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איך התירו רבית בבית שני בבתי ערי חומה? – הרב יצחק ברנד שליט”א

בענין בעיה של ריבית בבתי ערי חומה

ע’ ערכין לא. במשנה, המוכר בית בבתי ערי חומה הרי זה גואל מיד, וגואל כל שנים עשר חדש, הרי זה כמין ריבית ואינו  ריבית. ובגמרא, והתניא הרי זה ריבית גמורא אלא שהתורה התירתו, ואמרינן הא רבנן והא רבי יהודה ופליגא אי צד אחד בריבית אסור או לא, והמשנה ס”ל כרבי יהודה והברייתא כרבנן

ואנן קיי”ל כרבנן דצד אחד בריבית הוא אסור וא”כ יוצא שבתי ערי חומה הוא בעצם ריבית דאורייתא רק התורה התירתו.

ויש להקשות על זה, דלכאורה היתר התורה שייך רק כשבתי ערי חומה נוהג מדאורייתא, אבל כשנוהג רק מדרבנן לא שייך שהתורה התיר.

ועכשיו , הרי קיי”ל שבתי ערי חומה נוהג רק כשהיובל נוהג, ע’ ערכין כט. ואילו בבית שני לא נהג יובל , דכשגלו עשרת השבטים בטלו יובלות ע’ ערכין לב: שמנו יובל לקדש שמיטין, ואילו בתי ערי חומה נהג גם בבית שני, כדאמרינן גיטין ע”ד: ערכין לא:, וכתב הרמב”ן בספר הזכות גיטין דף י”ח מדפי הרי”ף, שנהגו בתי ערי חומה מדרבנן, וא”כ קשה איך התירו ריבית דאורייתא בזמן שנהג בע”ח רק מדרבנן.

ובשלמה לפי שיטת התוס’ גיטין לו. ד”ה בזמן, שס”ל שבבית שני נהג יובל מדאורייתא, ניחא, אולם כל הראשונים חולקים, ע’ רמב”ם פ”י מהל’ שמיטה, וכן דעת כל הראשנים, וא”כ קשה איך התירו ריבית דאורייתא

ומיהו י”א שצד אחד בריבית הוא רק מדרבנן ע’ בב”י ס’ קע”ד בשם רבנו ירוחם שכתב וכל אלו של מכר הם צד אחד בריבית ויש מן הגדולים שכתבו שהם אבק ריבית והרוב הסכימו שהם ריבית קצוצה וכ”כ הרמב”ם עכ”ל רבנו ירוחם, וכ”כ הריב”ש ס’ ת”ה שהובא בב”י שם שהוא ריבית דאורייתא

ולאלו שס”ל שצד אחד בריבית הוא רק דרבנן צ”ל דמאי דאמרינן בערכין שבע”ח הוא ריבית גמורה אלא שהתורה התירתה, דלאו דוקא קאמר, וכן יש דיעה בתוס’ שם של”ד קאמר מסיבה אחרת, אולם לדעת רוב הראשונים שס”ל שהוא ריבית דאורייתא, והגמרא אמר ריבית גמורה כפשוטה, קשה איך התירו בע”ח בבית שני.

והיה נראה לתרץ, דמה דאמרינן הרי זה ריבית גמורה אלא שהתורה התירתה , היינו שהתורה מגלה לנו סברה שאם חיוב חזרה לא בא מכח שהסכימה ביניהם אלא שהתורה מחייב אותה להחזיר, אז אין זה נחשב כביטול המכירה אלא כמכירה חדשה, והיינו שאף שמה שהתורה מחייבת אותו להחזיר נעשה זאת מעין ביטול מקח, ונעשה ריבית דאורייתא,  באותו זמן ג”כ התירה תורה כיון שביטול מקח לא בא בהסכמת הלוקח, והחשיבה התורה כמכירה חדשה וממילא סברה זו שייך ג”כ כשכל בתי ערי חומה הוא רק מדרבנן, כיון שהרי ג”כ כאן מה שמתבטל המקח וחוזר הבית הוא לא מצד רצון והסכמה מעיקרי של המוכר והקונה רק מגזירת חז”ל, ואז מחשיבים זה כמכירה חדשה.

