Business Ethics & Jewish Law

Jewish law has plenty to say about conducting business: accurate weights and measures, overcharging, verbal deception, false packaging and much more.

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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, and 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.

Accurate weights and measures

We are admonished in the Book of Leviticus (19:35-36): “You shall not falsify measures of length, weight, or capacity. You shall have an honest balance, an honest weight, an honest ephah [dry measure], and an honest hin [liquid measure]“.

The Mishnah (Bava Batra 5:10) rules that: “The wholesaler must clean out his measures once every thirty days and the householder once every twelve months... The retailer cleans his measures twice a week and polishes his weights once a week; and cleans out his scale before every weighing.”

Throughout the Talmudic period, the rabbis appointed agronomoi—a Greek word for market commissioners—whose job it was to inspect measures and weights and to fix prices for basic commodities (Babylonian Talmud [=B.T.], Bava Batra 89a). The agronomoi eventually disappeared, but the ideal was still there as late as the nineteenth century when Rabbi Israel Salanter [the founder of the musar (ethical self-improvement movement) wrote: “As the rabbi must inspect periodically the slaughtering knives of the shochtim [slaughterers] in town to see that they have no defect, so must he go from store to store to inspect the weights and measures of the storekeepers.”

Today, these laws are just as applicable as they were in biblical times. Wholesalers and retailers must check their scales and cash registers on a regular basis, not just because civil law demands it, but also because Jewish law requires it.

Ona'at Mamon (Monetary Deception)

This concept, too, is based on a verse in Leviticus (25:14): “When you sell anything to your neighbor or buy anything from your neighbor, you shall not deceive one another.”

This verse clearly refers to monetary deception. The rabbis of the Talmud used it as a basis for a series of specific laws on the subject (B.T. Bava Metzia 49b and 50b; Maimonides, Mishneh Torah,Laws of Sales, Chapter 12). They ruled that if the price charged was more than one sixth above the accepted price, the sale is null and void and the seller must return the buyer’s money. If it was exactly one sixth more, the transaction is valid, but the seller must return the amount overcharged. If it was less than a sixth, the transaction is valid and no money need be returned. Needless to say, these laws are still very relevant today. It is permissible for a Jew to make a fair profit; it is not permissible to price gouge and rob the customer blind. Such behavior is ona’at mamon, or monetary deception.

Ona’at Devarim (Verbal Deception)

This category is related to the second, and it is based on another verse in the same chapter ofLeviticus (25:17): “Do not deceive one another, but fear your God, for I the Lord am your God.” Since the other verse had explicitly mentioned monetary deception, the rabbis concluded that this verse refers to verbal deception. And thus we learn in the Mishnah (Bava Metzia 4:10): “Just as there is deception in buying and selling, there is deception in words. A person should not say to a merchant: ‘How much does this cost?’ if he has no intention of buying it”.

But why not? What’s wrong with comparison shopping? Nothing! But in this case he is not asking in order to compare prices. He is asking out of idle curiosity, which gives the merchant false hopes. Therefore the Mishnah says “he has no intention of buying it” and a parallel [source] (Bava Metzia 58b) states that he doesn’t even have any money.

As for our own day, once again the law ofona’at devarim is very applicable. Let us say that Reuven goes into a warehouse outlet in order to buy a computer, but he wants a demonstration before he spends $1000. The warehouse outlet is not equipped for demonstrations. The salesman says to Reuven: “go to the IBM showroom down the block and ask for a demonstration, then come back here and buy the computer at our low low price”. Reuven complies and gets a free demonstration plus a discount.

In this case, Reuven has committedona’at devarim—verbal deception. When Reuven asks for the demonstration at the IBM store, he has absolutely no intention of purchasing the computer there. He merely wants a free demonstration. The IBM salesman is being deceived. He either loses a real customer while waiting on Reuven, or feels badly when Reuven walks out on him after a half-hour demonstration. This isona’at devarim.

False Packaging or False Labeling

This is an example of geneyvat da’at, which literally means, “stealing a person’s mind.” Interestingly enough, [this prohibition] is not based on a specific verse from the Bible, but was derived by the Sages from the laws of theft and the laws of honesty. We learn in the [second-century commentary, the]Mekhilta (D’nezikin, Chap. 13): “There are seven kinds of thieves: the first is he who steals themind of his neighbor…”

The Talmud gives a number of specific examples of such false packaging or false labeling. [Two examples follow:]

“Our Sages have taught: one should not sell a sandal made from the leather of an animal that died of disease as if it was made from the leather of an animal that was slaughtered, because he is misleading the customer.” (B.T. Hullin 94a)

“One should not sift the beans at the top of the bushel because he is “deceiving the eye” by making the customer think that the entire bushel has been sifted. It is forbidden to paint animals or utensils in order to improve their appearance or cover up their defects.” (B.T. Bava Metzia 60a-b)

We are all familiar with these kinds of false packaging. A wholesaler takes an inferior brand of shirt and puts on Pierre Cardin labels. You buy a box of perfect-looking tomatoes or strawberries, only to discover upon opening the box at home that they were packaged with the bad spots facing down. And we all know how used cars are touched up and polished for the sole purpose of overcharging the customer. These are all good examples ofgeneyvat da’at, clearly forbidden by Jewish law.

"Putting a Stumbling Block before the Blind"

We would call [this] “giving someone a bum steer.” This law is based on Leviticus 19:14): “You shall not curse the deaf nor put a stumbling block before the blind, but you shall fear your God, I am the Lord”. Our Sages interpreted this verse in a very broad fashion. In a midrash on that verse, Sifra [another early midrash collection] says:

“ ‘You shall not put a stumbling block before the blind’—before someone who is blind in that particular matter…. Don’t say to your neighbor ‘sell your field and buy a donkey,’ when your whole purpose is to deceive him and buy his field. And if you claim, ‘But I gave him good advice!’ [Remember,] this is something which is hidden in the heart, [and therefore] the end of the verse says: ‘but you shall fear your God, I am the Lord.’ ”

Once again, the law of the stumbling block can be readily applied to modern situations: a real estate agent should not dupe a young couple into buying a home with structural faults simply in order to make a fast buck. A stockbroker should not sell his client a bad investment just to collect the commission. A salesman should not convince his customer to buy an expensive item he really has no use for. These are all considered “a stumbling block before the blind” about which we are warned “and you shall fear your God, I am the Lord.”

Taxes and Tax Evasion

Considering the scope of Jewish business law, it is not urprising that it also has a clear opinion regarding tax evasion. Eighteen hundred years ago the [Talmudic sage] Shemuel established the legal principle that in civil matters dina d’malkhuta dina—“the law of the land is the law” (B.T. Bava Kama 113a). In its discussion of this principle, the Talmud specifically includes taxation as a secular law that must be followed. This, for example, is the way Maimonides summarizes this law (Mishneh Torah, Laws of Theft 5:11):

“[…] but a tax fixed by the king of 33% or 25% or any fixed sum… a person who avoids paying such a tax is a transgressor because he is stealing the king’s portion, regardless of whether the king is Jewish or not.”

So we see, Jewish law requires us to pay our taxes in a scrupulous fashion because in civil matters “the law of the land is the law.”

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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.