Sensible Economics

Judaism Favors Capitalism

Between the two extremes of capitalism and communism, the Torah generally tends to favor capitalism, given that freedom of choice and individual responsibility are the moral foundations of man’s existence in the world. This is the essence of man’s being created in the image of God – he was given the ability to think, decide, improve, or destroy, and to take responsibility for his actions. If he chooses well – he merits the World to Come; if he chooses evil – he inherits ‘gehinom’ (hell). This is equally true in this world: if one treats his family well – he’ll have a good family life; if he ignores them – he’ll destroy his relationship with them.

This is also true in connection to money and wealth. If a farmer is lazy – instead of produce, his field will yield thorns; if he is hard-working, he will harvest a healthy crop. If one is slack at work – he’ll get fired, and have to pinch pennies. If he works diligently, he will reap the fruits of his labor. Just as a person is entitled to receive compensation for his physical labor, similarly, he is free to profit from his business initiative and natural talent of inventing and producing new products. The more popular his products are, the more profits he is entitled to make.

In contrast, the Communist system severs the connection between hard-work, initiative and production and their results, thereby causing people to be less responsible for their actions.

Thus, we find that in the Torah, the laws of ownership, and the prohibitions of stealing and robbery are based, in general, on the capitalist system, according to which the possessions one accumulates belong to him.


Today, nearly 100 years after the founding of the Communist system in Russia, in hindsight, we know that this method doesn’t work. The removal of personal responsibility from the results of one’s actions caused great damage to economic development. Consequently, countries that adopted the Communist system in order to provide welfare for its citizens, in the end, caused them appalling poverty. In a Communist economy, rather than working hard to improve and be more productive at work, the main effort is directed at obtaining larger slew of the public coffers. This is in addition to the awful tyranny and corruption this system creates by granting tremendous power to the rulers – besides being in charge of public funds, they also rule over private property, as well.

Socialism in Judaism

On top of the capitalist principle, the Torah commands the individual and society to care for the welfare of the poor, sick, and elderly who cannot provide for themselves. To this end, taxes were collected for the public fund. Care was taken not to encourage idleness and exploitation, which harms both society and the needy person himself, who gets used to living a life of shame.

In addition, the Sages also imposed upon the general public the responsibility of caring for the education of children whose parents couldn’t afford to do so, according to the principles of the Torah which state that, first and foremost, it is the parents who are responsible for their children’s Torah and vocational education.

The Boomerang-Effect of the Protests

If the government surrenders to the demands of the protesters, handing-out land for free to every citizen, then hundreds of thousands of families who invested their hard-earned money over the last twenty years by purchasing apartments in the center of the country will lose half of their assets, because two-thirds of the cost of an apartment in Tel Aviv stems from the price of the land. Such an extreme reduction of the cost of apartments is like pocketing money directly from the pension funds of the public.

The building process must be accelerated and wide-scale construction encouraged, making it easier for the needy to buy an apartment. However, it is forbidden to harm market prices in such a drastic way.

Market Logic

The rules of supply and demand which determine apartment prices are very logical. People earning higher salaries are able to purchase apartments in more exclusive neighborhoods, while people who earn less, buy apartments in less-desired areas. In the end, however, everyone has a place to live.

Market rules have another benefit: when the demand for apartments rises in the center of the country, prices also go up, creating a natural situation where families are driven to move to the periphery, and in this way, additional areas of the country are continually strengthened. When this natural process is interfered with, it creates a situation of national-disorder; the center of the country becomes over-loaded, crowded and choked, while at the same time, the cities and towns of the periphery are abandoned to poverty, crime, and seditious activities by internal and external foes.

Media Shame

In the coverage of these protests, the true face of the Israeli media has once again been revealed, as it enthusiastically offered its public relations’ services to the protesters, and fanned the flames of the rallies. The media made it clear that, in its opinion, “the nation” is a specific, defined group, namely: secular leftists. In the media’s eyes, a group of tens-of-thousands of young people from this category is considered a “people’s protest, the likes of which have never seen before”, while all the other millions of people mean nothing to them. This type of media event actually strengthens a commendable process, in which more and more people are waking-up from the fantasy that the media is reliable, and realizing that, in effect, it is simply a propaganda mouthpiece for leftist, secular, hostile view-points.

What Do the Protesters Want?

What do the protesters and the various media personalities want? Obviously, it’s impossible to pass a law stating that anyone can prove that he or she hung-out for a number of hours in a Tel Aviv cafe or nightclub, is entitled to purchase an apartment there for half the price?!

If the government makes plans for the inexpensive sale of apartments in the center of the country, they will have to set criteria for those entitled to buy. Normally, the first in line are large families with low incomes. The protesters and media personalities will be the last one’s on the list.

