Accepting Donations From Improper Sources

Each week Rabbi Yoel Domb writes about issues of business ethics related to the Torah portion of the week.

President Clinton’s controversial pardon of a prominent Jewish financier and philanthropist has brought the issue of receiving donations from inappropriate sources sharply into focus. Many Jewish organizations have benefited from the munificence of donors who accrued their money either in ways which are contrary to Jewish law or by dealing in businesses which the Torah disapproves of. The question of whether organizations devoted to the advancemant of Jewish moral values should accept the contributions of those who do not promote these values is an old dilemma: should we assume that the donor wishes to assuage some of his guilt by giving to worthy causes and assist him on the path of repentance, or do we view this as moral ambivalence and refrain from accepting “tainted” contributions.

The subject was actually disputed in a Jerusalem Post article (February 16th, 2001). Rabbi Mordechai Liebling, director of the Shefa fund, which aims to get “Jewish institutions to examine Jewish values in accepting money,” says that “we are not helping if Jews take money from someone accused of violating the law or exploiting people and restore that person’s good name without that person doing Teshuva (repentance). Rabbi Zvi Blanchard, director of organizational development at CLAL, contends that deciding whether to accept contributions “falls into questions of gray rather than black and white. You want to give a person a chance to contribute to society. In Judaism there’s a tradition of Teshuva-you don’t want to say because you did something wrong you can’t return to our community and do good things.”

The above viewpoints can be traced to an anomaly in our portion of the week, which describes in detail the procedure of donations for the Tabernacle which the Jews built in the desert. The first verse (Shemot 25:1) initially states “Speak to the children of Israel, that they should take for me a contribution,” implying that this is only for Jews, wheras the verse concludes “from every man whose heart moves him to donate, “seemingly including foreign contributions. The Zohar (a Kabbalistic tract attributed to second-century leader Rabbi Shimon Bar Yochai) explains (Vayakhel 7) that the Torah is alluding to the “mixed multitude “of gentiles who accompanied Israel out of Egypt. Despite the fact that their wealth predated the exodus and may have been acquired illicitly, G-d wished them to participate in building the Tabernacle. Rav Abba in Yerushalmi Shekalim 1:1 is more explicit: he sees the Kaporet, the golden cover which adorned the holy ark, as an appropriate atonement for the golden calf (the word Kaporet has a connotation of atonement in Hebrew, as in Yom Kippur). Rav Abba legitimates contributions which are brought as a guilt-offering and does not consider them an abomination. However, a more skeptical view is expressed by Rav Chiya. He says “One cannot comprehend this people’s character: they are asked to give for idolatry and they give: they are asked to give for a Tabernacle and they give.” It seems that Rav Chiya does not approve of this attempt to expiate one’s sins through philanthropy, as such donations could not emanate from a genuine desire for holiness if the same donor engages in promoting idolatry.

The Zohar itself concludes that the mixed multitude’s contributions were eventually rejected. “They made the Golden Calf and all the Jews who followed them died. Since they caused death and destruction to Israel, G-d said “from now on the Tabernacle will only be built by Israel, as it is stated (Shemot 35:1) “Moshe gathered the children of Israel, saying “Take from you a contribution for G-d.” Obviously if the donor has harmed Jews, his money would not be desired for sacred causes. What about an individual who has not hurt Jews, yet his money may have been obtained illegally? On this point the Zohar elaborates in another source (Vayakhel 63), stating that such a contribution is no merit for the donor and even serves as a reminder of his sins. This position is diametrically opposed to Rav Abba’s lenient approach.

David, king of Israel, wanted to build the Temple but was prevented by G-d because he had “spilt much blood.” He therefore decided to set aside money. Yet his son Shlomo refrained from using this money to build, because he was worried that the nations would later claim that the temple was destroyed since it was financed by his father’s theft of the nations (Rashi, Radak Melachim 7:51). David himself had expressed this fear later (see Yalkut Shimoni). Perhaps we can conclude from this that care is required when soliciting donations to ensure that they do not ultimately cause a desecration of G-d’s name. Possibly low-profile donations from controversial sources could be accepted, but not in a way which appears to condone illicit practices.

Rabbi Yoel Domb is a graduate of JCT and a member of the faculty of the JCT Bet Midrash. He was awarded a fellowship from the Center for Business Ethics for the academic year 2000-2001. He is currently researching topics of business ethics in Jewish Law and is preparing a curriculum to facilitate the teaching of these topics in Rabbinical seminaries (Yeshivot).


The Encyclopedia Salesman: The Use of Lying and High Pressure Tactics

Rabbi Dr. Aaron Levine

Henry Blackwell is the chief marketing strategist for Galaxy Educational Enterprises, Inc. (G.E.E.). The company publishes a twenty-volume encyclopedia work geared to young teenagers as well as other educational material. Blackwell believes that money spent to discover good prospects and acquire their good will is money well spent. Let’s proceed to describe Blackwell’s marketing plan and the experiences he had in implementing it.

The plan begins with an ad placed in publications that reach a substantial number of professional households. The ad invites the reader to send away for a free travel brochure which is designed to make “travel in Europe fun for young teenagers.” In Blackwell’s mind, families whose teenage children go on European vacations either alone or with their parents are good prospects to buy an encyclopedia for their home. The ad promises delivery of the brochure within two weeks.

When Blackwell receives the responses, he uses the information at hand to ascertain the telephone number of the persons who requested the free brochure. Let’s recount Blackwell’s experiences with the Fisher family:

Blackwell called Sam Fisher and told him that he was following up on his request for the free brochure. Blackwell went on to say that G.E.E. asked him to conduct a neighborhood survey on local attitudes towards the adequacy of educational resources in the home and in the community:

“If you would be so kind to allow yourself and your wife to be interviewed for the survey, I’ll be very happy to personally deliver the brochure at the time of the interview. Please be assured that the interview will take no more than ten minutes of your time. And, oh! Yes, I insist that you and Mrs. Fisher should be compensated $10 each for your time.”

Fisher was agreeable. When Blackwell arrived at the Fisher home, he was immediately ushered into the living room. Blackwell took out a questionnaire and proceeded to ask the couple a number of questions, including inquiring about their professional status, educational level and the number of children they have in school. Finally, Blackwell came around to ask the couple if they felt that the educational resources at home and at school were adequate. Because the Fishers’ answer to this question was less than a very firm yes, Blackwell felt that his cue had arrived to launch a sales pitch for the encyclopedia. Blackwell always uses a couple’s answers to the survey questions to determine his negotiating strategy. In the present instance, Blackwell’s instinct told him that he was dealing with an almost zero probability of making a sale, even if he offered both a deep discount from the regular price along with an installment plan to boot. The telltale sign for this pessimism was Sam Fisher’s continuous reference to the “endless educational opportunities surfing the net offered.” But there was still hope. Neither Mrs. Fisher nor the children were computer literate. Most confidant that he could now prove his mettle as a super salesman, Blackwell excitedly proclaimed:

“Mr. and Mrs. Fisher, I have exciting news for you. On the basis of your responses to the educational survey, you qualify for a free encyclopedia set from G.E.E. It’s a $1200 value and you’re going to get it for nothing.”

The Fishers appeared to be happy to hear the news and listened intently as Blackwell went on to explain that G.E.E. wanted to promote sales by placing the encyclopedia set in a model home. All the company would require of them is to produce a testimonial letter regarding the tremendous educational benefit the family derived from the set. To facilitate matters, the company would be glad to write this letter, subject, of course, to the couple’s approval. In addition G.E.E. would like the set to serve as a showcase for other potential customers. Accordingly, should the Fisher’s get a request to look over the set, they should graciously allow the potential customer to come into their home and browse through the set. All this sounded eminently reasonable to the Fishers until Blackwell got up to the part regarding the proper display and maintenance of the set. Blackwell explained that it would be reasonable for the company to expect the Fishers to display the set in elegant fashion and protect the volumes from physical abuse. The company would therefore require the Fishers to keep the set in an appropriate bookcase, which G.E.E. would provide at a cost of $100. Just as the couple digested the bookcase requirement, Blackwell brought up one final item:

“Knowledge, as you will appreciate, becomes rapidly obsolete. To insure that you maximally benefit from our educational product, please understand that my company requires you to purchase its annual supplements. Your commitment here need not extend beyond the publication date of our next edition of the encyclopedia, which is planned in six years from now. The annual cost for the supplement is $40. Why, if you like, you can apply your $20 interview fee towards the first payment. Marvelous! Look how painless the payment schedule will be!”

At this juncture, Blackwell felt that all his efforts might be for naught as he heard Mr. Fisher raise his voice and say:

“I’m sorry, we’re just not interested. As I told you, again and again, the kids can surf the net.”

Blackwell’s instinct told him that the situation called for high-pressure tactics:

My dear folks! Long experience has taught me that when a family rejects a phenomenal offer to acquire our encyclopedia, it’s for either of three reasons: (1) the family is poor; (2) the parents are ignorant and boorish and therefore don’t appreciate the value of the encyclopedia as an educational tool; and (3) the parents are indifferent to the welfare of their children.

Now, are you going to look me in the eye and tell me that you fit into one of these categories? What’s all the hesitation about? . . .I’ll tell what I’ll do. If you pay me up front for the six annual supplements, I’ll shave off $60 from the price. One hand washes the other! You save us billing costs and we’ll pass on the savings to you. So do we have a deal for $220?

The Fishers shook hands on the deal. A veritable triumph for Blackwell!!

Let’s begin the halakhic analysis of Blackwell’s conduct with a consideration of the ethics of the approach he uses to gain entry into the Fisher home. Blackwell’s primary motive in seeking entry into the Fisher home is to make a sales pitch for G.E.E.’s encyclopedia. Instead of informing the Fishers forthrightly of his commercial intent, Blackwell chooses to gain entry into the Fisher home by making use of an elaborate pretext. Blackwell’s conduct manifests a conviction that the open approach will fail. People are after all reluctant to admit strangers and especially sales people into their homes. Something much more inventive is called for. By following up on the couple’s request for the free brochure, Blackwell establishes immediate legitimacy for himself. Blackwell cleverly builds on the initial rapport and maneuvers to have the couple agree to a ten-minute interview. Because Blackwell chooses to conceal from the Fishers his primary motive for wanting to visit them and instead reveals to them only his secondary motive, Blackwell is guilty of a form of falsehood (sheker). This prohibition is derived from an analysis of R. Natan’s dictum at Yevamot 65b. Here, R. Natan expounds that it is not only permissible to alter the truth for the sake of peace but a positive duty (mizvah) to do so. R. Natan derives this from an episode in the life of Samuel the prophet: God charged Samuel to go to Bethlehem and anoint one of Jesse’s sons as King of Israel. Whereupon Samuel inquired: “How shall I go? For, if Saul hears, he will kill me.”… (I Samuel 16:2). In response to Samuel’s concern God created a pretext for him: . . .”You shall take a heifer with you, and you shall say, “I have come to slaughter (a sacrifice) to the Lord.” (I Samuel 16:2).

R. Natan’s dictum requires further elaboration. In what manner did Samuel alter the truth? True to his word, Samuel offered the sacrifice and invited the elders of Bethlehem to join him in the sacrificial feast (I Samuel 16:15). Addressing himself to this issue, R. Yom Tov Ishbili (Spain, 1270-1342) points out that Samuel’s primary mission was to anoint one of Jesse’s sons King of Israel. Concealing this from the inquisitive elders of Bethlehem and revealing to them only his secondary purpose in coming constitutes a form of sheker. What allowed Samuel to conduct himself in this fashion was his motive to preserve peace. Since God Himself provided Samuel with the pretext, it can be derived that it is a mizvah to alter the truth for preserving peace.1

Given Blackwell’s entirely commercial intent in using a pretext to gain entry into the Fisher home, his conduct constitutes a form of sheker, and is prohibited.

Blackwell’s use of his pretext violates geneivat da’at (creating a false impression) as well. The particular nuance of this prohibition that is violated here is dealt with in the talmud in connection with the account of Absalom’s plot to usurp the crown from his father, King David. Absalom’s plot entailed the “deceiving of three hearts.”2 His elaborate scheme began by “deceiving the heart of the men of Israel.”3 With the aim of both undermining King David’s system of justice and ingratiating himself with the masses, Absalom mingled with those who sought adjudication of their disputes in King David’s court and proclaimed: ” . . . see your words are good and right; but there is none of the King’s [judges] to hear you. . . Oh, who will appoint me judge in the land, and every man who has a quarrel or suit, will come to me, then I will [surely] do him justice.” (II Samuel 15:3-4). In the first phase of his plan, Absalom succeeds in generating for himself a massive amount of unwarranted good will. His objective was to draw upon this good will to support his quest for the crown.

In the next phase of his plot, Absalom deceives the heart of his father, King David, as well as the heart of the Sanhedrin (the Jewish high court). The particulars are as follows:

Absalom approached his father, King David, to grant him permission to go to Hebron to fulfill a sacrificial vow he made. King David consented. (II Samuel 15:7-9). Whereupon Absalom maneuvers the King into issuing a royal order for two people of Absalom’s choice to accompany him to Hebron. Absalom shows the royal order to separate groups of two, again and again, and thereby amasses an entourage consisting of two hundred associates of the Sanhedrin.4

In the last phase of his plot, Absalom disperses spies throughout the tribes of Israel and instructs them: . . .”As soon as you hear the sound of the shofar, then you shall say: ‘Absalom is King in Hebron’.” (II Samuel 15:10).

Absalom’s religious journey to Hebron was the event that launched his public quest to usurp his father’s crown. Because Absalom hid his true motive in seeking permission to go to Hebron, he was guilty of sheker. Absalom’s misconduct violated geneivat da’at law as well. This is so because his pretext was a duping mechanism to secure what he never would otherwise be given. Had King David only known Absalom’s primary designs, King David would not grant Absalom permission to go to Hebron. Absalom’s plot would have been stillborn.

In a similar vein, Absalom’s misuse of the royal order for an entourage violated geneivat da’at. Had the individuals who were approached only known Absalom’s primary motive, they presumably would not have joined him. By making repeated use of the royal order, Absalom created the false impression that the Sanhedrin as an institution supported his quest for the crown. Absalom was therefore guilty of deceiving the heart of the Jewish court.

Let’s apply the above nuance of geneivat da’at law to the issue at hand. Consider that on the basis of Blackwell’s explicit representations, the Fishers expect to expend no more than ten minutes of their time with him. But, Blackwell uses his entry into the Fisher home as a springboard to launch his sales pitch for G.E.E.’s encyclopedia. Instead of spending only ten minutes with Blackwell, the Fishers get tied up, say, forty minutes with him.

Blackwell’s geneivat da’at violation is compounded. Consider that G.E.E. advertised a free brochure that was designed to “make travel in Europe fun for young teenagers.” In reality, the brochure is no more than a “cut and paste” job that culls information regarding selected European capitals from the encyclopedia work itself. The brochure does not even pass muster as a general tourist information guide let alone as a travel booklet geared to the interests of young teenagers. Let’s assume, for argument sake, that the ad dashes the expectations of the reasonable man. Does the ad violate geneivat da’at law? A saving factor here is that we are not dealing with a sale transaction but rather with a free offer. R. Jacob Tam’s (France, ca. 1100-1171) view is here operative. In his view, an individual is prohibited from misrepresenting to the recipient the nature of his gift. Absent misrepresentation, a benefactor need not be concerned that the recipient might take his gift to be more than it actual is.5

Following R. Jacob Tam’s line, G.E.E.’s ad violates geneivat da’at law. This is so because the company explicitly misrepresents its brochure to the public. Now, if G.E.E.’s ad violates geneivat da’at, then Blackwell’s pretext becomes nothing but a mechanism to dupe the Fishers into allowing him to enter their home. Specifically, had the Fishers only known that the brochure would be of no value to them, they would not have sent away for it and consequently Blackwell would have no basis to enter the Fisher home. To be sure, Blackwell got the Fishers to agree to a paid interview. But this circumstance does not make Blackwell’s entry into the Fishers’ home legitimate. Why? Consider that without first softening the Fishers’ resistance to strangers by following up on their request for the free brochure and offering to personally deliver it, the Fishers would never have agreed to the interview. Moreover, the arrangement for the interview is a sham and hence a false pretext. This is so because the educational survey Blackwell purports to conduct is not a survey in the conventional sense, but instead is a device to pry out private information from the Fishers which he later will use to his advantage when negotiating price terms with them. What proceeds from the above is that Blackwell’s entry into the Fisher home should be characterized as entry by means of deception and hence in violation of geneivat da’at.

Testimonial Letter

G.E.E.’s use of the Fisher testimonial letter in their advertising campaign may entail violation of geneivat da’at law. Consider that the value of a benefit can only be properly evaluated in light of the opportunity cost involved in acquiring it. G.E.E. advertises the price of the encyclopedia at $1200, exclusive of the bookcase and annual supplements option. But, the Fishers acquired the set for $220, including the bookcase and the right to 6 annual supplements. Since the company conceals the special deal it made with the Fishers, the reasonable man may assume that the Fishers paid full price for the set. If the reasonable man does not apply the appropriate discount to the Fisher testimonial, the company generates more good will than is warranted with the letter and hence violates geneivat da’at law.

Installment Plans

Another issue at hand is Blackwell’s use of the installment plan as a means of inducing purchase of the encyclopedia set. Several aspects of Blackwell’s conduct will be put to question here.

(1) Blackwell typically suggests the possibility of an installment plan only in reaction to a client’s protest that the encyclopedia purchase is unaffordable. Blackwell’s answer is the installment plan. Since the purchase becomes obtainable only by the customer going into debt the purchase may find halakhic disfavor. Halakhic disfavor at financing living standards by going into debt can be derived from an analysis of the sliding-scale sacrifice:

In the times of the Temple, the offering of sacrifices often formed a part of the expiation process for the transgressor seeking atonement. Sacrificial requirements in connection with certain classes of offenses allowed the penitent to offer a sliding-scale sacrifice. To illustrate the nature of the sliding-scale sacrifice, we will describe its application in connection with a particular qualifying offense, the false oath of testimony. This offense consists of A falsely swearing to B that he is not privy to information relevant to his case. The sacrificial aspect of A’s atonement process requires him to offer a female sheep or goat. Should A’s means not suffice, he may substitute two turtledoves or two young pigeons for the animal sacrifice. If his means do not suffice for birds, he offers a tenth of an ephah of fine flour.6

The means criterion, according to Torat Kohanim, translates into allowing the penitent to move down the sliding scale if bringing the more expensive sacrifice would put him into debt.7

Noting the means criterion, R. Aaron ha-Levi (Barcelona, 1235-1300), advances the opinion that if the poor man offers the rich man’s sacrifice he does not fulfill his obligation. This ruling is rationalized on the grounds that since the Almighty shows compassion to the poor man by allowing him to bring a sacrifice according to his means, it would not be proper for the poor man to reject the gesture by incurring an expense for his sacrifice beyond his means. Sound practical advice regarding living standards should be derived from the sliding-scale sacrifice: An individual should not live beyond his means. Such conduct could lead the individual to unethical aggrandizement as a means of sustaining his habit of high living.8

Before Torat Kohanim’s criterion can be applied to contemporary society, several caveats are in order. First, we take it as a given that Halakhah has no objection for a household to borrow in order to achieve the common standard of living. Second, if the concern is that incurring indebtedness results in living beyond one’s means, then, the stricture should apply only when meeting the installment payments would predictably force the borrower to cut back on his accustomed standard of living. Here, there is real concern that the deprivation effect the indebtedness brings on will lead to aggrandizement as a means of maintaining one’s accustomed life style.

Proceeding from the above caveats is that Halakhah has no objection per se against financing living standards by means of installment debt. Given that householders differ in respect to wealth, income, and budget priorities, a wide variety of circumstances exist where the purchase of a particular item on an installment basis does not entail for the customer living beyond his means. Given these circumstances, a salesperson need not be concerned that the item at hand is actually not affordable to the customer and his offer for an installment plan amounts to proffering the customer ill-suited advice. Pushing an installment plan on a customer who has already declared that the purchase for him is unaffordable either for cash or on an installment basis amounts, however, to proffering ill-suited advice and violates for the salesperson the lifnei iver interdict.9 Recall that some decisors conceptualize the lifnei iver interdict to consist of the mere offering of ill-suited advice.10 Whether untoward consequences result or not is immaterial as far as violation of the prohibition is concerned. Following this line, pushing an installment plan on a customer after the customer has already declared the purchase to be unaffordable to him either for cash or on a credit basis, violates lifnei iver, even if the sales pitch proves, in the final analysis, to be unsuccessful.

(2) Another problem with Blackwell’s installment plan is that it may violate ribbit law. Ribbit is Halakhah’s prohibition of both receiving and making interest payments.11 The prohibition applies only to inter-Jewish transactions.12 Ribbit is violated on a biblical level, called ribbit kezuzah, when the interest stipulation is made within the context of a loan transaction.13 By rabbinical enactment, the ribbit interdict is considerably expanded and extended. These extensions are called avak ribbit (lit. the dust of ribbit). An important component of these extensions is ribbit charged within the context of a commercial transaction (derekh mekah u-memkar).14

G.E.E.’s use of the installment plan violates avak ribbit law. In all its advertisements and promotions, G.E.E. quotes its price at $1200. Blackwell’s offer of an installment plan calling for total payments that exceed the $1200 cash price amounts therefore to a premium for tolerating delay in payment. The plan hence violates avak ribbit law.15

G.E.E. can, however, revamp its approach to installment debt and thereby avoid violation of avak ribbit. The following permissible scenario described by R. Mosheh Isserles (Poland, 1525 or 1530-1592) provides, in the opinion of this writer, the underpinning of a valid restructuring plan.

S makes B a two tier price offer for the merchandise at hand: If B buys on credit the price will be $12, but if he buys on a cash basis, the price will be only $10. This arrangement violates avak ribbit law. But, suppose the credit transaction became legally binding before S introduces his cash discount offer. Here, the arrangement is valid.16 The rationale for this distinction is provided by R. Yaakov Yeshayahu Bloi: In the former case, the introduction of two prices into the negotiating process compels us to view the differential the credit price entails as a premium S demand for tolerating delay in payment. In sharp contrast, if the transaction became legally binding before the cash discount offer is injected, then only one price was operative in the transaction. This is the credit price. S’s stipulation, then, becomes no more than an offer to assume B’s debt for a price of $10.17

By logical extension, G.E.E. should be allowed to advertise that it is selling the encyclopedia set on a monthly installment plan consisting of twelve $110 payments. The ad should go on to say that anyone who legally binds himself to purchase the encyclopedia on a credit basis will be offered a reduced price of $1200 for an immediate cash payment. What the above mechanism does is to make the cash discount into nothing more than an offer to assume the customer’s debt to the company for a cash payment of $1200. Avak ribbit is hence avoided.

