The essence of Jewish ethics is responsibility
When Die Lehren des Judentums nach den Quellen (The Teachings of Judaism According to the Sources) was published in 1928, the Great Depression stood at the doorstep. The editors and authors of this threevolume work emphasized the ethic of social responsibility that is at the core of Judaism, and which is largely based on the teachings of the Mishnah. For Rabbi Leo Baeck and his colleagues, the issues at hand included “protecting the property of others” and the “prohibition against immoral business transactions”, along with charity and advancing the welfare of the community.
Eighty years later, in 2008, a real-estate bubble in America mutated into the worldwide financial crisis. The transparency and fair dealing demanded by the Talmud hasn’t been a topic of discussion on the financial markets for quite a while now, and we will be dealing with the consequences of this financial crisis for a long time to come. People are in their rights to ask whether the business conduct in the financial sector always lived up to ethical standards. For example, how should we judge the securitization of subprime mortgage loans, which the banks listed on the capital markets? Should we not view the sale of these claims on debt as genevat da’at – as fraud? Jewish law strictly forbids anything that could lead others to false conclusions and impede an accurate valuation. The standard view is that the prohibition against fraud is based on the biblical mandate in Leviticus 19:11, “Thou shalt not steal.” In Leviticus, the prohibition is expressed in the plural – lo tignowu = You (second person plural) shall not steal – while the Ten Commandments use the singular pronoun. From this, many rabbis derive their argument that this prohibition applies to a broad spectrum of activities that includes fraud. From the perspective of Jewish law, transferring risk from mortgage loans using these kinds of securities was highly dubious.
Don’t become Greek!
The financial crisis of recent years is hitting us in waves. The rabbinical admonition not to do as the Greeks do (al tityaven) is taking on a whole new meaning for Europeans. Is it really moral for us to pile up these debts for future generations? The Halakha views the repayment of debts as a moral and religious obligation. The question of whether or not a debtor impoverished by unemployment or the burden of a mortgage may ever be relieved of his obligation to repay is a hotly contested question within rabbinical literature. Joseph Karo (1488-1575) wrote in Schulchan Aruch that the debt should remain in place. In our time, Rabbi Yaakov Yeshaya Blau has written in Pitchei Choshen that debt should only be forgiven in cases in which a higher power has made repayment impossible. And what about our descendants? Should they inherit this liability? Many would point to the Prophet Ezekiel (18:20), who said: “The son shall not suffer for the iniquity of the father, nor the father suffer for the iniquity of the son.” However, Ezekiel is not speaking of financial debts. And looking to the Jubilee Year, according to which all debts are forgiven every 50 years, does not point us in the right direction either. In the Jubilee Year, only unsecured debts are forgiven (Moses Maimonides, 1135–1204). Furthermore, the rabbis generally knew how to get around the biblical idealism of the mandated debt relief. The prozbul established by Hillel the Elder equally protects the interests of creditors and the poor in need of loans. After all, who would still give loans when the Jubilee Year was approaching? Thus, coming generations will have to bear the burden of debt we are accumulating today, even if this seems morally dubious to us. Maybe that is the difference between life in paradise and real life. After mankind was driven out of paradise, our carefree and light-hearted days were over. We have lived in a succession of responsibility ever since. And we always will, for as long as we live.