Tuesday, May 4, 2010

Vayikra 25:4-22: Some economic implications to the laws of shemitta and yovel

Vayikra 25:4-18 records the laws of the special years, shemitta and yovel, where people were forbidden from working the lands to grow grains and wine and the land returned to is original owners in the yovel year. Regardless of the rationale for the laws, what are the economic implications of the laws? 

With regard to the law of not working the land during the shemitta and yovel years, what would the people do during the year?  Also, a more basic question is whether the lack of grains would lead to the people starving?

Vayikra 25:6 records that the people could eat the natural produce of the land that grew without being cultivated, but the question is how much food would that give? Apparently not too much, since 25:20-22 record that G-d was going to bless the people with bountiful crops in the sixth year which would hold the people over until the people could harvest the crops from the eighth year. This blessing would help landowners, but poor people who did not own lands, could have seen severe food depravation during the shemitta and yovel years. It is true that they would have greater access to the fields, but if there was limited produce, then this access would not have been helpful. In addition, if the blessing was not fulfilled, possibly since a person was not worthy of receiving this blessing, then even landowners could have faced a problem of food deprivation.

The implication of this possible food depravation is that people would go hunting and fishing during the shemitta and yovel years. In addition, instead of people raising grains in the six non-shemitta years, they might have dedicated more of their land to growing vegetables, which could be grown in the shemitta and yovel years and raising sheep and cattle. While a person had to allow some animals to enter one’s field, 25:7, there is no prohibition of killing one’s animals that were not in the fields. For example, the shemitta year did not annul the korban pesach or other animal sacrifices, which means that people killed their sheep, goats and cows during the shemitta year to celebrate various holidays. Thus, if there was a problem of not having enough food during the shemitta and yovel years, then the people would have reverted back to being hunter/ gatherers.

Even if there was enough food to survive and there was no food depravation, then still the people could have gone hunting and fishing during the year. They might also have “wasted” the year by playing games and sports. Another possibility is that the people could have spent the year on building and upgrading their homes. Another possibility is that Soss (1975, p. 338) suggests that since a person could not work in the fields during the year, this would free time which “would act to stimulate technical inventiveness and innovation.”

Are there any possible economic gains from the land resting? One, as mentioned by the Rambam (Moreh 3:39), is that the resting of the land could be considered a form of crop rotation. Would this lead an overall gain in productivity in the other six years?

Buchholz (1988) suggests that maybe the shemitta year increased the capital stock by forcing people to save in the intervening six years. However, as noted by Soss (1975) most of the savings would be for food, which would literally be eaten in the 7th year. One other consideration is that the loss of production in the seventh year would naturally have been partially offset by people working harder in the six intervening years to compensate for being unable to work in the seventh year. In fact, one could understand the verses that introduce the shemitta year as obligating a person to work in the intervening years. Thus, Shemot 23:10 and Vayikra 25:2 record, “For six years you are to sow your land,” Fox 1995 translation. (Note this idea could also apply to the Shabbat that a person is supposed to work for six days, see Shemot 20:9 and Devarim 5:19, and Avot de-Rav Natan, 11:1.) Furthermore, as mentioned above, the prohibition of the shemitta year would likely induce people to enter fields least effected by shemitta, such as tending sheep or cattle, crafts, or services instead of farming. Would these activities lead overall to increases in production in the economy?

The return of the ancestral land in the yovel year has more potential gains than the law of not working the fields in the shemitta and yovel years, though again these gains are not obvious. When the people would return to their ancestral fields this would decrease the inequality in society since each person would have the opportunity to start over again and there would be an increase of the assets of the poor people. However, if there was some particularly valuable land, then one family would own this land for perpetuity which can make them permanently wealthy. Also, over time normal demographic changes would nullify the initial attempt at equality when the land was divided in the time of Yehoshua. People from larger families would have less land than people from smaller families since their fixed share would be divided between more people. Furthermore, over time some families die out, and the land would be inherited by close relatives who would end up with “double” plots. (I heard this last point from Nobel Laureate Kenneth Arrow, in a discussion with him in 2000.) Thus, the equality of the division of the land was just a starting point that people started from the same point, but there was no guarantee of future equality, and the return of the land would not necessarily increase equality.

There are definite losses in the efficiency of the economy from the return of the land in the yovel year since there is less incentive for a buyer to develop the land in the intervening 49 years. Buchholz (1988, p. 422) also argues that the subdivision of plots “limits the ability to exploit economies of scale” by the farming. Yet, unless there are large transaction costs, this problem could be surmounted since adjacent farmers could work together to attain economies of scale.

On the other hand, there are some potential gains in efficiency from the return of the land. While one generation might have worked hard to become wealthy and accumulate large tracts of land, the continued possession of the land by future generations if there were no laws of yovel, could have reduced the level of competition and efficiency in the economy. The inheritors of the land might tend to “satisfice” as opposed to maximizing the value of the fields. Instead, the redistribution of the land means that the descendants of the previous large landowners would have to re-earn their wealth, and the people who returned to their ancestral land would have resources that would enable them to compete. Accordingly, by the return of the land in the yovel year, it is possible that there would be economic benefits to the economy, but the potential gains or losses in equality and in efficiency from the law cannot be known unless one actually can measure a real-life case of the land periodically returning to its original owners. (I think these possibilities are similar in some ways to arguments about inheritance taxes if they lead to more or less efficiency and equality in an economy.)

Bibliography:

Buchholz, Todd, 1988, “Biblical Laws and the Economic Growth of Ancient Israel,” Journal of Law and Religion, 6:2, pp. 389-427.

Fox, Everett, 1995, The Five Books of Moses: A new translation, New York: Schocken Books.

Soss, N., 1975, Old Testament Laws and Economic Society, Journal of the History of Ideas, 34, pp. 323-344.

2 comments:

  1. What do you mean by “satisfice”?

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  2. Hello,

    The idea is that instead of maximizing output, one aims to reach some satisfactory level. In this case, the people who inherit the land may not work to attain the maximum ouput from the land but only to reach some level of output which they think is satisfactory. This would lead to a reduction in the efficiency in the economy.

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