Price-Controls in Jewish Law
53 Pages Posted: 7 Aug 2016 Last revised: 20 Mar 2017
Date Written: March 19, 2017
Economists generally agree that price controls are almost always self-defeating, generally producing undesirable, perverse consequences and failing to accomplish their intentions. Previous scholarship has explored whether the halakhah (Jewish law) of ona'ah (fraud) constitutes a price control. However, less attention has been paid to the similar law of hayyei nefesh (essential foodstuffs) – also known as hafka'at she'arim (profiteering). Neither has criticism been directed towards arbitrary price controls imposed by the corporate, democratic Jewish community, nor to the Talmud's restrictions of speculation and middlemen. This essay argues that while the law of ona'ah is not a price control, the hayyei nefesh/hafka'at she'arim ordinance is one. Economic theory demonstrates that like all price controls, the hayyei nefesh/hafka'at she'arim law, corporate communal price controls, and restrictions on speculation and middlemen are all self-defeating because the means conflict with the ends sought. The conflict between religion and science is therefore not limited to cosmology and biology, but may include economics as well.
Keywords: price controls, price fixing, just price, Jewish business ethics, religious economics
JEL Classification: A12, B11, D00, K20, P00, Z12
Suggested Citation: Suggested Citation