Jonathan Neumann: To Heal the World? How the Jewish Left Corrupts Judaism and Endangers Israel. New York: All Points Books, 2018.

‘Social justice’ has become a code word for socialism. Socialism requires the redistribution of wealth, as Neumann puts it, “in order to achieve economic egalitarianism” and, he sees, to achieve social egalitarianism as well. It is a “political ideology”; if not necessarily any one kind of regime, in practice it has inclined toward tyranny and oligarchy. In recent decades, this ideology “has become embedded in all aspects of American Judaism–including education and worship at all ages,” to the point that many congregations discourage the traditional Jewish practice of charity because it deflects attention from the supposed “root causes” of inequality, typically ascribed to ‘capitalism.’ The “bible of Jewish social justice” is a collection of essays titled Righteous Indignation: A Jewish Call for Justice, edited by Rabbi Or N. Rose of Hebrew College, Jo Ellen Kaiser of the Jewish News of Northern California, and Rabbi Margie Klein. The Hebrew term adapted for the purposes of socialist ideology is tikkun olam, held up as “a divine commandment” and indeed “Judaism’s first principle and most fundamental message.” Neumann denies that it has any foundation in Judaism at all. “It was conceived by Jews who had rejected the faith of their fathers and midwifed by radicals who saw it as a pretext to appropriate Jewish texts and corrupt religious rituals…to further political ends.” Neumann intends “to slaughter the sacred cow of tikkun olam.”

In preparation for this, Neumann recounts the history of the efforts of some American Jews to reconfigure Judaism, beginning with the Reform Judaism of the 1880s. The Reform movement had roots in Europe—specifically, in the emancipation of Jews, hitherto confined to ghettos, that commenced in the late eighteenth century. Although Enlightenment philosophes often despised religion, in their political writings they propounded religious toleration, and eventually European politicians followed through on it. Jews responded to their new circumstance in several ways. Orthodox Jews “either rejected modernity and retreated back into the ghettos or began to seek ways to sustain observance of Jewish law while living in gentile society.” Others assimilated into that society, either as secularists (many becoming businessmen) or as Christian converts. Still others became socialists. And some “looked to remake Judaism in order to facilitate easier integration into local society.” To do that, they abandoned the centuries old Jewish aspiration to return to the Land of Israel, to Zion, and embraced the nationalism that prevailed in Europe during and after the Napoleonic Wars. In Germany, where Reform took hold most vigorously, “Berlin was the new Zion, Germany the new Promised Land, and the new role of Jews–their new Torah, as it were–was to serve as a local model of the universalist ethics of the great German philosopher Immanuel Kant.” Kant hardly derived his categorical imperative from the Bible (he called for the “euthanization” of Judaism), but the Protestant theologian Julius Wellhausen, a follower, “argued that the great contribution of ancient Israelite religion was the universal ethical message of its prophets.” A purely ethical Judaism would eschew Jewish ritual and even Jewish law, along with Jewish particularism, becoming a sort of Protestantism without Christ. In the United States of the nineteenth century, “Reform Judaism gradually made inroads and eventually became the dominant denomination, a status it still retains.”

The leading figure of American Reform Judaism was Rabbi Isaac Mayer Wise, who had emigrated to the United States from Bohemia in 1846. Wise and his colleagues were troubled by the traditional claims of Jewish chosenness, which “could not be reconciled with their drive to eliminate differences between themselves and their compatriots.” Accordingly, they rejected the doctrine of chosenness along with “the hope in a messianic restoration of the Jews to the Land of Israel and of the Davidic kingdom there”; they also rejected restoration’s secular, nationalist counterpart, political Zionism. They eschewed the term ‘synagogue’ for Jewish houses of worship, preferring ‘temple.’ “Rather than promote and celebrate Jewish difference, the new messianic aim of the Jewish People was the union of all the children of God.” According to the Reformers’ Pittsburgh Platform of 1885, “We consider ourselves no longer a nation, but a religious community, and therefore expect neither a return to Palestine, nor a sacrificial worship under the sons of Aaron, nor the restoration of any of the laws concerning the Jewish state.” Instead, “we deem it our duty to participate in the great task of modern times, to solve, on the basis of justice and righteousness, the problems presented by the contrasts and evils of the present organization of society.”

