Volume 15 Number 59
Produced: Sun Oct 9 0:58:20 1994
Subjects Discussed In This Issue:
Ona'ah
[Meylekh Viswanath ]
Racism
[David Charlap]
Response to Ona'ah: questions
[David Neustadter]
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From: Meylekh Viswanath <PVISWANA@...>
Date: Wed, 5 Oct 1994 21:16:46 EST5EDT
Subject: Re: Ona'ah
Seth Weissman writes re ona'ah:
> Ona'ah prohibits profiting from another's lack of knowledge.
>
> I have heard that while one
> may not take advantage of a non-jew's lack of information (i.e.;
> overcharge), one is not required to correct their misinformation (tell
> them the true value). This is confusing because it leads to the
> following situation:
>
> A non-jew wishes to buy something that a jew wishes to sell. This opens
> up the opportunity for a mutually beneficial transaction (economists
> call this a Pareto Effecient transaction).
More precisely, Pareto-improving
> We run into a problem,
> however, when the non-jew overestimates the value of the object he/she
> wishes to buy (and is therefore willing to pay above market value for
> it). The jew is simultaneously prohibited from taking advantage of the
> non-jew's lack of knowledge, and has no responsibility to correct the
> problem (by telling the non-jew the true value, and then selling the
> object for that value.) This may act as a barrier to transactions and
> prevent both the non-jew AND THE JEW from benefiting from the
> potentially mutually beneficial transaction (which is conceptually very
> similar to suffering a loss.)
There is no requirement that the jew _not_ enlighten the non-jew.
He/she could do so, and then conduct the Pareto-improving transaction.
> 2. Why are interest and ona'ah treated so differently in halachah?
>
> The paradigm of the interest prohibition concerns a case where the
> borrower experiences either illiquidity or poverty and needs capital or
> money to avert some loss. The introduction to interest (Lev. 25:35)
> begins with the phrase 'ki yomuch achichah,' or when your friend is in
> need. While the prohibition of interest extends to many other cases
> (including commercial loans), the basic prototype of loan is a personal
> loan for someone suffering some sort of hardship.
>
> Any sort of interest is prohibited, and this may again be related to the
> prototype loan. To avoid loansharking and excessive interest rates, the
> Torah prohibits any sort of interest. This is necessary because the
> borrower presumably wants to borrow the money, and will accept a high
> one and lie, protecting the loan shark, claiming the rate was a
> reasonable one, or the loan was commercial in nature (and thus
> permissible.) To avoid this situation, NO interest can be charged on
> ANY loan (notwithstanding heter iska). The purpose here is to prevent
> the lender, from taking advantage of a superior bargaining/negotiating
> position.
This assumes that there is no competition for providing liquidity. Why is
this assumption reasonable? To give an example, suppose it's close to
shabes, and you need a light bulb to provide light for your dining room
over shabes. You are willing to pay as much as $10 for a light bulb, yet
when you go to the hardware store, he sells you the light bulb for $0.50
(or whatever the market price is). Even if you tell him you are desperate
for a light bulb, he will not up the price (even if you are a stranger, and
it's a one-time sale), because if he doesn't sell it to you at 0.50, you can
go next door and buy it at $0.50.
> However, one is permitted to overcharge by more than a sixth if
> a) the overcharged individual KNOWS he/she is being overcharged, and
> b) the amount of the overcharge is known as well (in other
> words, there is full revelation of information).
>
> So, compare these two scenarios:
>
> A) Miriam needs to borrow $100 to pay for her child's medical bills.
> Shimon offers to lend her the money for one week at a 100% rate of
> interest (In other words, she must pay him back $200 in one week).
> Shimon's Rabbi will tell them the transaction violates the prohibition
> of interest.
>
> B) Again, our Miriam needs $100 dollars. This time, however, Shimon has
> learned from his mistake nad offers her $100 for her $200 wedding band.
