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''Rabbi Avdima, from Milcha, would steep his lean meat in water to improve its appearance. Said to him Yaakov bar Ahah, Was it not taught, ''One doesn't deceive by beautifying merchandise? From the words of Yaakov bar Ahah we can learn that the prohibition of beautifying applies to food.
R. Zeira who worked with flax came to Rabbi Abahu . He said to him: May I beautify my work? Said Rabbi Abahu to him: Go and do what you know [i.e. act according to your understanding of the law].
Rabbi Abahu was weaving veils. He came and asked Rabbi Yose ben Hanina and said: What can we do with these veils? He said to him: Go and do what you know [i.e., act according to your understanding of the law].
Rabbah painted a bath red to beautify it. Rabbi Yaakov Amsonya taught: What does it mean, One doesn't deceive by beautifying merchandise? That one doesn't paint one's body. (Talmud Yerushalmi Bava Metsia 4:7)''
The Yerushalmi is briefer than the Bavli in giving examples of ways not to deceive the potential buyer. The last mishna (Bava Metzia 4:9) seems to be the one explored in depth. Could this be because business law's mishnayot were so part and parcel of Hebrew society, that when then were discussed by the Rabbis in Babylon and eventually in Judea, that all that needed to be said about business ethics had been said?
Our Sages, however, never limited themselves to aggadic statements in pious language about ideal utopias. They insisted on spelling out concrete laws and legal principles by which to govern our everyday lives. The following six principles of Jewish business ethics will help teach us what pitfalls to avoid and what standards to strive for throughout the year.
1. Accurate weights and measures
We are admonished in the book of Vayikra (Lev) (19:35-36): "You shall not falsify measures of length, weight, or capacity. You shall have an honest balance, an honest weight, an honest ephah, and an honest hin." The Talmud Bavli Tractate Bava Batra 5:10 spells out how often wholesalers and retailers must clean their weights and measures.
Throughout the Talmudic period, the rabbis appointed agronomoi – a Greek word for market commissioners – whose job it was to inspect measures and weights and to fix prices for basic commodities (Talmud Bavli Bava Batra 89a). The agronomoi eventually disappeared, but the ideal was still there as late as the nineteenth century, when Rabbi Israel Salanter wrote: "As the rabbi must inspect periodically the slaughtering knives of the shochtim in town to see that they have no defect, so must he go from store to store to inspect the weights and measures of the storekeepers."
We should keep this in mind with kosher slaughter houses who mistreat workers and animals, which is why I have called rabbis a Heksher Tzedek, a seal of Ethics, and not just a seal of Kashrut.RABBI ARTHUR SEGAL:AGRIPROCESSORS TALE CONTINUES:CALL FOR HEKSHER TZEDEK BUILDS!
These laws are just as applicable today. Wholesalers and retailers must check their scales and cash registers on a regular basis, not just because civil law demands it, but also because Jewish law requires it.
Defective weights and measures are discussed by [twelfth-century Spanish/North African philosopher and rabbi] Moses Maimonides in his Laws of Theft:
"If one weighs with weights that are deficient by the standards agreed upon in his locality, or measures with a measuring vessel deficient by the agreed standards, he violates a negative commandment, for Scripture states (Leviticus 19:35), 'You shall do no unrighteousness in judgment, in length, in weight, or in measure. (Maimonides, Mishneh Torah Laws of Theft, 7:1)
"Similarly in measurement of land, if one deceives another when measuring land, he violates a negative commandment, for when Scripture says, 'You shall do no unrighteousness in judgment, in length,' 'in length' refers to land measurement." (Maimonides, Mishneh Torah, Laws of Theft, 7:9)
It is forbidden to keep a defective measuring device in one's possession, even if it is not being used: "Whoever keeps in his house or in his shop a false measure or weight violates a negative commandment, for Scripture states (Deuteronomy 25:13), 'You shall not have in your bag diverse weights.'" (Maimonides, Mishneh Torah, Laws of Theft, 7:3)
Standard weights and measures are not to be prescribed unless gradations are readily apparent. The Sages established that measures should be so designed as to be recognizable at a glance, so there will be no mistakes and they will not be interchanged." (Arukh HaShulhan, Hoshen Mishpat 231:4)
Maimonides codifies the penalty for false measure:
"The punishment for unjust measures is more severe than the punishment for immorality, for the latter is a sin against God only, the former against one's fellow man. If one denies the binding character of the commandment relating to measures, he denies in effect the Exodus from Egypt which was the basis of the commandments; but if one acknowledges the commandment relating to measures, he thereby acknowledges the Exodus from Egypt, which rendered all the commandments possible." (Mishneh Torah, Laws of Theft 7:12)
2. Ona'at mamon (monetary deception)
This concept is based on a verse in the book of Vayikra (Lev)(25:14): "When you sell anything to your neighbor or buy anything from your neighbor, you shall not deceive one another."
The rabbis of the Talmud used this verse as a basis for a series of specific laws on the subject of monetary deception (Talmud Tractate Bava Metzia 49b and 50b; Rambam, Mekhira, Chapter 12). They ruled that if the price charged was more than one sixth above the accepted price, the sale is null and void and the seller must return the buyer's money, while if it was less than a sixth, the transaction is valid and no money need be returned. Needless to say, these laws are relevant today. It is permissible for a Jew to make a fair profit; it is not permissible to price gouge and rob the customer blind.
A seller charging more than fair market value can be forced to rebate the difference, or even to cancel the sale. The rabbis use the term "over-reaching" where most of us would say "overcharging." The reason for the exception made for real-estate sales is debated in Jewish legal literature, with one opinion being that land is an inexhaustible resource and therefore people are willing to pay extremely high prices for it.
The biblical term ona'ah -- variously translated as overreaching or fraudulent pricing -- is used in two different ways in Jewish legal sources. In the first use, the term refers to the prohibition itself:
It is forbidden for a seller or a buyer to defraud his fellow, as is said (Leviticus 25:14): "And if you sell anything to your neighbor or buy of your neighbor's hand, you shall not wrong one another."
