The best example of the Fatal Embrace is the history of Poland. There the Jews had autonomy and more power than anywhere else because they became the caretakers of the estates of the king and aristocrats. In effect Jews became the middle men between the Polish and Ruthenian/Ukrainian native people and the Polish aristocracy. They became the enforcers of the aristocracy and practically run the monopoly economy of Poland. The more Jews collected taxes and raised rents, interest rates, prices and especially their alcohol monopoly prices the more they could bankrupt the peasants and confiscate their lands. Kings and aristocrats did not mind as long as Jews kept sending them most of the exploitation profits. The people started to hate and attack the Jews who then gradually isolated themselves from the native population but kept economically exploiting them. Jews became a hostile elite.
This exploitative nature of the Jewish elite was especially clear in Volhynia and Galicia, Southern Poland from where many famous Jewish economists such as Arthur Burns, Aaron Director, Ludwig von Mises and probably also the Friedman and Greenspan families originated. So one would expect them to write about the exploitation of the serf peasants. However, not a word. Historians have not been any better. Gentile historians have been the worst since they have not only been silent about the exploitation but denied it altogether. The famous American historian William M. Johnston went so far as to claim that the Jews had actually been helping the serfs!
In contrast to German cities like Frankfurt and Berlin, which had long had a Jewish settlement, Vienna first attracted Jews in large numbers after 1848. They came from small villages in Bohemia, Moravia, and Galicia, where Jewish culture had been preserved in relative isolation for hundreds of years. These were Jews who had lived in the countryside. In Bohemia, some of them had been farmers, and few had been touched by city life. They had been small merchants, often trading between towns or providing financial services to gentile landowners. Anti-Semitism had been rare in these regions because the Jews provided services that the gentile lords and peasants wanted but would not perform themselves. The economic complementarity of the countryside had guaranteed the Jews security and modest prosperity. (Emphasis added.) (William M. Johnston, Vienna, Vienna—The Golden Age, 1815–1914. Milan: Arnoldo Mondadori, 1981. p. 200.)
When in the Middle Ages Jews were being expelled from virtually every Western European country Poland became their promised land.
Poland became so weak that it was easy for Germany, Russia and Austria to conquer and divide it.
The Jews lost their position as privileged middle men and started to complain about anti-Semitism. The Tsar was especially determined to break the Jewish monopolies and cartels. Jewish movement was also restricted to the Pale of Settlement, the areas that were annexed from Poland. Jews were forbidden to move to Russia proper because the Tsar was afraid they would take over the economy and organize revolutionary activities.
The Jews had lost their power of the Gentiles but they would not give up. They created the socialist movement, toppled the Tsar and became a hostile elite in the Soviet Union. The Jews were back. This time with a vengeance.