A Maggid Shiur in YU recently got up in front of the whole Yeshiva and attacked capitalism in its contemporary form as being against the Torah. I will not argue that it is ideal but I think his presentation was lopsided [besides giving away that he almost definitely votes Democrat....].
One point worth making is that YU [and all of our institutions for that matter] raises it hundreds of millions thanks to modern capitalism and free markets.
Another is that you never see anywhere in the Torah or Chazal where it says that it is not fair for there to be large financial gaps between people and if there is we should steal from the rich to give to the poor. The extreme wealth of R' Elazar Ben Charsom is described at length by both the Bavli and Yerushalmi and there is not one iota of criticism against him.
כאשר התורה מכוונת מבטה לעולם אשר בו "לֹא יִהְיֶה בְּךָ אֶבְיוֹן" (דברים ט"ו, ד), היא מסבירה כיצד נגיע לכך: "כִּי בָרֵךְ יְבָרֶכְךָ ה' בָּאָרֶץ אֲשֶׁר ה' אֱ-לֹהֶיךָ נֹתֵן לְךָ נַחֲלָה לְרִשְׁתָּהּ" (שם). המלחמה בעוני היא על ידי ברכה כוללת לתושבי הארץ, עלייה כוללת ברמת החיים, ולא על ידי חלוקה מחדש של הנכסים הקיימים.
Another is that according to the experts [that I have heard from], capitalism has taken about one BILLION people out of poverty.
From The Economist:
The world’s achievement in the field of poverty reduction is, by almost any measure, impressive. Although many of the original Millennium Development Goals (MDGs) —such as cutting maternal mortality by three-quarters and child mortality by two-thirds—will not be met, the aim of halving global poverty between 1990 and 2015 was achieved five years early.
The MDGs may have helped marginally, by creating a yardstick for measuring progress, and by focusing minds on the evil of poverty. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution.
The world now knows how to reduce poverty. A lot of targeted policies—basic social safety nets and cash-transfer schemes help. So does binning policies like fuel subsidies to Indonesia’s middle class and China’s hukou household-registration system that boost inequality. But the biggest poverty-reduction measure of all is liberalizing markets to let poor people get richer. That means freeing trade between countries (Africa is still cruelly punished by tariffs) and within them (China’s real great leap forward occurred because it allowed private business to grow). Both India and Africa are crowded with monopolies and restrictive practices.
Many Westerners have reacted to recession by seeking to constrain markets and roll globalization back in their own countries, and they want to export these ideas to the developing world, too. It does not need such advice. It is doing quite nicely, largely thanks to the same economic principles that helped the developed world grow rich and could pull the poorest of the poor out of destitution.
This is an excerpt from an article in Mosaic magazine:
The preservation and invigoration of the Jewish family, the Jewish people, the Jewish nation—these are the purposes to which the Jewish spirit should rally. Yet the highest possibilities in life are grounded in how we attend to the more basic necessities. How to feed oneself and one’s children, how to house and protect them, how to embellish life with comfort and beauty?
Compared with the imperatives that have occupied us up to this point, articulating a Jewish economic vision may sound like a banal assignment. It is anything but. Indeed, it is no accident that early Jewish nationalists like Hess and Theodor Herzl, even though we may judge many of their specific economic ideas to have been misguided, invested much energy in describing this aspect of the governance of their envisioned Jewish state. Economics rightly understood connects individuals and families to civil society and to a nation; so, too, a Jewish economic vision must serve and connect the Jewish family and the Jewish people, or it will ultimately fail them both.
In this case, it is wise to state the obvious: a nation does not live by bread alone, but without bread it surely dies. Food—the primordial form of human wealth—is variously portrayed in the Hebrew Bible as evidence of divine generosity and of human ingenuity; it is also seen as a source of temptation to disobedience and a permanent limit on human pride, since man must forever toil to earn his bread. For centuries, Jewish penury was closely associated with Jewish ghettoization; extreme restrictions on the ability to earn a livelihood were connected with segregation and powerlessness. The promised land of Israel, by contrast, was seen as the land of plenty, a land of milk and honey. In modern times, some of the most piercing Jewish humor, as Ruth Wisse and others have pointed out, exploited the comic mismatch between the grand role of the Jews as God’s chosen people and the prosaic miseries of the Jews who struggled for bare sustenance.
A Jewish economic vision must serve and connect the Jewish family and the Jewish people, or it will ultimately fail them both.
For such Jews, the yearning for redemption included the yearning for economic redemption, whether through the eventual realization of God’s messianic promise or through the liberating worldly projects of modern Zionism, modern liberalism, and modern socialism, each of which offered its own path to civic and human equality. In the meantime, Jews throughout history survived and sometimes thrived by dint of economic pragmatism and ingenuity: buying and selling whatever the world needed and whatever they were allowed.
