Clever Geek Handbook
12 August 2025

Innovate the Pixar Way

Recommendation

Despite a blue-sky tone, this book offers a fascinating window into the singular culture of Pixar, the world’s foremost animation studio. Management consultants Bill Capodagli and Lynn Jackson balance their accounts of technological advances, cutthroat corporate politics and astonishing profits with descriptions of Pixar’s arcane approach to strategy and human resources. The tale of how Pixar’s leaders exercise their determination to run the shop their own way – while standing up to interference from Disney, their corporate parent – injects narrative drama into this straightforward presentation of Pixar’s in-house philosophy. Its leaders’ willingness to accept failure, and their faith in their own judgment about products and people, prove inspiring. The lessons offered at the end of each chapter err toward the simplistic and don’t usually demonstrate how conventional businesses might apply Pixar’s methods. Instead, the authors mostly leave extrapolation of Pixar’s business teachings to the reader. A lengthy index citing other companies that thrive under a “fun” matrix helps make up for that shortcoming. BooksInShort finds that those examples, plus revealing quotes from Pixar executives, will enable readers to emulate Pixar’s strategy as they enjoy this inside-the-theatre corporate profile.

Take-Aways

  • Pixar Studios, which created Toy Story and The Incredibles, among other animated hits, is the model of a cutting-edge, forward-thinking company.
  • Pixar shows that innovative companies foster creativity, and creative companies foster innovation.
  • Learn from Pixar’s example: Develop and stick to a long-term vision. Make sure all your business practices and goals serve that vision.
  • Punishing failure stifles innovation. Instead, celebrate failure as an essential element in finding solutions.
  • Top-down communication improves morale and increases productivity.
  • Look for the unpredictable hire; an eccentric genius is a better long-term investment than a safe plodder.
  • Make fun part of the daily work routine.
  • Stand up for your long-term goals against corporate superiors and shareholders.
  • Solicit input from all employees for creative and business-oriented decision making.
  • Create loyalty among your employees. Display “mutual respect and trust.”

Summary

“Dream”

Pixar Studios’ co-founder Ed Catmull and early hire John Lasseter, now Chief Creative Officer, have worked together as partners since 1984. Their fundamental credo is to retain the “childlike wonder” most adults lose. As Lasseter says, “People who get into animation tend to be kids. We don’t have to grow up.”

“Quality is the best business plan.”

Pixar emerged from an unusual confluence of interests: Computer animation geeks who wanted to be comic book artists connected with software entrepreneurs who wanted to be rich. Pixar’s engineers and its creative staffers understood from the beginning that the future lay in the machines and programs they discovered, learned or invented, but nobody knew what that future would look like. Under Steve Jobs’ early ownership (he bought Pixar from Lucasfilms in 1986; Catmull’s co-founder Alvy Ray Smith left in 1991), Pixar primarily attempted to sell expensive graphic-generating computers. Management regarded movie making as a hobbyist sideline.

“Collaboration is critical to the process of generating ideas and solving problems in any organization.”

As the technology grew more sophisticated, Pixar’s brain trust grew more determined that animated features would be its raison d’être. In ’95, Toy Story, Pixar’s first full-length movie, earned an absurd level of success. Catmull and Lasseter realized to their surprise that the inventive madness that went into Toy Story had a method, even though their freewheeling creative process might appear random. They set out to codify that method to maintain their success. Their early discoveries included the realization that they – as a management team, creative team and financial team – were often wrong. They pursued mistaken policies, fought pointless fights, chose inferior subjects for their films, used the wrong technology, and so on. At the same time, Pixar focused on long-term goals, hewed to its vision and never succumbed to market, press, peer or executive pressure. Thus protected, Pixar employees knowingly, seamlessly fold mistakes into their creative process, turning errors into artistry. This lesson cuts deeply through Pixar’s culture. As Lasseter explains, “We’re almost more excited about things that didn’t work.”

“Believe”

Pixar celebrates error; its leaders do not want employees to fear making mistakes. It encourages determined exuberance. When someone makes a big enough mistake, recognition and a party ensue. Pixar fosters flexible minds in a no-fear ambiance. This applies equally to creative staffers and to software and hardware engineers – who in more staid firms function under intense pressure to follow instructions and keep their imaginations to themselves. Pixar is determined that its geeks and artists will not and should not form antithetical, internal cultures. In many corporations, each group sees the other as the main impediment to the realization of its goals. Pixar maintains an atmosphere in which each group views the other as its most crucial collaborator.

“A check-the-boxes approach to creativity is likely to result in blandness and failure.”

This collaborative atmosphere derives from another Pixar dictate: Nothing is as important as communication. Pixar keeps all channels open. It encourages top-down contact from executives to all staffers, and regular formal and informal meetings between the geeks and creatives, who tell each other what they are doing and why. No leader ever presents Pixar’s people with a fait accompli decision; they always have input. Pixar expects employees to share ideas and opinions about upcoming company initiatives. The open-plan Pixar workspace, and its extensive community spaces for dining, hanging out and playing (an Olympic-sized pool, a game room, cafés), encourage constant interaction within departments, between units, and up and down the command chain. The corporate culture doesn’t respect rank, and it welcomes frank opinions. No one gets in trouble for speaking his or her mind. Of course Pixar can sustain this devotion to open communication and creative mistakes only because they’ve proven extremely profitable. Pixar employees do not expect outsiders to understand how they operate. In fact, they seem happier when outsiders have to wonder how it all works.

