Price Regulation in Jewish Law

Jewish law provides for government intervention in the markets for goods and services through price controls, limits on profits, and perhaps even allowing cartels to operate.

Print this page Print this page

“The townspeople may compel each other to build a synagogue and to purchase a Torah scroll and the books of the Prophets. And the townspeople may stipulate prices, measures, and the wages of workers. They are permitted to impose penalties.”

Here the Tosefta teaches that the residents of a town may not only make stipulations among themselves but enforce them as well.

Although the passage discusses the residents of a town, it is cited in [the Babylonian Talmud] in connection with an agreement among artisans:

“There were butchers who made an agreement with one another that if one of them slaughtered an animal on another’s day, the skin of his slaughtered animal should be torn up. One of them actually did slaughter on another’s day, and the others went and tore up his slaughtered animal’s skin [which would otherwise be a valuable asset belonging to the slaughterer]. Those who did so were summoned before Rava [Rava, Rav Yemar ben Shelemiah and Rav Papa were Babylonian Jewish sages of the fourth century CE] and he condemned them to make restitution. Rabbi Yemar ben Shelemiah thereupon called Rava’s attention to [the passage of the Tosefta that says] that the townspeople may impose penalties for breach of their regulations. Rava did not deign to answer him. Said Rabbi Papa, ‘Rava was quite right not to answer him; this regulation holds good only where there is no distinguished man in the town, but where there is a distinguished man, they certainly have not the power to make such stipulations without his approval.’” (BT Bava Batra 9a)

The requirement that such agreements be approved by a “distinguished man” is explained in several sources as based upon the need to protect customers against increases in price.

A far-reaching opinion on consumer protection can be found in the writings of Rabbi Menahem Ha-me’iri [the great Provencal Talmud commentator, 1249-1316]. Ha-me’iri holds that artisans do not have the authority to stipulate prices even with the approval of a distinguished man, since such practices cause a loss to the townspeople:

“It appears to me that the members of a particular trade are not permitted to set prices for their work without permission of the townspeople, since the townspeople would otherwise be forced to take an unfair loss.” (Bet Ha-behira [Ha-me’iri’s Talmud commentary] to BT Bava Batra 9a)

Who is the “distinguished person” with authority to approve agreements? There are a number of opinions. There are those who define “distinguished person” as the head of the community. Others hold that the distinguished person is the distinguished scholar of the town. A third opinion holds that the distinguished person must be both -- a distinguished scholar and the head of the community.

The requirement that agreements among artisans be approved is codified by Maimonides:

Did you like this article?  MyJewishLearning is a not-for-profit organization.

Please consider making a donation today.

Professor Nahum Rakover, former Deputy Attorney General of the State of Israel, is a leading scholar in the field of Jewish law and has written widely on Jewish legal topics. He compiled The Multi-Language Bibliography of Jewish Law.