The Rothschilds: Finance's Most Famous Conspiracy Theories

Joel Anderson |

Finance and business are often perceived as being home to reason and logic. No matter what sort of theories one may have, the cold, hard realities of the market ultimately demonstrate what’s really true. Evidence-based decision making wins out in the end, and businessmen are ultimately guided by this inescapable fact.

If only. While financial markets might provide a little more solid footing than some other disciplines, the fact remains that there’s no shortage of totally irrational behavior to go around on any given day. And often, this irrationality takes one of its most classic forms: the conspiracy theory.

Economics, Finance No Stranger to Conspiracy Theories

It was 1990s rock icon Kurt Cobain (who himself was subject to a variety of post-mortem conspiracy theories) who penned the lyric “just because you’re paranoid don’t mean they’re not after you.” And in the mind of every conspiracy lunatic lies a similar thought process: “no, but THIS time it’s real!”

Conspiracy theories are more about the person who holds them than the world they live in. Conspiracy theories provide an explanation for the wrongs of the world that’s simple to understand and easily quantified. Like the bogeyman, it’s a neat, simple reason why things don’t always go right.

What’s more, it’s about the ego of the theorist themselves. Ultimately, it’s satisfying to believe that you’re among the elite group that really sees the truth.

That’s how one rejects the perfectly reasonable conclusion that Lee Harvey Oswald was a crazy person who decided to shoot the President in 1963 and starts buying into wildly complicated theories about what REALLY happened involving the Mafia and communist Cuba. On some level, it’s easier to live in a world where a man of the importance and influence of Jack Kennedy needs more to be killed than one motivated lunatic with a rifle.

Occam’s Razor

Unfortunately for those with wildly active imaginations, almost all of these theories are complete and total bunk. And it’s the concept of Occam’s razor that illustrates this best. Occam’s razor states that, with two equally valid explanations for something, the simpler solution is probably the correct one.

So, assuming that one is dealing with “equally valid explanations,” the less elaborate, involved scenario is more likely to be true. Of course, the conspiracy is almost never an “equally valid explanation,” but why let that interrupt your ranting about the Illuminati, right?

The simple fact is, any time you have a theory that would, in order to be true, require hundreds or even thousands of people coordinating their efforts while keeping the very existence of their organization a secret to all but a handful of conspiracy nuts, it’s pretty clearly bogus.

For crying out loud, a conspiracy as simple as the owners of Major League Baseball teams colluding to hold down free agent contracts in the late 1980s fell flat on its face and was exposed within a couple years. If it didn’t work in an industry that small, relatively speaking, why would anyone think a similar arrangement would be possible when it involves the entire global economy?

Of course, if you ARE a conspiracy theorist, it’s all elemental and the only reason we don’t see that is because we’re “missing the big picture, man!” And the failure of MLB owners isn’t proof it doesn’t work, it’s the tip of the iceberg that demonstrates what's hidden beneath the surface. And this mindset has kept a select few wild ideas floating around the financial world for years, decades even in some cases. So here’s part I of a multi-part look into the most famous conspiracy theories in finance. Part I: the Jewish International Banking Conspiracy.

Jewish Bankers Control the World?

Conspiracy theories are inherently irrational, so it shouldn’t be all that surprising that one of the oldest, oft-repeated conspiracy theories is one rooted in one of the oldest, oft-repeated embodiments of societal irrationality: racism. Despite requiring a pretty epic level of ignorance and intolerance, the belief that Jewish bankers are colluding to control the world of international banking and finance has remained persistent in some circles since…well, since there’s been international banking and finance. Though, one has to admit it’s at least a little ironic that an ethnic group whose history is so littered with exploitation at the hands of those in power has been imbued with so much influence by conspiracy theorists.

A Long Association with Banking

There’s at least a kernel of truth to this particular theory because there has been a historical association between banking and the Jewish people. It is, of course, largely coincidental, derives from exclusionary practices levied against the Jewish people, and is not the least bit nefarious. There have also been historical associations between any number of different peoples and the banking industry that have failed to spark similar interest from conspiracy theorists, but, again, no one said any of this would be logical.

A History of Discrimination

The Jewish people in Europe have long been concentrated in urban centers. This came from the fact that they were typically prohibited from owning land by Christian monarchs during the medieval ages when agriculture was the most lucrative sector of the economy (I mean, basically the whole economy, really). Also, because the Bible prohibits usury, Christians in medieval Europe couldn’t participate in lending money. And, because of the racist and exclusionary membership practices of the all-important trade guilds at the time, Jewish people didn’t exactly have a ton of other options.

