Boycotts – Are boycotts a legitimate means to fight overpricing?

Q. One vital product in our community is sold by two large companies and a number of small ones, all charging similar prices. Recent price increases have been really outrageous. A total boycott of a vital product is not really practical, but can we organize a boycott of the large companies, who we think are behind the increases?

A. In last week’s column we explained that Jewish tradition is sympathetic to the right of workers to organize for their common benefit, but that this right has to be used in a responsible and accountable fashion. The exact same statement could be made about consumers. The Talmud records a number of cases where boycotts were used to lower prices, but as we will see, these cases involved a number of common justifying elements.

In three distinct cases in the Mishna and Talmud, we find that sellers were taking advantage of the fact that Jews were stringent in their performance of commandments and insisted on buying mitzvah objects of the highest standards.

The sellers considered that they had the buyers “over a barrel”, and exploited this fact to collude to raise prices. For example, the Talmud records that the prices for the best myrtles for the “four species” which are used at Sukkot were exaggeratedly high.

In each of these three cases, the leading rabbi enforced a de facto boycott of the overpriced item by instructing people that temporarily there was no longer any religious need for the good; in the case we mentioned, the ruling was that ordinary myrtles were perfectly adequate.(1) Four hundred years ago a leading rabbi similarly ordered his constituents to avoid eating fish on Shabbat for a period of weeks, though this is considered also a way of enhancing Shabbat enjoyment; the reason was that local fish merchants were cooperating to raise prices knowing that Jews would pay an exaggerated price to honor the Shabbat.(2)

These four situations have in common two characteristics that gave the sellers lopsided and unfair bargaining power. First of all, since the item was a necessity, sellers had buyers over a barrel. Second of all, in each case the sellers joined together in a cartel; the agreement of consumers to join in a boycott was basically a necessity in order to create “countervailing power.”

These elements correspond to two important justifications for labor unions: employers generally don’t suffer from a few months of bad performance, whereas the worker is desperate for his monthly pay (laborers over a barrel); and the relatively small number of employers find it easy to collude, implicitly or otherwise, whereas the large and dispersed community of workers have much more difficulty organizing (cartel).

Let us apply these insights to your question. The first condition is certainly present, since the good in question is a vital one. However, there is some doubt about the second one — cooperation among sellers. Common sense tells us that collusion is not so easy in a market with a number of sellers of varying sizes.

The most prudent course of action is to see if you can find convincing evidence of collusion among sellers. If you can present the public with such evidence, your plan for a boycott will gain more ethical legitimacy, a greater chance of persuading consumers to join, and a more realistic opportunity to have an impact on prices.

(1) Babylonian Talmud Sukka 34b; also Pesachim 30a and Mishna
Keritot 1:7.
(2) Responsa Tzemach Tzedek 28.