“Treat management as you would treat a customer – focus on getting them to embrace your dreams.”

Pixar prefers to hire eccentrics, wildcards, people who do not color within the lines. However, it wants these iconoclasts to be dedicated workaholics, as well. People who haven’t fit in at more traditional companies – and who’ve attained a reputation as difficult mavericks – tend to thrive at Pixar, with its combination of personal, creative freedom and devotion to deadlines and excellence. Managers are proud to cite flourishing employees whom other companies branded as “unmanageable.” These tough cases do not prove any more manageable at Pixar, but the firm provides an atmosphere where they can be consistently productive. Pixar’s leaders regard The Incredibles as a product of its “black sheep,” a group of frustrated artists who, given free rein, carried out the best work of their lives. The Incredibles won Academy Awards for Best Animated Feature and Best Achievement in Sound Editing, and became a best-selling DVD even though its budget was lower per minute than any previous Pixar film. All this came from a thrown-together team of malcontents anxious to show what they could really do.

“Decision-making hierarchy and communication structure in an organization are two different things."

To ensure that staffers never become stale, Pixar created and funded Pixar University (P.U.). Pixar encourages staff members to take at least four hours of free courses a week on its 16-acre campus – known as “The Habitat.” The courses, taught by recognized experts, cover a broad range of topics, from drawing to improvisation to self-defense. Pixar believes that smarter, well-rounded employees are more creative and innovative. In a clear demonstration of Pixar’s willingness to live up to its self-created image, it installed Randy Nelson as P.U.’s “dean.” Nelson is a former trainer at NeXT (the computer company Jobs launched following his ouster from Apple) and a founder of the absurdist postmodern juggling troupe The Flying Karamazov Brothers. Staffers can take as many classes as they like if they maintain their work schedule. Underlining Pixar’s collaborationist spirit, P.U.’s motto is “Alienus Non Diutuis,” which means “Alone No Longer.” Nelson says P.U. gives “people opportunities to fail together and to recover from mistakes together.”

“Dare”

Pixar’s founders survived various adventures with corporate overlords – especially bottom-line obsessed, hide-bound, bureaucratic Disney. They learned the hard way to prioritize long-term investment in innovation over short-term profits. Disney’s chiefs did not understand the potential of three-dimensional computer animation. They were complacent about profits from sequels to their animated hits and uninterested in funding any waves of the future. Disney lost the opportunity to own Pixar at its very beginning. Pixar’s partners profited from Disney’s mistakes; they always sought new methods and opportunities, and they believed in an enduring vision and total dedication to the finest work, whatever the cost. In 2006, Jobs sold Pixar to Disney for $7.4 billion.

“Creativity demands awareness – attention to managing the failures that happen on the path to success.”

Collaborative opinion sessions are a regular feature at Pixar. Directors and their creative teams show their work to gatherings of other employees, who are free to say what they think. Creative team members can listen to or ignore the advice, but they cannot escape the opinion sessions. Pixar believes this makes creative staffers more confident about their ideas and more able to stand up to criticism without losing their focus. It also teaches them to defend their thought processes. Plus, the commentators learn more about other people’s work. Such collaboration is Pixar’s lifeblood. Pixar believes in the people it hires and in their ability to find the best approaches. Pixar managers treat staffers and their ideas with respect, because they believe respect is the greatest motivator. Pixar workers do not sign contracts; Catmull shuns such agreements as a prerogative of corporate control, and wants workers to want to be at Pixar. When they no longer wish to stay, he thinks they should leave. As reflected in its human resources policies, Pixar wants people who cannot wait to get to work and who love being there.

“He who fails most wins.”

Pixar vets job candidates through the rubric of “depth, breadth, communication and collaboration” – attributes employees must possess. Depth addresses excellence in an employee’s chosen area of expertise, and his or her ability to work hard over the long haul. Breadth means possessing a broad base of life lessons and curiosities. It also means understanding other people’s motivations or cultures, and having the ability to draw upon those insights. People with breadth move toward others to solve problems; they do not shy away from one another. Communication is the capacity to know when a listener has understood a discussion, and to listen carefully and comprehend. Collaboration happens, in the Pixar view, when people use all these skills in the pursuit of a joint project with others who have equal abilities. Someone with all these qualities possesses field “mastery,” and any master has long since learned to fail, recover and move on.

“Do”

The “Pixar Way” involves knowing how to avoid being interfered with or bullied, on both an individual and corporate level. Throughout its existence, Pixar’s leaders have fought for its creative ideas against “the suits.” To keep the suits at bay, Pixar delineates clear progress points that mark how far each project has developed, stage by stage. Managers involve the suits in briefings designed to keep them up-to-date and make them feel included. Progress reports sell “the dream” to upper management and include executives in the collaborative process. Pixar’s staffers want to hear their bosses’ opinions, but the firm’s noninterference strategy embraces listening to, but not necessarily acting upon, their feedback.

