Restricting the Right of Free Entry

Responsa of the Week: Restricting the Right of Free Entry

A weekly series by Dr. Meir Tamari about responsa regarding business ethics issues.

In order to demonstrate the work of the halakhic system and its moral considerations regarding a variety of issues in business and economics, I will present a number of responsa drawn from the literature. These represent questions addressed either by laymen or by rabbis or communities to rabbinical authorities and their answers. They cover a period of close to 2000 years and reflect Jewish life in all the countries of the Diaspora. Even though the answers may vary and conflict with each other so that one cannot draw behavioral conclusions from them, they demonstrate Jewish thinking and values in this field.

Although we have shown that the halakhic authorities understood the necessity and efficiency of the right of free entry, and ruled accordingly, nevertheless, there is evidence that they also understood the necessity for restricting that right. This is over and above any limitations introduced by the question of investment, the effect of reducing as distinct from doing away with other people’s livelihood or consideration of the benefit of the consumers. We are not dealing with an economics textbook but rather with a religious, moral and ethical framework. Therefore, when the interests of justice or charity or protection of the welfare of society come into question, economic or efficiency dictates had to give way. Our sages realized that competition could ruin entire communities, at least in the short run due to a limited market, the malfunctioning of the market mechanism, or the Anti Semitism that unnaturally limited the economic base of the Jews by a severe degree. The most extreme example of how they enforced constraints of such competition is the Herem Hayishuv. This enabled a community to prevent people from other places, under threat of excommunication, from settling in their town and doing business there, even if they shared in the tax burden.

The Herem was applied in all most of the countries of Askenaz from early Medieval times till about the 15th century. This was probably the only real weapon available, given the political and social conditions of Jewry in those countries at this time.

Even though the Herem probably would not apply today, nevertheless since it deals with a problem that exists in all its severity, both with regard to any national economy as well as to all the players in the global village, a discussion of the thinking that lay behind the Herem would be of a great benefit.

QUESTION.

Reuven and his sons claim to have received permission [from the Lord of the town and from the Jewish communal council] to settle [and to trade] in town T, and they also show undisturbed settlement for more than 3 years [a period that gives a chazakah- an acquired right]. Shimon claims that Reuven and his sons received no such permission and that the reason they were not disturbed [from their illegal competition] was because they were informers and he was afraid of them. [The informers were a terrible threat for centuries, not only to individuals but to whole communities. They could endanger the economic basis or even, lead to pogrom or expulsion through malicious gossip or reporting illegal activities, to the anti-Semitic gentile authorities].

ANSWER.

“Since Reuven and his sons claim to have received permission to settle in and they also show 3 years of undisturbed residence [and trade], they have the right to dwell in the town and to prevent all newcomers from settling in it without their permission [even if they participate in the communal tax burden]. If however, Shimon proves that they are informers, they cannot claim chazaka.” (Responsa of Maharam Of Rothenburg (New York, I. Agus, 1972).

The logic behind the Herem as well as its scope and severity can seen in the edict of the Jewish council of Padua, Italy, enacted in 1583.

“Seeing as how the possibilities of earning a livelihood in our town are severely limited, and seeing as how the economic prospects for providing for the members of our community are very limited, therefore, we have decided that no Jew from this day on, came come and live here, open a business or earn his livelihood, irrespective of whether he comes as the head of a household or as an individual man or woman [without our permission]. This includes those former citizens who have left and now wish to return. The edict includes the extended families of those already settled here. All those who shall not observe this edict will not be able to participate in the slaughtering of kosher food and will be ostracized from the community. We will not go to their festivities and in the synagogue on Mondays and Thursdays they will be announced as renegades until they repent and observe this edict.”

The Herem constituted a property right of the veteran townspeople that could be bought and sold or bequeathed to heirs. “I am a citizen of this city whereas you are a citizen of another. I am opposed to your engaging in business here any more. I only gave you on loan the right to benefit from my inheritance [namely the right to trade].” This was the claim made by a member of the Paris community in a question to the Sages of Rome, who upheld the claim.

It should be noted that for centuries the Jewish communities, both in the Askenazic and the Sefardic worlds, reserved the right of settlement only to approved people. This was acknowledged as part of their self-defense against immoral people, informers and others who could endanger the moral well-being of the community. It was the application of this right, Hezkat HaYishuv, to economic protection that was new.

Seeing as how the Herem Hayishuv contradicted the accepted opinion of Rabbi Huna ben Yehoshua, who permitted outsiders from trading if they shared the tax burden, all the Codes [Mishneh Torah, the Tur and the Shulchan Arukh] ruled against it. Halakhic justification for it was based on the enactments of Rabbenu Meir HaGolah, together with other similar decrees. Under the conditions facing the Jews, constant discrimination and persecution, the whole society, as distinct from the livelihood of veteran individuals, was now in danger of economic ruin. Since Judaism is neither for nor against competition, but rather concerned with justice and communal welfare, competition, normally permitted, could be forbidden.

One may see that it was not primarily a result of economics but of values, from the exceptions to the application of the Herem. The free entry of Torah scholars that was always considered to be to the benefit of the community was permitted, together with the right of economic competition. So, the free entry of refugees, always unfortunately a factor in Jewish life, was permitted. The obligations of charity and communal responsibility, had preference over economic interests. It is true that there were examples of limitations on economic activity, but there is a difference between that and the negation of the right to that activity.

This column presents general principles for approaching business ethics topics. For specific guidelines, please refer to a halachic authority.

Dr. Meir Tamari is the former chief economist of the Office of the Governor at the Bank of Israel, and the founder of the Business Ethics Center of Jerusalem.