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Jewish Theology and Economic Theory

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How does one account for the widespread distaste among Jews for a free market political agenda? Why is it that Jews, who earn per capita almost twice as much as non-Jews in America, “fervently support relatively collectivist social policies”? Corinne and Robert Sauer, co-founders of the Jerusalem Institute for Market Studies, contend that “it is not at all true that Judaism is a set of principles that endorses income redistribution and other progressive social programs.” Instead, they say, Judaism is a system of thought that more naturally aligns itself with the basic principles of economic liberalism.

Read the commentary here. This article was adapted from Corinne Sauer and Robert M. Sauer’s Judaism, Markets and Capitalism, a new monograph available from the Acton Institute.

Jonathan Spalink


  • Cathy Schechter

    To call the Jewish affinity for "sharing the wealth" "champagne socialism" is surely shallow, for it totally ignores basic teachings expressed in the Torah and Talmud about how one is to handle the wealth one accumulates. Not one line in the volumes and volumes of Jewish wisdom literature suggests that poverty is good; we only know the poor will always be among us. Therefore, obligations fall upon those who accumulate goods. Leaving a corner of the fields for the poor. The obligation to help a person recover lost items, or to return what is found. There are a number of stories in the Talmud showing how our sages regulated the economies of the societies in which they lived, all for the betterment of THE GREATER GOOD. That is the operant phrase. THE GREATER GOOD. Not what is good for ME and MY FAMILY and MY FRIENDS, but for all.

    There is little in my studies to show that modern "left" wing or "right" wing extremes are normative, and what I have learned is the ancient wisdom that is a molecular part of the souls and intellects of Jews who earn like Episcopaleans and vote like Puerto Ricans, is the cause of this phenomena. To put it simply, it is wrong to be selfish.

    If you wish to win the hearts and minds of Jews, a different interpretive frame would be more appropriate.

  • Moshe

    Actually, the more religiously observant a jew is, the more likely they are to be conservative or republican, just as with more religious-right christians. Orthodox jews voted 70%% for president bush last election. The connection of judaism with socialism was invented by reform rabbis to REPLACE the jewish religion with a secularized social action emphasis that requires no theology, ritual, or any other of those embarrasing things from the old world. This way jews can feel jewish by simply voting democrat without having to be "too jewish" by actually observing more ritual or going to synagogue. Jewish tradition is far more conservative than cosmopolitan socialism; the torah and talmud believe in charity yes but charity starts at home and in communities, it isnt centralized government, thats an anachronism

  • Miriam Segall

    The core of traditional Jewish values is the community, not the individual. The concern for the individual is for both his spiritual welfare, and for the physical and economic welfare of each individual member of the community. In addition to all the specific rules about the corners of the field, paying the laborer at the end of his work day because he may need the money, etc. etc., the concern for the poor and "disadvantaged" is expressed as tzedakah, righteousness or justice. Despite its frequent (mis)translation as charity, tzedakah is more like a tax or other communal obligation than like charity in the Christian sense related only to the heart.

    There’s also the question of who gets the "credit" for what is "mine". To what extent do the rich man’s riches "belong" to him, as something that he obtained for himself without anyone else’s help? In Hebrew the word for "I have" is "yaysh li", "there is to me". I was taught that this means that everything actually belongs to G-d and is only on loan to me (or to anyone else). So it is my obligation, after making reasonable provision for myself and my family, to use what G-d has put into my hands for His purposes, to make my community and the rest of the world a better place in whatever way I can. I think many Jews try to live by some version of this principle.

    So, our behavior is really true to the core principles of Judaism. While there may be an abstract sense in which a free market is "better", at least for some of us, in the long run, our concern has to be with the individual as he stands before us and the community of which he is a part. Calling us "champagne socialists" is a cheap shot in a very complex debate, disregarding all the nuances of the optimum balance between a completely free and a completely regulated market.

  • Joshua Zev Levin, Ph.D.

