The Prozbul – Hillel’s Financial Creativity – Behar 5781

Trying to claim that the Torah supports this or that contemporary economic system or policy is like trying to fit a round peg into a square hole.

Jews have lived in many places and times and dealt with many different economic and political systems.  In all of those systems, there was economic struggle and human suffering, along with thriving and flourishing. We survived as a people due to cultural and religious adaptability.

Rather than try to awkwardly shoehorn the Torah into our modern theories, why don’t we instead look at what the Torah actually describes?

Parashat Behar, the first of this morning’s double parashah, presents a priestly vision of economic justice in ancient Israel. It offers details about land ownership, debt, poverty, and wealth. It describes indentured servitude and slavery.

By looking closely, perhaps we might learn something about the economic system that actually existed at the time.

First and foremost: there is no land ownership. It all belongs to God, who apportions the land to whom God sees fit. “The land must not be sold beyond reclaim, for the land is Mine; you are but strangers resident with Me.”  (25:23)  This is a core concept that we must understand. Nobody owns property.

The parashah begins with a description of the shemitah, the sabbatical year. Just as every seven days ends with Shabbat, every seven years ends with Shemitah.

The Israelites are permitted to work the land and collect the harvests for six years. The seventh year is a Shabbat Ladonai – A Sabbath unto the Lord. Every seventh year, the land must be allowed to rest. There can be no harvesting or planting. Everyone is entitled to eat what the land produces on it. The Torah specifies “you” – the Israelites, along with their slaves, employees, indentured servants, and animals.

Every seven shemitah years ends with the Yovel, the Jubilee year. On Yom Kippur of the Jubilee year, the shofar is sounded throughout the land. All harvesting and planting is forbidden, as in the Shemittah year. In addition, all property returns to the person whose holding it originally was, or his heirs.  All indentured servants are automatically redeemed as well, going free and returning to their ancestral lands.

The Torah then describes the cycle of misfortunes that lead a farmer into servitude. When things first start going downhill, the farmer can take out an interest free loan to buy seed. If that does not work, the farmer sells part of his land for more seed. But not the land, actually. It is the annual productive capacity of the land, multiplied by the number of years remaining until the Jubilee. This makes sense, since the farmer gets the land back on the 50th year. If he manages to do well, he can repurchase the land at any time before then, redeeming it. It is his perogative.

If that does not work out, he can sell the productive capacity of his remaining property. He then remains on the land and becomes a sharecropper.  The purchaser of the land has to supply the tenant farmer with seed, and the farmer tries to pay off his debt with the proceeds from the harvest.

If this does not work, the farmer sells himself and becomes an indentured servant. The purchaser now takes on full responsibility for his well-being, including paying him wages. If he makes enough to pay off his debt, he goes free. Otherwise, he must wait until the Jubilee year.

All of this applies to Israelites dealing with other Israelites. The Torah specifies different treatment for non-Israelites. Non-Israelite slaves are owned in perpetuity. They cannot redeem themselves and do not go free in the Jubilee year.

So what can we say about this economy? There is no land ownership. While a successful farmer can increase his holdings for a time, it gets reset every 50 years, so there cannot be any accumulation of wealth. There does not seem to be any money in this system. Everything is based on agricultural commodities. Since all land ultimately remains under the control of the original family, there is little flexibility. Newcomers cannot break in to this system. A person who does not want to be a farmer does not have many options, since wealth is concentrated in the productive capacity of the land. 

At the same time, there is a strong concern for justice, and for preventing people from falling through the cracks when things turn poorly for them. Israelites are responsible for their neighbors. Even when someone becomes impoverished, they retain their rights and must be supported by those who are better off. Plus, the ability to redeem the land is totally in their hands.  The purchaser is not allowed to refuse to sell it back.

Was this economic system ever put into practice? During the first Temple era, we do not know for sure. But the Prophet Jeremiah makes a point of redeeming his ancestral land before he goes into exile when the First Temple is destroyed. In the Book of Ruth, Boaz redeems the land owned by Ruth’s deceased husband.

Biblical scholars argue about the extent to which these laws were observed. But the fact that the Torah can construct such an elaborate system of wealth redistribution implies that it is reacting to some situation on the ground. Behar represents the priestly vision for a just redistribution of wealth.

During the Second Temple era, however, the shemittah and Yovel laws were definitely being observed. Nehemiah makes reference to it in the fifth century. Philo and Josephus, in their histories, describe its practice during the late Second Temple period.

But the economic situation that Jews are living under is nothing like what existed centuries earlier. Let’s fast forward to the late Second Temple period, after the biblical era has ended. The Romans are in charge. The economy has changed drastically. Property ownership exists.

There is now money, which allows for a much more complex, growth-oriented economy. Think about what money is for a moment. The Emperor issues an order to make coins. The coins have limited intrinsic value, based on what kind of metal they are made of. But the government sets a value for those coins, a value that holds to the extent that people are willing to use it.

