Haredi man in front of tents in Jerusalem 521.
(photo credit: Reuters)
Would the rabbis of the Talmud be out on the streets – and in the tents – with
the protesters? Or would they be defending the government and the status quo? I
believe they would be out in the streets and parks with the
The largely secular protesters may not know it, but they
have Torah on their side.
It is well known that the Talmud favors a
strong “safety net” for taking care of the poor. Jews have always collected and
disbursed charity for their less fortunate brethren. But the current protests
are not so much about the state of the safety net as they are about the cost of
living. Does the Jewish tradition have something to say about that? It does. The
Talmud favors an economic system that I would call “fettered capitalism.” It’s
capitalism with a lot of rules and restrictions to prevent the abuses that the
rabbis saw could occur when greedy people were free to exploit others because of
And we know people are greedy; after all, the Torah cautions
us that “a man’s inclination is evil from his youth.”
The Torah calls for
the marketplace to be fair. There are requirements to have true and just
weights. Not only that, but in Leviticus we are commanded, “You shall not
defraud one another.”
The rabbis of the Talmud understand this verse as
telling us that prices should be fair. A seller cannot charge more than
one-sixth (15 percent) more than the market price. If he does, the sale is
considered illegal and can be voided.
Of course, location, service,
warranties, etc. are all part of the product and could influence what the price
should be. In the interest of fairness, the rabbis of the Talmud were also
concerned about under-charging. Not only is it prohibited to pay more than 15%
above market value, it is prohibited to pay more than 15% less than market
value. The sellers are also protected.
The Talmud also says the maximum
profit should be 15%. In today’s world, any company selling consumer
“necessities” that can make a 15% profit after all expenses and taxes is making
quite a reasonable rate of return. Proctor and Gamble, for instance, one of the
leading consumer goods companies in the world, has a 14% profit margin. Osem,
one of Israel’s leading food producers, has a profit margin of less than
Hi-tech and pharmaceutical companies often earn higher returns, but
they are also higher-risk.
The 15% guidelines developed by the rabbis of
2,000 years ago cannot directly be translated into a complex, modern, global
economy. But the underlying principles – the values the rabbis teach us –
certainly still apply.
Consumers are entitled to “reasonable” prices and
protection from gouging, and vendors are entitled to make a living.
DO we decide what is a reasonable price? In a global economy, we can compare the
cost of living here to the cost of living in other places. By that measure, it
is clear that something is broken in the Israeli economy. We are at the bottom
of the affordability index for developed countries in terms of buying power
compared to salaries.
Immigrants from America, such as myself, often feel
taxes here are very high, but the truth is that the overall tax burden in Israel
is no higher than the OECD average. Our cost-of-living problems cannot be
explained simply by saying “taxes are too high.” The high cost of living is
driven partly by the structure of the tax system (owning a car here costs six
times as much as it does in most other countries), partly by economic
concentration (the small number of family enterprises that control huge parts of
the economy), and partly by governmental problems such as excessive bureaucracy,
needless regulation, and flawed policies relating to releasing land for
When there is a small number of competitors, it
makes it easier to fix prices and manipulate supply chains.
As the great
18th-century economist Adam Smith said, “People of the same trade seldom meet
together, even for merriment and diversion, but the conversation ends in a
conspiracy against the public, or in some contrivance to raise
The rabbis recognized this problem, and ruled that prices for
staples, like wine and oil, should be fixed by an official superintendent of
prices. Only for luxury goods, like spices, should prices be solely set by the
While most contemporary economists would say that government
price-fixing is not beneficial in the long run, again we can learn from the
principle: Prices for necessities are more important than for luxuries. In
modern terms, this would translate into policies such as a reduction or
elimination of VAT on necessities such as food.
The rabbis clearly did
not approve of those who would raise prices in the marketplace. The
teaches: “What was their reason for placing the [prayer for the]
blessing of the
years ninth [in the 18 blessings of the Shmona Esrei prayer]? R.
This was directed against those who raise the market price [of
it is written, break the arm of the wicked; and when David said this, he
in the ninth Psalm.”
The rabbis also frowned on people who hoarded goods,
keeping them off the market to make them scarce and raise prices, and
opposed to middlemen, because they recognized that a dealer selling to a
means there will be price inflation, as everyone wants to make
From these examples, I think it is clear that if they were alive
today, the rabbis of the Talmud would be out on the front lines with
complaining about the cost of living. So why don’t we have more rabbis
in the leadership of the social justice movement? The writer is a business
executive and rabbi. He serves as chairman of the Board of Directors of
for Human Rights. Opinions expressed here are his own.