The economic outlook of the Bible

The bible is socialist – this is the opinion that became fixed in Jewish consciousness in the 1960s. But a deeper reading of the text reveals a completely capitalist approach. This presents a fascinating challenge to Judaism: If the Bible espouses absolute economic liberalism, what Jewish solutions can be offered to the three phenomena of contemporary capitalism? And what you can do to promote growth in 2020?

Is the Bible capitalist? Yes!

1. Private ownership: In Genesis, Scripture devotes more chapters to the private property of the patriarchs than to spiritual revelations. “And Abram was very rich in cattle, in silver, and in gold” (Gen. 13: 2) is only one of the descriptions that point to Abraham’s robust socio-economic status. Regarding Isaac, the text is even more explicit: “And he had possessions of flocks, and possessions of herds, and a great store of servants;” (Gen. 26:14), meaning not only that he possessed much wealth but also a workforce which is very significant. And finally, we meet Jacob, the man who “bursts forth” even more in business “And the man increased exceedingly, and had much cattle, and maidservants, and men-servants, and camels, and asses“(Gen. 30:43). Private property and material wealth are the economic values that take the lead role in the first book.

2. Innovation: The Book of Exodus praises innovation – the foundation of modern capitalism – throughout the second part of the book. The book tells of the greatest startup in antiquity: building a home for God on earth. And as in any groundbreaking venture, the entrepreneur must have special qualities and be able to think outside the box. The text itself indicates that Bezalel was not only a problem solver or a great listener but also able to “Think new thoughts” (Exodus 35:32), which reminds us of a very famous slogan born in Steve Job’s mind – “Think different”. “To contrive works of art, to work in gold and in silver, and in brass”; that is, to come up with new ideas. In addition, each successful venture rides on necessary external parameters (such as timing, funding, cutting edge technology ...), parameters that are specified one by one towards the end of the book (story of Tabernacle).

3. Market Growth: Leviticus presents the third aspect of capitalism, its main driving motive: growth. Moreover, growth is the nature of the contract that summarizes the entire book. “If you walk in My statutes, and keep My commandments, and do them; then I will give you rain in due season, and the land shall yield its produce, and the trees of the field shall yield their fruit. And your threshing shall reach to the vintage, and the vintage shall reach to the sowing time; and you shall eat your bread to the full” “(Leviticus 26:3-5). In other words, if you follow all the moral guidelines and commandments throughout the book, then all economic indicators will be favorable. This means that all the fruits of your actions will automatically yield new fruits. Conclusion: The direct result of proper moral behavior is the growth of a local market. A blessing that is essentially an economic one.

4. Globalization: The Book of Numbers actively encourages international trade, a parameter that stands at the center of the market economy today. We encounter the globalization effort primarily in the story of the sons of Gad and Reuven, who preferred to cultivate their businesses in Transjordan rather than realize the Zionist vision in the Land of Israel (Num. 32:5), In order to receive the blessing of Moses, they remind him that their field of specialization is the cattle industry and that the lands that they are now entering on their way (the land of Gilad and Yazer), is full of cattle. Moses is outraged at the lack of solidarity they demonstrate, but ultimately, he gives his fascinating advice: “Build cities for yourselves” (ibid. 24), so that these may serve as midway infrastructure for the international trade that will in time develop from Canaan. Economic liberalism at its height.

5. Laissez-Faire: Deuteronomy emphasizes the non-intervention of the state in economic matters, the fifth element of capitalism. Indeed, in his last speech to the people, Moses warns them of the excess power that society is likely to hand over to the ruler. In shaping the role of state institutions, he aspires to a government limited in power so that it will not interfere with economic policy. “Only he shall not multiply horses to himself, nor cause the people to return to Egypt, to the end that he should multiply horses” (Deut. 17:16). In other words, the ruler must not mix his economic interests (horses) with those of the state, nor should he initiate moves (such as returning the people to Egypt) to create wealth (multiply horses). The lack of state intervention in the economy means liberalism.

It is fascinating to see that it is precisely those five anchors presented in the Torah that established the theory of capitalism. Indeed, this economic theory first appeared in Bruges, Belgium, and developed in eight other cities (Venice, Antwerp, Geneva, Amsterdam, London, Boston, New York, San Francisco) throughout the last eight centuries. In a sequential manner, these five components appeared simultaneously: an innovative product, wealth, growth, international trade, and liberal policy. As one example, Amsterdam has been the hub of capitalism for two hundred years. The combination of liberal policy in the intellectual world (Rembrandt, Spinoza) and the establishment of a local megacorporation (Dutch East India Company), for example, allowed the invention of the flujt (innovation), a super-fast boat that enabled effective trade with Latin America (international trade). Amsterdam experienced, then, economic growth from the cotton trade (growth), which caused purchasing power to be four times greater in Amsterdam than in Paris of that time (material wealth).

