The Jewish Ethicist: Educational Embargo

The Jewish Ethicist: Educational Embargo

from aish.com

by Rabbi Dr. Asher Meir, Business Ethics Center of Jerusalem

Q. A local retail chain treats the clerks inhumanely. Should we avoid buying there?

A. Previous columns have discussed two kinds of boycott: a boycott undertaken in order to counter price-gouging or avoiding a merchant because of his overall ethical behavior .

The first is perfectly legitimate because the customers are defending their own interest. The main ethical consideration is to adequately document that price-gouging is actually present; otherwise, the boycott baselessly deprives a merchant of his livelihood. Another relevant consideration is equity: if many merchants are equally culpable for a particular behavior, it’s not fair to arbitrarily single out one for action.

Continue reading

Over The Range

Over the Range

from projectfellow.org

by: Rabbi Yosef Y Ettlinger

Over the Range!     Issue #: 098

Over the Range!

“Your fresh-cooked vegetables shouldn’t come out of the microwave soft and mushy. Our sensor-equipped models take the guesswork out of cooking many common foods by using built-in sensors to automatically set power and time based on food moisture levels.” [GE Website]

“Convection oven cooking combined with microwave power produces beautifully baked and roasted foods fast. The convection fan is mounted on the right side of the oven and is surrounded by a 1550-watt heating element, allowing you to convection bake in your microwave oven at any temperature between 225 and 450 degrees.”[GE Website]

*

Anita Gross drove by  David’s Appliance Depot on Reisterstown Rd. in Baltimore, MD and saw her to dream GE Profile 1790 sensor technology Convection over-the range Microwave oven featured in the storefront window.

“We have one left. We’ll give it to you at our bargain giveaway price of $950. We offer optional payment plans as well with no extra fees! You won’t find a better deal anywhere in town…Don’t give up this once in a lifetime opportunity. By the next shipment, we’re raising the price to $1050”, pressed the salesman… Persuaded…though a bit wary…Anita handed the salesman three hundred fifty dollars cash and two post dated checks for three hundred dollars each.

Driving home with her prize in her trunk, Anita stopped off for a pizza at a local Kosher Pizza Shop when she eyed an advertisement in the “Where What When” Jewish Monthly on one of the tables. Abe’s Appliances featured her dream 1790 for $694. Mortified, she went home, did some homework and found that she was duly ripped off – over the range! GE’s suggested retail price was indeed $694. Incensed, Anita returned the next day to David’s Appliance Depot and demanded a sale reversal. “It’s a done deal Madam…”

 

May David’s Appliance Depot charge $950 for merchandise valued at $694?

 

Does Anita have any recourse on the day of purchase?

 

Does Anita have any recourse the next day?

 

 

 

What’s the Law?

The Answer

Generally, David’s may not charge $950.  If Anita discovers that she was overcharged 16% of the going rate, she may have recourse (see detailed explanation).

Detailed Explanation

Over the Range! Implicates the following four laws.

Taking advantage of an individual by overcharging or underpaying is generally prohibited [Choshen Mishpat 227: 1].

A customer who discovers, within the timespan necessary to ascertain the true value of the article (and return to the proprietor), that he or she paid more than 16% of the going rate, may generally rescind on the sale and demand his/her money back  [Choshen Mishpat 227: 2].

 

After the timespan necessary to ascertain the true value of the article (and return to the proprietor, the customer forfeits this right to retract on the deal. We assume that the customer ascertained the value, pardons the proprietor and consents to having been overcharged [Choshen Mishpat 227: 7].

Is a consumer who has not yet paid in full likely to consent to the degree of overcharge after the timespan necessary to ascertain the true value of the article, or does he/she view their holding on the money as leverage through which he/she can use to ensure a fair price as long as he/she still is in possession of the money?   [Ketzos HaChoshen 227: 3]

As valid arguments can be made to both sides, we would leave the status quo, and would not obligate the consumer to continue paying the full agreed upon price.

Are head-checks considered having paid for the article in full?

This depends upon the society. Generally in America one cannot receive cash for head-checks. Additionally, the issuer retains the right to cancel the check. A check is simply an IOU.

 

However, in Israel it is common to be able to redeem third party head checks for cash. In addition, in Israel, like in Old British Law, it is a felony to indiscriminately cancel a check.