שו”ר מעין סברה זו בחו”ב ערכין לא.

מאתר בריתי יצחק – הרב ברנד, כאן.

How to De-Communize: Entrepreneurship and Foreign Investment

A Better Red: The Transition from Communism to Coca-Cola in Romania

Volume 2, No. 2 (Summer 1999)

The transition from central planning to market-oriented economies in Eastern and Central Europe provides a fascinating laboratory for research in economic theory and business practice. With the collapse of communism, the inefficiencies of centralized planning have been laid bare. The classic debates between Mises and Lange on the viability of planning, although long resolved in the minds of free-market advocates, have been settled. Poznanski (1992), in an aptly titled book, Constructing Capitalism, makes the following observation: “The experience of state socialist economies also validates the hypothesis that efficient production is not only impossible without market competition but also without private property as a principle form of resource ownership and use control.” Austrian economists and others recognize that privatization of state-owned enterprises and the establishment of a system of property rights are the most important issues in the transition process. Svejnar (1991), for example, states that the absence of property rights is “the Achilles heel of the transition.” Although economists such as Jeffrey Sachs and others, who have served as advisors to various governments in the transition, recognize that privatization is important, they, however, also add other issues such as fiscal reform (i.e., taxes), monetary stability, and so on. Rothbard (1992) has provided some insight into an Austrian perspective dealing with these issues. Problems dealing with privatization, monetary reforms, and so forth are macro issues. Our research has focused more on what we call the micro issues; that is, managerial and entrepreneurial problems in the transition.

Among the many challenges confronting economies in transition is the promotion of entrepreneurship and successful business practices. Entrepreneurship involves the ability to predict how consumer demand will change and to find cost-efficient ways of supplying new products that govern business success. Exercising this ability and developing the talent necessary for successful market ventures was foreign to Romanians under the old regime. Responding to consumer demand was impossible in the planned economies. To some extent, the mind-set that existed during the communist era remained intact after the collapse of the dictatorship and the liberalization of the economy. Arzeni (1996) contends that the entrepreneurial culture needs to be rediscovered and reinvented. Entrepreneurship is a natural outgrowth of human action. However, the people of Eastern and Central Europe have experienced forty years of rationing, shortages, and other forms of coercion imposed upon them by their governments. How businesses grow and develop out of an economic experience that has been characterized by government distortions is the fascinating transformation taking place in the economies of transition. Although Austrian economists are among the few that recognized the crucial role played by entrepreneurs, Austrian theory is silent on the mechanics of how entrepreneurs get started. To some extent, Austrians can rely on entrepreneurs springing forth spontaneously since profit seeking is a natural and normal action. Once the shackles of oppression have been removed, the entrepreneurial spirit will rise. The innovativeness of entrepreneurship lies in the ability of some new businesses to read the market better than others do—not simply in the short run as arbitrageurs, but in the longer term as fillers of innovative niches. The transition in Romania represents a unique opportunity to investigate the process of developing businesses and entrepreneurship from the remains of one of the most oppressive regimes in Central and Eastern Europe.

Our focus here is on the effects foreign direct investment (FDI) has had on the transformation process. FDI represents a desirable form of capital infusion—one seeking profits and exploiting market potential as opposed to a World Bank type loan or subsidies in the form of foreign aid. We were presented with a unique opportunity to investigate the effects of one multinational company (MNC), namely Coca-Cola, on the transformation process in Romania. We conducted interviews and surveys in Romania between July 1994 and January 1995. It seemed appropriate that a consumer product would be influential in the transition from a command to a consumer-led economy. As Austrian theory recognizes, production is only useful when it satisfies the desires of consumers. Foreign direct investment has often been castigated in the past, with expressions such as “Yankee imperialism.” However, it is more appropriate to view FDI as a “white knight.” We found that besides providing capital, FDI provides qualitative impacts in transferring entrepreneurial and managerial skills from well-established profitable firms to developing businesses in transitional economies.