“Drawing class doesn’t just teach people to draw. It teaches them to be more observant.”

Pixar’s greatest strength is its willingness to fail. Because the company understands that punishing failure stifles innovation, workers know they can innovate without fear. Managers always encourage staffers to overreach, to try new ideas and techniques. Employees know the company trusts them. Their goal is to fail while reaching for the stars, to gain knowledge from the failure, and to rise up and try again. Pixar raises risk taking to an art. Its principles for encouraging risk and creating a “try, learn and try again” culture include:

  • Honoring failure like success.
  • Quickly creating prototypes of new products for rapid testing.
  • Giving teams unlimited freedom to see what they create.
  • Asking team members for 10 of their most imaginative, least-grounded solutions, no matter how far from reality they might be.
  • Using financial restrictions as strengths and developing within existing capabilities.
  • Treating plans flexibly, and letting plans and circumstances develop together.
  • Displaying team ideas, in planned or real form, for all to understand.
  • Avoiding long meetings and reports as a waste of energy and time.
  • Seldom asking for permission.
  • Implementing ideas as they arise.
  • Seeking purchasers or suppliers who match Pixar in flexibility and forward thinking, because such allies become real-world testers for even the wildest notions.
“Art is a team sport.”

Pixar believes in the power of play and the health-giving attributes of laughter. That laughter does not stop when managers come near. Pixar’s offices are a playground. As employees encounter one another in informal circumstances, ideas flow easily. In the early days, Pixar furnished its screening room with a hideous assortment of thrift-shop beaten-down couches – all the company could afford. Rather than seeing the couches as a symbol of the company’s budget restrictions, employees regarded them as a badge of honor, and the couch room became a favored hangout.

“We worked really hard, but we also had so much fun and it showed up in our work.” (John Lasseter)

Pixar’s play-oriented policies include having a team invent monthly, companywide playful activities, such as in-house scooter races; encouraging employees to personalize their work spaces; noting moments worth celebrating – from birthdays to project completions; and helping staffers gain recognition beyond the company by encouraging them to join professional organizations, attending conferences and publishing in journals. Letting workers share their achievements with the outside world makes them more loyal to Pixar. Managers always give “mutual respect and trust” to anyone on any level at Pixar. As communication must flow up and down the power chain, so must care and attention to the humanity of all the company’s workers.

About the Authors

Bill Capodagli and Lynn Jackson of Capodagli Jackson Consulting also wrote The Disney Way.

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Innovate the Pixar Way

Book Innovate the Pixar Way

Business Lessons from the World's Most Creative Corporate Playground

McGraw-Hill,
 


12 August 2025

The Checklist Manifesto

Recommendation

Some of the most highly trained and respected professionals in the world rely on the humble checklist to keep them organized and out of trouble. Tremendous advances in scientific knowledge now overwhelm practitioners in many fields – to the point that they make regular but frequently avoidable mistakes. Boston-based surgeon Atul Gawande chronicles how his research into the aviation, construction and investment industries helped shape the World Health Organization’s production of a two-minute, 19-point surgical checklist that has saved countless lives worldwide. While not designed to be a how-to manual, Gawande’s book provides sample checklists, instructive examples and plenty of food for thought about how to create and fine-tune checklists that fit your job and your organization’s mission. BooksInShort prescribes this eye-opening report to anyone responsible for complex tasks or for the lives of others and particularly to readers who plan to check into a hospital anytime soon.

Take-Aways

  • Two factors explain human error: “ignorance and ineptitude.”
  • Ignorance exists because people still have a lot to learn about the world and how it works. Ineptitude occurs when knowledge exists but people don’t apply it correctly.
  • Science has given professionals capabilities beyond their abilities to use them effectively.
  • Many professional fields “have become too much airplane for one person to fly.”
  • The aviation industry learned as early as 1935 that flying modern airplanes requires diligent use of specific checklists outlining even mundane procedures.
  • The demise of the “Master Builder” led architects, engineers and contractors to create highly sophisticated systems of written checklists and communication standards.
  • The pressure of making fast life-or-death decisions plagues medical professionals.
  • “Getting the steps right” in many medical procedures is “brutally hard,” even for highly trained specialists. One oversight can prove fatal to a patient.
  • In early 2009, the World Health Organization developed a two-minute, 19-point checklist that has since prevented countless surgical complications and deaths.
  • Professionals must set aside their egos, accept human fallibility and use their checklists.

Summary

“The Problem of Extreme Complexity”

Humans like to think of themselves as being in complete control of their world, but, more often than not, they must deal with failure. Such defeats stem, in part, from what philosophers Samuel Gorovitz and Alasdair MacIntyre call “necessary fallibility”; that is, despite scientific advances, some efforts people pursue are “simply beyond” human capacity. In areas of great achievement, such as erecting skyscrapers, predicting violent weather and performing lifesaving surgery, even experts must humbly concede the limitations of advanced training and years of experience.