Initially, the Reformers partook of the nationalist liberalism popular in the nineteenth century. By the early twentieth century, however, they hearkened to the democratic-socialist precepts Social Gospel Christianity propounded. The Social Gospel demanded not so much church-based charity but “coercive philanthropy,” whereby the modern state took on many of the charitable services churches had traditionally undertaken. That is, the Social Gospel consisted of a superficially Christianized Hegelianism, teaching (in the words of its proponent, Richard T. Ely, that “if anything on earth is divine, it is the state.” In Hegel, of course, divinity means the Absolute Spirit, not the Holy Spirit, a distinction Social Gospelers tended to elide. the claim was that “Christ could only return to rule in the end of days after a millennium of heavenly rule on earth,” a millennium of social justice “to be achieved and sustained by man” using the modern state as his instrument.

“The Social Gospel had an indelible effect on Reform Judaism, rousing it from its utopian dreams to practical action,” in which the Reformers “eventually surpassed the gentiles” in their zeal. Not only the Reformers but another denomination, Reconstructionist Judaism, also followed the demi-Christian lead. Its founder, the theologian Mordechai Kaplan, had emigrated to the United States in 1881, eventually seeking a middle way between Orthodoxy and Reform. He never embraced the de facto assimilationism of the Reformers but did follow their universalist rejection of chosenness and of Zionism. Still another denomination, Conservative Judaism, also occupied the middle way, but retained many traditional Jewish rituals and other particularist Jewish traditions. Conservatives “believed that Judaism needed to be updated for the modern era, but they still wanted it to be recognizably Jewish.” Yet they, too, eventually followed the social justice movement, taking it up after the Second World War and the Holocaust, while expressing its doctrines “in Scriptural and rabbinic terms, rather than purely as a secularist philosophy.” This turned out to be an unintended move toward tikkun olam, a movement no one would call conservative.

A sharper turn to the Left occurred in the 1960s, with the Havurah (“Fellowship”) movement. Taking their cue from the Sixties ‘counterculture,’ the Havurahs founded prayer and study groups asserting “the liberty to adapt Jewish law” by adhering to what Neumann gently calls the “expressive individualism” of the New Left. “Their interest in Judaism was prompted by the general turn toward minority identity in America at this time, particularly in the context of the Civil Rights and Black Power movements, but also by the amazement and ethnic Jewish pride surrounding Israel’s striking victory over the armies of the Arab world in the Six-Day War of 1967.” “Lacking basic knowledge of Judaism or the tools to acquire it,” and lacking the resolve to acquire either, “more familiar with Eastern philosophy, political radicalism, and the American counterculture than they were with Judaism,” men like Arthur Waskow and Michael Lerner simply turned to the politics of the New Left. But while Reform Judaism had indeed been reformist-liberal-progressive, any politics animated by the ideas of the New Left must be revolutionary. One important feature of the New Left was its emphasis on ‘cultural’ Marxism—dialectical struggle no longer centered on class warfare, preferring instead to do battle in the fields of the academy, religious institutions, and the media. The revolution effected within Judaism claimed not to reform Judaism but to ‘revolve’ it back to its alleged core, back to “real Judaism”—namely, tikkun olam. Lerner, who had been Herbert Marcuse’s teaching assistant as Berkeley and had headed the campus chapter of Students for a Democratic Society, founded Tikkun, which quickly became the flagship publication of the movement.