An Overview of the Coca-Cola System in Romania

As background, first consider the transition under way in Romania. In the tumult following the 1989 revolution, the country faced an uncertain and uncharted future. At least since Vlad the Impaler in the fifteenth century, Romania has been considered one of the more tormented parts of Europe. Recent history confirmed this role, for the political and economic difficulties facing Romanians stand out even amid the wreckage of former communist countries. Nowhere was a country so thoroughly exhausted after forty-two years as a “people’s republic.”

The terror, megalomania, and cult of personality that characterized Nicolae Ceausescu’s regime since the early 1960s left the country completely unprepared for the transition to capitalism. Ceausescu’s erratic and ultimately disastrous economic policies culminated in a desperate export drive during the 1980s that left the country with little foreign debt, but still woefully inefficient. With minimal exposure to the West through travel or business, Romanians had little foundation or experience with building consumer-oriented businesses within a market framework.

Given the weak market and lack of a well-developed plan for economic reform, Romania posed large risks for foreign investors like Coca-Cola. Transition economies by their nature pose large risks because of the uncertainties of the market reform process. At the time of Coca-Cola’s entrance, Romania had passed a Foreign Investment Law (1991). Coca-Cola received no special incentives to invest, but did receive the benefits already passed in the Foreign Investment Law. This law really did not provide incentives as much as it removed some of the disincentives, such as exemptions from customs duties for imported machinery. Raw materials, consumables, spare parts, and other supplies were exempted from import duties for a period of two years. Foreign firms were exempt from the payment of taxes on profits for a period of five years. At the time of Coca-Cola’s first investment, foreign entities were not allowed to own real estate. Coca-Cola was able to operate in one case by signing a ninety-nine-year concession with the city administration, and in other cases by forming joint ventures with Romanian firms. The access of private companies to foreign exchange was established in 1991. Other than the few tax abatements mentioned, however, Coca-Cola did not receive any kind of governmental incentives. Romania at the time did not impose any wage or price controls for private companies. Coca-Cola did agree to a limited layoff policy for two years in the case of one of its joint ventures.

Like most multinational companies, Coca-Cola never seriously considered expanding into Romania before the 1989 revolution. Unlike most Western companies, however, Coca-Cola saw the market potential early in the transition; it started planning to invest soon after Ceausescu’s fall. At the time of the revolution, the soft drink market was dominated by poor quality state brands (B-brands) and Pepsi, operated under an arrangement in which state-owned enterprises were provided concentrate to bottle independently. Using low quality local sugar, water, glass, and other inputs, soft drink products were far inferior at least by Western standards. Predictably, the erstwhile lack of competition had ensured general incompetence.

Once the communist regime fell, Coca-Cola executives recognized a “new paradigm in Central and Eastern Europe” at a time when few other Western companies were willing to invest. The reason is that Coca-Cola is aggressively market-driven; its pursuit of markets has made it the most pervasively branded product in the world. In any event, Coca-Cola was the largest foreign investor in Romania after two years into the transition. Everywhere, its red-and-white logo symbolized the rebirth of capitalism, as it had elsewhere. In newly emerging market economies like Romania, Coca-Cola quickly went from contraband to status symbol. The appearance of Coca-Cola trucks on bleak, riot-torn Bucharest streets was welcomed by citizens weary from years of deprivation and unaccustomed to consumer goods of any consistent availability or quality.

Thus, Coca-Cola became a highly conspicuous consumer good in the early period of the Romanian transition—available throughout the country and just as widely accepted. However, it was not an “invisible hand” that brought the product to the people; it took real individual risk and effort to rebuild the exchange system. Nevertheless, throughout Romania’s cities, villages, and towns the “fingers of the invisible hand” (Clower 1994) soon reappeared.

