Article for Behar-Behukotai
Is the Torah Socialist or Capitalist? Since the Torah is more than just a set of laws for private individual, but presents a legal and social code for the running of an entire community then naturally it includes an economic system and we can ask to which of our existing models that system can be compared.
But two particular elements which are unimaginable in any form of contemporary secular economy, which can be found in the sedra of Behar, make it impossible to fir the Torah neatly into any of our existing economic theories.
The first of these is the institution of the Jubilee year. Every fifty years, all lands had to lie fallow (as in each Sabbatical year). Furthermore, all rural land was to be “returned to its hereditary owner” – to the family in whose possession it was at the time of the original distribution of the land in the time of Joshua.
Consequently land could never be sold freehold. The result of this was that no family could amass vast holdings of land over several generations. Thus, no class of landowners could emerge who would wield economic power over the landless.
The second unique feature of Jewish economic life presented in this sedra is the prohibition of lending on interest. The lender is not permitted to charge interest to another Jew and nor is the borrower permitted to pay interest. Although Jewish banks today use the device of “hetter iska” whereby lenders become partners in a business investment and are thereby permitted to receice interest, the prohibition still very much applies on the personal level. Righteous people have been known to go to extreme lengths to avoid even receiving too much gratitude from a borrower, lest this be considered as a form of interest.
The author of the Sefer Hachinuch, writing in the thirteenth century describes the frightening effect that interest can cause:
“The way of borrowing on interest is for all the (financial) strength of the borrower to be swallowed up without the borrower realising until he finds his house completely empty.”
Therefore, says the Sefer Hachinuch, since God desired a successful and peaceful Jewish society, He forbade interest which would have hindered the fulfilment of this aim.
Six hundred years later, writing in a time when lending on interest was not only totally acceptable, but even perceived as being in the interest of the borrower, since it encouraged lending, Rabbi Samson Raphael Hirsch wrote that prohibition of interest havs two primary consequences. First, precisely because interest in justified, its loss is a sacrifice that proclaims God as the master of the world (like giving up work on Shabbat or in the Sabbatical year).
Similarly, others point out that the one who lends on interest is sure of a profitable return, whereas the one who does not has to hope that the enterprise for which the money will be used will be successful and he thereby remembers how dependent he is on God.
But the second effect, says Hirsch, is on society itself:
“This law takes away the worst effect of the power of money – the most potent factor in causing social inequality. It breaks the great power of capital, making it dead and unproductive and thereby raises labour to the primary factor of social well-being.
“The possibility of that shocking contrast, where the wretchedness of the labouring class is rampant right next to the most luxurious opulence, has the ground cut away from under its feet by this law”.
Thus the Jewish economic system is not capitalist or socialist – it is unique. The Jubilee will not be in effect again until the majority of Jews return to the land of Israel, and all who do business in today’s marketplace are liable to forget the meaning of the prohibition of interest. But, if we want to bring Judaism into every aspect of our lives and not just the “rituals”, then we must not forget that the Torah’s economic system is predicated on preventing the oppression of one group by another.