The term ‘tikkun olam’ appears nowhere in the Torah or in the Talmud. But there is a traditional Jewish prayer, “Aleynu,” which calls upon the congregants to “perfect the world under the Kingdom of God.” This prayer had already been appropriated for the purpose of world-perfection by Mordechai Kaplan; his student, Alexander Dushkin (in a move reminiscent of the secular Progressive, John Dewey) then took tikkun olam to Jewish educators after the Second World War. Thus, an opening had occurred, which Lerner and his allies could walk through. “A radical leftist group called New Jewish Agenda was founded in 1980 and adopted tikkun olam to summarize its objectives,” tying it to the tradition of Jewish prophecy. “It was in New Jewish Agenda and its offspring organizations that tikkun olam was properly married to social justice and radical leftist politics.” Although the organization itself disbanded twelve years later, by then its ideology had been embedded in both Reform, Reconstructionist, and Conservative Judaism and “is even making inroads into Orthodoxy.” “One simply cannot understand American Judaism today without understanding tikkun olam.”

How do tikkun olam advocates manage to reinterpret Jewish Scriptures in this manner? They focus their attention on six texts: the Genesis account of Creation, “which establishes universalism as the foundation of Jewish social justice”; Abraham’s appeal to God to show mercy to the inhabitants of Sodom and Gomorrah; Joseph’s ‘economic policies’ as an advisor to the Egyptian pharaoh; the Exodus from Egypt, reconceived as a revolutionary act; the Prophets’ critiques of corrupt practices in Israel; and a variety of rabbinic writings, duly decontextualized, which can be bent to their purposes. Neumann addresses each of these, seriatim, after noting that “Tikkun olam is not about turning Jews into Marxists” but “about rebranding Marxism as Judaism.” 

The Jewish social justice movement makes “three significant theological claims” about God’s creation as revealed in Genesis: first, that “all persons have the same dignity, deserve the same opportunities, and are entitled to similar outcomes” because they are all equally human; second, “since God didn’t create solely humans but all of nature, the environment has a streak of divinity of its own” (pantheism); third, because God shaped man from the dust of the earth, “mankind shares its origins with the rest of nature,” a claim that reinforces the movement’s environmentalist activism. Neumann does not hesitate to call this theology “a contrived religious system, a sort of New Age mysticism that distorts the biblical Creation story and Kabbalistic (Jewish mystical) motifs in order to portray the politics of social justice as an organic Jewish teaching” In order to “facilitate the quiet absorption of liberal politics,” itself redefined in ‘social justice’ terms, “into Judaism.” Under this pretended interpretation, the ‘God’ who ‘created’ the heavens, the earth, and human beings “is obviously not the personal God of the Bible,” a Being that Rabbi Arthur Green dismisses as “a mythical projection” of human consciousness into the heavens. Instead of that God and His creation, Rabbi Green takes creation to be evolution, natural history; evolution is what reveals itself. Ergo, “Creation equals revelation”–a clever way of rewriting the Bible to make it come out the way he wants it. This also abrogates the chosenness of Jews, inasmuch as there is no Person to choose them, a revision of Scripture that fits with Judaism as a form of universalism. 

As to the claim that human equality under God requires social and economic equality, sexual ‘liberation,’ or pacifism, Neumann again dissents. “The fact is that no particular contemporary politics necessarily flows from the Creation story in itself.” In the Torah, God’s commandments form part of God’s covenant with the Israelites. But Rabbi Green “rejects the idea of a distinct Jewish people in toto” as “too narrow and chauvinistic.” At most, what Moses handed down from God at Sinai was “merely ‘awareness’ of the Oneness of Being”—the sort of insight one might glean from the practice of yoga or the ingestion of psychedelic drugs. But, as Neumann insists, “The Torah is essentially a constitution for a single people living in its own land under God, where obligations are designed to benefit the other citizens who have accepted the same laws and can be held to account for any lack of reciprocity.” Jewish social justice universalizes what Scripture clearly intends as particular. This is not to claim that God requires nothing of non-Jews. Quite the contrary: the Noahide laws enunciated at Genesis 9:6 apply to everyone. And, unfortunately, human beings generally do a very poor job of following them. But at any rate, when it comes to the “theology of Jewish social justice,” “there is very little Jewish about it,” and designedly so.