Thus, when the old regime collapsed in late 1989, thousands of small shops and street vendors sprang up around the country. The essence of free enterprise, these kiosks and other small-scale retail outlets played a pivotal role during the turbulent first years into the market transition. Under communism, only decrepit state-owned stores were permitted in Romania. There was no Hungarian “goulash” system, the kind that allowed for limited private enterprise along with statism. But when allowed to form, markets appeared almost instantaneously. At first, the re-emergence of retail trade in Romania was dominated by makeshift operations with no focus on what to sell. For many of these nouveaux entrepreneurs, Coca-Cola provided that focus in the early years of transition, especially for the small retail shops and kiosks. In the early 1990s, a large part of the livelihood of these micro businesses came from high turnover products like soft drinks and cigarettes. The profit from these sales then became capital to pay for inventory and for the rest of the operational expenses and for expansion. Romania’s burgeoning retail sector, its new “petite bourgeoisie,” used Coca-Cola as a main source of cash flow.

Coca-Cola products served as a magnet for the kiosks, with cases piled outside used as advertising. In an ironic twist, the grey facade of communism was literally covered with Coca-Cola’s red-and-white signs within twenty-four months of Ceausescu’s downfall. Conditioned by the shortages that existed in the previous regime, the regular availability of consumer products was considered somewhat miraculous by Romanians. The small retailers and traders found that simply providing an indication that they stocked Coca-Cola products drew customers to their shops. For many Romanian entrepreneurs, Coca-Cola provided the direct link to modern business practices.

The Impact of Coca-Cola on Romanian Business

As the familiar Coca-Cola logo spread throughout Romania, it signified the renaissance of the Romanian market economy. By 1994, tens of thousands of businesses were distributing and selling Coca-Cola products. Many other businesses supplied inputs for soft-drink production. These linkages created and supported employment as the state sector shrank.

What are the effects of investment by a market-driven multinational company on local business in a transition to markets? Besides its visible impact on re-establishing retail trade in the country, Coca-Cola’s investment affected many other areas of commerce. Given Coca-Cola’s status as an early entrant in the market economy, it served as the vanguard of the private sector in many areas. One significant transformation in the Romanian business sector propelled by Coca-Cola occurred in advertising. According to some business leaders, the modern advertising industry began in Romania with Coca-Cola’s entrance. Known worldwide for sophisticated, high-quality, and highly successful advertising techniques, Coca-Cola brought these techniques to Romania, insisting on comparable quality being provided by Romanian advertising firms. If it was not available locally, it was imported from other firms. Coca-Cola’s superior quality commercials quickly set the standard of excellence for the country, winning national competitions and putting considerable pressure on other manufacturers and advertising companies to upgrade their efforts. The same effects occurred with outdoor and radio advertising.

Another competitive effect of the company’s investment was an upgrading of product quality. Coca-Cola’s insistence on quality spread through its linkages with other sectors of the economy. It would be hard to overstate the importance of introducing quality into a transitional economy. Coca-Cola had a policy of localizing as much of the inputs as possible in order to reduce costs. Yet, it also had a policy of strict quality control. The two policies often clashed in transitional economies. The state-owned industries were not accustomed to delivering quality goods for the internal Romanian market, and the central planning system of the previous regime paid little attention to quality. As a result, the notion of customer satisfaction or product quality were foreign to state-owned enterprises. Even newly-formed or privatized businesses found these concepts to be alien to their mode of thinking. As one U.S. manager stated, “How do you communicate the importance of one-hundred percent quality to people who have been accustomed to standing in line and buying whatever is available at whatever quality?” (Fogel 1995). This manager found that retooling factories is easier than retooling attitudes. While it was common for businesses in developed market-oriented economies to switch suppliers if they were not satisfied with product delivery, this notion was foreign to the practices found in Romania at the time.