Prepayment Discount

Another avak ribbit problem with Blackwell’s price negotiation stratagem is his offer of a discount if prepayment for the annual supplements is made. Let’s proceed to discuss the prepayment discount case in general terms and then proceed to apply the principles to the case at hand:

Discount sales which call for payment for the merchandise before its delivery violate avak ribbit law.18 Since, by rabbinical enactment, kesef (money) does not effect transfer for movable property, payment does not confer the buyer (B) with legal title to the merchandise. B’s payment is therefore essentially a loan extended to the seller (S), which is paid back on the delivery date with merchandise having a higher market value than B’s transfer.19

The prepayment-discount scheme, is however, legitimate when the transferred article is not a standard product.20 An appearance of ribbit is not evident here as S may theoretically opt to deliver an article commensurate in value to B’s payment on the agreed-upon date.21 To be sure, legitimacy is not given to the above business practice unless two additional conditions are met: (1) the discount must be small.22 (This condition has generally been understood by decisors to require the discount not to exceed twenty percent of the purchasing price.23) (2) In addition, S may not expressly tell B that the discount is accorded on account of the prepayment feature of their deal.24

With the appearance of ribbit remaining intact in the standardized-product case, legitimacy is not given to the discount-prepayment scheme until yet a third condition is met. In addition to the small discount and the non-express linkage conditions mentioned above, equivalent merchandise must be in S’s possession at the time of the sale. Satisfaction of this condition is met even if the merchandise is not readily accessible to S at the time of the sale.25

Why satisfaction of the third condition helps remove the ribbit interdict in the standardized-product case is explained by R. Isaac b. Sheshet Perfet (Spain, 1325-1408) as stemming from the fact that kesef effects transfer of movables by dint of pentateuchal law. Since S has equivalent merchandise in his possession at the time of the sale, B’s payment effects for him legal title to the extent that his transfer is not regarded as a loan to S.26

The above criteria equip us to assess whether Blackwell’s prepayment discount scheme falls within the boundaries of permissibility. Since the copies of the annual supplement for any given year will be identical, the case at hand falls into the standardized product variant discussed above. Recall that three conditions must be satisfied here to free the offer of avak ribbit. To be sure, Blackwell successfully avoids expressly linking the discount for gaining early access to the customer’s money. He does this by linking the discount to the saving the company will make on annual billings. Notwithstanding that a correspondence between the billing cost saving and the discount is not evident, the express linkage to early use of the money is avoided and hence this condition is satisfied. But, the two remaining conditions are certainly not satisfied here: (1) the discount offered does not fall within less than twenty percent of the future payments due. The discount offered hence is not small; (2) Because the annual supplements do not exist now, G.E.E. cannot be said to have equivalent merchandise to give the customer at the time the pre-payment discount offer is made.

A saving factor here is that the annual supplements the Fishers agree to buy are yet non-existent. The Fishers therefore face considerable uncertainty in regard to what exactly they will be getting for their money. Blackwell, for instance, makes no representations regarding the investment G.E.E. is committed to make in producing the annual supplement. The company’s investment here may vary from year to year, with the result that the quality of the annual supplements will vary too. Moreover, suppose G.E.E. goes out of business over the next six years? What then? Given these uncertainties, it is not at all clear that the cash payment the Fishers are making now should be characterized as a discount from the fair market value of the yearly supplements.

An analogous case is recorded at Bava Mezia 64a: S stipulates to B an up front price of, say, $300, for the entire milk production of his goats for the year. Given that the milk yield of the goats is not known at the time the deal is struck, B’s up front payment of $300 may turn out to be either an overpayment or underpayment for the quantity of milk he actually receives. B’s $300 payment should therefore not be viewed as a discount he receives for paying for the milk before delivery and hence a violation of avak ribbit law. Instead, the $300 payment should be viewed as the price S must accept in order to induce B to assume the risk the transaction entails.27

Basing himself on the aforementioned, R. Yizhak Yaakov Weisz (Israel, contemporary) defends the widespread practice among publishers to offer a pre-publication discount price. The practice does not violate avak ribbit because the one who pays up front assumes the loss in the event one or more of the volumes in the multi-volume set is either produced in defective form or is not published at all. In sharp contrast, the publisher will not realize the post publication price he sets unless he actually delivers the volume(s) in question in perfect condition. The lower pre-publication price hence should not be viewed as a discount from the post publication price. Moreover, consider that in the case at hand the publisher sets the post publication price of his work before the work is actually issued. This price should therefore be regarded as the base or reference price (yaza ha-Sha’ar) of the work only in respect to transactions that call for the publisher to deliver the work free of any defective workmanship. Since, in the case at hand, the one who pays up front agrees to accept the work irrespective of defective workmanship on the part of the publisher, the lower up front price should not be regarded as a discount from the post publication price.28

The affinity of the above case to our scenario involving a pre-payment discount offer for an encyclopedia set with annual supplements is readily apparent.

The avak ribbit problem inherent in the installment plan and pre-payment discount cases can be remedied by use of Hetter Iska. In the next section, following this case study, Hetter Iska will be taken up.

High Pressure Tactics

One final matter. Blackwell’s use of high pressure tactics violates the Torah’s prohibition of “… And thou shalt not lust (lo tahmod)”.29

Violation of lo tahmod entails the following elements: B desires to acquire an item S owns. S refuses B’s offer. As a means of overcoming S’s initial resistance B increases his bid or pesters S to accept his original offer. Alternatively, B petitions S’s friend to induce him to change his mind. Acquiring S’s item by means of these pressure tactics violates for B the prohibition against coveting.30

A declaration on the part of S of rozeh ani (I am willing) at the time he parts with the article removes for B, according to R. Abraham b. David of Posquieres (1125-1198) the lo tahmod interdict.31 In his formulation of the interdict, however, Maimonidies (Egypt, 1135-1204) offers no such caveat.32

B’s high-pressure tactics also violate the biblical prohibition of “… and thou shall not covet (lo tit’aveh)…” (Deuteronomy 5:18). The essence of this prohibition consists of the “plotting of the heart” to overcome S’s initial rejection of the offer.33 The prohibition is violated even if B’s effort to overcome S’s rejection do not succeed.34

The prohibition against coveting is formulated in the codes in terms of the behavior of the buyer. By logical extension, posits R. Yaakov Yeshayahu Bloi, the prohibition should apply to the conduct of the seller as well. Accordingly, the use of pressure tactics to induce someone to buy an item violates for the seller lo tahmod.35

R. Bloi’s line of reasoning apparently leads to the proposition that a seller (S) is prohibited from offering his customer (B) more favorable price terms as a means of overcoming B’s initial rejection of the offer. But, consider that in certain instances B signals in advance that he is interested in S’s product or service provided it is available at the right price. This occurs when B initiates the sales encounter or when B gives S an appointment to make a sales presentation to him. Here, there should be no objection for S to offer B more favorable price terms as a means of overcoming B’s initial rejection of the offer. Analogously, if S puts up his asset for sale, there should be no objection for B to make escalating bids as a means of inducing S to agree to the sale.

Suppose, however, S barges in on B and makes a sales pitch to him. Here lo tit’avveh and lo tahmod should prohibit S from offering a more favorable price as a means of overcoming B’s initial rejection of the offer. If S wants to continue his sales pitch he must first secure B’s explicit permission to do so.

Let’s apply the above analysis to our case study. Consider a variant of the opening vignette: Blackwell gains entry into the Brown home by means of his pretext to personally deliver the travel brochure and to conduct an educational survey. After the conclusion of his educational survey, Blackwell springs an offer to sell G.E.E.’s encyclopedia set for $1200 cash price. The Brown’s reject the offer. Without first securing permission from them to make an installment plan offer, Blackwell is prohibited from continuing his sales pitch. Since Blackwell effectively barged in on the Browns with the encyclopedia offer and never received a signal from them that they were interested in buying the set provided the price was right, overcoming their initial rejection by offering more favorable price terms violates lo tit’avveh and lo tahmod. Ethical conduct requires Blackwell to seek the Browns permission before continuing with his sales pitch.

Far more troubling is the high-pressure tactics Blackwell employed in his dealings with the Fishers. Recall that Blackwell shamed the couple into changing their mind about acquiring the encyclopedia set by telling them that only “parents who are either poor stupid or care nothing about their children” reject a fantastic offer to acquire the set. Because Blackwell gained entry into the Fisher home by means of a pretext, the offer of even a price reduction to overcome the couples’ rejection of his offer should be prohibited. Blackwell’s use of insult and shame to achieve his ends is particularly outrageous, as this form of pressure should be prohibited even if Blackwell makes his sales pitch by invitation. Being invited to make a sales presentation suggests no more than that couple might be interested in acquiring the set provided the price is right. The invitation does not, however, signal their willingness to change their mind by being shamed or insulted. Blackwell’s high-pressure tactics violate both lo tit’avveh and lo tahmod.

Inter-Jewish loan transactions are regulated by the laws of ribbit.1 Ribbit law prohibits both the receiving and the making of interest payments.2

As a means of avoiding violation of ribbit law, the hetter iska mechanism developed. Having its origins in the sixteenth century, development of hetter iska is credited to R. Mendel Avigdors of Cracow. The standard hetter iska document used today is, however, a variant of R. Avigdors’ form. At the end of this section, a standard hetter iska form is reproduced along with a second form, which incorporates R. Avigdors’ original formulation.

The basic objective of hetter iska is to restructure an otherwise loan transaction as a business partnership. In the hetter iska arrangement F furnishes capital to MP for the purpose of investing the funds in merchandise or some other business venture for the benefit of both parties. The distinctive feature of iska is that F, the financier, is a silent partner and MP, the recipient, is the managing partner. Because F plays no operational or managerial role in the business enterprise, avak ribbit law regulates the iska partnership. What follows is a description of these regulations along with the features hetter iska attaches to the partnership arrangement to make it into an attractive investment for the financier.

(1)Profit-Loss Division Constraint

Heter Iska agreement calling for the financier to reap more than fifty percent of the profits but to absorb less than fifty percent of the losses is prohibited. From the standpoint of the financier such an arrangement, in Talmudic terms, is “near to profit and far from loss” and hence violates avak ribbit law.3

While any symmetrical profit-loss division frees the iska arrangement from the “near to profit and far from loss” prohibition, transferring capital for iska purposes without any stipulation in regard to the profit-loss division confers upon the transfer a half-loan, half-deposit (hazi milveh, hazi pikkadon) character. Profits and losses in the non-express case are therefore divided equally between the financier and the managing partner.4 Conventionally, the hetter iska document today calls for the profits and losses to be divided equally between the financier and the managing partner. This form is hence dubbed hazi milveh, hazi pikkadon.

Compensation for Labor and/or Managerial Services

Avak ribbit law requires the financier to stipulate compensation for the managing partner in return for his labor and/or managerial services rendered during the iska term. The compensation requirement referred to as the sekhar tirha condition, follows from an examination of the legal status of the iska transfer. Given that responsibility for accidental loss is what differentiates the legal status of the debtor from the bailee, Halakhah confers a loan-deposit status on the iska arrangement. The portion of the capital transfer that the active partner assumes responsibility for takes on the character of a debt, while the remaining portion takes on the character of a deposit. Now, since the agreement calls for MP to invest the funds for the benefit of both himself and F, performing the managerial function gratis amounts to a disguised interest premium as a precondition for receiving the loan.5

Providing the stipulation is agreed to before the capital transfer is made, the sekkar tirha requirement may be satisfied with a nominal fee. Pre-iska term arrangement of sekkar tirha allows the nominal fee to suffice even when the iska generates an opportunity cost to the managing partner in the form of calling for him to desist from selling his own wares while merchandizing the iska.6

Making Iska into an Attractive Investment Vehicle

The innovation of hetter iska was to transform the basic iska partnership into an attractive investment from the standpoint of the financier. What follows is a description of these features:

(1) To insure his principal, F may attach conditions to the iska and stipulate that if they are not met, responsibility for losses devolves entirely on MP. Specifications of the types of investment MP may enter into with the iska and the security measures he must adopt for the iska income are examples of conditions F might want to attach to the iska. Since fulfillment of the conditions is feasible and MP may avert full responsibility for losses by adhering to them, the arrangement is not regarded from F’s standpoint as “near to profit and far from loss.”7 What follows is the inadmissibility of setting conditions that are either impossible to fulfill or are not usually undertaken by business people. Such stipulations on the part of F constitute a subterfuge to exact ribbit and are therefore forbidden.8 On similar grounds, R. Abraham Y. Karelitz (Israel, 1878-1953) disallows F to stipulate conditions that do not in any way relate to the iska arrangement. Violating the avak ribbit interdict on this account, for example, would be a stipulation disallowing MP from eating grapes for the entire term of the iska agreement and calling for his assumption of full responsibility for losses should he violate this condition.9

Stipulations of the permissible variety, it should be noted, do not impede the managing partner’s flexibility to depart from the conditions. Since his intention is to seize upon opportunities for greater profit, his departure from the stipulation is not morally objectionable as long as he faces the consequences of failure.10

Another clause that may be inserted in the iska agreement for the purpose of securing F’s principal is the stipulation that MP’s claim for loss will be accepted only if it is corroborated by the testimony of designated witnesses (C and D). 11 Disqualifying the testimony of all witnesses except C and D is permissible, according to R. David b. Samuel ha-Levi (Poland, 1586-1667), as long as these designated individuals are known to be at least slightly conversant with the iska affair.12

To increase the chances of earning a profit on the capital transfer, F may stipulate that MP’s claim regarding the amount of profits the iska realizes will be accepted only by means of his solemn oath (shevuah hamurah). Insofar as MP can always maintain accurate records of the iska transactions and take the solemn oath in regard to the profits realized, the solemn oath element of the agreement does not characterize it, from the standpoint of F, as “near to profit and far from loss.13

Requiring corroboration of the profit claim by means of designated witnesses violates, however, avak ribbit law. Why the designated-witness condition is admissible in connection with the loss claim but not here is explained by an examination of the strength of the counterclaim in each case. While F can positively attest to the amount of the iska transfer, he cannot with certainty dispute MP’s profit report. Given the weak nature of F’s counter claim in the latter case, he may not disqualify all but a few designated witnesses from validating MP’s statement. Moreover, assuming the veracity of the statement, the overpayment occasioned by agreement to the designated-witness clause could be given to F in the form of a gift. Since the payment in its entirety amounts to no more than the principal, ribbit law is not violated. In contrast, any overpayment of profits to F occasioned by the designated-witness clause would violate ribbit law even if the differential were given as a gift, since the total payment F receives exceeds his principal.14

To further increase his chances of earning a profit F may stipulate that payment of an agreed-to sum, referred to as sekhar hitpashrut, would relieve MP of both his solemn-oath obligation and any further monetary obligation should F’s share in the profits exceed this sum. Similarly, the iska agreement may call for F to receive a fixed sum as his share in the profits, with the proviso that MP may reduce this payment by any amount by taking a solemn oath that F’s share in the profits did not amount to this sum.15 To increase the probability that F will actually realize the sekhar hitpashrut, the iska agreement may call for the attachment of all MP’s business profits to the iska venture.16 This clause effectively precludes MP from opting for the solemn oath unless F’s pro-rated share in the profits that all MP’s ventures earned during the iska term fell short of the sekhar hitpashrut sum.

Limitations of the Hetter Iska Arrangement

The aforementioned has demonstrated that hetter iska should in no way be viewed as a subterfuge to overcome ribbit law. Rather, it is a device to structure a capital transfer as a business partnership between the financier and the recipient. Indeed, secular courts have recognized hetter iska as a document that creates a partnership rather than as a loan instrument; and for this reason legitimized a return for the financier that exceeded the prevailing usury law limit.17

Because hetter iska is not, as R. Mosheh Feinstein, (New York, 1895-1986) put it, “an incantation or charm” to permit ribbit, both parties must fully understand the nature of the partnership they are entering into.18

Another aspect of taking hetter iska seriously is to understand both its limitations and risks as an investment vehicle. What follows is a discussion of these caveats together with the application of hetter iska to the encyclopedia salesman vignette of the previous section.

The Definition of Iska

In addressing the issue of the limitation of the use of hetter iska, the most fundamental concern is how expansively does Halakhah define investment as far as the use of hetter iska is concerned.

Advancing a very broad view of an investment transaction is R. Joseph Saul Nathanson (Lemberg, 1810-1875). Classified, as iska, in his view, is a capital transfer that makes it possible for the recipient to continue his normal income-generating activities. Accordingly, R. Nathanson ruled that a religious schoolteacher might acquire capital by means of hetter iska for the purpose of paying off his debts. Without the capital transfer, the teacher would be forced to leave his job and seek a higher-paying one elsewhere. Since the transaction allows him to continue on his job it is classified as iska, with the consequence that it may call for dividends for the financier.

Also qualifying as iska, in R. Nathanson’s view, is the acquisition of capital by an individual for the purpose of debt reduction to avert the forced sale of his home. Receiving dividends here is legitimized because the profit for the recipient of the transfer consists of both the avoidance of a capital loss and the circumstance that it becomes unnecessary for him to rent an apartment.19

Disputing the above view, R. Meir Arak (Poland, ca. 1925) and others conceptualize iska profit as earnings realized either from the investment of the original capital or from a capital or merchandise the recipient substitutes for it. Profits in the form of avoidance of liquidation or loss would not, in his view, legitimize the receipt of dividends on the part of the financier.20

Despite the narrow application of hetter iska proceeding from the view of R. Arak and others, this arrangement can easily accommodate the businessman desiring to acquire capital for personal needs. Towards this end, the iska arrangement would be designed in the following manner: F transfers capital to B for general iska purposes, but gives him permission to make immediate use of the funds for personal finance. To legitimize the payment of dividends to F, B transfers to F part ownership of merchandise in his possessions, equivalent in value to the original capital transfer. This merchandise substitutes for the original sum and assumes its legal character. Should B not have in his possession substitutable merchandise at the time the iska was entered into, he obligates himself to acquire merchandise during the iska term and sell it at a profit for the benefit of himself and F.21

Misappropriation of Iska Funds for Personal Use

Having received capital for the purpose of iska (business), the recipient is obligated to invest it in a commercial venture and is prohibited from making personal use of it.

The prohibition to make personal use of the iska applies even to the loan portion of the iska: Now that we say that it is a semi-loan and a semi-trust, if he [the managing partner] wishes to drink beer therewith [i.e., for the loan part] he can do so. Rava said: [No] It is therefore called iska [business] because he can say to him “I gave it to you for trading, not for drinking beer.”

Talmudic decisors regard Rava’s position as normative.22 Insofar as no explicit restriction was agreed to regarding the disposition of the loan portion of the iska, Rava’s position requires an explanation. Addressing himself to this issue, R. Solomon b. Isaac (Rashi, Troyes, 1040-1105) regards the restriction to proceed from the implicit mandate MP is operating under to manage the iska in a manner that maximizes F’s return on his investment. Since putting the loan portion of the iska at risk in the venture effectively drives MP to be more diligent in his management of the enterprise, the requirement to do so is self-evident in the agreement.23

In a similar vein, Tosafot point out that the consequence of not investing the loan in the venture is to immediately expose F’s entire capital to loss, with no additional capital to draw upon if needed. The implicit mandate to operate the iska to maximize F’s gain requires MP, therefore, to invest the loan portion of the iska in the venture.24

Let’s take note that in respect to the trust portion of the iska, a bailor-bailee relationship exists between F and MP. MP’s use of the funds in a manner that departs from F’s mandate constitutes misappropriation (shelihut yad). 25

MP’s misappropriation of the trust portion of iska for personal use, according to R. Barukh b. Samuel of Mainz (ca. 1150-1221), transforms the trust portion of the iska into a debt. With the entire capital transfer taking on now the legal character of a debt, return of anything more than the principal violates ribbit law.26

Following the above line of reasoning, R. Shneur Zalman of Lyady (1745-1813) posits that even if the iska agreement expressly allows MP to make personal use of the capital transfer on a loan basis, appropriation for personal use by MP of any sum in excess of the portion of the capital transfer he took responsibility for disallows F from earning the agreed upon profit rate on that differential. F’s right to receive his profit rate on this differential can, however, be restored by returning the temporary loan to a third party, T. Acting on behalf of F, T repossesses the appropriated sum and returns it to MP for iska purposes. This device does not suffice in the misappropriation case. Here, the original character of the iska is not restored unless the misappropriated sum is directly returned to F and recycled by him to MP for iska purposes.27

Limitations on the Sekhar Hitpashrut Sum

Since hetter iska does not permit interest payments, the sekhar hitpashrut sum it calls for, according to R. Mosheh Feinstein (New York, 1895-1986), must reflect no more than the financier’s pro-rated anticipated return on the planned iska investment. To illustrate: Suppose the following: the capital transfer is $100,000; the agreement calls for the profits and losses to be divided equally between the financier and the managing partner; and, finally, the sekhar hitpashrut is set at $10,000. Setting the sekhar hitpashrut sum at $10,000 implies that the anticipated return on the venture is 20%. Now, if the parties involved do not even optimistically anticipate a return on the iska of at least 20%, there is no justification for setting the sekhar hitpashrut at $10,000.28

In his treatment of the above matter, R. Yisroel Reisman suggests that the above restriction can be overcome by making the iska investment open-ended. Given the possibility that a particular investment can reap extraordinary returns, setting the sekhar hitpashrut at a relatively high sum can be defended.29

Another way around the above restriction would be to structure the capital transfer entirely as a trust. R. Avigdors’ original innovation of hetter iska incorporated this concept.30 Hetter iska of this variety is dubbed kullo pikkadon (lit. wholly a trust). Setting up the iska in this fashion frees the capital transfer of any loan character. What kullo pikkadon does is to make the active partner’s management of the iska entirely for the benefit of the financier. In consequence, the financier is entitled to 100% of the profit but he also must sustain 100% of the losses. Because in kullo pikkadon the financier’s share of the profit is identical with the entire profit rate the venture is expected to earn, this variety of iska naturally allows for a higher sekhar hitpashrut than would be allowed had the iska been structured as part loan and part trust.