    You can also go back to the biblical times, when rural land was inalienable from the bloodlines, guaranteeing that the Israelites would be a nation of smallholders, each man possessing enough of the fundamental source of wealth (agricultural land, at that time) to provide for himself and his family. It was up to him to provide the labor to make the land productive, so there was incentive to produce, something lacking in many modern "socialist" communities.

  • Allan Goldstein

    Interesting, but Occam’s razor cuts to some simpler explanations. As in, historically, American Anti-Semitism was a phenomenon of the right, ranging from the racial segregationists of mainstream conservative Dixiecrats and genteel Republican establishment Icons in the first part of the twentieth century–Henry Ford is an example, all the way to the American Fascist movement (tiny) and its apologists (not so tiny) in the America First movement–think Lucky Lindy.

    Back then, it was the left that championed tolerance and equality for Blacks and Jews, even the American Communist left. That solidified the Jewish voter’s attachment to liberalism, that and the social justice so characteristic of our people–the New Deal was SO Jewish in spirit, we took to it almost en block, emotionally, deeply. There is an inertia in political/ideological indentification that doesn’t stop in a big hurry, even if the current version of liberal left is less hospitible to Jewish interests, even though contemporary Anti-Semitism in America comes mostly from the left, especially its fringe, anti-globalization, blame America first and Israel second wing.

    And, one need not go to the Talmud to understand why liberalism is the default politics of our people. It’s simpler than that. We were underdogs, oppressed, quotaed in elite universities, banned from the best, "restricted" country clubs, unwelcome and invisible on the boards of many major American corporations–old line companies that we would call "legacy" industries today, or "dinosaurs of the rust belt"–which is why we dominated and created new industries like motion picture studios, or formed new aggressive competitors to Jew-phobic firms in, for instance, Wall Street.

    We remember our underdog days (how could we forget, considering the catastrophes we endured worldwide) and we still champion the underdogs of today, even though, in America at least, we’ve become big, successful (see your income comments) overdogs. That is to our credit. But it can (and does) cloud our judgement at times. Some underdogs hate us actively and noisily, Black Muslims, lots of un-black muslims, Castro/Chavez loving, free market loathing neo-coms, reflexively Anti-Israel, pro Palestinian NGOs, even some mainstream Protestant churches (divestiture proclamations, Israel boycots) and, irony of ironies, the heavily Jewish ACLU. Yes, we often hate ourselves, out of guilt for our so-called privilege (privilege that was EARNED for us by our great-grandfathers in Lower East Side sweat shops.)

    In that way we’re just like the rest of guilty liberal America, who should be the mortal enemy of everything the profoundly illiberal, anti-feminist, gay-decapitating Islamists stand for, but are self-castrated by their tender-hearted but terribly misplaced guilt.

    But we’re a smart people. I think we’ll grow out of it. Social justice will remain the hope of our hearts, but our heads will teach us, eventually, what social justice means, who is for it, who is against it, and whom we have to oppose to achieve it.

  • Professor Paul Socken

    The authors know a lot about economics and nothing about Judaism. Have them read the prophets on social justice.

  • Lawrence Bush

    The fundamental law of Jewish economic philosophy is expressed in Psalm 24:1: "The earth is the Lord’s, and all of its fruits." This notion of the Divine ownership of wealth was used by the Talmudic rabbis to construct an economic philosophy that mixes market and distributive mechanisms, but emphasizes a covenantal obligation of the whole community to help uplift the poor. The Divine ownership of wealth easily translates into the recognition that wealth is collectively generated, that natural resources are our collective blessing, that all economies are social, and so on — insights that much more reinforce a socialistic orientation than a pure market orientation. Yet Judaism, in its wisdom, also recognizes the yetzer hara, the evil or lustful impulse, as the motor force of individual economic action. There is, therefore, intimation of a social democratic ideal that blends recognition of our covenantal obligations with our self-interest. As for "champagne socialism," let’s hope so: we have nothing to lose but our corks.

