It is only a racist term in certain very specific contexts. I’ll repost what I posted a couple of months ago on this thread:
Brief history: Back in the 1970's-80's, fans of other clubs (particularly other London clubs and / or clubs with a hard core, right wing following) would routinely sing vile antisemitic songs at Spurs fans because Spurs had a significant Jewish fan base. After a while, Spurs fans as a whole (regardless of whether they were Jewish or not) fought back by claiming the words "yid" and "yiddo" for themselves. This drew the sting from the racists and the antisemitic chants largely disappeared.
By this time, referring to themselves as "yids" or "yiddos" had become a kind of badge of honour. But as the years went by, it just became habit. When Spurs fans chant the word "yid" or "yiddo" now, they mean only "Spurs fan" or "Spurs player". Nothing more than that.
"Yid" was originally an Ashkenazi Jewish word that meant, literally, "Jew". In yiddish, it is neutral or, when prefaced by "reb", respectful. It only became a pejorative in the employ of antisemites. I've seen claims from some quarters that Spurs fans had no right to reclaim the word and no right to use it still. That it belongs to Ashkenazi Jews.
Sheer nonsense, of course (just as the notion of cultural appropriation being a bad thing is sheer nonsense). No one owns language. Spoken language is just sounds. And words / sounds can have many meanings. They can also change meaning or develop further meanings. Language is fluid; not set in stone. Such has happened countless times in the history of most languages. Especially English. I would argue that for every time the word "yid" is now used in English as an offensive term towards Jews, it is used ten or twenty times as often to mean Spurs fan or player. A new meaning of the word has therefore entered the vernacular, if not yet the lexicon.
Lastly, we have enshrined in law in this country, the principle of Mens Rea. In the context of this discussion, Mens Rea determines when it is or isn't acceptable to use the word "yid". If someone were to walk into a synagogue or a Jewish supermarket and start angrily shouting and snarling about "yids", it's a safe bet that this person is an antisemite. If, however, a person is at the Tottenham Hotspur stadium, wearing a Tottenham shirt and smiling while singing "the thing I love most is being a yid", then it's a safe bet that this person is just a Spurs fan. Context is everything.
And if someone is determined to ignore context and take offence at the use of the word "yid" regardless, then that is their problem alone. No one has the right not to be offended.
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