Drawback of the Solemn Oath Provision

In his analysis of hetter iska, R. Shiloh Raphael feels that the document is a shaky financial vehicle from the standpoint of the financier. Recall that the financier’s confidence in his ability to realize the sekhar hitpashrut sum is predicated on the aversion of a pious person to take an oath to even verify what he knows to be the truth. But, an aversion to oath taking cannot be presumed today. Now, if the managing partner takes an oath that the iska earned no profits at all, the financier will have no further recourse.31

One approach to R. Raphael’s concern is to make the solemn oath requirement more unpalatable and onerous for the managing partner than the requirement set out in the standard hetter iksa document. In this regard, R. Mosheh Feinstein allows the hetter iska document to call for the managing partner to take the oath in the setting of a public prayer session at the juncture of the Torah reading. In addition, the document can call for the managing partner to accept upon himself a curse in the event his declarations are untruthful.32

R. Raphael’s own solution to the problem he addresses is more radical. In his view, the solemn oath clause should be dispensed with entirely. Instead of requiring the managing partner to verify the profits by means of an oath, the document should give the financier the right to participate in all managerial decisions relating to the iska as well as give him the right to examine the managing partner’s financial records. The document can then go on to stipulate that the financier agrees to give up these rights in exchange for a designated sum. This designated sum corresponds to the sekhar hitpashrut of the conventional hetter iska document.33

Another limitation of the solemn oath clause of hetter iska occurs when the financier has personal knowledge regarding how the iska performed. Here, the financier may not demand of the investor that he attest to the iska results by means of an oath. Demanding an oath under these conditions characterizes the investing partner’s oath as an oath taken in vain or for no purpose and therefore constitutes a forbidden oath.34 If the financier has no right to demand an oath, then, he losses his bargaining chip to obtain the sekhar hitpashrut.

Given the pivotal role the solemn oath plays in triggering the sekhar hitpashrut requirement, the financier should design the hetter iska agreement in a manner that will insure him that he will not lose the right to demand of the investing party that he take the oath. In this regard, R. Mosheh Feinstein advises that the financier should make the iska open ended, leaving the investment vehicle to the discretion of the managing partner. Because the managing partner does not know what form the iska investment took, he will be within his rights to demand of the managing party that he take an oath regarding the performance of the iska. If the active partner does not want to take the oath, he will be free of the oath, according to the agreement, by paying the financier the agreed to sekhar hitpashrut sum.35

Hetter Iska and the Sale of an Encyclopedia Set

We now turn to the application of hetter iska to the previous case study. Recall that a number of Blackwell’s sales pitches entailed an avak ribbit problem. These included the pre-delivery payment discount offer and the installment plan offer. Both of these scenarios lend themselves to the hetter iska mechanism. Let’s begin with the pre-delivery payment discount case:

Pre-Delivery Payment Discount

Recall that Blackwell offered the Fishers a bookcase and rights to six future annual supplements for an immediate cash price of $220. Since the value of the goods G.E.E. promises to deliver in the future is more valuable than the $220 outlay the Fishers are asked to make, the transaction entails violation of avak ribbit.

To free the transaction of an avak ribbit problem, it can be structured in the following manner. Instead of handing over the $220 as payment for a good to be delivered in the future, the Fishers should furnish the sum to G.E.E. for the purpose of setting up an iska partnership with the company. G.E.E. will be the managing partner and the Fishers will assume the role of silent partner in the venture. The reporting periods for the performance of the iska should be set to coincide with the date the bookcase will be delivered as well as with the publication dates for the six annual supplements. With the publication of the sixth annual supplement, the iska arrangement ends. Finally, sekhar hitpashrut for each reporting period is set equal to the value of the bookcase and the six annual supplements, respectively.

Installment Plan

With the aim of avoiding violation of avak ribbit, an installment plan to purchase G.E.E.’s encyclopedia can easily be restructured into a hetter iska agreement. Recall that G.E.E.’s advertised cash asking price for the encyclopedia is $1,200. Suppose the Brown’s agree to buy the set on an installment basis stretching out over twelve monthly payments for $1,560. Instead of billing the Browns $130 each month as partial payment for the encyclopedia, G.E.E. should set out to establish an iska partnership with the Browns. Toward this end, G.E.E. should furnish the Browns with its encyclopedia set and fix its value at $1,200. What should, however, be designated as the iska? Perhaps, the encyclopedia set itself can be regarded as an iska? Arguing in favor of viewing the encyclopedia in this fashion is the circumstance that the set imparts knowledge and hence builds up human capital for the Brown children. Using the set will enhance the quality of the education of the Brown children and will eventually translate into higher lifetime earnings for them. While there can be no doubt that the encyclopedia takes on the character of an investment good of sorts, there is no way of determining what rate of return the Brown family realizes on the encyclopedia over the iska term. Moreover, one could argue that the Brown family realizes no economic return on the encyclopedia investment until such time their children enter the job market. Designating the encyclopedia as the iska is hence unacceptable from several standpoints. Because the economic return the Browns realized on the encyclopedia is impossible to ascertain, demanding that the Browns verify the figure they claim by means of oath amounts to demanding that they take a false oath. Moreover, given the strong probability that the economic return for the relevant time interval was zero, the solemn oath clause serves as a powerful temptation for the Browns to actually take an oath that the return was zero and effectively escape thereby the responsibility to pay a premium for the encyclopedia above its cash price.

What the above analysis indicates is that G.E.E. should insist that the Browns substitute some other business asset for the encyclopedia to serve as the iska of their joint commercial venture. Given that personal knowledge of exactly what the iska is may compromise G.E.E.’s ability to demand an oath of the Browns regarding the performance of the iska, G.E.E. should leave to the Browns’ discretion the selection of the iska.

We are not out of the woods yet. Recall R. Feinstein’s caution that hetter iska is not a “charm or incantation.” Suppose G.E.E. desires a 10% premium above its cash price for selling the encyclopedia on an installment plan basis. But, suppose the Browns are non-business people whose assets consists of bank accounts yielding only a 5% return. Since the assets already in possession of the Browns cannot possibly yield the sekhar hitpashrut sum the hetter iska calls for, the iska arrangement will be nothing but a sham unless the Browns at the very least intend to invest in a new asset that could conceivably yield the sekhar hitpashrut G.E.E. seeks. Given the very significant gap between the return the Browns currently receive on their assets and the rate of return implicit in the sekhar hitpashrut sum G.E.E. seeks, use of the kullo pikkadon form of hetter iska would be very helpful and therefore recommends itself.

Now, suppose that the Browns are risk averters to the extreme and harbor a closed mind regarding entering into a speculative investment. Given that the Browns intend to do absolutely nothing in respect to achieving G.E.E.’s investment goals, the hetter iska agreement is nothing but a subterfuge to arrange a ribbit payment.36

Let’s change the scenario a bit. Suppose the Browns are receptive to making a speculative investment, but end up making no new investment over the iska term. Here, given the good faith intent of the Browns, the iska arrangement is certainly not a sham. But, consider that it is a clearcut matter that the Browns’ assets did not earn more than a 5% return over the iska term. G.E.E. must therefore absorb the risk that the Browns might opt to take an oath that the iska earned no more than 5%.

Hetter Iska: Hazi Milveh – Hazi Pikkadon Form37

I, the undersigned, have received the sum of $ from (hereafter referred to as the “Investing Partner”), for investment in an Iska partnership, subject to the following terms:

In exchange for the aforementioned sum, the investing partner shall acquire a share (in the value of the funds received) in any investment, real estate or business which I own. In the event that no such investments exist, the investing partner will acquire partnership (in the value of funds received) in any future investment that I shall make. The investing partner hereby appoints me as an agent to execute this investment (or investments), as I deem appropriate, on his behalf. This investment (or investments) shall be owned jointly by the investing partner and myself. Any profits realized or losses sustained shall be shared equally between the investing partner and myself.

Any claim of loss must be verified through the testimony of two qualified witnesses in, and under conditions acceptable to, an Orthodox Jewish court of law. Any claim regarding the amount of profit generated by this investment (or investments) shall be verified under solemn oath, before and under conditions acceptable to, an Orthodox Jewish court of law.

It is agreed that if I return the above-mentioned principal to the investing partner, together with an additional as payment for his share of the profits which are generated, then I will not be required to make any further payment nor will I be required to make an oath. I am obligated to make this payment on or before . If payment is not made by this time, the terms of this Iska shall continue.

I have received one dollar from the investing partner as payment for my services during the term of our partnership.

In the event of any conflict between the terms of this Iska agreement and the terms of any other agreement signed by the two parties in regard to these funds, the terms of this agreement shall prevail.

This agreement shall follow the guidelines of Hetter Iska as explained in Sefer Berit Yehudah.

It is agreed that any dispute which may arise in connection with this agreement shall be submitted before .

Judgment rendered by the aforesaid authority may be entered in any court having jurisdiction thereof.


Signature of the Recipient

Signature of the Investor

Hetter Iska: Kullo Pikkadon Form38

I, the undersigned, have received the sum of $ from (hereafter referred to as the “Investing Partner’), for investment in an Iska partnership, subject to the following terms:

In exchange for the aforementioned sum, the investing partner shall acquire a share (in the value of the funds received) in any investment real estate or business that I own. In the event that no such investments exist, the investing partner will acquire partnership (in the value of funds received) in any future investment that I shall make. The investing partner hereby appoints me as an agent to execute these investment(s) as I deem appropriate, on his behalf. These investment(s) shall be owned by the investing partner.

Any profits realized or losses sustained shall be allocated to the investing partner. However, percent ( %) of the profits shall be retained by the undersigned for his services during the term of this Iska.

Any claim of loss must be verified through the testimony of two qualified witnesses in, and under conditions acceptable to, an Orthodox Jewish court of law.

Any claim regarding the amount of profit generated by this investment (or investments) shall be verified under solemn oath, before and under conditions acceptable to, an Orthodox Jewish court of law.

It is agreed that if I return the above-mentioned principal to the investing partner, together with an additional as payment for his share of the profits which are generated, then I will not be required to make any further payment nor will I be required to make an oath. I am obligated to make this payment on or before . If payment is not made by this time, the terms of this Iska shall continue.

In the event of any conflict between the terms of this Iska agreement and the terms of any other agreement signed by the two parties in regard to these funds, the terms of this agreement shall prevail.

This agreement shall follow the guidelines of Hetter Iska as explained in Sefer Berit Yehudah.

It is agreed that any dispute which may arise in connection with this agreement shall be submitted before .

Judgment rendered by the aforesaid authority may be entered in any court having jurisdiction thereof.


Signature of the Recipient

Signature of the Investor


Rabbi Dr. Aaron Levine is the Samson and Halina Bitensky Professor of Economics and Chairman of the department at Yeshiva University. Elected to Phi Beta Kappa at Brooklyn College, he was awarded his M. A. and Ph.D. by New York University. He was ordained in Jewish ritual and civil law at the Rabbi Jacob Joseph School and is the spiritual leader of Brooklyn’s Young Israel of avenue J.

* This article was printed with permission from Rabbi Aaron Levine’s book Case Studies in Jewish Business Ethics.

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A noted authority on Jewish commercial law, Professor Levine’s research specialty is the interface between economics and Halakhah, especially as it relates to public policy and modern business practices. He has published widely on these issues, including four books and numerous monographs. His books include Free Enterprise and Jewish Law (1980); Economics and Jewish Law (1987); Economic Public Policy and Jewish Law (1993); and Case Studies in Jewish Business Ethics (2000). Ktav publishing House Inc. and Yeshiva University Press published these volumes jointly as part of the Library of Jewish Law and Ethics, edited by Dr. Norman Lamm.

Footnotes for The Encyclopedia Salesman

1. R. Yom Tov Ishbili (Spain, 1270-1342), Ritva, Yevamot 65b. For an identical comment, see R. Samuel Eliezer b. Judah ha-Levi (Poland, 1555-1631), Maharsha, Yevamot 65b.
2. …and because he stole three hearts, the heart of his father, the heart of the court of justice, and the heart of Israel. As it is said, so Absalom stole the heats of the men of Israel (II Samuel 15:6). Therefore three darts were thrust through him…(Mishnah Sotah 1:8).
3. II Samuel 15:6.
4. Jerusalem Talmud, Sotah 1:8.
5. R. Jacob Tam quoted in Tosafot, Hullin 94b, s.v. amar, and by R. Asher b. Jehiel (Germany, 1270-1343), Rosh, Hullin 7:18. R. Shelomo b. Jehiel Luria (Poland, 1510-1573), Yam Shel Shelomo, Hullin, ad locum claims that R. Isaac b. Jacob Alfasi (Algeria, 1013-1103, Rif) and R. Mosheh of Coucey (France, early thirteenth cen., Smag) agree with R. Tam. See also R. Abraham Joseph Ehrman, Halikhut O’lam, p. 98.
6. Leviticus 5:1-13; Keritot 10b; Maimonides (Egypt, 1135-1204), Yad, Shegagot 10:1-4.
7. Torat Kohanim 5:7.
8. R. Aaron ha-Levi (Barcelona, 1235-1300), Sefer ha-Hinnukh 123. R. Aaron ha-Levi’s position here, according to R. Joseph b. Moses Babad (Poland, 1800-1872, Minhat Hinnukh, ad locum), is contradicted by Mishnah Nega’im 14:12.
9. Leviticus 19:14; Torat Kohanim 19:14; Yad, Rozeah 12:14.
11. Exodus 22:24; Mishnah, Bava Mezia; Rif ad locum; Yad, Malveh 4:2; Rosh, Bava Mezia 5:80; R. Jacob b. Asher (Toledo, 1270-1340), Tur, Yoreh De’ah 160:2; R. Joseph Caro (Safed, 1488-1575), Shulhan Arukh, Yoreh De’ah 160:1; R. Abraham Danzig (Prague, 1748-1820), Hokhmat Adam 130:1.
12. Yad, op. cit. 5:1; Tur op. cit. 159; Sh. Ar., op. cit. 159:1.
13. C.F. Hokhmat Adam 131:1-3.
14. R. Mosheh Isserles (Poland, 1525 or 1530-1592), Rema, Sh. Ar., op. cit. 161:1.
15. Bava Mezia 65a; Rif, ad locum; Yad, op. cit. 8:1; Rosh, op cit. 5:21; Tur, op. cit. 173:1; Sh. Ar., op. cit. 173:1; Hokhmat Adam, 139:1.
16. Rema, Sh. Ar., op. cit. 173:3.
17. R. Yaakov Yeshayahu Bloi, B’rit Yehudah, 22:10 and notes 24-25.
18.R. Nahman, Bava Mezia 63b; Rif ad locum; Yad, op. cit. 9:6; Rosh, op. cit. 5:11; Tur, op. cit.173:7; Sh. Ar., op. cit. 173:7.
19.Brit Yehudah, op. cit. 22:1, note 2.
20. Rema, Sh. Ar., op. cit. 173:7; Hokhmat Adam 139:14. For a variant view see R. David b. Samuel ha-Levi (Poland, 1586-1667), Turei Zahav, Sh. Ar., loc. cit., note 12.
21. R. Moses b. Naphtali Hirsch Rivkes (d. ca. 1671-2), Be’er ha-Golah, Sh. Ar., op. cit. 173, note 18.
22. B’rit Yehudah, op.cit. 23:3, note 9.
23. R. Nahum Yavrov, Divrei Soferim, p. 215.
24. Rema, loc. cit.; Hokhmat Adam, loc. cit.
25. R. Nahman, Bava Mezia 63b; Rif ad locum; Yad, loc. cit.; Rosh, loc. cit.; Tur, loc. cit., Sh. Ar., loc. cit.
26. R. Isaac b. Sheshet Perfet (Spain, 1325-1408), Responsa Ribash, quoted by R. Joseph Caro, Beit Yosef, Tur, op. cit.
27. Baraita, Bava Mezia 64a; R. Solomon b. Isaac (Troyes, 1040-1105), Rashi, loc. cit., s.v. mutar; Yad, op. cit. 9:3; Tur, op. cit., 173:9; Sh. Ar., op. cit.173:9.
28. R. Yitzhak Yaakov Weisz, Minhat Yitzhak 4:99.
29. Exodus 20:14; Deuteronomy 5:18.
30. Yad, Gezeilah 1:9; Tur, Hoshen Mishpat 359:9; Sh. Ar., Hoshen Mishpat 359:10; R. Jehiel Michel Epstein (Belorussia, 1829-1908), Arukh ha-Shulhan, Hoshen Mishpat 359:8-9.
31. R. Abraham b. David of Posquieres (1125-1198), Rabad, at Yad, loc. cit.
32. Yad, loc. cit. The dispute between Maimonides and Rabad is explained by R. Vidal Yom Tov of Toloso (Fl. 14th cent., Maggid Mishneh, Yad, ad loc.) as follows: Maimonides regards the prohibition of lo tahmod to consist of the exertion of effort to overcome B’s resistance to part with his article. B’s declaration of rozeh ani at the end of the process hence does not remove lo tahmod. Rabad, however, regards the prohibition to consist of acquiring B’s article when he is unwilling to sell it. B’s declaration of rozeh ani at the moment of transfer thus removes lo tahmod.
33. Yad, op. cit. 1:10; Maimonidies, Sefer ha-Mizvot lo ta’aseh 66; Tur, op. cit.; Sh. Ar., op.cit.; Ar. haSh., op cit. 359:8
34. See, R. Joel Sirkes (Poland, 1561-1650), Bach at Tur Hoshen Mishpat 359 note 9 and R. Joshua b. Alexander ha-Kohen Folk (Poland, 1555-1614) Sma at Sh. Ar. Hoshen Mishpat 359 note 16.
35. R. Yaakov Yeshayau Bloi, Pithei Hoshen, Hilkhot Genevah ve-Ona’ah, p. 30, note 26.

Footnotes for Hetter Iska Section

1. Maimonides (Egypt, 1135-1204), Yad, Malveh 5:1; R. Jacob b. Asher (Germany, 1270-1340), Tur, Yoreh De’ah 159; R. Joseph Caro (Safed, 1488-1575), Shulhan Arukh, Yoreh De’ah 159:1.
2. Exodus 22:24; Mishnah, Bava Mezia 5:11; R. Isaac b. Jacob Alfasi (Algeria, 1013-1103), Rif, ad locum; Yad, op.cit. 4:2; R. Asher b. Jehiel (Germany, 1270-1343), Rosh, Bava Mezia 5:80; Tur, op.cit. 160:2; Sh.Ar., op.cit. 160:1; R. Abraham Danzig (Prague, 1748-1820), Hokhmat Adam 130:1.
3. Bava Mezia 70a; Rif, ad.loc., Yad, op.cit. 5:8; Rosh, Bava Mezia 5:50; Tur, op.cit. 177:1; Sh.Ar., op.cit. 177:1; Hokhmat Adam 131:4, 142:1.
4. Bava Mezia 104b; Rif, ad.loc.; Yad, op.cit. 6:2; Rosh, Bava Mezia 9:9; Tur, op.cit. 177:2; Sh.Ar., op.cit. 177:2; R. Yaakov Yeshayahu Bloi, B’rit Yehudah 35:2-3 and note 3.
5.Bava Mezia 68a; 104b; Yad, op.cit. 6:2; Rosh, Bava Mezia 9:9; Tur, op.cit., 177:1-2; Sh.Ar., op.cit. 177:2; Hokhmat Adam 142:2.
6. R. David b. Samuel ha-Levi (Poland, 1586-1667); Turei Zahav, Sh.Ar., op.cit., 177, note 5; R. Shabbetai b. Meir ha-Kohen (Poland, 1621-1662), Siftei Kohen, Sh.Ar., op.cit., 177, note 9: Hokhmat Adam, loc.cit.
For the monetary requirements of the nominal fee, see R. Ezra Basri (Israel, contemp.), Dinei Mamonot, vol. 1, pp. 144-5.
7. Tosafot, Baba Kamma 102a; R. Baruh (ca. 1150-1221), quoted in Mordecai, Bava Kamma 9:122; Tur, op.cit., 177:14; Sh. Ar., op. cit., 177:5; Rema, op. cit., 177:5 Hokhmat Adam 142:26. Limiting the protective force of the devolvement clause, R. Abraham Y. Karelitz, Hazon Ish, Yoreh De’ah 176:1 posits that the iska agreement may only call for MP to assume full responsibility for loss when the losses occur as a result of his failure to adhere to F’s conditions. Should the realized losses be unrelated to MP’s departure from F’s conditions, the loss must be divided according to the profit-loss stipulation of the iska agreement. R. Shneur Zalman of Lyady (1745-1813), Shulhan Arukh of the Rav, Hilkhot Ribbit, note 44, however, validates the devolvement clause even for losses not caused by MP’s departure from F’s conditions.
8. R. Abraham b. Mordecai ha-Levi (late 17 cent.), Ginnat Veradim, Yoreh De’ah 6:9.
9. Hazon Ish, loc.cit.
10. Rema loc.cit.; Hokhmat Adam 142:6.
11. R. Israel b. Petahiah Isserlein (1390-1460), quoted in Turei Zahav, Sh.Ar., 167, note 1, and in Siftei Kohen, Sh.Ar., op.cit., 167, note 1; Hokhmat Adam, loc. cit.
12. Turei Zahav, loc. cit.
13. Turei Zahav, loc. cit; Siftei Kohen, loc. cit.; Hokhmat Adam, loc. cit.
14. Turei Zahav, loc. cit.; Kunteres ha-Sma Arukha ot 9; see B’rit Yehudah, 37:9, note 23.
15. Mosheh Isserles, Responsa Rema, n. 80; R. Meir b. Gedaliah Lublin (Poland, 1588-1616), Responsa Maharam Lublin 135; Hokhmat Adam 142:7.
16. R. Mosheh b. Joseph Trani (Safed, 1500-1580), Responsa Mabit 43; Ginnat Veradim, Yoreh, De’ah 6:8-9; R. Joseph Saul Nathanson (Lemberg, 1800-1875), Responsa Sho’el u-Meshiv, vol. 3, part 1, siman 137.
17. Leibovici v. Rawicki, 57 Misc.2d 141, 290 N.Y.S.2d 997 (Civ. Ct. 1968).
18. R. Mosheh Feinstein, Iggerot Mosheh, Yoreh De’ah 2:62.
19. R. Joseph Saul Nathanson, Responsa Sho’el u-Meshiv, vol. 1, part 3, siman 160; vol. 3, part 1, siman 133. Sharing the above broad definition of iska is R. Shalom Mordecai Shwadron (Poland, 1835-1911), Responsa Maharsham, 2:215, 252 and R. Mordecai Yaakov Breisch (Israel, contemp.), Responsa Helkat Yaakov 3: 199, 200.
20. R. Meir Arak, Imrei Yosher 1:108. R. Arak’s position is articulated in various forms of elaboration in earlier rabbinic literature. C.F. Ginnat Veradim, op.cit. 6:4; Shulhan Arukh of the Rav, op.cit. seif 42; R. Solomon b. Joseph Ganzfried (Hungary, 1804-1866), Kizzur Shulhan Arukh 66:10; R. Solomon Leib Tabak (Hungary 1832-1908), Erekh Shai 177:7.
21. See Imrei Yosher, loc.cit. Requiring a third party to take possession of this merchandise on behalf of A when B acquires it, is, according R. Arak, unnecessary. B’s resolve, at the time he purchases and transacts with the requisite merchandise, that his actions are on behalf of A suffices to allow A to acquire part ownership in the merchandise.
For an alternative hetter iska arrangement designed to accommodate the businessman desiring capital for personal use, see Kizzur Shulhan Arukh 66:20.
22. Yad, Sheluhin ve-Shufetin 7:4; Tur, op.cit., 177:30, Sh.Ar., op.cit 177:30.
23. R. Solomon b. Isaac, Rashi at Bava Mezia 104b.
24. Tosafot, Bava Mezia 104b.
25. R. Mosheh Isserles, Rema, Sh.Ar., Yoreh De’ah 177:5.
26.R. Barukh (ca. 1150-1221, quoted by R. Mordecai b. Hillel (Germany, 1240-1298), Mordecai Bava Kamma 9:122 and by R. Mosheh Isserles, Rema, Sh.Ar., op.cit 177:5.
27. Shulhan Arukh of the Rav, loc.cit. seif 42.
28. Iggerot Mosheh, op.cit.
29. R. Yisroel Reisman, The Laws of Ribbis (New York: Mesorah Publications, Ltd., 1995), p. 399, f.n.53.
30. See R. Samuel b. David Moses ha-Levi (Poland, 1625-1681), Nahalat Shivah, no. 40. 31. R. Shiloh Raphael, Torah she-be-al Peh, Vol 19 (Jerusalem: Mossad Harav Kook, 1977), pp. 100-105.
32. Iggerot Mosheh, op.cit.
34. Iggerot Mosheh, op.cit. See also authorities quote by Rabbi J. David Bleich in Contemporary Halakhic Problems, Vol. 2, (New York: Ktav Publishing House, Inc., Yeshiva University Press, 1983), p. 379, f.n. 2.
35. Iggerot Mosheh, op.cit.
36. See R. Avraham Mosheh Lewanoni, Mishnat Ribbit 22:18, note 24.
37. The Laws of Ribbis, op.cit. p. 421.
38. Ibid., p. 424.

