IntroductionThe Bernard Madoff scandal has caused a great deal of soul-searching in the Jewish community, since he presented himself as a generous contributor to Jewish causes and had many Jewish clients, both individuals and organizations, whom he betrayed. This page has links to articles both on Madoff's actions and Jewish community reaction to them, and resources on Jewish business ethics.In Madoff Scandal, Jews Feel an Acute Betrayal. The article begins: "There is a teaching in the Talmud that says an individual who comes before God after death will be asked a series of questions, the first one of which is, 'Were you honest in your business dealings?' .... In addition to theft, the Torah discusses another kind of stealing, geneivat da’at, the Hebrew term for deception or stealing someone’s mind. 'In the rabbinic mind-set, he’s guilty of two sins: one is theft, and the other is deception,' said Burton L. Visotzky, a professor at the Jewish Theological Seminary." Betrayed by Madoff, Yeshiva University Adds a Lesson. The article begins: "The Jewish social philosophy class at Yeshiva University was supposed to focus on repentance, but there seemed to be too much to atone for. In the eyes of the students, Bernard L. Madoff had deceived scores of people, turned billions of dollars into dust and ruined many lives. So instead, the graduate seminar of 15 began by debating whether Mr. Madoff’s actions were sins, and whether it mattered that he was Jewish. In The Long Arm of Halacha: Jewish Law and the Madoff Scandal, Chaim Saimon writes that aspects of the Madoff case, including people in the community who ran "feeder funds" that invested in Madoff's securities' firm, should be considered in a Jewish court of law, a beit din. He writes, "Jewish law conceptualizes this case in a way that more accurately reflects the emotional and theological disposition of the affected community. While there is no direct parallel to the American legal concept of “fiduciary duty,” the laws pertaining to persons charged with managing the financial affairs of the community — known as the gabbai tzedakah, (administrator of charitable funds) or parnas al hatzibbur (head of communal institutions) — provide the relevant analogy." Deceit in social lifeAnother perspective on deceit is offered by this article by Natalie Angier: A Highly Evolved Propensity for Deceit. She writes: "Deceitful behavior has a long and storied history in the evolution of
social life, and the more sophisticated the animal, it seems, the more
commonplace the con games, the more cunning their contours."What are Jewish business ethics?What are they based upon in the Torah and later Jewish literature? Some articles to get you started.From a Conservative rabbi in Jerusalem: Some Basic Principles of Jewish Business Ethics, by Rabbi David Golinkin Geneivat Da'at: The Prohibition Against Deception in Today's World, by Hershey H. Friedman. Business Halacha - Torah.org. Cases organized according to the order of the Shulchan Aruch. Articles from the January, 2009 issue of Sh'ma magazine on Jews and money: Money and Morals by Lewis E. Newman. Tzelem Elokim and the Free Market, by Yehiel E. Poupko. Banking as Moral Hazard, by Scott A. Shay. Impact of Madoff's actions on the Jewish communityOne example: the Hillel at the University of Maryland has lost $40,000 that it should have received as income from an endowment fund of the United Jewish Endowment Fund of the Jewish Federation of Greater Washington.A complete list of people claiming to have lost money with Madoff is now available - "For weeks, the list of prominent people known to be caught up in Bernard L. Madoff’s investing scandal has been growing. And the roster got a flurry of new additions late Wednesday, when the names of thousands of customers of Mr. Madoff’s now-infamous firm, Bernard L. Madoff Investment Securities, were made public in bankruptcy-court filings." Anti-Semitism and the Madoff caseTwo social scientists at Stanford have recently reported on their research about whether there has been a rise in anti-semitic sentiment in the United States in the wake the financial crisis and the Madoff case. In their article, Anti-semitism and the economic crisis, they found an increase in blame of Jews for American economic troubles, something which has happened during past economic crises around the world. Some of their findings:In order to assess explicit prejudice toward Jews, we directly asked respondents “How much to blame were the Jews for the financial crisis?” with responses falling under five categories: a great deal, a lot, a moderate amount, a little, not at all. Among non-Jewish respondents, a strikingly high 24.6 percent of Americans blamed “the Jews” a moderate amount or more, and 38.4 percent attributed at least some level of blame to the group. Interestingly, Democrats were especially prone to blaming Jews: while 32 percent of Democrats accorded at least moderate blame, only 18.4 percent of Republicans did so (a statistically significant difference). This difference is somewhat surprising given the presumed higher degree of racial tolerance among liberals and the fact that Jews are a central part of the Democratic Party’s electoral coalition. Are Democrats simply more likely to “blame everything” thus casting doubt on whether the anti-Jewish attitudes are real? Not at all. We also asked how much “individuals who took out loans and mortgages they could not afford” were to blame on the same five-point scale. In this case, Democrats were less likely than Republicans to assign moderate or greater blame. Educational attainment also correlates with variation in anti-Semitic attitudes. Whereas only 18.3 percent of respondents with at least a bachelor’s degree blamed the Jews a moderate amount or more, 27.3 percent of those lacking a 4-year degree did so. Again, we get a similar reversal when examining the blameworthiness of individuals who took out loans they could not afford.... The findings presented here are troubling. This is not the first
instance of an economic downturn sparking anti-Semitic sentiments.
