In the emerging centralized states of Europe – in the German states, most notably Prussia and Saxony, some Italian states, the Habsburg empire, France, England, and the Netherlands – rulers and bureaucrats began to evaluate Jews in a new way. Military and commercial competition between these states, and the demands of modern state-building, put a premium on pragmatic thinking. An ideological orientation that placed the welfare of the state at the pinnacle of the scale of values – raison d’état, as it is known – came to dominate policy. Among the mercantilist thinkers who formulated that policy, there was agreement that a strong state required active international trade, a standing army, and the encouragement of manufacture for export. Rulers who adopted this outlook were routinely declining to force the issue of religious conformity. Jews, who as a group possessed financial skills, capital, and international commercial ties, were increasingly viewed as a group that benefited the state.

During and after the Thirty Years War, Jews were allowed to resettle in parts of the German states from which they had been driven out, in order to help rebuild a war-torn Central Europe. They served as merchants and moneylenders, marketing agricultural surpluses and providing the credit needed for expansion. The capital accumulation from these activities enabled the emergence of the so-called “court Jews,” creatures of the emerging absolutist fiscal state who, with their international commercial ties (especially with Jewish grain merchants in Poland), financial skills, and readiness to accept risk, were able to supply services to monarchs that Christian merchants could not. They provided large-scale loans, provisioned armies, supplied metal to the mints, and promoted manufacture.

For rulers and bureaucrats, Jews also became tools in the effort to break the monopoly of Christian guilds. In the 1660s, for example, the elector of Brandenburg-Prussia, hoping to develop maritime trade, attracted a Jewish merchant from Holland to settle in Memel, and local merchants were soon protesting that this Jew deviated from their own traditional, anti-competitive patterns of trade – precisely what the elector had in mind. The protests of the clergy were also increasingly ignored- In the Netherlands, the merchant ruling class routinely turned a deaf ear when the Reformed clergy complained of the “great freedom” of the Jews. Louis XIV’s minister Colbert deflected the religious objections to a Jewish presence by the merchants in Marseilles- “Since, at this moment, commerce is the only issue,” he wrote, “there is no reason to pay any attention to [these] arguments.”

An increasingly demystified, utilitarian view of the Jews (at least in ruling circles) facilitated their resettlement (or at least consideration of their resettlement) in virtually every European region from which they had been driven in the medieval period. In evaluating this resettlement, however, it is impossible to ignore the specific role played by the Sephardi Jews, both exiles from Spain (and their descendants) and so-called “conversos,” descendants of forcibly baptized Jews in Spain and Portugal. In Italy, even at the height of the Catholic Reformation, princes and governments of the various Italian states competed to attract members of this merchant population, with its strong ties to the Ottoman Empire. As early as 1538, the importance of these Jews in Balkan commerce induced the Duke of Ferrara to grant them a favorable settlement charter. This set off a domino reaction. In 1541 the Venetian Senate offered “temporary” settlement rights to “Levantine Jews”; in 1551 the Grand Duke of Tuscany offered them favorable terms to settle in Pisa; and in 1553, the very year the Talmud was burned in Rome, the papacy followed suit to develop the port of Ancona. In 1572 the Duke of Savoy, ignoring pressure from Spain and the pope, offered privileges to Levantine Jews to settle in Nice and other Savoyard towns. In 1589, the Venetian Senate offered full rights of settlement to Levantine and “Ponentine” Jews, the latter being a euphemism for ex-conversos. The Grand Duke of Tuscany aced all of the competition by offering a charter in 1593 with unprecedented privileges and protections, drawing Sephardi Jews of every background to settle in Livorno.

As Jews became increasingly aware of the leverage they were gaining, they began developing arguments of a kind that would eventually be important in gaining them civic rights. In 1638 the Italian rabbi Simone Luzzatto published an essay in Italian entitled “Essay on the Jews of Venice” in which he enumerated all the advantages his and other states could derive from the presence of the Jews, declaring that “wherever the Jews live, trade and dealings flourish.” Menasseh ben Israel echoed this idea in his “Humble Addresses,” his petition to Oliver Cromwell to permit the return of the Jews to England. The dispersal of the Jews, he wrote, had not made them “a despicable people, but a plant worthy to be planted in the whole world…being trees of most savory fruit and profit.”

Eventually, such arguments were used by non-Jewish publicists who sought to remove the restrictions and disabilities that historically accompanied the settlement rights of Jews in Europe. In a treatise published in 1693, Sir Josiah Child, head of the East India Company, proposed that Jews settling in England should be naturalized. Holland had acted this way, he argued, and had thus attained considerable economic benefit. John Toland reiterated this argument in his treatise Reasons for Naturalizing the Jews in Great Britain and Ireland (1714), drawing explicitly from Luzzatto’s work. Such arguments remained the leading means for seeking the improvement of Jewish status until the eighteenth-century Enlightenment, when they were displaced in progressive circles by the argument that Jews deserved to be naturalized on the basis of universal human rights.