Why People Cheat

by Rabbi Jay Kelman

The past fifty years have witnessed an amazing transformation of Jewish life in North America. We have succeeded in transforming the treife medinah(unkosher land) into a land filled with yeshivot, Torah tapes, chesed organizations, glatt kosher food, mikvaot and daf yomi classes. However there does appear to be one major area where increased observance of and dedication to the details of halacha still eludes us. I refer to the general category of business ethics, the section which occupies the most space in the code of Jewish law.

Unfortunately all too often (once is too often) we hear about ritually observant Jews involved in white collar crime; tax evasion, money laundering, embezzlement, and fraud. Perhaps even worse is the attitude that one so often hears in casual conversation. ‘I am only an employee so I can’t write off any personal expenses’, or ‘of course I pay my contractor in cash’ thereby helping him evade his tax responsibility and thus stealing from the honest taxpayer. In an era where increased stringency has become the norm in so many ritual areas why is it that it is leniency that is the norm in our money dealings?

For some the phenomena is culturally based. Unfortunately many people hail from areas where Jews were actively and legally discriminated against. Thus to level the playing field Jews had to resort to cheating. This attitude was then carried over to our democracies. One still hears the incorrect assertion that from goyim one may cheat.

I do not wish to suggest that our behavior in this crucial area is worse than any other group. However it does not require a very close examination of our general business practices to realize that a serious problem exists.

Judaism equates silence with acquiescence. Those who have the ability to address a problem but do not do so are equally culpable in the eyes of the Lord. It is in this spirit that I put in writing some of my own personal observations, based on my experiences as a chartered accountant as a pulpit rabbi and discussions with friends and colleagues.

We were all created with a natural love of material possessions. This has many positive features; if not for our desire to make money people would cease to build thereby making society as a whole poorer. However our inclination for more, more and more often leads us astray. The Talmud declares that (along with gossip and sexual impropriety) everybody sins somewhat in the area of money. The problem is increased exacerbated by the high cost of leading a Jewishly meaningful life, adding to the temptation. Furthermore it is so easy to get away with it. The plethora of ‘cash only’ businesses combined with the extremely remote possibility of getting caught make the temptation too great for many. This combination of (perceived) need, greed and easy access is hard to overcome.

The problem though goes beyond the personal desire for money. Our society idolizes material success. Hence even people who don’t need the money to make ends meet are tempted to cheat. Even our religious institutions unwittingly contribute to this problem. When was the last time you saw a teacher being honored at a dinner? How many buildings are named for social workers who have devoted their lives to Jews in need? While I understand the need to honor financial donors, how many organizations check the business reputations of a potential honoree? While many institutions will refrain from honoring those who disregard ritual norms, it is the rare one which will apply the same standards to ethical norms. Thus, there is no social ostracizing of those who neglect this crucial area of Jewish life. Unfortunately the problem is so widespread and accepted that those who follow the ethical norms of the Torah in this area are often viewed as naive simpletons. People have often complained to me that I speak on the issue of business ethics too often. One member of my synagogue even told me that by speaking out on the subject it will be more difficult to attract members to the shul. Once society accepts a norm it becomes difficult to change. After all if everybody does it, it can not really be wrong.

We live in a society that distinguishes between private activity and public life, a distinction which in many ways is foreign to Judaism. However its affects are clearly felt within the Jewish world. Much of the increased observance that we have thankfully witnessed, has focused on areas that are external and visible to others. Business activity generally takes place away from our religious environment and very few of our brethren have any idea what our standards are. Hence there is no religious norm to conform to.

A further distinction that people incorrectly make is that between ritual and ethic. We have compartmentalized our lives into religious and secular components. Unfortunately people then classify business activities into the secular component which is somehow divorced from religious norms. We have failed to integrate all of our activities into a religious framework. The basic notion that Judaism does not recognize anything as being secular, there are only varying levels of holiness, has been ignored. Ethics to many, just is not a Jewish issue; after all there is (apparently) nothing distinctly Jewish about this issue. In an era where religiosity is often defined by the amount of cultural barriers that are erected, those areas that we have some degree of commonality with other groupings tend to be neglected.

Reinforcing the notion that business ethics is not a religious issue is the fact that rarely do many of our Rabbis speak on this subject. Perhaps with the paucity of Jewish life after the war it was understandable that religious energies would be devoted to kashrut, shabbat, mikvaot, and Jewish education. Perhaps Rabbis naively thought that ethics would come naturally to a Jew. It was inconceivable that a Jew who would sacrifice economic gain in order to keep shabbat thereby showing his faith in the Creator, would show total lack of faith in the ability of G-d to provide economically for us. This is why the first question asked to us by G-d after 120 years is nasata v’natata b’emunah, did you deal faithfully in business. The question is asking more than how honest we were in business; it is asking were our dealings conducted with faith in G-d as our ultimate provider.

Even on those occasions when rabbis speak out they are often ignored. The perception is that the Rabbinic leadership does not really understand the business world, that they are living in an ivory tower detached from the real world.

We must make things perfectly clear. A Jew who is ethically wanting, no matter how meticulous in his relations with G-d, is not a religious Jew.

Much more important than the diagnosis of the problem is finding a cure. While the evil inclination will continue to resist efforts to curb its appetite for money, this yetzer hara can be ‘defeated’ as we challenge it for productive purposes. Not so long ago, everybody, including observant Jews themselves, thought that traditional Judaism could not survive in America and were thankfully proven wrong. Similarly a concerted effort to address this problem is bound to have positive results. The first step towards a solution is recognizing the gravity of the problem, and the centrality of the issue to the definition of being an observant Jew.

It is time to make this issue a priority. We must teach and re-teach the basic Jewish values of honesty, full disclosure, and integrity in all of our dealings. Our rich heritage includes such teachings as: the flood happened because of the sin of robbery, that the first question that G-d will ask us is whether our business dealings were conducted honestly, that it is a Biblical obligation to follow the civil laws of your country of residence, that due to dishonest weights Amalek comes (Midrash cited by Rashi Devarim 25:17), that robbery is “more difficult” than adultery (Baba Batra 88b), that G-d abhors social sins but can tolerate idolatry (see commentary of Meshech Chochmah to Exodus 14:24). We must stress the notion that our prophets have told us over and over again that absent social ethics G-d does not want, in fact He even despises our sacrifices (Isaiah 1). And we all know that prayer has replaced sacrifices.

We must not allow those whose business practices are not up to Torah standards to be held as role models for a Torah lifestyle. We must ensure that all of our activities are conducted in a manner that will result in a kiddush Hashem. We must continue to work until people will stop and say what a wonderful Torah the Jewish people have, look at the honesty and integrity of those who keep it.
Rabbi Jay Kelman is a founding director of Torah in Motion, an educational institute dedicated to inspire Jews to engage with the challenges and opportunities of the modern world through the prism of Jewish law, values and traditions. Rabbi Jay teaches ethics and Rabbinics at the Community Hebrew Academy of Toronto, and authors a monthly column for the Canadian Jewish News entitled Money Matters. Rabbi Kelman served for nine years as Rabbi at Beth Jacob V’Anshei Drildz and was a practicing accountant, earning both his Chartered Accountancy (Canada) and CPA (USA) designations; working in the International tax Department of a large international firm.

The New Home Economics – Overcoming Overdraft

by Jody Blum

There are three things we’re not taught about growing up that would enable us to become more productive, efficient, and happier adults: how to have a great marriage, how to be a superb parent, and how to manage our household finances so we don’t fall into debt.

Debt is a universal problem, but locally it’s reached epidemic proportions. In Israel, approximately 70 percent of our households are in “minus” or overdraft. Another 25 percent would like to be, but the banks actually won’t allow them to be anymore.

As a nation, we pay out some 9 – 14 billion shekels annually in overdraft interest alone. Divide that by the 1.5 million families that make up our country and you’ll see that an average Israeli family pays between 6,000 – 10,000 NIS per year in overdraft interest payments to the bank. This is the equivalent to a half to a whole monthly salary that we’re paying to the banks. It’s horrifying to think about!

But why should it be any different? We’re not taught money management in school, and very few of us ever broach such a “taboo” subject at home when we’re growing up. So how can parents who are already suffering from overspending and debt possibly be qualified to educate their children properly about healthy spending habits?

They can’t; as a result, the problem has become the reoccurring vicious cycle that has led us to where we are today. But if we don’t combat this problem now, our children and grandchildren will not know how to put away money towards a secure financial future. And that spells national economic disaster.

What’s actually happening “on the Israeli street” today? Many people choose to cover their debt with a loan. If they secure a good enough loan, they might be able to save a bit of money, but this approach is really just a way of “transferring” one debt to another. I prefer a more comprehensive approach of debt management to such a “band-aid” approach.

Debt management includes 4 steps:

  • Commit to not creating more debt
  • Record expenses
  • Set up a monthly budget
  • Control that budget weekly

People fall into debt for many reasons. Not only are they not taught money management skills; there are often emotional issues that drive the way people spend or overspend:

  • Parents often neglect to set limits when spending on their children, since they have no limits on their own adult spending.
  • High expenses become so frustrating and anxiety producing that people avoid the bank altogether.
  • It’s very difficult to stay on top of the various (and high) fees the bank collects – including for overdraft interest.
  • Some people have a need to impress others; others have a sense of entitlement.

When these problems start at an early age, they tend to drive our spending as single adults and then well on into our marriages. If a young couple doesn’t have good communication skills and aren’t able to solve a serious money issue from the start, their money issues will snowball, often ending up in divorce. In fact, thirty-percent of divorces are due to financial issues.

I know a newly wed couple living in Jerusalem. She is 36 and this is her first marriage. He is nearing 50, his second marriage. She has natural money sense and is gently helping him realize that he needs to not only stay out of debt, but also put away for his retirement which is not that far down the road. I say “gently” because in the beginning he didn’t want to hear from this. For 49 years he’s been spending money his way. He doesn’t want someone else, not even his beloved wife, to control the way he spends money. Now he is beginning to see she’s making “cents.”

In the courses I teach, “Overcoming Overdraft: Your Journey to Financial Empowerment,” the majority of my students are 40 and above. But the real “darlings” of each class are the twenty-somethings who are just starting out. Why? Because the students in their 50s know that these young couples have a chance that they didn’t have. It’s never too late to start, but with youth does come the inarguable advantage of time.

Ideally, money management skills should be taught early – in school. However, this comes with its own challenge: I have found with my courses that people need to be motivated to change the way that they are doing things. Imposing money management on kids before they are ready – or motivated – to learn it may simply be ineffective at best and backfire at worst. Students need to admit that they have a problem, that this is a real issue that needs to be addressed.

Once I had a non-profit loan organization send someone to my course as a condition to receiving a loan. He came to the first two classes and never came back again, calling me in the middle to say he’s considering declaring bankruptcy. I’ve also had a mother pay for her son and daughter-in-law to have private sessions with me. After one meeting, the daughter-in-law decided she didn’t want to change her spending habits even though they were seriously in overdraft…and even though her mother-in-law was paying!

If teaching home economics in school is dicey, there’s still hope for teaching kids at home. This can begin, as early as age 3 with simple concepts like “keeping” money. Later, cost comparisons, needs vs. wants, healthy spending habits, decision-making, and eventually record keeping and setting up budgets can be introduced. With proper education in the family, there would be a real chance of reinforcing good behaviors as part of curriculum starting in kindergarten and finishing in 12th grade.

A large percentage of the world is in debt. There is no question that things have gotten out of hand. My prayer is for money management to naturally be part of our children’s and grandchildren’s education at home and at school.

Jody Blum teaches the popular course “Overcoming Overdraft” and offers one-on-one coaching on financial empowerment through her organization minusPLUS. Visit the website:

Morality Costs Money

by Professor Jonas Prager

“Honesty is the best policy” suggests not only an ethical norm, but also pragmatic benefits. But it’s certainly not the working rule in economic transactions. Indeed, there’s little difference between consumers and business purchasers; both are fundamentally skeptical and suspicious buyers. This lack of trust, based on both conceptual and experiential grounds, not only reflects poorly on business morality, but also involves significant costs to the economy.

The theoretical grounds for buyer skepticism rise from asymmetrical information, the divergent degrees of knowledge held by the parties in any transaction. Sellers know what they’re selling; buyers do not really know what they are buying. Legal systems recognize this discrepancy, with Jewish and Western legal mandates for seller honesty supplemented by civil and criminal penalties for fraud. The plethora of legislation and court cases devoted to the entire range of misrepresentation issues is clear evidence that seller honesty cannot be taken for granted. In fact, writing and enforcing of such laws is a continuing cost to the economic system.

Confidence-strengthening measures taken by sellers to convince buyers of their integrity and defensive actions engaged in by buyers to protect themselves against less than fully scrupulous vendors normally entail expenses that would be superfluous in a more ethical society. Perhaps the most important evidence of seller probity is the firm’s long-run horizon, demonstrating to the purchasers that short-term cheating is self-defeating. Some economists have explained apparently frivolous marketing expenditures such as expensive showrooms or celebrity endorsements which will be recovered only over the long haul, as credibility-establishing techniques. Similarly, a company paying for an evaluation by a recognized unbiased source – bond and equity rating agencies, for example -hopes thereby to assure purchasers of the seller’s integrity. Sellers also devote resources to and publicize quality control, so that repeat buyers can purchase with confidence without having to subject each transaction to testing.

Buyers, too, protect themselves in a variety of ways. Most indirectly, they support government administrative agencies that apply and enforce quality standards, such as those certifying the honesty of retailer weights and meas-ures or the safety and effectiveness of medicines. Similarly, consumers purchase information from not-for-profit and private agencies who test and report on consumer product and service quality or integrity. (Government and private kashrut certification are obvious examples.) Most important, buyers attempt to make informed decisions, gathering all available information on product performance, vendor reputation, and, when possible, testing the products themselves. Product testing, in fact, is big business for big business, which cannot afford to buy faulty components. After all, producers will ultimately bear responsibility for defective merchandise even when caused by defects in purchased parts. Clearly, such efforts and expenses are not negligible.

Many products and especially services are however, simply not testable, since each purchase is unique. Moreover, most buyers are not only ill-informed, but can never be adequately informed except at prohibitive cost. How truly competent is a physician, an attorney, or a mechanic is something that only peers can judge. Unfortunately, such information is rarely publicly available. Indeed, in the U.S., professionals may violate standards of ethics by offering unfavorable opinions — even when justified – against fellow practitioners. In such cases, the possibility of being discovered and penalized thereafter is remote, and the incentive to perform dishonestly is reinforced. The costs of protection must then rise disproportionally.

No one has yet added together society’s costs from deception and potential misrepresentation. They are found but rarely identified in government budgets, in the financial statements of business firms, and in the practices of consumers. Integrity in selling may be wishful thinking. Yet, it would not only be morally superior, but less expensive for us all.
Dr. Jonas Prager is a Professor at New York University

Leviticus and the Law of Markets

by Professor Eli Schwartz

There is a stream of feeling or thought, some of it held by members of learned professions, which shares a disdain for the study of economics. The field of economics is held to be crass and materialistic, emphasizing production for profit and the accumulation of wealth in opposition to spiritual and social values. This view arises from a shallow acquaintance with economic analysis and is devoid of a deeper knowledge of the economic literature which provides the theoretical framework of the subject. For example, Alfred Marshall, the father of modern economics, made it clear that the market system operates within social units (families or social groups) and within the institutions and rules of social and religious traditions and obligations. Such institutions not only provide for those unable to fully care for themselves; they also set a framework of normalized ethical behavior which eases the frictions of the market.

When examined carefully, the larger part of the rules of ethical behavior promoted by religion and subsumed in the economic discipline, are not promulgated solely on a notion of self-sacrifice. They are subtly founded on a rational base of enlightened self interest. So the ordinance in Leviticus, Chapter 19, verse 35, “thou shall have just weights and measures,” implies the whole corpus of business and industrial law. On a very precise and important level, the rule simply means that the measure of commodities sold in the market shall not be falsified. Furthermore, it just as surely implies a whole multitude of derived laws of behavior, such as that the numbers on financial statements be truthful, that the quality of goods not be falsified, that the laborer not charge for work not done, and that full disclosure be given on the sale of a security. There is grave harm wreaked on the economy when the precepts of just weights and measures are extensively violated. An inordinate amount of time is consumed when each transaction has to be validated: both buyer and seller waste time and effort. The force of the doctrine holds for both commodity and financial markets. A prevalence of false financial reporting would make impossible the existence of a modern financial market. There could be no banks and no security markets, and it would not be possible to accumulate the amount of capital necessary for the financing of large scale efficient enterprises. A simple, short, pragmatic ordinance, carefully placed in a book devoted to rules of purity and sanctification, the precept of just weights and measures, is a basic foundation for a functioning efficient economy.

Ethical Challenges of the New Economy and the Information Age

by Rabbi Pinchas Rosenstein

Long gone is the time when one person could impose an ethical culture on a major enterprise by sheer force of will and conviction. The globally spread companies that control much of the world’s commerce nowadays require formal ethics programs. Hi-Tech companies riding today’s “new economy” need special codes that address their specific needs and concerns.

A landmark survey of US employees conducted in 1993 by the Ethics Resource Center (ERC) in Washington uncovered certain problematic trends in regard to ethical performance in industry.

An increasing number of companies are adopting ethical codes and programs, however the ERC survey found a considerable gulf between the perspectives of senior and front-line management regarding the ethical performance of their respective companies. The survey shows that senior management were most likely to believe that their companies fulfill their ethical obligations to stakeholders “exceptionally”. They were also least likely to believe that their companies actively encourage or passively ignore unethical conduct in order to meet their business objectives.

However, these positive perceptions declined along with the respondent’s level in the organization. Front-line supervisors, who reported feeling the most pressure to engage in misconduct, were most likely to believe that their companies encourage or ignore unethical conduct from employees in order to achieve business objectives.

It is necessary to attempt to explain this phenomenon. Much attention is paid by ethics practitioners and trainers to the “tone at the top” – that ethical standards must come from the top leadership of an organization. Justification for this suggestion is self-evident, however this is not enough. The ERC survey indicates that in many companies only lip service is paid to ethics at the top and that the programs have little effect on the front-line, the place where they are most needed.

Transmission of Ethical Standards – Early 20th Century Experiences

Longstanding companies, traditionally known for their high ethical standards, such as IBM and Johnson & Johnson in the USA or Marks & Spencer in the UK, were in general established or led for significant periods of time by individuals with strong views and convictions. These companies did not always boast the formal ethics programs or codes of ethics that we find in many modern corporations. Yet, the ethical standards were transmitted from generation to generation through a process similar to osmosis. As the companies developed and grew, so their specific ethical corporate cultures developed and spread throughout the organizations, whilst adapting, in order to cope with new challenges.

It is particularly worthwhile to examine the development of the J.C. Penney approach to business ethics, because this company had one of the earliest ethics codes and programs.

J.C. Penney’s earliest business experiences as a clerk in various retail stores allowed him to observe various questionable practices. Penney subsequently examined good and bad business practices and developed a respect for the philosophy of leading businessmen John Wanamaker and Marshall Field who were changing the character of retailing in the United States and who also found it profitable to develop an image of honesty and integrity. Wanamaker instituted the money back guarantee and Field believed that the misrepresentation of merchandise was suicidal to any business and admonished his employees not to ever make a promise that could not be fulfilled.

Penney began his own empire in 1902 and in 1913, with 34 stores and 325 employees, he presented his first written code of ethics – “The Penney Idea”.

The Penney Idea

  1. To serve the public, as nearly as we can, to its complete satisfaction
  2. To expect for the service we render a fair remuneration and not all the profit the traffic will bear
  3. To do all in our power to pack the customer’s dollar full of value, quality and satisfaction
  4. To continue to train ourselves and our associates so that the service we give will be more and more intelligently performed
  5. To improve constantly the human factor in our business
  6. To reward men and women in our organization through participation in what the business produces
  7. To test our every policy, method and act in this wise: “Does it square with what is right and just?”