To expand the economy, the government encourages the issuing of credit, either by banks or by wealthy individuals. They make interest-bearing loans, which increases the money supply, allows businesses to grow, and allows trade to take place over vast distances.

A wealthy class emerges. Rich people need somewhere to park their money, so they do the obvious thing. They invest in real estate. Gradually, smaller farmers become squeezed out and are forced to sell their lands to wealthy absentee landowners, who typically dwell in the cities.

Jews, of course, are living under Roman rule, and they have to adjust to this system. Those Jews living in the land of Israel are also bound by the Torah’s agricultural laws, including those of the Shemittah and Yovel.

According to Deuteronomy, debts are cancelled every seven years, during the Shemittah. That is a problem. Why would anyone make a loan, especially an interest-free loan, if it is subject to cancellation at the end of each seven year cycle?

The result are as expected: credit dries up for those who are most in need. The poor remain poor, and the wealthy refuse to step in.

This situation led Hillel HaZaken, Hillel the Elder, to take action. Mishnah Tractate Shevii details the laws of the Shemittah year. The tenth chapter introduces an economic innovation that Hillel introduced. It is called a prozbul. The word most likely comes from the Greek pros boule, which means “before the council.”

The prozbul was a contract in which a creditor appears before a Beit Din, a Jewish court, and declares, “I turn over to you, so-and-so, judges of such and such a place, that any debt that I may have outstanding, I shall collect it whenever I desire.”  (Mishnah Sheviit 10:4) In other words, the debt, which by law should be cancelled, is transferred over to the court. The court is not a person, and therefore has no obligation to cancel the debt. After the Shemittah year is over, the creditor reclaims the debt from the Beit Din.

Why did Hillel issue this decree, which so clearly goes against the spirit, if not the letter, of the Torah? The Mishnah answers that question.

When he observed people refraining from lending to one another, and thus transgressing what is written in the Torah, “Beware, lest you harbor the base thought, [‘The seventh year, the year of remission, is approaching,’ so that you are mean to your needy kinsman and give him nothing].” Hillel enacted the prozbul.

Mishnah Sheviit 10:3

According to the Mishnah, those with means behaved exactly as we would have expected them to. They stopped making loans. That is why Hillel made this dramatic change. To put it into modern terms, “he eased up on banking regulations in order to get the economy moving again.”

The prozbul is one early example of how Judaism evolved to deal with a new economic reality. Over the past two thousand years, there have been many more developments. The best ones recognized, as Hillel the Elder did, the Torah’s underlying concern. “Beware, lest you harbor the base thought so that you are mean to your needy kinsman and give him nothing.”

Whatever the economic system, whether it be barter, feudalism, mercantilism, capitalism, socialism, whatever’ism, we are supposed to take care of each other. There will always be some who do well while others struggle. We have seen this very clearly during the pandemic.

Food Banks around the country have distributed food in record numbers. We have been warned lately that the numbers of homeless Americans will rise dramatically when national and state eviction moratoriums end in the near future. I am not going to suggest that there is an obvious or simple solution to these problems. We live in a vastly complex global economy that defies simple solutions. 

But we would do well to remember the values expressed by the Torah laws: to be compassionate and generous with our neighbors, to not encumber them with unpayable debt, to support them when they stumble, and to give them opportunities to redeem themselves.

Breaking the Downward Spiral – Behar 5779

We constantly hear about the tremendous disparities in wealth between the ultra rich and everyone else.  Just this morning, the front page article in the Mercury News reported that Elon Musk received $2.29 billion(!) in compensation in 2018.  

Parashat Behar presents an economic system that recognizes the inevitability of wealth disparities, but strives to prevent those disparities from becoming locked in across generations.  In the course of prescribing economic resets every fifty years, the Yovel system abolishes the enslavement of Israelites by their fellow Israelites.

Underlying the concept of the Yovel is God’s ownership of the land.  Humans are entitled to settle and work the land, but at no point are we to be considered its owners.  At the time of the Israelites’ settlement of Canaan, the land was apportioned among the tribes, and further subdivided according to clans and families.  This allotment is meant to be eternal.

A farmer who possesses a field owns the produce that the field yields, but not the field itself.  The Yovel, or Jubilee, occurs every fifty years.  The entire land remains fallow, like in a sabbatical year.  In addition, all land returns to the original owners or their descendants.

The Yovel system recognizes that some landholders will be successful, while others will fail.  In three stages, it describes the gradual descent into poverty of a farmer who is not so fortunate. (Jacob Milgrom, Leviticus: A Continental Commentary.)

In the first stage (25:25-28), a farmer has a bad year and does not have enough money to purchase seed to plant on his land.  He takes out a loan.  Then the crop fails, and he finds himself unable to pay his debt.  He sells part of his land for the estimated value of the number of harvests from now until the Yovel year.  In effect, he has leased the land. If his luck turns around, however, he retains the right to repurchase the land at any time.  Not only that, but his closest relative has an obligation, if he can afford it, to redeem the land so as to keep it in the family to which it was originally apportioned.

