How did this come about? Because Jews enjoyed high levels of literacy and numeracy and the fact that the Church's usury laws restricted Christians from making loans, Jews came to occupy an important niche in the medieval economy because they could provide the bookkeeping skills necessary to facilitate lending and other commercial transactions. Indeed, in 1190, Richard I (the Lionheart) established the Exchequer of the Jews (or Jewry), giving Jews monopoly power over lending because it provided a better system for tracking loans and being able to tax them more effectively. Moreover, the security measures installed around the Exchequer meant that the records were less likely to be destroyed. In practical terms, this meant that it was easy for the king to tally up and levy a tax (known as a tillage) on these financial transactions.
The arbitrary nature of the tallage, however, angered the nobility because it often led them to default on their loans, which in turn often meant that members of the royal court were able to purchase their land at bargain-basement prices. Instead of directing their anger at the king, however, the nobility directed it at the Jews, demanding an end to the Exchequer. And as King Edward I (1272-1307) found other avenues for imposing and collecting taxes, the Exchequer's value declined, and he disbanded it in 1275. However, because Edward continually looked for ways of increasing his revenues, he briefly toyed with the idea of reinstating the Exchequer. This, however, proved unpopular with the nobles in Parliament, and he ultimately decided (after a series of "baron revolts"), that the only way he could reassure them that he wouldn’t renege on his promises was to expel the Jews from England.
All of this is covered in the latest Research on Religion podcast ("Mark Koyama on the Economics of Jewish Expulsions"). Here is a brief description of the podcast:
Prof. Mark Koyama of George Mason University explains why King Edward I expelled the Jews from England in July of 1290, giving them only three months to leave. Rather than focusing on anti-semitism or explanations based upon “greed,” Prof. Koyama shows how changes in feudal revenue collection during the 13th century led to a devaluation of the moneylending role that Jews played in the English economy and how expulsion represented a credible signal to the ever-rebellious lower nobility. He generalizes this explanation to help us understand why further expulsions of Jews occured in continental Europe in the subsequent centuries.Moreover, as Professor Koyama notes in the podcast, Jews weren't the only groups that were expelled by kings. Indeed, there were others that were expelled for nearly identical reasons. Thus, while anti-semitism may have played an indirect role in the expulsion of the Jews from England (e.g., one could argue that anti-semitism is one reason Jews became moneylenders and helps explain why the nobility directed their anger at the Jews rather than King even though the tallage was levied by the King), it was probably no more than that.
As always, Research on Religion podcasts are available at the RoR website ("Mark Koyama on the Economics of Jewish Expulsions") or can be downloaded from iTunes.