The Challenge of Wealth

By Dr. Meir Tamari

RESPONSA for the week of BECHUKOSAI-- IYAR,23-28 .

In order to demonstrate the work of the halakhic system and its moral considerations regarding a variety of issues in business and economics, I'm going to present a number of responsa drawn from the literature. These represent questions addressed either by laymen or by rabbis or communities to rabbinical authorities and their answers. They cover a period of close to 2000 years and reflect Jewish life in all the countries of the Diaspora. Even though the answers may vary and conflict with each other so that one cannot draw behavioral conclusions from them, they demonstrate Jewish thinking and values in this field.

I have chosen the subject of competition in all its forms. At first I will deal with competition through free entry that will be spread over a number of weeks.

FREE ENTRY.

The right to the free entry has to be considered in the light of a number of conflicting property rights. These involve questions of economic efficiency as well as moral dilemmas. The veteran entrepreneur in an area or specific trade or industry has made an investment in time, capital or effort and wishes to safeguard that investment. Employees and often, whole communities too, desire to guard their economic stakes that may be threatened by the entry of newcomers. On the other hand the interest of the community and of society is best served by competition that will bring it the benefits of better prices or of new products. Insisting on the rights of an entrepreneur or employees to prevent the entry of others, subjects society to economic stagnation, inefficiency and non-growth. Furthermore, the other entrepreneurs may have a desire and ability to enter a certain area or industry. We would deny them the freedom to use their property as they wish, if we maintained the right of the veterans.

The first responsum we will deal with concerns the Holder of monopoly rights. Until modern times almost all European economic activity was conducted under such rights, granted by the lay or ecclesiastical authorities. Settlement in the New World and the Far East was carried out by chartered companies, natural resources were exploited under license, and banking and major marketing operated under charters. All of them granted their holders monopoly rights. This was true also of the Jewish economies in those countries. In Ashkenaz these were known as Arunda while in Sephardic countries it was called Marufya literally 'a friend' who was cultivated. This referred to the money or effort devoted to obtaining such rights. The legal and moral issue was the safeguarding of those rights, without prejudicing the rights of others to earn a livelihood. The question was addressed to Rabbi Joel Sirkis (The Bach)(Poland, 1561 -1640).

RESPONSA HABACH, 60.

Question.

It is well known that in all the communities of Lithuania there is an enactment regarding the renting of the Arunda. Thereby it has been agreed upon that whoever holds this right to the license for three years or has a letter of authority for three years even if they did not use it yet, no one has the authority to encroach on this right all the days of his life and they may not hire his Arunda or offer a higher rent for it. This has been the practice for many years that the veteran holder has this right even after the death of the original grantor. This is because of the damage that is done through the competitive raising of the rents of the Arunda of wine shops or inns [a major Jewish industry at that time], in that way depriving others of their livelihood and destroying themselves in the process.[An indication of the limited economic possibilities facing them].

Now the ruler of Lithuania has died and the community of Brisk has come to demand that the Arunda of brandy and of milling shall be taken away from the tenants and given back to the communal authorities who had originally sub-leased it to the present holders in return for a fee in addition to that paid to the ruler. The kehillah wishes to use the license for the benefit of the community and claims that it had only leased it until then. The holders of the license claim that this contravenes the laws of Lithuania and that the kehillah lost all its rights by demanding an additional payment for the license.

Answer.

It has long been the practice that those who were elected to represent the community are able to make enactments in the community, even such as cause a loss to one party or a profit to another, and to attach property. Those enactments that have been passed regarding the Arunda, only apply concerning individuals and not between the individuals and the community. It is logical that the restrictions should not apply against the community, because how should we protect the interests of three individuals [in this case] against the welfare of the whole community.

We should realize that satisfying the needs of the community is a mitzvah that is capable even of setting aside oaths according to the will of the majority. Even if we are to regard earning a livelihood by an individual as a mitzvah as the Bet Yosef does [Yoreh Deah, Section 228], nevertheless, the Shulchan Arukh rules that there is no mitzvah greater than the public livelihood. It is far better that the community distribute the license to a large number of people and thus give them a livelihood, than that this possibility should be restricted to benefit a few. Furthermore, all the enactments regarding Arunda are written in the singular. Even if the ancients in previous generations [as claimed by the holders of the Arunda], placed obligations on the community regarding the Arunda to benefit individuals, such enactments are void and obligate no one.

Since there are no enactments against the community it is forbidden for the present holders of the license to apply for its renewal. This would have been true even when the previous ruler was still alive and it is even more so now that a new ruler has taken over. The money that the community took did not in any way detract from this right, as it was introduced only to provide protection from holders of the license who would be violent or powerful.

Now that it is necessary to obtain a new license, that should be held by the community. The majority has precedence over a minority and is the straight and good thing to do. It is no different from the law of the adjoining neighbor, who always has the right of first refusal in cases of the sale of real estate.

The laws of Lithuania in this respect are destructive rather than helpful and therefore cannot be used for protection.

Copyright © 2002 by Rabbi Meir Tamari and Project Genesis, Inc.

Dr. Tamari is a renowned economist, Jewish scholar, and founder of the Center For Business Ethics (www.besr.org) in Jerusalem.