Jews and Capitalism: Call Them Frenemies

A recent rabbinical court ruling in Brooklyn calls attention to the fact that traditional Judaism isn’t so supportive of free markets.

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Traditional Judaism isn’t so supportive of free markets.Credit: Tina Fineberg / Chabad.org

For those of you who closely follow developments in the Brooklyn kosher-pizza scene, a recent decision by a local Jewish religious court must have been a shock.

The rabbis ordered the owner of a new pizza joint called Calabria to adjust his menu, and start serving ordinary round pies sliced in eight wedges to avoid unfair competition with another pizzeria across the street, known as the Basil Pizza & Wine Bar, which serves the thin-crust saucy type.

Shocking? 

Only if you think Jews are arch-capitalists who have thrived in the world of business, finance and trade going back to the Middle Ages. “Why did God create gentiles? The old joke goes. “So there’d be somebody to buy retail.”

If Jews are so good with money, there must be something in Jewish law and traditional religious practice to explain those capitalist kishkas.  

And yet here we have a bet din citing a raft of Talmudic dicta to tell an honest Jewish businessman how to run his restaurant, down to the shape and depth of the crust. The dayanim cited the principle of “hasagat g’vul,” which bars competition that could hurt the income of a pre-existing business.

It’s kind of the reverse of antitrust, saying competition has its social costs, and we will set limits on it.

A Rothschild for every Marx

Since the ideas of capitalism and socialism arose over two centuries ago, there has been a long debate about which side the Jews are on. For every Karl Marx, Rosa Luxemburg and Leon Trotsky, there’s been a Rothschild, a Hollywood mogul or a Sheldon Adelson, which makes the issue very confusing.

Jews have prospered in free market economies, but their politics are left of center. Israel was born as a socialist society and still wistfully looks back to those halcyon days, even as its kvells over Mobileye’s billions.

The Capitalist Torah school points to the assumption of Jewish law going back to the Bible that there’s property and that it is sacrosanct – just look how Elijah raged when King Ahab murdered Naboth and took his vineyard. The Socialist Torah school points to the prophets in general and their calls for social justice and the central place of charity in the rabbinic world.

In fact, both sides miss the point, which is that Hillel as much as Shammai would have been lost in the debate.

The sages and the market economy

In their world and the world of the sages before and after, the ideas of a market economy, investment, enterprise and innovation didn’t exist. Their economics, such as it was, was based on community values and social solidarity.

Private property was fine as far as it goes, but Jewish law enveloped it in so many restrictions that it was hardly an absolute principle. Not just hasagat g’vul: the Torah has rules about treatment of hired labor, leaving part of your harvest for the poor, which evolved into the notion of mandated charity; a ban on doing business on the Sabbaths and holidays; and regular remission of debts.

The rabbis never employed the word, but it was all about distributive justice and the notion that you were answerable to an organized community and its values.

The prophets had some stirring words to say about justice and oppression, but they were ignored when they were spoken. Great for sermons, not for the real world. But Jews did follow halachic norms for centuries and their attitudes were communitarian, which left of deep impression on the Jewish world outlook, even for Jews who long stopped observing halacha.

If we're good at business, I would argue that  is only tangentially connected with Jewish tradition.

The earliest Jewish capitalists, the medieval merchants and money lenders, got into the business because they had no choice in economies based on feudalism and guilds, where Jews were unwelcome. A tradition of book-learning and ties with other Jews is far-off communities gave them the intellectual skills and the business networks they needed to thrive.

By the time capitalism as we know emerged hundreds of years later, Jews had all the human capital needed to make it in the world of banking and business. Moreover, capitalism’s focus on the impersonal workings of the market and money served the Jews well by making them equals in competition with their gentile neighbors. And so Forbes list of the world’s top 10 billionaires in 2016 counts no less than three Jews.

Milton Friedman in a lecture 30 years ago pondered the question about why the Jews are at once so prosperous yet have such leftist political tendencies. Part of it he ascribed to the left-right divide in Europe in the 19th century – the right was tied up with Christianity and hostile to the capitalism that was so good to the Jews, so the Jews sided with the left.

In America, which had no such divide, the Jews were determined to disprove the anti-Semitic canards about their greediness by supporting social justice and the welfare state.

There’s a ring of truth to all that. But Friedman missed the deep Jewishness of the Jewish worldview.

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