In the current age, a distinctly Jewish economic vision is both more essential and more achievable than throughout most of Jewish history. Jews in the democratic West are freer than ever to define their own economic lives, and the Jewish state comprises a complex web of economic institutions and policies. Jews now govern their own economic lives. As a community, they deserve a vision of economics that reflects and serves both Jewish values and Jewish interests.
The crucial starting point for such a vision is the flourishing of the Jewish family from generation to generation. As we have seen, thinkers in both antiquity and modernity have envisaged political economies that either require or lead inexorably to the dissolution of the family. In Plato’s Republic, children are raised by the state to assume their state-designated positions in society. In the Marxist vision, the family is seen as a threat to equality and an impediment to social progress; the special ties to one’s own children are the seeds of injustice, driving mothers and fathers to seek the good of their own instead of the good of society as a whole. The Marxist-universalist project is inimical to all special attachments, and no attachments are more particular or more powerful than those of parents to children and children to parents.
As a way of thinking, this alone makes Marxism, with its inbred hostility to God, family, and particular national identities, antithetical to Jewish self-understanding. But if Judaism rejects Marxism, along with all the false utopias it inspired, it is also the case that biblical and rabbinic maxims touching on the economy, maxims developed and expressed in a bygone agricultural age, cannot simply be adopted and updated for a modern Jewish state or for modern Jews in general. Is there, then, a Jewish view of economics that is both true to Jewish moral teachings and instructive for Jews as they actually live in the modern world? What can Jews draw upon from their own texts and traditions, and what forms of economic wisdom must they import from others?
In his 1998 Hayek lecture, Jonathan Sacks, the former chief rabbi of the United Kingdom, took up the challenge of articulating such a Jewish view. Why, he asked, is there so great an affinity between Jewish ideas and practices and free-market ideas and practices? His answer includes such touchstones as biblical respect for the idea of property rights; biblical appreciation for productive labor; the biblical understanding of man as a creative being; the rabbinic belief that parents must teach their children a useful trade; and the affirmative Jewish attitude toward wealth. In general, Sacks concludes, the talmudic rabbis “favored the free market”—a point reinforced by the example of how they treated competition among scholars and teachers:
An established teacher could not object to a rival setting up in competition. The reason they gave for this ruling illustrates the general approach. They said simply, “Jealousy among scholars increases wisdom.”
Competition, even in the most elevated realm of education, promotes human excellence.
This affinity between traditional Judaism and market economics may come as a surprise to those who believe that Judaism is most compatible with some form of socialism. That this is not the case is argued exhaustively in Joseph Isaac Lifshitz’s careful study of the biblical and rabbinic corpus, Judaism, Law, and the Free Market. Consider this from the talmudic tractate Brachos: “One who benefits from his own labor is greater than one who fears heaven.” Or this from Chullin: “Said Rabbi Elazar, . . . ‘For the righteous, their property is dearer to them than their own body. Why so? Because they do not stretch out their hands to steal.’” And from Shabbos: “The Divine Presence rests only on one who is wise, strong, wealthy, and of great stature.” And from Psachim, in a teaching of Rabbi Akiva to his son: “It is better to make your Shabbos [meals] ordinary than to become dependent on others.”
One of the deepest insights arising from the Lifshitz study is that the rabbis understood the obligation to help the poor as a matter of righteousness, not of justice. Helping the poor—and, most importantly, helping the poor to help themselves, if so capable—is a religious obligation, and Jewish societies throughout history developed ways of fulfilling that obligation through limited versions of organized welfare. But the mere fact of poverty does not constitute an injustice, or a claim against God or society. Ameliorating poverty is not treated by the rabbis in terms of the pursuit of justice, and there is no expectation or celebration of some future society when the differences between rich and poor will have been eliminated. There are even limits to how much private wealth can be taken by—or should be given to—the communal welfare system.
Does this then mean that traditional Jewish teachings about economic life are a protean form of capitalism in the way we now understand it? Not at all. Many biblical precepts, whatever their merits within the agricultural order of the time, are not compatible with modern capitalist life. They include the prohibition on lending money at interest, the forgiveness of debt in the sabbatical year, the requirement to keep a sabbatical year and a jubilee year in which almost no agricultural work can be performed, and the prohibition on selling arable land in perpetuity.
As times and circumstances changed, and as Jews confronted the needs of a more urban existence, the observance of these precepts was modified by the rabbis, who recognized the need to accommodate Jewish life to economic reality without directly violating biblical authority and while upholding biblical principles. The Jewish tradition clearly continued to respect property rights, reward for one’s own labor, and the goodness of wealth—all of them prerequisites for a capitalist society. Adam Smith and F. A. Hayek eventually discovered and explained to the world that the complex mechanisms by which markets channel self-interest to create economic progress, spur entrepreneurial creativity, leverage investment capital, and promote the efficient division of labor through evolving modes of corporate organization, and the decentralized information embodied in the price system constantly marries changing human needs and desires with man’s ever-expanding capacity to meet and satisfy them.
