Saturday, February 03, 2007

Jews do not worship free markets

The title of this post is the kind of thing that ought to be self-evident. We worship God, not markets. Yet many Jews, even Orthodox Jews, seem to think that there is something magical about free market capitalism. This despite the many intrusions into the operation of such markets that are mandated by the Torah. The most famous example is the explicitly prohibition against freehold land tenure in Eretz Yisrael. Taanit 20b offers an example when interference in the market, even when not required by the Torah, is meritorious. Rav Huna, who was very wealthy, took it upon himself to try to protect agricultural producers from the merciless free market: "On every eve of Sabbath he would send his servants to the markets with instructions to purchase all the vegetables, which the marketers had left on their hands, and throw them into the stream, in order that they might not be put on sale again the following week in an unwholesome condition." (Rodkinson translation.)

Rav Huna as making sure that the growers would continue to produce goods for the market, so that buyers would have a plentiful supply. This is not much different from what governments in Europe, the United States, and some other countries do to this very day. It is precisely the kind of market interference that free market economists rail against. But the hashgafah is not according to the economists, as this brief aggadic material shows.

8 Comments:

Anonymous Anonymous said...

"Yet many Jews, even Orthodox Jews, seem to think that there is something magical about free market capitalism."

Straw man alert!

Many Jews, even Orthodox, seem to think that it is more important to actually help poor people, than to implement nice-sounding policies (minimum wages, income redistribution, WIC, and so on) that work to their detriment. We've had this discussion many times, and you have yet to respond to my identification of prozbul as a primary example of Chazal favoring a mechanism that actually benefits poor people over the Torah's purer form of shemitat kesafim, which ultimately did not.

I contend that what is hashkafically (to coin a clumsy word) preferred is that which actually works in a given society.

It is fairly clear that society as a whole does far better in free economies than when the government intrudes, regardless of the nobility of its intentions. There's a reason why per capita income is better in, say, South Korea than in its immediately northernly neighbor, if I can choose an extreme example.

Or look at France, and the difficulties it is having in integrating its immigrant population, many of whom are unemployed. This steadily deteriorating situation is easily attributable to completely foreseeable (and, in fact, foreseen) market reactions to France's ostensibly "pro-worker" policies, which are causing grievous harm to French society.

- Moishe Potemkin

1:14 PM  
Anonymous Anonymous said...

"And I haven't even begun to enumerate the tremendous domestic problems for which government might be able to contribute to a solution."

(Man, am I ever clogging up your comments today!)

Should this statement, attributable to one Charles Hall, be interpreted as a belief that "many Jews, even Orthodox Jews, seem to think that there is something magical about" the American government?

- Moishe Potemkin

1:25 PM  
Anonymous Anonymous said...

"This is not much different from what governments in Europe, the United States, and some other countries do to this very day. It is precisely the kind of market interference that free market economists rail against. But the hashgafah is not according to the economists, as this brief aggadic material shows."

I neglected to point out the main error in your post - Rav Huna used his own money to make his acquisitions. No free-marketer anywhere disagrees with this concept. We do disagree with using government-expropriated funds to disrupt the marketplace, but if a wealthy person chooses to buy stuff to throw it away, that's not a market disruption, that IS the market.

- Moishe Potemkin

5:43 PM  
Blogger Ezzie said...

I'm with MP, as you know. You've also created a LOT of straw men in this piece.

Moreover, I don't think that even those of us in favor of free markets are against anyone not only buying up the garbage food, but we're also in favor of ensuring that quality products make it to the market. Buying the bad out is one way to do so (notice also that there's a huge difference because it's a private individual doing so unforced - the sellers can't take advantage, because R' Huna will simply not buy it; when the government promises to buy certain amounts, the sellers can take advantage).

If anything, other halachos seem to work against the ideas of welfare/minimum wage/etc in terms of helping the poor. Not only did they have to work hard to get their leket et al, they were restricted from taking much of the produce.

10:18 PM  
Blogger Ezzie said...

I'm with MP, as you know. You've also created a LOT of straw men in this piece.

Moreover, I don't think that even those of us in favor of free markets are against anyone not only buying up the garbage food, but we're also in favor of ensuring that quality products make it to the market. Buying the bad out is one way to do so (notice also that there's a huge difference because it's a private individual doing so unforced - the sellers can't take advantage, because R' Huna will simply not buy it; when the government promises to buy certain amounts, the sellers can take advantage).

If anything, other halachos seem to work against the ideas of welfare/minimum wage/etc in terms of helping the poor. Not only did they have to work hard to get their leket et al, they were restricted from taking much of the produce.

10:19 PM  
Blogger Charlie Hall said...

"other halachos seem to work against the ideas of welfare/minimum wage/etc in terms of helping the poor. Not only did they have to work hard to get their leket et al, they were restricted from taking much of the produce."

I see this point -- but that is clearly not what the leaders of the Torah world accept today, especially in Israel. They are enthusiastic supporters of the welfare state. (That would be a great subject for JAJC.)

10:48 AM  
Anonymous Anonymous said...

"I see this point -- but that is clearly not what the leaders of the Torah world accept today, especially in Israel. They are enthusiastic supporters of the welfare state."

Of course, the same way we educate them on specific medical issues as the need arises, we should educate them on economic issues as well.

- Mpishe Potemkin

12:16 PM  
Anonymous Mike S. said...

In fact, the economic system prefered by the Torah and by Chazal does not seem to fit readily with any of the available modern models. It is certainly true that pure laissez faire capitalism is not what the Torah favors, but it is a bit of a straw man, in that no one else really favors it either. On the other hand, with a few exceptions like interest bearing loans, people are generally free to enter into economic agreements as they see fit. Absent a specific Torah prohibition, the Beit Din will generally enforce any agreed to contract, even when it explicitly changes some default rule. The areas where Chazal seemed to most strongly favor market interventions were specifically to make sure that the poor could find food they could afford. That is far less common a situation than it once was, partly because of rising economic standars, and partly because of successful social programs.

I generally find that when people invoke Chazal to support their preferred line of economic policy, they are pulling isolated cases and quotes from a large corpus. It is very hard to rely on classical Rabinnic writings for current policy, becuse Chazal's policy decisions were made in a very different social context, and the question of how the same authorities mught rule today is often contentiously debated. For an example I was recently paying attention to, consider the permissibility of smoking. Rav Moshe Feinstein, writing in the 1960's wrote that one should not start smoking, but that we should not require smokers to quit. Some people say that is still the case; and RCA committee however, ruled that it is not permissible to smoke. They asserted that, if Rav Moshe were aware of all the scientific data accumulated between his t'shuva and the time of the RCA committee, he would have ruled as they did. others say he wouldn't. Without either prophesyvor violating the Torah prohibition agains necromancy (and somehow making the necromancy actually work) I seen no way of conclusively deciding what Rav Moshe, ZT"l would have said

8:02 AM  

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