Jewish Philosophy and Politics: A Challenge from Yitzhak Baer

Traditional liberal thought castigates its religious opposition as being superstitious and otherworldly. The idea being that the more rational one is the more one is going to consider problems of this world. This framework is translated into a framework of good guy philosophers who are liberal and tolerant and their close-minded religious opponents. The Jewish historian Yitzhak Baer (1888-1980) was famous for turning this framework on its head. His History of the Jews in Christian Spain heaps scorn on the Jewish courtier class, with their Averroism and Maimonidean philosophy, as people of weak faith, who undermined the Jewish community and abandoned the Jewish people at the first sign of danger. This is in contrast to the simple Jews and the anti-Maimonidean rabbis who exemplified the true spirit of the Jewish nation. In his short book, Galut, Baer challenges the political pretensions of Jewish philosophy. According to Baer:

Philosophical exegesis, when it does not lead to skepticism, occupies itself with the problem of the relationship between faith and knowledge, between Jewish and secular education, between Jewish and Christian doctrine. The contrast between the Jewish world and the larger world is reduced to scholastic problems of dogma. Jewish philosophy is helpless when it approaches the problems of political and historical life, while at the same time many Jews occupy the most prominent positions in the political and economic life of their countries. Here the gap between the religious-historical vocation and real life is widest. (Baer, Galut pg. 50)

So I put it to my readership, do you agree with Baer and what might the implications of this be for Jewish thought? Are all intellectual forms of Modern Orthodoxy doomed to an ivory tower?