|Articles from the Center for Business Ethics and Social Responsibility by Rabbi Yoel Domb|
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Dr. Meir Tamari
Competition: Justice and Mercy
Dr. Meir Tamari
Competition, in a moral perspective, is one of the most complicated area of all economic activity. Unlike most forms of dishonesty, oppression or physical damage, it is legal, efficient and usually beneficial, so that the ethical problems are obscured and often difficult to define or to discuss. However, some players in the marketplace, such as entrepreneurs, producers and workers, may suffer as a result of such competition. Conversely, in the absence of competition, consumers, new entrepreneurs and new entrants into the labor market often suffer. In both cases, a moral problem exists. Alternative solutions to the moral problems raised by competition are usually viewed as a balance between efficiency and equity. A Jewish perspective would perhaps rather see the whole issue as a balance between justice and mercy. This is a perspective that has consequences different from the usual academic view.
hasagat gvul, encroachment on the boundary of another's property. Considering the issue of free entry of new firms, the Shulchan Arukh rules that the veterans do not acquire a property right simply because they came first. However, where the incumbent has acquired a property right through licensing, medallion, natural resources, etc., competition is not permitted. Regarding the entry of foreign firms, the Rashbah rules that the local merchants do not enjoy a property right to monopolize trade, provided that the foreigners participate in the local tax burden.
Tzedakah, it seems that they would bear a responsibility (though limited), to assist the displaced entrepreneurs to reestablish themselves. In labor relations, the unequal power of workers versus the employer may lead to a depression of wages beyond reasonable living conditions. Here Judaism recognizes the right of unionization to improve the bargaining power of workers and the obligation of society to adopt macro-economic charitable policies.
Dr. Tamari is the former chief economist of the Office of the Governor at the Bank of Israel, and the founder of the JCT Center for Business Ethics and Social Responsibility.