In the second use, the term refers to the effect of the prohibited act upon the monetary rights of the victim vis-a-vis the perpetrator: Whether one overreaches knowingly or is not aware that there is any fraud [ona'ah] in this sale, he is obligated to make restitution. (Maimonides, Mishneh Torah, Laws of Sale 12:1)
Protection against overreaching is granted to the consumer in the form of a monetary remedy: the defrauding merchant has to refund the difference between the market value of the item and the amount paid. Moreover, when the fraud amounts to more than one sixth of the market value of the item, the seller may face cancellation of the entire transaction. On the other hand, when the difference between the market value and the amount paid is small -- less than one sixth of the market value -- there are no monetary consequences for overreaching. Thus, only transactions where the amount of overreaching was small were treated as final:
"How much does the overreaching have to amount to in order that he who committed it shall be obligated to repay it? A sixth of the value of the article... constitutes fraud in which the transaction is valid but the defrauder has to pay the entire difference to the aggrieved party. If the overreaching amounts to anything less than that, the defrauder is not obligated to repay anything, because it is the general custom to waive the right to frauds amounting to less than a sixth. If the overreaching amounts to anything more than a sixth..., the transaction is void and the aggrieved party may return the article and not buy it at all. The defrauder, however, may not retract if the aggrieved party wishes the transaction to stand...." (Maimonides, Mishneh Torah, Laws of Sale 12:2-4)
It should be noted that the determination of one sixth as the minimum required for invoking monetary remedies applies only to the value of the item. If, however, the sale was transacted by size, weight, or number, and an error occurred, the seller must make up for his error, no matter how small. The same applies to defective merchandise:
"If one sells commodities to another by measure or by weight or by number and has made even the slightest error, the difference must always be returned, because the laws of overreaching apply only to errors in money value, while in errors in quantity the difference must be returned. Thus, if one has sold to another one hundred nuts for a dinar and it is found that there were one hundred and one or ninety-nine, the transaction is valid, but the amount of the error must be returned to the aggrieved party.... So too if one has sold an item... and a defect of which the purchaser was unaware is found on the purchased article, the purchaser may return the article even after the lapse of many years because this was a transaction in error...." (Maimonides, Mishneh Torah, Laws of Sale 15:1)
The monetary regulations concerning overreaching comprise numerous details. Their place, however, is to be found within the civil law. Unlike the monetary remedies which look essentially to the past, granting ex post facto remedies to the aggrieved consumer, the prohibition of overreaching protects the consumer by establishing a norm of behavior for the future.
Are Real Estate and small infractions covered?
The scope of the prohibition is not identical to the scope of the monetary measures available in cases of overreaching. Whereas overreaching is not actionable in immovable property or where the amount is less than one sixth of the market value, there are those who hold that the prohibition nevertheless applies to real estate and to overreaching less than one sixth.
The prohibition of overreaching applies to both buyer and seller. This is inferred from the relevant biblical passage, which discusses both buying and selling . The prohibition of overreaching applies not only to sale but to hire as well, given that the latter is regarded as a temporary sale. Maimonides writes: "If one hires utensils or livestock, the transaction is subject to the law of overreaching because hiring is equivalent to a sale for a day." (Maimonides, Mishneh Torah, Laws of Sale 13:17)
Is the law of overreaching dispositive, in the sense that it can be being excluded by express stipulation? The Talmud reports the following difference of opinion between Babylonian sages Rav and Sh'muel:
"If one says to his neighbor, 'I agree to this sale on condition that you have no claim of overreaching against me' -- Rav said, 'He nevertheless has a claim of overreaching against him.' Whereas Sh'muel said, 'He has no claim of overreaching against him.'" (Talmud Bavli Bava Metzia 51a)
The law was decided in accordance with the opinion of Rav, though his opinion is construed restrictively:
"If one says to another, 'I will sell to you on condition that you have no claims of overreaching against me,' the other nevertheless has claims of overreaching against him. This rule applies only in a sale where the buyer does not know the amount of the overcharge to which he should waive his right; and needless to say, this rule applies if one has said, 'on condition that there is no overreaching therein,' since there is overreaching therein.
"However, if the amount of the overcharge is known, then the aggrieved party has no claim for the difference because all stipulations made in monetary transactions are binding.
Thus, if the seller says to the buyer, 'I know that this article which I sell you for two hundred zuz is worth one hundred only, but I sell it to you on condition that you have no claim of overreaching against me,' then the buyer has no claim of overreaching. Similarly, if the buyer says to the seller, 'I know this article that I buy from you for a mina is worth two hundred zuz, but I buy it on condition that you have no claim of overreaching against me,' then the seller has no claim of overreaching." (Maimonides, Mishneh Torah, Laws of Sale 13:3-4)
3. Ona'at devarim (verbal deception)
This teaching is based on another verse in the same chapter of Vayikra (Lev)(25:17): "Do not deceive one another, but fear your God, for I the Lord am your God." Since the verse cited above had explicitly mentioned monetary deception, the rabbis concluded that this verse refers to verbal deception. Thus we learn in the Talmud Tractate Bava Metzia 4:10): "Just as there is deception in buying and selling, there is deception in words. A person should not say to a merchant: 'How much does this cost?' if he has no intention of buying it."
Let us say that Reuven goes into a warehouse outlet in order to buy a computer, but he wants a demonstration before he spends $1000. The warehouse outlet is not equipped for demonstrations. The salesman says to Reuven: "Go to the IBM showroom down the block and ask for a demonstration, then come back here and buy the computer at our low, low price." Reuven complies and gets a free demonstration plus a discount.
When Reuven asks for the demonstration at the IBM store, he has absolutely no intention of purchasing the computer there. He merely wants a free demonstration. The IBM salesman is being deceived. He either loses a real customer while waiting on Reuven, or feels badly when Reuven walks out on him after a half-hour demonstration. This is ona'at devarim, verbal deception.
This is called the ''shop keeper's law.'' It not only steals time but can actually make the IBM salesman think the fellow left because his fee is too high and lower his fee, causing him to loose money over and over.
4. Gneivat da'at (literally, "stealing a person's mind")
We would call it false packaging or false labeling. The Talmud gives a number of specific examples: One should not sift the beans at the top of the bushel because he is "deceiving the eye" by making the customer think that the entire bushel has been sifted. It is forbidden to paint animals or utensils in order to improve their appearance or cover up their defects(Talmud Bavli Bava Metzia 60a-b).
