An Economic Lesson from the Biblical Joseph, by Way of Friedrich Hayek

Dec. 15 2017

In this week’s Torah reading, Joseph becomes the second most powerful man in Egypt after successfully interpreting Pharaoh’s dream as a portent of seven years of plenty followed by seven years of famine. Tasked with preparing the country for the lean years, Joseph acquires enough surplus grain during the fat ones to feed the people for the duration of the famine. In what happens next, Jonathan Sacks finds an important insight about economics and freedom:

When the people ran out of money during the lean years, Joseph told them to trade their livestock. When this too ran out, he arranged for them to sell their land to Pharaoh with the sole exception of the land belonging to the priests. The Egyptians were now, in essence, Pharaoh’s serfs, paying him a tax of 20 percent of their produce each year [to rent back the land that they had sold].

This nationalization of livestock, labor, and land meant that power was now concentrated in the hands of Pharaoh, and the people themselves reduced to serfdom. Both of these developments would eventually be used against Joseph’s own people, when a new Pharaoh arose and enslaved the Israelites. It cannot be by accident that the Torah twice uses about the Egyptians the same phrase it will later use about the Israelites: avadim l’faro: they have become “Pharaoh’s slaves” (Genesis 47:19, 25). There is already here a hint that too much economic power in the hands of the state leads to what [the great Anglo-Austrian economist] Friedrich Hayek called “the road to serfdom” and the eclipse of liberty.

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More about: Economics, F. A. Hayek, Hebrew Bible, Joseph, Religion & Holidays

Jerusalem’s Economic Crisis, Its Arabs, and Its Future

Oct. 18 2018

The population of Israel’s capital city is 38-percent Arab, making Arab eastern Jerusalem the largest Arab community in the country. Connected to this fact is Jerusalem’s 46-percent poverty rate—the highest of any Israeli municipality. The city’s economic condition stems in part from its large ultra-Orthodox population, but there is also rampant poverty among its Arab residents, whose legal status is different from that of both Arab Israelis and Palestinians in the West Bank. Haviv Rettig Gur explains:

Jerusalem’s Arab inhabitants are not Israeli citizens—in part because Palestinian society views acceptance of Israeli citizenship, [available to any Arab Jerusalemite who desires it], as acceptance of Israeli claims of sovereignty over the city, and in part because Israel is not eager to accept them, even as it formally views itself as having annexed the area. Nevertheless, they have a form of permanent residency that, unlike West Bank Palestinians, allows them unimpeded access to the rest of Israel. . . .

There are good reasons for this poverty among eastern Jerusalem’s Arabs, rooted in the political trap that has ensnared the Arab half of the city and with it the rest of the city as well. Right-wing Israeli political leaders have avoided investing in Arab eastern Jerusalem, fearing that such investments would increase the flow of Palestinians into the city. Left-wing leaders have done the same on the grounds that the Arab half would be given away in a future peace deal.

Meanwhile, eastern Jerusalem’s complicated situation, suspended between the Israeli and Palestinian worlds, means residents cannot take full advantage of their access to the Israeli economy. For example, while most Arab women elsewhere in Israel learn usable Hebrew in school, most Arab schools in eastern Jerusalem teach from the Palestinian curriculum, which does not offer students the Hebrew they will need to find work in the western half of the city. . . .

It is not unreasonable to argue that Jerusalem cannot really be divided, not for political reasons but for economic ones. If Jerusalem remains a solely Israeli capital, it will have to integrate better its disparate parts and massively develop its weaker communities if it hopes ever to become solvent and prosperous. Arabs must be able to find more and better work in Jewish Jerusalem—and in Arab Jerusalem, too. Conversely, if the city is divided into two capitals, that of a Jewish state and that of a Palestinian one, that won’t change the underlying economic reality that its prosperity, its capacity to accommodate tourism and develop efficient infrastructure, and its ability to ensure access for all religions to their many holy sites, will still require a unified urban space.

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More about: Israel & Zionism, Israeli Arabs, Israeli economy, Jerusalem