Later this week, I will do another traditional Torah podcast and go over the Parsha of the week. Today, though, I want to do something a bit different. I want to talk about Torah-based economics.
The reason for this is simple. We are in a period of massive economic change. Coronavirus, combined with exponentially more capable robotics and a concentration of economic, social and even political power in fewer and fewer corporate and government hands is leading to massive changes.
The continued rise of coronavirus in Israel, despite our massive vaccination campaign, is also deeply worrying. Some things may be far more permanent than we’d like.
Now, of course, everybody is looking at the crisis as an opportunity to create the reality they’d like to see.
Given all of what’s going on, it isn’t hard to imagine a future with regular stimulus payments serving as a sort of universal basic income. Or seeing logistics, delivery and food service workers being phased out en-masse in favor of automated systems.
It isn’t hard to imagine, to put a bit of a Marxist spin on it, a world in which capital is far more powerful than labor – simply because the labor isn’t much needed.
It also isn’t hard to imagine the democratic force of that unneeded labor regularly and massively redistributing wealth.
We’re going to go through some economic change. And in this environment, it is truly important to step back and ask a basic question: “What do we actually want?”
What purpose is economics supposed to serve?
Is our concern income inequality? Is it opportunity? Is it property rights and the economic growth they tend to drive? Is it food and comfort?
Over the last few podcasts, you might have noticed a bit of a Conversative streak. I decried the effects of Joseph’s welfare on his brother’s. I attacked the collectivization he drove. I spoke about freedom not in terms of freedom from want and need – but in terms of freedom to choose and take personal responsibility despite the risks.
You might assume, given the recent content, that I read the Torah in a Conservative economic light.
But isn’t actually the case.
My mother was a professor at a local college. One of her colleagues had a class called “Marxist Influences on Pre-Socratic Thought.” We used to laugh at the ridiculousness of it. Marx established a way of looking at the world thousands of years after Socrates. Trying to suggest that those ideas had an influence on pre-Socratic thought was anachronistic at best. The challenge is more than anachronism, though. When you try to impose ideas like capitalism and Marxism on texts and ideas that were based on very different worldviews, you risk failing to see those worldviews were actually talking about; were actually concerned about.
You are so busy casting everything you’re your modern mold, that you fail to realize what the ancients were actually arguing for, and about.
The same thing applies to Torah. If you try to cast it into a Conservative economic mold, you can find your sources. You can find the dangers of welfare. You can find poor laws that had no actual enforcement and were thus calls for moral, rather than State, action. You can find commandments to treat rich and poor the same under the law. You can find commandments against theft that care not a whit what the motivation for that theft might be.
At the same time, if you try to cast it into a Liberal economic mold you can also find a great deal of support. There are commandments to support the poor, widow and orphan. The corners of fields are left for the poor. You have to pay wages immediately. Loaning money with interest is almost entirely prohibited. You have to redistribute land every 50 years.
If you want to push the text into either mold, into either system, you can. Religious people do this as a way of arguing that their particular modern perspective is actually the right modern perspective.
But when they do, they miss the ideas the text is actually arguing for.
They have the wrong filter on their lens.
I think those ideas are critically important for answering the question we should all be asking: “What do we actually want?”
If you look at the list I just gave you, the Torah clearly has both Liberal and Conservative ideas, so what is the Torah trying to accomplish?
Let’s begin to walk through a few examples and see what we can glean from them.
The first concept I want to look at is the disconnect between creation and acquisition. It isn’t obvious, but it runs deeply throughout the text.
Creation is absolutely central to the Torah. We are created in the image of G-d and the first thing we know about Him is that He is the Creator (or She, depending on your perspective). When He creates something related to creation, He calls it Good. Notably, Heaven, Night and even Shabbat are not good. The term is focused on connection to creation and Heaven, Night and Shabbat are not connected to creation. Goodness in Torah is, with the exception of two indirect verses, entirely separate from the concept of holiness.
As I read it, and I can go into it more detail another time, the failure to create leads to our exposure to greater and greater evil – as a spur to creation. Eventually, we are banished from the garden because it is better for us to experience good and evil than to experience neither.
But Hashem doesn’t create in order to own. It seems that He creates in order to create us and then to rest on the Shabbat – establishing holiness.