Many of the qualitative effects of Coca-Cola on the host economy can be summarized as technological, managerial, and organizational competencies. Coca-Cola brought experience to Romania. Specifically, Coca-Cola brought distribution expertise and the concept of serving the customer, which was foreign to the state-owned Romanian enterprises. Coca-Cola provided the first example of a corporate culture in Romania. For example, the manager of a private printing company with Coca-Cola label contracts found that FDI like Coca-Cola’s had already been beneficial for Romania by stimulating efficiency through technology. Whereas a privately-owned company used thirty-six workers to produce seventy-five percent of the orders for Coca-Cola labels during 1994, its state-owned competitor used forty workers to produce twenty-five percent of Coca-Cola’s label business. The state company used the same label machines as the private printer but three times the number of operators. When packing the labels, five times as many workers were used. Although employment declined in the more efficient private label maker, salaries doubled.

Rondinelli (1994) noted that in the old regime the socialist leaders pushed state enterprises to create jobs and made it difficult to terminate employment. As a result, managers had no incentive to use workers efficiently. At the same time, workers were not motivated to be productive: their jobs were secure, their pay was low, and a large portion of their consumption came from state subsidies. The prevailing attitude of workers toward management was reflected in the aphorism: “I’ll pretend to work and you pretend to pay me.” The idea that labor should be a variable input was completely foreign in the old regime. Coca-Cola plant managers reported in interviews that getting the concept across that labor should be a variable input was very difficult. We observed a similar phenomenon in interviews with Polish managers of privatized plants (Hefner and Woodward 1997).

In many respects, Coca-Cola set the standards for technological, managerial, and organizational competence throughout the country. As a major MNC in the early transition period, its demonstrative effect was crucial. Other companies, local and foreign, sought Coca-Cola’s trained personnel.

Coca-Cola’s presence led to greater competitiveness and product diversity in Romania through a number of avenues. Being a supplier to Coca-Cola put a stamp of approval on a company’s ability to deliver a quality product. Several anecdotal reports confirmed that having Coca-Cola contracts stimulated additional business for some suppliers: the contract enhanced the reputation of the supplier. We surveyed six major suppliers in Romania, all of whom reported that working with Coca-Cola helped them establish other contracts. It was well-known that Coca-Cola demanded high quality and on-time-delivery. As a result, firms with Coca-Cola contracts received, in essence, a “stamp of approval” that signalled to other businesses that the supplier could deliver quality, on time.

Conclusion

Private economic activity developed from nothing after 1989 with the fall of Ceausescu (Hunya 1992). Given the extreme isolation of the Romanian economy prior to 1989, it was not altogether surprising that Coca-Cola’s investment had a large demonstration effect. The major effect of Coca-Cola operations on the economy came through the introduction of market-oriented, profit-motivated business practices. In the old economy, suppliers controlled the flow of activity. Bribes were sometimes required to get delivery and, even then, it was erratic. In the new economy, thousands of kiosk owners, the embryonic entrepreneurs of Romania, had the free service of a supplier (Coca-Cola) bringing its product to the point of sale. Regular and free delivery were radical concepts, bringing a permanent and reliable source of cash to the retail and wholesale sector that mushroomed after 1989. In essence, Coca-Cola became a mainstay of small business privatization and entrepreneurship in Romania. There was also significant impact of a symbolic nature resulting from Coca-Cola’s presence in Romania.

Rothbard (1992) provided suggestions for successful desocialization. Herbener (1992) discussed the role of entrepreneurs in the process and noted that “Entrepreneurship has no direct role in bringing about the program of desocialization.” However, entrepreneurship and, as we found, foreign direct investment illustrate the benefits of the market economy to a country steeped in planning and government distortions. We found that foreign direct investment can play a major role in the education process needed to retool the attitudes and business practices of Romanians during the transitional process.

References

Arzeni, Sergio. 1996. “Entrepreneurship in Eastern Europe: A Critical View.” In Horst Brezinski and Micael Fritsch, eds. The Economic Impact of New Firms in Post-Socialist Countries: Bottom-Up Transformation in Eastern Europe.Cheltenham, U.K.: Edward Elgar. Pp. 52–58.