“Much of the world and universe is – and will remain – outside our understanding and control.”

Error-based failure happens for two reasons: “ignorance and ineptitude.” Ignorance stems from the fact that people still have a lot to learn about the world and how it works. Ineptitude occurs when knowledge exists but people don’t apply it correctly. For example, in medicine, research has illuminated staggering amounts of knowledge about human health, so much so that ineptitude is now as great a problem as ignorance. Furthermore, sometimes the problem is “‘eptitude’ – making sure [to] apply the knowledge...consistently and correctly.”

“The volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely or reliably. Knowledge has both saved us and burdened us.”

Despite advances in technology, mistakes happen daily in every field that requires “mastery of complexity and of large amounts of knowledge.” Think of all the gaffes that make the news: medical blunders, bad software design, legal errors, troubled fiscal systems, botched handling of weather disasters, and more. “Failures of ignorance” are easier to forgive, but most people feel incensed when others don’t implement existing knowledge properly and thereby do harm. Trained, hardworking, dedicated professionals in all fields regularly and frequently make avoidable mistakes. The solution may seem “ridiculous in its simplicity”: Use a checklist.

The Checklist

A three-year-old girl fell into an icy pond near the Austrian Alps and was underwater for 30 minutes before her parents found her, pulled her ashore and began CPR. When rescuers arrived eight minutes later, her body temperature was 66°F (19°C), and she showed no signs of life. Nonetheless, medics airlifted her to the small local hospital where a surgical team cut into her chest, even though she had been lifeless for 90 minutes. Machines kept her blood flowing, and, when her body temperature rose to normal six hours later, doctors performed a cardiac bypass. Within two days, all organs except her brain returned to normal. She remained in a coma for more than a week. After extensive rehabilitation, she was totally back to normal by her fifth birthday. The lead cardiac surgeon attributed the team’s success to his earlier insistence on using a set of simple checklists to remind rescue squads and the hospital phone operator about the detailed steps to take to prepare the surgical team for a patient’s arrival.

Checklists “provide a kind of cognitive net. They catch mental flaws inherent in all of us – flaws of memory and attention and thoroughness.”

In October 1935, the US Army Air Corps had aircraft manufacturers compete to build the “next-generation long-range bomber.” Boeing’s design had the lead; everyone thought the flight trials would be just a formality. But, minutes after its smooth takeoff, the giant four-engine Model 299 stalled and “crashed in a fiery explosion.” The veteran aviator who died in the crash had forgotten to release a lock. Rather than call for redesigning the plane or the training, some test pilots developed a checklist for flyers to review during takeoff. Just requiring them to use an index-card-sized checklist saved Boeing from bankruptcy and turned the Model 299 into the B-17 bombers that fought Nazi Germany. In 1.8 million flight miles, B-17s have never had an accident.

“Expertise is valuable but most certainly not sufficient.”

Many professionals, including medics, lawyers, architects, firefighters and police officers, face the same problem as the 1935 test pilots: Their jobs “have become too much airplane for one person to fly.” In a complex setting, professionals often face two key challenges: too much information to remember and too many distractions to attend to every detail. Whether building a skyscraper or buying recipe ingredients, if you “miss just one key thing, you might as well not have made the effort.” A checklist can make the difference.

“The End of the Master Builder”

From medieval times until the mid-20th century, “Master Builders” designed, engineered and erected great structures. These craftsmen ruled the entire building process from concept to completion. Today, however, advances in every aspect of construction “overwhelmed the abilities of any individual to master them.” The building profession split into architects, engineers and contractors, each of which has specialities and subspecialities. Knowing that they have “no margin for error” and that “failure is not an option,” these professionals developed a way to work together using a complex system of written checklists for each step of the construction process.

“You want people to make sure to get the stupid stuff right. Yet you also want to leave room for craft and judgment and the ability to respond to unexpected difficulties that arise along the way.”

No one authorizes or performs a task, no matter how small, without checking if preceding tasks are complete. Contractors use large wall-mounted paper charts to track each small step visually as it happens, and they use project-management software and communications systems. That is now the industry standard. A 2003 study cites an average of “just 20 serious [US] building failures per year...an annual avoidable failure rate of less than 0.00002%.” Checklists work.

The Idea

One “particularly tantalizing aspect” of construction is that builders push power out to on-the-ground practitioners to make decisions in the face of unanticipated events. Most central authorities, conversely, make checklists for their subordinates but hesitate to let those staffers make big decisions. Checklists work for organizing and overseeing routine tasks, but not for operating in crises, as Hurricane Katrina proved. Federal Emergency Management Agency officials refused to abandon command-and-control management despite worsening conditions; they should have pushed decision making “out of the center as far as possible.”

“The evidence of how slow we’ve been to adapt is the extraordinarily high rate at which care for patients is duplicated or flawed or completely uncoordinated.”

