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Financial Crises And Torah
October 10, 2008
Rabbi Shmuel Kaplan
Special to the Jewish Times
The financial crisis is absorbing the attention of the country. How will the crisis unfold? What will the solution be? Who will be the winners and who the losers? Where the crisis originated and what is the root cause is receiving scant attention and that is what I want to address.
In human economic affairs there is a built in paradox. On one hand, if economic activity is tightly regulated and controlled by the government, as in the communist module, then all initiative, energy and drive is sucked out of the system and it ultimately collapses, as we witnessed it in the Soviet Union in the 1990’s. On the other hand, if we do not have any (or only minimal) regulation and permit an unfettered free market then greed takes over and becomes the dominant drive in the system and ultimately it is also doomed to fail, as is happening before our eyes in the US today.
The reason each of these extremes leads to disaster is that from the time of the sin of Adam and Eve everything in the world carries within it a mixture of good and evil. Every human conceived system must follow this paradigm and contain a mixture of positive and negative results. The trick, of course is to find the exact balance point where the individual initiative and spirit is unleashed while still maintaining a reasonable control over the greed and avarice that resides in each one of us. But is this balance possible?
This is where the Torah comes in.
The Torah advocates an essentially free market system of competition, land ownership, and wealth accumulation. However, it is seasoned with various limitations; killer competition is outlawed, property rights are overlaid with zoning regulations, price gouging is banned and wealth must be shared with the less fortunate.
What makes the Torah system work, however, is that morals and ethics play a pivotal role in every strata of society. The whole of Torah is a process geared to ennobling the human being to overcoming the inherent attributes of greed and lust.
This notion is clearly demonstrated in the Biblical commandment (Deuteronomy 26:1) obligating the people to bring the first fruits of the land each year to the Temple where a statement of thanksgiving and gratitude to G-d was made. Though the actual value of the fruits was small, the significance of the event was profound.
Thanksgiving has a profound effect on the one who gives thanks. Thanksgiving is an admission that the blessings one has are G-d given gifts, not an entitlement or payment for one’s labor and effort. Such humility and gratitude form the very basis of the Torah economic system. When this attitude is properly internalized it becomes the antidote to greed and desire, replacing them with gratitude and thanksgiving.
Whereas the giving of charity demonstrates that we have compassion and concern for others (an important and laudable trait) the commandment pf the first fruits instills gratitude, humility and modesty.
In looking for the root-cause for the current crises in the United States I suggest that it is the very sense of entitlement and greed that has become so pervasive in our society. Those who borrowed money for houses they could not afford and those who extended the mortgages to them (so long as they got their fees), as well as those who packaged the mortgages and sold them off to (unsuspecting or willing) buyers, are equally guilty of the same sin of entitlement and greed. Each of these people acted with their personal gain in mind instead of the eventual wide-spread consequences.
The 1980s was the Me-Generation, epitomized by slogans like “taking care of number one.” Well, the young people of the eighties grew up and applied their life’s lessons to house buying, mortgage lending and the security firms’ board rooms. The result is the mess we find ourselves in today.
There are those who will now rally to the battle cry of more and more regulation, as if regulation is the panacea for the economic troubles we face. They fail to acknowledge the serious down-side of regulation, the stifling of personal initiative. Others will cling to the idea of the free market and try desperately to hold on to the freewheeling days of yesterday. They’re argument is, that left alone the markets will right themselves despite the greed. The truth is that any economic system devoid of values and ethics will fail in the end, either because the weight of regulation needed to combat greed sinks it or unbridled greed overcomes prudent market forces and destroys it.
The true hope for an energized free market economy is to imbue society with true Torah values and ethics. People who achieve wealth and live their lives with modesty and humility should be the ones held up for public approval and respect. The traits of gratitude and thanksgiving need to be valued and promoted and not the traits of entitlement, greed, and conspicuous consumption.
Rabbi Shmuel Kaplan is the Maryland regional director of Chabad Lubavitch.