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The Jewish Ethicist:  How Far is Wall Street from Las Vegas Boulevard?

The Jewish Ethicist: How Far is Wall Street from Las Vegas Boulevard?

Is playing the market unethical?

by

Q. You've written in the past about the many ethical problems involved with gambling. Isn't playing the stock market just another form of this same vice?

A. It's true that in 1935 the great English economist John Maynard Keynes looked at Wall Street and wrote that the capital development of the United States had become "the by-product of the activities of a casino," and added, "It is usually agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of stock exchanges." It's also pretty unlikely that the experience of the intervening sixty-five years would have done much to change Keynes to change his mind.

However, before we draw any ethical conclusions we should recall that the main objective of the Torah is not the efficiency of capital markets but rather individual spiritual development. From this point of view, there is still a vast difference between the two kinds of speculation.

The Talmud points out two main ethical problems with gambling. One is that the winner often takes unfair advantage of the loser, who is not always fully aware of the adverse odds he faces. The other is that large-scale or professional gambling is generally associated with an anti-social, underworld mentality of contempt for productive work and an "easy come, easy go" attitude towards money. We can easily see these elements at work in a casino, where many bettors are in over their heads and which breed a general environment of vice and immodesty.

These problems are not endemic in the stock market. Let us first examine the problem of exploitation. While there are many unfortunate cases where unscrupulous brokers or business executives take advantage of investors, the vast majority of trades are undertaken by individuals who are well informed about their investments.

If we turn to the social issue, we can see that most people who participate in the financial markets are assiduous individuals whose commitment to social stability is no different than workers in other professions.

Every profession has unique ethical challenges, and workers in the financial markets need special care to escape the maelstrom of greed that has a particularly strong hold on their line of work. (Regular Torah study is a particularly effective antidote.) But there is nothing inherently unethical or problematic about their work.

SOURCES: Babylonian Talmud Sanhedrin 24b; Rabbi Aaron Levine, Economics and Jewish Law, chapter 7.

Send your queries about ethics in the workplace to jewishethicist@aish.com

The Jewish Ethicist presents some general principles of Jewish law. For specific questions and direct application, please consult a qualified Rabbi.

The Jewish Ethicist is a joint project of Aish.com and the Center for Business Ethics, Jerusalem College of Technology. To find out more about business ethics and Jewish values for the workplace, visit the JCT Center for Business Ethics website at www.besr.org.

JCT Center For Business Ethics

Copyright © JCT Center for Business Ethics.

Published: August 24, 2002


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Visitor Comments: 1

(1) Anonymous, August 31, 2002 12:00 AM

To the contrary...

"The Talmud points out two main ethical problems with gambling. One is that the winner often takes unfair advantage of the loser, who is not always fully aware of the adverse odds he faces. The other is that large-scale or professional gambling is generally associated with an anti-social, underworld mentality of contempt for productive work and an "easy come, easy go" attitude towards money. We can easily see these elements at work in a casino, where many bettors are in over their heads and which breed a general environment of vice and immodesty. These problems are not endemic in the stock market."

Many would argue to the contrary, just consider the untold number of folks who have buried their whole life's savings into mutual funds, and 401K plans heavily invested in company stock. This probably represents the typical investor who has no clue just how risky the whole venture is. Many would argue that these were not as well informed as you claim, or they would not have lost so much money.

And consider that many invest in the market with the hope of making a lot of "easy money", that parallels your point that casinos can be associated with "a contempt for productive work and an 'easy come, easy go' attitude towards money". The phenomenon of day trading reveals the truth of this.

As far as the breeding of criminal mentality, you don't have to go much further than Martha Stewart Inc., Enron, and WorldCom to see evidence of that.

Another telling sign is terminology and lingo. Phrases like "playing the market" and similar gambling lingo used to be a common for those involved in Wall Street investing. As the masses became de-sensitized to the risk involved, use of such lingo has been less common.

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