We are all familiar with this kind of ruse. A wholesaler takes an inferior brand of blouse and puts on Dolce and Gabbana labels. You buy a box of perfect-looking tomatoes or strawberries, only to discover upon opening the box at home that they were packaged with the bad spots facing down. And we all know how used cars are touched up and polished with wax for the sole purpose of overcharging the customer. Such behavior is clearly forbidden by Jewish law. In fact, the word sincere, means without wax. Pagans would take marble and fill in defects with wax. Jews are not allowed to take a used car and cover defects with wax.
Jewish law takes a very strict approach to misrepresentation and fraud in commerce. In the Tosefta Talmud Bavli Tractate Bava Kama 7:8 we read: "There are seven types of thieves. First and foremost among them is one who misrepresents."
Maimonides writes: "It is forbidden to deceive people in buying and selling or to deceive them by creating a false impression.... If one knows that an article he is selling has a defect, he must inform the buyer about it. It is forbidden to deceive people even by words." (Mishneh Torah, Laws of Sale 18:1)
The prohibition applies even where the purchaser suffers no economic loss as a result of the misrepresentation.
A number of prohibitions regarding commercial transactions have been established on the basis of the prohibition of misrepresentation:
Used goods should look used
Goods may not be dressed-up so as to mislead the customer to think they are better than they really are:
"One should not dress up... an animal or old vessels so that they appear new; but he may dress up new ones by polishing, ironing, or beautifying them all they require." (Mishneh Torah, Laws of Sale 18:2)
It is permitted to remove waste from grain in order to make its appearance more pleasing, but it is forbidden to remove waste from the top and leave it at the bottom. (Mishneh Torah, Laws of Sale 18:4)
It is forbidden to mix merchandise of higher quality with merchandise of lower quality and to sell the entire mixture as the former. If, however, the nature of the mixture is readily apparent, it is permitted, since there is no deception:
"If the taste of each of the wines can be distinguished, it is permissible to mix them anywhere, because everything which can be distinguished will be detected by the purchaser and it is therefore permissible." (Mishneh Torah, Laws of Sale 18:5)
Even giving a false impressions is wrong. It is forbidden to attribute to an article a quality it does not possess:
"One must not sell to a non-Jew meat of an animal not slaughtered according to ritual law under the impression that it is meat from an animal slaughtered according to ritual law, although to the non-Jew, the two are the same." (Mishneh Torah, Laws of Sale 18:3)
Health hazards must not be hidden, (even if made in China and sold in the USA).
No product that is hazardous to health may be sold by concealing the hazard through false description. According to the Talmud:
"A man should not sell his neighbor shoes made of the hide of an animal that died, [representing them] as made of the hide of a living animal which was slaughtered; there are two reasons: first, because he is deceiving him, and secondly, because of the danger." (Talmud Bavli Tractate Hullin 94a) Rashi [the classic eleventh-century commentator on Bible and Talmud, from Northern France] explains: "A shoe made of the hide of an animal that died without being slaughtered: the hide is not as strong as that of an animal that was slaughtered." And he explains the danger as follows: "The animal may have died of a snake bite, the venom of which was absorbed by the hide [posing possible danger to whoever wears the shoes]."
Altering markings that indicate an item's place of origin may also be included under the prohibition of misrepresentation:
"There are two types of deception. One is deception in the body of the merchandise, where it is sold as quality merchandise from a particular place, when in fact it is merchandise from somewhere else." (Arukh Ha-shulhan [late nineteenth century work, by Yehiel Michal Halevi Epstein], Hoshen Mishpat 227:1)
5. "Putting a stumbling block before the blind"
We would call it "giving someone a bum steer." This law is based on Vayikra (Lev) Chapter 19 (v. 14): "You shall not curse the deaf nor put a stumbling block (livni iver) before the blind, but you shall fear your God, I am the Lord." Our Sages interpreted this verse in a very broad fashion (Sifra ):
"You shall not put a stumbling block before the blind" – before someone who is blind in that particular matter… don't say to your neighbor 'sell your field and buy a donkey,' when your whole purpose is to deceive him and buy his field.
This law can be readily applied to modern situations: A real estate agent should not dupe a young couple into buying a home with structural faults simply in order to make a fast buck. A stockbroker should not sell his client a bad investment just to collect the commission. A salesman should not convince his customer to buy an expensive item he really has no use for. A mortgage broker should not tell a client to buy a sub prime low rate mortgage which will balloon is a few years, because he shouldn't worry because his income will balloon as well. About such behavior we are warned: "and you shall fear your God, I am the Lord."
The discussing of mortgages and any loans leads us to usury, ribbit, the collection of interest. Ribbit is the motivation of loans as well as closing and finders fees.
Ribbit is the payment of interest on a loan by [a] borrower to [a] lender. The two biblical passages which forbid the taking of interest are:
Eighteen hundred years ago, the Amora Shmuel established the legal principle that in civil matters "dina d'malkhuta dina - the law of the land is the law" (Talmud Bavli Tractate Bava Kama 113a ). In its discussion of this principle, the Talmud specifically includes taxation as a secular law that must be followed. This, for example, is the way Maimonides summarizes this law (Gezeilah 5:11): "but a tax fixed by the king of 33% or 25% or any fixed sum… a person who avoids paying such a tax is a transgressor because he is stealing the king's portion, regardless of whether the king is Jewish or not."
Jewish law requires us to pay our taxes in a scrupulous fashion because in civil matters "the law of the land is the law."
Stories of scandals in the world of big business are splashed across the front pages of newspapers with dismaying frequency--in the U.S., about banks, insurance companies, and Wall Street collapse, about insider trading, the failures of deregulated savings-and-loan institutions, and the bankruptcy of corporations whose senior managers emptied them of assets for their own gain; and in Israel, about the collapse of the banking system after banks encouraged potential depositors to invest in bank shares instead.
Such well-publicized revelations reflect only the most egregious violations of ethical norms in commerce and finance on a grand scale. Ethical decisions pervade our economic behavior, and wherever new forms of business relationships develop, new ethical questions emerge.
