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May 7, 2015 10:03 am

Judaism Was First in Fight Against Income Inequality

avatar by Jonathan Sacks

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The Bank of Israel headquarters. Photo: Ester Inbar via Wikimedia Commons.

The most surprising best-selling book in 2014 was French economist Thomas Piketty’s Capital in the Twenty-First Century – a dense 600-page long treatise on economic theory backed by massive statistical research: not the usual stuff of runaway literary successes.

Much of its appeal was the way it documented the phenomenon that is reshaping societies throughout the world: in the current global economy, inequalities are growing apace. In the United States between 1979 and 2013, the top one per cent saw their incomes grow by more than 240 per cent, while the lowest fifth experienced a rise of only 10 per cent. More striking still is the difference in capital income from assets such as housing, stocks and bonds, where the top one per cent have seen a growth of 300 per cent, and the bottom fifth have suffered a fall of 60 per cent. In global terms, the combined wealth of the richest 85 individuals is equal to the total of the poorest 3.5 billion – half the population of the world.

Picketty’s contribution was to show why this has happened. The market economy, he argues, tends to makes us more and less equal at the same time: more equal because it spreads education, knowledge and skills more widely than in the past, but less equal because over time, especially in mature economies, the rate of return on capital tends to outpace the rate of growth of income and output. Those who own capital assets grow richer, faster than those who rely entirely on income from their labour. The increase in inequality is, he says, “potentially threatening to democratic societies and to the values of social justice on which they are based.”

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September 7, 2016 6:28 am
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Petty Orthodoxy

Thetorah.com is a website that analyzes the weekly reading of the Torah for people who do not take every word in the Torah...

This is the latest chapter in a very old story indeed. Isaiah Berlin made the point that not all values can co-exist – in this case, freedom and equality. You can have one or the other but not both: the more economic freedom, the less equality; the more equality, the less freedom. That was the key conflict of the Cold War era, between capitalism and communism. Communism lost the battle. In the 1980s, under Ronald Reagan in America, Margaret Thatcher in Britain, markets were liberalized, and by the end of the decade the Soviet Union had collapsed. But unfettered economic freedom produces its own discontents, and Picketty’s book is one of several warning signs.

All of this makes the social legislation of parshat Behar a text for our time, because the Torah is profoundly concerned, not just with economics, but with the more fundamental moral and human issues. What kind of society do we seek? What social order best does justice to human dignity and the delicate bonds linking us to one another and to God?

What makes Judaism distinctive is its commitment to both freedom and equality, while at the same time recognising the tension between them. The opening chapters of Genesis describe the consequences of God’s gift to humans of individual freedom. But since we are social animals, we need also collective freedom. Hence the significance of the opening chapters of Shemot, with their characterisation of Egypt as an example of a society that deprives people of liberty, enslaving populations and making the many subject to the will of the few. Time and again the Torah explains its laws as ways of preserving freedom, remembering what it was like, in Egypt, to be deprived of liberty.

The Torah is also committed to the equal dignity of human beings in the image, and under the sovereignty, of God. That quest for equality was not fully realised in the biblical era. There were hierarchies in biblical Israel. Not everyone could be a king; not everyone was a priest. But Judaism had no class system. It had no equivalent of Plato’s division of society into men of gold, silver and bronze, or Aristotle’s belief that some are born to rule, others to be ruled. In the community of the covenant envisaged by the Torah, we are all God’s children, all precious in His sight, each with a contribution to make to the common good.

The fundamental insight of parshat Behar is precisely that restated by Piketty, namely that economic inequalities have a tendency to increase over time, and the result may be a loss of freedom as well. People can become enslaved by a burden of debt. In biblical times this might involve selling yourself literally into slavery as the only way of guaranteeing food and shelter. Families might be forced into selling their land: their ancestral inheritance from the days of Moses. The result would be a society in which, in the course of time, a few would become substantial landowners while many became landless and impoverished.

The Torah’s solution, set out in Behar, is a periodic restoration of people’s fundamental liberties. Every seventh year debts were to be released and Israelite slaves set free. After seven sabbatical cycles, the Jubilee year was to be a time when, with few exceptions, ancestral land returned to its original owners. The Liberty Bell in Philadelphia is engraved with the famous words of the Jubilee command, in the King James translation: “Proclaim liberty throughout all the land unto all the inhabitants thereof” (Lev. 25: 10). So relevant does this vision remain that the international movement for debt relief for third world countries by the year 2000 was called Jubilee 2000, an explicit reference to the principles set out in our parsha.

