Economic Democracy - Which Economic System Is Most Consistent With Judaism?   
By Richard H. Schwartz

The pursuit of profit has led to the condition where the great treasures of natural resources are accumulated in the hands of the few individuals who, because of further profits, have brought to tens of millions of human beings pain, hunger and want. Does this not show clearly the wickedness of the present capitalist order, which is in glaring contradiction to the religious ethical tendencies of Judaism? ... The fight for Socialism is the fight for human liberation.... Moral rebirth and not mere economic reconstruction. The fight for Socialism ... must be firstly a fight for values, higher spiritual values, infinite values.
-- Rabbi Abraham B. Bick

With the United States and most of the world suffering from a very severe recession, with rapidly rising unemployment, falling home and stock prices and a sharp decrease in confidence for many people about their economic future, it is timely to consider which economic system and conditions are most compatible with basic Jewish values.

Judaism does not recommend one type of economic system for all times and places. However, its principles of social conduct are clear. The Torah is opposed to all types of exploitation and to concentration of wealth in the hands of a few, with the resultant impoverishment of the many. The Torah desires that all people should work and enjoy the fruits of their labor.

Jewish Social Values

Elements of modern capitalism are inconsistent with basic Jewish values related to justice, compassion, concern for the poor, the dignity of every person, and love of our fellow humans:

•     While Jewish values are epitomized in the visions of prophets, capitalist values are often dreams of profits. Things are done in a capitalistic society not because they are just, righteous, or kind, but because they are profitable.
•     While Judaism teaches "love thy neighbor as thyself," under capitalism the motto seems to be, as Rabbi Abraham Joshua Heschel put it,  "suspect thy neighbor as thyself." One never knows if a person being dealt with is behaving honestly. Surveys have shown that many automobile mechanics and other business people act dishonestly when they think they can get away with it.
•     While Judaism teaches that each person is created in God's image and hence is of infinite worth, under capitalism people are treated primarily as consumers. Advertisers do not attempt to educate people or increase their sensitivity, but rather appeal to their greed and insecurity in order to maximize sales and profits.
•     While Judaism teaches that life is sacred and we must make great efforts to save lives, under capitalism lives are often endangered to increase income. Hence we see widespread advertising of cigarettes and other dangerous products, extensive lobbying by industry against increased job safety for workers, and corporate efforts to circumvent anti-pollution legislation.
•     While Judaism stresses tzedek, tzedek tirdof ("justice, justice shall you pursue") and that God is sanctified through acts of justice, society is filled with injustice. There are great income gaps and they have been widening in recent years. While a minority of the world's people lead lives devoted to consumption and waste, millions of God's children lack adequate food, shelter, health care, sanitary facilities, and education.
•     While Judaism mandates that we practice compassion for animals and avoid inflicting unnecessary pain, animals are often treated like machines, in order to maximize profits.
•     While Judaism asserts that each person is "his brother's keeper" and that "we must be kind to the stranger, for we were strangers in the land of Egypt," under capitalism each person is primarily out for himself and his family. Primary attitudes include: "Cut services for others," "Hire an ‘illegal' to do it cheap," and "Where's mine?"
•     While Judaism asserts the need for a jubilee every fifty years when wealth is redistributed and property is returned to its original owner, under capitalism there are very large and increasing gaps between people's incomes. Due to the tremendous power that wealth provides, these gaps are likely to continue growing, making unrest and violence more likely.
•     While Judaism stresses the dignity of labor and creative work is considered necessary for every person, under capitalism alienated workers try to do as little work as possible for as much pay as they can get. Few people take pride in their workmanship.
•     While Judaism teaches that God is the Father of all people and that one person (Adam) was created to teach our common ancestry and thus there must be no prejudice against people because of race, religion, nationality, or sex, there is much discrimination in our society. Each group is pitted against other groups if it wishes to improve economically.

There is a Hasidic story that is consistent with socialism. It tells of a rabbi so righteous that he was permitted to see the realms of Heaven and Hell before his death. He was taken first to Hell where he saw people sitting around a great banquet table with a magnificent white tablecloth, the finest of china, silver, and crystal, and the most appealing of foods that he had ever seen. However, the people were looking at the food and wailing uncontrollably, for each person's arms were splinted so that their elbows could not bend and they could not bring the food to their mouths. When he got to Heaven, he saw the identical banquet table and foods. But here the rabbi observed joy greater than any he had ever seen, for while the people also had splints and could not put the magnificent food into their own mouths, each fed it to his or her neighbor.