Scholars and rabbis have explored the implications of the ethical principles and economic regulations of rabbinic tradition for contemporary problems of previously unimagined complexity. They have often done so with ethical sensitivity and economic subtlety, but their judgements inevitably reflect their own views of economic life and of ethics as much as they reflect those of the authors whose precedents they cite. Consequently, there is often lively debate about which rules are to be applied to a given situation and in what way those rules should be interpreted.
Insider trading has been categorized by Jewish scholars as a violation of ethical norms and of specific commercial legislation. Jewish commercial law makes specific demands on sellers and buyers, requiring full disclosure of information relating to the value of the goods being traded. This is no less true if the goods are shares of a corporation than if they are physical items. A transaction effected under falsified conditions may be canceled. If the information withheld by buyer or seller was gained by virtue of some office or task that provided access to privileged information, the sale or purchase made on the basis of this information also constitutes dealing in stolen property.
Intellectual property protection developed late in Jewish law, beginning with early modern rabbis' bans on republication of printed materials. Such restrictions were designed to protect the printers' investments, both for reasons of economic justice and because of cultural concerns: to help ensure the wide availability of Jewish religious texts once the printing industry began to make that possible. (Allowing printers' works to be pirated would have reduced their expected profit and thus curtailed Hebrew printing ventures.) The latter motivation may be irrelevant to the copying of music, computer games, or DVD films, but considerations of economic justice have led to a broadening of the traditional ban to include a wider recognition of the validity of copyright restrictions.
Many pre-modern Jewish communities enacted sumptuary laws--regulations limiting the extent to which one could engage in ostentation in celebrations or conspicuous consumption in everyday life. This emphasis on modesty in consumption is echoed in the criticisms leveled by some Jewish scholars against the advertising industry, for arguably disseminating inaccurate information about goods and services and seeking to stimulate consumption by encouraging us to covet what others have. The latter flies in the face of the sentiment expressed in the Mishna-rabbinic adage, "Who is wealthy? He who is satisfied with his lot."
An issue of social and economic policy that has divided Jews no less than other citizens is the question of gun control. A case can be made that Jewish law forbids the sale of weapons to those who will use them for offensive purposes in illegitimate ways, such as to commit a crime or support an unjust regime. One might argue, however, that the original strictures were simply a way of preventing small and beleaguered Jewish communities from being drawn into the military clashes between surrounding powers, and that the advantages of unrestricted trade should now be enjoyed even by those who want to deal in weapons. This debate has implications both for individuals and for governments, including that of the State of Israel, whose military industries provide a significant proportion of its exports, and in a true sense are supporting genocide in African countries.
This last statement takes us from the souk into the global marketplace as Jews.
Judaism, which relies on the Torah for its written law, has had a great impact on marketing and business. The Torah is replete with precepts dealing with business, and the Talmud, the source of Jewish oral law, elaborates and expands Torah law. The process is ongoing and rabbinical authorities today build on the decisions of their predecessors to apply Jewish law to modern problems. Some of the issues examined in this paper include: honesty in the marketplace, fair pricing, employer-employee relations, and environmental issues. Jewish law is not only concerned with practical legal advice but in encouraging individuals to go beyond the requirements of the law and practice the "way of the pious." Judaism does not have a negative attitude towards business and wealth -- indeed, most of the Talmudic sages had occupations and some were quite wealthy -- but riches must be acquired honestly and used to help the poor, the needy, and the stranger.
Jewish culture, values, and ideas have permeated many aspects of modern life including the modern marketplace. This impact of Judaism on marketing and business is manifested not only in such areas as business ethics, but also in the organization's perceived social responsibility, and in a positive attitude towards business and wealth (when obtained and used in a proper manner). Numerous articles and books have been written describing applications of Jewish law from antiquity to the modern era and their continued relevance to the business problems of contemporary society. To understand this impact, one must first examine Jewish law, tradition, and culture, especially those principles relevant to the marketplace.
The TaNaK, particularly the Chumash, contains the written law and, to the believer, is the word of God. The precepts in the Torah are the foundations of Jewish law and are cited by rabbinical authorities as a kind of constitution to this very day. According to Jewish tradition, the Torah contains 613 precepts, many of which deal with business practices. The Torah is revered by other religions; the Talmud and the Midrash, however, are distinctly Jewish. Thus, to understand the impact of Judaism on marketing and business one must examine the Talmud and Midrash, as well as the Torah.
The Talmud, which is the compilation of Jewish oral law, expounds on the Hebrew Bible and consists of the Mishna and Gemara. The Mishna, originally an ancient oral tradition, was compiled and edited in written form about 1800 years ago by Rabbi Judah the Nasi (President of the Sanhedrin). The Gemara, which was completed about 1500 years ago, consists mainly of commentaries on the Mishna. There were two academies, in Israel and Babylon, independently studying the Mishna. Thus, there are two versions of the Talmud: the Jerusalem Talmud, a product of the academies in Israel, and the Babylonian Talmud, a product of the academies in Babylon. The Babylonian Talmud is considerably larger than that of the Jerusalem Talmud, and it is more authoritative.
The Talmud is primarily concerned with halacha (Jewish law) but also provides a detailed record of the beliefs of the Jewish people, their philosophy, traditions, culture, and folklore, i.e., the aggadah (homiletics). The Midrash, a separate scripture which records the views of the Talmudic sages, is mainly devoted to the exposition of Biblical verses but is also rich in philosophy, folklore, and legends. It should be noted that, other than the few individuals who headed academies, the overwhelming majority of the scholars referred to in the Talmud had secular occupations, such as beer brewer, farmer, farm worker, peddler, physician, wood chopper, merchant, blacksmith, gravedigger. Indeed, some were known by their occupations, for example, Rabbi Yochanan the Shoemaker (haSandlar). Even in later times, many of the great Jewish Biblical and Talmudic commentators had ordinary occupations, e.g.: Rabbi Shlomo ben Yitchak (1040 -- 1105), known as Rashi, was a vintner in France; Rabbi Abraham ibn Ezra (1089 -- 1164) was a poet and astronomer from Spain; Rabbi Moshe ben Maimon (1134 -- 1204), known as Maimonides, was a physician and philosopher in Egypt; and Rabbi Ovadiah Sforno (1470 -- 1550) was a physician in Italy.