Penney’s managers were all part-owners and therefore at the first national meeting in 1913 where the code was adopted, the “partners” were asked to participate in an “Obligation Ceremony” and to pledge a personal commitment to a life of honesty, integrity and moral leadership both within and outside the company

(JC Penney Archives, quoted by Oliverio).

Earl C. Sams, one of Penney’s most senior associates observed in 1927 that:

“…Every man who joined our group – in those early days – was personally selected by Mr. Penney. And in the formation of the original (company), the type and kind of associates sought for and obtained were:

  • Men of character and ability
  • Men of unselfish aims
  • Men who, in seeking the opportunity, know full well that dividends would be paid to them only as the result of a demonstration of worthiness
  • Men who, in their business and social conduct, would not swerve from a line of procedure and personal action, which was planned to represent that which was right and fair to all, and a living example to others.”

Penney constantly re-inforced his basic ethical position through conventions, letter and bulletins. One manager states the following in 1917: “The J.C. Penney Company enjoys the reputation of being a character and man builder as well as a builder of profits. It is because there has always been and always will be that energetic spirit of efficient honesty, directing and developing its affairs, not because honesty is the best policy, but because honesty is right and always has been and always will be until the end of time.” (Beatley, Dynamo, September 1917, quoted by Oliverio)

Observers argue as to whether Penney faced a general level of ethical behavior better or worse than what we experience today and it is pertinent to note a contemporary observer: “A large part of modern prosperity is bottomed on the overproduction of fraud and sham. The crisis is acute. A feeling of distrust is growing throughout the country. Many branches of finance and business have in one way or another been seized by the unscrupulous for the purpose of deceiving the unwary.”

(James Dill, Reported in The New York Times, 29 June 1905)

We shall return, later in the paper, to examine some of the modern-day implications of Penney’s policies.

These various processes, which brought us “ethical” companies appear very much to be a feature of the past. The late 20th Century has provided a very different commercial environment, culminating in the “new economy”. In modern, often multinational enterprises it is unusual for one or even a few individuals to be able to provide the same level of “ethical” direction for an organization as was possible in the past.

Two Case-Studies: Beech Nut and Johnson & Johnson

Two case-studies are worth examining in this context:

In the 1980s the Beech Nut company was investigated by the FDA and was found guilty of selling adulterated and misbranded baby juice. As the story emerged, it was discovered that Beech Nut executives at all levels had turned a blind eye to the almost obvious fact that a vendor was supplying apple concentrate that contained only sugar and chemicals. Under extreme pressure to turn an ailing company around, the executives focused on the 25% price advantage presented by the supplier of the

bogus concentrate and failed to carry out any QA or laboratory tests. When a member of the research department raised concerns about the concentrate he was accused of not acting like a team player. In his annual performacreview his supervisor wrote that his judgement was “colored by naivete and impractical ideas”. The total cost to the company including fines, legal expenses and lost sales was estimated at $25 million.

The Tylenol crisis faced by & Johnson also in the early 1980s presented a different story. The decision to recall all Tylenol capsules, after several were found to have been maliciously contaminated, to avoid further loss of life, was reflection of the organization’s culture. Robert Wood Johnson, Johnson & Johnson’s CEO from 1932 to 1963 wrote a credo for his company. This credo states that that the company’s first responsibility is to the people who use its products and services;

the second responsibility is to its employees; the third to the community and its environment and the fourth to the stockholders. Johnson claimed that if the credo’s first three responsibilities are met, then the stockholders will be well served. The cost of the recall was $150 million just for 1982, and at the time of the recall there was a fear that the future of Johnson & Johnson and not just Tylenol was being risked. In the end, despite the various doomsday scenarios, Johnson & Johnson gained Widespread praise for its courageous decision and regained its previous market share for Tylenol within one year.

Without a shared set of values and deeply entrenched guiding principles, it is unlikely that Johnson & Johnson’s response would not have been so prompt, effective and so ethically sound. We can conclude from the diverse results of the two case-studies that business ethics becomes an issue of both leadership and management.

“Ethics has everything to do with management… Managers who fail to provide proper leadership and to institute systems that facilitate ethical conduct share responsibility with those who conceive, execute, and knowingly benefit from corporate misdeeds” (Pain)

Ethics in the “New Economy”

The most challenging aspects of the new economy are the pace and the speed of change. These often prevent adequate reflection on the part of management with regard to ethical implications relating to their commercial decisions. In practical terms, the rapid commercial growth among hi-tech companies makes it difficult to initiate and develop effective corporate cultures of ethics and corporate governance in parallel with rapid commercial growth.

The conditions for introducing effective ethics programs have become more difficult. It is therefore ironic that such programs have become more commercially crucial. Never before have companies faced such an intense level of scrutiny. Media, government agencies, politicians and NGOs are all eager to expose wrongdoings and the unwillingness of some corporations to act in a socially responsible manner. In the age of the global village, companies also have to internalize the fact that ethical lapses on the part of individual employees have the capability of causing major and sometimes incalculable damage to the company as a whole.

Enterprise Ethics Planning (EEP)

No less important than Enterprise Resource Planning (ERP) must therefore be Enterprise Ethics Planning (EEP). By this we mean that companies must develop properly planned, unified, consistent and comprehensive ethics programs. Many companies have developed outstanding ethics programs, ironically one of the best frameworks for ethics programs can be found in what is essentially a punitative system – the USA Federal Sentencing Guidelines (FSG). These guidelines are a rare example of how laws can be enacted to improve ethical behavior. They take a carrot and stick approach by directing judges to considerably increase or decrease fines on corporations convicted of carrying out illegal acts, depending on whether or not the company made a genuine effort to develop and run a comprehensive and effective ethics program. The FSG’s seven element ethics program includes the development of a company code of ethics, the appointment of high level personnel to run the ethics compliance program and the establishment of an effective training program.

We can note that J.C. Penney’s code and program appear to comply with these regulations to a large degree. The main difference being that modern codes are expected to also deal with realistic examples of ethical dilemmas relevant to the company and not to rely on generalities.

Hi-tech corporate ethical codes must deal with standard ethics issues such as conflicts of interest, bribery, misuse of company property etc. However, boilerplate codes are not adequate for such companies. In light of the special nature of the hi-tech company and in particular the emerging new organizational structures, they must place a specific emphasis on such issues as intellectual property, confidentiality, changing employer-employee relationships, reciprocal loyalty and head-hunting.

Employee Loyalty in Hi-Tech

The last few years have seen an unprecedented number of hi-tech jobs being created by Internet and New Economy companies, and we are witnesses to an unemployment rate at an all-time low throughout much of the developed world. Due to these factors, hi-tech companies are increasingly experiencing difficulty in finding and retaining good workers. As a result, hi-tech employee loyalty is dropping sharply, as employees jump from one company to another to pursue higher pay, stock options and other benefits. Surprisingly, despite the recent bad times for technology stocks on the Nasdaq, hi-tech companies are still having turnover and loyalty Problems.

In traditional enterprises, critical technology and trade secrets can generally be limited to a small number of select employees. In hi-tech, by its very nature, there are few blue-collar workers. Critical technology and trade secrets are spread widely through the company. High employee turnover greatly exposes a company, low employee loyalty makes obtaining a competitor’s sensitive information easier.

J.C. Penney’s approach appears to be particularly relevant for modern hi-tech companies. When a company’s secrets are widely exposed and spread throughout much of the workforce, choosing managers for for both ability and character appears to be particularly prudent. Instilling ethical values throughout the firm appears critical.

A Possible Approach

Corporate ethical codes and programs can be written in different styles: Inspirational, Regulatory, Presenting Guidelines or Presenting Market Ethos. Each style has both advantages and drawbacks. Regulatory style codes can never cover every possible situation, market ethos can appear distant to the average employee and guidelines can be vague and lack context.

The issues discussed in this paper lead us to believe that codes and programs for the hi-tech sector must be inspirational in nature and that they must emphasize the importance of the development of the professional integrity of the person under contract. Enlightened self-interest would also suggest that hi-tech companies must examine their hiring policies and procedures and give serious attention to the integrity of the individual as well as to his or her professional qualifications.

This paper has attempted to address one small element of a complex rapidly evolving issue. Corporations must accept that it is in their interests to carefully plan and develop comprehensive ethics initiatives (Enterprise Ethics Planning). Corporate codes of ethics and ethics training programs must relate to the new realities when there are changes in the manner in which commerce is conducted – The hi-tech market is an obvious example of this.


  • Paine, L.S. (1994) Managing for Organizational Integrity. Harvard Business Review, March-April 1994
  • Oliverio, M.E. (1989) The Implementation of a Code of Ethics: The Early Efforts of an Entrepreneur., Journal of Business Ethics Vol. 8, 1989
  • Ethics Resource Center. (1994) Ethics in American Business: Policies, Programs and Perceptions – Report of a Landmark Survey of US Employees


Rabbi Pinchas Rosenstein is the director of the Center for Business Ethics and Social Responsibility.

By the Sweat of Your Brow: An Analysis of Jewish Work Values

by Professor David J. Schnall

No doubt the best-known and most enduring analysis of the link between religious culture and work values is Max Weber’s seminal assessment of Protestant faith and the rise of capitalism. In it, Weber argued that early Protestant religious thought particularly the work of John Calvin, committed believers to a harsh, inescapable determinism. Here the unchanging God chooses those who will win grace and those who will be cursed, virtually at their birth. One could never be quite certain of his membership in the Elect, this special group of individuals whom the Lord had chosen for eternal life, but outward testimony was available. Notably, financial success and personal prosperity would attest that the Lord had smiled upon one’s fortune.

In considering the impact of Protestant thought upon capitalist economics, Weber was particularly taken by those elements that were distinct and original to Calvin. For example, financial success and prosperity alone were not sufficient to mark one as a member of God’s Elect. Those chosen also were characterized by lives of disciplined austerity, bordering on the ascetic. In this sense work was intrinsically valued on religious grounds, and not merely for the prosperity it might bring. Idleness and sloth were sinful, but so were materialism, opulence and pride. One must work diligently, for an independent and industrious spirit paved the way to personal redemption. Beyond basic personal needs, profit ought not to be squandered on frivolous luxuries that mark the devil’s temptation. Instead, it was to be reinvested so that it might yield still greater wealth and yet further testify to the righteousness of its possessor.

There was little point in providing assistance to those whose poverty and want suggest that they are not among the Lord’s chosen, for He has ordained that they never raise their status. Instead, profits should be reinvested in personal commercial ventures again and again, to amass wealth and thereby, raise the economic wellbeing of the community at large. In fact by serving God through hard work and austere living, one was free of family tradition, and obliged to seek out those trades and professions that were the most profitable.

Weber argued that these values promoted and encouraged radical changes in the economic systems of Europe and later the New World. In his estimation, delayed material gratification created the pool of resources thwas the basis for capitalist expansion. This in turn nourished more mobile financial systems, which moved Europe away from the land-based economics that reinforced Feudalism and retarded growth.

He insisted that the effects of this Protestant ethic could be observed and empirically measured. He argued that members of Protestant churches tended to work harder, to save more and to show greater financial success than others, especially Catholics. He claimed that similar differences would be evident in comparing predominantly Protestant countries to those whose majority affiliated elsewhere. Others have added that Protestant faith encouraged child-rearing practices that emphasized achievement and that encouraged entrepreneurial success in their children.

More recent empirical attempts to examine Weber’s propositions have yielded mixed results. For example, a study of congregants at 31 Roman Catholic, Protestant Calvinist and Protestant non-Calvinist churches, found that the salience of their religious faith and church participation correlated significantly with their tendency to view work as a “calling.” However, specific denominational norms, sermons and pastoral influence had little effect. Similarly religious affiliation and religious conviction yield little or no correlation with organizational commitment, job satisfaction, job involvement or achievement need.

Yet cross-national research does suggest that the Protestant Work Ethic is alive and well, though not necessarily among Protestants. Comparative studies in Barbados, China, Malaysia, India, Sri Lanka and Uganda have found a commitment to measures of PWE as strong or even stronger than those found in predominantly Protestant nations. This has led analysts to conclude that Weber’s predisposition notwithstanding, many other religious and cultural traditions are rooted in analogous commitments to the centrality of work and to the accumulation of wealth through austerity and frugality.

Matched by the industrial success of Far Eastern nations, notably Japan, this has led cross-cultural research to uncover themes in Eastern faiths that support and encourage work values similar to those of the PWE. Elements of Confucianism, for example, are said to encourage respect for work, discipline, thrift and duty in the maintenance of harmony and support for an ordered society. In addition, interpersonal principles such as Guanxi (social connections and indebtedness) and Jen (warm feeling between people) promote a high degree of organizational loyalty and a close relationships among coworkers, and between employees and management.

Finally, through a variety of encyclicals and authoritative ecclesiastical documents, the Roman Catholic Church has fashioned a unique response to the role of labor in the lives of believers, over the past century. Dubbed Catholic Social Teaching, Papal authority formally entered the realm of modern economic thought with the publication of Rerum Novarum by Pope Leo XIII in 1891. It grounded workplace relationships in the inherent dignity of the laborer, in a concern for the common good, and in the reciprocal obligation for employees to work energetically and honestly. The welfare of the worker’s family also was included as an important dimension in calculating wages, benefits or career advancement.

This was followed by a series of declarations that presumed the employee’s role as a partner in the enterprise from which he would achieve his god-ordained rights to human fulfillment. From Pius XI (1922-39) to John XIII (1958-1963) to John Paul II (1978 – ) encyclicals, letters and homilies have made this a central point of Church policy. Employers are obligated to expand the role of their workers, encourage their participation in all facets of business, and develop in them the professional and technical skills that will support their new and activist role.

It should be noted that Pope Pius XII (1939-1958) took strong exception to these trends. He evidently concurred with the proposition that employers bear an obligation to consider the personal and social needs of their workers. Yet he saw nothing in Catholic tradition to justify restrictions and limitations of ownership implicit in contemporaneous movements of worker participation. Never formally presented as an encyclical, his was a minority opinion among the many Churchmen with views more liberal and expansive.


It is against this backdrop that we undertake an analysis of Jewish work values as they emerge in classic text. These will be derived from Hebrew Scripture, the Talmud and its commentaries, the medieval codes and the collections of Rabbinic responsa, the approximate equivalent of case law and legal findings developed by leading religious thinkers over the centuries. Particular emphasis will be given to the balance between work and religious study as core social values.

In the Bible labor is introduced as a scourge and punishment to mankind (Genesis 2:15, 3:16-19). Adam and Eve are placed in the Garden of Eden to work and to protect it, restricted only in that they refrain from eating of the Tree of Knowledge of Good and Evil. Once they transgress the Lord’s will by eating the forbidden fruit, they are expelled from the luxurious garden wherein their physical needs were divinely provided. Moreover, for Adam’s personal iniquity, the land would be ever cursed before him so that he earn bread only “by the sweat of [his] brow.” Despite his ministering, the earth would bring up only thorns and thistles.

Among those seeking inspiration from, and writing commentary to this passage many derived that among Jewish values, therefore, work itself was a curse and a punishment. The need to toil was born in evil and rained upon haman only the sins of his forebears. No longer could man assume that the Lord would provide of His bounty alone. No longer could man reach out and pluck what nature had prepared. For his sin, his consumption now would depend largely upon his own efforts. He would eat, but only with great exertion.

As an example, consider the following Talmudic lament:

Rabbi Shimon ben Eliezer said, have you seen beast or fowl with a craft? Yet they are sustained without pain. Were they not created only to serve me? And I who have been created to serve my maker, should I not certainly subsist without pain? But I have turned my deeds to evil and my subsistence is curtailed (Kedushin 82a).

In its natural state, life for man should be as effortless and carefree as it is for the beast or the bird of the field, who earn their bread with neither trade nor craft to support them. The effortless bounty he rightly deserves is curtailed and because of his evil, he is subject to arduous labor.

Yet normative rabbinic sources largely ignore the passage while considering work in the social scheme. Neither a curse nor purely an instrumental necessity of subsistence, they look upon it as an ennobling facet of moral development. To affirm this proposition, a recent study of some 900 “work related statements” from the Babylonian and Jerusalem Talmud, the Tosefta and 19 compendia of the Midrash were reviewed and categorized. A quantitative content analysis was executed to discern the norms and values represented by these statements. The results suggest that of all “ideational references” to the value of labor, 84% were positive, reflecting a “high esteem of work and craft.” Evidently this was intrinsic to labor and not merely a concession to its role as a condition for sustenance.

A brief sampling of such statements is in order. Thus labor was so central to the rabbinic scheme for living that the two, work and life, were often equated in literary and poetic form. We read in Moses’ famous soliloquy at the close of a life’s career as leader and lawgiver:

I bring the heavens and the earth as witness that life and death have I placed before you, blessing and curse. And you shall choose life so that you and your children may survive (Deuteronomy 30:19)

Of the variety of messages the rabbis might have derived from the ringing call “choose life,” it is telling that Rabbi Yishmael understood it to mean choosing a trade or a vocation (Talmud Yerushalmi:Peah 1.1; Kedushin 1:7). To earn one’s keep by gainful employment is a central tenet of normal existence set in the crossroads between life and death, between blessing and curse. It was to be understood as “livelihood” in its literal sense, a mode for living.

Rabbi Yehudah and Rabbi Shimon both declare “great is work for it brings honor to its master” (Nedarim 49b) while Rabbi Yirmiah proclaims its value more dear than noble ancestry (Bereshit Rabba 74:12). In that vein, consider the following from Rabbi Hiyya ben Ami in the name of Ulla:

Greater is one who benefits from the work of his hands than he who stands in fear of heaven. Regarding the fear of heaven it is written: “Happy is the one who fears the Lord” (Psalms 112:1). However, in regard to the work of one’s hands it is written: “If you eat by the work of your hands happy are you and it will go well for you” (Psalms 128:2). Happy are you in this world and it will go well for you in the world to come (Berachot 8a, also Avot 4:1).

The reference is curious. Rewards attributed to the “fear of heaven” reasonably accrue in the spiritual or mystical realms of the World-to-Come. Those attached to self-sufficiency should garner extra benefits in the more material climes of our mundane present. Yet the rabbis chose to understand these texts in reverse. The extra promise “that it shall go well” for one who toils on his own behalf, reflects wellbeing in the celestial regions of eternal paradise.

The dissonance concerned Rabbi Shmuel Ideles, whose commentary expands our point. He relates the story of Rabbi Hanina Ben Dosa (Ta-anit 25a) a saintly soul whose godliness was matched only by his indigence. At his wife’s behest, the rabbi prayed that he and his family be adequately sustained through the mercy of heaven. His prayers were answered when he mysteriously discovered a golden pillar whose sale would support them for many years.

Soon thereafter Rabbi Hanina is visited in a dream in which he sits among the saintly and pious of all ages around golden tables, imbibing the spirit of the Divine. To his shock, however, his table is absent a prop, the very golden pillar that was bequeathed to support his family. Though his petition was just, his stake in Paradise was diminished nonetheless. Again at his wife’s behest, he prays that golden pillar be returned to Heaven. They would live in hunger and want rather than compromise their eternal rewards in the hereafter.

From this Rabbi Ideles infers the moral lesson embedded in our dictum. One places his eternal rewards at risk when piety forces dependence upon the largess of Heaven. By contrast, he who provides for himself assures that his faith and good deeds remain intact and stand him in good stead. To be self-sufficient, therefore provides a spiritual benefit even over the fear of heaven. Beyond a mere prescription for comfortable living, it stands akin to a religious obligation.

Moreover, the Talmud holds parents responsible to properly train and prepare their children for successful lives. Among the essentials in this relationship are the obligations to see that a child marries, and to teach him a trade. To be negligent is tantamount to training one’s child to be a thief (Kedushin 29a, 30b). Yet, a discordant note is sounded. At the very close of the volume that houses much of this discussion, Rabbi Nehorai asserts:

I would leave all the trades in the world and teach my son nothing but Torah. The trades will not stand for him except in his youth. In his elder years he will be suspended in hunger. Not so Torah which will stand for him in his youth and give him future and hope in his old age (Kedushin 82b).

Consequently, the Rabbis of the Talmud were very clear about the place of work in the Jewish scheme. It must never become an obsession, the organizing principle of life. The accumulation of wealth is no sin, but Weber cum Calvin notwithstanding, neither is it a modality by which righteousness is evaluated. Significance, permanence and fulfillment is to be found outside the workplace, through study, prayer, acts of kindness, empathic behavior, probity and compassion. As a general rule, therefore, they advised that one teach his child a clean and simple trade that will overtax neither his energy nor his integrity.


Apart from the choice of a career, exertion in its pursuit, and personal piety, fate and fortune also were considered important ingredients of prosperity. Thus the sage Rava tells us that “one’s life span, children and prosperity do not depend upon personal merit but rather upon mazal” (Moed Katan 28a). Not easily defined, mazal popularly connotes luck or fate though, more precisely, it refers to the astrological signs ascendant on the day and at the hour of birth. In Rava’s view, therefore, the most fundamental elements of life — longevity, fecundity and prosperity — were controlled less by man than by the stars, matters of simple and inalterable fate.

Despite lively discussion and protest to the contrary, many Talmudic commentaries were unwilling to part with the idea that mazal, this peculiar form of Jewish fate exerted a profound influence on these vital aspects of life. Yet to claim that there was no recourse from what had been ordained at birth flew in the face of deeply help values of free choice and personal accountability. To ease the conflict, they argued that the broad social patterns of life along with highly personal and individual dispositions were predetermined. However, given their unique relationship with the Creator, for Jews extraordinary effort in the form of prayer and supplication, joined with personal morality, religious study and acts of kindness and compassion, may avert misforordained.

Their positiwas reinforced by such references as the following:

What shall a man do so that he may become wealthy? Let him increase his business activities and trade. Let him buy and sell honestly and faithfully. Many have done such and it has not helped. Rather, let him beg for mercy from the One with Whom all wealth resides (Niddah 70b).

What emerges therefore, is a manifold formula whereby assiduous labor and honest trade combine with personal merit and with mazal to determine material success. Pursuing one to the exclusion of the others is a prescription for disappointment and failure. Moreover, hard work alone is no guarantor of wealth. In fact it may actually hinder success if its overemphasis becomes an obstacle to moral and spiritual improvement.