Retail giant Walmart got it right. Immediately after Katrina, the company gave its local store managers full permission to do whatever they could to help. Some gave away entire inventories to people needing emergency supplies. Some gave first responders food, tools and sleeping bags, using just a “crude paper-slip credit system” to keep track. Senior executives focused less on issuing orders and more on communication. The lesson is that complex, uncertain situations – when no one person or central agency can possibly know all that must be known – require a two-pronged mechanism to ensure that no one misses the “stupid but critical stuff” and that people keep talking to each other as they resolve the crisis.

“The First Try”

In 2006, after joining an international World Health Organization (WHO) group to tackle the growing dangers associated with surgeries, author Dr. Atul Gawande, a surgeon, and his research team found that, globally, surgical complications led to at least seven million deaths and one million disabilities each year. WHO wanted a “measurable, inexpensive and substantial reduction in overall complications from surgery.” The team rejected unfeasible remedies, but a study on the use of checklists to improve health persuaded them to take that path.

“A single type of error can affect thousands, but because it usually touches only one person at a time, we tend not to search as hard for explanations.”

In one case history, field workers distributed bars of antibacterial soap in poor neighborhoods in Karachi, Pakistan, teaching residents how to use the soap as part of a checklist of six daily routines for personal hygiene, food preparation and child care. During the one-year trial, bouts of diarrhea in children fell 52%, pneumonia fell 48% and the skin disease impetigo fell 35%. Interestingly, participants already used bar soap in their homes, but not correctly or often enough.

“Just ticking boxes [on a checklist] is not the ultimate goal. Embracing a culture of teamwork and discipline is.”

Another example that helped convince the WHO group was a short checklist used just before initial appendectomy incisions at Columbus Children’s Hospital where more than a third of patients “failed to get the right antibiotic at the right time.” Nurses routinely placed a small metal tent inscribed “Cleared for Takeoff” over the scalpel and were given new authority to stop the surgeon if even one step was omitted, effectively distributing the power. After three months, 89% of patients received the correct antibiotic in a timely way, and, after ten months, 100% did. Checklists also improved the operating-room working environment at the University of Toronto, Johns Hopkins and the California-based Kaiser health system hospitals. Checklists requiring the surgical team to introduce themselves to one another and to discuss and confirm all aspects of the procedure at hand directly led to enhanced levels of teamwork and surgical results.

“The Checklist Factory”

Veteran pilot Daniel Boorman, who spent 20 years creating checklists and flight deck controls for Boeing, warns against bad checklists that are “vague and imprecise, too long, hard to use, impractical, and made by desk jockeys with no awareness of the situations in which they are to be deployed.” Conversely, good checklists are “precise, efficient, to the point and easy to use in even the most difficult situations.” When compiling a checklist, don’t spell out every single step in bureaucratic detail; use simple words in the lingo of your field. Fit your list on one piece of paper and use both upper- and lowercase type (preferably sans serif). Test and refine your checklist in the real world.

“We are not built for discipline. We are built for novelty and excitement, not for careful attention to detail. Discipline is something we have to work at.”

Good checklists focus on the “killer items” – the ones that are “most dangerous to overlook” and that people are most likely to skip. Boeing uses two types of checklists: “DO-CONFIRM” to verify that pilots carry out critical actions and “READ-DO” for specifying the steps pilots take while doing a specific action. But even the best checklist cannot force anyone to use it. Aviators learn that their recollection and judgment are fallible. Good pilots – unlike many surgeons – understand and accept their limitations. When facing a calamity, pilots are “astonishingly willing” to use their checklists.

“The Test”

The WHO group met again in Geneva in spring 2007 to eliminate items that took extra time during the checklist procedure. Some of the proposed cuts might have made a life-or-death difference, depending on the country, the hospital or the surgery. The “final WHO safe surgery checklist” has 19 checks: seven before administering anesthesia, seven before incision, and five after the operation but still in the operating room. WHO gathered data on surgical complications and tested the checklist in eight hospitals worldwide, four in high-income countries – the US, Canada, England and New Zealand – and four in low- and middle-income nations – the Philippines, Jordan, India and Tanzania. In spring 2008, all eight hospitals educated their staff members and implemented the two-minute, 19-item checklist. “Pockets of resistance notwithstanding,” the checklist was in use in every study OR within a month of introduction.

“Checklists must not become ossified mandates that hinder rather than help. Even the simplest requires frequent revisitation and ongoing refinement.”

After just three months of using the checklists, major postsurgical complications dropped by 36%; deaths, by 47%; infections, by nearly 50%; and follow-up surgeries to correct problems, by 25%. Of 4,000 patients, only 277 developed serious complications, compared with 435 patients in prechecklist statistics. The WHO checklist “spared more than 150 people from harm – and 27 of them from death.” Follow-up surveys of more than 250 OR staffers revealed that 80% found the checklist easy to use and 78% saw it prevent a surgical mistake.

“The Age of Checklists”

By the end of 2009, more than 12 nations committed to using checklists in their hospitals; hospital associations in 20 US states pledged to track the results of checklist usage; 10% of US hospitals either adopted or planned to adopt checklists; and globally, more than 2,000 hospitals were using them. Checklists offer opportunities “not just in medicine but in virtually any endeavor.” For example, interviews with three successful investors reveal that each one attributes his success to using checklists based on his experience and that of respected peers; Warren Buffett also uses a “mental checklist process.”

