November 02, 2008


What is the cause of the financial "tsunami" we are experiencing? Is it incompetent oversight, dishonesty, or simply unbridled greed?

Humans are usually very selfish. That is why all religions put so much emphasis on charity. Yet it is the modern state that supposedly controls excess. It taxes the wealthy more, precisely because rich individuals are usually so loath to part with their money. And as soon as one makes enough money to live off, the bar gets shifted higher and higher. Hence the Talmudic maxim that a rich man is one who is satisfied with his lot!

But it is "greed" that seems to be the issue in the public mind and media, "greed" one of the "Seven Deadly Sins" of Christianity. There is no Biblical word directly equivalent to "greed". "Envy" of course is prohibited in one of the Ten Commandments. But the command "Lo Tachmod" (You Shall Not Envy) is usually understood to mean actually taking steps to acquire something that belongs to someone else. Actions are the issue. Therefore the concern is not so much with abstract feelings of greed or envy, but rather what happens when those feelings prevent one from sharing with others or respecting what is theirs.

Our sources do not regard wanting something, or striving to acquire it legitimately, to be necessarily bad. The Talmudic tradition is to encourage every productive aspect of human activity so long as one lives up to one's responsibility to the poor and the needy, to community and society in general. Commercial activity was regarded as essential, to the point where ethical conduct of business affairs is one of the conditions of eternal life (Shabbat 31a). Poverty is not glorified in our tradition, and dependency is regarded as an undesirable state. There is no concept in Jewish texts that is the equivalent of "Money is the root of all evil." On the contrary, the Talmud actually gives advice on how to get rich: He who wishes to get rich should save (Bava Batra 25b).

Yet the Bible and the Talmud speak out against the dangers of wanting too much. There were originally Talmudic limits on excessive profit (though as we lived under different regimes, in the end the "Law of the Land" came to determine acceptable practice). And there is indeed an obligation to share one's good fortune and not to hide from the needs of others. It is all a matter of degree. Our tradition sees both the material and the spiritual holistically engaged in the struggle to live according to Divine values. Both can be used well or abused. Hence we value the Maimonidean ideal of the golden mean, of disciplining oneself to be balanced.

Some have argued that this current crisis is a failure of an economic system. Judaism takes no definitive position on economic systems. Capitalism does seem to be a better way of generating wealth than an overly regulated command economy. Yet most capitalist countries also have welfare systems in place that rely on money being generated to fund them. So freeing markets to allow them to produce wealth is necessary. Many individuals benefit, and the community benefits. Perhaps excessive consumption, luxurious cars, private jets, twenty homes, and all the signs of success in the modern world are what are needed to fuel the economies that provide welfare services to the poor and disadvantaged?

But then, in the world we live in, governments and international financial institutions decide how markets should function. If they fail to see danger, or if they fail to regulate properly as is clearly the case now, then they must accept the blame. As we saw with the old Soviet Union, if a government gets its financial policies so wrong that the economy collapses, in the end it will be voted out of power. We rely on experts running economies to make the necessary adjustments. This time they have failed both in foreseeing the crisis and in failing to stem the decline in confidence.

It seems that if religion recommends and tries to get people to behave ethically and spiritually, it is government legislation that decides what is economically acceptable and legal. Dishonesty, deception, even failure of duty are what is at fault here more than human emotion. Governments grew complacent and had too few experts involved. And as we have seen, strong effective leadership works, tentative tinkering does not.

Of course we are told to put our trust in God, not man. This has been the message of the Torah for thousands of years. There is more to life than money and physical comforts. The way to cope with this or any other crisis is to have good values and live by them. If a parent's only way of showing love is money, and money goes, what is left? But if there have been other values, other ways of showing love, then they will survive a monetary collapse.

This financial crisis will pass. There is still a lot of wealth, many good healthy businesses, and lots of natural resources. The markets ran wild as they periodically do. Irrational exuberance, as Greenspan once called it. It happened during the bubble and collapse. There have always been bubbles. Tulips, South Sea, real estate, and more. Out of the rubble new business, and new regulations, emerge. It is a constant process of "thesis, antithesis, and synthesis". It is the way each of us learns to cope with life. Irrationality, exuberance or fear is another human condition.

It is right that this crisis should make us reassess our values and our goals. All pain serves to teach us lessons, to appreciate life. Religion provides periodic and recurring opportunities to rethink and re-evaluate. So too, less predictably, do markets. Some of us will learn not to be too greedy, to sell when we have made a little profit, to work in jobs that give other satisfactions that are less susceptible to crises. There have been fools, greedy fools, aplenty. But it is not human desire that is at fault, only human folly. And the worst fool is the one who does not learn from mistakes.


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