Torah can help guide our financial system

Torah can help guide our financial system

The financial crisis is absorbing the attention of the country. How will the crisis unfold? What will the solution be? Who will be the winners and the losers?
Where the crisis originated and what is the root cause is receiving scant attention, and that is what I want to address.
In human economic affairs, there is a built-in paradox. On one hand, if economic activity is tightly regulated and controlled by the government, as in the communist module, then all initiative, energy and drive is sucked out of the system and it ultimately collapses, as we witnessed in the Soviet Union in the 1990s. On the other hand, if we do not have any (or only minimal) regulation and permit an unfettered free market, then greed becomes the dominant drive in the system, which ultimately is also doomed to fail, as is happening before our eyes today.
The reason that each of these extremes leads to disaster is that from the time of the sin of Adam and Eve, everything in the world carries within it a mixture of good and evil. Every human-conceived system must follow this paradigm and contain a mixture of positive and negative results. The trick, of course, is to find the exact balance where the individual initiative and spirit can be unleashed while still maintaining a reasonable control over the greed and avarice that resides in each one of us.
This is where the Torah comes in.
The Torah advocates an essentially free market system of competition, land ownership and wealth accumulation. The Torah system, however, is seasoned with various limitations: Killer competition is outlawed, property rights are overlaid with zoning regulations, price gouging is banned and wealth must be shared with the less fortunate.
The whole of Torah is a process geared to ennobling the human being to overcoming the inherent attributes of greed and lust; morals and ethics play a pivotal role in every stratum of society.
This notion is clearly demonstrated in the biblical commandment (Deuteronomy 26:1) obligating the people to bring the first fruits of the land each year to the Temple in thanks and gratitude to God.
Giving thanks has a profound effect on the one who does so; it is an admission that the blessings one has are God-given gifts, not an entitlement or payment for one’s labor and effort. Such humility and gratitude form the very basis of the Torah economic system. When this attitude is properly internalized, it becomes the antidote to greed and desire, replacing them with gratitude and thanksgiving.
Whereas the giving of charity demonstrates that we have compassion and concern for others (an important and laudable trait), the commandment of the first fruits instills gratitude, humility and modesty.
In looking for the root cause for the current crises in the United States, I suggest that it is the very sense of entitlement and greed so pervasive in our society. Those who borrowed money for houses they could not afford and those who extended the mortgages to them (so long as they got their fees), as well as those who packaged the mortgages and sold them off to (unsuspecting or willing) buyers, are equally guilty of the same sin of entitlement and greed.
The 1980s was the Me-generation, epitomized by slogans like “taking care of No. 1.” Well, the young people of the ’80s grew up and applied their life’s lessons to house buying, mortgage lending and the security firms’ board rooms. The result is the mess we find ourselves in today.
Those who now rally to the battle cry of more and more regulation fail to acknowledge the serious downside of regulation: the stifling of personal initiative. Others cling to the idea of the free market, arguing that left alone, the markets will right themselves despite the greed. In truth, any economic system devoid of values and ethics will fail in the end, either because the weight of regulation needed to combat greed sinks it or unbridled greed overcomes prudent market forces and destroys it.
The true hope for an energized free market economy is to imbue society with true Torah values and ethics. People who achieve wealth and live their lives with modesty and humility should be the ones held up for public approval and respect. The traits of gratitude and thanksgiving — not of entitlement, greed and conspicuous consumption — need to be valued and promoted.

(Shmuel Kaplan is Maryland regional director of Chabad Lubavitch. This column previously appeared in the Washington Jewish Week.)