Monday, August 10, 2009

Parshas Re'eh: Tzedaka, Recession & Welfare

Rabbi Dr. Aaron Levine, Economic Public Policy & Jewish Law (Ktav 1993) writes on pp. 201-204:

...Our purpose here is to demonstrate that in the Torah society full employment and price stability [very low inflation - my comment] are mandated goals for the public sector....

Judaism's charity obligation consists of of both a public and a private component. In talmudic times the public component consisted of a variety of levies for the purpose of attending to the full range of the needs of the poor. Public communal levies were never entirely relied upon to relieve poverty. Evidencing this is the talmudic dictum that if one becomes needy he does not immediately apply for public relief. His relatives and friends must first attend to his needs; only then is the community required to make up the deficiency.

In his analysis of Jewish charity law, R. Hayyim Soloveitchik (Russia, 1853-1918) advances the thesis that society as a collective, apart from its individual members, has a responsibility to relieve poverty. The purpose of the coercive levy, he posits, is not to ensure that the individual members of the community qua individuals discharge their charity obligation, but rather to allow the public sector to carry out its own distinctive social welfare responsibility. The thory that the charity obligation consists both of an individual and collective component is bolstered by by its repitition in the Torah. The charity obligation is set out once at Leviticus 25:35 and again at Deuteronomy 15:7-8. The Leviticus passage refers to society's collective responsibility to relieve poverty, while the Deuteronomy passage speaks of the individual's personal charity obligation....

To be sure, poverty cries out for both an individual and a communal response. But from the standpoint of Judaism's social welfare program, income transfers are not the ideal approach. If the needy individual is capable of engaging in productive labor, offering him a job represents a much-preferred alternative....From the standpoint of the donor, offering a job to someone in a precarious financial situation fulfills the charity obligation on the highest level....From the standpoint fot he recipient, engaging in productive labor is an ennobling experience....

...R. Baruch Epstein (Russia, 1860-1942) finds its message to be that it is improper for man to derive benefit from this world unless he engages in socially useful labor as a quid pro quo for the enjoyment received (Torah Temima, Breishis 2:16). Consonant with this notion is Rav's advice to R. Kahana: "Flay carcasses in the marketplace and earn wages, and do not say, I am a priest and a great man, and it is beneath my dignity."

When the economy finds itself in deep recession, employment opportunities will rapidly shrink. Under these conditions, the private sector's response to the crisis, will, for the most part, consist of income transfers to the needy. Given the collapsing demand for labor, society will not be practicing charity on the highest level, regardless of the ingenuity it utilizes to conceal the charitable intent of the income transfers.

In dealing with the malaise of deep economic recession, a modern government enjoys a distinct advantage over the private sector. By means of expansionary fiscal and monetary policies, a modern government is is capable of vastly increasing the available employment opportunities. Mechanically, the government substantially reduces taxes and / or increases its spending. The resulting deficit is financed by selling bonds to commercial banks or to the general public. Any initial increase in spending will result in a multiple expansion of income....

Recall R. Hayyim Soloveitchik's thesis that society as a collective, apart from its individual members, has a responsibility to relieve poverty. The distinction between what society can accomplish in poverty relief as a collective and what it can accomplish as individuals is highlighted by the technique of deficit finance. Left to its own devices, the free enterprise-oriented economy can do precious little to pull itself out of depression. But what is an impossibility for individuals, even when joined in cooperative effort, can be accomplished by society as a collective. Deficit finance, as the previous discussion has demonstrated, allows the public sector to transform the depression-ridden economy into one of abundant employment opportunities.
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I leave that without comment, but with one update: The source of the communal obligation of tzedaka as brought in the article is in Parshas Behar. Prof. Levine's source is what R. Daniel Lander said in the name of the Rav in Kevod Harav. This is also how it is brought by R. Herschel Reichman in Reshimos Shiurim, Shavuos & Nedarim vol. 1, p. 174. This is undoubetedly how the Rav said it in Shiur. However, the Shiurei Rabeinu Chaim Halevi on Bava Basra 8 seems to say it's based on Egla Arufa (see Sotah 38b). (Someone told me about it and I read it 4 times before I saw it there.) I'm not sure if Rav Chaim is saying the source of the communal mitzvah of tzedaka is Egla Arufa (and not Parshas Behar in Vayikra) or, as the Rav must have understood, that Egla Arufa shows us there is a communal mitzvah and its source is in Parshas Behar.

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