“In the end, a checklist is only an aid. If it doesn’t aid, it’s not right. But if it does, we must be ready to embrace the possibility.”

Yet people aren’t very disciplined, so efforts to introduce the discipline of checklists in other fields have been an uphill battle. Little research goes into examining failures “in teaching, in law, in government programs, in the financial industry or elsewhere.” When the same mistakes keep happening, it’s time to take a different tack: Try a checklist.

About the Author

Atul Gawande is a MacArthur Fellow, a surgeon at Brigham and Women’s Hospital in Boston, and an associate professor at Harvard Medical School.

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The Checklist Manifesto

Book The Checklist Manifesto

How to Get Things Right

Metropolitan Books,
 


12 August 2025

Capitalism and the Jews

Recommendation

Good etiquette advises that discussing religion, money and politics with strangers is not prudent, but, fortunately, professor Jerry Z. Muller ignores this maxim. Instead, this broadly published academician presents four exceptional essays assessing the role of Jews in developing capitalism in terms of complex social, historical and religious structures. He wrote the series, which covers centuries of history, over the course of 30 years of study. His combined notes and bibliography alone are 29 pages. Muller tellingly shows the relationships among the political, theological and economic ideas that created some of the best and worst events in modern society. BooksInShort highly recommends this enlightening, accessible work of contemporary scholarship.

Take-Aways

  • As modern capitalism developed in the 1600s, European Jews were positioned to work with it and benefit from it, despite being considered outsiders.
  • Reactions to the Jews’ commercial achievements depended on how a host nation regarded capitalism.
  • Their success led to tensions fed by changing capitalism and ethnic nationalism.
  • The medieval church prohibited Christians from lending money, so Jews – barred from many trades – fulfilled that need.
  • The label of “usury” made their position controversial.
  • Even when interest fees became accepted, usury was a powerful symbol of capitalism.
  • By the late 1800s, bankers such as the Rothschilds personified Jews to the public.
  • Karl Marx attacked Jews as an icon of bourgeois capitalism.
  • The 20th century’s colliding forces resulted in both the Holocaust and the birth of the state of Israel.
  • The need to flee organized persecution and the pressures of capitalism impelled Zionism, the Jews’ drive to create their own nation.

Summary

Complex Reasons

Capitalism has been good for the Jews, and the Jews have been good for capitalism. In the Middle Ages, Jews migrated widely, primarily settling as guests in host nations and functioning as a religious group of merchants in exile. Over the centuries, historical forces, including nationalism and extreme political movements, shaped the way they earned their livelihoods and practiced their religion. Despite being seen as outsiders, they were positioned for meaningful economic participation when modern capitalism emerged in the 1600s. But nationalism, anti-Semitism and racism imbued the public view of their achievements with hostility, which affected Jews’ self-perception. Jewish intellectuals, such as Moses Mendelssohn, worked to link the economic benefits Jews provided to their other, overall contributions to society.

“Capitalism has been the most important force in shaping the fate of the Jews in the modern world.”

Changing capitalism, economic inequality and the dawn of ethnic nationalism created many disenfranchised groups. As nations modernized, these trends also drew attention to the Jews – particularly those with wealth – as religious, cultural and financial outsiders. In the 1900s, some Jews turned to communism, capitalism’s antithesis, and to the quest for security. The sense of being permanent outcasts, plus the need to flee organized economic, social and religious persecution, drove the Jews’ to establish their own nation.

Essay One: “The Long Shadow of Usury”

Jews began lending money to earn interest in the Middle Ages, with the Catholic Church’s permission. Recognizing the need for money lending, it allowed Jews, but not Christians, to practice “usury” – charging interest – because it saw the Jews as existing outside of religious and social norms, and as being condemned anyway, as nonbelievers. Prohibitions against usury and its age-old vilification invariably involved the Jews and capitalism itself. Today, the archaic word “usury” depicts a “stigmatized form of an otherwise permitted activity,” lending money, but for excess interest. The medieval church condemned interest as “usury,” a term it applied to “any economic activity...deemed immoral.” Aristotle called usury “blameworthy.” Theologians, who debated which profits were usurious, viewed it as sin, an idea codified in the Second Lateran Council of 1139, extended in 12th-century canon law and repeated in Dante’s Inferno.

“Jews have been a conspicuous presence in the history of capitalism, both as symbol and as reality.”

Because the 12th-century Catholic Church restricted money lending to Jews, they became essential to the rulers, but reviled by the Christian public. Leading Reformation economic and political thinkers, including John Calvin and Martin Luther, as well as the Dutch Reformed Church and authorities in Protestant England, tolerated lending, but sought to limit interest rates. Catholic nations prohibited usury with canon and civil laws until the 1900s. Many people considered the practice unsavory and associated it with Jews. More extreme thinkers made no distinction between lending at interest and other business, and used “usury” as an umbrella term to condemn commerce, Jews or both.

