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In the early 20 century, a dense corporate network was created among large German corporations, with about 16 percent of the members of this corporate network of Jewish background. At the centre of the network (big linkers) about 25 percent were Jewish. The percentage of Jews in the general population was less than one percent in 1914. What comparative advantages did the Jewish minority enjoy that enabled them to succeed in the competition for leading positions in the German economy? Three hypotheses are tested: (1) The Jewish minority was integrated in a dense network of solidarity, which provided it with comparative advantages in competing with non-Jewish entrepreneurs (hypothesis: embeddedness); (2) The Jewish minority had a high level of education that enabled it to gain access to positions of leadership in big companies during a period in which science and technology became very important for industrial production (hypothesis: human capital); (3) The Jewish minority possessed experience in banking and the financing of large projects since the Middle Ages which gave Jewish bankers comparative advantages in entrepreneurial financing (hypothesis: Jewish private bankers). Our data do not support any of these hypotheses. The observed correlation between Jewish background and network centrality cannot be explained by a higher level of education, a higher level of social capital, or a higher proportion of Jewish managers engaged in (private) banking. The spirit of capitalism: Sombart versus Weber 1 The question of what role the Jewish minority played in the development of capitalism during the late 19 and early 20 century was controversial in scholarly literature already before the First World War. Werner Sombart saw Jews as the «founders of modern capitalism» and emphasized their «great importance for modern economic life, one that far surpassed all other influences». He argued that the Protestant ethic had been influenced by the Jewish religion and that it would therefore be more accurate to speak of an elective affinity between the Jewish religion and the spirit of capitalism: «[...] those elements of Puritan dogma that appear to me to be truly important for the development of the capitalism spirit [were] borrowed from ideas within the realm of the Jewish religion». Max Weber rebuffed Sombart's critique. He argued instead that it was not possible to attribute the characteristic form of capitalistic rationality to the Jewish religion or 1 The research for this article was supported by the Deutsche Forschungsgemeinschaft. The grant is gratefully acknowledged. I am also grateful for the particularly helpful comments of one of the two anonymous referees of the Journal. 2 Werner Sombart, Die Juden und das Wirtschaftsleben, München 1 9 1 1 , v, vii (translated from the German original. The English translation is incomplete: Werner Sombart, The Jews and Modern Capitalism, London 1913) . Sombart's book was sharply criticized already by his contemporaries: Lujo Brentano, Die Anfange des modernen Kapitalismus, München 1916 , 190-199; Ernst Troeltsch, Die Bedeutung des Protestantismus für die Entstehung der modernen Welt, in: id., Schriften zur Bedeutung des Protestantismus für die moderne Welt, 19061 9 1 3 , Kritische Gesamtausgabe, vol. 8, Berlin 2001 , 199-3 16 , here 273-278.

The German-Jewish Economic Elite (1900 to 1930)