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Doing Business with G‑d

Doing Business with G‑d


If your brother becomes poor, and his means fail, you shall support him [with a loan]. . . . Do not take interest and usury from him. . . . I am the L‑rd your G‑d, who has taken you out of the land of Egypt . . . to be your G‑d.

Leviticus 25:35–38

From these [concluding words], our sages have derived: One who accepts upon himself the prohibition of usury accepts upon himself the yoke of Heaven; but one who rejects the prohibition of usury rejects the yoke of Heaven.

Sifra ad loc

The Torah strictly forbids the collection or payment of interest on a loan granted from one Jew to another. However, there is a procedure called heter iska (“partnership clause”) by which it is permitted to profit from funds extended to one’s fellow. In a heter iska contract it is stipulated that the money is not a loan but an investment in a joint business venture, with profits to be shared between the owner of the capital and the one who has been granted the right to use it and deal with it.

Why is interest on a loan forbidden, while profit-sharing on an investment is permitted?

The legal difference is that in the case of a loan, the money is no longer the property of the lender. From the moment the borrower receives it, it is his in every respect (it is only that in receiving the loan he assumes the obligation to make a payment for the same amount to the lender at some future date). So if the lender were to collect a fee or percentage in return for the benefit the borrower is deriving from the money, he would be being rewarded for the fact that the money was once his, not for something that he is contributing now. This the Torah forbids. On the other hand, in the case of a heter iska agreement, the money remains the property of the investor (in partnership with the one to whom the money has been entrusted), and the compensation he receives is not “free profit,” but profit that his money is currently generating. (This is also the difference between extending a loan in return for interest, which is forbidden, and renting a home or other object to another in return for payment, which is permitted. While loaned money becomes the property of the borrower, a rented object remains the property of its owner.)

Body and Soul

The Zohar states that Torah has both a body and a soul. The Torah’s “body” is its physical dimension—its recounting of the physical history of the universe, and its instructions for the physical life of man. Animating this body is a soul—a spiritual dimension in which every law and event, and their every detail, has its metaphysical significance.

Body and soul complement and fulfill each other. The body is a vehicle for the soul, extending the soul’s reach to areas it could not touch on its own; the body of Torah is its soul’s implementer, realizing its ethereal concepts as concrete truths in a concrete world. On the other hand, a body without a soul is dark and cold: often a law or event in Torah might seem dry, prosaic or trivial, until it is viewed in the elucidating light of its spiritual import.

The same applies to the laws of usury and heter iska. Viewed solely in terms of their application to our financial lives, these might seem highly technical, or even pedantic; heter iska sounds like an elaborate loophole by which to circumvent the prohibition of usury. Is there really that much of a difference between these two ways of being rewarded for granting the use of one’s capital to another—a difference equivalent (as the above-quoted Sifra states) to the difference between accepting the very notion of G‑d’s authority or rejecting it, G‑d forbid? For this we must look to the soul of this law, to the concept behind its material incarnation.

Before and After

Our sages tell us that G‑d Himself observes all that He commands us to do. A closer examination of their words reveals that there are in fact two aspects to G‑d’s observance of the mitzvot.

Quoting Psalms 147:19, “He tells His words to Jacob, His statutes and His laws to Israel,” the Midrash states: “G‑d’s way is not like the way of a flesh-and-blood [king]. The way of a flesh-and-blood [king] is that he instructs others to do, but does not do so himself. G‑d, however, what He Himself does, that is what He tells Israel to do and observe.” In other words, the mitzvot originate as Divine deeds (His statutes, His laws); then, as a result of the fact that these are “what He Himself does,” “He tells Israel to do and observe” them.

On the other hand, other sources imply the reverse: that our observance of the mitzvot causes G‑d to respond in kind (e.g. Yalkut Shimoni, Eicha, section 1034—“One who studies Torah, G‑d sits opposite him and studies with him”). Thus, there are two levels to G‑d’s observance of the mitzvot: the level on which it precedes and enables our observance, and a second level, on which G‑d is “moved” to do these deeds in response to our doing them.