Judaism and Capitalism

Can modern capitalism be reconciled with Judaism? Can a system that emphasizes the pursuit of personal financial gain with little concern for the needs and welfare of others be consistent with Jewish values? Under capitalism we have what philosopher Richard Lichtman calls "the alienation of economic activity from moral concern." Can Jews accept this separation of economic and moral concerns when we affirm a Creator whose laws and concern extend to all of life?

Many of the world's people today face economic conditions similar to those indicated in the following passages from the book of Job (24:5-11):

Lonely as wild asses in the wilderness
They go forth to their labor;
They must hunt the desert for sustenance,
There is no harvest for the homeless.
They must harvest fields that are not theirs....
Naked must they pass the night for lack of clothes.
They have no covering from the cold.
They are drenched by the downpour of the mountains,
They must embrace the base rock for want of shelter.
They must go naked, without garments;
Hungry, they must carry the sheaves.
Shut in by walls, they must press the oil;
Thirsty, they must press the wine-press.

Today, under a profit-based system where each person seeks gain, first and foremost, the following words of Jeremiah (5:1,5; 6:13; 8:10; 6:6) are relevant:

Run to and fro through the streets....
Look and take note!
Search her squares to see
If you can find a man,
One who does justice
And seeks truth; . . .
But they all alike had broken the yoke,
They had burst the bonds....
From the least to the greatest of them,
Everyone is greedy for unjust gain;
And from prophet to priest
Everyone deals falsely....
There is nothing but oppression within her.

The fact that Jewish ethical teachings are inconsistent with a profit-based system was explicitly stated in a pronouncement of the Rabbinical Assembly of America in 1934, in the midst of the Depression, in words that have become relevant again in view of the current severe economic conditions.

In all of Jewish ethical tradition, it is assumed as axiomatic that men must live for each other, that mutual aid and human cooperation are indispensable both for peace in society and for moral excellence in the individual. Judaism has always asserted the brotherhood of human beings. If this concept has any meaning for life at all, it insists that men must live cooperatively for the common good.

We therefore hold an individualistic, profit-inspired economy to be in direct conflict with the ideals of religion. We maintain that our present system, based, as it is, on acquisitiveness and selfish competition, is in practice a denial of human brotherhood. It exalts the aggrandizement of the individual above the interests of the group, it emphasizes the competitive rather than the cooperative elements in human character. It means that our social order is based on the theorem of "Every man for himself" rather than on the ideal of mutual aid. Our system of individualism has degraded human character, it has appealed to the most selfish instincts in men. It has been tried and found woefully wanting. Under the policy of laissez-faire, society has led itself to the verge of a complete collapse. It has created prosperity for a few and destitution for the multitude.

We hold that only a cooperative economy, only one which has for its objective the enrichment of all rather than profit for a few-only such an economy can be moral, can elevate man and can function successfully. Wherefore we look to the ultimate elimination of the profit system as the basis of our national economy. We would have our present economy of individualism supplanted by one in which a socially controlled industry and agriculture would have for their objective not profits for a few but the fullness of life for all.

The practices of modern capitalism are a prime cause of ecological damage, poverty, hunger, resource scarcities, and war. For global sustainability, it is necessary that it be replaced by a more just and humane system.

Democratic Socialism

The system most consistent with Jewish values is one of economic democracy: Democratic Socialism, somewhat modified in consonance with Jewish teachings. What does this mean? First, let us clearly indicate what it does not mean: It is certainly not the type of system of the former Soviet Union; it is not undemocratic and certainly not oppressive; it does not involve a small elite that makes the major decisions and controls most of the wealth and power; it does not mean that you are told where to work, what to buy, where to live, what opinions to hold; it does not mean that you have no personal possessions and cannot own a home or a car.

