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Ben Franklin's Loophole

May 9, 2009 | by Yisrael Rutman

While honesty may be the best policy, there are other policies, like tax evasion, insider trading and phony profits, that are also very good.

"Honesty," said Benjamin Franklin, "is the best policy." Two centuries after him, more than a handful of America's corporate leaders seem to have found a loophole in the Founding Father's maxim: While honesty may be the best policy, there are other policies that are also very good. At they thought that $9 billion dollars in phony profits was a very good policy. At Arthur Anderson they thought that destruction of evidence was a very good policy. Analysts at Merrill Lynch thought that false stock ratings was a very good policy. Samuel Waksal, formerly of ImClone, thought that insider trading was a very good policy. Tyco's L. Dennis Kozlowski thought that $1,000,000 in tax evasion on artwork was a very good policy...

The gallery of greed gets bigger almost by the day, as more and more allegations of criminal wrongdoing come to light. We have yet to see to what extent this "infectious greed," as Alan Greenspan called it, has spread.

But the focus on the fallen giants of corporate America has in it an element of scapegoating. As Washington Post columnist Robert Samuelson has pointed out, the current dismal state of the economy is not due exclusively to the misbehavior of the guys with the gold cuff links. Between 1996 and 2000, Americans poured $1.1 trillion into mutual funds. Everyone thought they could get rich quick on the stock market. "Greed went democratic," observes Samuelson.

A fabric of dishonesty exists at every stratum of society.

Nor is the problem limited to the stock market. It reflects a fabric of dishonesty that exists at every stratum of society.

A recent New York Times report on theft in the trendiest eateries in America revealed that their well-heeled customers are taking home everything that isn't nailed down, and some things that are. From $3 water glasses to $1,200 ice buckets and designer sconces set into the walls, the folks like the stuff so much that they just had to take it home with them. Restaurants expect to lose 2 to 3 per cent of their service ware over the course of a year, and it all gets figured into the rising prices on the menu. Not all of the culprits are CEO's, either.

At NASA, that citadel of clean-cut Americanism, three space center employees have been charged in a plot to sell stolen moon rocks from the Apollo missions for $1,000 to $5,000 a gram. A safe containing moon rocks and meteorites was stolen from the Johnson Space Center in Houston on July 15. It contained lunar samples from every Apollo mission."(AP, July 25, 2002)

And as a recent study of American teenagers done by the Joseph and Edna Josephson Institute of Ethics shows, some 35% of all students polled admitted that they had been guilty of stealing merchandise from stores last year. (And 70% admitting to cheating on tests!) (Milwaukee Sentinel Journal, October 19, 2001.)

Of course, there is nothing new in all this. Nobody here invented stealing. As Alan Greenspan said, it is not that the leaders of corporate America are greedier than they used to be, it's just that the opportunities to satisfy that greed have lately been greater than ever.

Indeed, society has suffered from it from time immemorial. The sages of the Talmud teach that of all the wrongdoing that human flesh is heir to, theft is the most common. The sealing of the decree of the destruction of Sodom and Gemorrah was for robbery; the one battle that the Israelites lost during the conquest of the Promised Land under Joshua was due to the immoral act of one soldier, Achan, who stole some of the gold and silver; the prophet Isaiah rebuked the people for selling watered-down drinks (Isaiah 1:22); and the Midrash says that Ruth had to arrange her late-night encounter with Boaz out in the field because he had to sleep there with the barley harvest in order to ward off local thieves.

What To Do?

The infection of greed will not be eradicated by government regulation, but by self-regulation.

The response of American government -- to increase penalties for corporate crime and implement a more effective regulatory structure -- is laudable. But ultimately, the infection of greed will not be eradicated by government regulation, but by self-regulation. Otherwise, just as the CEO's and accountants have conspired to circumvent the existing laws, so they will find ways to outsmart or outrun the new ones. Nor can we realistically expect the heads of business, who operate at a level where the temptations are greatest, to be more moral than the rest of society. It is not the problem of a handful of transgressors, but of an entire culture of dishonesty. There is a cynicism toward immoral acts. Everything becomes accepted because "everybody does it." But if we can regain our sense of outrage at such immoral behavior, then we have a chance at the moral recovery that will make possible the long-term economic recovery that everyone is seeking.

Jewish tradition, which unflinchingly records the iniquities of past generations, also outlines the path back to honesty. Indeed, the very definition of theft in Jewish law -- more far-reaching than anything one might imagine -- shows the way. For theft, in the eyes of the Torah, includes the prohibition against not only using false weights, but making them, as well. Just dipping a weight in salt to make it heavier, as the old trick was played, was branded as theft. In Jewish law, delaying the payment of wages is not merely not a nice thing, it is a crime that the Bible itself proscribes. Even disturbing another person's sleep, and depriving him of his rest, is considered to be a serious violation of another's rights.

If those things are categorized as theft, then the brazen act of actually taking what belongs to another becomes virtually unthinkable. Thus does Jewish law keep us off the slippery slope toward infectious greed.

Nor is the Torah calm about these matters. Even the seemingly minor infraction of dealing in false weights comes in for scathing attack. The Midrash (Toras Koahanim cited by Rashi to Leviticus 19:35) calls it "hated, abhorrent, disgraceful and abominable." Imagine what they would have said if they'd had a thesaurus back then?

If the old thumb on the scale is so reviled, what can be said of someone who actually reaches out and takes what belongs to another? Or defrauds him of his life savings?

To err is human; to be outraged at it is Divine.

Our sages and prophets did not lose the capacity for moral outrage. Nor would they let anybody else forget the standards of honesty that God expected of them. To err is human, they taught -- to be outraged at it is Divine.

We, too, cannot afford to lose our ability to be shocked and disgusted by the sight of theft and dishonesty, whether on the level of the local supermarket or the on the scale of multinational conglomerates. So we can take comfort in the public outcry against the guys with gold cuff links who plunder the public trust. For it's not only those who have personally been hurt through the loss of jobs or their stocks' value that are crying out. It's more than a matter of what such scandals do to investor confidence and the health of the economy. It is also a feeling of repugnance at the rottenness at the core of American society.

Jay Leno said it well. Comparing the heroic rescue of coal miners in Pennsylvania with the latest malefactors of wealth, he exclaimed, "It's great to see real men back in the news; I'm so sick of weasels."

Ben Franklin, shrewd as he was, left a loophole. In Jewish tradition, however, there is no loophole. For as King Solomon, the wisest, and in his time, the richest of men, said: "An honest man shall abound in blessings; but he who makes haste to be rich shall not go unpunished (Proverbs 28:20)."

My thanks to Rabbi Mendel Weinbach for the inference in Franklin's maxim and to HaModia's Tales of Hashgacha Pratis for the comparison between Franklin's maxim and the verse in Proverbs."

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