Jewish Journal


July 29, 2009

Business Ethics for a Post-Madoff World


The Madoff scandal, which involved so many Jews as both perpetrators and victims, inevitably raises deep questions in people’s minds about the relationship between Judaism and business. Let me ask the question that none of us wants to face: Does our tradition and the culture it spawned actually encourage fraud? Are the anti-Semites right about Jews “Jewing” everybody — even fellow Jews?

Clearly, the long history of anti-Jewish legislation that prevented our ancestors from engaging in what were considered honorable professions like farming pushed them into the “dirty” professions that involved money, and so many of our ancestors developed expertise in trade, banking and other businesses. That explains the high percentage of Jews involved in business, but does it also explain why Jews would engage in fraud?

Theology and Anthropology

Actually, if anything, the opposite is true: Judaism helps us to hone our sense of the importance of honesty in business and the ways to achieve that value. It does so through its beliefs about God and humans and through its laws. These theological, anthropological and legal moorings clearly cannot prevent scandals in business like the Madoff case; life does not come with such watertight guarantees. They can, however, help us understand and avoid fraud and respond appropriately to it when it occurs.

First, theologically, the Torah asserts that the whole world belongs to God. God, as Creator of the world, is thereby owner of it (Deuteronomy 10:14). We humans, then, are tenants in God’s world, and God can and does establish the rules for our use of the world.

But, second, what are we humans like? In contrast to Christian notions of Original Sin, the Jewish tradition portrays us as coming into this world with both self-directed faculties (the yetzer ha-ra, the evil inclination) and other-directed faculties (the yetzer ha-tov, the good inclination). One rabbinic source (Avot D’Rabbi Natan 16) suggests that the self-directed impulse holds sway over us from infancy (think of the way infants behave) until we reach maturity at 12 (for girls) or 13 (for boys), at which point the other-directed faculty has been sufficiently trained to balance our self-directed interests and we can be held morally responsible for our actions. Even then, however, we need some self-directed concerns, for without them we would not do many of the things that we need to do in life: “Were it not for the evil impulse, a man would not build a house, marry a wife, beget children or conduct business affairs” (Genesis Rabbah 9:7).

Legal Principles and Rulings

These views of God and human psychology, then, set the stage for business. The Jewish tradition does not presume, let alone demand, socialism or communism; quite the contrary, it assumes capitalism, albeit with a thick safety net for the poor and sick. That is the reason that Jewish law sets out so many rules about how business should be conducted honestly. These laws include both general principles and specific demands. So, for example, the Torah and the Talmud announce value statements like these:

• “You shall not steal; you shall not deal deceitfully or falsely with one another” (Leviticus 19:13).

• “Love your neighbor as yourself; I am the Lord” (Leviticus 19:18).

• “You shall not falsify measures of length, weight or capacity. You shall have an honest balance, honest weights, an honest ephah [dry measure] and honest hin [liquid measure]” (Leviticus 19:35).

• “Your ‘yes’ should be honest, and your ‘no’ should be honest” (Babylonian Talmud, Bava Metzia 49a).

• “Justice, justice shall you pursue….” (Deuteronomy 16:20).

• “You shall not oppress a stranger, for you know the feelings of the stranger, having yourselves been strangers in the land of Egypt” (Exodus 23:9).

• “The seal of the Holy One is truth” (Babylonian Talmud, Shabbat 55a, Yoma 69b, Sanhedrin 64a).

• The Holy One created everything in the world except for falsehood and exaggeration, which were not God’s doing; people created those on their own (Pesikta Rabbati 24).

The prophets of the Bible complain bitterly about people who violate such principles, and both the prophets and the Books of Psalms and Proverbs depict the righteous person as one who is honest in business (e.g., Psalms 15; 112).

We need such principles to guide our lives, but we also need to know how they should be applied to concrete circumstances. The Torah, the Talmud, the codes and the multiple rabbinic rulings in concrete cases (teshuvot, responsa) to our own time give us precisely that kind of guidance. For example, the Conservative movement’s Committee on Jewish Law and Standards has approved responsa on such modern issues in business ethics as intellectual property, whistleblowing, unions, privacy on the Internet and donations of ill-gotten gain (all available at rabbinicalassembly.org under the link “Contemporary Halakhah”).

The Ultimate Test of Our Moral Mettle

A remarkable passage in the Talmud speaks of what God asks us about our lives when we die. The very first question on the list is: “Did you conduct your business affairs honestly?” (Babylonian Talmud, Shabbat 31a). Presumably, most of us do not murder or intentionally injure others, and so the Talmud goes to the heart of what will test our moral mettle: Did you conduct your business affairs honestly? It thus calls attention to how important honesty in business is in determining who we are as individuals and as Jews.

Rabbi Elliot N. Dorff is the Distinguished Professor of Philosophy at American Jewish University and chair of the Conservative movement’s Committee on Jewish Law and Standards.

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