Maimonides wrote Mishneh Torah, in which he arranged and codified the laws without the Talmudic debate and homiletics. Later, Rabbi Joseph Karo (1488 -- 1575), relying on the works of Maimonides and other scholars, wrote the Shulchan Aruch, the authoritative code of law for observant Jewry. The Torah, Talmud, Mishneh Torah, Shulchan Aruch, and thousands of responsa (legal decisions handed down by Jewish authorities) are major sources for the rules and regulations governing Jewish law today. Even in the secular arena, Rakover (1992) demonstrates that hundreds of decisions handed down by secular courts in Israel today refer to Jewish law. For instance, in one case, Maimonides' ruling that "It is prohibited to deceive people in transactions or to mislead them" (Mishneh Torah, Laws of Selling 18:1) was quoted to demonstrate the obligations of sellers (Rakover 1992, 755). Friedman (1980; 1984; 2000) shows how many current business laws and practices and numerous concerns of business ethicists today have their antecedents in the Hebrew Bible and the Talmud.
Rab.Friedman (1980) notes that the Talmud often resorts to ethical principles in order to improve upon the law. Following the strict letter of the law is not sufficient. In fact, the Talmud Bavli Tractate Bava Metzia 30b claims that Jerusalem was destroyed because judgments were based strictly on the law and did not go beyond the strict line of justice. This principle of Jewish law, that demands that one be ethical and even go beyond the legal requirement, is derived from the verse (Deuteronomy 6:18): "You shall do that which is fair and good in the sight of the Lord." The Talmud Bavli Tractate Bava Metzia 108a) uses this verse to establish the right of pre-emption, i.e., when one sells a field the adjoining neighbors are given the right of first refusal. In addition, individuals who go beyond the requirements of the law will return found objects even if the object was lost in a place where it is clear that the owner gave up any hope of recovery (e.g., if it fell into the sea), and there is thus no legal obligation to return it (Talmud Bavli Tractate Bava Metzia 24b).
Another indication that one must do more than simply obey the letter of the law is that "one may be (legally) compelled not to act in the manner of Sodom." In some situations where one party benefits and the other party loses absolutely nothing, the courts can compel an individual to do the right thing ( Talmud Bavli Tractate Bava Bathra 12b). Spiteful selfishness of this type is considered a behavior characteristic of Sodom and is not tolerated by Jewish law.
The Talmudic sages believed that there is an ethics hierarchy and that individuals should strive to reach the summit. He The highest level of ethics described in the Talmud is "the way of the pious." Businesspeople leading their lives according to this principle go beyond the letter of the law and are willing to lose money rather than take advantage of another person's misfortunes. The following case discussed in the Talmud Bavli Tractate Bava Metzia 83a proves that the purpose of the Torah and Talmud is not solely to provide precise answers to legal questions but to develop the morals and ethics of individuals.
Some porters negligently broke a barrel of wine belonging to Rabbah bar Bar-Chana who then confiscated the porters' property as restitution. Rav, the judge, advised Rabbah to return the property belonging to the porters. Rabbah asked Rav whether this was indeed the law and was quoted the following verse from Proverbs (2:20): "In order that you may walk in the way of the good …" The porters then complained to Rav that they were poor, had worked all day without earning anything, and were in need. Rav told Rabbah to pay them. Rabbah again asked whether this was the law. Rav responded with the conclusion of the verse from Proverbs: "… and keep the paths of the righteous."
Because the Talmud is concerned with improving the ethics of the individual, cases are discussed in which the courts cannot legally prosecute the defendant. This is not surprising given that, in Jewish law, the legal content of the law is totally conjoined with ethics, religion, and morality . It is interesting to note that the Ten Commandments (Exodus 20:2-14; Deuteronomy 5: 6-18) mixes laws that are the foundations of every legal system (e.g., those dealing with murder, theft, and bearing false witness) with laws that are religious (e.g., against idolatry and observing the Sabbath), and with the Tenth Commandment dealing with "coveting" and "desiring." Legislation against desiring is not part of any legal system and relates more to ethics and morality than to practical jurisprudence. These very different types of laws are combined to demonstrate that crimes against people are also crimes against God and that individuals have an obligation to go beyond the letter of the law and elevate themselves spiritually and ethically. Indeed one wonders whether advertising whose sole purpose is to arouse envy and desire on the part of those that do not possess a certain product is inconsistent with the spirit of the Tenth Commandment.
The Talmud rules that the offender is "liable under the laws of Heaven," is described as "wicked," as having "behaved with deceit," "acted in the manner of Sodom," "lacking in honesty," and engaged in a behavior "that is not pleasing to the spirit of the sages." Whether or not a defendant can or cannot be prosecuted for an action may be less important than knowing about whether it is the "right" thing to do. Rabbi Moshe ben Nachman (1194 -- 1270), Nachmanides, a major commentator on the Torah (and also a physician), notes that one can follow the letter of the law and still be considered a "vile person within the permissible realm of the Torah" (Nachmanides, Leviticus 19:2).
There are gradations of unethical behavior and the objective is to motivate individuals to move up the ethics hierarchy. Not everyone is capable of reaching the level of Rabbi Safra who is described in the Talmud Bavli Makoth 24a as an individual who abided by the verse (Psalms 15:2) "who speaks truth in the heart." One day, while Rabbi Safra was praying, a man offered to buy some merchandise from him. He made an offer, but Rabbi Safra did not want to respond in the middle of a prayer. The prospective buyer assumed that Rabbi Safra was holding out for more and kept increasing the bid. After Rabbi Safra concluded his prayer, he informed the buyer that he would sell the merchandise at the first price because he had "agreed in his heart" to this price. Legally, one is not required to do as Rabbi Safra; this is the "way of the pious." On the other hand, if two parties have concluded negotiations leading to a sale and are in the process of closing the deal, and a third party jumps in and makes the purchase, the interloper cannot be prosecuted legally but is described by the Talmud Bavli Tractate Kiddushin 59a) as a "wicked person." Hence Wells Fargo in their dealings with Whachova and CitiBank are wicked business people according to Jewish law.