Apparently, the protesters are composed of three different groups. One group wants to topple the government – and it doesn’t matter in which way, or for what reason. The second group supports Communist positions, repeating all the revolutionary slogans from over a hundred years ago. The third group are people who don’t know exactly what they want, but, feeling distressed and without much thought, joins the ‘revolution’.

Dangers of Communism

It is forbidden to disregard the dangers posed by the Communist way of thinking and style. Precisely because they come in the name of ‘idealism’, they have no problem ridding themselves of any moral barriers. The end justifies the means. They allow themselves to use false propaganda. The mobilization of the media, whose roots run deep in the political left, is also part of this. At present, the media is trying to create a false perception, as if life here in Israel is extremely difficult, and the entire nation is up-in-arms. Just like in all the Communist revolutions, once again, we hear how the leaders of the protests incite the people against the wealthy and the government, while scattering false promises that if they have their way, the belongings of the rich will be divided amongst the public, and that from now on, everything will be free. Such claims are enticing; the problem, however, is that, in the end, the ruler’s are the only ones’ who enjoy the plundered spoils. Currently, it can still be seen how the Communist system in North Korea caused the nation to deteriorate to the point of famine, encouraging tyranny and corruption, while at the same time, in South Korea, people of the same nation created a prosperous society by means of a democratic, capitalistic system. Greece also adopted an extreme, socialist approach, and the result – national bankruptcy.

Levels of Social-Welfare

Within the framework of Judaism’s approach, which obligates us to take care of the poor and the weak, it’s possible to lean in the direction of the socialistic approach a little bit more, or a little bit less. In other words, we must obviously help those who are not able to take care of themselves, however, the aid can be basic, or it can be generous. Assistance can be given only to people who really can’t exist on their own, or also to those who find it a bit difficult to get by. Grants can be given to middle-class home-purchasers, or instead, they can be directed to the periphery. There, it’s easy to buy an apartment, even without assistance.

The Arab Problem

I must admit frankly, that under different circumstances, we would probably favor the socialist approach more readily. However, because of our current national situation, where we are forced to contend with a large and hostile Arab minority, who naturally, according to any social criterion agreed upon, would be the first to receive any type of benefits – we favor the approach of tightening-the-belt. This method also has its advantages, placing more responsibility on the individual, his family, and friends.

Invest in Infrastructure and Education

The tightening-the-belt approach, which is presently our appropriate path, should be strengthened by investing in education, health, and infrastructure. Such investments benefit all – including the lower-classes. By improving education, children with poor parents can also improve their social-economic status. The development of infrastructure and roads will allow residents of the periphery to commute easily and inexpensively to business centers. Also, investment should be made in our soldiers, during and after their military spell, in compensation for their army service.

Promoting Competition, Breaking Monopolies

The difficult problem with the Israeli economy is that there are still sections – the legacy of left-wing governments – which have not been opened to free and fair competition, where exaggerated prices are being charged. For example, the media, which is still controlled as a ‘cartel’ by the leftists, without free competition. Moreover, a number of factories and public assets were sold (privatized) to various ‘tycoons’ at rock-bottom prices in lieu of ridiculously low royalties. For example, when Labour Party Minister of Finance, Biega Shochat, sold the ‘Dead Sea Factories’ in a lousy deal for the country, but a bargain for the Ofer brothers. Not by chance, most of these deals occurred under the socialist Labour Party, since the leftist approach encourages, unintentionally, corruption, ‘protectzia’, and monopolies. This is also the reason why many of the ‘tycoons’ prefer the left-wing government, which nurtured them. With the leftists, they know to close deals, blocking their competitors, and continuing to rake-in huge profits at the expense of the public. That’s why the ‘tycoons’ and the media – which they own – support the protesters.

Binyamin Netanyahu

I wouldn’t be disappointed if Binyamin Netanyahu lost his “throne”. He has failed in his role as Prime Minister. He promised to build in Jerusalem, Judea, and Samaria, and instead, he froze construction and promised the Arabs a state in the heart of our country. Admittedly, as far as the economy is concerned, Binyamin Netanyahu, together with Minister of Finance, Yuval Shteinitz, is very good. There are still many issues which need improvement, but the general direction is correct. The economic situation of Israeli citizens today is far better than it was ten or twenty years ago, even in comparison to other developed countries. Netanyahu’s weakness is that he is easily influenced by pressure. He is liable to squander many accomplishments by capitulating to the protesters.
If, in the economic arena he overcomes his tendency of being easily pressured, perhaps the Prime Minister will also be strengthened politically, returning to the legacy of his fathers’, and working diligently to build Jerusalem, Judea, and Samaria.

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