Tikkun Olam and Regulation of Markets

Tikkun Olam attained through a regulating state

November 7, 2013

November 7, 2013

Noam Zion is a Senior Fellow Emeritus of the Kogod Research Center at the Shalom Hartman Institute since 1978. He studied philosophy and holds degrees from Columbia University and the Hebrew University in Jerusalem. He studied bible and rabbinics at the Jewish Theological Seminary of America and the Hartman Beit Midrash. In his career as an educator at SHI, he led the Tichon program for North American Jewish educators and he taught in Hartman Institute

By NOAM ZION

The role of medieval kings was not usually conceived as providing for the economic welfare of the people, though by winning wars, maintaining justice in market activities and making trade in the empire feasible, the king indirectly improved the general economic situation. However, Maimonides and Aquinas do include economic welfare in the monarch’s responsibility for the common good.

The greatest responsibility for the poor, Thomas Aquinas maintained, was held by the political rulers because they bear the greatest responsibility for the common good. Political authorities are responsible for providing not every good but only the public good that is indispensable for the functioning of the political community. A good ruler seeks to preside over a society that is self-sufficient, that is, one able to ‘procure unto itself the necessities of life.’ This goal leads political authorities to distribute emergency aid in cases of disasters, but most importantly it involves the ongoing task of securing justice, social order, and peace throughout the political community and in its relations with its neighbors.

Maimonides in his Guide for the Perplexed holds the monarch responsible for the harmonization of economic activities for mutual benefit functions. Maimonides cites as prooftext a verse about the Torah’s human-centered telos – For Adonai commanded us to do all these laws and to revere Adonai our God for our own good – all the days (the world to come) and to help us live today – in this world (Deuteronomy 6:24).

Then he explicates that principle in the domain of ruling the body politic:

Fixing the body is removing exploitation one by the other [economic injustice] … so that each human will not be allowed to do whatever they want and whatever they are capable of doing, but each will be coerced to what produces utility for all. (Guide to the Perplexed III 27)

The economic laws of justice determine the business conducted, so that they do not go beyond the cooperation that benefits both sides and so neither will intend to increase their own portion of the total, so only they will profit from all others. Therefore excessive profits are prohibited in sales and only regular prices are permitted. (Guide to the Perplexed III 42)

The greediness of individuals and their anarchic tendencies must be controlled by an impartial judicial system with effective punishments as deterrents and by an executive arm that is capable of “breaking the arm of the wicked” (Laws of Kings 4:10). Therefore, building on the Talmudic precedents, Maimonides creates a regulatory body for prices to avoid profiteering:

The court is required to appoint officials in every county and every city who will circulate among the stores and validate the scales and the measures and set the prices…. Anyone who profiteers and sells dearly is punished with lashes (until) he sells at the market price. (Maimonides, Laws of Theft 8:20)

Shmuel said: "One may not increase the weights or the coins by more than a sixth, and one may not profit more than a sixth." (TB Baba Batra 90a). But economic restrictions on exorbitant prices in the marketplace cannot be enfored piecemeal. There must be state regulatory board. The Ramma states that a merchant is obligated to abide by this law only if there is a supervisory mechanism to insure that all merchants conform to its provisions. If, however, the market is unregulated one does not have to sell cheaper than others.

The philosophy of tikkun olam which Maimonides promotes involves a concern not only for the poor and persecuted but for a whole society aimed at a common good – tikkun haguf, repairing and balancing the body politic so that the individual’s desire for profit would be restrained and balanced so as to serve everyone’s needs in a mutually beneficial way. In that sense his notion of society and of economy is at odds with the laissez faire free market model in which economic relationships are supposed to be shaped by amoral economic motives of individual profit – “the invisible hand” of the free market that turns private economic vice into public virtue. In Gertrude Himmelfarb’s words in her book, The Idea of Poverty, she contrasts a traditional view of society that is congruent with Maimonides and the modern market view of the economy. The traditional view is:

The vision of a society devoted to the common end, valuing communal and spiritual rather than private and material goods, is a standing reproach to modern society, which is presumed to have no higher aspiration than the gratification of economic appetites and no higher principle than self-love and expediency. The contrast is between a moral society and an amoral one. (Gertrude Himmelfarb)

However since the 19th C. “the science” of economics has generally insisted:

That society is and always has been nothing more than the sum of individuals, that the common end can only be achieved by maximizing individual interests, that the economy is, by definition, a mechanism governed by economic motives for the satisfaction of economic needs, and that religious standards are at best irrelevant to the economic.

This chasm between traditional and market notions of society is still the source of great tension in our society as conceptualized by the historian R. H. Tawney:

Between the conception of society as a community of unequal classes with varying functions, organized for a common end, and that which regards it as a mechanism adjusting itself through the play of economic motives to the supply of economic needs; between the idea that a man must not take advantage of his neighbor’s necessity, and the doctrine that ‘man’s self-love is God’s providence,’ between the attitude which appeals to a religious standard to repress economic appetites and that which regards expediency as the final criterion – there is a chasm.

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Tikkun Olam and Regulation of Markets

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