Financial scandals are widely regarded as contributors to the rise of
anti-Semitism in European history. Famously, the Panama Scandal—often
described as the biggest case of monetary corruption of the nineteenth
century—led to the downfall of Clemenceau’s government in France and
involved bribes to many cabinet members and hundreds of
parliament members. Nonetheless, the public’s fury centered on two
Jewish men who were in charge of distributing corporate bribe money to
the politicians. In her classic The Origins of Totalitarianism, Hannah
Arendt described the Panama Scandal as a key event in the development
of French anti-Semitism. The Stavisky Affair, in which the Jewish
financier Alexandre Stavisky embezzled millions of francs through
fraudulent municipal bonds, broke out 40 years later and had a similar
effect of nourishing the accusation that the Jews were behind the
corruption in financial dealings. Crises often have the potential to stoke fears and resentment, and the current economic collapse is likely no exception. Therefore, we must take heed of prejudice and bigotry that have already started to sink roots in the United States. The negative attitudes toward Jews reported here are not only dangerous in and of themselves, but they may also have bearings on national policy matters. The media ought to bear these findings in mind in their coverage of financial scandals such as the Madoff scam. In most cases, religious and ethnic affiliations have nothing to do with the subject at hand, and such references, explicit or implied, ought, then, to be avoided. Assignments for 4/20-22, 2009April 20 Jewish business ethicsRead: 1. David Golinkin, “Basic Principles of Jewish Business Ethics” (http://www.uscj.org/Basic_Principles_of_6097.html) 2. Two articles from the January, 2009 issue of Sh'ma magazine on Jews and money: a. Money and Morals by Lewis E. Newman (http://www.shma.com/jan_09/money_morals.htm) b. Banking as Moral Hazard, by Scott A. Shay (http://www.shma.com/jan_09/banking_moral_hazard.htm) For a longer discussion of Jewish business principles, read Hershey Friedman, “The Impact of Jewish Values on Marketing and Business Practices” (http://www.jlaw.com/Articles/impactjewish.html) “Geneivat Da'at: The Prohibition Against Deception in Today's World,” by Hershey H. Friedman (http://www.jlaw.com/Articles/geneivatdaat.html) April 22 Bernard Madoff as a test caseRead:1. “In Madoff Scandal, Jews Feel an Acute Betrayal,” by Robin Pogrebin (http://www.nytimes.com/2008/12/24/us/24jews.html?_r=1&hp) 2. “Betrayed by Madoff, Yeshiva University Adds a Lesson,” by Javier Hernandez (http://www.nytimes.com/2008/12/23/nyregion/23yeshiva.html?ref=us) 3. Chaim Salmon, “The Long Arm of Halacha: Jewish Law and the Madoff Scandal” (http://www.forward.com/articles/14934) For April 22, write a one-page paper on the following questions: 1. What are the basic principles of Jewish business ethics as explained by Golinkin or Friedman? 2. Should these principles be applied to contemporary business issues? How can this be done? 3. What has been the impact of the Madoff case upon Jews as individuals and as a community? 4. How would halakha rule on the Madoff case? |