As I read it, He creates in order to have a relationship with us. In a mirror image, I believe we are meant to create in order to have a relationship with Him. That relationship is holiness. But holiness requires the absence of both creation and destruction. It is separate.
The disconnect between acquisition and creation is starkly highlighted in the stories of Lamech’s sons. Very early in the Torah, we learn about three sons whose names have a connection to Yaval – to acquisition. They all acquire money. Their names are forms of passive acquisition, or – in the case of Tuval Cain – active acquisition. The first one is a cowboy or cattle herder and he acquires. The next one is in the entertainment industry, or perhaps prostitution, and he acquires as well – but more passively. And then you have Tuval Cain who acquires through selling arms. Their focus on acquisition leads to a complete breakdown of society. It would seem that this sort of acquisition without creation is inherently a bad thing. And the further down they go, the more their acquisition is connected to destruction.
At the same time though, that root, Yaval, is a central economic plank of the Torah. It refers to the 50-year cycle in which people get their ancestral lands back. They acquire without creating. It is also used just before the giving of the Torah. The people are to prepare for the Hamshech Hayovel in which they will come up the mountain. There isn’t a Hemsech Hayovel that actually happens for reasons we’ll get to when we get to that parsha – but something magical and wonderful is handing there.
And it has something to do with acquisition disconnected from creation.
While the reference on Har Sinai is almost impossible to understand, the reference to land ownership is far clearer. Critically, people aren’t really getting back ancestral lands. We think of it that way – getting back your family’s lands. Instead, the land belong to Hashem. They are getting back what is their right because of their relationship to G-d, not what family they belong to.
But the concept of Yovel doesn’t apply to all property. People aren’t suddenly on the same footing. There is no redistribution of gold or even real estate within the cities. What people are specifically acquiring is land that can be worked. It is land that is worthless unless it is worked.
As I read it, because of our connection to G-d, we regularly reacquire our right to engage in creative work.
What we have, then, is our first two Torah-based economic rules.
First, creation is critical, but acquisition is not.
Second, we have a right to engage in creative work.
So if acquisition is somehow disconnected from creation, where does acquisition come from? As we read further in the text, it seems that – at least on a national level – that acquisition is in the hands of G-d. There are curses in which we plant but do not harvest and there are blessings in which our plantings yield unnatural results.
The question is, what triggers these curses or blessing?
Specifically, what triggers a lack of acquisition? Later in the Torah there are many things that trigger national curses – often tied to our relationship to G-d. But these national curses only occur after the sin of the Calf when the relationship to Hashem changes. Before that sin, our relationship to G-d is far more basic.
Before that sin, there was only one national curse.
I’m going to translate the word ‘Anah’ as impoverish – it can also mean afflict. And I’m going to use the word ‘y’all’ for the plural – because conventional English misses this. So, here goes:
Exodus 22:21 Y’all shall not impoverish any widow, or fatherless child.
22 If you impoverish them greatly – because of which they cry out greatly to me, I will surely hear their cry–
23 My nostrils will flair, and I will kill y’all with the sword; and y’alls wives shall be widows, and y’alls children shall be fatherless.
(Sorry if that seemed a little off to some of you. But we really need a plural second person in English.)
Why are widows and orphans special? Why not include any poor people. Widows and orphans aren’t a huge social and economic problem today. But let’s think about how they were created in the ancient world. Typically, the father/husband in the family would die – perhaps in war or from disease – and his family would be left destitute. They would have no means of income.
In this situation, they can’t be allowed to be impoverished. This can be interpreted a number of ways. It could be active impoverishment – as in people trying to make the lives of these people worse than it already is. Given their circumstances, though, passive impoverishment would seemsufficient – as in, letting people be greatly impoverished.
We have to suspend their exposure to destruction.
If good is creation, evil is destruction. We have to limit the effects of destruction on their lives.
We’re not talking about total redistribution of assets. We’re just talking about putting a limitation on the effects of extreme poverty.
The suspension of destruction is a concept is closely tied to holiness later on. It is fundamental to the concept of holiness. And it leads to our third economic Torah principle: we have to defend the weak against loss and destruction.
There are a few later cases, a few later commandments, which can help us understand the methods of accomplishing this.
First, when the tithing is taken:
Dev 14:28 At the end of every three years, even in the same year, you shalt bring forth all the tithe of your increase, and shall lay it up within your gates.
