When recently researching an article on negotiation ethics, I found myself immersed in the ancient writings of the Talmudic sages. I was amazed to see how these early writings in the Torah and Talmud, as well as Jewish law, Halakhah, have impacted how we conduct our business and personal negotiations in the 21st century.
According to many of the early Talmudic writers, since the entire purpose of commerce is to create brotherhood and mutual trust, then anything which contradicts this is not only inexcusable in itself, it frustrates the very purpose of commerce.
This article is not necessarily concerned with the exact Jewish law in business situations. We will focus on the essence of the law, demonstrating that many ethical issues of today had their origins in the Bible and the Talmud. We will also see how other aspects of Jewish life have impacted our conduct of business.
The Talmud, which is the compilation of Jewish oral law, explains and expounds on the Hebrew Bible and consists of the Mishna and Gemara. The Mishna, originally an oral tradition, was compiled and edited in written form about 1,800 years ago. The Gemara, which consists mainly of commentaries on the Mishna, was completed approximately 1,500 years ago.
The Talmud is principally concerned with Jewish law, but it also provides a detailed record of the beliefs of the Jewish people, their philosophy, traditions, culture and folklore. The Midrash, a separate body of Jewish literature, recorded the views of the Talmudic sages and is mainly devoted to the exposition of biblical verses.
Many of the ethical tenets that are found in the Talmud are the basis of today’s negotiations and business law. In fact, many of these tenets that governed the Bet Din, the Jewish court of law, find parallels in laws that govern contracts, contract negotiations and competitive business practices. For example, the Talmud forbids an individual from interfering with the ongoing negotiations. This is similar to the concept of “contractual interference” which is a tort in common law. To take it a step further, the marriage contract, the Ketubah, details the obligations of the groom Hatan towards his Kallah, bride. Prior to the bride’s and groom’s acceptance of the Ketubah, the Tenayim, a mutual agreement between two sets of parents, is signed. This demonstrates that these families agree to go forward with the upcoming wedding. This is similar to a letter of intent that parties sign when beginning a business relationship. Today’s business contracts also spell out the obligations of each party and are signed by the parties and in many cases witnessed as is the marriage agreement.
Lying is also forbidden if it is going to cause an injury to the other person. Little white lies are permitted if they prevent injury. Businessmen are discouraged from positioning their business in a location that would cause the owner of an existing business from providing for his family. They are encouraged to locate somewhere else where there will be no damage to an existing business.
When it comes to buying a product, the Talmud cautions not to show interest in a product unless there is a genuine intent to purchase. Only an individual who has some interest in purchasing a product has the right to inquire about a price. Otherwise you raise the hopes of the seller that they would have a sale, when in fact they don’t. Geneivat Da’at (the stealing of knowledge) is conduct designed to deceive or create a false impression and is forbidden. These statements can be found in Beva (Bava) Metzia 58b.
It is fascinating that the writers of the Talmud showed such insight into consumer behavior long before formal market research was developed. They also showed an appreciation for the psychological elements of bargaining. The strategies involved in any negotiation can be complex and be influenced by the profit motive. The theory of Umdana in Ketubbot 97a retroactively voids a transaction when it is evident that if certain information had been known at the time of negotiation, the transaction would not have been concluded. In today’s world, we put the onus on the buyer to be prepared for any negotiation and not on the seller to be ethical and share the information that is pertinent to the decision making process.
The rabbis caution us not to use sharp practices, such as lies and deceit. This is evidenced in the parable of the negotiations between Ephron and Abraham over the Cave of Machpelah. Abraham’s wife Sarah died, and Abraham needed a place to bury her. He was desperate for a burial plot. Ephron, knowing this, realized that he could overcharge Abraham and probably still get his asking price. Ephron was interested in posturing before his countryman and looking generous, he offered the land free, but mentioned it was valued at 400 shekels. In later commentary, the rabbis point out that Jeremiah paid 17 shekels for property that was better. In later commentary the rabbi points out that Ephron was taking advantage of Abraham’s plight, which is not ethical. As the Torah commands in Exodus 23:7, “Distance yourself from every falsehood.”
The Talmudic sages thought that business ethics were so important that Rava claimed that the first question an individual is asked in the world to come at the final judgment is, “Were you honest in your business dealings?” [Shabbos 31a] Rabbi Yehudah stated that one who wishes to become pious (i.e., reach the highest form of ethical behavior) must be scrupulous in observing the laws dealing with damages and torts. [Bava Kama 30a] Rava said that the way to reach this high level of ethics is to observe the principles contained in the Talmudic tractate of Avot. The Mishna in Avot 5:10 states that a pious person follows the philosophy that “mine is yours and yours is yours,” the antithesis of the wicked person whose philosophy is “mine is mine and yours is mine.” A simple rule of business ethics can also be derived from Hillel’s philosophy in Avot: 1:14, “If I am not for myself, who will be for me? And if I only care for myself, what am I?” If an organization is to achieve its goals (e.g., profit, market penetration) it must also care for its employees and for others.
It would be safe to say that the examples of ADR(alternative dispute resolution) are in the Talmud. Jay Isenberg states in his article, “ADR and the Talmud,” that navigating the Talmud’s intellectual and spiritual intricacies is in many ways similar to an ADR neutral’s search for the truth and fairness in the dispute resolution processes.”
Jay continues by saying that most disputes do not involve complex legal issues, rather a breakdown in communication, a loss of trust, a challenge to integrity, which now precludes the possibility to resolve the dispute on their own through negotiation. He states that serving as an ADR neutral, he is taking part in the tradition of Talmudic discourse, the argument, the positing and witnessing the unwinding of a great drama that unfolds before you as an arbitrator or mediator. It was not unusual for a rabbi to serve as a mediator or even an arbitrator when it came to disputes between individuals or families. This tradition continues today with the establishment of professional mediators and arbitrators.
So let’s recap the many influences these ancient texts have had on our approaches to the conduct of business and our daily lives.
1. We should not interfere with the ongoing business relationships of others in order to increase our own business.
2. We should not enter into any agreement unless we clearly understand the obligations of each party.
3. When it comes to buying a product, you do not show interest unless you intend to purchase it.
5. Do not use sharp practices, such as lies and deceit.
6. Maintain, trust, integrity and communication in our dealings, so we do not create an avoidable impasse.
Many of us have been applying these principles in our daily business dealings without recognizing that they had their roots in the Talmud and Jewish traditions.
I would like to thank Rabbis Marc Berkson and Dena Feingold for their assistance in the preparation of this article. I must also recognize the counsel and assistance of attorney Bradley Backer for his insights into the current body of law and how it relates back to the Talmudic writings.
