Jewish Economics

Capitalism, Faith and Lovingkindness Jewish Labor: Return to a Healthy Jewish Economy Jewish Welfare Is Profit the Only Factor? Divine Economics

Capitalism, Faith and Lovingkindness

Every nation has its culture, honed over the centuries of its history -- and an economic structure that suits it. Economy is not an exact science. An economic method that thrives in one culture can be a complete failure if it is applied on an inappropriate cultural base without making the necessary changes.

The Second Aliyah to Israel brought with it the spirit of the Russian revolution, the Bolshevik culture and its economic system, socialism -- then the ultimate in progressive thinking. The Bolshevik economy was pasted onto the new Israeli society, unfiltered and uncontested. A society bereft of any culture of its own cannot cope with this type of challenge.

At the beginning of the 1980s, when socialism collapsed, Israel scurried to adopt the new fashion; unrestrained Western capitalism. This new economic structure was also adopted unfiltered and unchallenged, as there is no Israeli culture to assess it. The capitalistic structure certainly rectified many of the flaws of the old system. It increased economic efficiency in an unprecedented way, making Israel's economy internationally competitive. However, the status of the weak strata of society worsened, deteriorating to an even worse state than it was under socialism.

What, then, is the economic structure appropriate for Israel?

A truly Jewish Israel must find the economic structure that will most aptly balance objective economic principles with Jewish values. We can call it "Jewish Economy."

Careful inspection of Judaism's approach to economic matters reveals a triangle of principles.

Prinicple 1: Capitalism

Judaism absolutely recognizes personal property rights, the right to amass and maintain wealth and the fact that there will never be full economic equality. Moreover, Judaism sees wealth as a sign of blessing. Our Patriarchs were all "millionaires."

Commerce, which socialism sees as negative and "robbery of the workers," is viewed in Judaism as an honorable trade, just as any other legitimate source of income. Many of Israel's sages engaged in commerce, from Rabbi Yehudah Hanasi who compiled the Mishnah to the Holy Ari.

Principle 2: Faith

A Jew must always understand that his wealth is not the product of his business acumen and that he is not its ultimate owner. It is G-d's blessing that brought him success, and wealth is nothing more than a deposit in his hands to enable him to do what is right in G-d's eyes. According to Judaism, it is permissible and appropriate to enjoy wealth. Judaism does not encourage asceticism, but guides us within the refining cultural framework of Torah. Furthermore, Judaism obligates the Jewish capitalist to perform actions that completely contradict the rules of capitalism. He must cease from work on the Shabbat even if he will lose the economic chance of a lifetime. During the Temple era, the Jew's capitalism was even more compromised, when he was commanded to thrice yearly ascend to Jerusalem for the holidays, leaving his work far behind.

 The laws of Monetary Sabbatical (Shmittat Ksafim) and the Jubilee, in which loans and land return to their original owners, are obviously the most compelling expression of the second leg of the economic triangle. The idea that the entire capitalistic game eventually returns to its starting point and that personal property is not exactly personally owned completely contradicts capitalism. Currently, these laws are reserved for the "Era of the Messiah," but we can integrate the principle of faith inherent in them. The main economic objective is not growth just for its own sake, but rather the spiritual lifestyle that wealth can foster.

Principle 3: Lovingkindness

Acts of lovingkindness are the responsibility of the individual and the community. No hiding behind state organizations such as social security or welfare. The welfare mandate, like most other authority, will be the responsibility of the community and its elected officials. The local officials must be responsible for the underprivileged of the community. They know them personally and can identify who is truly needy. They will collect the taxes and decide what portion of the district income will be allocated for education, health, welfare, etc. Furthermore, every individual in the community must take responsibility for the poor, setting aside a fixed percentage of his income for charity, as the Torah commands.

How can we apply these principles today?

Jewish Economy that strikes a balance between capitalism, faith and lovingkindness will enhance the development of a free market while restraining and refining it. For example, Jewish Economy will not allow for flooding the market with a product, which makes it impossible for smaller businesses to compete. This practice is based on capitalistic principles but ignores the ideals of faith and lovingkindness. An entrepreneur would not be allowed to open a shopping mall and put all the surrounding small shops out of business. Instead, he would have to make provisions to give the small businessman a fair chance to integrate his business into the mall. A person would not be allowed to hire foreign workers while ignoring the unemployment of the people in his community. And certainly, an elected official's salary would have to be proportional to the average wage of the general public.

The Jewish state must cultivate an economic approach that reflects the basic culture of the nation. As long as economic methods that contradict Jewish cultural genes are pasted onto Israeli society, we will witness one economic crisis after another.