Formulating a detailed program for Democratic Socialism is beyond the scope of this article. But some key features (all consistent with Jewish values) would include:

•     High priority and value given to human life and well-being rather than money and possessions
•     People treated as ends, not means (consistent with the concept that people are created in God's image, demonstrating respect for their dignity, ability, and potential)
•     Social ownership and democratic control of the major economic resources for the benefit of everyone (this does not mean that every single business would be taken over by the workers. It does mean that the important economic institutions of the country would be controlled by the people, directly or through elected representatives)
•     A more equitable distribution of income, wealth, and services
•     A broader distribution of power, with workers participating in decisions that affect them
•     Progressive taxes designed to reduce inequality, rather than to magnify it
•     Prices and wages set at a level where every person can obtain adequate food, clothing, and shelter.

While the above changes would be extremely valuable, it is not enough merely to change the methods of production and distribution and to establish more democratic decision making. It is also essential to radically change people's outlook and behavior. This was powerfully discussed by Leib From, a Polish leader in the Poale Agudath Israel (PAI) labor organization:

For of what avail a change of the social order, a mechanical change of the means of production, if human beings will remain the same sinful and egotistic individuals that they are now? We must create not only a new order, but principally a new man, a humane and just individual. For if human beings will remain evil, no change of social system will avail; evil persons will bring harm and cause suffering to their fellows in every society, for the opportunities for wrongdoing will always exist.

Perhaps the closest model for economic democracy is the kibbutz, a collective settlement in Israel, built on the principles of collective production, self-labor, communal sharing of the fruits of that labor, absence of private property, and government by democratic decisions. Kibbutz members believe that they are putting Jewish teachings into practice by building a classless society where each person's abilities are used to the fullest and there is equitable distribution of what is produced. While the kibbutzim face many problems in a society where they are surrounded by capitalistic institutions and thinking, they have advanced considerably through collective efforts and have made major contributions to Israel's agriculture, industry, and defense. By contrast, much of Israel's economy, which is based on capitalism, faces major problems today, including increasing poverty, a widening income gap between the wealthy and the poor, widespread pollution and environmental degradation, and deteriorating health, education, and other social systems. Of course, these problems have been worsened by Israel's chronic severe security problems.

What's in it for the Affluent?

You may be wondering, Why should I consider socialism? I'm doing well under capitalism. I have a good job and a home and am able to purchase what I need for my family. And I have the freedom to do what I want, work where I want, travel where I want.

But are things all that good? Can't they be much better for you and everyone else, especially now that there is high unemployment, falling home and stock values and increasing uncertainty about our economic future? Are there areas near your home where you and your family are afraid to go, especially at night? Is your transportation system as good as it could be?

Are you concerned about increases in global warming, pollution, acid rain, and toxic wastes? Can we continue with the same general economic approaches when, for example, there are so many indications of global warming and when some climate scientists are saying it might spin out of control with disastrous consequences unless major changes soon occur?

Do you feel that our government is doing enough to make sure that the foods you eat are adequately inspected? Are you satisfied with material presented on television and in movies? Are you happy with the values our society presents today? Do you feel that you can trust people to give you a fair deal? Do you ever consider that our well being is built upon the exploitation of other people? Do you think people can really learn ethical, religious values in a society whose mottos often are "What's in it for me?" and "Do unto others before they do unto me"?

Is it Unreachably Utopian?

You, dear reader, may be wondering why Democratic Socialism is being considered here. Isn't it a utopian dream that can never be reached, especially in the United States?

But perhaps this is an ideal time to consider a shift toward democratic socialism, as the failures of capitalism-increasing poverty, homelessness and unemployment, a planet in dire peril, increasing uncertainty about personal economic security, widespread hunger, many struggles over scarce resources-are becoming more and more apparent. And even if total economic democracy cannot be fully established, even a partial pursuit of this goal produces many benefits.

Actually all advanced democracies already have economies which combine elements of socialism with capitalism. For example, delivery of mail, garbage collection, police and fire protection are all paid for by taxes and run by governmental agencies. Countries with socialized health care systems do health care delivery better than the United States and with much more equality, and they do it at a far lower cost. The socialized Medicare and Medicaid systems provide health care efficiently to many Americans.

Socialism in the Jewish Tradition

While the Torah does not advocate socialism, many of its teachings seem most consistent with this economic system. When the Jews wandered in the wilderness after the exodus from Egypt and in the early years in the land of Israel, the people were strongly egalitarian; there was no hierarchy of kings or rulers. Decisions were reached democratically by the assemblage of one person from each family of the tribe. There was virtually communal ownership of property, at least of wealth-producing property. The rights to pasture lands and water were vested in the tribe as a unit, and private property was virtually nonexistent.