A mitzvah is an embodiment of the Divine will: doing a mitzvah creates a connection (the word mitzvah means both “commandment” and “connection”) between man and G‑d, between its human implementer and its Divine conceiver. This is why G‑d must first “do” a mitzvah before we can do it. Creating this connection is obviously beyond the capacity of finite and earthbound man; it is G‑d’s initiation of a particular connection that empowers us to do the same.

But why does G‑d follow our observance with an observance of His own? Certainly He, the paradigm of independence and perfection, is not “moved” or “affected” by anything—unless He chooses to be affected. Why, then, did G‑d desire that our fulfillment of His commandments should stimulate a similar response in Him?

The Empty Pitchfork

The answer to this question lies in another, more general question: why did G‑d command us to do mitzvot at all? Certainly, He does not need anything from us. As Elihu the Buzite says to Job (Job 35:5–6), “If you sin, how have you affected Him? If your transgressions are many, what have you done to Him? If you are righteous, what do you give Him? What can He receive from you?” So why didn’t G‑d, who is “benevolent, merciful . . . bountifully kind” and “good to all His creatures” create a world free of demands and restrictions on its inhabitants?

Because a life free of work and responsibility—a life whose blessings are not earned, but are handed out without cause or restriction—is a life devoid of the only true joy there is: the joy of achievement. G‑d’s greatest kindness to us is His “burdening” us with the “yoke of Heaven”—giving us a program for life that we are responsible to uphold, and making our material and spiritual wellbeing contingent upon it.

But G‑d did more than hand down a list of dos and don’ts. For work alone is not enough. Unless work has a function, the worker will derive no satisfaction from it, even if it is amply rewarded. Achievement for the sake of achievement is hollow and unfulfilling—something objectively significant must be achieved.

The previous Lubavitcher Rebbe, Rabbi Yosef Yitzchak Schneersohn, illustrated this point with the following parable: A nobleman was touring his estate, and came upon a peasant pitching hay. The nobleman was fascinated by the flowing motions of the peasant’s arms and the graceful sweep of the pitchfork through the air. He so greatly enjoyed the spectacle that he struck a deal with the peasant: for ten rubles a day, the peasant would model his hay-pitching technique for an hour in the nobleman’s drawing room.

The next day the peasant arrived at the mansion, hardly concealing his glee at his “new line of work.” After swinging his empty pitchfork for an hour, he collected his ten rubles—many times his usual take for a week of backbreaking labor. But by the following day, his enthusiasm had somewhat abated. Several days later he announced to his master that he wished to quit his new employment.

Said the nobleman: “I don’t understand. Why would you rather labor outdoors, in the winter cold and summer heat, when you can perform such an effortless task in the comfort of my home, and earn many times your usual pay?”

“But Master,” said the peasant, “I don’t see the work.”

So to grant meaning and fulfillment to our lives, G‑d caused that our every action should have an objective significance—that they should affect Him. Indeed, this is the only objectively significant effect there can be, since G‑d is the only objective reality; any other objective is, by definition, contrived and artificial.

And to extend this significance to every aspect and detail of our deeds, He caused that our deeds should effect Him in a manner that reflects their particular earthly nature and function. He caused that when we put on tefillin, a mitzvah whose function is to underscore the mind’s guidance of and involvement with the emotions, this causes Him, too, to put on tefillin—cause the involvement of the Divine “mind” with the Divine “emotional” attributes. The same is true of all 613 mitzvot of the Torah: each has a corresponding impact on the Divine reality.

Life is thus neither a humiliating free lunch nor an empty pitchfork pitching imaginary hay, but true “work”—work that earns the blessings it generates and has a true impact and effect.

G‑d’s Money

Thus, the prohibition against usury embodies the very concept of the “yoke of Heaven”—of G‑d’s imparting true work and achievement to our lives.

If G‑d’s observance of the mitzvot were to only precede observance but not also result from it, our relationship with Him would be as a usury-paying borrower. G‑d does the mitzvah, granting us the ability to do the same, but there His involvement ceases. The “capital” is now wholly in our domain, our efforts at His behest disconnected from anything that is truly His: we are only making a “payment” in return for what He has given us, like a borrower who pays the lender for the fact that he has extended him a loan.