Clower, Robert. 1994. “The Fingers of the Invisible Hand.” Brock University Review 3 (1): 3–13.

Fogel, Daniel. 1995. “U.S. Machine-Marnt in Poland: Changing a Corporate Culture.” In Daniel Fogel, ed. Firm Behavior in Emerging Market Economies. Brookfield, Vt.: Avebury. Pp. 71–93.

Herbener, Jeffrey M. 1992. “The Role of Entrepreneurship in Desocialization.” Review of Austrian Economics 6 (1): 79–93.

Hefner, Frank, and Douglas Woodward. 1997. “Foreign Direct Investment Linkages and Entrepreneurial Development in Poland: Two Case Studies.” In Arieh Ullman and Alfred Lewis, eds. Privatization and Entrepreneurship: The Managerial Challenge in Central and Eastern Europe. Binghamton, N.Y.: International Business Press. Pp. 155–66.

Hunya, Gabor. 1992. “Private Economy in an Etatist Environment: The Case of Romania.” In Dynamic Entrepreneurship in Central and Eastern Europe. Derek Abell and Thomas Kollermeier, eds. Amsterdam: EFER-Elsevier. Pp. 107–15.

Mazur, Marek, Tomasz Dolegowski, Jerzy Suchnicki, and Igor Mitroczuk. 1994. “Privatization in Poland.” In Rondinelli (1994). Pp. 173–208.

Poznanski, Kazimierz. 1992. “Epilogue: Markets and States in the Transformation of Post-Communist Europe.” In idem., Constructing Capitalism. San Francisco: Westview Press. Pp. 199–219.

Rondinelli, Dennis. 1994. “Privatization and Economic Reform in Central Europe: Experience of the Early Transition Period.” In idem., Privatization and Economic Reform in Central Europe: The Changing Business Climate. Westport, Conn.: Quorum Books. Pp. 1–40.

Rothbard, Murray N. 1992. “How and How Not to Desocialize.” Review of Austrian Economics 6 (1): 65–77.

Svejnar, Jan. 1991. “Microeconomic Issues in the Transition to Market Economy.” Journal of Economic Perspectives 5 (4): 123–38.

From Mises.org, here.

If You Need a Reason, Aliyah Is Not for You!

Why Live in Israel?

BY  · PUBLISHED  · UPDATED 

The Duma Blood Libel – Plea Bargain

The Duma plea bargain

The court is basing their evidence upon testimony which was disqualified after it was found to be forced under prolonged torture and extreme duress. A letter from the minor’s parents follows the article.

Chaya Chava Shulman, 12/05/19 14:58 | updated: 14:20
Chaya Chava Shulman is a graduate of Bar Ilan University. She has worked as a journalist and as a social worker in both Israel and the U.S.

More from the author ►

The State Prosecutor’s Office exerted heavy pressure on Elisha O. who was an alleged accomplice in the 2015 Duma arson, to agree to a plea bargain. The hearing is scheduled for May 12.

According to this plea deal, he will admit to having been involved in planning the arson in the Arab town of Duma. In exchange, he will be convicted of reduced offenses. His confession might incriminate another suspect, Amiram ben Uliel, who has consistently maintained his innocence.

The court is basing their evidence upon testimony which was disqualified after it was found to be forced under prolonged torture and extreme duress.

Michoel Fuah, one of the administrators of the Facebook page, The Duma Blood Libel, (Hebrew name: עלילת-דומא) has published the following article by Ruth Gavison regarding the torture of the suspects in what has become known as the Duma blood libel. (Ruth Gavison is one of Israel’s leading intellectuals and a renowned Israeli Law professor at the Hebrew University of Jerusalem who holds the chair for Human Rights and whose areas of research include Ethnic Conflict, the Protection of Minorities, Human Rights, Political Theory, Judiciary Law, Religion and Politics, and Israel as a Jewish and democratic state.)

She writes:

”We presently find ourselves at a critical juncture in the Duma blood libel. Not only is the issue of torture under examination, but also the question of the proposed plea deal.

