Chief Rabbi on European crisis

In his impressive address in Rome on the crisis in Europe, the Chief Rabbi praised the modern market economy and modern capitalism, which "emerged in Judeo-Christian Europe and not in other cultures like China that were more advanced in other ways," because our religious ethic was "one of the driving forces of this once new form of wealth creation." It "originated in Europe in the fertile environment of Judeo-Christian values sympathetic to hard work, industry, frugality, diligence, patience, discipline, and a sense of duty and obligation."

"The market’s 'invisible hand' turned the pursuit of self interest into the wealth of nations, and intellectual property fuelled the fires of invention. Capitalism has enhanced human dignity, leaving us with more choices and a longer-life expectancy than any generation of those who came before us."

But he adds that "his same ethic taught the limits of capitalism. It might be the best means we know of for generating wealth, but it is not a perfect system for distributing wealth. Some gain far more than others, and with wealth comes power over others. Unequal
distribution means that some are condemned to poverty." In fact, as the critics of capitalism allege,

"the market does not create a stable equilibrium. It engages in creative destruction, or as Daniel Bell put it, capitalism contains cultural contradictions. It tends to erode the moral foundations on which it was built. Specifically, as is manifest clear in contemporary Europe, it erodes the Judeo- Christian ethic that gave birth to it in the first place." 

It ceases to be merely a system, and becomes an ideology.

"The market gives us choices; so morality itself becomes just a set of choices in which right or wrong have no meaning beyond the satisfaction or frustration of desire. The phenomenon that uniquely characterises the human person, the capacity to make second-order evaluations, not just to feel desire but also to ask whether this desire should be satisfied, becomes redundant. We find it increasingly hard to understand why there might be things we want to do, can afford to do and have a legal right to do, that none the less we should not do because they are unjust, or dishonourable, or disloyal, or demeaning. When Homo economicus displaces Homo sapiens, market fundamentalism rules."

He looks for the solution – a way of taming capitalism – to the Judaeo-Christian tradition and to the wisdom of the Bible: "the Sabbath, the family, the educational system, the concept of ownership as trusteeship, and the discipline of religious law".

"The concept of the holy is precisely the domain in which the worth of things is not judged by their market price or economic value. This fundamental insight of Judaism and Christianity is all the more striking given their respect for the market. Their strength is that they resisted the temptation to believe that the market governs the totality of our lives, when it fact it governs only a limited part of it, that which concerns goods subject to production and exchange. There are things fundamental to being human that we do not produce; instead we receive from those who came before us and from God Himself. And there are things which we may not exchange, however high the price."

He concludes: 

"Stabilising the Euro is one thing, healing the culture that surrounds it is another. A world in which material values are everything and spiritual values nothing is neither a stable state nor a good society. The time has come for us to recover the Judeo-Christian ethic of human dignity in the image of God. When Europe recovers its soul, it will recover its wealth-creating energies. But first it must remember: humanity was not created to serve markets. Markets were created to serve humankind."