Competing Businesses and Borders

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

One of the plants that herald the advent of autumn in Israel is the squill, a bulbous member of the lily family which has the unusual feature of very deep roots reaching underground. Apparently these roots are very hard to remove even when one uproots the plant itself, and they also grow straight down without spreading in all directions. For all these reasons, Yehoshua used this plant to demarcate the borders between the estates of the Jews entering the land of Israel, since the squill both accurately defined the borders and protected the owners from attempts to change these borders by removing the same landmarks which had served to define the borders. Indeed, the Talmud reports (Beitza 25) that the squill “cuts off the feet of evil men”, since they do not realize that their careful efforts to erase the original borders and to steal and rob land have not succeeded because of the roots of a lowly plant.

The Torah specifically prohibits any removing of borders, and in Parshat Ki Tavo this prohibition is included among the curses, which the Levites had to proclaim when the Jews entered Israel:

” Cursed be he that removes his neighbor’s landmark”

In the course of history, as the Jewish nation was itself uprooted from the land of Israel and consequently lost its agrarian orientation, the focus of this prohibition was transferred to an entirely different arena-that of commercial competition. In the same way as the Torah sees a person’s land as his inviolable property, the Rabbis viewed a person’s source of livelihood as something which belongs to him, and others are not allowed to encroach on that source for their own benefit. Of course, this approach would stifle competition and the benefits of a free market, and therefore the right balance had to be struck between the rights of the individual and the needs of the public. For this reason the Rabbis sought to establish guidelines which would uphold both these two opposing goals.

Rabbi Shlomo Luria (RaShaL), a 16th century sage living in Cracow, Poland, divided the issue of competition into four distinct categories (Yam Shel Shlomo Kiddushin 59a, Teshuvot Maharshal 35): –

  1. If an individual is involved in purchasing a certain item and another individual intervened and offered a higher price for that item, he is considered “an evil person” since he has taken what would rightfully have belonged to his friend. According to RaShaL, one can announce publicly that this person is evil. This clause serves to protect one who has endeavored to obtain a certain item from being preempted by another.
  2. If the salesman had himself initiated contact with the second individual, he would be allowed to conclude a purchase with that salesman even if another individual had shown interest in the item. Similarly, if the item involved was unique and not obtainable anywhere else at that price, he would be allowed to negotiate to buy it even if the first person had attempted to purchase it. This clause protects the right of the seller to get the highest price for his item and encourages fair competition.
  3. If an individual had worked hard and risked his life to obtain the item in question, it would be forbidden to preempt him and buy the item, and this is already classified as theft, which is much more severe than “evil” behavior. However, since the Torah did not define it as theft one cannot legally remove it from the second individual. This clause demonstrates that human endeavor empowers an individual to prevent others from preempting him, since he has invested so much effort that the item is considered to be his.
  4. If an individual has set up his store in a certain place, another individual from the same town is allowed to set up a similar store adjacent to the first, but if he is from another locale the first storekeeper can ask the authorities to prevent the opening of a similar store. Moreover, if the first store already had an established clientele, even if the other storekeeper lived in the same locale he would be forbidden to open his store there, since he is considered to be encroaching on his friend’s livelihood, which is a form of theft akin to stealing part of his turf. This clause establishes rough guidelines as to what is deemed fair and unfair competition.

Many latter authorities pondered these categories and offered different comments which are beyond the scope of this Dvar Torah. Rabbi Luria’s analysis could definitely serve as a basis for a code of behavior between competing businesses, which both enables commerce to thrive and eliminates the unfair excesses of a free market where individuals build on their colleague’s hard work. I believe that this system of antitrust laws set up by Chazal has successfully been implemented over two millennia of Jewish commerce and can serve equally well when applied to a modern context. In this way we can perpetuate the effect of the lowly squill plant and define what belongs rightfully to us and what belongs to our friend, so that we should not fall into the category of “landmark stealers”

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).