Limits on Freedom of Contract: Some Instructions From the Torah

Following my brief allusion to Ayn Rand and moral objectivism, I wish to consider some specific laws found the Hebrew Scriptures or Torah: the first is found in the Book of the Covenant (the chapters immediately following the Ten Commandments) and the other from Deuteronomy, the second giving of the Law to God’s people on the verge of entering Canaan.

Loans in Israel were not commercial but charitable, granted not to enable a trader to set up or expand a business or to allow a consumer to enjoy yet more material goods but to tide a peasant farmer over a period of poverty.  The Israelite economy remained predominantly agricultural up to the end of the monarchy.  Hence, the Mosaic judgments do not contain mercantile regulations but standard by which to live as the Society of God.  Israelites who enjoyed financial security had an obligation to ensure that their less fortunate compatriots were not deprived of the necessities of life by force of circumstance.  It was not charity in the sense of alms-giving that was being called for; rather, the Torah required a charitable disposition coupled with  righteous conduct toward a needy person who pledged to repay a loan.  Israelites were expected to mirror the compassionate and righteous nature of the God they worshiped.

Exodus 22:26-27 falls within the category of Cases of Oppression.  There are 42 “judgments” listed in Exodus 21:1-23:  These are called “judgments” because of their form; a required finding of fact (typical of mishpatim): “If you take . . .” followed by a conclusion of law: “You shall return . . . .”  The laws, or judgments, in this section of Exodus express the grundnorm under-girding the covenantal relationship.  Whereas the Ten Commandments provided a general statement of the basic principles of justice which God demanded of his people, the examples here demonstrated how those principles were to be applied to real life situations.  The reference in Exodus to a person’s cloak is significant.  The cloak or garment was not simply one’s outerwear for the day.  Rather, it was the average person’s bedroll and protection from the elements rolled into one.  Not to return someone’s cloak at night would be to subject them to great inconvenience and perhaps illness or even freezing.  Personal autonomy did not extend to contracting to endanger one’s life.

Deuteronomy in turn reveals an updating and renewal of the Sinaitic covenant in light of a later situation.  Deuteronomy 24:10-13 further minimizes the oppressive power of taking pledges.  The creditor must wait outside until the debtor brings out the pledged item.  This instruction served a twofold purpose: it preserved the privacy of the borrower’s home and, by leaving the selection of the pledge to the borrower, it prevented the creditor from pressuring the borrower into payment by carrying off something the poor person could not spare or that was worth more than the debt secured by the pledge item.

Deuteronomy’s reference to the millstones speaks to an agrarian lifestyle into which the people would be entering.  Note that the pledge of the cloak was permitted on a limited basis but that a pledge of millstones was not allowed under any circumstances.  A cloak was not necessary to preserve a borrower's life during the daytime but millstones were required; no poor Hebrew family could live more than a day or two without grinding grain for their daily bread.

God’s laws were intended to contribute to the wellbeing of the Society of Ancient Israel.  On the one hand, they encouraged lending to the needy poor rather than creating dependency through mandatory “gifts.”  On the other hand, there was provision for the life and privacy of the poor in spite of their poverty.  Parties could undertake consensual obligations but absolute freedom of contract was not permitted.

Ayn Rand in India?

Listening to an interview with Jennifer Burns, assistant professor of history at the University of Virginia and author of Goddess of the Market: Ayn Rand and the American Right, I was surprised to hear her assert that Ayn Rand's novels have developed a large readership in, of all places, India.  I quickly contacted my students from last year's classes I taught at the National Law University in Jodhpur to see if this were so and, indeed, it is.

A link to the November/December 2009 issue Foreign Policy http://www.foreignpolicy.com/articles/2009/10/19/howard_roark_in_new_delhi
presents Professor Burns's explanation in terms of a deliberate turning away form the strongly communitarian ethos that undergirds Indian society.

The mixed attitudes toward capitalism I found in India lead me to doubt that a "Randian" justification--based on an unadulterated self-regard--will ever captivate the minds and hearts of Indians.  This seems especially so when one considers Rand's ethics of rationalistic moral objectivism in light of the lesser regard that Indian philosophy generally grants pure reason.  Nonetheless, India's accession to a modern market society from a traditional order centered around the joint family requires some sort justification.  Perhaps a future entry or two (or more) from a Christian perspective will prove helpful.