“This proposed plea deal is a form of criminal extortion. The State Attorney’s Office is pressuring the family of Elisha O. to accept this plea deal with the unrelenting coercive pressure of the court. While accepting a plea deal will save time in the courtroom, it is inherently dishonest and is a distortion of the legal process. The prosecution has all the time and all means to pressure the defendant indefinitely to confess to the most serious charges. The defendant, on the other hand, does not have the financial or emotional means to wage a costly and lengthy legal battle to prove his innocence.

“The defendant also knows that there are quite a few issues in which the court does not rule on evidence. In these cases, defendants often admit to crimes they did not commit just to finally end the tortuous saga of a powerful legal system. And even if he does accept the plea deal, he knows that he is not guaranteed to be found innocent.

“In the case of the Duma arson, the situation is much worse. The State Prosecutor’s Office insists on including the minor’s confession in the plea bargain, even though the minor’s confession in this matter was rejected in a higher court due to the fact that it was elicited under torture. The goal of the prosecutor’s office is clear. They want to achieve the admission of guilt by a Jewish youth in the Duma case by ANY means possible. They want to remove the dark stain that hangs over all the high-level officials and legal bodies in Israel involved in this fraudulent case.”

We are interested in hearing Ruth Gavison’s opinion on another subject as well. Is it correct to allow plea bargains in criminal cases? Is it in the public interest to allow the State Prosecutor’s Office to extort confessions from defendants whose innocence seems likely, thereby enabling the real perpetrators to roam at leisure? (In this particular case, the evidence strongly points to Arabs in the village having committed the arson as part of a prolonged family feud which involved numerous Arab arsons against the Dawabshe family).

It would be fitting that the State Prosecutor’s Office close this case, which is based on confessions and reconstructions that were collected in improper ways and did not produce any concrete evidence. The policy of trumped up charges against innocent people must end!

https://m.facebook.com/story.php?story_fbid=1019019781501764&id=960177554052654

Addendum:

The plea bargain itself: The minor will plead guilty to three counts of price tag and conspiracy to arson, but the amended indictment disconnects the minor from the incident in the village of Duma and does not mention the name of the main defendant Amiram Ben Uriel.

This is a translation of the letter Elisha’s parents sent to friends:

Dear Friends,

By now I imagine that you have heard that we accepted the plea bargain offered to us. It was with tremendous discussion, deliberation and great qualms that we decided to accept the offer.

Two principles guided us.  The first being the ability to put this saga behind us and allow Elisha, full rehabilitation and to move on with his life.

The second was that the plea bargain would not  compromise any other defendant. 

We pray that these goals will be achieved.

In addition, we did not agree to  admit that Elisha is part of a terrorist organization. Therefore it will be decided by the court.

We deeply appreciate your prayers, care and support throughout.

In an imperfect world one must look forward and have Emunah that a better future lies ahead of us.

This is not the end and we have little control over the final verdict so we continue to pray for help from Hashem.

With great appreciation, 

Naama Odess

From Arutz Sheva, here.

Government Failure Is WORSE Than Market Failure

Do Capitalists Manipulate, Deceive, and Cheat?

Not as Much as Politicians Do
Monday, November 9, 2015
Michael Makovi
  

Real-world markets, according to Nobel laureate economist Robert Shiller, are all about manipulation and deception.

So he argues in a New York Times article summarizing his new book, coauthored with fellow Nobel laureate economist George Akerlof: Phishing for Phools: The Economics of Manipulation and Deception. According to Shiller, merchants and vendors regularly “phish for” ignorant consumers who they can mislead into acting less in their own interests and more in those of the phishermen.

The question is not whether the market fails, but whether the government is more likely than the market itself to correct those failures. 

Shiller claims that the theoretical defense of the free market depends on consumers being rational and well informed — a condition that doesn’t hold true in the real world. Drawing on behavioral economics, he argues that consumers are often possessed with cognitive biases that allow them to be systematically deceived by unsavory merchants. For this reason, Shiller argues, consumers need government regulation to protect their interests. The internal forces of the market are not sufficient.

