Research On Religion | Colleen Haight on Jewish Peddlers in 19th Century America

Colleen Haight on Jewish Peddlers in 19th Century America

Date: November 16th, 2014

Tags: "lemons problem", asymmetric information, ethnicity, George Akerloff, hostility, Jewish peddlers, Jews, Larry Iannaccone, merchants, middlemen, oyster stew, religion and economics, reputation, signalling

In the 19th century, as the US population was expanding westward, Jewish immigrants and their children played an important economic role in moving supplies via merchant channels. Relative to their numbers in the population, Jews were disproportionately represented as peddlers and merchants. Prof. Colleen Haight, an associate professor of economics at San Jose State University, returns to the program to discuss this phenomenon and how it relates to the economics of religion.

After a bit of introductory chat about how Prof. Haight stumbled on this project, rituals, and her aunt’s oyster stew, our conversation about Jewish merchants begins with a rather odd and seemingly unrelated topic — used car lemons. Nobel Laureate George Akerloff’s famous “lemons problem” will become an important foundational point for Colleen’s argument about Jewish peddlers. Akerloff used the selling of used cars to highlight what is known as an asymmetric information problem in economics. While the seller of a used auto knows the various problems the car has, the buyer is uncertain whether or not the information about the car is correct or not. If no trust can be established between the buyer and seller, such economic transactions are likely to break down. We then discuss various solutions to this problem including, and most importantly, the role that reputation and investments in one’s trustworthiness makes.

We then turn to the issue of “middlemen” — peddlers and merchants who provide a very important role in the economy by transporting resources to their highest use, but who are often much maligned because they do not seem to add any value to the goods they are trading. Colleen notes that the role of the merchant is not one that many people like to do because of its negative image. We then discuss the very unique role that religious minorities and immigrants have played in this portion of the economy. She explains how dense networks of trust create the right environment to overcome many of the financing (credit) problems that beset peddlers. This then moves us to a discussion of the role that stigma plays in differentiating a community, binds people more tightly in their networks, and makes it difficult for members to defect upon agreements when it might be easy to do so. We note that Jews out in pioneer territory would have found it hard to “fit in” with the dominant community because of their religious rituals and particular ethnic markers. This was also exacerbated by a cultural hostility that was exhibited towards Jews in the 19th century. But we further note that this hostility created a “love-hate” relationship between pioneers and Jewish peddlers in that the pioneers needed the vital services of the travelling merchants even though they didn’t fit in with the community. Indeed, it was the fact that they didn’t quite fit in to the dominant culture that enhanced their ability to be trustworthy businesspeople.

We finish off the podcast with Colleen’s broader reflections this study and she notes that scholars need to look more closely at behaviors that seem odd or misplaced in order to find some interesting underlying logic to those cultural rituals and traits. Recorded: November 6, 2014.

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