The manna that nourished the Israelites in the desert teaches lessons consistent with socialism. Each day when the Israelites collected the manna, some more and some less, when they measured the amount at home it always turned out to be one omer per person. This teaches that when an adequate supply of necessities is produced and shared there is no need to gather and amass excessive things at the expense of others.

Those who tried to save some manna in order to store it up found that it rotted and bred worms. The lesson here is that when people become greedy or spend excessive time gathering possessions, they become oblivious to the important concerns in life, and that which they already have turns rotten.

The manna also teaches a lesson about the Sabbath, which can be related to socialist values. The people were told to gather two portions on Friday: one for that day and one for the Sabbath, when they were not to go out to collect. Those who went out to gather manna on the Sabbath found there was none in the fields. Thus the Sabbath is to be a cessation from the constant amassing of wealth and possessions, a time for dedication to human values and for appreciation that God's bounties are sufficient if people live in peace and brotherhood rather than trying to get ahead of others.

The Israelites were not satisfied with their simple diet of manna. They cried out for flesh to eat. God and Moses were very angry that the people had not learned the lessons of simple, cooperative living taught by the manna and life in the wilderness. Finally, God relented and provided quails for the people to eat. But while they were chewed on the flesh. a plague broke out and many people died (Numbers 11:4-33). While the manna was the staple food for forty years and kept them in good health, when they deviated from their simple diet and lusted for more, many deaths occurred.

What about the many laws in the Torah related to private property? They no more sanction the worse aspects of corporate capitalism than the many laws in the Torah related to slaves sanction present-day slavery or the laws concerning polygamy are endorsements of that practice. God realizes that the highest ideals of the Torah cannot always be realized and hence provides laws to reduce the damage caused by acts which are permitted as concessions to people's weakness

Significantly, division of property was initially part of the Torah's plan to ensure social equality. Originally, land was distributed by Joshua among the Israelite tribes, using the principle that "To the more [larger tribe] you shall give the greater inheritance, and to the fewer [smaller tribe] you shall give the lesser inheritance" (Numbers 26:54). Hence the first distribution of land was on the basis of social need, not privilege.

To avoid conditions whereby, due to bad fortune, a family might be compelled to sell or mortgage its land and thereby suffer for generations, a complete redistribution of land every fifty years was provided for by the Jubilee law: "In the year of the jubilee, you shall return every man unto his possession" (Leviticus 25:13). This law protecting property rights in ancient Israel was designed to ensure social equality. Hence the Torah's concept of property rights was very different from that of modern capitalism, which tends to lead to great concentrations of wealth, while many people suffer from poverty.

The basis for the Jubilee year, as for other legislation designed to help the unfortunate, such as the laws related to leaving the gleanings of the harvest and the corners of the field for the poor, is the principle that "the earth is the Lord's" (Psalm 24:1). In proclaiming the Jubilee year, the Torah states its reason for the periodic revolution in property rights: "For the land is mine; for you are strangers and settlers with me" (Leviticus 25:23). In light of the Torah, a person's rights to property are not those of an owner, but rather of a steward as co-partner with God in preserving and protecting the earth and seeing that its resources are used for the benefit of everyone. As Rabbi Eleazer of Bertothas says, "Give unto Him of what is His, seeing that you and what you have are His" (Pirke Avot 3:8). King David expressed a similar idea: "For all things come of You and of Your own have we given You" (1 Chronicles 29:14).

Consistent with these principles, the Talmud, though recognizing property rights, did not consider such rights unbounded and limited them greatly, even eliminating them in some instances for the common good. For example, the Halachah (Jewish law) prohibits profit related to "fraudulent misrepresentation" (Baba Metzia 49b). It bans hoarding for the purpose of increasing prices (Baba Batra 90b). The Talmud prohibits the export of articles of food to foreign countries if this would increase the domestic price of these articles (Baba Batra 90b). For the common good, the rabbis even justify the confiscation of private property in some cases (Yebamot 89b; Gittin 36b).

While Judaism sanctions private property, it gives priority to human rights. Hence any hungry person could, without obtaining the owner's permission, help himself to the produce in a field, as long as he did not carry away food to be sold for his own profit (Deuteronomy 23:25,26). The biblical tithe was an obligatory contribution imposed on all, so that "the stranger and the fatherless and the widow shall come and eat and be satisfied" (Deuteronomy 14:29).