The failure of human beings to obey the Noahide laws led to God’s turn to Abraham and thus to Judaism proper. “The patriarch Abraham truly became the father of the Jewish People when he heeded God’s call to adopt the sacred purpose of spreading righteousness and social justice in the world,” according to Reconstructionist rabbi Sidney Schwarz, the founder of Panim: The Institute for Jewish Leadership and Values—the use of ‘values,’ by the way, being a giveaway of the Institute’s secularist orientation. Panim holds up Abraham as the Jewish exemplar in a way that advances the cause of social justice by citing Abraham’s dialogue with God, in which he protests the destruction of Sodom. This supposedly teaches the importance of protest in Judaism, of ‘speaking truth to power,’ even to the ultimate Power. Joshua Stanton, a Reform rabbi, goes so far as to call “a testament to the sacred nature of protest.”

To which Neumann replies, some protest. “I am but dust and ashes,” Abraham says to God, meekly. If that is a protest, it is more reverential than indignant, more “hopeful entreaty than protest.” In fact, “the entire conversation is a pedagogical exercise initiated by Abraham himself, who is curious to learn ‘the way of God,'” not to correct Him or bring Him to the bar of some standard of justice independent of God. And even if Abraham cannot understand God’s suspension of His law prohibiting the destruction of the innocent, this has nothing to do with calls for socioeconomic equality.

For this, however, social justice warriors turn to the Bible’s account of Joseph’s economic policy as advisor to Pharaoh. According to Sandra M. Fox, a clinical social worker, and Martin I. Seltman, a member of Physicians for Social Responsibility, Joseph’s hard-earned “compassion and wisdom” animate his “responsible planning” with respect to Egypt’s food supply, which “save[d] the lives of countless Egyptians and his own estranged Israelite family during a grave famine.” Conservative social justice rabbi Jill Jacobs concurs: Joseph, she writes, “us[es] political authority to protect the lives of all members of society.” Not so fast, Neumann cautions. “If you read the text more attentively, you realize that this isn’t what happened.” What Joseph actually does is to take “the opportunity of the famine to enslave the Egyptian people to Pharaoh”; having expropriated and stored surplus grain during times of good harvest, Joseph doesn’t return it to the people during the famine. “He sells it to them,” saying, for good measure, “Behold, I have bought you this day and your land for Pharaoh,” inducing them in turn to proclaim, gratefully, that they are now “slaves to Pharaoh.” “Not only is the ‘lesson’ of the Joseph story not what these activists wish it were, but, remarkably, its real lesson seems to be the very opposite: reliance on government leads to dependency, and dependency can lead to much worse.” While “Joseph does indeed save Egypt from famine,” the consequent augmentation of ruling authority “had grave consequences” for Egyptians. And for Israelites, who eventually chose to escape.

Ah, but Jewish social justice proponents have Exodus covered, too. According to them, Exodus demonstrates the need for revolution. That is the point of the “Freedom Seder” invented by Institute for Policy Studies co-founder Arthur Waskow. In keeping with tikkun olam univeralism, the Seder “wasn’t just for Jews” but “for everyone.” And indeed, as Naumann observes, it is “barely Jewish at all.” The rhetorical gimmick is that, in Waskow’s words, “we all live under Pharaohs” now. “In Waskow’s telling, Moses is a militant trade unionist and God plays practically no role at all,” being “nothing more than a figure of speech.” As Waskow puts it, “the profound conversation” between God and the people of Israel amounted to “the conversation between the Promise and the Work, the Vision and the Creation; freedom, justice, sustenance, and law were all made real by [the Israelites’] own hands.” In his Exodus and Revolution, Michael Walzer makes similar moves, pretending that Exodus amounts to “a how-to guide for political revolution” by turning “Egypt” and the “Promised Land” into metaphors and God into a nonentity. Naumann perceptively remarks that it was Christians who first treated the Promised Land and Jerusalem as metaphors for “a spiritual condition,” but it must be said that Augustine and those who came after him did not forget God while doing so. After all, in Exodus God says, “Let my people go, so that they may serve Me.” Not themselves. Not humanity. Naumann concludes his refutation of the tikkun olam rhetoric by recalling that the Promised Land in the Bible is “no metaphor” but “a real territory that has been known as the Land of Israel for millennia.” When God punishes the Israelites, He exiles them from that real territory, and when they repent and He relents, He allows them to return “to the same actual land.“

