Jewish Ethical Principles for Business

The principles of ethics embodied in Jewish legal and ethical writings apply explicitly to business situations.

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Abbreviated from Insight Israel 3:1 (October 2002), published by The Schechter Institute of Jewish Studies in Jerusalem. Some bibliographic references that have been eliminated here, as well as a bibliography on Jewish business ethics, can be found in the original version of this article, available on-line. The opinions expressed here are the author’s own and in no way reflect an official policy of the Schechter Institute.

In addition to all the laws mentioned [in the parallel article on specific legislation related to business ethics], the halakhah contains a number of ethical principles which go one step beyond what we would normally expect a businessman to do.

Beyond the Letter of the Law

The first principle is called “lifnim mishurat hadin”, which means “beyond the letter of the law”. Here is one classic case. According to Jewish law, a purchase has not been concluded until the buyer has physically “lifted up” the item being bought (Mishnah Bava Metzia 4:2). In light of this fact, the following story [from an early post-Talmudic code of Jewish law] is quite surprising:

“It happened that Rav Safra had some wine for sale, and a potential buyer came to him while he was reciting the Shema [required twice daily]. The customer said ‘Sell me this wine for such and such a price.’ Rav Safra did not answer [so as not to interrupt theShema]. Assuming that he was unwilling to settle for the price offered, the customer added to his original offer, and said, ‘Sell me this wine for such and such a price.’ Rav Safra still did not answer. [Presumably, this cycle was repeated, with ever-escalating prices.] Upon finishing theShema, Rav Safra said to him: ‘From the time you made your first offer, I had resolved in my mind to sell it to you. Therefore I may take no greater amount [than your first bid].’” (Sheiltot Vayehi, No. 38)

The Sheiltot went so far as to make Rav Safra’s behavior a halakhic norm for all Jews. It rules:

“There is no question if he said ‘I will sell you this,’ but even if he merely resolved in his mind to sell something [at a particular price], even if he did not articulate it, he should not go back on that resolution…”

This decision was not included in later codes of Jewish law, yet the concept of lifnim mishurat hadin remained an ideal, which Jews strive to emulate until today.

Indeed, Rav Safra’s behavior was repeated by a German Jew some 1600 years later. The firm of Beer, Sondheimer and Company is reported to have owed its tremendous expansion to the following fact. On a Friday in 1870, just before the Franco-German War broke out, Mr. Beer left his office for the Sabbath rest. He had large holdings in copper and other metals necessary for the waging of war. The porter received a number of telegrams, which he presented on Sunday morning to his employer. They came from the War Ministry and offered to buy all metals in the possession of Mr. Beer; each successive wire increased the price.

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Rabbi David Golinkin

Rabbi David Golinkin, Ph.D., is president and rector of the Schechter Institute of Jewish Studies in Jerusalem, where he teaches Talmud and Jewish law, and he heads the Va'ad Halakhah (committee on Jewish law) of the Masorti, or Conservative, movement's Rabbinical Assembly in Israel.