In stage two (25:35-38), the farmer has not been able to redeem it, and his crops have failed on his remaining land.  He takes out another loan to pay for seed, and he defaults again.  He now must turn over all of his remaining land to the creditor who owns his debt.  But, he gets to remain on the land as a tenant farmer.  The new owner lends him seed to work the land, and he pays off his debt using proceeds from the harvest.  The creditor is not allowed to charge any interest for the loan.  If the farmer succeeds in paying off the loan, he gets his land back.  If not, it reverts to him anyways in the fiftieth year.

In stage three (25:39-43), things are even worse for the farmer.  His crops have continued to fail and he can no longer feed himself and his family.  In this case, he enters the his creditor’s household as an employee.  He is no longer entitled to any of the profits from the land. But he is not a slave.  The creditor must pay him wages, which the farmer uses to repay his debts.  In the fiftieth year, he goes free and gets his land back.  The creditor is not allowed to treat the farmer like a slave, and is forbidden from mistreating him.

This story of a farmer’s financial decline is quite sophisticated.  It depicts a downward economic spiral in which his options gradually narrow due to increasing poverty and debt. This model of the economic downward spiral has not changed much over the past three thousand years, on both the personal, and macroeconomic level.  When an individual or a nation becomes impoverished, or as is often the case, starts out impoverished, it is almost impossible to rise.

What is unique in the Yovel system, however, is that the farmer retains inalienable rights throughout his decline.  He can repurchase the land at any time.  He does not pay interest on his loans.  He goes free in the fiftieth year.  The Yovel system recognizes that we cannot prevent a person from experiencing bad fortune, whether deserved or not.  But we can have a society and an economy that does everything possible to rehabilitate that person.

The Yovel was not a pipe dream utopia.  It was written to be implemented.  It should come as no surprise to learn that it was never successfully put into practice.  It is a timeless, universal principle that those who have wealth will always resist efforts by others to take it away from them.

That is why we find the prophets constantly complaining about the gross economic inequalities in Israelite society and the crushing burden of debt on those who are least able to handle it. The Book of Proverbs astutely observes that “The rich rule the poor, and a borrower is a slave to a lender.”  (Pr. 22:7)  It is as true now as it has always been.

But there are some positive developments taking place that are attempting to break the downward spiral. One of the ostensible purposes of the criminal justice system is the rehabilitation of those who have broken the law.  At all levels, we are terrible at it.  Recidivism rates, the likelihood that someone released from prison will return, are over 60%, which is unacceptably high.  There are many factors.

One important correlation is that prisoners who are able to gain employment after release are less likely to commit crimes in the future.  But of course, the stigma associated with being a former criminal makes it extremely difficult to get a job.  Thus, the downward spiral continues. with no Yovel to break the cycle.

The bipartisan First Step Act, which the President signed into law in December, aims to address this problem by creating more incentives for prisoners to undergo job training while in prison so that they will be better prepared to enter the work force right away.  Time will tell if it will make a difference.

Another increasing problem is the student debt crisis.  Americans owe more than $1.5 trillion in student loan debt, a number which has risen disproportionately over the past decade.

A person who is saddled by debt before even entering the work force is going to have a much harder time getting ahead than one who is not.  A young adult who graduates with debt delays achieving life milestones like getting married, having children, and purchasing a home.  The pressure of debt limits the choices and risks that a person can take.

Last week, billionaire investor Robert F. Smith made a surprise gift to the graduating class of Morehouse College, a historically black men’s liberal arts college in Atlanta.  “We’re going to put a little fuel in your bus,” he pledged as he announced that he would pay off the student loans of this year’s entire graduating class.

This is especially significant because African American college students graduate with greater amounts of student debt than any other group.  In addition, over the course of a career, an African American worker with a college degree can expect to earn close to a million dollars less than his or her white counterpart. 

In making his generous gift, Robert F. Smith is betting that these graduates will have an easier time getting started on their careers, and will, over the long run, achieve greater success and contribute more to the economy and their communities, and will be able to pass along more opportunities to their children in the next generation.

These two developments, which remove barriers to getting ahead, will make a difference in  thousands of lives.  One is a change in government policy that aims to break the cycle of crime.  The other is an inspired action by a private citizen to give a push forward to an entire class of new graduates. But there is so much more that could be done at every level to relieve the pressures that hold people back.

The Yovel‘s system of wealth redistribution would have significantly flattened the wealth disparities between the well off and the struggling, and would have ended multi-generational poverty.

It didn’t work.

But it does inspire us with a vision of how to treat each other with dignity, how to remove barriers that prevent people from succeeding, and how to break the downward spiral of debt and poverty.