> He says "I'll offer you $100 for that $200 ring." The value exchanging
> hands is the same, but this time the Rabbi agrees that this transaction
> does not violate ona'ah because Miriam knows the value of what she is
> selling.
I presume that in your scenario, Shimon ties the purchase of the $200
ring for $100 to the loan. If so, then it's at least 'avak ribis' and is
prohibited mi de-rabbanan (rabbinically). If the purchase is not tied to
the loan, then Shimon has no legal way to ensure that he gets his
'interest.' Shimon, therefore, has no way to use the laws of ona'ah to
collect his interest. And even if Shimon does not make such a
stipulation, he may not consummate the purchase of the $200 ring for
$100 if he knows that Miriam is going through with the transaction to
compensate him for the loan. Similarly, Miriam may not go through with
the transaction, because it is as much forbidden to receive interest as to
pay it.
If your point is that in one case (the loan), Shimon is prohibited from
receiving 'extra,' while in the other (the purchase of the overvalued ring)
Shimon is allowed to get 'extra,' there is no problem. The deciding
factor is the circumstance in which Shimon gets the extra. If it's in the
context of a loan, it's not permitted. Otherwise, it is. For example, if
Miriam wanted to give Shimon a gift (unrelated to a loan), she may.
Meylekh Viswanath
P.V. Viswanath, Rutgers University
Graduate School of Management, 92 New St, Newark NJ 07102
Tel: (201) 648-5899 Fax: (201) 648-1233 email: <pviswana@...>
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From: <david@...> (David Charlap)
Date: Tue, 4 Oct 94 12:09:24 EDT
Subject: Re: Racism
Frank Silbermann <fs@...> writes:
>
>I don't think you can assume the axiom "racism is bad" was derived
>from modern liberalism. One may assume this to be a Jewish value;
>otherwise those of us with extensive Jewish educations would have
>been taught racism in school.
What? You mean to say that if an idea is not Jewish, then its opposite
is always taught in school? What's wrong with the (more likely)
possibility, that neither racism, nor opposition to racism is taught?
>Cantor (w/smicha) David Neumark told me that when he was in the Brisker
>Yeshiva, some boys studying the curse of Noach made snide remarks about
>the local Blacks. As he put it, "The Rov BLEW HIS TOP! He shouted,
>`YOU CANNOT USE TORAH TO JUSTIFY BIGOTRY!'" Given Rav. A. Solevetchik's
>reputation, I think it's safe to accept "racism is bad" as an axiom.
No. It's safe to accept "bigotry is bad". The two are very different.
A bigot tells everyone he's in favor of equality, but acts otherwise. A
racist doesn't hide his true feelings.
That aside, the comment must be understood in context. The students
were using a piece of Torah to justify hatred and persecution of a group
of people. This has nothing to do with "racism" - this is a case of
Sinat Chinam (baseless hatred) which if made public could lead to
Chillul Hashem (disgracing God's name). What Rabbi Solovetchik was
opposed to was thses students using the "curse of Canaan" (not of
Noach!) as justification to commit two very great aveirot.
>> ... we are commanded to pursue all courses of action which lead
>> to the sanctification of the Name in this world and to the good name
>> of the Jewish people. And we must do all this without worrying
>> whether Jews are superior to non-Jews or not.
>
>That certainly condemns the behavior which motivated this thread.
Absolutely, but it doesn't say a thing about racism. As a matter of
fact, it does imply that there is nothing wrong with (although possibly
nothing right with, either) racist attitudes as long they don't
translate into actions.
One is never held guilty for his thoughts, although he should be very
careful that "wrong" thoughs don't become wrong speech and wrong
actions.
>Also, I am uncomfortable with the idea of "keeping secrets."
I agree here. But there's a difference between keeping secrets and
announcing everything you know to the world around you.
If you (in a moment of weakness, perhaps) ate a hamburger at a
non-kosher restaurant and nobody noticed (you weren't wearing anything
obviously Jewish), it's a secret. And you gain nothing (and may lose
quite a bit) by making that secret public.