Three things are worth noting about the Torah’s social and economic programme. First, it is more concerned with human freedom than with a narrow focus on economic equality. Losing your land or becoming trapped by debt are a real constraint on freedom. Fundamental to a Jewish understanding of the moral dimension of economics is the idea of independence, “each person under his own vine and fig tree” as the prophet Micah puts it (Mic. 4: 4). We pray in the Grace after Meals, “Do not make us dependent on the gifts or loans of other people … so that we may suffer neither shame nor humiliation.” There is something profoundly degrading in losing your independence and being forced to depend on the goodwill of others. Hence the provisions of Behar are directed not at equality but at restoring people’s capacity to earn their own livelihood as free and independent agents.

Next, it takes this entire system out of the hands of human legislators. It rests on two fundamental ideas about capital and labour. First, the land belongs to God: “Since the land is Mine, no land shall be sold permanently. You are foreigners and resident aliens as far as I am concerned” (Lev. 25: 23). Second, the same applies to people: “Because the Israelites are my servants, whom I brought out of Egypt, they must not be sold as slaves” (Lev. 25: 42).

This means that personal and economic liberty are not open to political negotiation. They are inalienable, God-given rights. This is what lay behind John F. Kennedy’s reference in his 1961 Presidential Inaugural, to the “revolutionary beliefs for which our forebears fought,” namely “the belief that the rights of man come not from the generosity of the state but from the hand of God.”

Third, it tells us that economics is, and must remain, a discipline that rests on moral foundations. What matters to the Torah is not simply technical indices such as the rate of growth or absolute standards of wealth but the quality and texture of relationships: people’s independence and sense of dignity, the ways in which the system allows people to recover from misfortune, and the extent to which it allows the members of a society to live the truth that “When you eat from the labour of your hands you will be happy and it will be well with you” (Ps. 128: 2).

In no other intellectual area have Jews been so dominant. They have won 41 per cent of Nobel prizes in economics.They developed some of the greatest ideas in the field: David Ricardo’s theory of comparative advantage, John von Neumann’s Game Theory (a development of which gained Professor Robert Aumann a Nobel Prize), Milton Friedman’s monetary theory, Gary Becker’s extension of economic theory to family dynamics, Daniel Kahneman and Amos Tversky’s theory of behavioural economics, and many others. Not always but often the moral dimension has been evident in their work. There is something impressive, even spiritual, in the fact that Jews have sought to create – down here on earth, not up in heaven in an afterlife – systems that seek to maximize human liberty and creativity. And the foundations lie in our parsha, whose ancient words are inspiring still.

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  • Julian Clovelley

    Marx as an idol? – especially mine? – I think not. Your suggestion that he envisaged a society led by commissars is equally ridiculous

    Marx was for the most part an academic and a theoretician. His theses on the nature and dynamics of society were remarkably accurate but his concept of a replacement society was somewhat vacuous

    It seems to me you confuse Marx with Lenin, the latter who in terms of political and economic theory was firmly of the left but whose behaviour was very much of the extreme right, it being at times somewhat difficult to see the difference between a revolutionary “vanguard” and a wannabe ruling class. Both repress and murder

    Which is why a number of what started as theoretical socialists were able to make the otherwise inexplicable transition to be Fascist – Mussolini himself being the greatest example, but Mao being an obvious contender for such description, joining Stalin.

    Crummy traditional analysis puts ideology in advance of behaviour. Bad and often genocidal error

    Quite wrong – Never make the Stalinist error of confusing Marx with Lenin, or the analytical error in relation to behaviour of confusing Left with Right. At best you are likely to wear your shoes on the wrong feet

  • Alexi

    As long as Money is Speech and Corporations are People… we are doomed.

    It really that simple.

  • Genghis Cohen

    Dear Rabbi Sacks: Quoting passages from the bible has been a favorite parlor game of the devout for thousands of years and still little is resolved in so doing. Truly, Leviticus 25:23 is unequivocal that “no land shall be sold permanently.” However, Leviticus 25:34 stipulates that”unenclosed land about the cities[of the Levites} is their holding for all time.” What then is God’s ruling should several Levites claim ownership of the same parcel?

  • Julian Clovelley

    Unfortunately the United States especially, is very slow on grasping much of what is said here. More than any other major influential country in the advanced world America seeks to rely on the Market Economy of unregulated absolute laissez faire Capitalism – protected and balanced by guns

    American politics are dominated by two parties which elsewhere would both be considered, at every level, as belonging to the extreme Right. Neither grasps the point elucidated here that market economics creates trends that polarise society economically and politically. As Pickett is quoted “Those who own capital assets grow richer, faster than those who rely entirely on income from their labour. The increase in inequality is, he says, “potentially threatening to democratic societies and to the values of social justice on which they are based.”

