The Jewish Ethicist: How Far is Wall Street from Las Vegas Boulevard?
Is playing the market unethical?
Q. You've written in the past about the many ethical problems involved with gambling. Isn't playing the stock market just another form of this same vice?
A. It's true that in 1935 the great English economist John Maynard Keynes looked at Wall Street and wrote that the capital development of the United States had become "the by-product of the activities of a casino," and added, "It is usually agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of stock exchanges." It's also pretty unlikely that the experience of the intervening sixty-five years would have done much to change Keynes to change his mind.
However, before we draw any ethical conclusions we should recall that the main objective of the Torah is not the efficiency of capital markets but rather individual spiritual development. From this point of view, there is still a vast difference between the two kinds of speculation.
The Talmud points out two main ethical problems with gambling. One is that the winner often takes unfair advantage of the loser, who is not always fully aware of the adverse odds he faces. The other is that large-scale or professional gambling is generally associated with an anti-social, underworld mentality of contempt for productive work and an "easy come, easy go" attitude towards money. We can easily see these elements at work in a casino, where many bettors are in over their heads and which breed a general environment of vice and immodesty.
These problems are not endemic in the stock market. Let us first examine the problem of exploitation. While there are many unfortunate cases where unscrupulous brokers or business executives take advantage of investors, the vast majority of trades are undertaken by individuals who are well informed about their investments.
If we turn to the social issue, we can see that most people who participate in the financial markets are assiduous individuals whose commitment to social stability is no different than workers in other professions.
Every profession has ethical challenges, and workers in the financial markets need special care to escape the maelstrom of greed that has a particularly strong hold on their line of work. (Regular Torah study is a particularly effective antidote.) But there is nothing inherently unethical or problematic about their work.
SOURCES: Babylonian Talmud Sanhedrin 24b; Rabbi Aaron Levine, Economics and Jewish Law, chapter 7.
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