by Dr. Meir Tamari
Unethical and immoral business behavior is rapidly becoming a major corporate concern. While there are still the eternal distortions prompted by greed, egoism and uncertainty that lead to fraud and oppression, increasingly a new dimension in moral dilemma has been introduced. This has been caused by the rapid expansion of the economic global village wherein entrepreneurs and corporations operate in economies whose legal structure and ethical practices are radically different from those acceptable and obvious in their own countries. Environmental damage, civil rights, insider trading, contractual obligations, and regulated markets are only some of the affected areas. However, it is bribery, participation in public sector investment and corruption that affects every facet of decision-making. Solutions for these dilemmas may be primarily classified into two groups:
Moral relativism argues that no single culture has a monopoly on moral concepts and therefore may not impose its standards on another one. So “when in Rome do as the Romans do” means doing business according to the prevalent moral and legal norms, known to all the participants and accepted by them. “Everybody does it” is the watchword that makes our own unethical behavior permissible. This watchword is also used in the home economies but we are usually more reticent in its use there.
Unrestrained moral relativism can lead to investment and trade, with basically evil regimes. Business then becomes a partner in aiding and abetting even the most abhorrent and immoral acts. It was this relativism that led to the funding and economic stabilization of Nazi Germany, spreading the guilt for the holocaust of European Jewry to many prominent corporate board-rooms. In other countries apartheid in South Africa, state terrorism in some South American dictatorships and in many Middle Eastern countries as well as the denial of basic civil rights in these countries, China, and some African states, found their existence in the economic fruits of this relativism.
This comes to limit relativism by placing restraints based on internationally or universally accepted ethical rights. The United Nations, public opinion in the democratic states and the decisions of area trade blocs attempt to impose such limits. Civil rights, the environment and child protection are some of the areas in which much good has been done by such consensus morality.
Bribery in a Normative Morality
However, consensus morality is only a limitation. It too suffers from relativism and subjectivity, albeit to a lesser degree. While it is an improvement on “everybody does it so it’s all right,” neither of the two groups presents an objective, normative and absolute ethical framework. Perhaps it would be instructive to attempt to present a possible alternative system, namely one based on traditional Jewish teaching and law. Our focus will be on the morality of giving or taking bribes in order to enter a new market, make investments, obtain contracts or participate in any other economic activity. It is well known that such payments to heads of governments, their families or cronies and state officials are normal business practice and part of the ethical culture of many countries in South America, Africa and Asia.
Judaism does not accept the concept of relativity in any of its ritualistic demands. No rabbinic authority would agree that one may desecrate Shabbat, eat non-kosher food, or not pray, simply because this is the normal pattern of behavior among the majority of Jews. The same applies to sexual morality, modesty and Torah study. There seems to be no sound basis besides perhaps the profit motive to assume that economic halakha is any different. It may well be that under certain conditions or in certain economies the only way to stay alive physically lies in immoral business acts. Since one is not required or permitted in normal circumstances to die to avoid such acts, they would seem to be permissible. However, the same applies to Yom Kippur, non-kosher food or Shabbat in cases of danger to life, so that the moral pattern remains clear. Further, I doubt if investment or trade in countries that have unethical behavior by Jewish standards, is a matter of life and death for the foreign corporation or entrepreneur; after all the global village is still reasonably large. Therefore it has to be determined whether such payments are forbidden or permitted halakhically.
Bribery of judges is clearly forbidden. It seems that in our context the function of the recipients is exactly that of the judge. They allocate rights to some parties and deny them to others; they judge the respective claims to tenders or contracts, and they arbitrate between concerned corporations and entrepreneurs. Judges and arbitrators do just this; the only difference being that here the payments are determined by public policy, disclosed and equal to all, while in the business world the payments are secretive, arbitrary and illegal.
In all these cases, the bribe “blinds the eyes of the wise and perverts the words of the saintly”, so it is forbidden. It could be argued that strictly speaking we must make a distinction between judges who deal with rival claimants at law and the bribery of public officials and others. However even if we reject the judicial role of the unofficial intermediaries, these payments would be still halakhically forbidden both asnezikim, damages, and because one may not put a stumbling block in the path of the blind.
Superficially, the bribe may be seen solely as a cost of doing business to be borne by the entrepreneurs. In reality, however, these costs are borne by the public who are not even parties to the transaction. Bribery as a way of doing business prevents real competition and society pays the cost of the resultant misallocation of the resources yet, nevertheless, suffers damage that is in effect theft from the affected society. Citizens of the host countries are forced to pay more for public works, for the purchase of capital goods, and for the benefits of investments as these are not the result of business decisions but rather the ability of private people to extract payment in return for favors.
Such payments often promote inefficient economic investments, construct shoddy infrastructures, exploit natural resources below their real market values and enable the foreign corporation to evade environmental safeguards. In all these cases the average citizen’s property rights and economic welfare are damaged and the payer is a party to the damage. Halakhically a Jew may not cause damage to another’s property, health or environment, nor may he steal from non-Jews.
Beyond the theft from citizens, bribery corrupts the whole host society, prevents the functioning of Judicial institutions, thus frustrating civil rights, and makes immorality a way of life. So, increasing government regulation like that of the Foreign Corrupt Practices Act in the USA prevents local citizens from doing business as everybody does it in certain countries. International bodies are making their assistance conditional on anti-corruption policies as the IMF is doing in Indonesia and the donor countries to the Palestinian Authority.
The injunction for Jews against placing a stumbling block in the path of the blind, Lifnei Iver applies to their relations to non-Jews as well. Non-Jews are halakhically obligated to establish a just legal system and are forbidden to steal. Economic bribery prevents the first obligation and annuls the second. The recipient of such payments is stealing from the public of his country and the payer is facilitating such theft. It is forbidden halakhically to buy stolen goods since this encourages the evil act by creating a market for these goods and thereby making the theft profitable. These gifts do exactly that. Our rabbis taught that “it is the hole that steals not the mouse.” By making bribes we create the hole that enables the mouse to steal. We create a stumbling block in the path of the blind.
Whenever faced with the moral dilemma of what to do in Rome, we should consider the rabbinic dictum that “Rome ascends, Jerusalem descends is believable, Jerusalem ascends above Rome is believable. That Rome and Jerusalem live in harmony is not believable.”
Beyond the judiciary
Not only a judge is forbidden to take bribes [and the giver forbidden to give them], but so too are all of the officials and those engaged in communal affairs. Even though their decisions are not specifically Torah laws, they are still not allowed to distort their decisions based on favoritism or personal bias. They are definitely not allowed to accept bribes.
(Aruch HaShulchan, Choshen Mishpat, sec. 9, subsection I)
For more on this subject, see International Business and Cultural Relativisim by Professor T. Donaldson
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.