But this leads to a much more fundamental set of questions about Judaism and the market, which Sacks also raises in his lecture. Does the market’s “creative destruction,” with its galvanizing effects on forward-looking individuals, undermine Jewish attachment to longstanding traditions? Does it lead to a radical individualism—an ethos of the self-creating self, unbound by inherited pieties and with no sense of limits—that comes into tension with the basic Jewish idea of human good? For if Karl Marx and Friedrich Engels—with their utopian vision of a post-God, post-family, post-national society—are radically anti-Jewish thinkers, so are zealous libertarians like Ayn Rand, whose Nietzschian works of fiction pay little heed to families, recognize no need for moral constraints, and include almost no scenes with children.
It is here that Jews—and all moral societies—need to distinguish between the just defense of a free economy and misguided idolization of the capitalist system. Seen as moral ideas in a free society, the sabbatical and jubilee years mandated by Scripture convey necessary wisdom. Man is a creative being, with dominion over nature, who survives and often prospers through labor. Yet man is also a resting being, created by God, who must remember that his dominion is limited—limited in time, limited in space, limited by nature, and limited by death. Judaism emphatically does not embrace a vision of man as a capitalist alone, let alone every man as his own lawgiver. Such a vision is as utopian, and as anti-Jewish, as utopian socialism.
The fate of the Jews rests on the success of Jewish sovereignty; the success of Jewish sovereignty depends on the reality of Jewish power; and the reality of Jewish power depends on the creation of Jewish wealth.
Central to the argument for a free economy is that it places a crucial limit on state power, opening space for families and communities to flourish and provide for themselves. This does not preclude a welfare system; but it does mean that the modern welfare state, which often assumes many of the functions once rightly performed within families—including care for one’s own needy children and aging parents—risks weakening the family in the name of helping the family. Indeed, it is no accident that many nations with the largest and most expansive welfare systems also have the weakest families and the lowest birthrates. Nor is it accidental that those same welfare-state nations have shrunk the size and capabilities of their military forces.
For Israel, robbing the defense budget to fund the welfare state is simply not a long-term option. A small nation in a tough neighborhood, with committed ideological enemies, Israel faces threats unlike those confronted by almost any other nation. Meeting those threats requires a level of military power, and thus of national wealth, that only a thriving free economy and relatively constrained welfare state can sustain. Israel cannot afford merely to succeed economically, measuring its performance against other OECD countries as if it were Luxemburg or Norway. Israel needs to outperform the world economically, and it needs to see economic growth as a moral and strategic imperative. The fate of the Jews rests on the success of Jewish sovereignty; the success of Jewish sovereignty depends on the reality of Jewish power; and the reality of Jewish power depends on the creation of Jewish wealth. This, too, is central to the meaning of Jewish economics in today’s world.
In this connection, Israel still needs to break free of the socialist mindset of its founding fathers—a mindset that today, despite the many privatizing initiatives in recent decades, still dominates conventional thinking in government offices and university departments. Here is a clear instance where importing external ideas, in this case the ideas of the best free-market economists, can serve Jewish interests, Jewish values, and the success of the Jewish state.
And here, too, American Jews have a role to play—and credit to claim. Like their Israeli cousins, many liberal American Jews profess a belief that the only just economic system is a socialist one, and that Judaism itself endorses such an arrangement. In practice, American Jews are the conspicuous beneficiaries not of socialism—into which they have enjoyed the good luck not to be born—but of capitalism, history’s greatest engine of wealth creation: a system that, with appropriate safeguards to ensure fair competition, essential regulatory oversight, and an appropriate safety net, has proved spectacularly good for America, for American Jews, for Judaism—and therefore indirectly for Israel as well. The capitalist success of American Jews is what has made possible American Jewish investment and philanthropy in the Jewish state, with spectacular results in the form of ambulances and operating rooms, social-service agencies for disabled children and wounded soldiers, university buildings, business enterprises large and small, defense equipment and field hospitals, orchestras and theater companies, corps de ballet and art museums, and on and on.
Such are among the blessings, the privileges, and the responsibilities of Jewish patriotism—the full exercise of which depends on the ability to generate the means of sustaining them. The great challenge, both intellectual and political, is to marry the Zionist ethos of national commitment with the capitalist ethos of free enterprise, and combine reverence for Judaism’s own ancient traditions with the dynamism necessary in the modern technological age. If Jews fail in this, they will fail in everything that matters: education, family life, national power, and the possibility of Jewish excellence.
