ש רוזנברג S. Rosenberg

פרשת ויחי: שִׁמְעוֹן וְלֵוִי אַחִים כְּלֵי חָמָס מְכֵרֹתֵיהֶם.

This article draws from Rav Shamshon Rafael Hirsch.

Two Hebrew words for profit, for gain, are Yitron, and Betza. Yitron means ‘expansion’. There is an expansion of goods, services, and value in the economy. Put into Pareto terms, it is possible that everyone can gain, or at the least, that no one loses. So, when Yitron occurs as the result of economic activity and ingenuity, it is a question of distribution of the gains.

Betza is substantively different. It is related to the word Petza which means ‘to wound’. Betza is the type of profit where one person gains at another person’s expense or ‘wounding’. In other words, there’s a ‘zero-sum game’ at play.

The argument is: To the extent that an economy is motivated, organized, and conducted, with reinforcement by legal and financial structures, to achieve Betza, as opposed to Yitron, it is headed for ‘end stage’ failure or collapse. I utilize the term ‘end-stage’ failure much the way the term is used with respect to heart failure or kidney failure. The heart or kidney can be ‘in failure’ and still function, albeit, at a much-diminished capacity, for a while, until… ’end stage’ occurs.

Examples of Yitron abound. Think of innovation and invention that lead to new products, services, or efficiencies. Alas, examples of Betza also abound. Whether or not the reader will agree that the following examples are good examples of Betza, I would suggest that the above-stated argument is still worthy of analysis and debate.

The more common examples are in situations (not every situation) where a seller (or manufacturer) takes advantage of information asymmetry to provide an inferior quality product marketed as a superior quality product. Transaction costs make it prohibitive for the buyer to ascertain the true quality. ‘Marketing’ can be quite convincing, even when patently or mostly false. We all know this from experience. Moreover, in the calculus of the seller, ‘marketing’ costs much less than ‘quality’, and the cost of being revealed is judged to be small.

There is a Mishna in Bava Metzia 4:12 about mixing the wines and advertising superior wine or sifting the bran and cleaning only the top layer: (translation and Bartenura here.)

Of course, this model is predicated on the notion that there is little if any inherent value to integrity and honesty, except for its utility in gaining a profit. (Alas, there is an implicit editorial or, better, lament, here that ‘integrity’ and ‘honesty’ are gone from much of economic life. Oh, we see people claiming these qualities and even putting them onto their product names, but these are lower cost ploys….’marketing’.)

Banks are notorious for Betza. Many (possibly hundreds) of the popular Betza schemes fall under the rubric called ‘predatory lending’ which generates billions in fees (late fees and many hidden fees – that the targeted consumers aren’t keen enough to discern).  The Housing Bubble of the early 2000s may be an example where there was substantial Betza (even though there was some Yitron as well). Banks gave large mortgages to people who could according to the usual financial prudence and calculation could afford (or sustain) only small mortgages.

The reader may be able to think of other economic activity that follows the ‘zero-sum’ game plan or Betza.

I would like to conclude with the notion of Chamas, the Hebrew word which is often translated as robbery or violence. Rav Hirsch translates Chamas as legalized stealing. The sages of the Talmud provide support for this definition by saying that Chamas is stealing less than can be recovered in a court of law. At the time of Noah and The Flood, the world was full of legalized immorality and legalized stealing, Chamas. The decision to let The Flood occur was primarily because of all the Chamas that was the engine of economic activity in the time of Noah.

To this writer, when Betza and Chamas work together (and there is substantive overlap between the two, for sure) and reach some ‘critical mass’ in the economy, ‘failure’ follows. I do hope it’s not ‘end-stage’.

The underpinning of much economic analysis is whether or not consumers are rational in their choices. I would like to offer the notion that consumer rationality is a skill that can be either developed or left in a primitive state. This brief essay utilizes examples in the domain of budgeting to point the way toward educating the consumer to be more skillful in their rationality… or, at least, more reasoned in their choices.

Years ago, when text messaging was commonly an add-on to cell phone plans, my son, away at a high school asked me if he could add a ‘2000-messages-a-month’ option to his plan… and it cost only $10 per month. “Dad, 10 dollars a month isn’t much money.” “True”, I answered, “but let’s do the math. $10 a month would be $120 a year. You would be in high school for 4 years, so now we are up to $480 for this feature. In my high tax state and locality (NYC), this would mean I would have to earn $800 to pay for your text messages. Now, I earn $32 per hour as a Registered Dietitian so I would have to work 25 hours for this. Now, let me be honest, do I want to work a little more than 3 days of my life so that you, my dear son, can have basically unlimited text? No! I would rather take the 3 days off and go mountain biking.”