 

Thus, in an American style society, having given head checks is deemed as though the merchandise has yet to be paid for in full.  Whereas, there is strong reason to believe that in an Israeli style society, forwarding head-checks is as though the merchandise is paid for in full.

Application

David’s Appliance Depot overcharged Anita more than 16% of the going rate. Anita did not notify David’s or return until the next day which was after the timespan necessary to ascertain the true value of the article. Thus, she theoretically, forfeited her opportunity for recourse. However, two thirds of the payment were in head checks. In America, we will assume that full payment was yet to be paid. We would therefore, allow Anita more time to rescind on the deal.

Continue reading

The Jewish Ethicist: Upcoding

The Jewish Ethicist: Upcoding

from aish.com

By Rabbi Dr. Asher Meir, Business Ethics Center of Jerusalem

Q. Insurers insist that every procedure be reimbursed according to its code. But sometimes a procedure that usually takes five minutes takes an hour. Can’t I record a higher-level code in order to get fair recompense?

A. The practice you describe is often called “upcoding” – recording a code for a procedure more expensive than the one the patient needs. It is recognized as a form of insurance fraud, or if the insurer is the government as a form of defrauding the government.

Continue reading

The Jewish Ethicist: Bankruptcy

The Jewish Ethicist: Bankruptcy

From aish.com by Rabbi Dr. Asher Meir, Business Ethics Center of Jerusalem

Q. Most advanced countries allow indebted people to erase their debts through personal bankruptcy. Is this ethical?

A. It’s impossible to relate to personal bankruptcy in a vacuum. We need to examine this law in the context of the overall relationship between borrowers and lenders. The general principle is that an appropriate balance is needed between the protections and obligations of each side.

We find in a wide variety of economic relationships that the Torah balances the rights and obligations of each side, yet also leans slightly in favor of the weaker party.

Continue reading

The Jewish Ethicist: Witness Character

The Jewish Ethicist: Witness Character

from aish.com by Rabbi Dr. Asher Meir, Business Ethics Center of Jerusalem

Q. Much of my income as a real estate appraiser comes from testifying as an expert witness. The litigants who hire me expect me to give low appraisals which will help them in court, and they’ll stop hiring me if I don’t meet their expectations. Can I tailor my testimony to the needs of my clients? JF

A. In order to answer your question, we have to clarify a critical distinction. There is a big difference between a litigant or party to a trial and a witness in a trial. Everyone understands that the litigants are not impartial, and that their claims may be carefully crafted to help their case in court. But a witness is expected to provide only facts, and to be completely impartial.

Continue reading

The Jewish Ethicist – Sweatshops

The Jewish Ethicist – Sweatshops

from aish.com by Rabbi Dr. Asher Meir, Business Ethics Center of Jerusalem

Q. Many consumer products are made in third world countries in sweatshop conditions. Is buying these products exploiting the workers? Or perhaps it is actually helping them, because it provides them with work and gives them a chance to improve living conditions? What about the effect on local workers?

A. The foreign sweatshop debate has raged for generations. Organized labor has traditionally demanded better working conditions not only in the home country, but also abroad; cynics have complained that this demand is really a way of fending off low-cost foreign competition which benefits consumers.

A verse from Leviticus (25:14) can help focus the debate: “And when you sell something to your fellow, or buy from the hand of your fellow, don’t exploit each one his brother.”

The simple meaning of the verse is that we shouldn’t exploit each other in commerce by charging an unfair price. But Rashi’s commentary points out that the verse contains an implicit mandate: when we sell, we should preferably sell to our fellow; when we buy, we should buy from our fellow. In a previous column, we explained that this preference both provides a livelihood for community members and also builds a feeling of connection and solidarity among members of a particular community. [See: Malicious Merchant] Many authorities have stated that we should even pay a premium in order to do business with fellow community members, thus making economic relations complement social ones. (1)

The critical question then becomes: who is my “fellow”? My neighbor? My fellow citizen? Any fellow human being? In past generations this question was easier to answer, because both practically and emotionally mutual awareness and concern could exist only among those who were close by. In the age of globalization, many people believe that it is both practical and obligatory to view all humans as our “fellows”; others worry that this approach carries the danger that existing, functional community relationships will be weakened in favor of a still-hypothetical “community of man,” resulting in the loss of all communal concern.