No person had absolute control over his own property. A person could be punished for cutting down a young tree in his own garden because he had destroyed what ultimately belonged to God and was to be used for everyone's benefit. A person who owned a well had to make the water available for the needs of the inhabitants of nearby communities. Henry George used the biblical concept of property distribution as the basis for his "single tax system":

Everywhere in the Mosaic institutions is the land treated as the gift of the Creator to His common creatures, which no one has the right to monopolise. Everywhere it is, not your estate, or your property, not the land which you bought, or the land which you conquered, but "the land which the Lord thy God giveth thee..."

Moses not only provided for the fair division of the land among the people, and for making it fallow and common every seventh year but by the institution of the Jubilee, he provided for a redistribution of the land every fifty years.

Consistent with the principle that "the earth is the Lord's" and that we are thus only stewards, custodians, and guardians of what land we "possess," the Talmud stresses that things that are essential to the life of the community should not be owned and controlled by any individual or group. The sages discuss a well of water that was essential to people in a village. They conclude that the title to the well should be maintained in trust by the community, so that it would be open and accessible to all, without cost. Hence Judaism points to social possession and control of all social enterprises essential to life. Ideally, this means that the earth's vast resources are to be held in trust for and developed for the welfare of every person, and not for the enrichment of the few who may have control.

Jewish Support for Socialism

Reform and Conservative rabbinical groups have passed resolutions supporting this principle. In 1934, the Social Justice Commission of the Central Conference of American Rabbis (Reform) stated that for society's safety, basic social enterprises should not be left in the control of private groups, which consider private profit ahead of community service. They advocated nationalization of banking, power plants, housing, transportation and communication systems,

In the same year, the Rabbinical Assembly (of Conservative rabbis) stated that some social enterprises, such as banking and credit, power, transportation, and communication, were so essential to community welfare that they must be publicly owned.

In the late 1800s and early 1900s, many Jews were actively involved in socialist movements in Europe and the United States in reaction to the exploitative conditions they faced. They felt that the salvation of the Jewish people could only come about as part of the salvation of humanity. Morris Hillquit, a Jewish Socialist leader in New York in the early years of the twentieth century, gave a typical view:

I am a socialist because I cannot be anything else. I cannot accept the ugly world of capitalism, with its brutal struggles and needless suffering, its archaic and irrational economic structure, its cruel social contrasts, its moral callousness and spiritual degradation.

Based on such Jewish values as justice, compassion, and concern for the poor, Jews should be in the forefront of efforts to establish economic democracy, an economic system that would provide dignity and human necessities to every person. They should work for democratic socialism using methods consistent with Torah teachings: elevating individuals through religious ethical education, forming worker's cooperatives such as the Israeli kibbutzim, and striving for peaceful and harmonious changes. In view of the severe economic and environmental threats, the widening hunger and the other problems that the pursuit of profits have created or worsened, such a shift is essential.

Recent events in both communist and capitalist countries have shown that the world needs democratic socialism more than ever before. The recent fall of oppressive regimes in Eastern Europe, with the increased attention to their economic and ecological problems has shown the failure of communism. Similarly, the current economic woes in the United States, plus the earlier S and L, HUD and other scandals, and the increasing problems of homelessness, crime, drugs, decaying cities, and pollution, vividly demonstrate the many weaknesses of capitalism. In order to establish a more just and peaceful world, it is essential that there be a shift to democratic socialism.

Religion can and must play a fundamental role in this transformation.

Many people profess to be religious today. It is essential that people become aware that religious values of compassion, sharing, justice, and peace, and biblical concepts such as the sabbatical and jubilee years and the mandate to leave the corners of the fields and the gleanings of harvests for the poor are incompatible with capitalism.

Nothing less than global survival is at stake.


Richard H. Schwartz, Ph.D.
Professor Emeritus, College of Staten Island
Author of "Judaism and Vegetarianism," "Judaism and Global Survival," and "Mathematics and Global Survival," and over 130 articles at
President of Jewish Vegetarians of North America (JVNA)
and Society of Ethical and Religious Vegetarians (SERV)
Associate Producer of A SACRED DUTY (
Director of Veg Climate Alliance (