Case Studies in Jewish Business Ethics: Introduction
Rabbi Aaron Levine
An ancient parable is told of a king who for political reasons imprisoned a sharp witted, pious young man by the name of Nosson ha-Harif (lit. the sharp one). One day, the king visited Nosson in the dungeon where he held him prisoner and told him that he was giving him a chance to gain his freedom:
This dungeon has two doors. One door leads to your freedom, but the other door opens into a den of lions. You must choose which door you want me to lead you out from. To help you make your decision, I'm placing two parrots in the dungeon; one is red and the other is blue. Both parrots know the secret as to which door will lead to your freedom. One parrot always tells the truth, the other parrot always lies. I'll permit you one question to pose to either of the two parrots. If you're really close to God, you should be able to discover the truth regarding the doors.
It took but a few moments for the anxious look on Nosson's face to turn into a serene smile. An inspiration had overcome him. The "sharp one" was sure he knew how to find out the truth about the doors:
I'll ask either parrot to tell me which door the other parrot claims will lead to my freedom and then I'll request to be led out the other door.
An astonished king eagerly waited for the explanation. Ha-Harif continued:
Suppose I ask red to tell me which door blue claims will lead to my freedom. Now, if red is the truth teller, he will faithfully report to me which door blue claims leads to my freedom. But, since blue in this scenario is presumed to be the liar, I will select the other door.
Now, suppose red is the liar and blue is the truth teller. In this scenario, red will falsely report which door blue claims will lead to my freedom. Again, I am forced to reject red's recommendation and select the other door.
How should the modern world of business relate to Nosson ha-Harif? Is he some type of hero or role model or someone we should, for the most part, regard as irrelevant? The answer to this question is crucial. It will supply us with the keynote theme for this volume, Case Studies in Jewish Business Ethics.
Why not identify with Nosson ha-Harif? Because there is something surreal about him. His nimblemindness defeats parrots. But, in the marketplace, one's opposite number is a person, not a parrot. The challenge we face is not only to defeat evil but also to resist the temptation to inflict evil upon others.
Indeed, we would not be justified in making Nosson ha-Harif the hero and model for the modern marketplace unless we subscribed to Albert Z. Carr's brand of business ethics. In Carr's conceptualization, business is a game of strategy. The duty of the businessman is no more than to comply with the letter of the law. Within the sphere of business, morality commonly operates on a lower level than the norms prescribed by religion.1 In this world, the secret to success is to become Nosson ha-Harif and devise a strategy that will be best regardless of whether our opposite number is a liar or truth teller. Moreover, for the one who perceives the marketplace in terms of a game of poker,2 the use of an occasional bluff or lie should be an easy matter. Why the moral qualm? Initiating deceptive conduct amounts to no more than a preemptive attack against someone who was planning the same or worse against you.
From the perspective of Halakhah (Jewish law), Carr's approach to business ethics is totally repudiated. For one, it is not acceptable for morality to operate in only compartmentalized spheres. Rather, ethical norms are meant to permeate every aspect and dimension of the life experience: "In all your ways know Him and He will straighten your paths." (Proverbs 3:6).3
Moreover, man's duty is not summed up as an obligation to comply with the law. Instead, man must apply the law to contexts not explicitly covered by legislation.4 Moreover, for those contexts where his duty is defined by law, man must show a responsibility and a generosity of spirit lifnim mi-shurat ha-din (beyond the letter of the law).5 Relatedly, for Halakhah, the ideal is for an individual to conduct himself in a manner that will make his integrity objectively evident. This calls for behavior according to objectively verifiable standards and formulating commitments in precise and unequivocal terms.6
Finally, it behooves us to recognize that Carr's genre of business ethics does not develop in a vacuum. What gives it impetus is a legal system that stresses rights over duties. When an individual operates in a milieu where he expects to find rights, it is an easy matter to judge that his rights are threatened and to launch a preemptive attack against those who are bent on depriving him of his due.
In sharp contrast, Halakhah emphasizes duties over rights.7 Justice Moshe Silberg (Israel, 1900-1975) elaborates on this theme. One example that he gives is how Bet Din (Jewish court) treats a debt. Satisfaction of a debt is actionable, not primarily as enforcement of the creditor's right, but as a means of compelling the debtor to fulfil his religious duty to pay off his debt. How Bet Din handles a debt is the prototype of Judaism's whole system of legal obligations.8 Within the framework of a system that stresses duties over rights, it should come as no surprise that Halakhah allows a market participant little discretion to decide on his own that his particular duties do not apply to the situation at hand.9
The upshot of the above analysis is that Nosson ha-Harif is essentially irrelevant as a model for the market participant. How can we relate to a person who defeats evil with sheer brilliance when our primary concern in the marketplace is to educate ourselves with respect to our duties and resist the temptation to inflict evil upon others.