29 And the Levite, because he has no portion nor inheritance with you, and the stranger, and the fatherless, and the widow, that are within your gates, shall come, and shall eat and be satisfied; that the LORD thy God may bless you in all the work of thy hand which thou doest.
This isn’t about sustenance. Every three years isn’t enough to keep people alive and there is no notion of storage in the verse. The widow and orphan eat and are satisfied, they don’t take stuff home.
Instead, this is about acknowledging the rights of those who have no portion of their own. Essentially, it is saying that if Hashem has given you an inheritance because of your relationship to Him, you must remember that these people also have a relationship with G-d from which they derive blessing.
They aren’t excluded just because they don’t have land.
This gives us a fourth principle: Poverty does not exclude you from the right to a relationship with G-d.
This may not seem economic on its face, but it speaks to the importance of going beyond simple poverty relief.
The more common relief for the window and the orphan appears three times in various forms. I’ll take the longest of them:
Dev 24:17 You shall not pervert the justice due to the stranger, or to the fatherless; nor take the widow’s raiment to pledge.
But you shall remember that you were a bondman in Egypt, and the LORD thy God redeemed you from there; therefore I command you to do this thing.
When you reap your harvest in your field, and have forgotten a sheaf in the field, you shall not go back to fetch it; it shall be for the stranger, for the fatherless, and for the widow; that the LORD your God may bless you in all the work of your hands.
When you beat your olive-tree, you shall not go over the boughs again; it shall be for the stranger, for the fatherless, and for the widow.
When you gather the grapes of thy vineyard, you shall not glean it after yourself; it shall be for the stranger, for the fatherless, and for the widow.
And you shall remember that you were a bondman in the land of Egypt; therefore I command thee to do this thing.
Hashem made us slaves in Egypt. People have argued in the past that Hashem puts the poor in their circumstances and so somehow they are right. But the Torah is suggesting that it isn’t right; the reality that people find themselves in doesn’t speak to what they deserve. It just speaks to their situation.
But there’s an economic lesson here as well that is even more important. The poor here don’t have a right to finished goods. They don’t get bread and wine and olives you can actually eat. They get grain and grapes and raw olives. Before these things become the foods they are intended to be, they must be processed.
Put another way, the widow and orphan must participate in the act of creation.
This isn’t a cruelty. This is a blessing. They may not own the land or have planted the crops, but they can have a hand in the creation of their food. In the case of the grain – the most fundamental of the foodstuffs – they have to glean, to dry, to thresh, to grind and to bake. This is hard work. Grinding, in particular, is heavy industry. This is the act of creation, of imitating the divine.
This is a path to fulfillment despite one’scircumstances.
In the City on the Heights, I wrote a chapter about two orphans engaging in this process in the aftermath of the Islamic State conquest of Mosul. It is one of my favorite bits of my own writing.
There’s a charity that picks crops for the poor. I suggested to them that perhaps donors should buy rights to the fields and then the poor should pick the crops, rather than the donors. I suggested this to them, and they replied: “we’d have to figure out a way to make sure that this is done with dignity so it doesn’t make anyone feel like they have to work for their supper.”
But that is exactly the point. It far more fulfilling and empowering to work for your supper than to have it handed to you.
So, this is my fifth principal of Torah economics: Charity should provide the poor with a part in the process of creation.
Of course, not all of Torah economics is about poverty. The most striking examples of Torah economics are the Yovel and Jewish slavery.
Let’s start with slavery. In essence, Jewish men could be enslaved because of debts. Most typically, this is due to fines they couldn’t repay. Their family is supposed to bail them out, but if they don’t, they’d be sold to pay their debts. The period of the enslavement was limited to six years. In that time, nothing they created would belong to them. Not even their children or relationships. Everything belongs to their owner and – in turn – those they had owed money or fines to.
It would seem like this is creation without acquisition but, in fact, that which they acquire for their owners is going to really pay off their own debts. On the day of their sale, they acquired a large sum to cover their debts which they then work off. And when they are released, there is no additional payment necessary.
This is a way of clearing debts and resetting the clock. Kind of like bankruptcy.
The most famous example of this is the Shmitta, the seven-year-cycle in which debts are erased. It is, to say the least, seriously controversial from an economic perspective. I have a Masters in Finance and I have struggled with it for years.
