy’s blog seem to be. One writes (re Ebenezer Scrooge) that if Scrooge consumes goods, he deprives others of the use of those goods (correct!) whereas if Scrooge hoards money, he deprives others of the use of that money (false, because taking money out of circulation changes the price level and increases the value of everyone else’s money, so they lose nothing). At one level, this is basic monetary theory, but at an even deeper level, it’s just basic arithmetic. What matters are the goods we consume, and those are what you need to track. Many a poorly trained policy analyst has gone astray by losing sight of this simple truth.
• Another big thread began here, where I caught Paul Krugman in a whopping howler. (Followups are here and here.) Because he is not a crank, Krugman acknowledged the logic and backed off his argument, though he did so in a rather churlish tone.
• Then there was the thread where I trumpeted my ignorance of Keynesian business cycle theory and asked for help in understanding what seemed to me to be a difficult theoretical point. Over the course of two more posts (here and here), I figured out where I’d gone wrong. It now all seems blindingly obvious. In my defense, I initially (before the first post) consulted several very good macroeconomists, who seemed to be as confused as I was.
• A big thread that might have been bigger was Econ 101 for the Supercommittee, where many commenters (including the ever thoughtful and provocative Bob Murphy) took issue with aspects of my post, but, due to my travel schedule, I was mostly unable to respond. I expect that if I’d been online that week, the 136 comments might easily have grown to 300 or so. I regret missing out on that discussion because a lot of smart commenters jumped in, and I wish we could have hashed out the issues. Maybe I’ll raise the same issues again soon, and hope that all those smart commenters are willing to come back for another round.

Speaking of commenters, you guys are great. For the most part you do an amazing job of staying on topic, and when you stray it’s usually because you’ve got something tangential but interesting to say. You engage with each others’ arguments. You are merciless when you think I’m wrong, supportive when you think I’m right (though sometimes you point out that I could have been clearer), and incisive in either case. I am not aware of any other blogger who is blessed with such a great cadre of regular and occasional commenters. I’ll try my best to keep you entertained this year.

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Here’s what I like about Ebenezer Scrooge: His meager lodgings were dark because darkness is cheap, and barely heated because coal is not free. His dinner was gruel, which he prepared himself. Scrooge paid no man to wait on him.

Scrooge has been called ungenerous. I say that’s a bum rap. What could be more generous than keeping your lamps unlit and your plate unfilled, leaving more fuel for others to burn and more food for others to eat? Who is a more benevolent neighbor than the man who employs no servants, freeing them to wait on someone else?

Oh, it might be slightly more complicated than that. Maybe when Scrooge demands less coal for his fire, less coal ends up being mined. But that’s fine, too. Instead of digging coal for Scrooge, some would-be miner is now free to perform some other service for himself or someone else.

Dickens tells us that the Lord Mayor, in the stronghold of the mighty Mansion House, gave orders to his 50 cooks and butlers to keep Christmas as a Lord Mayor’s household should—presumably for a houseful of guests who lavishly praised his generosity. The bricks, mortar, and labor that built the Mansion House might otherwise have built housing for hundreds; Scrooge, by living in three sparse rooms, deprived no man of a home. By employing no cooks or butlers, he ensured that cooks and butlers were available to some other household where guests reveled in ignorance of their debt to Ebenezer Scrooge.

In this whole world, there is nobody more generous than the miser—the man who could deplete the world’s resources but chooses not to. The only difference between miserliness and philanthropy is that the philanthropist serves a favored few while the miser spreads his largess far and wide.

If you build a house and refuse to buy a house, the rest of the world is one house richer. If you earn a dollar and refuse to spend a dollar, the rest of the world is one dollar richer—because you produced a dollar’s worth of goods and didn’t consume them.