Thus, it is clear the five economic values which are prominent in the Torah are precisely those that established a liberal-economic approach. This is a finding that presents a serious challenge: What does the Jewish tradition have to say about the three phenomena of capitalism in the modern age? The three phenomena of capitalism in modern times.

1. The market is stronger than the state: Today Google, Facebook, Apple, and Amazon are stronger entities than many countries. In evidence, the annual turnover of each of these companies is larger than that of the GDP (Growth Domestic Product) of most countries in the world (for example, Apple’s annual revenue is three times the GDP of the State of Israel). In addition, as compared to the most powerful companies of the previous centuries (General Electric, Gazprom), the companies today are not dependent on the natural resources of the countries. This is the nature of the digital revolution that has produced a new continent: the software. As a result, these leading companies have the luxury of determining their own taxation rates for the state (Twitter was paying an average of 3% in San Francisco while Apple paid only 0.005% taxes in Ireland ...). More and more initiatives led by both the US Senate and the European Parliament try to apply new taxation on the Tech Giants. However, insofar as these companies do not rely anymore on specific countries (e.g., a gas company used to be dependent on the natural resources of its country), we can guess this phenomenon will be hard to stop as the market is by definition global while the country is by definition local.

2. The gaps between the socio?economic classes are growing: One percent of the world’s population holds 50% of the global wealth, while the number of people living below the poverty line increases each year. We must not forget, for example, that in Israel every third child is poor (In Israel, the poverty rate is calculated as half the median disposable income). But there is even a more worrisome statistic: the trend is getting worse. In all of the world’s developed economies, the “gaps” between the strong and the weak classes are steadily growing. An economic indicator called the Gini Index calculates a growing gap between the classes. In other words, the rich get richer each year while the economic situation of the poor only gets worse.

3. Freedom bordering on disloyalty: The individual gradually shirks any essential commitment to the proper functioning of society. As a result of an extreme liberal viewpoint, people are less and less committed to the institution of marriage (there are more divorces each year), less committed to their place of work (the labor market gives less stability than in the past), the employers are less loyal to the workers (more and more contracts for limited periods), and as a society, we also less committed to future generations (as the national debt – that we will leave them to cover for us – is growing every year). In this way, excessive liberalism leads to a lack of loyalty.

THREE JEWISH ANSWERS

How does the Bible confront the three challenges of modern capitalism?

1. A universal statute

This is the way to ensure a sustainable world where global corporations and states – large and small – play according to the same rules. The middle class will no longer pay for the superpowers that the states favor fiscally. Perhaps this universal regulation was intended when the Bible spoke about a universal rule for generations 21 times (the first mention is in Exodus 12, and the last in Numbers 19). Surprisingly - or not, many global associations exist today in various fields (International Aviation Association, FIFA in Soccer, the International Energy Agency, etc.), but in the economic sphere, there is no global treasury (Institution) with a uniform economic policy.

2. Loyalty:

Positioning a social “contract” in the center of our lives ensures stability in a liberal world. This is the nature of the bill (Heb. shtar) in Jewish thought. The bill of marriage (Shtar Ketubah)  was commanded in order to preserve the institution of marriage; a “bill of work” (Shtar melakha) to protect against employers who dodge any long-term employment contract or a “promissory note” that requires covering the deficit in order to prevent it from being left to our children. The guiding principle is loyalty to others so that each relationship becomes more moral. Loyalty is the name of the Jewish game in a world where “I, immediately, first” is becoming the norm and a sense of “together” is the effort of the few. An old-new social contract is needed in the family, at work, and in society, and which can be translated into practice. It is interesting to consider, for example, which clauses that are fair to both sides will appear in your contract, whether you are the employer or the employee.

3. Investing in another

It is possible to create a liberal society with justice. This is the innovation of the Torah when it brings together the rich and the poor through charity (Maimonides, Laws of Gifts to the Poor 10: 7) when it encourages the poor to take the initiative with the portion that he is owed by the successful entrepreneur. There are well-known terms in Jewish law that mandate the portions that the entrepreneur must leave for the poor: leket – gleanings, crops that fall to the ground; shik’kha – produce forgotten in the field, “peah” – corners of the field left unharvested (Leviticus 19) that are left for the poor and the stranger. And the Torah periodically wipes out the total amount of loans, an amnesty granted once every seven years (“financial remission” – Deuteronomy 15). Jewish justice does not mean simply giving charity, but also is a clever mechanism of lowering taxes to 10% (called Maasser) and the obligation to dedicate another peah (i. e., at least 2%) of our revenue, our success, or our capital for the next venture. In practice, this is a financial investment (2-5% of the total capital) in people who wish to develop, innovate and create in their own field. 

--> Starting in January 2020:

What venture will you invest 2-5% of your capital in? Who will you dedicate 2-5% of your time to?