“Jews tended to prosper whenever they attained that civil equality that allowed them to engage freely in market activity.”

Usury became a powerful symbol of capitalism and unfettered market activity. By the 18th century, the time of Adam Smith, lending at interest was a matter of course, though rates were an issue. The exception was Voltaire, who cited usury to label Jews as “avaricious.” Karl Marx and Friedrich Engels advanced anti-Jewish bias by positioning Jews as emblematic of capitalist society. Marx’s 1844 essay, “On the Question of the Jews,” ignited a flurry of some 2,500 political articles discussing Jews’ social role. He criticized Jews as parasites on society; antisocial; uninterested in science, art and philosophy; and focused on money. Marx rejected capitalism, attacking Jews as a figurative way to assail Christian and Jewish bourgeois society.

“Jews have had a preference for market-oriented occupations going back to the Middle Ages.”

By the last half of the 1800s, international bankers, notably the Rothschilds, had begun to personify Jews to the public. In 1902, social scientist Werner Sombart wrote that the pre-capitalist society of peasants and artisans was authentic but that modern capitalism, as embodied by Jews, attacked genuine culture. British economist John Maynard Keynes, who cited aspects of Jewish practice as anti-individualistic, accused Jews of being focused on the pursuit of interest earnings at the expense of the culture. In contrast other leading thinkers drew positive connections between Jews and capitalism, including Georg Simmel, who praised Jews’ adaptation to the outsider’s economic plight, likening them to “Huguenots in France and Quakers in England.”

Essay Two: “The Jewish Response to Capitalism”

Christian decrees dating back to the Middle Ages barred Jews from farming and trade guilds. For such reasons, more Jews than Christians had entered commerce. Jews also pursued trade since it provided more time to study the Talmud, which examines centuries of rabbinical teachings. The Talmud details many religious debates about business. Unlike Christian teachings, it posits that poverty is an ill to avoid; it also tells the Jewish community to be self-sufficient.

“For by creating bills of exchange, Jews managed to make their valuables intangible, putting their wealth beyond the oppressive hand of princes.”

With the advent of the 1700s, as the modern era dawned, the world’s Jewish population was 1.1 million; some “370,000 lived in Asia and North Africa, 146,000 lived in Central and Western Europe, while 570,000 Jews lived in Eastern Europe and the Balkans.” In the 1700s, Christian thought focused on the afterlife, while Jews were concerned about worldly survival. In practice, this meant assessing risk, accumulating capital, minimizing consumption and finding new markets. Judaism stressed the use of intellect over brute force and believed in alcoholic temperance, discipline and long-term planning. Jews followed a “religious intellectualism” based on extensive textual studies, debates and abstract thinking. This approach translated easily into daily commercial situations and extended into medicine and law. Jews invested in “human capital” by having fewer children and emphasizing education, often conserving money to pay for the children’s schooling.

“With the development of credit, money becomes more abstract and, still, little more than a bookkeeping notation.”

As more Jews became dependent on the wider Christian population, religious law adjusted. The U.S. granted Jews civic equality with its founding in 1776. Britain and France followed, as did Germany in 1871 and Russia in 1917. Jews generally did well, but their success could be dangerously conspicuous. A host nation’s reactions to Jewish commercial achievements depended on how it regarded capitalism. The Jews’ greatest financial gains occurred in Germany and Austria-Hungary. In 1800, Jews comprised 4% of Berlin’s population, but paid 30% of its municipal taxes. Jews also played large roles in banking, especially in the formation of joint stock and commercial banks, such as Dresdner Bank, Deutsche Bank and Crédit Mobilier. The Eastern European Jewish population boomed from less than two million at the beginning of the 19th century to eight million by its end. “Some two million of that number moved to America.”

“[Margaret] Thatcher presided over a cabinet that probably had a higher percentage of Jews than any government outside of Israel since the Hungarian Soviet Republic of 1919.”

Among Jews, one reaction to financial success was a backlash toward agriculture and trade, and against the banking professions. The emerging labor Zionist movement advanced the idea that Jewish national existence required working-class members. A 1907 philanthropic campaign urged Jews to become farmers in Texas. A more concerted effort helped 60,000 Jews settle in Ukraine and in the Crimea from 1924 to 1938. Stalin’s purges halted the influx; in 1941, the Nazis devastated these communities.

“For liberals, the reality of differential group achievement under conditions of legal equality is something of a scandal, an affront to egalitarian assumptions.”

While socialist thought influenced Zionism, the move to settle Israel also had a distinctively capitalist bent. By the 1990s, Israel had more companies “traded on the major New York stock exchanges” than any other nation except the U.S. and Canada. Jews embraced Europe’s laissez-faire markets and promoted free-market development and privatization, especially under Margaret Thatcher.

