Is Greed Godly?
Fri, 12/03/2010

Greed,” Jewish stock speculator Ivan Boesky declared in 1985, “is healthy,” a thought echoed by the fictional Gordon Gekko in the 1987 movie “Wall Street,” starring Michael Douglas. It was such a great line, that it was used again in the recent sequel: “Wall Street: Money Never Sleeps.”

Shylock, of course, is the paradigmatic greedy Jewish moneylender portrayed by Shakespeare in “Merchant of Venice.” The play was written about 1597 by someone who likely never met a Jew, as Jews were expelled from England in 1290 and weren’t allowed to return until 1640.

In my research, I have encountered all manner of greedy fraudsters, and not a few of them were Jewish. This set me to wondering, are Jews really more greedy?

Hayim Nahman Bialik (1873–1934), Israel’s national poet, famously exclaimed, “we will be a normal state only when we have the first Jewish prostitute the first Hebrew thief, and the first Hebrew policeman.” Thus, we Jews will only be “normal” when we are represented in all fields of endeavor, and some level of criminal activity among Jews is to be expected.

Only about 4,000 of the over five million Jews in the United States are incarcerated, according to Rabbi Menachem M. Katz, of the Aleph Institute, a Florida-based arm of the Lubavitch chasidic movement dedicated to helping Jewish inmates. This figure is far lower, proportionately, than the rate of incarceration in the general population; according to USA Today, one in every 32 American adults is imprisoned.

While there are no precise statistics, it seems that when we consider only white-collar crime, Jews are, proportionately at least, much “better” represented, certainly more prominently, and more than likely, we are overrepresented.

Jewish white-collar crime runs the whole gamut of nonviolent crime and includes income tax fraud, mortgage fraud, bankruptcy fraud, money laundering, accounting fraud and securities fraud of every description.

Some white-collar Jewish criminals, like Solomon Dwek, Steven Byers (Wex-Trust) and Bernard Madoff, preyed primarily on their fellow Jews. Others were specialists. Marc Drier’s specialty was defrauding hedge funds from which he snared $400 million. Sholam Weiss drew an 845- year sentence for insurance fraud. (That’s not a typo; his scheduled release date is Nov. 23, 2754). Others specialized in what some perceive as victimless crimes like Medicare fraud, corruption of public officials or illegal insider trading.

Why do they do it? Is Jewish law somehow more forgiving of white-collar crime?

Not by a long shot.

Rabbi Steven Pik-Nathan, writing on
the website of the Jewish Reconstructionist Foundation, says that Jewish opposition to greed has ancient roots. “The Sages teach us that only the wealthy were welcome as guests in Sodom. The poor were to be expelled or killed.“ He attributes this collective greed as the main reason that Sodom and Gomorrah were destroyed. He cites the economist and business ethicist Meir Tamari (“Jewish Values in an Open Society”) who called the sin of Sodom and Gomorrah the sin of economic egoism. Rabbi Pik-Nathan attributes the collapse of the savings and loan industry, Enron, and Ponzi schemers as being, in part, fueled by greed. He sees this biblical story as a very early Jewish outcry against greed, and as a warning of its dire consequences

Aaron Levine, the Samson and Halina Bitensky professor of economics at Yeshiva University, sees the roots of the “Recession of 2008,” in moral failure. It would not have happened, he argues in great detail, had halacha (Jewish law) been followed. Jewish law demands a level playing field, and unlike much of Western law, which is rooted in Roman law that postulates “caveat emptor” (let the buyer beware), Jewish law mandates that a “seller” disclose all of the flaws in his merchandise. So for example, the defects concealed in complex financial instruments require full disclosure to the buyer, and the seller is held responsible for losses caused by undisclosed defects.

No one argues that Ponzi schemes are OK. It’s in crimes like laundering money through charities to gain improper tax deductions that some see “wiggle room.”

The halacha is explicit and unequivocal: one is absolutely obligated to pay taxes imposed by the government. The obligation stems from the famous statement of Shmuel, “Dina de-malchuta dina,” literally “the law of the land is the law.” This halachic principle does not mean that Jews have to follow secular law (the “law of the land”); it means that halacha incorporates the law of the land in which Jews live. In other words, where dina de-malchuta dina applies, a requirement of secular law becomes a halachic obligation as well. Moses Maimonides formulates this rule in his Mishneh Torah (Hilchot Gezelah ve-Avedah 5:11), where he explains that tax evasion constitutes stealing from the king. Rav Hershel Schachter, in Nefesh Harav, records the following practices of Rav Yosef Dov Soloveitchik (1903–1993): “Our master was very scrupulous about paying government taxes, and I heard reported in Rav Soloveitchik’s name that if one has specific knowledge about a particular store that does not pay sales taxes to the government, that it is forbidden to make purchases there, as it violates Lifnei Iveir (the prohibition to cause others to sin).”

The late Rav Moshe Feinstein (1895–1986), perhaps the foremost posek (decisor) of the 20th century, ruled explicitly that cheating on income taxes in the United States, which he terms malchut shel chesed (a country ruled by a benign sovereign), is forbidden according to Jewish law. In Teshuvot Igrot Moshe he specifically rules that one must pay taxes. In one of his responsa he explicitly forbids defrauding the U.S. government in order to receive more student aid than deserved (Teshuvot Igrot Moshe 2:29), saying, “There exists no manner in which to proclaim such behavior as permissible, and just as Hashem hates sacrifices offered from theft so too Hashem hates support of Torah and those who study Torah by means of theft.”

About the question if whether Jews are greedier, I can’t answer it. There simply isn’t data. What’s certain, however, is that none of the white-collar crimes of which Jews have been found guilty get a pass in Jewish law.

David E. Y. Sarna is a writer, entrepreneur and technologist. His most recent book is “History of Greed: Financial Fraud From Tulip Mania to Bernie Madoff” (Wiley). He blogs at DavidBarNahum.com.