    Indeed but this does not go far enough. The present economic system based on Capital, is also based on class. Since no-one votes themselves to be part of a poorer class, either democracy has failed to deliver, or it has failed to exist. Which is it? Is it incompetent of is it stillborn?

    The myth that what we have is congruent with “Democracy” is protected by the Greek Myth that Democracy originated in the selective and exclusive “Demos” of a Greek City State, and that whilst the original structure failed, it was preserved over the centuries as a philosophical ideal to be revived in the City States of Renaissance Italy – and refined therefrom by a benevolent Middle Class. This is bosh of the highest order. The rulers of the City States – even as power was gained by the Middle Classes – were far more dominated by the thinking of a man they at first ignored – Machiavelli. Machiavelli’s whole ethos is based on repressing and subverting any move towards democracy. That idea of political subversion dominates Market Economics

    Democracy really originated as a parallel force in the Revolutions of England – the Civil War and the Bloodless Revolution – the Revolution in France and in the War of Independence in America. The progress of Democracy was aided by two movements against slavery – the Abolitionist cause and, especially in Europe, notably in Britain, the Chartist and Trade Union Movements. Democracy is not the protected baby of Ancient Greece – it is the child of the struggles of the labour movement, as it sought to achieve aims of decent wages, universal education, women’s emancipation, public health and decent housing

    The Greek myth makes it possible to pretend that democracy could rise and be active within a Slave State. It could not and did not. For all the years between the American Revolution and the end of the Civil War, America was not ruled by Democracy – nor indeed will it be until the last shred of racism – native and exported in America’s foreign policy – has fluttered away.

    Jewish communities have lived as best they can in this atmosphere of inequality and class. Many of the principles of behaviour that exist within their communities are desperately needed outside. But they can only be made available if they are transformed into secular form.

    This then is where one most needs to look at what the leveller in a democratic society is. Even that Captain of mythology – the Pope in Rome – openly no longer swallows the delusion of the “trickle down effect” – There is no such cascade of wealth. Wealth, as this article illustrates, flows upwards

    The democratic leveller is taxation that is used directly to finance basic living standards, and quality health, accommodation, and education. It finances unemployment and coping with disadvantage, unemployment and disability. Taxation provides the “commons” on which a stable society depends – replacing the territorial commons of the past, that were enclosed and stolen by the rising middle class, and in the colonies by the settlers.

    If we are ever to have societies in which eccentric(sic) communities of differing culture and religious persuasion are secure, then that “commons” must be restored as the first duty of Government. No lower priority will do. There must also be a protected structure of social advancement, of financing of new enterprise, and a recognition that the errors of the past must needs be corrected in a fairer distribution of wealth, and the universal distribution of all services on the basis of equal entry and opportunity

    Society can progress in two directions – one is towards greater and more representative democracy, with protected minimum wages and protected living standards and services – or it can move in the direction of Feudalism – a class system in the local politics of a nation which is dangerously close to Fascism. Neither political party in America has chosen the democracy path – both are Feudalist. Both ultimately pose the threat of Fascism. One would have thought that for their own protection minority societies would opt to assist the progress towards democracy, and away from the Feudalist/Fascist path. Doesn’t the plight of Jewish communities in Europe inform them that a process is being repeated? – as Conservative and Corporate politics drift further towards Feudalism and Fascism, through the implementation of “Austerity” – so that the cracks appear in society that first attack immigration and refugees, and then proceed to attack minority groups

    Present Zionism seems steeped in the Greek Myth of democracy – and yet so much of the principles of mutual concern, compassion and love, that motivate democratic evolution come from Judaism as a universal legacy. Why is Zionism, and especially the Zionism of America and its Israeli counterpart, so determined to court the very Right, and the very dynamics, that inevitably could become the womb of a new antisemitism

    In your last paragraph, Rabbi Sacks, there is a name missing. You know that as well as I do. It needs to be there. It is the name of the man who helped us see society and economics in a very different way, whose political movement was largely rejected by the western world, but whose political and economic analysis have become an integral part of all political and economic thinking

    He is the man who said to his friends “we can forgive Christianity much for it taught us the worship of the child”. If he got nothing else right he was correct there. It is a principle embedded in both Judaism and in Christianity, and ultimately from the same source. That is what we need to recover in our politics – the striving for a better future – for the equality and nurture of every child – whatever the sacrifice it cost us in pride, tradition, class status, and material wealth. Therein lies the answer to more than perhaps you realise – but visible in these words of your own:

    “The Torah is also committed to the equal dignity of human beings in the image, and under the sovereignty, of God. That quest for equality was not fully realised in the biblical era. There were hierarchies in biblical Israel. Not everyone could be a king; not everyone was a priest. But Judaism had no class system. It had no equivalent of Plato’s division of society into men of gold, silver and bronze, or Aristotle’s belief that some are born to rule, others to be ruled. In the community of the covenant envisaged by the Torah, we are all God’s children, all precious in His sight, each with a contribution to make to the common good.”

