Entrepreneurship and Communal Tax Liability: The Political Economy of the Early Modern Jewish–Polish Symbiosis

Relative to agriculture and manufacturing, income generated from entrepreneurial pursuits is harder to observe by the ruler, and therefore harder to efficiently tax directly. In the institutional and political context of Early Modern Poland, the most efficient method to tax such economic activities was through communal taxation at the widest possible scope. Jews stood out from other groups because their communal institutions had developed during the middle- and late-Middle Ages to support a superior mechanism of wide-scope internal communal taxation and external communal tax liability, and because they could not pose a political threat despite the extensive autonomy required by this arrangement. I explain the uniqueness of the Jewish-Polish symbiosis as a result of the surplus that was generated due to the ability to impose and implement communal taxation at the regional and the national levels on an entire ethnic community that specialized, and often fully dominated, the entrepreneurial sector of the economy.