With the abrogation of ritual, the prophetic character of Judaism comes to the fore. Rituals are conventions; prophecy challenges convention in the name of God. Michael Lerner deplores what he calls “the ritualization of Judaism” at the expense of justice, which is not only unconventional but universal, according to social justice proponents. Ritual may be readmitted after prophecy has been heeded and new, reformed, or redirected rituals conforming to the prophetic message have been introduced. But as Neumann sees, the prophet Isaiah (for example) does not oppose ritual; he opposes ritualism, ritual without grounding in prophecy and covenant. “The prophets rebelled against hollow ritual.” Ethics or moral law require right behavior toward other human beings; ritual entails right behavior toward God. Ritual rightly understood must be anything but “hollow.” As to the universality of ethics, Jews are commanded to respect it without homogenizing it; they have moral obligations towards non-Jews but they owe additional, stricter moral obligations toward one another. Isaiah himself lambastes not all of mankind but Israel for its moral failings. That is because “Israelites have a sacred responsibility to one another as they are bound together in covenant. That covenant does not extend to other peoples,” at least not immediately. As Isaiah puts it, “out of Zion shall come forth the law” whereby swords shall be beaten into ploughshares.” There is a sequence. Israel comes first; it must obey its own covenant with God before God will permit it to be extended to ‘the nations.’

“As it happens, God also warns the people not to believe false prophets in their midst.” In fact, rabbis have traditionally “insisted that, following the prophetic epoch, prophecy is suspended” because “prophetic pretensions ae conceited and can easily become hazardous.” Social justice ‘prophets’ might well take note.

Neumann returns to a consideration of tikkun olam itself. As he mentioned before, it “isn’t mentioned in the Bible anywhere.” It has “no connection to tax rate, the labor movement, abortion, immigration reform, healthcare provision, education concerns, environmentalism, or any of the many other political issues in which social justice is concerning,” having no relation to social justice at all. In the Aleynu, the line “to perfect the world under the Kingdom of God” refers to Jewish monotheism, to having no God before the God of Israel, to “the elimination of all other forms of religious practice” among Jews “in favor of the exclusive and universal worship of the God of Israel.” There is some question whether the original phrase meant not to “repair” or to “perfect” the world under the Kingdom of God but to establish it. If so, then it is only God Who can do so: “Therefore we put our hope in You,” the prayer goes on to say. Not in ourselves, as secularists must claim.

And would the perfection, repair, or establishment of “the world” under God’s Kingdom mean social justice as defined by social justice proponents? The Aleynu makes no such claim. The Torah makes no such claim. What about the Talmud?

The Mishnah, the older section, uses the phrase “for the sake of tikkun ha’olam” on several occasions, but only with reference to existing laws, with no calls for revolution or even reform. “Perfection” there entails “mostly minor legal adjustments to safeguard the existing system,” to perfect it, not “systemic change.” Further, the authority of the rabbis who wrote the Talmud “did not extend beyond the Jews.” As for the Gemara, it consists of homiletic teachings, “commentaries that build on nuances, ambiguities, discrepancies, and other textual anomalies in the Bible to make more general theological, mystical, or normative claims that often depart radically from the plain meaning of the words in the biblical text.” This might appear to offer a more promising field for social justice proponents.

Except that it doesn’t. The Midrash does not anticipate, much less express, social justice ideology. Overall, “the Talmudic tikkun olam…seek[s] to protect the existing system” of Jewish law “through minor adjustments.” Nor has it ever been treated as a set of commands or “religious imperatives.” Its spirit is explanatory and exploratory, not revisionist or revolutionary.