    Shalom Rabbi and thank you.

  • Genghis Cohen

    The Economist hails Thomas Picketty as the second coming of Marx. Just as Karl Marx was, Thomas Picketty is blind to the most colossal economic force of our times. Marx was so fixated on capital that he discounted the surge of creative energy loosed by the scientific, technical and industrial revolutions of the 19th century. The effects of that surge were not manifested until the 20th century, and Picketty is apparently oblivious to them. Marx was too narcissistic to credit mankind with any knowledge that Marx himself lacked, (in his poetry Marx played at being God and passing judgment upon humanity) while Picketty seems unaware of the momentous storm of change that was gathering in the economic galaxy of the 19th and 20th centuries. I am referring to the population bomb that exploded early in the 20th century. World population stood at 1 billion in 1800 and it grew to only 1.6 billion by 1900. By the year 2010 world population was 7.1 billion. Yet, Picketty pays no attention to the impact this may have had upon “income distribution,” (as if a machine disbursed income impersonally).

    • Julian Clovelley

      Ah the missing name that even I chose not to sound:

      I find your assertions a little peculiar, Mr Cohen, in that political economy was the subject of Marx’s writings rather than technology. In this it is worth noting that his most important writings were between 1848 (the Manifesto) and 1867 (Capital volume 1) – years of continuing scientific advancement, but hardly digital technology or rocket science

      Had Marx based his writings on technological change – for which action he was not qualified – I doubt if his theses would retain relevance in the modern world, or that his classifications, definitions and analyses of political, economic, and social dynamics would so much have become embedded into all economic, political, and social thinking

      Where is Marx now other than his incorporation, like Plato or Paul of Tarsus, within our culture, whether we ascribe integrity and accuracy to their works or not? – other than additionally as fictitiously described in the anecdote of the Keeper at the British Museum, who when asked about Marx, pondered a while, and said:

      “Marx, Karl Marx? – A little old man with a grey beard who used to come here every day and sit in that corner of the Library with his books, and pens writing page after page of some book or other? – yes I remember Mr Marx

      I wonder what happened to him”

      As the comedian Gerard Hoffnung said in his recommendations to tourists visiting England – do try “the famous echo in the Reading Room of the British Museum” – They’ll even show you Marx’s corner in the rooms of the old nineteenth century library now part of the historical main museum

      Moving on…

      • Genghis Cohen

        Karl Marx, like Plato, wrote for a species unknown to Linnaeus. Where Plato had the excuse of existing prior to the scientific revelations of the 17th through the 19th centuries, your idol, Marx did not. He coveted and nourished the ancient image of humanity so beloved of mystics: that of sheep with the exception that they would be led by commissars instead of priests. Linnaeus specified that we are Homo sapiens and Darwin explained a dynamic, natural system called Evolution in which Homo sapiens had not only achieved the power to create a material world that Marx could not imagine, but also to gain control of the forces which determine evolution. Julian, the time of Marx has passed and so has that of all mystics. This is their last century.

        • Julian Clovelley

          Marx as an idol? – especially mine? – I think not. Your suggestion that he envisaged a society led by commissars is equally ridiculous

          Marx was for the most part an academic and a theoretician. His theses on the nature and dynamics of society were remarkably accurate but his concept of a replacement society was somewhat vacuous

          It seems to me you confuse Marx with Lenin, the latter who in terms of political and economic theory was firmly of the left but whose behaviour was very much of the extreme right, it being at times somewhat difficult to see the difference between a revolutionary “vanguard” and a wannabe ruling class. Both repress and murder

          Which is why a number of what started as theoretical socialists were able to make the otherwise inexplicable transition to be Fascist – Mussolini himself being the greatest example, but Mao being an obvious contender for such description, joining Stalin.

          Crummy traditional analysis puts ideology in advance of behaviour. Bad and often genocidal error

          Quite wrong – Never make the Stalinist error of confusing Marx with Lenin, or the analytical error in relation to behaviour of confusing Left with Right. At best you are likely to wear your shoes on the wrong feet

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