Religious Law and the Financial Crisis

In this recent interview in L’Express (in French), Gilles Bernheim, the Chief Rabbi of France, makes some points about the relationship between religious law, specifically Talmudic Law, and contemporary economics. Although the Talmud could not imagine today’s financial arrangements, he concedes, it did teach, in the language of its time, that individualism was the worst enemy of communal confidence. According to the Talmudic view, we should place confidence in work, solidarity, and justice, not the “audacity” of rugged individualism “that dares all without concern for others.” The Talmudic worldview, one infers, would help avert crises like the one we’re currently experiencing.

Rabbi Bernheim’s critique of market economics from a religious perspective is quite familiar; it is very similar, for example, to the critique in Catholic Social Thought (another reminder that one should not reflexively link religion with the political right). And the financial crisis we’re living through does reflect reckless behavior by people who should have known better. A sense of responsibility to the community, which a religious worldview might have imparted, might have helped to avert the crisis.

That said, we should avoid being simplistic about things. Of course individualism “that dares all without concern for others” is incompatible with a religious worldview, but egotism like that is inconsistent with sane market economics as well. And in the United States, at least, the housing bubble that led to the Panic of 2008 was caused in part by government programs that encouraged people to purchase homes they could not afford. In other words, the crisis was not caused only by rugged individualism and greed; it was also caused by a misguided egalitarian project that had terrible consequences for everyone, including its supposed beneficiaries. Anyway, the relationship among selfishness, communal solidarity, and financial collapse is a complicated one that the Chief Rabbi more or less slides by. Though perhaps one shouldn’t expect too much from a newspaper interview – or a blog post. – MLM

One response

  1. Mark, thanks for this very interesting post. To your point about the government encouraging people who couldn’t afford homes to buy them—it certainly happened, but if you take a hard look at the data I think it is pretty clear that things like the Community Reinvestment Act played a comparatively minor role in sparking the crisis. For all the divisiveness of the Financial Crisis Inquiry Commission, nine of the ten commissioners (Republicans and Democrats) agreed that these programs were not a big factor. Those who take a contrary position are typically only able to do so through a fairly tortured definition of what counts as a sub-prime mortgage.

Leave a Reply

%d bloggers like this: