Jewish Economic Theory

29 May 2007 at 12:07 am 3 comments

| Peter Klein |

Five principles of Jewish economic theory, as described in Judaism, Markets, and Capitalism: Separating Myths from Reality by Corinne Sauer and Robert M. Sauer (forthcoming from the Acton Institute):

  • Work, creative activity, and innovation are the avenues through which the divine image is expressed.
  • Private property rights are essential and must be protected.
  • The accumulation of wealth is a virtue not a vice.
  • Man has an obligation to care for the needy through charitable giving.
  • Government is inefficient and concentrated power is dangerous.

Sauer and Sauer compare this passage in 1 Samuel to Hayek’s warnings in The Road to Serfdom:

These will be the rights of the king who is to reign over you. He will take your sons and assign them to his chariotry and cavalry, and they will run in front of his chariot. He will use them as leaders of a thousand and leaders of fifty; he will make them plough his ploughland and harvest his harvest and make his weapons of war and the gear for his chariots. He will also take your daughters as perfumers, cooks, and bakers. He will take the best of your fields, of your vineyards and olive groves and give them to his officials. He will tithe your crops and vineyards to provide for his eunuchs and his officials. He will take the best of your manservants and maidservants, of your cattle and your donkeys, and make them work for him. He will tithe your flocks, and you yourselves will become his slaves. When that day comes, you will cry out on account of the king you have chosen for yourselves, but on that day God will not answer you (1 Sam 8:11-18).

Werner Sombart famously took Max Weber to task for overlooking the Jewish contribution to modern capitalism. Sombart’s analysis has not stood up to critical scrutiny, but there has recently been a surge of interest in Jewish economic practices and ideas. Avner Grief‘s work on the emergence of long-distance trade among the Maghribi traders is perhaps the best-known example. Other contributions come from a variety of perspectives. Here is an argument that Rabbinical law takes economic efficiency into consideration. Robert Aumann says the Babylonian Talmud reflects a sophisticated understanding of risk aversion. And here is Jewish commentary on John Paul II’s Centisimus Annus.

Entry filed under: - Klein -, Classical Liberalism, Cultural Conservatism, Institutions. Tags: .

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3 Comments Add your own

  • 1. Kevin Carson  |  31 May 2007 at 12:08 am

    It probably makes a big difference what time frame we’re talking about here. Since you’ve included a reference from the Bible, the points about property rights and accumulation seemingly should be taken with some caveats regarding (among other things) ultimate ownership of land by the tribe or clan, the reversion of land to the tribe or clan under the jubilee, and the reversion of moveble property used as collateral to the original owner after seven years.

  • 2. Peter Klein  |  31 May 2007 at 11:01 am

    Kevin, you are right, of course, and raise a more general problem of Biblical interpretation: Were the commands and promises given to the Israelites by Yahweh meant as universal instructions or do they apply only to a particular people at a particular time? I imagine Sauer and Sauer would take the moderate position that the OT documents include both specific instructions for the Israelites and expressions of universal social, moral, and (here) economic principles.

  • 3. Kenneth  |  8 September 2013 at 9:24 pm

    The prophet Samuel was one of the greatest. I believe that the prophets knew history very well, and that when they spoke of events which were to occur in the future it all has the coloring of the words, “What has been shall be…” That said, Solomon, who was said to have been one of the wisest Kings is also said to have taxed his people heavily in order to provide funds to build a great temple, to build his great palace, and his stables, and in order to provide for his hundreds of wives and many children. It is also worth noting that the wise King Solomon acquired one of the women he coveted and lusted after by setting up her husband to be killed. How did he acquire the others? There is no telling. But we believe he was wise because he told two quarreling women that he would have an infant sliced in two pieces, In order to determine who truly loved the child, and who among the two was the rightful mother. But when he wanted Baathsheba, who was the rightful bride of a loyal man, it was her husband that he had sliced in two.

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