But G‑d’s contract with us is not that of a usurious moneylender, but of a heter iska investor. He extends us the capital and insists on payment in return, but He stresses that this is a partnership, an ongoing involvement. He retains His stake in the capital throughout our use of it, being affected, as we are, by the ups and downs of the market of our lives.

G‑d desires that we emulate His relationship with us in our relationship with our fellows—that the nature of the “profit” He extracts from His creation should dictate the manner in which we profit from what we extend to one who has need for the resources in our possession. One who disregards the prohibition of usury rejects the Divine partnership in his life, a partnership that makes our every endeavor a true and fulfilling achievement.

Based on the teachings of the Lubavitcher Rebbe, Rabbi Menachem Mendel Schneerson; adapted by Yanki Tauber.
Originally published in Week in Review.
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Anonymous Brooklyn NY August 17, 2017

I read the comments and feel the pain of some of the authors.
The free loan (without interest) and heter iska -specifically for a mortgage =- are different also in the matter of loss. The bank owns the house until the mortgage and the interest is paid back. But money loaned - without a guarantee, reflects a real possibility of loss. I believe it is Hashem who is the guarantee before yovel -where all loans were cancelled. It was pointed out to me that after WW11 there were free loan societies- Jews were poor yet the free loan societies made home purchases of working class yidden possible. Where are the wealthy yidden today and their interest free loans? Making more and more money through "partnering" as mortgage bankers at market rates too? I believe the Lubavitcher Rebbe ruled that yidden should charge minimum rent. Just look at rentals today- with families facing school tuition too. There is a concept of naval b'reshut hatorah. Nonetheless I believe in hashgacha pratis. Reply

Angela Saint Petersburg May 21, 2017

Truly fascinating. Though, I am not sure where or why the law of heter Iska was introduced. It certainly is a deviant in the laws of users and allows for deviation to the spirit of the law. If one is doing a mizvot, why consider profits. Reply

Denise South Africa May 18, 2017

Thank you so very much in clarifying this matter which has often been of deep interest to me in the ways of worldly works of money and gifting. We can surely know the tree by its fruit as we receive G-dly discernment in particular situations. Reply

Paulo Toyosi Toda Nishimura São Paulo May 17, 2017

How should we regard the ones who observe what we do, get inspiration about us, and uses this inspiration to construct a way of profiting, without our permission or without paying royalties to the one who first saw and first inspired?
Today as we get to a "closer and closer" society we see how one does the know how and the patent.
We are able to copy and mimic and earn money from that.
Some people even say it was their idea and not yours.
This is not usury but this ought to end in royalties payment because the one who really inspired this had expenses and a breakthrough. A creative breakthrough coming up with the inspiration.
How would we pay back to these muses inspirers that bring such inspiration their share of the business? Breakthroughs are things close to miracles: one suddenly starts something creative. From a type of creation that brings much more possibilities to our society.
I don't know if there is an answer ready but justice should be made and the muses should be prized. Reply

Boris warsaw May 27, 2016

profit only in business years ago - I was then ca 25 - I gave a loan to my friend for his first car. I was then thinking if I should take interest as I took the money from a bank and lost my interest on it. It was a crazy thinking. I shouldn't take the interest from the friend as it poisoned our relation. Young people lack knowledge and experience and make mistakes. Never take interest when it is just a loan - not a joint business as you may loose a friend. This is so simple and sad. Keep your friends - not your profit.