The Talmud Bavli Tractate Makoth 24a enumerates 11 ethical principles (based on Psalm 15) that underlie the 613 precepts of the Torah. These include such virtues as "speaks the truth from his heart," like Rabbi Safra; "deals righteously," like Abba Chilkiyahu, who would not even greet people while working as a day laborer since he did not want to waste time -- even a few moments -- that was not his; and "who has done his fellow human no evil," referring to one who does not infringe on his fellow craftsman's business. Opening a store next door to a store selling the same merchandise is something a pious person does not do (Wagschal 1991, 25).
The prohibition against stealing is the eighth commandment of the Ten Commandments (Exodus 20:13; Deuteronomy 5:17) and is interpreted by several of the classic Jewish commentaries to include every kind of dishonesty and deception (e.g., Sforno and ibn Ezra). One ancient commentary (Targum Yonathan) translates this commandment to include being a partner or friend of unscrupulous individuals. It is also stated in Leviticus (19:11-13): "Do not steal, do not deny falsely, and do not lie to one another. Do not swear falsely by My name…Do not cheat your fellow and you shall not rob." Any type of deceptive act or practice, including deceptive advertisements and deceptive packaging, would also be a violation of the Biblical principle (Exodus 23:7), "Distance yourself from a false matter." Moreover, the Torah's injunction against "placing a stumbling block before the blind" (Leviticus 19:14) is interpreted by the Talmud and Midrash to include proffering bad advice to unsuspecting people or causing others to sin (Sifra Leviticus 35; Ta;mud Bavli Tractate Bava Metzia 75b). Thus, Jewish law would consider deceptive advertising and misleading labeling as placing a stumbling block before the blind and a violation of Torah law. Even the advertising agency that created the deceptive advertisement would be guilty of transgressing this law.
Adulteration of products was a problem even in ancient times as can be seen from Isaiah's criticism (1:22) of the Israelites: "Your silver has become dross, your wine diluted with water." According to most commentaries, this is not a metaphor but refers to actual deceptive practices in ancient Judah and Jerusalem that angered the Lord.
Merchants were prohibited from falsifying weights and measures by the Torah or even owning a dishonest weight (Leviticus 19:35-36; Deuteronomy 25:13-15). The prophet Amos (8:5) reproached the Jews for "making the ephah (a dry measure) smaller and the shekel larger and falsifying the scales of deceit." After all, "Deceitful scales are an abomination of the Lord" (Proverbs 11:1). In fact, any deception or dishonest business practice is "an abomination unto the Lord, your God" (Deuteronomy 25:16). To ensure honest weights and measures, the Talmud Bavli Tractate Bava Bathra 88a required merchants to wipe their weights once a week and clean their scales after every weighing. Market commissioners were appointed to ensure that businesses used honest weights and measures Talmud Bavli Tractate Bava Bathra 89a). Vendors were prohibited from rapidly pouring liquids from great heights (Talmud Bavli Bava Bathra 89b), which was done by retailers to generate foam thereby ensuring that the customer would end up with less product. One can see this being done today in the souks of "Arabia'' when one buys a cup of coffee. When the foam settles, one has only a half of a cup.
Included in the Torah law against theft and deception is the requirement that vendors must be honest in selling. Hiding faults from the buyer is not permitted and such a sale is null and void. The Talmud Bavli Tractate Bava Metzia 59b-60a) prohibits such deceptions as: mixing your own produce with that of other farmers when the agreement was to provide produce from your field; painting animals or utensils in order to fool prospective buyers into thinking they are younger or newer; deceiving potential customers by placing the better quality merchandise on top of the bin (and the lower quality merchandise on the bottom) in order to make it appear that the merchandise is of uniformly high quality throughout; selling wine that has become adulterated with water in your store without informing the customers. The laws dealing with transactions under mistaken assumptions are relevant even in marriage, i.e., the discovery of a bodily defect in a spouse can nullify the marriage (Talmud Bavli Tractate. Ketuboth 11b, 57b).
Clearly, firms must be aggressive in ensuring that all their advertisements and communications are honest, straightforward, and unlikely to deceive the public.
The Torah states (Leviticus 25:14): "If you sell something to your neighbor or buy something from your neighbor's hand, you shall not wrong one another." The Talmud interprets this verse to refer to overcharges and undercharges. The Talmud Bavli Tractate Bava Metzia 50b ruled that if the overcharge is more than one-sixth -- i.e., the retailer sells an item for a price that is one-sixth higher than what is generally accepted as a fair price -- the sale is null and void. Similarly, if an individual is unaware of the true value of an item and wishes to sell it, one must not take advantage of the seller's ignorance and underpay.
The law against overcharging was extended by the Talmud to include excessive markups on necessities Talmud Bavli Bava Bathra 90a. Profits from the sale of staples such as wheat, oil, or wine was not to exceed one-sixth.
Price stability was of great concern to the Talmud, and the Talmudic sages considered causing prices to rise by hoarding or other means a violation of Torah law similar to ribbit or tampering with weights and measures Talmud Bavli Tractate Bava Bathra 90b. Leaders such as Rabbi Shimon ben Gamliel, the head of the Sanhedrin, threatened to revise laws concerning sacrifices when he heard that the price of doves used for certain sacrifices had increased to a golden dinar (Talmud Bavli Tractate Krithoth 8a). He was successful and the price dropped to one-quarter of a silver dinar.
Shmuel was another Talmudic sage that used his legislative powers to keep the prices of myrtles, used during the holiday of Sukkoth to make luluvim, and of pots, purchased before the holiday of Passover, from rising prior to the holidays (Talmud Bavli Tractate Sukkah 34b; Tractate Pesachim 30a). Shmuel and his father were known to purchase and subsequently sell produce in such a way as to keep the market price stable and low throughout the year (Talmud Bavli Bava Bathra 90b).
Firms have an obligation to engage in fair pricing and not overcharge or hoard products in order to make excessive profits, especially for necessities and drugs.