Nonetheless, it and the limits on Jewish slavery suggest that there should be a limit on the power of debt.
This limit of debt is given a specific and modern form in the prohibition on the time value of money.
For those who aren’t aware, the time value of money is a principle that says money in the hand now is worth more than the same sum promised sometime later. The time value of money is why we have interest. If I loan you $1000, there’s a risk you won’t pay me back. So, I demand $1100 back, for example. The risk of the situation drives me to set a minimum reward. The higher risk the borrower, the higher the rate. The more uncertain the economy, the higher the rate.
The Torah prohibits interest. Not only that, but it prohibits the time value of money in the sale of land. We have to price land by the value of its remaining crops until the Yovel. Later crops aren’t worth less than earlier crops.
The time value of money, the pricing of risk into transactions, is prohibited.
Now, this is silly from a standard economic view. But while debt is prohibited, investment isn’t. You can buy land based on the crops it is expected to yield and then improve that land through clearing, terraces or better drainage. When you do this, you are creating a greater opportunity. It would seem, given the economic restraints, that this is the only sensible reason to buy land.
You can invest with an eye to opportunity – but you can’t have a baseline return required from those you lend money to.
So what’s the fundamental difference between investment and debt?
Interest-bearing debt gives solidity to the concept of risk. It makes it real. Whether or not anything bad actually happens, you are pricing it in. If destruction is evil, then debt establishes evil – whether or not it will actually occur.
Equity investment is about opportunity. It is about creation and thus goodness. It is about enabling us to follow in the path of G-d.
So, we have a seventh principle: Debt should be discouraged because it gives evil reality.
And there is one last principle. The principle of Shabbat. The Shabbat, in some form or another, applies to everything. It applies to men, women, slaves, animals and strangers. It is the day of holiness, specifically created by rest from work. We don’t create or destroy on the Shabbat, we attempt to touch the timeless. Through the Shmitta, it even applies to land.
This gives us our last principle: Every person must have an opportunity for holy restfulness.
This, of course, ties into debt. Debt forces the maximization of return. You can’t take a day or a year off because you have debt to service – not just your own less costly need for food and clothing. In our world, debt drives up the cost of fixed assets – specifically housing. It drives up rents and mortgages alike. If you are indebted, you can never really rest. And, of course, when financial headwinds hit debt just serves to amplify them.
Corona is about to make that clearer than it has been in many many years.
So, putting everything together, we have an economic system which is neither Conservative nor Liberal.
Let’s review the principles:
- Creation is critical, but acquisition is not.
- We have a right to engage in creative work.
- We have to defend the weak against loss and destruction.
- Poverty does not exclude you from the right to a relationship with G-d.
- Charity should provide the poor with a part in the process of creation.
- Debt should be discouraged because it gives reality to evil.
- Every person must have an opportunity for holy restfulness.
These seven principles seem like contrary goals. To give one example, welfare undermines creation. We are driven from the Garden precisely so that we will create – which we weren’t doing when we had everything handed to us. But let’s restructure this list a bit:
- We have a right to engage in creative work, but creation is not the same as acquisition
- We have to defend the weak against loss and destruction, but charity should provide the poor with a part in the process of goodness (creation) and holiness (rest with G-d).
- We must make space for holy restfulness.
This is not a conservative or liberal approach. This is its own thing, speaking another language, that happens to have both liberal and conservative aspects.
We can boil it down one more level:
- We should enable everyone to participate in the positive cycle of goodness and holiness.
Just as Hashem creates for six days and rests on the seventh, we should all have an opportunity to follow in His path. I believe it is by far the most common road to human fulfillment.
Let’s make it a bit more secular:
- We should enable everyone to participate in the positive cycle of creation and rest.
I’m not going to talk about policy in this episode. Of course I have policies that speak to this in areas including the structure of taxation and welfare, healthcare and education models and – of course – the encouragement of new forms of equity to replace debt. They aren’t conservative or liberal policies – although they have aspects of each. I can certainly speak about those policies – and argue about them. But before we do any of that, there’s a simple question.
As we go through this period of transformation, what should we aspire to. My answer is:
- We should enable everyone to participate in the positive cycle of creation and rest.
I have one question for you:
What do you think?
Thank you for listening and have a good and productive week.
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