There are some social lending services over the internet - when you lend with others $10 to unknown person on high interest - there is another problem - these people most probably won't pay the money back so they agree on high interest. Everybody looses - they loose self esteem and you loose self esteem - they steal - you try to earn money on poor people. I thought social lending is a great idea - but it is not. If you want to help - just help, if you want to earn - offer good deal. Reply

Anonymous U K May 23, 2016

Heter iska and loans. In these days of low returns on savings, I have put money into an Islamic bank and I find that it operates as the heter iska described
and that, furthermore, it is also described as an ethical bank. It is a great joy to know that I am following Torah teaching. My parents were not wealthy but I was taught never to incur debt.
Anything that I needed was saved for and bought when I could pay outright. I have also seen the hurt and trouble caused by lending and borrowing. I have not done either. Instead, where there is need I give, I regard that as my duty, and I am able to bless HaShem who makes it possible for me to do this. I am at peace because I have said goodbye to that sum, and I do not cause guilt in those who benefit; also I am very careful to respect the dignity of those I am able to help. I remember that I myself am indebted to HaShem and to my wise parents. Reply

Chauxner Santa Monica, CA May 19, 2012

A good investment in the Kingdom We are the promising stocks in an international market; where those of us whom engage are either active, dormant, dead, or promising innovasions which may or may not draw a yield.

I like to consider that our children are our nation's treasuries. What we invest in the next generation will determine what sort of harvest these could yield. If we short-change our investments we will recieve what we believed, likewise whether we hoped and anticipated something great we took extra guards to make sure nothing obstacled the process of returns from the balance of the advances we made in due season against those prospects.

In some special cases certain risks are taken and in others a line of credit by way of beliefs and trust encouraging healthy relationship. The privelege to serve needs to participate both ways.

For that gambler who believed & lent an impossible hand over time; who had been deprived the priveleged to see an end come true: Futures & Securites are backed 100% by Hashem. Reply

Nosson Beijing May 12, 2011

loan Please note that G-d in this case invests all he is.
He not only creates the world and its boundaries he becomes so too speak bound by them .
For him it is also a zero sum game since if we lose he loses .
He of course can break the rules but than the whole reason for creation of the world is lost. Reply

Jonathan Johannesburg, South Africa January 31, 2011

"Loan" and risk - Camarillo above. You said that:
"A "lender" is normally entitled to full repayment of the amount loaned, no more and no less. Because a lender does not accept the risk of loss, the lender is not entitled to a share of the profit, if there is one."
I don't agree - a lender (e.g. a bank) DOES accept the risk of loss - they will minimise this risk by only lending to people who they feel can and will repay them. However, many people who have borrowed from banks have not been able to repay the loan -and if they have no collateral, the bank will lose its money. Therefore the bank is fully entitled to charge interest on the loan to "cover" the risk. Reply

Anonymous Camarillo, CA January 30, 2011

Difference between "loan" and "investment partner" When you invest in a business as a partner, your capital is at risk; if the business fails, you lose your investment, and are not entitled to be repaid. It's a gamble.

When you loan money, you are entitled to full repayment. If necessary, the borrower must use his or her own funds.

If you borrow money to buy a house, and house prices drop, you still owe the money.

If you rent a house, and house prices drop, you can walk away at the end of your lease, owing nothing.

A "lender" is normally entitled to full repayment of the amount loaned, no more and no less. Because a lender does not accept the risk of loss, the lender is not entitled to a share of the profit, if there is one.

An "investment" involves accepting the risk of loss, and therefore creates an entitlement to the gain, if there is one. Reply

john smith fort lauderdale, fl January 28, 2011

auto loans so EVERY auto loan in the US is suspect due to being lent money for an asset that depreciates daily. no wonder the auto industry is always in trouble with positive cash flow. of course union labor doesnt help matters. Reply

Yehuda Shurpin for January 26, 2011

Re: isn't a loan 'rented money'? The difference between a loan of money, and a loan of a house or any other object is that the money becomes fully the borrowers to use as he sees fit. The only stipulation is that he payback the same sum of money, but not the same actual bills.

In other words, the borrower does not presently have any actual object that belongs to the lender right now.

With regards to an object or a house, the renter is obligated to return the actual object that he rented. Therefore, as long as the renter has the object, he has something that not only used to belong to the lender but actually belongs to the lender right now.