Essay Three: “Radical Anticapitalism” and Marxism

The trajectory of ideas connecting Jews with communism and Marxism is also linked with anticapitalism and anti-Semitism. Modern history associates Jews with capitalist success, which fueled anti-Semitism. To break this cycle, Jews and other minorities tried to see if communism’s anticapitalist promises would lead to an egalitarian, unbiased society. As more Jews accepted this belief at the time of World War I and Bolshevism’s rise, some joined the Communist Party. The backlash against communism led to more anti-Semitism and inadvertently linked Jews and communism in the public mind. In a 1920 article, Winston Churchill called Bolshevism “the schemes of International Jews.” This accusation became a key element in Nazi ideology.

“The Jews are valued precisely for demonstrating the cultural trait of resourcefulness, the intellectual act of discovering new opportunities for the use of resources.”

Most Jews welcomed the overthrow of the anti-Semitic czars. But the Jews in the first Russian Duma in 1906 were mostly members of centrist and Zionist parties. Only the smallest group was Bolshevik. Generally Jews avoided Bolshevism as atheistic, and its anticapitalist ideology threatened the livelihoods of Jewish businesspeople. Bolshevism’s threat of revolutionary violence prompted Moscow’s chief rabbi, Jacob Mazeh, to tell Jewish-born Leon Trotsky that revolution would benefit only the revolutionaries, and would be disastrous for the Jews. As the revolution progressed, the Red Army and the White Russian Volunteer Army initiated anti-Jewish pogroms. The Volunteer Army killed 50,000 Jews, and the Red Army murdered another 70,000 in the Ukraine. Despite the Jews’ moderate role in the Russian Revolution, inflammatory headlines shaped public opinion elsewhere. The label “Jewish Bolshevism” resonated with U.S. politicians who passed the Reed-Johnson Act of 1924, limiting immigration from Eastern Europe. The presence of Jews in interwar revolutionary circles helped reinvigorate anti-Semitism.

“The economic history of the Jewish majority of the state of Israel was a speeded-up version of the economic history of Western capitalist societies.”

In the following decades, Adolph Hitler solidified his power in Germany and launched his invasions. The collision of “pseudoscientific...racism” and anti-Semitism became “a campaign of extermination,” as the “Nazis and their collaborators managed within a few years to murder six out of every seven Jews in eastern and central Europe.” As survivors returned to claim their stolen homes, the “confiscatory middle class” launched pogroms against them in the mid-1940s.

“There were many strains within Zionism – liberal, socialist, religious, revisionist – and they disagreed about their visions for the future of Jewish polity.”

In post-World War II Europe, Russia first allowed Jews to assume high Communist Party posts, and then purged them. Joseph Stalin placed loyal Jewish communists in top roles in Romania, Czechoslovakia, East Germany and Poland. Local people regarded these leaders suspiciously, igniting a new anti-Semitism. Among Soviet bloc nations, Hungary had the most Jewish Communist Party officials. For a short time, it permitted Jews in influential posts, but by 1949, Hungary began ousting its Jewish officials. It turned its repression on its citizens, penalizing some 450,000 people. Stalin abandoned most Jewish communists coincident with the “Doctors’ Trial” in 1952, where seven of nine physicians accused of medical crimes were Jewish. In Soviet-run Czechoslovakia, another 1952 show trial put 14 top party members, including 12 Jews, on trial for crimes against the state. By 1950, emigration had left only 20,000 Jews in Czechoslovakia, but that didn’t stop the trial or the government’s stringent anti-Zionist program in 1968.

Essay Four: “The Economics of Nationalism and the Fate of the Jews”

The rise of nationalism in the late-19th and 20th centuries produced Zionism, specifically feeding the communal need for a state comprised solely of Jews, who had “long viewed themselves as both a people and a religion.” Members of this community held widely divergent views, but Zionists agreed that it was not beneficial – or, perhaps, even safe – to live under non-Jewish civil authority. Sociologist Ernest Gellner, speaking of wide social patterns and not of specific societies or events, alternatively theorized that ethnic nationalism grew out of modern industrial urbanization and capitalism. Writing in the 1980s, Gellner echoed earlier political thought on the appeal of nationalism, particularly for Jews, who were “segregated and overrepresented in middleman roles.” As capitalism grew, bringing competition against the Jews as financiers, they were further marginalized. Economic positions once filled only by Jews were now open to indigenous people in Russia and other countries.

“Thus, in Israel, too, Jews have once again become a highly commercial nation, finding their historical proclivities well suited to the global economy.”

Gellner explained large historic evolutions based on their structure. He said modern industrial society needs the nation-state to create coalitions that bridge ethnic and social strata with shared language and homogenous education. In contrast to the Jews’ isolation in other societies, nationalism bred a sense of family, based on history and contemporary circumstances. Zionism, the move to establish a separate Jewish state, emerged in response to the pressures of capitalism, “the economic base of the rise of modern nationalism.” This “diaspora nationalism” offered Jews a concrete response to stigmatization and marginalization before and after “the watershed of the Holocaust.” But “now their economic and cultural success is a source of envy, and of danger.”

About the Author

Jerry Z. Muller is professor of history at the Catholic University of America in Washington, D.C. His previous books include The Mind and the Market: Capitalism in Modern European Thought and Adam Smith in His Time and Ours.

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Capitalism and the Jews

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