“These activists care about social justice independently of Jewish texts, from which they have no interest in actually learning.” Accordingly, they practice not exegesis but eisegesis, the imposition of “preconceived views and biases onto the Bible.” Two of the most prominent eisegesists are the aforementioned Michael Lerner and Judith Butler. Lerner deplores “the violence of the Bible,” the way that God at times rewards or commands violence. Lerner denies that the books of Joshua, Judges, Samuel, and Kings, which assert “Jewish sovereignty over the Land of Israel,” backed by the sword, really record the voice of God, in this echoing the claim of Martin Buber, who claimed that Samuel misunderstood God’s will in taking Him to have commanded the destruction of the Amalekites. Lerner associates what he calls the “voice of cruelty and fanaticism and intolerance and oppression” with the modern political Right, whereas the “voice of love, justice, and transcendence” belongs to the modern political Left. In this, he evidently overlooks his contemporary tyrants on the Left, while leaving Rightist critics of military intervention conveniently unnoticed. For her part, Butler tends a bit more toward the sanguinary, denying Israel’s right to exist and lauding Hamas and Hezbollah. Jews belong in the Diaspora, not in any one land. “Her argument is that exilic Judaism is about imbibing the idea of living with others and not being exclusively Jewish.” This is necessary, as she explains because “the notion that to be a Jew is to be a Zionist [is] a historical equation that is to be countered if Jewishness is to remain linked with the struggle for social justice,’ which is universal, ‘ethical,’ devoid of anything specifically Judaic.

Naumann correctly traces the intensification of contemporary Jewish anti-Zionism on the Left to the aftermath of the 1967 Six-Day War. While the Reformers had already rejected Zionism a century earlier, “anti-Israel activism in the Jewish community emerged less from Classical Reform…than from the milieu of 1960s anti-American radicalism.” Until 1967, the United States had not been Israel’s primary foreign ally. The Soviet Union had favored it (as a socialist state) in the years immediately following the Second World War. Israel then enjoyed the patronage of France from the early 1950s, on. However, President Charles de Gaulle advised the Israeli government against a pre-emptive attack on the Arab forces massing all around it; when the Israelis quite sensibly went ahead and rolled up its enemies, de Gaulle rebuked them. Americans, mindful of their need of a reliable ally in the region (Egypt’s ruler, Gamal Nasser, leaned toward the Soviets), worked out an alliance. All of this infuriated the New Left and those Jewish activists who had adopted its ideology. These included the usual suspects: Waskow, Lerner, and others in that network of organizations and their publications. Many endorsed the Palestine Liberation Organization, backed by the Soviets. Such efforts have knocked against the more established and sane Jewish organizations, which recognize a threat to Israel as a threat to Jewish interests everywhere. More recently, some on the Jewish Left, such as Jewish Voice for Peace (Butler, Noam Chomsky, Tony Kushner, among others), want Israelis to withdraw from Judea and Samaria (the ‘West Bank’) and East Jerusalem while recognizing an Arab ‘right to return’ to those ‘occupied territories.’ They add the removal of Israel’s naval blockade of Gaza, where, up until the late war, Hamas held sway. These moves obviously would spell the end of Israel itself, which Jewish Voice for Peace wouldn’t mind, as its members “have been known to question the historical Jewish connection to the land of Israel.” 

In sum, in the eyes of the Jewish Left, neither Israel nor Judaism itself should survive. “The triumph of ethics over Judaism is ultimately the triumph of philosophical morality”—once Kantian, now neo-Marxist—over “religious law out of the sources of Revelation.” But if rationalist ethics “were sufficient, then there’d be no need for a religious legal code,” as human thought would suffice to guide human action. “Most liberal Jews involved in general social justice activism are either indifferent to pursuing their agenda within a Jewish context or positively opposed to doing so,” preferring “to do their work without any Jewish connection.” That makes sense, from their standpoint, since “social justice and Judaism are fundamentally at odds with one another,” beginning with the underlying question of the reality of the God of the Bible. Or, to put it more comprehensively, “unlike Judaism, which is built upon a personal God, Revelation, the particularistic covenant, and the commandment, Jewish social justice holds a preference for man, Creation, universalistic morality, and reason”—not reason as such, but reason unassisted by divine Revelation. Meanwhile, it is “inconceivable that advocates of Jewish social justice would tell African-Americans or Muslims that ultimately they should abandon their particular cultures, practices, or beliefs”; “the Jewish people alone must become obsolete.”