As such, it’s true that some of the origins of European banking are tied to Jewish culture. Not at all to the degree that conspiracy theorists like to imagine, but there is some connection there. But, as the centers of economic power in Europe shifted more to the cities after the industrial revolution, it was easy for those people who were losing out in the new economic equation to fixate on the presence of Jewish people in the newly-influential banking industry as the primary source of their misery.

After all, Christians in Europe had a few centuries of demonizing the Jewish people under their belts already. If you’ve already blamed the Jewish people for the existence of the bubonic plague, settling on Jewish bankers as the villains driving economic changes was hardly a stretch. Throw in the fact that bankers of any ilk have been pretty easy to demonize in basically any era and this particular myth really hit the ground running.

The Rothschild Family

Also fueling this absurd conspiracy theory was the rise of the Rothschild family. Mayer Amschel Rothschild was a court Jew to the Landgraves in Frankfurt during the mid-18th century. Rothschild was unique because he was given the opportunity to bequeath the wealth he acquired through his banking empire to his family, allowing him to build a legacy. The Rothschilds remained a powerful and influential family in Europe for years, investing heavily in government bonds and even helping finance arms deals during the Napoleonic Wars.

And, to this day, the Rothschilds name still sparks the fevered interest of conspiracy theorists despite the fact that the family's influence began to starkly decline following World War I. To those conspiracy nuts, the Rothschilds are everywhere you care to look, funding governments and wars, holding the strings that control the puppets running the banking industry and, by extension, the world.

But is there any truth to this? Is it possible that the presence of Jewish people in banking from its earliest days, combined with the rise of a wealthy superfamily during the 18th century, has resulted in their undue influence on an industry that has the capacity to shape public policy?

Well, no. Not even a little bit.

Selective Reasoning

A single family that leveraged its tremendous institutional wealth into great power and influence over monarchs and political figures alike? Oh my! What a story! Where else could you find a tale like that except for all of the rest of European history? Because the only thing that really sets the Rothschilds off from the hundreds, if not thousands, of other similarly wealthy, influential families of Europe, some of which were established centuries earlier than the Rothschilds, is that the Rothschilds are Jewish.

And that’s what this conspiracy is really about. The Rothschilds never held influence, money, or power that was at all unique to the wealthiest families of Europe at the time. But the fact that they’re Jewish allows people who are already fixated on people who are Jewish, consciously or not, to begin building wild fantasies about they would consider ridiculous were they directed at a gentile family.

That’s also how one can start believing something as ridiculous as a cabal of Jewish bankers controlling anything by acting as a monolith. In the eyes of an anti-Semite, the different Jewish men who have managed to hold prominent positions in the banking industry over the years are all just members of the same tribe. In the eyes of a rational person, though, they’ve been a wildly diverse group of people hailing from dozens of different countries, backgrounds, and cultures. Really, not at all unlike the non-Jewish bankers who have always made up the vast majority of the industry.

And the level of careful and precise coordination required for this wildly diverse group of individuals to wield the level of control implied by the conspiracy theories would be pretty impressive if they carried it out in the open, let alone as part of a secret plan for collusion that’s kept from public view despite requiring the complicity of thousands of people. Something that’s easy to swallow if you already believe that there’s something inherently wrong with the Jewish people, but otherwise a pretty stupid idea.

Conspiracy Debunked

Ultimately, believing that any one particular ethnic or religious group is acting together to advance their own interests is always going to be a flawed one. One could just as easily look at today’s international economy and decide that Texans are colluding to control the world’s governments for Texas by dominating the oil & gas industry. One could look at that industry’s power and influence, its locations, the number of Presidents elected from Texas, the invasion of Iraq, and there’s more than enough fodder for a pretty wild conspiracy theory.

And the fact that people don’t is just a sign of what’s really driving the conspiracy of Jewish control of international banking: racism. People don’t immediately assume that Texans must be working together for nefarious reasons just because they’re from Texas, but a portion of the population has always seemed ready to do just that for people of Jewish descent. Those people ready to believe in the Rothschild family’s capacity to wield control over global finance are really just projecting their own insecurities to form a worldview that they’re more comfortable accepting despite it’s being complete and utter fantasy.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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