Deux ex Nirvana

But government regulation is not an infallible deus ex machina. The question is not whether the market fails, but whether the government is more likely than the market itself to correct those failures. Economist Harold Demsetz coined the term “nirvana fallacy” to make this point: it is not enough to find flaws in the real world; one must prove that some feasible alternative is likely to be less flawed. James Buchanan, one of the fathers of public choice economics, compared advocates of government regulation to the judges of a singing contest who, after hearing an imperfect performance from the first contestant, immediately award the second contestant, reasoning that he must be better.

No, the market is not perfect, and consumers are often ignorant and manipulable. But the real question is this: Will government do any better?

Just because the first singer offered a less-than-perfect performance is no proof that the second singer will be any better. Ironically, Nudge author and former member of the Obama administration Cass Sunstein, no friend of economic freedom, accidentally makes this very point in his positive review of Shiller and Akerlof’s book.

According to Sunstein,

Bad government is itself a product of phishing and phoolishness, for “we are prone to vote for the person who makes us the most comfortable,” even when that person’s decisions are effectively bought by special interests.

So yes, people behave irrationally in their capacities as market participants, but they are no more rational in how they cast their votes than in how they spend their dollars.

Buying What You Don’t Want

The difference is that in a market, there are feedback signals, however attenuated. If a vendor cheats his customer by holding back information about his product, at least the customer will learn about the product’s faults after he purchases it, and he will buy from someone else next time. He will likely warn others, too. The consumer may have cognitive biases, but he has the opportunity to learn from his mistakes, prevent others from making them, and correct them in the future. The deceptive merchant will develop a bad reputation, and paying customers are motivated to learn about merchants’ reputations — especially as 21st-century technology develops ever-more-robust reputation markets, accessible through anyone’s smartphone.

By contrast, there are fewer feedback signals in politics and even fewer opportunities to act on that feedback. One vote barely counts, and each voter must vote not for specific policies, but for politicians with a range of policies. Electoral politics doesn’t really offer a choice so much as it imposes a bundle. A vote for a particular candidate implies endorsement of all the policies in that bundle when the truth is more likely that the voter has selected the least bad option. In the market, customers can easily split their “dollar votes” to purchase only the specific products they want.

In Freedom and the Law, Bruno Leoni notes that we are all doubly unrepresented by politics: we vote for A, but B defeats A in the election. Then, when B is sitting in the legislature, he is outvoted on a bill by C. So in the end, a person is governed by politician C who beat B, who in turn beat the voter’s preferred choice, A.

When Phoolishness Is Rational

In such a situation, it makes sense for voters to be rationally ignorant of the effects of government policies they are helpless to affect. Politicians are free to peddle shoddy products when they know voters have few opportunities to learn from their mistakes — and even fewer opportunities to correct them.

Meanwhile, markets tend to concentrate benefits and costs on the consumers who use a specific product. This internalization of costs and benefits promotes learning and feedback. In a market, a person must bear the consequences of his or her own actions.

In politics, benefits are concentrated on those whom the politician wishes to favor — such as financial donors and special interests whose attention is narrowly focused — while costs are dispersed among those whose attention is elsewhere, including many who focus on producing wealth instead of transferring it.

The combination of rationally ignorant voters and informed and motivated special interests encourages rent seeking. Private benefit and social cost diverge as the political process encourages the creation of new externalities. While markets tend to internalize the costs, politics encourages externalities.

So yes, consumers are often “irrational” and deceived and make mistakes. But, as Sunstein himself tells us, this is true in both politics and markets. The question is, Which institutional environment is more likely to promote learning from mistakes? And which institution — the market or politics — maximizes a person’s ability to correct those mistakes? Shiller and Akerlof have failed to prove that government regulation will detect or correct mistakes better than the market itself can.

Michael Makovi recently graduated from Loyola University in New Orleans, where he majored in economics.

From FEE, here.