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.

Income Inequality – Behar 5771

As you know, economists have officially declared the recession over.  That may be true on paper, but there are still millions who have lost their jobs, and their homes, and are struggling to get by.  Despite the immensity of the recession, it has not impacted everyone the same. Some have come through just fine, and even prospered.  One of the recent critiques we have heard is that the national unemployment rate is still well over 8 percent while some of the largest American corporations are making record profits and sitting on billions of dollars.  There are vast differences between the economic experiences of Americans.  I don’t think there is much disagreement that there is something broken in the socio-economics of this country.  There is a lot of disagreement about what is broken and how to fix it.

As a Diaspora people, Jews have lived in many different societies.  But wherever we have lived, we have taken our Torah, and our teachings with us, and we have applied their lessons to the situations we face.  This morning’s Torah portion has a lot to say to us about the relationship between the rich and the poor in society.

Most of Parshat Behar, is a presentation of the laws of land ownership in ancient Israel.  It describes an economic system that is vastly different from what we have today.  It is agriculturally based.  There is no money.  And land is apportioned to tribes, clans, and families.  As in some other societies in the Ancient World, land could not really be sold.  Great value was placed on keeping ancestral land within the family.  The Torah adds an innovative, and powerful moral concept with far-reaching implications.  God instructs the people, “But the land must not be sold beyond reclaim, for the land is Mine; you are but strangers resident with Me.”  (Lev. 25:23)

The Israelites get this reminder every seven years, when they observe shemitah, and let the land lie fallow.  Every fifty years, they observe the yovel, the Jubilee.  In that year, all land reverts back to its original owner.  Any Israelite who had to indenture himself into servitude regains his freedom, and his land.  All debts are cancelled.

This economic model, if fully implemented, would have some pretty significant effects.  Families would not fall into multi-generational poverty, since there would effectively be an economic reset every fifty years.

Also, it would be impossible for anyone to accumulate huge amounts of property, since any land or debt that a successful business person acquired would revert on the Jubilee year.  There is not even such a thing as selling land, just leasing it for a period of time up until the fiftieth year.

The result would be a flattening of economic disparities.  You can imagine that the gap between the richest and the poorest in society would never get that huge if everything reset itself every half century.

What I especially appreciate about the system that the Torah dscribes is that it is not a pie in the sky utopia.  It does not say that everyone will be equal.  This is not “From each according to his abilities, to each according to his needs.”  This system understands that some people are going to be wealthier, better educated, shrewder, and luckier, than others.

Remember, the underlying moral value is that the land ultimately is owned by God, and not us.  While prosperity is important, there are values that are more important to pursue than the accumulation of wealth.

In his commentary on the Book of Leviticus, Jacob Milgrom describes these laws as trying to stop the loss of land by debtors to the rich, as well as reduce “the ever widening gap between the rich and the poor.”  The Biblical Prophets condemned the mistreatment of the poor in their particular prophetic style.  They harangued a society for ignoring the light of the poor, the stranger, the widow, and the orphan.  Here in the Book of Leviticus, Israel’s priests are trying to fix the immorality of economic inequality, not through moral pronouncements, but through law.

Nevertheless, the historical evidence suggests that the Jubilee year as presented in the Torah was never actually practiced.  What are we to make of its appearance here?  It is a presentation of values.  An ancient reader would see in this theoretical economic system a critique of what was probably a less just society in which those with less money, and less power, did not have many opportunities.  A society in which bankruptcy risked dooming a family to poverty for generations.

We seem to have some of the same issues today.

As you no doubt are aware, the last several decades have seen a significant rise in income inequality around the world.

Of all developed countries, the income gap between the rich and the poor is greatest in the United States.  In 2008, the top earning 20 percent of Americans, who earn at least $100,000 per year, received 49.4 percent of all income generated in the country  The bottom 20 percent received  just 3.4 percent of all income.  The relative gap is the widest that it has been since the U.S. Census Bureau started collecting data in 1968.

We are not going to get into what causes income disparities, or how to reduce them.  But I do want to talk about the effects.

There has been a lot of study over the last few decades about the impact that large gaps between the rich and the poor has on society.

Robert Putnam, the professor of political science at Harvard University, conducted a study on the relationship between social capital, or the connections between members of a society, and economic inequality.  He found that throughout the twentieth century, social connectedness and civic engagement moved “in tandem” with economic equality.  The flatter the gap between the rich and the poor, the more society was interconnected.  The high point in social capital, according to Putnam, occurred during the 1950’s and 1960’s, which was also the most economically egalitarian period in the twentieth century.  “Conversely,” he writes, “the last third of the twentieth century was a time of growing inequality and eroding social capital… The timing of the two trends is striking: somewhere around 1965-70 America reversed course and started becoming both less just economically and less well connected socially and politically.”

In other words, when the rich-poor gap is smaller, society functions better.  There are more interactions between people.  Communities are tighter-knit.  Individuals are more engaged politically, meaning that they are more involved in shaping the course of society.

There are many other social factors that have been also statistically correlated to income inequality.  To the extant that the income gap is reduced, societies in the developed world experience lower homicide rates, fewer mental health problems and less teen-age pregnancy.  But the gap is expanding.

It was not always like this.  In 1831, in his book Democracy in America, Alexis de Tocqueville talked about how wonderful the economic equality was that he witnessed.  He writes:

Among the new objects that attracted my attention during my stay in the United States, none struck me with greater force than the equality of conditions.  I easily perceived the enormous influence that this primary fact exercises on the workings of society.  It gives a particular direction to the public mind, a particular turn to the laws, new maxims to those who govern, and particular habits to the governed…  It creates opinions, gives rise to sentiments, inspires customs, and modifies everything it does not produce…  I kept finding that fact before me again and again as a central point to which all of my observations were leading.

De Tocqueville was describing an engaged, inspired population.  I don’t think de Tocqueville would be able to make those comment today.

Today, with the widest gap between the wealthy and the poor this country has seen since the 1920’s, it seems that there is a tremendous  despair among individuals about our ability to affect society.  With corporations now defined as people, and large PACs with unknown sources of funding able to influence politics with huge amounts of money, that despair seems justified.

The point I want to make this morning is that our Jewish tradition has always understood large gaps between the rich and the poor to be highly problematic.  Such disparities are harmful to a cohesive society, and are antithetical to the Jewish notion of justice.  To be clear, our tradition encourages us to be involved in the material world around us.  We pray for God to bless us with prosperity.  Wealth and prosperity are things to pursue.  But not as ends in and of themselves.  Only as means to do the more important work of serving God by creating a just world.

It is said that you can always cherry pick a text that will support your position.  I don’t think that can be said about this issue.  I have never heard or read any Jewish thinker, speaking from within the tradition, defend the idea that the rich should be free to acquire as much as they can without regard to the consequences on the rest of society.  As Jews, we have a moral and a legal obligation to create opportunities for the people at the bottom to succeed.  We can argue about strategy – raise taxes, lower taxes, expand social services, cut medicaid – but from a Jewish perspective, something has to be done about income inequality.