So, the ‘petty cash’ $10 per month looks quite different, and the consumer’s decision may change when the time horizon of the expense increases and the value of leisure is considered.

These days I am still a Registered Dietitian and I have too many patients with sub-optimally managed diabetes. Many of them are spending $165 to $220 per month for a cable TV subscription which gives them 800+ channels. I suggest to them, “Couldn’t you make do with the cheaper $79 per month plan? You would save between $1032 to $1692 after-tax dollars, which could buy you a lot of blueberries, walnuts, and other healthy foods to help manage your diabetes, and you will still have enough left over for a 4-to-5-day cruise. Or, you could take off an extra week to two from work each year. For what? For simply giving up some channels. And, if you are really ambitious, you could save enough to pay for one 10-day excursion to Europe every three years.”

We, the consumers, are relentlessly being bombarded by offers to sell us things (or services) we would want, where the price is expressed in some incredibly low monthly amount. If the consumer would convert this price into the number of days he could take off from work if he avoided this expense, or what he could have acquired instead if he put the monthly amount into an earmarked savings account, his purchase decision may change. Likely his future purchase calculus would become more reasoned.

Lastly, I suggest to patients (I suppose I choose them because they are a captive audience; at least for their hour-long session of NUTRITION counseling) to go through all the items on which they spend money each month, and look for all the ways they can save money by making some minor changes. For example, it is reliably estimated that using power strips for appliances and turning them off when not needed can save between $6 to $12 per month, which annually comes to $72 to $144 for the mere act of reaching down to turn off (and on) the power strip. I challenge them if they cannot come up with $150 per month in savings, incurring minimal disutility or minor reduction in features or conveniences. That would be $1800 after-tax dollars, another cruise with an unlimited bar and a room upgrade, or 3 to 4 weeks off from work.

Here’s a reverse example. I recently leased a new car for $289 per month with all the myriad of upfront fees – many of which seem to me ridiculous and extortionary – folded into the rate. It also includes $18 per month for a $5000 damage waiver.  Many people I know do not opt for the damage waiver because they calculate that over the 36-month lease, the total cost of the waiver is $648, which is about $1000 in pre-tax dollars. However, here they ought to think about the lease return experience of nearly every returnee, who gets hit with a bill for between $1500 to $3500 for repairing all the small dings and dents and cracks that occur inevitably.

The import of these examples is not whether or not consumer choice is rational. It’s that by teaching consumers to include other facets such as time horizon and the value of leisure or work avoidance in their calculus, they may make more skillful or reasoned choices.

Letter to the Editor

There is an alternative, even simple way to free Rubashkin, using investigation tools we are allowed even as private citizens. It requires several reasoned steps.

If the prosecutor and judge in some way conspired – or if we don’t like such a strong word – use the word ‘inclined’ – to construct the case in a way that would ensure a mandatory long term sentence, then this would mean that they believe ‘the end justifies the means’ and they do not give weight to their oath of integrity and faithfulness to the principles of fairness and justice.

If this were the case then this means that there is quite likely something in their personalities that would allow them to utilize ‘extra-legal, even dishonest and deceptive, means to accomplish some end. This means that they likely would have used their ease of employing dishonesty at some earlier stage or stages in their careers, such as lying about some important credential or qualification.

So all that is needed is to hire a lawyer and private investigator to find some substantive flaw in their resumes or applications for their jobs as judge and/or prosecutor. To be clear, if they were dishonest in how they set up the Rubashkin case and trial, then it is highly likely that, with a  thorough and legal investigation, one would be able to find a substantive lie or misrepresentation in their credentials that would lead to their being dismissed from their positions as judge and/or prosecutor.

It could be strongly argued that a falsehood of such import means they weren’t qualified for their positions in the first place. This would give good reason to throw out the case against Rubashkin, especially in light of the many briefs of former Attorneys General and practicing legal scholars who raised serious questions about the fairness of the trial in the first place. Now we understand it. The judge and or prosecutor were never qualified to serve in those roles.

Again, it would be likely to find a ‘fatal flaw’ in their representation of their qualifications, if we are correct that they ‘inclined’ to set up the case in a most unfavorable way.

Another way to free Rubashkin is if the judge and prosecutor ever had a close personal relationship, not just professional. Perhaps in college, or surreptitiously at legal ‘conventions’ and ‘conferences’. This too could be uncovered by a good private investigator. If they ‘conspired’ against Rubashkin, then it could be ‘love’, ‘S&M’, ‘well known mutual hate for some class of citizens’, or some other ‘glue’ that bound them together in the past and influenced them at the time of the case and trial.

I hope I made the reasoning clear enough for someone with financial means and interest to hire the necessary lawyer and investigative team.