Similarly, merit and supplication may avert the penury or misfortune already ordained by the stars — but, then again, it may not. Therefore, one is warned to “increase his business activities,” i.e. to work hard and honestly. Yet he is not to lose faith if hard-working saints spend their lives in poverty even as the evil prosper. Mazal remains part of the mix, and according to some, the determining factor. A fourth element, the Lord’s compassion remains available for if all other paths prove insufficient.

For parents to teach their children a trade that is simple and clean takes on fuller meaning in this context. Given elements of prosperity cannot be controlled nor can all misfortunes be averted, no matter how fervent the prayer, how sincere the penance. Therefore encourage children to choose a trade that is simple and clean, neither degradinor exhausting, a trade that leaves ample time for religious reflection and study, a trade that will become neither life’s central focus nor its driving force. Early on, teach them that poverty is a function of neither sloth nor indifference. A successful life is marked not by wealth and material acquisition but by spiritual values and personal morality.


Notwithstanding the honor accorded work as a vital aspect of successful living, at the roots of Jewish tradition reside dreams of a life devoted to the full-time study of Jewish texts, exclusive of mundane and material responsibilities. One well-known Talmudic passage used to open the daily prayers, suggests that the study of Torah is equal to all other commandments combined (Peah 1:1, Shabbat 127a). Over time, special provisions were made to accommodate those for whom “Torah is their profession,” including public support for their families so that they may pursue their studies unburdened by worldly concerns. Indeed the Talmudic definition of a large city is one in which there were at least ten batlanim, or “free-riders, ” who would spend their days in study and reflection, also performing various communal functions and assuring that there was always a minyan, a religious quorum for prayer (Megilah 5a).

However, the proper balance between work and study and the nature of public support for those who chose Torah as their “profession” remains a matter of serious controversy to this day. The Talmud records a lively debate (Brachot 35b) that speaks directly to the issue. It is based in their reading of the biblical verse “and I shall give you rain in its season, early and later, and you shall gather your grain,” (Deuteronomy 11:14) as against,

and the words of the Torah shall not be absent from your mouth and you shall be immersed in them day and night so that you guard all that is written therein. For then your path shall be successful and you shall grow wise (Joshua 1:8).

The interlocutors are bothered by the apparent contradiction. Can one gather grain, both literally and figuratively toiling at his work and yet still remain constantly immersed in the words of Torah? Rather, Rabbi Yishmael concludes, deal with these words in “the way of the world,” i.e. these obligations ought not to be understood literally. Work must be combined with study. Otherwise, to paraphrase Rashi’s commentary, one will become dependent upon the charity of others and neglect his study entirely.

Rabbi Shimon ben Yochai thinks otherwise:

Can it be that a person shall plow in season and plant in season and harvest in season and mill in season and plant in the wind? What shall become of Torah? Rather when Israel fulfills the will of the Lord their work will be performed by others …When Israel does not fulfill the will of the Lord then they must perform their own labor…and more, the work of others must they also perform.

Several points are in order. Rabbi Shimon’s position evokes the plight of primordial Man in the Garden of Eden. As there, here too worldly toil is cast as a form of punishment heaped upon him for his sin. If Israelites would but follow the ways of the Lord by devoting their time to the singular study of His holy books, they would be freed of such mundane obligations. Absent this commitment menial labor emerges to fill the breach.

Rabbi Shimon’s impatience with what Rabbi Yishmael terms “the way of the world” is clear from anecdotes related elsewhere. The best known (Shabbat33b) illustrates our point with powerful imagery. We are told that Rabbi Shimon was overheard making disparaging remarks about the Roman overlords of Judea. To flee the authorities, he sought refuge first in his study hall and then in a cave. There along with his son Rabbi Elazar, he devoted himself exclusively to Torah study for twelve long years, sustained by God’s compassion in the miraculous appearance of a spring and a carob tree.

He and his son emerged from the cave only after receiving word that his persecutors had relented. Forced to acclimate themselves to normal human society once more, the two rabbis were shocked as farmers and workman went about their daily business, plowing, sowing and harvesting. “They forsake eternal life and occupy themselves with passing needs,” Rabbi Shimon said, horrified.

There anger so roiled that by the Talmudic account, everything caught in their gaze burst into flame. In short order, a voice boomed from the heavens, demanding that they return to the cave lest they destroy the world by their passion and their righteous indignation. Rabbi Shimon was not yet ready to accept the demands placed upon those less exalted.

He and his son went into seclusion once more, their confinement no longer a sanctuary from Roman oppression but more a form of divine penalty. They remained in the cave for an additional twelve months, the sentence place by tradition upon the most evil in Purgatory. When they emerged once more, they again encountered peasants and villagers pursuing their livelihood. As before, flames burst forth from Rabbi Elazar’s penetrating glance but this time his father rushed to heal those wounds.

“The world has enough with you and me alone,” Rabbi Shimon told his son, suggesting that not everyone need copy their model of staunch discipline and rigor. Subsequently they spied an old farmer, gathering myrtle from his harvest for the Sabbath. His simple piety, combining the work ethic with devotion to the Lord’s command, assuaged them and calmed their fiery spirit. Now the two rabbis could re-enter society without undermining its very foundations.

Evidently, Rabbi Shimon, a man of unbending principal and strict demeanor, was initially unable to merge fealty to God’s will with the “way of the world”. The fire in his soul threatened to consume the natural order, and he was banished to the cave by nothing less than divine decree. One with such a singular commitment, no matter how pure and sanctified, must live out his years divorced from society. It is no surprise therefore that for Rabbi Shimon if one plows and sows then “what shall become of Torah?”

Yet his Scriptural reading disquiets the commentaries. For them, it is ironic to claim, as he does, that the verse “and you shall gather your grain,” is meant as a warning or a penalty. Both from its use elsewhere on the very same Talmudic page, and from the verse that immediately precedes it, the phrase is clearly meant as the promise of reward to those who “shall surely listen to My commandments.” How can Rabbi Shimon consits meaning to the contrary?

Inan attempt to make peace with his assertions, they conclude that for Rabbi Shimon too, the phrase promises reward, albeit an imperfect one. Righteousness incomplete condemns one to “gather his own grain,” distracting him from the more elevated pursuits of study and prayer that should properly occupy his time. By contrast, those of impeccable faith and conduct shall have others to toil on their behalf.

Issuing no comment on the cogency of these claims, the Talmud (Berachot 35a) draws conclusions grounded in common experience. Abaye declares that many have followed the advice of Rabbi Yishmael and succeeded. By contrast, of those who followed Rabbi Shimon ben Yochai many did not. As a practical matter the Talmud seems to suggest that a balanced relationship between Torah study and gainful employment is a more likely recipe for personal success. Rabbi Shimon’s strictures are reserved for the very few. One is well advised not to pursue such a path, lest he be undone by his own presumptions.

Finally, it is appropriate to conclude this facet of our discussion with two well-known citations from Avot, an eaTalmudic collection of ethical teachings and homilies that will figure handily in our later analysis. First,

Rabban Gamliel son of Rabbi Yehuda the Prince said, better is the study of Torah with derekh eretz, for the effort expended in the two will keep sin out of mind. All Torah that is not accompanied by work ultimately will be nullified and cause sin (Avot 2:2).

As above, derekh eretz, literally the way of the world, is a euphemism for employment and livelihood. Here Rabban Gamliel advises that when pursued in tandem with study, both are strengthened. Unlike Rabbi Shimon above, there is no consideration even for the few that may succeed at a life of study. Work is a necessary component to successful religious fulfillment. Study alone will be nullified. Ironically, it even may lead one astray.

Commentaries support the point by noting that one searching for salvation solely by his learning soon will be left with no sustenance. He may come to abandon his studies and depend upon gambling, thievery, and deception for his bread. Beyond this, Rabbi Zadok tells us:

Do not use them [words of Torah] as a crown by which to be glorified nor a shovel with which to dig. And so Hillel would say “one who uses the Torah as his trade shall be removed.” From this we learn that any who derive benefit from the words of Torah remove their lives from the world (Avot 4:5).

Quite apart from encouraging a life program that combines gainful employment and religious study, this source looks with disdain upon those who would support themselves through their study. The words of Torah must remain pristine and pure, pursued for intrinsic value and not as a tool with which to justify one’s keep. To do otherwise demeans their sanctity and “removes” one from the world. In a parallel sentiment, students are warned not to seek honor or tribute for their wisdom, never learning so that others might call them master and they spend their days in the academy (Nedarim 62a). As we shall demonstrate, the sentiment grounded in these texts helped fuel the next stage of our debate.


The growing controversy over these alternative routes to successful living continued among later Jewish scholars. For example, following the path defined just above, Maimonides minced few words in expressing his utter disdain for those who accept public support so that they may devote themselves exclusively to their learning.

Whomsoever has in his heart that he shall indulge in the study of Torah and do no work but rather be sustained from charity, defames the Lord’s name, cheapens the Torah, extinguishes the light of faith, causes himself ill and removes himself from the world to come. For it is forbidden that one benefit from words of Torah in this world…

…all Torah that is not accompanied by work will be nullified and end in sin. Ultimately such a person will steal from others. One is at a high level if he is sustained by the efforts of his own hand, a characteristic of the pious of early generations. In this he will merit all the honor and good of this world and the world to come, as it is written, “If you eat by the work of your hands happy are you and it will go well for you” (Psalms 128:2). Happy are you in this world and it will go well for you in the world to come.

In his commentary to the words of Rabbi Zadok, he enumerates the many scholars and sages who performed menial labor rather than accept philanthropic aid. They saw no difficulty in suspending their study temporarily so that they might labor on behalf of their families and households, always remembering that work was transitory in life while Torah was its foundation. Those who bring evidence to the contrary, Maimonides concludes, are “insane and confused.”

His argument and the passion with which it was declared raised a storm of protest. Rabbi Yosef Caro, in his Kesef Mishneh commentary to Maimonides, strained to refute the master’s claim, point by point. From earliest times scholars sustained themselves through their learning, he countered, whether as students, teachers, or religious functionaries. To be sure, those who enter the field only to reap its benefits were to be condemned, alongside those with the means to support themselves but who accept charity nonetheless. However, those devoted to religious study purely “for the sake of heaven” deserved no such castigation. The community was obliged to support them.

He concludes his lengthy discourse by noting that practice and usage should serve as the arbiters of tradition, guiding our actions at every turn. Perhaps the sages of prior generations agreed in principle that students not reduce themselves to dependence upon charity and the dole. Yet in contemporary times a preoccupation with the demands of trade or profession would cause Torah learning to be forgotten and abandoned. Else why were there so many examples, both before and since, of precisely that practice which Maimonides seeks to defame.

Rabbi Caro was joined by Rabbi Shimon ben Tzemach Duran, a fifteenth century scholar of Spain and North Africa. Scandalized by the aspersions being cast upon generations of scholars properly maintained by communal funds, he claimed that Maimonides:

broke his good senses and miscast all the scholars and rabbis of his time and those who preceded him. And because he spoke in anger he came to err and to call them insane. Is a prophet insane, or is the man of God’s spirit?

It was his [Maimonides’] good fortune to be close to royalty and honored in his generation, and because of his medical wisdom he was not required to accept fees from the communities he served. What shall rabbis and sages do if they have not reached this quality? Shall they die in hunger, demean their honor and remove the yoke of Torah from their backs? That is not the intent of Torah, the commandments or the Talmud.

Notwithstanding the zealous indignation expressed by both sides, the less passionate rulings of their contemporaries generally reinforced the obligation of scholars to seek their own livelihood and avoid becoming wards of the community. Representative examples of these findings deserve brief digression. One, dating to the 13th century, deals with a learned scholar who was libeled by a member of his community who took his allegations to the Gentile authorities. Upon investigation the claims made by this scoundrel were proven false. In the action that followed, the scholar sought damages for his defamation.

The case came before Rabbi Asher ben Yehiel (ROSH), of Germany and Spain who found for the claimant. The matter of setting specific financial liability turned upon his status as a scholar, i.e. one who was fully devoted to his Torah studies. To forestall any further aspersion against the him, Rabbi Asher provided the following definition of a scholar:

That his Torah is his craft and that he sets regular periods for Torah and cancels none of his studies, except for his maintenance. For it is impossible for him to learn without maintenance, for “if there ino flour there is no Torah,” and ” all Torah that not accompanied by work ultimately will be nullified and cause sin”… The rest of the day, when he is free and he is not required to seek after his maintenance, he returns to his books and studies and he never strolls in the markets and roadways but for his livelihood and that of his household. Nor should he labor to accumulate much money. This I call a scholar.

Though afield of the petition, Rabbi Asher has provided us with a clear statement of the responsibilities of one who dons these exalted robes. Of course, he expected to commit himself to Torah study, but not to the exclusion of his mandate to support himself and his family. If he wasted none of his time, nor did he allow such pursuits to overtake him, his status was secure and he deserved the financial redress appropriate to that station.

A second communal controversy later sheds similar light upon the work values held dear even for one pursuing the life of a scholar. Judging from the number of rulings issued on the topic and the fervent zeal evident in their language, the matter plainly engendered much vehemence on both sides. Throughout the Middle Ages Jewish leadership was much pressed to raise revenues to pay exorbitant and abusive taxes heaped upon them by gentile overlords, both lay and ecclesiastical. They sought funds from every imaginable source, and that included the income of local rabbis and scholars.

However, longstanding Jewish tradition and practice generally exempted members of the clergy from taxes and other forms of revenue generation, regardless of their own financial holdings or business pursuits. Still communal authorities held that, Rabbi Asher’s dictum notwithstanding, a scholar’s life was to be devoted totally to his Torah studies, excluding any other activities, especially those that generated income. One who pursued gainful employment in the secular marketplace could no longer claim that “Torah was his trade.” He was not a genuine scholar and he should pay his fair share.

For their part, rabbinic thinkers staunchly supported the clergy exemption and it is here that the affair becomes relevant to our discussion. They consistently defended the pursuit of financial self-sufficiency on the part of Torah students as an equally legitimate aim for their life’s pursuit. In no way did it diminish their claim to membership in the heady cadre of those for whom “Torah was their trade.” For them it was self-evident that scholars had a moral obligation to support themselves rather than depend upon charitable assistance. The writing of Rabbi Mordechai HaLevi of 17th century Egypt eloquently represents these opinions.

The studies that deal with the exemption of Rabbis from tax and other forms of levee, how were they expressed? Did they refer to those who go begging from door to door? Did they speak of ministering angels that neither eat nor drink and have no bodily needs? It is written openly that one should do all manner of work, even that is strange to him rather than depend upon others…

From all the studies we learn that the Talmudic sages exempted rabbis absorbed in Torah, not meaning that they did not toil after their food and sustenance and the sustenance of their household. Rather, they exempted those who fulfilled the verse “and you shall be immersed in [Torah] day and night,” according to their power and their abilities. They exempted those who did not suspend the words of Torah except to fulfill amitzvah, to seek after their food and their sustenance and the sustenance of their household and their food.

His sentiments echo those earlier expressed by colleagues and predecessors from Austria, France, Turkey, Greece and Palestine over a period of 300 years.


The debate and the controversy notwithstanding, mainstream Jewish attitudes reflected in normative codes of practice appear fairly consistent. Thus Rabbi Yacov ben Asher Ba’al Haturim in his code of religious laws and traditions cites Maimonides almost verbatim, insisting upon financial self-sufficiency for scholars and students alike. Rabbi Yosef Caro, consistent with his notes on Maimonides cited above, softens this ruling, in his Bet Yosef commentary to Rabbi Yacov’s code. Again he argues that scholars are within their right to accept public support even as communities are well advised to provide it. Yet he concedes that as a sign of piety and godliness, those able to see to their own material needs should refrain from accepting public funds.

However, in his own collection of laws and traditions, Rabbi Caro takes still another path. Following the Ba’al Haturim, he employs two categories to deal with the topic at hand. In one he considers customs and practices regarding the study of Torah, educational methodology and the relationship between students and their instructors. There, despite his previous defense of publicly supported scholarship, he simply ignores the matter of study and employment entirely.

His reserve here notwithstanding Rabbi Caro takes a more definitive stand on the issue in its other incarnation relative to the daily regimen of Jewish religious observance. His thrust seems to contradict his writings elsewhere as he rules that after fulfilling the ritual obligations of prayer and supplication each morning, the believer is obliged to leave for the job. “Torah, which is not accompanied by work,” he writes, quoting from Avot cited above, “will ultimately be nullified.” He closes with a stern warning that all one’s dealings must ever be honest and faithful.

The decision is a rather straightforward statement in support of gainful employment from one of the primary advocates of undistracted Torah study. Still modern authorities have interpreted it in ways that allow the millennial debate to continue. On the one hand, Rabbi Yechiel Michael Epstein understands it in simplest terms. Citing Rabbi Caro verbatim and quoting earlier sources, he adds:

And many have been mistaken in this and have said that a vocation is demeaning. Yet many Talmudic sages were workmen and we have read in the Midrash that work is more dear than distinguished lineage…. Still, one must never allow his work to be primary and his Torah to be temporary, but rather his Torah shall be primary and his work temporary and thus both will be sustained.

And it seems to me that this is only for a scholar whose main dealings are in Torah. But for an average householder this does not apply. For an average householder there is no obligation other than to establish periods for study…[but a scholar] is obliged to study Torah all the day and all the night except for what is necessary to seek his livelihood.

Notable is his differentiation between the life’s mission of the scholar who must enforce Torah study as the core of his existence, and the householder, for whom there is no such obligation. Yet, even the scholar must take time from his studies to seek the material needs of his household. Elsewhere he argues that Maimonides himself would support a salary and financial emolument for those whose wisdom and skill merits their appointment as communal functionaries and religious leaders. In effect, this has become their profession.

However, Rabbi Yisrael Meyer Ha-Cohen understood Rabbi Caro’s ruling in favor of gainful employment quite differently. In his Beur Halakhacommentary, he agrees that the workaday world is an appropriate venue for the large majority of otherwise pious and learned individuals. However, in a gloss evocative of Shimon Ben Yochai, he declares that in each generation some few stand on a spiritual and intellectual plane so exalted that they merit the right to devote themselves solely to Torah, depending upon the Lord for their livelihood.

He adds an important caveat, however. Even those who reach for this exalted plane may pursue their particular destiny only if they find patrons and sponsors who agree in advance to support their exclusive commitment to Torah. To buttress his case, Rabbi Yisrael Meir cites references to a similar relationship said to exist between Yissachar and Zevulun, sons of the Biblical Patriarch Jacob. A nuance not unbut rarely invoked in prior debate over this issue, the analogy hbecome a rally point in its contemporary manifestations.

A cursory glance at the text in which this famous relationship is rooted sheds light on our discussion. The rabbis appear troubled that in two separate Biblical passages the tribes of Israel are enumerated out of their usual order: the elder Yissachar is listed only after Zevulun the younger, due to their most unusual partnership. By prior arrangement, the descendants of Zevulun pursued commercial endeavors, while the families of Yissachar committed themselves to Torah study, supported through the income earned by their cousins of Zevulun. The Rabbis conclude that reflecting their relative importance to this partnership, Scripture ignores their order of birth and gives priority to Zevulun, the tradesman and merchant, over Yissachar the scholar.

In addition, Rabbi Yisrael Meir refers us to the Tribe of Levi as yet another early model for today’s scholars. Exempted from civic obligations in order to perform public and religious functions in ancient Israel, it was for them to serve as “the army of God.” By consequence they were not apportioned a geographic base but were dispersed in cities and religious centers throughout the country, supported by the tithes and taxes mandated in Scripture. To make his case he cites the following from Maimonides:

And not just the Tribe of Levi alone but each individual from all parts of the world whose spirit moves him and by his wisdom he separates himself to stand before the Lord to serve and to know God and walk honestly before Him. He shall relieve himself of the yoke of the many demands that people seek. Therefore is this one sanctified among the most holy and the Lord will be his portion and his heritage forever. He shall merit in this world that which is sufficient for himself, as did the Priests and the Levites.

A careful reading of Maimonides, however, provides no indication that he saw exclusive Torah study at public expense as the function of the Levites of old. It is nowhere mentioned in the chapter cited, it flies in the face of his vituperation against such practices, and none of the primary commentaries to his work, or subsequent scholars for that matter, infer any such allusion.

The very point seems to have disturbed Rabbi Dovid ibn Zimri who provides us with the singular relevant gloss. In his notes to this passage, Rabbi Dovid adds “the Holy One will enable him to profit from the world that which is sufficient for himself so that he shall not thrust himself on the public.” This clearly runs quite to contrary of the analogy being struck between the ancient men of Levi and those who seek to devote themselves exclusively to Torah study at public expense. At least in the mind of Rabbi Dovid ibn Zimri, Maimonides means no license here for their public support.

Finally, there is a small body of empirical data that provides a unique test of these issues and the degree to which they may be salient among Jewish workers today. The results take us full circle, evoking the sentiments with which we began this exploration. A comparative study of work values in Israel, Germany and Holland, the latter two nations with large Protestant populations, found that for German and Dutch workers there were clear positive relationships between work centrality and religious commitment, suggesting the positive influence of Protestant ideals on work values. Among Israelis, however, religious conviction and religious education were negatively correlated with work centrality, suggesting that Jewish religious influences lead in an opposite direction.

Similarly, the obligation to work and its intrinsic value were important to religious respondents from Germany and Holland, but only among non-religious respondents from Israel. To the extent that Jewish religious culture can be isolated in a cross-national study it appears to influence adherents in a direction opposite to the norms of the Protestant Work Ethic.

Moreover, workers in the survey were asked:

Imagine that you won a lottery or inherited a large sum of money and could live comfortably for the rest of your life without working; what would you do about work – continue or stop working? In Israel, only 10.3% of the non-religious respondents said they would stop working, whereas 21% of the respondents with strong religious convictions show such a desire. When the latter were asked, “Why would you stop working?” their overwhelmingly prevalent reply was “to practice and study the Torah.”

The broad majority of all workers, whatever their religious sensibilities, report that should fortune smile upon them in this unexpected manner, they would continue on the job. Apparently work values remain central for them, despite their ideological or spiritual differences. It is revealing, however, that more than twice as many “with strong religious convictions” say that if they were rich they would forgo their work in favor of religious study and practice.


A summary of our discussion must take us to where we began. There is much in the Jewish attitude toward work that stands in common with both the Protestant Work Ethic and with Catholic Social Teaching. Like Calvin, many rabbis saw intrinsic religious value in labor as an expression of human accomplishment and mastery over his environment. There was no evil in the accumulation of wealth and honest effort toward self-sufficiency was lauded as a boon to religious study and as a complement to the “fear of heaven.”