The Torah states (Numbers 32:22): "and you shall be innocent before God and Israel." The Talmud uses this verse to derive the principle that one must behave in a manner that does not give rise to suspicions on the part of others. We call this maarit eyen...what looks good to the eye. The Torah (Exodus 38:21-31) provides a detailed list of the amounts of gold, silver, and copper used in the construction of the Tabernacle. This was done to demonstrate the importance of keeping clear records and behaving in a way that does not cause the public to suspect one's veracity. The Torah states (Exodus 38:21): "These are the accounts of the Tabernacle, the Tabernacle of the Testimony, as they were calculated according to the commandment of Moses…" Moses wanted to make it evident that he and the builders of the Tabernacle did not divert any of the precious metals for their own personal use and he therefore used others to audit the records. The Midrash (Exodus Rabbah 51:1) comments: "though Moses was the sole treasurer, yet he called others to audit the accounts with him."
Having the bundlers of mortgages pay S and P and Mooney's for 'independent' ratings is not Jewish.
The Talmud Bavli (Tractate Pesachim 13a) states that the overseers in charge of the soup kitchen were not allowed to purchase surplus food when there were no poor people to whom to distribute it. Surpluses were only allowed to be sold to others so as not to arouse suspicion that the charity overseers were profiting from public funds. For the same reason, children in the family of Garmu, that made the showbread for the Temple, were never seen with fine bread; brides from the family of Abtimas, the Temple's incense manufacturers, never wore perfume (Talmud Bavli Tractate Yuma 38a). Those who entered the Temple chamber to collect the money for the sacrifices wore clothing with no pockets or other receptacles so that people should not suspect them of stealing money Talmud Bavli Tractate Shekalim 3:2.
Organizations have the same obligation as individuals to act in a manner that does not arouse suspicion and to use outside auditors that are truly objective.
In an agrarian society, the laborers who worked the fields were usually slaves. Regarding the treatment of slaves, the Bible states: "You shall not rule over him through rigorous labor" (Leviticus 25:43). The Midrash (Sifra, Leviticus 86; Midrash Hagadol, Leviticus 25:39) explains this to mean that one is not permitted to make a servant engage in degrading work (e.g., removing his master's shoes), perform work that has no purpose (i.e., "busy" work), or carry out a task without a defined limit (e.g., "hoe until I return" when the servant does not know when the master will return). Employers are required to pay employees on time. The Torah states (Leviticus 19:13): "You shall not oppress your fellow and you shall not rob; the wages of a worker shall not remain with you overnight until morning."
The concept of fringe benefits is alluded to in the Torah. Field workers are given the right to eat of the produce while they work. The Torah states (Deuteronomy 23:25-26): "When you come [as a worker] into your neighbor's vineyard, you may eat as many grapes as is your desire, to your fill, but you may not put any into a receptacle. When you come into your neighbor's standing corn, you may pluck ears with your hand, but you should not lift a sickle on your neighbor's standing corn." When their servitude ended, the master was required to give the slave a severance gift known as hanakah. The Torah states (Deuteronomy 15:13-14): "Do not send him away empty-handed. You shall give him a severance gift from your flocks, from your threshing floor, and from your wine cellar ..."
Employees must be treated with respect and describes various obligations of employers. The rabbis conclude: "Is an employee worse than a slave?"
An organization should try to achieve its goals (e.g., profit) but must also care for others. Hillel's simple rule summarizes this philosophy of business ethics as well as anyone can (Talmud Bavli Tractate Avot 1:14): "If I am not for myself, who will be for me? And if I only care for myself, what am I?"
The Torah makes it quite clear that the landowner has a responsibility to help the indigent. Landowners were obligated to help the poor by leaving the corners of the field for them; during the harvesting, individual stalks that unintentionally fell from the sickle also became the property of the "stranger, orphan, and widow" (Leviticus 19:9). Similarly, vines and olive trees were not to be picked clean: gleanings of the vine and olive tree were left for the destitute (Deuteronomy 24: 20-21). A sheaf of grain that was inadvertently left in the field during the harvest had to be left behind for the indigent (Deuteronomy 24:19). The landowner was obligated to provide a tithe for the priests and the Levites (Numbers 18:21-32) and a special tithe for the poor (Deuteronomy 14:28-29). There is also an obligation to "open one's hand" for the impecunious and lend them money (Deuteronomy 15:7-8).
The Torah is very concerned with the welfare of the stranger, an individual that often can be easily taken advantage of. Indeed, the stranger is often mentioned together with the destitute, widows, and orphans. The Talmud Bavli Tractate Bava Metzia 59b notes that the precept of not mistreating a stranger is alluded to 36 times in the Torah. For instance, the Scripture states: "You shall strengthen him, whether he is a stranger or a native, so that he can live with you" (Leviticus 25:35). Abusing, taunting, wronging, or oppressing the stranger is forbidden (Exodus 22:20; Exodus 23:9); in fact, the Bible obligates one to love the stranger (Leviticus 19:34; Deuteronomy 10:19). Jerusalem was destroyed for wronging the poor, the needy, and the stranger (Ezekiel 22:29), and Sodom was annihilated for not using its wealth to help the poor and needy (Ezekiel 16:49). The Torah (Numbers 15:16) insists that: "One law and one ordinance shall be both for you and for the stranger who sojourns with you." Individuals, organizations, and government must ensure that all ethnic and religious groups are treated equitably; special efforts should be made to help the poor and the handicapped get jobs -- the highest form of charity (Maimonides, Mishneh Torah, Laws of Gifts to the Poor 10:7).
Deuteronomy (22:8) states "when you build a new house you must place a guardrail around your roof, so that you will not place blood in your house." The Talmud extends this law to apply to any dangerous situation, for example, keeping a defective ladder (Talmud Bavli Tractate Ketuboth 41b). Certainly, selling a broken ladder would be no better. One may infer from this that any product with the potential for harming the user is prohibited by Talmud and, by extension, the Torah. In addition, employers must be extremely careful to make certain that the workplace environment is safe and not deleterious to employees' health.
Wasteful consumption is proscribed by the Torah. Soldiers are not permitted to cut down fruit trees even when besieging an enemy's city (Deuteronomy 20:19). The Talmud Bavli Tractate Shabbat 129a; Tractate Bava Kama 91b) extends the prohibition of not destroying fruit trees to any type of wasteful destruction; thus, wanton destruction of any kind is a violation of Torah law. This is known as the principle of bal tashchit (literally meaning "do not destroy"), a prohibition against unnecessary destruction or waste. Recent rabbinical authorities have applied the principle of bal tashchit in regards to our envionment.