If you know of some Jews commiting aveirot, you shouldn't take it upon
yourself to announce this to the world. It would be wrong to lie if
you're explicitly asked, but you serve no purpose in telling the world
simply to avoid keeping secrets.
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From: David Neustadter <david@...>
Date: Tue, 4 Oct 1994 13:36:52 +0200
Subject: Response to Ona'ah: questions
Seth Weissman asks regarding Ona'ah:
> Is one allowed to overcharge a non-jew? I have heard that while one
> may not take advantage of a non-jew's lack of information (i.e.;
> overcharge), one is not required to correct their misinformation (tell
> them the true value). This is confusing ...
It seems to me that what you describe here is the same as the halacha
for a Jew? If you were required to tell a Jewish customer what the
market value was, then there would be no halacha of Ona'ah, because once
he knows the market value, you could charge him anything he agreed to
pay.
Seth's second question really had me thinking.
The question is why in Ona'ah, if both parties know the market value,
then anything they agree to is allowed, whereas in interest, it is not
permissible to charge (or pay) interest even if both parties agree.
Seth comments:
> So, compare these two scenarios:
>
> A) Miriam needs to borrow $100 to pay for her child's medical bills.
> Shimon offers to lend her the money for one week at a 100% rate of
> interest (In other words, she must pay him back $200 in one week).
> Shimon's Rabbi will tell them the transaction violates the prohibition
> of interest.
>
> B) Again, our Miriam needs $100 dollars. This time, however, Shimon has
> learned from his mistake nad offers her $100 for her $200 wedding band.
> He says "I'll offer you $100 for that $200 ring." The value exchanging
> hands is the same, but this time the Rabbi agrees that this transaction
> does not violate ona'ah because Miriam knows the value of what she is
> selling.
>
> Does this seem odd to anyone out there?
Actually, these particular scenarios I think I can handle. The way I
understand it, Ona'ah and interest are two very different concepts.
Ona'ah deals with the current value of an object, which might be
different to different people. Interest deals with the present vs. the
future value of objects or money.
The reason Ona'ah is allowed as long as all information is out on the
table, is that it's perfectly reasonable for an object to have different
values to different people. In interest, on the other hand, one is
saying that because of their current situation, an object is worth more
to them now than it will be next week. This is not necessarily
reasonable, considering that no one knows what will happen next week. I
believe that this is what the halacha against charging interest is
designed to protect us from.
In the particular scenarios mentioned, I believe this difference
explains the difference in halacha. In the first case, Miriam is
commiting to a future debt of $200, in exchange for receiving $100.
This is not a generally good thing to do, because who knows what medical
bills she will have to pay next week. In the second case, however, she
has made no commitments for the future. She sold her wedding band at
less than market value because it was worth less to her because of her
current situation. What's wrong with that? She sold it for what it was
worth to her at the time when she sold it.
There is however, another set of scenarios which are even more similar,
which I'm not sure what to make of:
1) Miriam desperately needs a drug that Shimon sells. It's market value
is $100, but Miriam has no money. Shimon offers to lend her the $100 to
buy the drug, if she pays him back $200 next week. --not allowed--
2) Same situation, but this time Shimon offers to sell her the drug for
$200, and lend her the $200 for a week (what a great guy!). Would this
be allowed?
I really don't know. On the one hand, Miriam could borrow the $200
with no interest, and then go buy the drug from someone else for $100.
Or could Shimon agree to lend her the money only on the condition that
she buy the drug from him for $200. Would this be allowed?
Even if case 2 would be allowed, it still is not necessarily a problem.
We have two halachot which deal with two different concepts. If the two
concepts happen to both be able to effect a particular outcome, one
legally and the other not, this is not a problem. In most cases the
difference between these halachot makes perfect sense. Think of this
case as an allowable result for which there happens to be an illegal
method as well as the legal one.
Hope this is helpful,
David
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End of Volume 15 Issue 59