Yet there is little of the harsh determinism that emerges, especially in Weber’s treatment of Calvin. Economic status on its own is no indicator of righteousness and the power of fate may easily rearrange financial fortunes. Consequently, one is advised to attend to personal merit and prayer as ingredients for material success, and to accept the role of mazal as an unpredictable element in the mix. Better choose work that is simple and clean and which allows ample time and energy for religious and personal fulfillment.

By the same token, Jewish tradition shares with Catholic Social Teaching the concern for the worker as a weak and often vulnerable partner to the commercial relationship. Its inclination in favor of the laborer has been well documented as part of an attempt to create balance and equity in the marketplace. However, this does not suggest that the worker becomes a partner thereby to corporate decisions over capital, policy or the allocation of resources. Jewish thought retains its basic commitment to private property and the rights it implies. While work remains a central value in mainstream Jewish thought, it cannot be the core of personal identity, nor is there an inherent right of empowerment and self-determination associated with employment.

We also have demonstrated that over the centuries, the mainstream of Jewish thought has favored a life of balance between religious study and labor, for the large majority of its adherents. Indeed it questions the legitimacy of an exclusive devotion to the study hall if dependence upon charity and public support is the result. Yet, none of this should be interpreted as an attack on Torah study, per se.

After all, most everything that has been marshaled here is rooted in its sources, indicating, if nothing else, that the question of balance and priority has occupied interpreters of the tradition for tens of centuries. Surely, every culture and civilization makes special provision for its scholars and sages. Those committed to Torah study exclusively have always held a unique place in Jewish life and under the limits described above, their position should be no different in modern Israel and the Jewish communities of the Diaspora. Yet that may be precisely the point.

The mainstream of Rabbinic thinking sharply differentiates between the broad population and a sand select handful of scholars. The former expresses its religious devotion and fulfills its spiritual obligations in large measure by working with diligence and integrity, setting aside time for study and reflection as possible. Their commitment to honest, gainfulemployment is in no wise demeaning nor does it undermine their status among thefaithful of the Lord.

By the same token, the study hall as an exclusive domain, is reserved for the very few. Even those who have made a spirited defense of this lifestyle over the years could scarcely argue that it was intended as normative and modal for the broad population. It is hardly likely that they envisioned whole communities, the bulk of whose male population enters this pursuit virtually as an entitlement, with little consideration aptitude or accountability, and the bulk of whose female population will marry no one that toils for his bread. Nor did they suggest they one raise children to expect the same and that their sustenance be provided by involuntary taxpayers and unwitting philanthropists as a matter of public policy

Rather, the intellectual battle raged over the justification for taking any financial benefit from Torah, whether in return for service as a teacher or religious leader, or as an outright grant in the pursuit of religious study. Even those who supported the idea saw as a concession. Latter-day scholars, they opined, were simply inadequate to the task of earning their keep as they attempted to master their texts. It is a relatively recent claim, that intensive Torah study was a contribution to communal wellbeing and security or that it qualified per se for charitable support.

In this vein, the words of Rabbi Yisrael Meir HaCohen, often invoked in support of exclusive Torah study at public expense, deserve one more look. First, his gloss to Rabbi Caro’s ruling in favor of gainful employment is directed at the exclusive and exceptionally qualified. Moreover, he demands that even these few must seek out sponsors and patrons willing to underwrite their Torah study by prior arrangement, caring for the financial needs of their families on an individual and voluntary basis. Nowhere is life on the dole lauded or showcased as a model for the next generation.

His citation reinforces the point. Zevulun, the merchant, is given priority for his secular and material endeavors on behalf of pious Yissachar and his studies. Properly channeled, employment and commercial pursuit is held aloft here. Alongside those few groomed for exclusive study, well-intentioned students might well consider this second model, even as their instructors work to develop a new generation of “Zevuluns,” successful business leaders and professionals with a special sensitivity for Torah.


Dr. David J. Schnall is Herbert Schiff Professor of Management and Administration at the Wurzweiler School of Social Work of Yeshiva University.

* This paper is abstracted from the author’s forthcoming book, By the Sweat of Your Brow: Aspects of Work and the Workplace in Classic Jewish Thought(New York: Yeshiva University Press). It was completed during his tenure as Fulbright Professor and Senior Scholar at the Hebrew University in Jerusalem, 1999-2000. He wishes to express his deepest gratitude to the Fulbright Foundation for its kind assistance and generous support.

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During the 1999-2000 academic year Dr. Schnall served as Fulbright Visiting Professor and Senior Scholar at the Hebrew University of Jerusalem. He is an ordained rabbi and author/editor of 8 books and over 100 articles, essays and reviews dealing with professional ethics, Jewish issues and public policy.


1. Max Weber (1958) The Protestant Ethic and the Spirit of Capitalism. New York: Scribner’s; also Martin Rose (1985) Reworking the Work Ethic: Economic Values and Socio-Cultural Politics. London: Schocken; and A. Furnham (1990) The Protestant Work Ethic: The Psychology of Work Related Beliefs and Ethics. London: Routledge.

2. See e.g. David McClleland (1961) The Achieving Society, Princeton, New Jersey: Van Nostrand, and Paul Bernstein (1997). American Work Values: Their Origin and Development. SUNY Press.

3. James Davidson and David P. Cadell(1994) “Religion and the Meaning of Work. Journal for the Scientific Study of Religion 33(2):135-142 and Leonard Cushmir and Christine Koberg (1988) “Religion and Attitudes Toward Work: A New Look at an Old Question” Journal of Organizational Behavior 9(1): 251-262. Also see G. Hofstede (1983) “The Cultural Relativity of Organizational Practices and Theories”Journal of International Business Studies 14(2):75-90 and G. Hofstede (1993) “Cultural Constraints on Management Theories”. Academy of Management Executive 7(1):81-94.

4. For a review of these efforts see Jennifer Dose (1997) “Work Values: An Integrative Framework and Illustrative Application to Organizational Socialization” Journal of Occupational and Organizational Psychology 70(3):219-240; MOW International Research Team (1987) The Meaning of Work. London: Academic Press.

5. See James Lincoln and Arne Kalleberg (1985) “Work and Work Force Commitment: A Study of Plants and Employment in the US and Japan” Sociological Review 30(3): pp.738-760; F.S. Niles (1999) “Toward a Cross Cultural Understanding of Work Related Beliefs.” Human Relations 52(7): 855-867; A. Furnham, et al (1993) “A Comparison of Protestant Work Ethic Beliefs in Thirteen Nations.” Journal of Social Psychology, 133(2):185-197; Jing-lih Farh, Anne Tsui, Katherine Xin Bor-Shiuan Cheng (1998) “The Influence of Relational Demography and Quanxi: The Chinese Case” Organizational Science 9(4): 471-488; Lisa Hope Peled and Katherine Xin (1997) “Work Values and their Human Resource Management Implications: A Theoretical Comparison of China, Mexico and the United States.” Journal of Applied Management Studies 6(2):185-198; David A. Ralston (1997) “The Impact of National Culture and Economic Ideology on Managerial Work Values: A Study of the United States, Russia, Japan and China” Journal of International Business Studies 28(1): 177-208. Norman Coates (1987) “The “Confucian Ethic” and the Spirit of Japanese Capitalism” Leadership and Organizational Development Journal 2(3):17-23.

6. Gerald C. Treacy (1939) Rerum Novarum: The Condition of Labor NY: The Paulist Press; also Michael Zigarelli (1993) “Catholic Social Teaching and the Employment Relationship” Journal of Business Ethics 12(1): 75-82.

7. Michael Naughton (1995) “Participation in the Organization: An Ethical Analysis from the Papal Social Tradition” Journal of Business Ethics 14(11): 923-935; also Michael Naughton (1992). The Good Stewards. Lanham MD: University of American Press.

8. Bilha Mannheim and Avraham Sela (1991) “Work Values in the Oral Torah” Journal of Psychology and Judaism 15(4):252

9. Rabbi Shmuel Ideles, Agudot Maharsha: Berachot, 8a

10. See Tosafot:Moed Katan 28a s.v. elah be-mazalah;Tifferet Yisrael Kidushin 4:14 s.v. lefi zekhut; Tosafot: Shabbat 156a, s.v. ayn mazal le-yisrael; Rashi: Yevamot 70a, s.v. zachah mosifin lo and Tosafot: Yevamot 70a, s.v. mosifin lo; also see Tosafot: Kedushin 82a, s.v. elah ha-kol, Tosafot: Moed Katan 28a, s.v. elah be-mazalah and Agudot HaMaharsha: Moed Katan 28a, s.v. be-mazalah talia.

11. See Tosafot: Brachot 35b, s.v. kan bizman she-Yisrael, and Rabbi Shmuel Ideles, Agadot Hamaharsha: Brachot 35b, s.v. shene-emar.

12. Rabbi Ovadiah Bar Tenora, Avot 2:2 sv vechol Torah, Rashi, Avot 2:2 sv Sheyegiat, and Lesof, Rabbi Moshe Maimonides (RAMBAM)Perush HaMishnayot: Avot 2:2 and Rabbenu Yonah Gerondi, Avot 2:2 svechol Torah.

13. Rabbi Moshe Maimonides (RAMBAM) Yad HaHazakah: Hilchot Talmud Torah, 3:10-11 and Perush HaMishnayot: Avot, 4:5.

14. Rabbi Yosef Caro, Kesef Mishneh: Hilchot Talmud Torah, 3:10.

15. Rabbi Shimon ben Tzemach Duran Tashbetz, 1:146.

16. Rabbi Asher ben Yehel, Shelot U’Teshivot HaRosh, 15:10

17. Rabbi Mordechai HaLevi, Shelot U’Teshivot Darkhei Noam: Choshen Mishpat item 55 and 56.

18. See e.g. Rabbi Yisrael Isserlein, Terumat Hadeshen item 342; Rabbi Moshe Al-Shakar, Shelot U’Teshivot Maharam Al-Shakar, item 19; Rabbi Benyamin ben Matityahu, Shelot U’Teshivot Binyamin Zev, item 252; Rabbi Levi Ben Yacov Ibn Haviv, Shelot U’Teshivot Maharalbach, item 140; Sefer Kolbo item147. Also, see the rulings of Rabbi Yosef Caro Sulchan Arukh: Yoreh Deah 243:2 and Rabbi Shabbtai HaCohen, Siftei Kohen: Yoreh Deah 243:6-7.

19. Rabbi Yacov ben Asher Ba’al Haturim, Tur Shulchan Arukh:Yoreh Deah, 246, and Orach Chaim,156.

20. Rabbi Yosef Caro, Beit Yosef: Yoreh Deah, 246:21 and Orach Chaim, 156:1

21. Rabbi Yechiel Michael Epstein, Oreykh HaShulchan:Orach Chaim, 156:1-2.

22. Rabbi Yechiel Michael Epstein,Oreykh HaShulchan:Yoreh Deah, 246:39.

23. Rabbi Yisrael Meyer Ha-Cohen, Beur Halakha: Orach Chaim, 156:1. For other recent manifestations of the debate see, e.g. Rabbi Moshe Feinstein, Iggerot Moshe:Yoreh Deah, 4:36-37. Rabbi Moshe Feinstein, Iggerot Moshe: Orach Chaim, 3:111. Rabbi Moshe Sofer, Hiddushei Chatam Sofer: Sukkot 36a; Rabbi Ovadiah Yosef, Yechaveh Daat 3:75; Rabbi Mordecai Greenberg (1999) Henaheg Bahem Minhag Derekh Eretz. Yeshivat Kerem B’Yavneh and Abraham Steinberg and Fred Rosner (1996). “Sources for the Debate: Torah Alone or Torah Togethwith Worldly Occupation” Journal of Halacha and Contemporary Society, 32(1):65-9.

24. See e.g. Bereshit Rabbah 99, s.v. zevulun le hof.

25. Rabbi Moshe Maimonides (RAMBAM) Yad HaHazakah: Hilchot Shemittah VeYovel 13:13.

26. Rabbi Dovid Ibn Zimri (RIDVAZ) Hilchot Shemittah VeYovel, 13:12.

27. Itzhak Harpaz (1998) “A Cross National Comparison of Religious Conviction and the Meaning of Work” Cross Cultural Research, 32(2):143-170. See also Itzhak Harpaz (1999) “The Transformation of Work Values in Israel,” Monthly Labor Review 122(5):46-51 and Itzhak Harpaz (1990) The Meaning of Work in Israel: Its Nature and Consequences. New York: Praeger.

28. See for example, Aaron Levine (1987) Free Enterprise and Jewish Law. New York: Yeshiva University, Meir Tamari (1987) With All Your Possessions: Jewish Ethics and Economic Life. New York: The Free Press and David J. Schnall (1999) “The Employee as Corporate Stakeholder: Exploring the Relationship between Jewish Tradition and Contemporary Business Ethics” in Aaron Levine and Moshe Pava (eds.) Jewish Business Ethics: The Firm and Its Stakeholders. New York: Jason Aaronson, pp. 45-75.

Business Ethics of Wealth and Property

by Dr. Meir Tamari


It is impossible to talk about business ethics or business behavior unless the purpose and role of property and wealth are first made clear. A society where property is unimportant, or is considered something evil, will have no problem with business ethics at all. At the other extreme, a society where people believe that wealth is the sole purpose of human existence will find it almost impossible to maintain any form of economic morality; their obsession with wealth is so great that it will ride roughshod over any ethical system. The primary question, therefore, is, “What is the Jewish attitude toward wealth. Is wealth intrinsically evil? Is wealth something that is permitted? Is wealth something that is the be-all and end-all of men?”

In one of his anti-Semitic writings, Karl Marx depicted the Jew as a creature whose sole interest in life is the acquisition of wealth. This canard has been repeated by many anti-Semites, and sometimes, self-deprecatorily, by Jews as well. Intellectually, the main reason for this has been the ignoring, by Jewish and non-Jewish scholars, of authoritative Jewish sources, or even more prevalent, the misreading of these sources. All too often, the researchers’ own biases– pro-socialist, secular, nationalist, l9th-century liberalist– have led, willfully or innocently, to squeezing a Torah system into the straight-jacket of one of these social philosophies.(l) Today, a similar attempt is being made to equate Torah with the unlimited free market. The only way to define a truly Jewish attitude to wealth is to study Jewish sources in the light of Jewish law and the written works of the Torah scholars. The following mishnah or talmudic teaching from Ethics of Our Fathers serves as a basis for this study.


“There are four characteristics among people: One who says, “Mine is mine and yours is yours,” that is the mark of the average person; some say that is the mark [of the people] of Sodom. [One who says,] “Mine is yours and yours is mine,” [that is the mark of] an ignorant person. [He who says,] “Mine is yours and yours is yours,” [that is the mark of] a godly [person]. [One who says,] “Yours is mine and mine is mine,” [that is the mark of] an evil person.”

– Talmud, Ethics of the Fathers, Chapter 5, Mishnah 10

OUR MISHNAH talks about the characteristics of different types of people with regard to wealth. There is no mention of a system based on poverty, nor is there in Judaism any- thing particularly spiritual about being poor. This in itself is an admission that there is nothing wrong per se with earning, having, or keeping economic goods or financial assets.

Unlike the founders of other religions, the Forefathers were not poor people. The sections of the Torah dealing with Abraham, Isaac and Jacob, show that they were extremely wealthy men, with flocks of sheep and herds of cattle. So too, the Land of Israel, part of the bargain in the Abrahamic covenant made at the very inception of our People, is not a desert but a fertile place. The blessings showered upon the Jewish Nation for keeping God’s laws are all material ones, as are the punishments for violating them.(1) In their Promised Land, the Jews were not to earn their living by miraculous means, but in normal, prosaic ways. The manna stopped when they crossed the Jordan; they did not drink any more from the miraculous Well of Miriam, nor could they rely on the Divine Clouds of Glory to protect them any longer. In that Land, they had to build houses and dig wells, to plow, to sow and to reap.

Similarly, when the High Priest emerged from innermost chamber in the Temple in Jerusalem on Yom Kippur, the holiest day of the year, after obtaining salvation for the Jews and forgiveness of their sins, he recited a prayer which forms part of our present prayer service on that day. One would expect this prayer to be pure spirituality: thanks to God, thanks to the people for doing penance, and so on. Yet all the High Priest asked for was that God give the Jews a decent livelihood, which they would be able to earn honestly, and that they should not be dependent on other people for charity.

Actually, the possession of wealth presents a greater spiritual challenge than does poverty. Throughout Jewish history, from the earliest beginnings in Egypt up until the present day, one may perceive a cycle of events which clearly demonstrates this. The Jewish nation becomes prosperous, neglects its religious obligations, assimilates, and finally becomes subject to punishment and exile. In exile, it then suffers abject poverty and disgrace, slowly regains economic strength until it reaches prosperity, and the cycle recommences. In his farewell address to the People of Israel, Moses says, “But Jeshurun waxed fat and kicked…” (2) –sad but prophetic words.

Recognition of the spiritual issues flowing from the possession of wealth, even though economic activity is legitimate, is shown by the large number of Jewish laws associated with having, earning or spending money. Just as with man’s needs for food, sex, and clothing, so too, in regard to his material possessions, the Torah provides parameters within which economic needs may be satisfied and elevated. There is no Jewish textbook on how to make money, but there is a comprehensive framework for sanctifying the drive for wealth so as to make it holy. This framework encompasses the commentaries on the Torah, classical works on Jewish law, and the philosophical literature. No less important are the life stories of the sages and the rabbinic leaders of each generation, which in effect represent role models for the Jewish attitude towards economic life.

The Jewish legal treatment of wealth has created a Jewish economic person whose business affairs, despite the myths perpetuated by detractors and enemies, have been conducted according to the highest demands of morality and ethics. During the three days of darkness in Egypt, when all the wealth of Egypt lay unprotected before them, our ancestors did not succumb to the temptation to steal, and for this they were rewarded by the Egyptians when they left. (3) In the days of Mordechai and Esther in Persia, Jewish self-defense was untainted by looting. Throughout the Middle Ages, in both the Christian and Moslem worlds, the Jew served as banker and financier, a tradition continued into l9th-century Western Europe and even in our own day. Of course, one of the prime requisites of banking is the integrity and honesty of the banker– further evidence of the high moral regard accorded the Jew.

Our excerpt from Ethics of Our Fathers and the ensuing discussion are part, therefore, of a fabric which has clothed Jewish life and thought ever since the days of the giving of the Torah at Mount Sinai.


Actually, there seems to be nothing negative about this statement. All that this man is saying is that he respects his property, does not use it to injure others, and will not steal other people’s possessions. He undertakes to look after his property and expects others to look after theirs. Viewed in terms of present-day economic behavior, one would expect the rabbis to say, “That’s a very good person.” Yet all they could credit him with is “the mark of an average man”–not criminal, but not very exciting spiritually.

Even though the Torah has laws protecting property from theft and damage, Judaism never accepts the concept that there is unlimited private property. A person’s property is his, but not merely his. It is meant to provide for one’s needs and those of one’s family, but it is also meant to be used to assist others. This Jewish obligation to help others is not left up to the free will of the individual; it is not a question to be solved solely on the basis of compassion, mercy, or personal feelings. Just as prayer or sexual morality is not left to the judgment of the individual, to be observed whenever or if ever the spirit moves one, but is translated into permitted and forbidden actions, so too, assistance to the weak, the poor and the inefficient cannot be relegated to the sphere of individual conscience.

The community has the right to tax the individual for that purpose and to introduce legislation that forces him to part with some of his private wealth. The moral basis for taxation for this purpose lies in the belief that this is one of the reasons why God gives men wealth. The German Jewish 19th century scholar, Samson Raphael Hirsch, comments that the reason we are not allowed to take interest on money which we lend to other Jews is that God gave us such money so we should be able to help others. In a way, our money is not only ours, even if only morally, and for this reason, we are not allowed to charge interest for something we were given, inter alia, to give to others. (4)

Legal action alone, however, cannot create a moral and ethical society. It requires an educational basis and a commonly accepted value structure to be efficient and effective. One example, which demonstrates the spiritual purpose of Jewish laws concerning assistance to others, may be found in the talmudic order of Pe’ah, dealing with agricultural laws. Here, the Jewish farmer is obligated to leave part of his field unreaped for the benefit of the poor and the stranger. This positive injunction is repeated and expressed in the Torah in a negative form: “You shall not reap to the last edge of your field.” All recognize that the field is undoubtedly the farmer’s, yet the poor are given the legal right to harvest a corner of the field after he has finished harvesting the rest. The simple reason is to provide the poor with something to eat. That is obvious, yet the Sefer Hachinuch (written in 13th-century Barcelona, Spain), which provides ethical, spiritual, and ideological reasons behind all the mitzvot that God gave us, points out that there is more to it:

“God wanted the Jews to develop merits of mercy, that they should become accustomed to helping others, to develop an instinct to give away something which actually belongs to them. [This has to be done by continually teaching the practice of mercy. At the same time, the educational process alone is not enough to guarantee assistance to the poor. Education may simply create good but unfulfilled intentions.] Therefore, we are obligated to perform actions which will train us until these merits become second nature. A person who actually leaves the corner of his field for the poor acquires a generous soul; through this mitzvah he learns to be generous to people.” (5)

In Leviticus, the list of the festivals beginning with Passover and Shavuot is interrupted with the mitzvah of Pe’ah (leaving the corner of the field for the poor), even though there is no festival related to it, then continues with the festivals of Rosh Hashanah, Yom Kippur, and Sukkot. The discussion of Pe’ah occurs between the festival of Shavuot, the festival of the ripening of the first fruits, and Rosh Hashanah, the Day of Judgment. There is an important lesson concerning the Torah’s attitude to property to be learned from this intrusion of Pe’ah into the list of festivals.

On Shavuot, the festival of first fruits, one tends to be proud of seeing one’s economic success demonstrated by the first fruits of the year’s labor; one is very conscious of his ability to make money and confident in the use of his property. Yet these first fruits had to be brought to the Temple, and “viduy” (confession), in which the Divine origin of wealth is acknowledged, was recited. The next festival in the calendar is Rosh Hashanah, the day when God sits in judgement of the world. In between those two festivals, one emphasizing thanks for prosperity, the other an awe of judgment, another idea had to be introduced: the mitzvah of Pe’ah.