  • Dr. Aubie Baltin

    Lawyer’s and Theologians rule the world and they both have set their mark on thought and methods of thinking. Both attempt to narrow the focus and extrapolate from there. Every Rabbi and Minister that I know of can’t speak more than 3 sentences without quoting a partial phrase out of the Bible, always taking it out of context. Quite often they even misquote the few words that they do quote. As an example. "Money is the root of all evil". It is the relentless pursuit of money that is the root of all evil. Not money itself, since money is an inanimate object. The best example of this is Det: XXII which states that a Jew cannot charge his brother interest and, XXIII which states that a Jew may charge a stranger or foreigner interest. This naturally contradicts another of God’s laws about treating the stranger as if he was your brother: From these two sentences comes the prohibition of Jews of neither paying or receiving interest. "Neither a Borrower Nor a Lender Be". It was not until Thomas Aquinas, before any religious text, came to realize the absolute necessity of lending and interest to social and economic progress,some 2300 years after God told Moses of its importance. If we Jews were to follow the dictates of Det XXII and XXIII as interpreted by our rabbis, no Jew could buy a house or own or expand a business.

    The Bible expressly teaches us about how to give charity. 1) 10%% of income only, with absolutely no regard to the size of the income or the wealth of the individual. 2) You must not harvest the corners of your field… that is so the poor can come at night and glean for themselves. It is better not to give at all than to give and take away the recipient’s self respect. That is why Governments should not be in the business of giving charity or redistributing wealth.

    I can go on indefinitely, but to sum it all up in a nut shell. Adam Smith’s Free Market Capitalism comes straight out of Torah and it is Capitalism that is the economics of the Bible, not socialism. The proof of that is that Socialism must destroy all belief in God if it is to exist: Just ask them they will tell you.

    Hopefully it won’t be too much longer before I finish writing and then publish the two books that I am working on. "GOD FAITH AND REASON" and THE ECONOMICS OF THE BIBLE".

  • J. Ankrom

    "If we Jews were to follow the dictates of Det XXII and XXIII as interpreted by our rabbis, no Jew could buy a house or own or expand a business." (?) Rushdoony and others made this same mistake in arguing with S.C. Mooney regarding his book: "USURY: Destroyer of Nations"

    Given the context of the prohibitions against charging usury on loans, I fail to see where one can conclude this to be a prohibition against borrowing money for a home or for expanding a business. This is twisted. While needing to borrow money may be perceived as bad, this does not rise to the same level as being damnable; ie, lending at usury.

    Furthermore, the distinction of lending at usury to a "stranger/foreigner" as opposed to a brother is not a contradiction. It, (lending at usury) is historically understood as an act of war against the enemy of God’s people hence the ‘neshek’ bite of usury being permissable against the ‘nokri’ foreigners/distinct from the sojourner willing to live at peace (like Ruth who was a stranger/foreigner) but a different word is used in the original and I cannot at this time recall it.)

    Thomas Aquinas like Calvin suggested (in spite of their admitted lack of economic training) that lending with interest for commercial purpose was permissable and perhaps necessary, since the biblical prohibitions are clearly personal. Deut. XX111 clearly states, "when YOU lend to a person who is POOR BY YOU." (NAS) this does not limit the lending at usury only to those not poor as some would suggest. It simply states, when lending to someone more needy than you. This is far different from, as some would attempt to suggest that, lending at interest is only prohibited in loans to ‘the-poor’ whoever they may be.

    Perhaps the best answer to the dilemna of usury is found in Psalm 15. "Who may dwell on Thy holy hill? …He who does not put out his money at usury." Indeed

    Finally, the final word on usury/interest may be found in Luke in the parable of the talents. A parable which has been torn asunder by most. Particularly those who like the idea of ravaging anyone in need. "christian-bankers" love to hear the twisting of the Masters words into a blank check for usury taking. However, a more careful reading of the parable clearly demonstrates the Master condemning the lazy servant as well as interest taking. "By your own words I will JUDGE you. If as you say, I am a thief, evil and wicked, reaping where I have not sown. Why then, did you not put my money with the bankers, so that upon my return I could collect mine own with usury?"
    This is hardly a recommendation for the newest CD or local municipal bond program. Rather, it is a clear and unequivocal statement equating usury/interest as theft.