But, according to the Bible (Genesis 22:18), “through Abraham’s progeny all the peoples of the earth will be blessed.” That being so, “Jews and non-Jews alike should be alarmed by the prospect of tikkun olam succeeding in assimilating the Jewish People into all of humanity, for then that blessing will be no more.”

Jill Eicher: Mellon vs. Churchill: The Untold Story of Treasury Titans at War. New York: Penguin Books, 2025.

This review was first published in Civitas Outlook, May 19, 2025.

The story Jill Eicher expertly tells is less “untold” than forgotten, as she herself demonstrates. The controversy over repayment of America’s wartime loans to the United Kingdom and the linkage of those loans to German reparations for the catastrophic damage the Kaiser’s troops inflicted during the First World War spurred newspaper headlines in both countries, from the immediate aftermath of the war until the Great Depression and Adolf Hitler combined to change the subject. Esteem for Churchill during and after the Second World War, along with the Anglo-American ‘Special Relationship’ during the old War, ensured that the dead past stayed dead. By now, the fact that Life magazine’s “Man of the Century” was for a while perhaps the most detested Englishman among Americans will come as a bit of a surprise.

Wartime loans by the United States to the U.K. began in April 1917, after President Wilson had requested a declaration of war against Germany. Until that time, America had maintained neutrality, hoping to sell merchandise to both sides. But since the powerful British navy blockaded German ports and the German navy could not reciprocate in kind, German strategists adopted a policy of “unrestricted” submarine warfare—not blockading but sinking American merchant ships headed for the British Isles. Although this proved a serious miscalculation—Germans didn’t expect America to be able to do anything effective soon enough to save their trading partners—it very nearly won the war. While the rival armies were stalemated in France, cutting the supplies of food and munitions from the U.S. to the Allies would have won the war for the Central Powers. However, since the Barbary Wars of the early 1800s, the American commercial republic had regarded interruption of its shipping on the high seas—the “great highway of the nations,” as Jefferson called it—a just casus belli.

With these loans, America became “a creditor nation for the first time in its history.” Pittsburgh, Pennsylvania’s Andrew Mellon knew all about being a creditor, having been brought into the banking business by his father at the age of nineteen. He “believed in the guiding principles [Alexander] Hamilton established as the financial policy of the American government—balanced budgets and disciplined debt reduction.” But for the most part he didn’t involve himself in politics before or during the war, confining himself to deploring the antitrust legislation advanced by Progressives in both major political parties. His 1921 appointment as Treasury Secretary by President Harding was his first venture in government.

By the 1920s, in contrast, Churchill was of course a prominent figure in British politics, like his father before him. But by the time American declared war and rescued British finances, he was on the outs, having been sacked as First Lord of the Admiralty after his plan to attack the Central Powers through the Dardanelles Straits ended in catastrophe.

American businessman, British aristocrat. Two commercial republics, but one democratic, with an influential oligarchic class, the other only lately democratic (the last of the Reform Acts had only been made law a generation before) and with an influential aristocratic class to go along with its oligarchs. In many ways, the intensely private Mellon and the intensely public Churchill exemplified their countries, once enemies and until then scarcely friends.

Congress authorized the loans to the United Kingdom and the other allies, stipulating that the money would be repaid with interest. To fund $200 million in loans and the costly military effort, Treasury Secretary William McAdoo proposed a tax increase and what he called “Liberty Bonds,” purchased by American citizens. Mellon himself purchased $1 million of these, and his banks purchased another $60 million. By the end of the war, the Allies had bought $7 billion of war materials, mostly from the United States, all on credit provided by the American government, which ended the war with a $20 billion national debt, half of it caused by the loans. The policy worked, militarily; American troops, money, and materiel tipped the scales of the war. The price was economic and recession and inflation, postwar.