The Pe’ah is not the property of the owner of the field; he cannot harvest it and give it to somebody of his choice, as he can do with other forms of charity. The corner has to be left ownerless so that anybody can come and harvest it. In effect, Pe’ah is a rejection of the farmer’s private property rights. If the Torah did not teach that there was a certain necessity to waive his property rights, it could not bring the individual from the self-satisfaction of Shavuot, with its first fruits, to the humility of the Day of Judgment. (6)


The Torah relates that the people of Sodom “were evil unto the Lord, exceedingly,” (7) yet we are not told what they actually did. The Midrashim tell of their refusal to welcome guests and the punishments meted out in Sodom by the community to those, who in fact, were hospitable. “Yours is yours and mine is mine” is saying that in Sodom the people refused to acknowledge that they had an obligation to help others. In Sodom they said, “I do not care what happens to you, whether you are poor, or you are old or weak. While I will not steal from you, neither will I help you.”

There’s a Chassidic story about a man who was very pious and charitable and became wealthy. Gradually his charitable actions grew fewer, his contributions smaller. One day, during the festivals, he visited his Rebbe. The Rebbe took him to a window and asked, “What do you see?”

“I see people in the streets, men and women, young and old.”

The Rebbe then gave him a mirror and said, “Now tell me what you see.”

“What do you mean? I see myself.”

The Rebbe said, “Both the mirror and the window are made of glass. The only difference between them is that the window is clear and the mirror is backed by silver. Before you had silver, you were able to see other people’s needs and other’s problems. Since the glass became coated, you are only able to see yourself. That’s the mark of the people of Sodom.”

When an individual says, “What’s mine is mine and what’s yours is yours; I have no financial obligation to you,” society can exist. But when everybody says, “What’s mine is mine and what’s yours is yours,” that society has accepted a concept of absolute private property. In Sodom, economic evil went far beyond the selfishness or crimes of marginal individuals–the whole society became corrupt and had to be destroyed. It was not the individual act of inhospitality which characterized Sodom, but the collective refusal to utilize wealth to alleviate suffering. They refused entry to poor immigrants, but welcomed Lot, who was a wealthy man. This is a parallel to wealthy countries today, which have free immigration for “capitalist” immigrants, but turn away poor people seeking to better themselves, maintaining rigid immigration laws to prevent their entry. So the whole society of Sodom abandoned the concern for the unfortunate, and the inefficient. In the Jewish view, such a selfish society is doomed.

The effect of “what’s mine is mine,” however, goes beyond mere selfishness, individual and communal. When a society maintains absolute private property, it rejects the Divine source of its wealth and frees itself for widespread economic immorality since man sees himself as the sole owner of his property, until in fact the two become integrated. Then the acquisition of wealth by any means, moral or immoral, becomes a major purpose of his life, a lust to be satisfied at all costs. “What’s mine is mine” is the ideological preparation for a society in which institutionalized theft and legalized inhumanity flourish.

In the Book of Amos, the prophet talks about those who sell the poor for a pair of shoes.(8) Some commentators explain this to mean that they sell everything the poor have, even their shoes, or that they sell the poor themselves, even for something as cheap as a pair of shoes. The eleventh century Sage Rashi, however, understands the Hebrew word “naal,” shoe, to connote “to lock” “or to close” something, as distinct from “sandal,” which is open. He comments that the rich men did not steal the poor people’s fields; instead, they bought up the fields around them, then forced them to sell. So, too, in Sodom. The Medrash informs us that the people of Sodom were careful not to steal anything which was a “sheveh prutah”–the minimum value for legal action. Instead, each man, woman, and child took only one item from a field, until the farmer lost his whole crop. Perfectly legal perhaps, but immoral.


This attitude sounds basically like a very moral one, and indeed it has been the basis of many utopian seeking societies, including the Israeli kibbutz movement and European communist economies. While the sages did not see it as wrong, they maintained in the mishnah that it is not characteristic of the ideal Jewish economic society. They viewed it, in- stead, as the mark of an ignorant man, not evil or wrong but ignorant.

Proposing a society which rejects the concept of private property goes against human nature. Rather than attempting to destroy man’s selfish tendencies, Judaism has always aimed at educating and sanctifying man’s nature. Philosophically, attempting to destroy a selfish trait, rather than shaping it to operate in a spiritually elevated framework, calls into question God’s creation of these tendencies, as well as the Torah He gave to educate it. Practically, such attempts have shown themselves to be failures, usually creating new abuses to replace those they came to correct. The experience of the last fifty years has shown that changes in the economic system brought by socialism and communism in various countries do not eliminate moral problems. These changes have admittedly solved some social problems, but they have also given rise to other, no less serious moral issues.

Private property rights not only make for economic efficiency, as evidenced by the performance of free market economies relative to socialist ones, but also have been shown to be necessary for a viable economic morality. Morality presupposes rights and obligations. So private property rights mean that the individual is responsible not only for earning his wealth, but also for preventing it from damaging others, and for the way he spends it. In this way, the owner cannot escape responsibility for the social and communal effects of wealth, nor can he transfer this responsibility to some amorphous, group possession.

For example, the modern corporation represents a form of economic organization in which there is a separation of identity between the shareholders and the corporation, thus permitting such a transfer of moral responsibility. The result has been that shareholders feel they have no role in supervising illegal or immoral acts of the directors. So, too, in the commune, the average member, being in practice a non-owner, frees himself from bearing responsibility for the acts of the commune. Experience has shown, for example, that children in the kibbutz have no concept of personal charity since this need is cared for, like everything else, through the communal purse.

Private property also creates a direct link between earning and spending, the lack of which has been shown to create serious moral problems. The lack of such a link leads people to demand a standard of living which has no relationship to what they create. It makes the satisfaction of their wants a function of the acts of others rather than their own. Sometimes this may be the result of factors such as the pleasure of a government official or the decision of one’s peers. Such factors may often lead to injustice or, what is worse, the necessity of bribing the decision-making officials.

Similarly, although unemployment may be immoral, it has been found that removing this link through full-employment policies, which in effect disguise the unemployment, leads to people not working. People thus receive wages for a job they have not done, which is also immoral.

Before people can give charity to others or help others with their wealth, they have to own property so that what they are giving away is something of their own. The individual’s parting with wealth as a result of his own active decision means that he is consciously giving up that which is actually, legally and morally, his own. This means that he is able to overcome the human tendency of selfishness, of greed, of ignoring the needs of others. The overcoming or spiritual education of these negative traits is the basis of economic morality.


The voluntary renunciation of private property, lacking in the ignorant man, characterizes the godly personality while his ability to say, “Enough,” distinguishes him from the evil person. His saying, “Mine is yours,” separates him from the people of Sodom and places him higher than the mediocre. He does not abandon his property, but is willing to place it at the disposal of others. There is no idealization of poverty here, no otherworldly philosophy, but rather, a correct use of wealth.

The godly person’s statement is an imitation of God. God created the world, it belongs to Him, yet, in His kindness, He provides for the needs of all creatures. The talmudic Rabbi Simlai taught that the Torah begins with an act of kindness and ends with an act of kindness. It is written, “And the Lord God made garments of skin for Adam and Eve and clothed them” [Genesis 3:21], and at the conclusion of the Torah, “He [God] buried him [Moses] in the valley in the land of Moab” [Deuteronomy 34:6]. (9)

Yet there is more in the mishnah’s statement than mere acts of kindness and righteousness. He is prepared to give up claims against others, despite the fact that he is not legally obligated to do so. His business actions are “lifnim meshurat hadin”–beyond the demands of the law. Our Sages said that one of the reasons for the destruction of the Second Temple in 70 CE was that the people of that generation insisted on exerting the full measure of their legal rights. (10)

The most significant Jewish legal expression of this moral stance is the dictum ze nehene ve ze lo chaser–one has a benefit and the other does not lose [by a transaction]. (11) This dictum permits one to benefit from another’s property provided that the owner does not suffer a loss thereby. When Joshua crossed the Jordan River, the Tribes of Israel agreed to ten decrees. One of them was that a person could not be prevented from picking weeds (herbs) from another’s field; the one benefits from picking herbs for his own use, while the other suffers no loss, since they are worthless. If, however, the crop is meant for animal consumption, in which case weeds and herbs are used as cattle fodder, one is not permitted to gather them, since the owner suffers a financial loss.

The law of bar metzrah, whereby owners of adjacent property have the right of first option to buy when a neighbor intends selling his field, is another application of ze nehene. The neighbor has a benefit, since this gives him a larger unified tract of land with all the consequent efficiencies, while the owner suffers no loss, since he receives the market price for his field.

In all these cases, one person is doing another person a favor with his property. The people of Sodom, the rabbis taught, refused to do each other favors with their money, and whoever acts like them causes us to doubt their descent from Avraham.

What a contrast between this Jewish attitude and the property rights prevalent in our society, where laws of trespass forbid people to use our property, even when we suffer no loss from their use.

Modern examples of this dog-in-the-manger attitude are manifold. A few should suffice to show how being selfish, even when it does not cost anything, is very prevalent. In family-owned corporations, where various proportions of the share capital are held by the members of the family, it is often difficult for one member to buy shares from the others, even at their market price. Usually, the purchase of these shares would give him greater control, a benefit which the other members of the family are unwilling to grant him. The common solution is to go public, that is, selling the stock to anybody else but the family member. Similarly, owners of real estate find it emotionally difficult to offer their property to their neighbors because of the additional benefit the latter will enjoy, even though the sale is at market price. One of the reasons for registering corporations in the Caribbean Islands, Luxembourg, or the Channel Islands is to hide the true identity of the owners. Over and above the consideration of income tax benefits, there is the suspicion that were this to be common knowledge, it would hinder the activities of the owners. In many cases people would refuse to sell them real estate or stock in other companies, owing to the benefits that would accrue to them from the increased control.

By his declaration, the godly person is demonstrating that the real source of wealth is God, who gives this wealth to mankind under certain conditions and for certain purposes. This idea that one’s property does not primarily flow from one’s own cleverness, luck, or diligence, but is granted by the mercy of the Creator, appears in many of the mitzvot. One example should suffice here. Fruit of new trees are called orlah–“uncircumcised” fruit–until the fourth year. Just as a newborn boy must be marked with the covenant of Abraham by the removal of the foreskin, so too, the fruit of new trees, the addition to our economic wealth, have to be sanctified before they can be enjoyed. By waiting the required period which, so to speak, removes the orlah, we demonstrate that wealth flows from God.

Similarly, every seventh year–shmitah–the Jewish farmer is told to let his land lie fallow and to declare it ownerless, so that the animals, the poor, and whoever wishes to do so may eat of its fruit. Then in the yovel–the 50th Jubilee year–the land reverts to its original owner, once again demonstrating the Divine ownership.(13)

The rabbis said that one may not eat or have benefit from anything in this world without first making a blessing, thanking the real Source for it. (14)

Self-made men cannot really be pious since they ascribe all their success to their own greatness. Perhaps this is why the commandment of honoring one’s father and mother, an act between man and man, is placed in the Ten Commandments alongside those acts between man and God. It has been argued that honoring one’s parents expresses gratitude for one’s birth and for their contribution to our lives. This, in turn, is a prerequisite for being able to admit that there is a God and that everything, including our wealth, flows from Him. This is the mark of the pious and the godly.


Here, the thought process behind robbery and exploitation is presented. It is important to note that in describing the evil man, the mishnah tells us not of one who takes other people’s property, but only of one who considers other people’s property his own. This is paralleled by an injunction in the Ten Commandments, “You shall not covet,” which is also an injunction against a thought process.

Usually, the Torah is primarily concerned with actions, not thoughts. For instance, one has to give charity, not merely think that it is a good thing to do. Intentions not followed by actions are something society cannot control, nor are they easily detected by outside factors; it seems strange, therefore, that coveting, a frame of mind rather than an action, should be proscribed as a negative precept. In this case, however, the coveting of another’s property is actually the real beginning of immoral economic acts, since it is that need, that lust, that jealousy that leads one to steal or injure another’s wealth.

This may be illustrated from the story of the vineyard of Navot. (15) King Achav wanted to buy this vineyard and when Navot refused to sell it, he sulked, refusing to eat or drink, thus expressing his powerful lust for the property. To satisfy this lust, Navot was falsely accused and put to death, with his property reverting to the king. Coveting led to murder, and murder preceded theft. The thief’s punishment is, therefore, always twofold, once for coveting and once for theft, both realized when the thought is translated into action. This is an expression of the conviction that unless we have a moral attitude towards our neighbor’s property, we cannot have moral actions or a moral society.

There is a story in the Medrash that when Alexander the Great came to a certain foreign country, the people there asked him to listen to the following court case:

A man bought a field from another man and found a treasure in it. He argued that the treasure belonged to the seller since he had only bought a field, not a treasure. On the other hand, the seller maintained that the treasure belonged to the person who bought it, since he had sold him the field and everything in it.

The case was decided in a very Jewish way. The judge ruled: “The seller has a daughter and the buyer has a son, so let them marry and the treasure will become the dowry.”

Alexander was so surprised at the judge’s decision that his hosts asked him, “What do you think of our justice?”

“In my country a case like this would probably never even come to court, because the buyer would make sure that nobody heard that he had found a treasure. If, however, it did come to court, the roles would be reversed. The seller would argue, ‘I sold a field, I did not sell a treasure, and therefore the treasure belongs to me.’ The buyer would argue, ‘I bought a field and everything in it, and therefore the treasure belongs to me.'”

In reply to the question of how he would rule if he were the judge, Alexander replied, “The king would kill both of them and take the treasure for himself.”

The hosts were puzzled. “Your country sounds strange. In your country does it rain? In your country does the grass grow? Are there animals?”

Hearing that this was so, they told him, “The only reason it rains, and the grass grows, is for the animals, because the people in your country don’t deserve rain or grass.” (16)

Basically, theft, robbery, and exploitation flow from coveting the wealth of our neighbors, rather than from actual abject poverty. The need to keep up with the neighbors is often the primary factor in determining the individual’s pattern of consumption, and, therefore, that which sets the pace and morality of the economic activity which comes to pay for that consumption. This, together with the status, power, and satisfaction which come from having and earning more than others, can prevent people from distinguishing between what is moral and immoral, permitted or forbidden.

Even a casual glance at our surroundings will show that, irrespective of their wealth, people suffer from an inability to know when they have enough. People do not decide to defraud, embezzle, or exploit others on the spur of the moment. These actions are essentially the result of social pressures, accepted norms of behavior, and the need to always have more of “mine.” It is only by educating people to restrain material appetites, by voluntarily limiting the standards of living, and by teaching the difference between real needs and imaginary wants, that it is possible to achieve a moral economic society.


1. Vayikra 26:3-26; Devarim 28:3-14.
2. Devarim 32:15.
3. S. R. Hirsch, Shemot 11:2-3.
4. Shemot 22:24.
5. SeferHachinuch, mitzvot 216, 217.
6. Vayikra 23:22-23 and S. R. Hirsch ad loc.
7. Genesis 13:3.
8. Amos 2:6.
9. Talmud Bavli, Sotah 14a.
10. Talmud Bavli, Baba Metzia 30b.
11. Talmud Bavli, Baba Kama 20a.
12. Ibid., 80b-81a.
13. SeferHachinuch, mitzvah 330.
14. Talmud Bavli, Berakhot 35b.
15. I Kings 21:1-16.
16. Vayikra Rabbah, K’doshim.
17. Takkanot of the Rhine Communities, enactment 17; Synod of Castillian Jews, enactment 11. L. Finkelstein, Jewish Self-Government in the Middle Ages (New York: Feldheim, 1964). Also see Pinkas Va’ad Arba Aratzot, ed. Israel Halperin (Jerusalem: Mossad Bialik, 1954), enactment 90.


Dr. Tamari is the former chief economist of the Office of the Governor at the Bank of Israel, and the founder of the JCT Center for Business Ethics and Social Responsibility.

Reprinted with permission from In The Marketplace: Jewish Business Ethics Targum/Feldheim Publishers, l991


Business Ethics and the Sabbatical/Shemitta Year

by Rabbi Dr. Asher Meir

This Jewish year, 5761, is the Sabbatical year in Israel, the year when according to the Torah, agricultural labors are not carried out. But the commandments relating to the Sabbatical year, known in Hebrew as shemitta go far beyond giving a fallow year to our fields. In fact, the main principles of the Jewish approach to our possessions can be learned from the laws of shemitta.

There are three main places in the Torah where shemitta is mentioned. The first is in Shemot, parshat Mishpatim. Let us look at the verses in context:

“Do not oppress the stranger, for you know the soul of the stranger, for you were strangers in the land of Egypt. Six years shall you sow your land and gather in its produce. And in the seventh year release it and leave it alone, so that the poor of your people may eat; and what is left shall be left to the beast of the field. So shall you do to your vineyard and your olive trees.” (Shemot 23:9-11.)

Here the emphasis is on equality or social justice. Unlike the regular year when the landowner is in control of the produce, in the seventh year the poor have equal access to the fruits of production. Contextually, we can connect this to the empathy with the downtrodden, which our experience in Egypt taught us, as mentioned in the first verse.

In Vayikra in parshat Behar, the laws of shemitta are elaborated at greater length. Let us examine some selected verses:

“Speak to the children of Israel, saying: When you come in to the land which I gave to you, the land shall rest a Sabbath to HaShem. Six years shall you sow your field, and six years shall you prune your vineyard, and gather its produce. And in the seventh year the land shall have a Sabbatical, a Sabbath to HaShem; you shall not sow your field nor prune your vineyard. You shall not reap the growth of your harvest nor gather in the grapes of yield; the earth shall have a Sabbatical.” (Vayikra 25:2-5.)

In this passage the focus is not social, but religious: the land has a Sabbath to HaShem. This theme is reiterated later in the passage:

“And should you say, ‘What will we eat in the seventh year? We will not be planting nor gather our produce!’ I will command My blessing in the sixth year, and it will make produce for the three years. . . And the land will not be sold in permanence, for Mine is the land, and your are sojourners and residents with Me.” (Vayikra 25:20-21, 23.)

Here is a message which is relevant even in a society of exemplary equality: Man is not the master of the world nor the source of blessing; G-d is. Our Sabbatical rest, like our Shabbat rest, gives us a break from productive activity to remind ourselves that we are not in control. Shemitta is a lesson in Divine providence.

However, the message of social equality is not absent here either. Immediately following the first verses we cited the Torah continues:

“And the Sabbath of the land shall be to eat; for you and for your manservant and for your maidservant and hired man who live with you. And for your animals and for the wild beast in your land will be all of the produce to eat.” (Vayikra 25:6-7)

Here again is the message of equality, that in this year all share equally in the fruits of the earth. However, these verses also carry an additional message. Unlike the passage in Mishpatim that merely mentioned that the Sabbatical is so that the poor may eat, here the Torah explicitly orders that the produce of this year is to eat.

Our tradition tells us that this expression confers a special sanctity on the produce of the shemitta year, a sanctity which both enjoins us to use them for food or for similar enjoyments and which forbids us to waste them. (Sukkah 40a.)

Most interestingly, this produce may not be treated as merchandise that is exploited only in order to make a profit. (Pesachim 52b.) Relating to HaShem’s providence in this way is problematic for two reasons. For one thing, the very nature of profit is that it accrues to a single person. Profit is a salient expression of private property, whereas the message of the shemitta year is that G-d’s bounty is intended for all. Second of all, relating to objects in this way is alienating. The merchant is ultimately uninterested in whether his stock in trade is apples or zephyrs; market forces tell him to examine only how much it costs him to make or buy and how much it fetches on the market. Yet part of the essence of providence is that HaShem is providing us with wonderful items for our enjoyment and delight.

To summarize the message of these two passages, the Torah is telling us that although economic production is something that is usually created through our effort, ultimately it is a gift from HaShem and the result of His blessing. This blessing is meant for us to enjoy, but we must remember that ultimately all of us have an equal claim on this manifestation of Divine providence.

A very similar message is provided by the manna, which came directly from HaShem. The amount of manna each person found in his receptacle was the same whether he exerted himself to gather much or whether he perfunctorily gathered little. (Shemot 16:18.)

There is a third passage in the Torah dealing with the shemitta year, in Devarim (parashat Re’eh) where we are commanded on the release of debts in the seventh year. This passage is adjacent to the verses which strictly warn us to be generous in giving to the poor. Afterwards we find the commandment to free slaves after six years of work, parallel to the first six years of the shemitta cycle, and to give them gifts which will help them to be self-reliant. (Devarim 15:1-18.)

But one of the most interesting messages of the shemitta year is not related to its laws but rather to its timing. The Sabbatical comes only once in every seventh year! During this year the institutions of private property are partly suspended, but during the other six years they are rigidly enforced!

Parsha Mishpatim begins with the rules of a Hebrew slave. While we are enjoined to treat him fairly, the fundamental inequality of master and slave, like the parallel one of boss and employee, is not questioned. The main laws of damages, which are among the most important safeguards of private property, are in this parsha, as is the prohibition for judges to favor the poor person in judgment. (Shemot 23:3.)

While commerce in fruits of the Sabbatical year is forbidden, commerce in all other goods, and at all other times, is perfectly permissible and is protected by the same basic laws as those that protect personal possessions.

Indeed, one of the expressions the prophet Yechezkel uses to describe the Jewish people at the time preceding the redemption is “a people gathered from the nations, gathering mikneh vekinyan” – livestock and possessions. (Yechezkel 38:12.)

So this is the message of the shemitta year:

  1. Private property is permissible and proper, but we should remember that ultimately all belongs to HaShem – “the land is Mine”. (Vayikra 25:23.)
  2. Enjoying our possessions is encouraged, but we should remember that HaShem’s bounty is intended for others as well. “The produce is the land to you to eat – for you, and your servant. . .”. (Vayikra 25:6.)
  3. It is natural that there are rich and poor people, but the rich have a responsibility to display generosity towards the poor. “For the poor shall never cease from the land, therefore I command you saying, open your hand wide to your poor brother”. (Devarim 15:11.)
  4. It is natural for there to be a master and servant, boss and employee, but the master has to treat the slave in a humane way. “Don’t work him with rigor.” (Vayikra 25:43) The master must also eventually release him and allow him to fend for himself. “He shall serve you for six years, and in the seventh year you will set him free. And when you set him free, you shall not let him go away empty-handed”. (Devarim 15:12-13.)


Rabbi Dr. Asher Meir received his Ph.D. in Economics from MIT, and received his Rabbinic ordination from the Israeli Chief Rabbinate after 12 years of study at Israeli Rabbinic Institutions (yeshivot). Rabbi Meir directs the Jewish Business Response Forum at the JCT Center for Business Ethics and Social Responsibility, and is a Senior Lecturer in Economics at the Jerusalem College of Technology