To be sure, Nosson ha-Harif is not totally irrelevant. In situations where the bluff is a permissible tactic, the ideal is still to extricate ourselves from the circumstances through sagacity rather than connivery.10
The Plan of This Work - By means of the case study method, this work will explicate the principles in Halakhah that govern the marketplace in a variety of interactions.
In the opening two vignettes, the case for moral education is made. The work proceeds then to present ethical norms relating to advertising, salesmanship, marketing, pricing policies, labor relations, insider trading and consumer and social ethics in the marketplace.
Inter-Jewish transactions are regulated by the prohibition to pay and receive ribbit (interest). Many of the nuances of this prohibition within the context of a commercial transaction are dealt with in this volume. The treatment of ribbit includes a discussion of Hetter Iska.
The norms we describe in Case Studies in Business Ethics are transcendent duties prescribed for all market participants in a nondiscriminatory manner. The "reasonable man" criterion, for instance, informs, at once, both the disclosure obligation for the buyer and the seller. Similarly, the prohibition against engaging in pressure tactics equally constrains the conduct of both the buyer and the seller. When a commercial transaction entails ribbit, both the buyer and seller infringe the prohibition. To provide but one more example, the prohibition against causing someone needless mental anguish enjoins the seller against the use of the "bait and switch" tactic no less than it enjoins the consumer against insincere comparative shopping.
What Halakhah has to say for the marketplace defines the very rules of economic participation and is designed to promote harmonious social relations and generosity of spirit.
While our focus is on Halakhah, comparative analyses in respect to both American law and secular business ethics is a feature of this work. The concern of this work is also the role Halakhah assigns government in fostering business ethics and the approach it urges government to take in respect to specific issues. Both economic theory and economic analysis will be used to clarify and elucidate the issues involved.
In writing this book, I was faced with a stylistic dilemma: On the one hand, business ethics is a very serious subject matter and there seems to be little room for humor. On the other hand, long experience as both Rabbi and Professor has taught me that humor is a powerful pedagogical device. I wish I had more of it at my disposal! I resolved this dilemma by deciding to make my major thrust at humor not in the text itself but rather in the footnotes of this volume. If the reader fails to discover any humor embedded in the footnotes, I will have at least succeeded in arousing the reader's curiosity to examine my notes more carefully than otherwise. Should I, perchance, succeed at my task, but the reader finds more humor in the text than in the footnotes, know well that this relative distribution of humor between the text and the notes was entirely unintended on my part.
1.Abert Z. Carr, "Is Business Bluffing Ethical?," Harvard Business Review, vol. 46, no. 1, Jan.-Feb. 1968, 143-53.
2. Carr, op. cit., p. 145.
3. See Berokhot 63a.
4. Nahmanides (Spain, 1194-1270), Ramban at Deuteronomy 6:18. For an analysis of Nahmanides, see R. Aharon Lichtenstein, "Does Jewish Law Recognize an Ethic Independent of Halakhah?" in Marvin Fox, ed., Modern Jewish Ethics; Theory and Practice (Ohio State University Press, 1975), pp. 62-88. See also Walter Wurzburger, The Ethics of Responsibility (Philadelphia: The Jewish Publication Society, 1994), especially chapters 1 and 2. For a discussion of how Nahmanides' insight might apply to various aspects of the modern business scene, see Professor Moses L. Pava, Business Ethics: A Jewish Perspective (Hoboken, New Jersey: Ktav Publishing House, Inc., Yeshiva University Press, 1997), pp. 150-57.
5. For treatment of the lifnim mi-shurat ha-din concept in this volume, see pp. .
6. Please turn to pp. of this volume.
7. There was this [man] who walked along saying: "--One who leaves a court having his coat removed (i.e., the court ruled against him, removing his coat as payment to his opponent)--should sing a song as he goes on his way." (Sanhedrin 7a). (He should be happy that wrongly acquired property was removed from his possession (R. Solomon b. Isaac (Troyes, 1040-1105), Rashi ad locum).).
8. (Justice) Moshe Silberg, "Law and Morals in Jewish Jurisprudence," Harvard Law Review, LXXV (1961-62), 306-31. For further elaboration on this theme, see Professor Aaron Kirschenbaum, Equity in Jewish Law Beyond Equity: Halakhic Asperationism in Jewish Civil Law (Hoboken, New Jersey: Ktav Publishing House, Inc., Yeshiva University Press, 1991), pp. 1-58.
9. For examples of the operation of this principle, please turn to pp. of this volume.
10. See R. Hayyim Mordecai Margoliot (Dubno, -1820), Sha'arei Teshuvah at R. Joseph Karo (Safed, 1488-1575) Shulhan Arukh, Orah Hayyim, 448 n. 8.