(I would add in case it is of interest, that the source for this article appears to be Likutei Sichot vol. 3 Parshat Behar) Reply

Anonymous rm, usa January 26, 2011

isn't a loan 'rented money'? to qoute the article:
(This is also the difference between extending a loan in return for interest, which is forbidden, and renting a home or other object to another in return for payment, which is permitted. While loaned money becomes the property of the borrower, a rented object remains the property of its owner.)

please explain the halachic difference: why is a loan not viewwed as rented money? Both the home and the money both belong to owner/lender but may be used by the rentor/borrower within agreed guidleines. Reply

Eula Irene Bunting RFD, IL January 25, 2011

The money backer I have had many times when money has almost magically apeared in my life when I needed it most and was able to make the best of it to my advantage, sometimes so that I amazed myself at how things came to pass. Reading these passages kind of make sence of times like these and I have again received a great lesson from these paragraphs. It is good to know where my help has been coming from. I thought I knew, but now I am sure it was always G-d! Thank you once again. Reply

Ariel TA, Israel February 11, 2010

Lending vs. partnering Dear Rabbi,

Your analysis(and comparison to Gd's partnership with us)is flawed in one significant way: Gd has infinite resources and we don't. Hence, although a lender might not "benefit" from the lending, you ignore the fact that that same money could be put to another use(gain interest in a bank) and hence the lender is losing something else by lending the money(it is called opportunity cost in economics). It is not a zero sum game for him, as you assume. With this in mind, the "partnership" instead of lending seems to simply be a way to circumvent a pretty clear commandment. At the very least, the spirit of the commandment is being broken completely, because although you may call it a partnership or whatever else you want, the lender knows he lended and the receiver knows he is paying interest. Reply

mother of 5 sons Perth, WA February 16, 2009

I can see the difference D.C. D.C., there is a difference ;-)

a loan = **no relationship**, just money going from one domain to another, with the giver having no say as to how the loan is spent. Yes the loan needs to be paid back, but what is done with the loan is none of the giver's choice.

a heter iska (investment) = **a relationship/partnership**. The money is invested in the reciever, the investor has a say as to how the investment is spent, and whilst the investment needs to be paid back, the investor has an interest in what the Receiver chooses to do with it.

In the secular world, there also is a difference in the definition between a loan and an investment. That is why in the current financial crisis, the credit card companies are having a field day (loans) and the shareholders are going bust (investments)....

that is how I've interpreted it anyhow, and Baruch HaShem that HaShem is interested in what I'm doing, like an investment :-) What an honour, I'm feeling great humility...great article! Reply

Anonymous Johannesburg, South Africa May 10, 2007

Loans I must agree with "D.C." above.
Often words can be/are changed to suit the occasion.
Is this honest? Are we being true to the spirit of the Torah? - or merely manipulating what is written down for own convenience???
What are the long-term ramifications of this kind of thing??? Reply

D. C. Anonymous May 9, 2007

Loans So if one calls the loan something else, it's OK -- Just change the words! If you call a dog's tail a leg, the dog still has four legs only. Reply

Jonathan Levy Johannesburg, South Africa May 9, 2007

The Empty Pitchfork "But master," said the peasant, "I don't see the work."

The renowned existential psychiatrist, Victor Frankl, said "Man can do with almost any how as long as there is a why."
If we "don't see the work" - or the "meaning" to what we are doing, it is indeed empty.
Frankl actually "stumbled" on this basis to his existential psychiatry while in a Nazi POW camp. He noticed that those people who "gave up" hope - meaning - soon passed away - but that those who were able to cling to a "why" - regardless of how horrific the "how" was, survived.
Frankl went on to elaborate on this in his many works - specifically his "The Doctor and the Soul."
All of this lies at the foundation of his work of how vital "meaning" ("Logos" in Greek) is in our lives - and his "Logotherapy" has earned a vital place in psychiatry.
Of course, the vital spiritual aspect of all this cannot be understated. Reply

Mark L. Bramlett Jacksonville32244, Fla. May 16, 2006

mitzvot The subject of the mitzvot in/of our lives was most intriguing. The "capital" (our abilities, talent, training, and education) of our lives is certainly something to be used to celebrate, to cement, and to glorify God in our work and in our function(s) in society. Reply

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