Jews and the Stock Market

Jewish ethics of stock-market investment and speculative activity

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But there is also another, more profound, reason for the restrictions on speculation. In marketplace regulation as in so many other aspects of Jewish law, economic considerations were not in the forefront of the thinking of our sages. Most often, they put human considerations first. This principle applies to the restrictions on hoarding, as we can see from the source of the regulations.

The Talmud's censure of hoarding is based in the context of the following prophetic passage from the book of Amos: "Hear this, you who would swallow the needy and destroy the downtrodden of the land; who say, When will the month pass so that we may sell grain, and the Sabbatical year so that we may open our granaries?... so that we may buy the poor for money and the needy for a pair of shoes."

What worried the prophet above all was not the economic conse­quences of hoarding but the tragic human consequences, for it destroys the solidarity of society. The speculators, instead of sharing the general interest in relief, now have a private interest in continued distress, which will enrich them. They ask, "When will the month pass?" Rashi (the medieval Torah commentator) explains that they are waiting impatiently for the harvest season to pass, because then there will be a shortage of grain in the market and prices will rise.

Beyond this, the speculators are enticed to go beyond their desire for monetary enrichment, which is justifiable within bounds, and are seeking dominance over others: "So that we may buy the poor for money." This is a tendency that the Torah repeatedly condemns, since we are all servants of God. "For the children of Israel are slaves to Me"--slaves to Him, and not to other human beings. This ethical problem with speculation is very similar to Rav Sheshet's concern about gambling. The speculator becomes alienated from the concerns of working people, who depend on reasonable prices for commodities. The first result is that the common people are exploited, and the ultimate result is that they may be abused and enslaved.

It is a fundamental ethical idea that we should try to ally our eco­nomic and human interests so that our desire for gain does not lead us into betraying our ideals. A simple example illustrates this concept:

Imagine a member of a football team just before the Super Bowl. If his team wins, he will earn a huge sum of money; if they lose, his earnings will be far less. Economic theory states that in order to hedge his risks, the player ought to bet against his own team. But human nature would view such a bet as a shocking betrayal of loyalty, even if it were so small that it is not an incentive to throw the game.

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Rabbi Asher Meir

Asher Meir received his Ph.D. in economics from MIT, and received his rabbinic ordination from the Israeli Chief Rabbinate after 12 years of study at Israeli Rabbinic Institutions.