Churchill foresaw the dilemma. In a 1919 article, “Will America Fail Us?” he argued that Americans should forgive their wartime Allies’ debt in whole or very substantially, on two grounds. First, the victorious countries were simply unable to repay, given the war’s devastation and the tariffs imposed in all countries, whose rulers hoped to protect the remnants of national industry. If angry workers turned to socialism, the ‘capitalist’ interest in repayment would ruin the commercial dimension, and perhaps the republican dimension, of commercial republicanism itself. Second, the debts were incurred “in the common cause of the war,” not (as in the case of an ordinary bank loan) in the hopes of turning a profit in business. Churchill proposed a campaign to change public opinion on the basis of an appeal to Americans’ sense of fairness. he continued to insist on this policy during his years as Chancellor of the Exchequer, beginning with his appointment in November 1924 by his future rival, Prime Minister Stanley Baldwin and ending, fortuitously for himself, a few months before the collapse of American stock prices in 1929.

The Americans throughout the Harding and Coolidge administrations had their own moral argument, also an appeal to what Adam Smith called the moral sense. A debt is itself a moral obligation. In Coolidge’s laconic formulation, “They hired the money, didn’t they?” This resonated not only with Congress but with the American people, who had invested in good faith in the Liberty Bonds. Mellon and his assistant Treasury Secretary, Russell Leffingwell soon thought differently, although not daring to say so publicly. In Leffingwell’s words, “A good customer is better than an insolvent debtor.” Debt relief of some sort would be necessary to bring Europe back, in the interests of Americans as well as Europeans.

A London editorial writer quoted Hegel: “Tragedy is the conflict not of right and wrong but of right and right.” (One pinches oneself to think that a century back, not only could an editorial writer quote Hegel but that he could assume that his readers knew who that was.). And so the tragicomic game of debt and reparation collection began, complete with taunts, as the English called Uncle Sam “Uncle Shylock” and the somewhat less literary Americans called John Bull “Sponger.”

Practically speaking, the weakness of the American position was the public refusal, through two administrations, to admit that debt repayment depended in substantial measure on German reparations. Arguably, Mellon’s one serious gaffe during his tenure was his public pronouncement in 1926 that “all of our principal debtors are already receiving from Germany more than enough to pay their debts to the United States.” He knew this to be untrue, having told a closed-door session of the Senate Finance Committee, “those who insist on impossible terms are, in the final analysis, working for an entire repudiation of the debt.” And he had in fact quietly begun preparing for loan default at that time by running the budget surpluses needed to pay down the national debt owed to American citizens who had purchased Liberty Bonds. In the end, he also managed to collect most of the monies owed, even from the understandably recalcitrant French, on whose territory the Western Front had held at agonizing cost. Churchill didn’t do quite as well, but as one of his friends said, “Winston had too generous a heart to be a hard debt collector.”

In its feeble attempt to pay at least some of the reparations, the Weimar Republic borrowed from American banks; in effect, American corporations were subsidizing the European Allies’ debt repayments to, well, Americans. The stock crash “revealed that the American payment system for reparations and war debts…amounted to little more than a house of cards,” although it had worked so long as the American economy roared along with the Twenties.

The Depression saw the Hoover Administration, with Mellon still at his post, announce a moratorium on debt repayment. He retired from Treasury in February 1932, accepting an appointment as Ambassador to the United Kingdom in April. The new Roosevelt Administration tried to revive the debt collection policy, only to see Hitler cancel reparations payments, dismiss the terms of the Versailles Treaty, drop out of the League of Nations, and remilitarize Germany with malign intent. In their turn, the United Kingdom, France, Belgium, and Italy defaulted on the remainder of the loans. FDR countered these events decisively—by charging Mellon with tax evasion. (“The jury found otherwise and exonerated him.”) When cornered, distract: FDR may not have known much about economics, but politics—yes.

“By the time Andrew Mellon resigned as ambassador to Great Britain in March 1933, as was the custom upon the inauguration of a new president, Alexander Hamilton’s founding principles of American government finance…had been supplanted by habitual deficit financing.” As for Churchill, we know the rest of that story, too.