Where did the legal system of the Torah come from? Scholars point to other ancient societies whose legal systems appear similar to the Torah. “Gotcha,” they exclaim, smugly thinking they’ve proven the human origins of the Bible. The irony, of course, is that the Torah itself acknowledges contemporary juridical contributions. Why was Moshe’s father-in-law Chovav known as Yisro? The name derives from the word יתר, meaning “addition,” a nod to the additional parsha he added, the section dealing with our legal system. And it’s not just for any random parsha that Yisro merits the naming rights—his name is the title of the portion containing the giving of the Torah!
Let’s recap. God has redeemed millions of Israelites from slavery in Egypt. He has crossed them over the Red Sea on dry land and drowned their oppressors. He has granted them victory over the Amalekite warriors, and He has provided sustenance for them in the wilderness. Now they are marching to Sinai, preparing to receive the Torah. Meanwhile, the Midianite priest Yisro has heard about all these miracles and sets out to the Israelite camp.
We are preparing to read about the Revelation at Sinai, but then the Torah digresses to tell us the story about Yisro’s redesign of the Jewish legal system. That episode probably didn’t even occur prior to the Giving of the Torah. At that point, we hadn’t yet received most of the laws, so what could Moshe have been adjudicating? Why then does the Torah insert the story of Yisro immediately before the greatest moment in history?
Today’s daf discusses the logical basis for the prohibition of interest-bearing loans.
תניא ר”ש אומר מלוי רבית יותר ממה שמרויחים מפסידים ולא עוד אלא שמשימים משה רבינו חכם ותורתו אמת ואומרין אילו היה יודע משה רבינו שיהיה ריוח בדבר לא היה כותבו
Rabbi Shimon says: Lending with interest we lose more than we gain. Furthermore, we present Moshe Rabbeinu as this wise man and that his Torah is so true, saying: Had Moshe Rabbeinu known the profitability (of interest-based loans), he would not have inscribed it (as a prohibition in the Torah).
When Rabbi Shimon teaches that advocates for interest call Moshe “wise,” the commentators read their words as sarcastic criticism of the Torah’s prohibition of charging interest. Anyone who has ever taken out a mortgage understands the importance of credit to the economy. If you have to pay for it, that’s okay. Every rental has a price, and money should be no different. If I rent a car, it costs me a rental fee. Upon returning it, I give you back the car and a sum of money for the time you allowed me to use it. Likewise, if I borrow money from you, it only makes sense that upon returning the money, I should add a premium to compensate you for the rental period.
Nevertheless, the truth is, such derision is a backhanded recognition of the Divine origin of the Torah. No mortal leader would ever prohibit lending on interest. If a man as wise as Moshe had written the Torah, he would never have included such an unreasonable law. It is illogical to place such an impediment on the health and prosperity of the national economy. The only conceivable conclusion is that Moshe didn’t write it. Only God could have composed such an apparently obstructive institution.
Rav Hirsch explains the Torah’s insertion of the Yisro narrative in a similar vein. Lest anyone later question the Divine origin of the Torah, we are preempted with a story that paints Moshe as so incompetent that he needs assistance from a Midianite priest to formulate a viable court system. It’s a far stretch to suggest that this Moshe could create an extensive and intricate legal code that he subsequently wouldn’t be able to organize and oversee in an efficient judicial process! The story of Yisro proves that God wrote the Torah.
Why then did God include such a challenging prohibition that appears so “unwise” for societal economic prosperity? The answer lies in Rabbi Shimon’s introduction: Lending with interest we lose more than we gain. How do we lose more than we gain by charging interest?
When you take out a mortgage to buy a house, it may feel gratifying to finally own your own piece of property. However, with every interest payment you make, someone is getting richer off the back of your hard work. If you could pay just the principal, you could use that money to buy other material goods. Instead, the financier gets to use your money to purchase his heart’s desires. That interest-bearing mortgage has created greater wealth inequality in society, which ultimately leads to social unrest, and sometimes even societal collapse.
How about if you take a business loan and purchase a rental property? You’re not losing anything because your renter is paying your mortgage, covering the principal and interest. That sounds like a sweet deal, and you have no issue whatsoever with paying the interest premium. You’re happy to because it’s making you money! But here’s the thing: while you might not be paying to enrich the financier and pay for his extravagances, your tenant is paying. Once again, the interest-bearing loan has led to a widening of overall societal inequality.
Money doesn’t grow on trees. If a lender is making money from interest charges, someone is paying for it. In the latter case, you have a tenant who is working hard to have money to pay the landlord who then passes it on to the wealthy individual who provided the loan and now has even more money in the bank. Put differently, the construction magnate pays wages to the construction worker who ultimately gives him the money back. Meanwhile the magnate has crafted a building for free! Obviously, that’s an oversimplification, but it’s essentially how interest payments work. The increased wealth is extracted by the upper strata from the lower strata of society.
Now, to achieve the capitalist ideal of the tide rising for all, we need a resource outside our society from which to extract wealth. A typical reserve may be foreign labor markets or migrant workers. When we invite non-citizens into our country to perform menial labor, it tends to be a win-win for all parties. We extract the wealth, allowing our general tide to rise. They enjoy better wages than they did in their home country. And oftentimes, not only do they generate a surplus above their subsistence needs to increase the wealth of their hosts, but they also have surplus funds to send back home, called remittances.
The Torah’s system of interest-free lending should now make more sense. Lending with interest we lose more than we gain is true if we are lending to one another with interest because it leads to societal inequality. However, if we lend interest-free to our fellow citizens, we offer them opportunities to increase their wealth and reduce societal inequality. They may use the money to extract wealth from non-citizen workers, hence the Torah’s exception for gentile residents of Israel, who were generally happy to pay the interest charges because they still prospered overall relative to their lives elsewhere.
Every political leader who has ever governed any country at any point in history has engaged in extractive economic activity, getting richer off the backs of their citizenry. That’s why no mortal leader would ever have included a prohibition against charging interest to one’s fellow citizens. Only God can command a law that is truly beneficial for society. Because He has no personal interest. May you forever grow in your appreciation of the true wisdom of the Torah!
Daniel Friedman is the author of The Transformative Daf book series. He teaches at Touro University’s Lander Colleges and his Center for Torah Values combats Christian anti-Zionism.
