The Role of Ethics in Business From a Jewish Perspective

This article is an excerpt from the Shortform book guide to "Thou Shall Prosper" by Rabbi Daniel Lapin. Shortform has the world's best summaries and analyses of books you should be reading.

Like this article? Sign up for a free trial here.

What’s the role of ethics in business? Where did the stereotype of “Greedy Jew” come from?

In Thou Shall Prosper, Daniel Lapin advises making money ethically, regardless of whether you run your own company or work for someone else. He also addresses why Jewish people have the unfortunate stereotype of being greedy and unethical.

Keep reading to learn more about the role of ethics in business from a Jewish standpoint.

What Your Business Practices Say About You

According to Jewish teachings, the way you make money can’t be separated from how other people see you or from how you see yourself. Therefore, Lapin urges you to conduct business in a way that demonstrates to yourself and others that you’re a good person.

(Shortform note: Lapin is saying that the role of ethics in business is important because the way you earn a living is a key part of your identity. This is arguably a common way of thinking—it’s natural to think of what you do as being part of who you are. However, some experts warn that it’s dangerous to link your sense of self too strongly with your job. When your job and identity become too “enmeshed,” if you start to dislike your job, you may start to dislike yourself as well. Further, if you can no longer do your job—for instance, due to burnout or illness—you may feel that you’ve lost your entire identity, triggering depression.)

Lapin adds that morally upright people will earn their money through hard work and honest business practices; as a result, they’ll have good reputations and feel good about themselves. Conversely, morally bankrupt people will lie, cheat, steal, and exploit others to make money—those unethical actions will harm their reputations and negatively impact their self-image.

(Shortform note: Other experts also suggest that there’s a link between self-esteem and morality, though the exact relationship between them isn’t clear. One possibility is that people who act in line with their morals avoid feelings of guilt and shame and therefore naturally feel better about themselves. Because acting ethically makes you feel good about yourself, it may also make you happier: High self-esteem is an important part of happiness. However, it could also be that happiness leads to ethical behavior, rather than the other way around. For instance, some studies have shown that happier people tend to be more outgoing, kinder, and more honest than unhappy people.)

Nobody’s Perfect, so Embrace Imperfection

While you should always strive to be ethical in both business and life, Lapin warns that you mustn’t let yourself become paralyzed by the fear of accidentally causing harm. In other words, while you should do your best to act morally, don’t be a perfectionist—just do the best you can in the moment, and be ready to own up to your mistakes.

Lapin adds that ethical business decisions can be especially imperfect since nearly anything you do will lead to both good and bad outcomes. For example, you could find yourself in the difficult position of having to lay off some of your workers. Those layoffs will be harmful to the people who lose their jobs, but they’ll be helpful to the rest of your staff and your customers if they allow you to stay in business. Therefore, proceeding with the layoffs is the ethical choice.

Addressing the “Greedy Jew” Stereotype

While on the subject of ethics, Lapin discusses the common stereotype that Jews are greedy, cruel, and overall unethical. He explains that this stereotype arose from the fact that Jews were the first bankers and moneylenders, and therefore the first people to charge interest on loaned money; Christianity and Islam traditionally forbid their practitioners from charging interest.

(Shortform note: The prohibition on interest comes from the Old Testament: Deuteronomy 23:19 forbids charging interest to your “kinsmen.” It therefore seems as if it should apply equally to all Abrahamic religions (Judaism, Christianity, and Islam). However, the next verse does allow charging interest to foreigners, which is why (according to some interpretations) Jews are allowed to charge interest on loans to non-Jews. Some rabbis interpreted people outside the Jewish community to be foreigners, meaning that they could be charged interest on loans.)

Lapin adds that Jewish tradition views lending money as more charitable than giving it away—simply giving money away would suggest that the recipient is a beggar who’s unable to support themselves. Conversely, by lending money, you support the recipient in starting a business while maintaining their dignity.

Furthermore, charging interest on loaned money makes banking a sustainable and profitable business. It allows bankers to care for themselves, expand their businesses, and help many more people in the long run. It also makes sense from the standpoint of tradition: Jews are taught that they must provide for themselves before they’ll be able to help anyone else.

(Shortform note: Some other scholars agree that Judaism views lending money as a better form of charity than giving money away. However, those scholars add that this practice traditionally refers to interest-free loans. Furthermore, if the loan is specifically for business reasons, there are stipulations to make the lender a business partner to share in the profits, allowing both parties to benefit from the loan while still observing the ban on interest.)

The Role of Ethics in Business From a Jewish Perspective