Some questions discussed in the Talmud include how far to locate a tannery (which emits bad odors) from a city (Talmud Bavli Bava Bathra 25a). Noise pollution resulting from an individual opening up a store in a courtyard shared by several families is also discussed in the Talmud Bavli Tractate Bava Bathra 20b. Many of the Talmudic laws dealing with relations between neighbors to modern questions dealing with pollution.
The Torah requires that the land be given a complete rest in the seventh year, known as Shemitah (Leviticus 25: 1-7). One purpose of the Sabbatical year may have been to protect the land from depletion. During the Jubilee (50th) year, the land was also rested and reverted back to former owners.
The obligation to care for the environment and minimize pollution and waste is one that falls on individuals as well as companies. The Talmud Bavli Tractate Bava Kama 30a) notes that one who wishes to be pious must be extremely scrupulous in matters that may cause harm to others, e.g., in the disposal of glass and thorns.
The Jewish attitude towards business is quite positive. In fact, wealth, peace, and/or long life are rewards from God for obeying God's laws (Leviticus 26: 3-13; Deuteronomy 11: 13-16; Deuteronomy 25:15; Proverbs 22:4). The Bible makes it clear that one who helps the poor will be blessed by God (Deuteronomy 15:10; Isaiah 1:17-19; Proverbs 19:17); those that mistreat the stranger, widow, or orphan will be punished by God (Exodus 22:20-23; Isaiah 1: 23-25). There is nothing wrong with being wealthy as long as the rich do not forget that wealth comes from God and that there is an obligation to help the needy. The danger of wealth and its true purpose is explicitly stated in the Bible (Deuteronomy 8: 11-18): One should not believe that "my power and the might of my hand has made me all this wealth"; rather, one should remember that God gives wealth to individuals in order that they may do His will.
It is clear that Judaism sees nothing wrong with wealth as long as it is obtained honestly and used to help the poor. The Talmud also reinforces this idea: In a wordplay on the verse (Deuteronomy 14: 22): "You shall surely tithe," the Talmud Bavli Tractate Taanit 9a) advises that one should tithe in order to become rich (the Hebrew word that means to tithe is very similar to the word that means to become rich). The verse (Proverbs 11:24), "There is one who scatters and yet is given more" is interpreted by many of the commentators (e.g., Rashi and ibn Ezra) as referring to one who spends his money on the needy. The question of what a person should do to become rich is discussed in the Talmud; one answer is to engage in much business and deal honestly (Talmud Bavli Tractate Niddah 70b). Wealth is seen as "comely to the righteous and comely to the world" (Talmud Bavli Tractate Avot 6:8), and affluent people who used their possessions to help others were respected by the Talmudic sages (Talmud Bavli Tractate Eruvin 86a).
Similarly, the Talmud has a favorable attitude towards working. The ideal is to combine the study of Torah with an occupation. Some statements about work include: "Whoever does not teach his son a trade, it is as though he taught him to commit robbery" (Talmud Bavli Tractate Kiddushin 29a); "All Torah that is not combined with work will eventually cease and lead to sin" (Talmud Bavli Tractate Avot 2:2); "A person should love work and not hate it; for just as the Torah was given with a covenant, so too was work given with a covenant" (Tractate Avot D'Rabbi Noson 11:1); "Even God did not let His presence rest upon Israel until they had performed some work" (Tractate Avot D'Rabbi Noson 11:1); "Skin a carcass in the street and receive wages and do not say I am an important person and this type of work is beneath my dignity (Talmud Bavli Tractate Pesachim 113a)." As noted above, the Talmudists practiced what they preached and also had occupations.
The Talmud Bavli Tractate Pesachim 113a records Rav's business advice to his son Aibu, which included the idea to "sell your wares while the sand is still on your feet" (i.e., do not procrastinate, and sell as soon as possible). The idea of diversification -- i.e., dividing one's assets into thirds: 1/3 in land, 1/3 in business, and 1/3 kept liquid -- is also mentioned in Talmud Bavli Tractate Bava Metzia 42a. Advice is provided as to the ideal occupation, which, according to Rabbi Chisda, is needle work (Talmud Bavli Tractate Beracoth 63a). Another sage believed that investing in business was better than being a farmer (Talmud Bavli Tractate Yevamot 63a). Rabbi Papa claimed that he became wealthy by being a beer brewer and recommended this occupation since it allowed one to become affluent and to be charitable (Talmud Bavli Tractate Pesachim 113a). Rabbi Yochanan's opinion was that raising small cattle would make one wealthy (Talmud Bavli Tractate Chullin 84b). His fellow rabbis reminded him that he ate most of his profits.
Judaism sees nothing wrong with business and making a profit as long as the firm realizes that it has other responsibilities as well. Jeremiah (9:23) stressed that God demands that people practice "lovingkindness, justice, and righteousness." The same can be asked of any organization.
The Dovid Melech (Psalms 15) describes some of the attributes of a virtuous individual. We cannot help but notice that these same attributes are just as important for an organization: "One who walks in total integrity, deals righteously, and speaks the truth from his heart. One who has no slander on his tongue, who has done his fellow human no evil nor cast disgrace upon his close one… Whoever does these things shall never falter." Achieving the highest level of ethical behavior in the marketplace and practicing the social responsibility that must accompany success in business are the hallmarks of the 'way of the pious.'
Indeed, business ethics occupies such an important place in Jewish law, culture, and tradition that Talmud Bavli Tractate. Shabbat 31a has as the very first question an individual is asked in the next world at the final judgment: "Were you honest in your business dealings?"
In summation, while many of Talmudic laws seem outdated especially those involving women, those involving ethics, especially business ethics, are as relevant today, as the day our sages, blessed be they, discussed them.
Shalom:
Rabbi Arthur Segal
Hilton Head Island, SC
Bluffton, SC
Savannah, GA
Jewish Spiritual Renewal
Jewish Renewal
Acknowledgments to:
Sermons and D'vrai of Rabbis/Professors H. Friedman, N. Rakover, L. Jacobs, A. Segal, D. Golinkin