Presumably what we need is a concentric set of communal relationships, each one on a suitable scale. It is practical for everyone to be concerned with world ecology and global warming, which are truly global problems; conversely, a free loan society for needy individuals in a small neighborhood is practical, but it would be hard to administer one which serves an entire region.

If you believe that consumers in advanced countries can create genuine empathy and solidarity with sweatshop workers in East Asia, considering these distant individuals our “fellows,” then it is definitely appropriate for you to take steps, including consumer activism, to promote better working conditions for these workers. Of course we should take care that our steps don’t actually work to their detriment, by destroying their livelihood during a prolonged boycott or pricing their goods out of the market. If you feel that your first concern should be for workers in your own region or country, then you should try when practical to give preference to local manufacturers even if there is a moderate price difference.

In a way, both the stated or cynical understanding of labor groups have relevance. If we do share a sense of community, or worker solidarity, with sweatshop workers in distant countries, then we should be concerned with their working conditions, and not exploit them (as the verse states). If we don’t share a sense of community with them, we should try to give precedence to local workers who are our “fellows”.

Our aspiration should be for economic relations that harmonize with communal ones; we should engage in buying and selling with our fellows, and avoid exploiting them. When practical, we should either display concern for the workers who make our goods, or buy goods from those workers for whom we can effectively display concern.

SOURCES:
(1) Responsa Rema 10.

The Jewish Ethicist: Disinformation

The Jewish Ethicist: Disinformation

from aish.com by: Rabbi Dr. Asher Meir, Business Ethics Center of Jerusalem

Q. In a recent column you condemned prying into the private information of competitors. My business rivals didn’t read your column, what steps can I take to protect myself?

A. Just as there is a burgeoning field of “competitive intelligence,” we are witnessing equally robust growth in the complementary area of “competitive counterintelligence.” One aspect of this field is safeguarding sensitive information, which is certainly proper. But another prominent element in effective counterintelligence is disinformation, designed to make life difficult for competitors and to keep them guessing. This aspect raises some interesting ethical questions. Let’s examine the various manifestations of the disinformation business.

Continue reading

‘It’s Only Business,’ What’s Kosher About Business Ethics?

‘It’s Only Business,’ What’s Kosher About Business Ethics?

from rabbincalassembly.org by Mark Greenspan

Introduction

“It’s not personal it’s only business. You should know, Godfather.” Those were the words of Licio  Lucchesi, one of the characters in the classic film The Godfather. After looting the Vatican-owned Immobiliare Corporation of several billion dollars with the help of a high ranking Catholic official, Lucchesi turned to Godfather Michael Corleone for help covering his tracks. While few of us will ever be quite so cunning or deceitful it’s not uncommon for people to say, “Its only business” when cutting corners in business. The end justifies the means. We presume that in the real world of business the standards of ethics are different than they are elsewhere. After all don’t we say caveat emptor, “Let the buyer beware?” In the world of business and corporate dealings only the shrewd and the most cunning survive. We admire those people who manage to get ahead until their actions have an adverse effect on our lives.

Continue reading

7 Biblical Secrets to Business Success

7 Biblical Secrets to Business Success

from aish.com by Bob Diener

After graduating law school and practicing for two years, I launched an airline ticket business which was quickly profitable. I sold that business in 1991 and then launched Hotel Reservations Network which became hotels.com. I sold the balance of my interest in hotels.com in 2003 and after a five year non-compete launched getaroom.com. Recently during our weekly Friday night dinner discussion, I mentioned that getaroom.com is growing and profitable and reached some new milestones.

Continue reading

The Jewish Ethicist – Discounts

The Jewish Ethicist – Discounts

from aish.com by: Rabbi Dr. Asher Meir, Business Ethics Center of Jerusalem

Q. I have a standard price list, but I’m pretty liberal about giving discounts when I need to make a sale. Is this a problem?

A. Adam Smith noted that economic progress is dependent “a certain propensity in human nature,” namely “the propensity to truck, barter, and exchange one thing for another”. After all, Smith notes; “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.”

However, people nowadays seem to prefer facing predictable prices over having to haggle over every exchange, and so most sellers today have standard prices which apply equally to all customers.

Continue reading