Who exactly gets those goods? That depends on how you save. Put a dollar in the bank and you’ll bid down the interest rate by just enough so someone somewhere can afford an extra dollar’s worth of vacation or home improvement. Put a dollar in your mattress and (by effectively reducing the money supply) you’ll drive down prices by just enough so someone somewhere can have an extra dollar’s worth of coffee with his dinner. Scrooge, no doubt a canny investor, lent his money at interest. His less conventional namesake Scrooge McDuck filled a vault with dollar bills to roll around in. No matter. Ebenezer Scrooge lowered interest rates. Scrooge McDuck lowered prices. Each Scrooge enriched his neighbors as much as any Lord Mayor who invited the town in for a Christmas meal.

Saving is philanthropy, and—because this is both the Christmas season and the season of tax reform—it’s worth mentioning that the tax system should recognize as much. If there’s a tax deduction for charitable giving, there should be a tax deduction for saving. What you earn and don’t spend is your contribution to the world, and it’s equally a contribution whether you give it away or squirrel it away.

Of course, there’s always the threat that some meddling ghosts will come along and convince you to deplete your savings, at which point it makes sense (insofar as the taxation of income ever makes sense) to start taxing you. Which is exactly what individual retirement accounts are all about: They shield your earnings from taxation for as long as you save (that is, for as long as you let others enjoy the fruits of your labor), but no longer.

Great artists are sometimes unaware of the deepest meanings in their own creations. Though Dickens might not have recognized it, the primary moral of A Christmas Carol is that there should be no limit on IRA contributions. This is quite independent of all the other reasons why the tax system should encourage saving (e.g., the salutary effects on economic growth).

If Christmas is the season of selflessness, then surely one of the great symbols of Christmas should be Ebenezer Scrooge—the old Scrooge, not the reformed one. It’s taxes, not misers, that need reforming.

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Here’s a question I haven’t seen asked: If fear of future regulations and taxes is holding business back, as everyone on the right asserts, why didn’t the Republican victory in the midterms set off a surge in employment?

After all, if you really believed that fears of Obamanite socialism were the key factor depressing employment, the GOP victory — with the clear possibility that the party will take the Senate and maybe the White House next year — should greatly reduce those fears. So, where’s the hiring surge?

I even set out to write a blogpost citing this argument with approval — but around the time I was composing it, Krugman followed up with this bit of idiocy, to which a response seemed more urgent.

Now that that’s out of the way, I can come back to the bit about the missing Boehner Boom. It’s a more-than-fair question. How would you respond to it?

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The numbers in this morning’s post (now missing) were completely wrong as were, therefore, the conclusions I drew from them.

For the record, all of the numbers concerned what happens if you save $1000 a month. I often show these numbers to my students, and when I do, I get the assumption right. But this time, I somehow a) convinced myself that the assumption was $100 a month, not $1000 a month and b) therefore concluded that saving is a whole lot easier than what I tell my students every year, and c) said a lot of nonsense that followed from this.

(I tell my students that for *them*, saving $1000 a month will soon probably be a plausible strategy, which is likely to be true. Having conflated $1000 with $100, I drew implausible conclusions in the blog post about what you could do on $25,000 a year.)

I could say things about the folly of posting at 2AM, but I think the wiser course is simply to apologize.

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There was, of course, never any need to raise the debt ceiling; there was only a need to prioritize debt service over other stuff the government shouldn’t be doing anyway. To a very rough approximation, the annual budgets of the Departments of Commerce, Agriculture and Labor add up to the annual interest payments on the national debt.

Be that as it may, it will be interesting to catch up on the news and see what got cut. For now, I’ll just say that if we still have a Department of Commerce, then they didn’t cut enough. If we still have a Corporation for Public Broadcasting, or a National Endowment for the Arts or Humanities, then they didn’t even try.

But now that I’m back, I’m unlikely to dwell on what’s become old news. My plan is to ramp back up to regular blogging, starting with a few things that struck me as noteworthy while I was traveling in Britain. I hope you’ll forgive my long absence. It’s good to be back.

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