The Challenge of Wealth
By Rabbi Dr. Meir Tamari
RESPONSA-Vayeitzei, Week of 5-11th Kislev, 5764.
Coercion in Marketing
The moral issue of coercion in marketing is one that takes many forms, over
and above the use of blatant force or of power. All these forms in addition
to the immorality inherent in their use disrupt the efficient working of
the market mechanism.
Advertising exploiting ethnic or racial differences in order to convince or
prevent consumers from buying goods or services has often been used by
majorities to harm minorities economically, as anti-Semites have done to
destroy the economic basis of the Jews. Ironically, minorities have often
used the same advertising to protect themselves. Large firms in general,
often exploit the small firms by delaying payments and when they are the
sole suppliers or customers, they use the power of their size to obtain
price or marketing advantages.
High pressure salesmanship, badgering consumers especially the elderly and
the poor, and taking advantage of peoples ignorance of the market price or
quality of goods and services are all widespread examples of coercive
marketing techniques that while they may be legal, are immoral. Generally
speaking free marketers have seen in the Roman dictum of caveat emptor- let
the buyer beware-the answer to any moral dilemma in this regard. This
places the full responsibility for verification on the consumer and is
based on the assumption that all the players have equal access to
information and equal power in the market. In reality, this is seldom the
case and usually the seller has the advantage. The Halakhah that is
generally supportive of the competitive free market and understanding of
its legitimacy, has however, limited the free market and granted protection
to all the parties to a transaction against coercion and the following
responsum is an example of one of them.
QUESTION: (From the Av Bet Din, Akinou).
"Reuven has been conducting a business in our town for many years and now
Shimon has opened a similar one. Shimon also has a store in one of the
outlying villages, where in addition to his usual business, he has the
monopoly of granting licenses to the peasants for collecting the empty
cartridge shells from the army firing range, for sale to the smelters.
Shimon has threatened the peasants that if they continue to buy from
Reuven, then he will not grant them licenses.
"According to Rabbi Huna [ Bava Bathra, 21b], the original storekeeper
cannot prevent newcomers from opening similar businesses, where this does
not completely choke off the livelihood of the veteran.[This support of
free entry of new firms is the halakhic norm. It recognizes peoples right
to do as they see fit with their assets, acknowledges the benefits of free
competition and generally does not recognize any restrictive rights
accruing to a veteran simply as a result of being the first]. However, we
cannot apply this to our case, because of the ruling of Ibn Migas
restricting a seller from distributing gifts to children [non-price
competition] in order to encourage them to buy from him in preference to
another storekeeper. Ibn Migash ruled that in cases where such non-price
competition effectively prevented the customers from buying from a
competitor, we rule like Rabbi Yehudah and not like the Sages who permitted
giving of such gifts; normally the halakhah in this regard would be like
The restrictive law of fishermen having to distance themselves from one who
had already spread his nets in a certain spot, could perhaps be used to
prevent storekeepers from encroaching on an existing business. We could
argue that just as the original fisherman was already certain of the fish
in his territory, so too, the veteran storekeeper could be certain of his
customers; therefore to permit newcomers would permit theft, just as in the
case of the fisherman. That argument has not been accepted, since, unlike
fish in the area of the net, one cannot be certain of the customers until a
sale has actually been made, and therefore, the competition would be
permitted (Ran-HaShutafim and also Rabbenu Tam, Kiddushin59a)
However, in our case none of these permissive arguments apply since the
competitor competes through his threats not to grant the villagers their
licenses for collecting the shells if they buy from the veteran.[ This is
oshek- coercion, that is tantamount to robbery]. Therefore, he is not
allowed to open the new store. Even if he promises not to threaten the
villagers, he may not open the new store, since such a person cannot be
trusted to keep his promise. However, if he were to sign such an agreement
before the bet din, then he may open his store".
Teshuvot Avnei Nezer, 24; Avraham, Admor of Sochochow, 5668.
All the Codes [Rambam, Mishneh Torah; Yechiel ben Asher, Arbah Turim and
Yoseph Karo, Shulchan Arukh] include coercion in their definition of
gezel-robbery; "Thou shall not oppress your fellow and you shall not
rob"(Lev. 19:13). Furthermore, they trace it to coveting and lusting after
the property of others.
"One covets the servant or the house or the equipment of another and wishes
to buy them from him but the latter does not wish to sell [even at market
price]. Then the buyer pesters him or uses his friends and relatives to
bring pressure on the reluctant seller [perhaps like pressure on
shareholders in a hostile takeover]. Such a one transgresses the negative
commandment, "You shall not covet" (Ten Commandments, Exodus, 20:14).
Even if one lusts after another's assets so that one plots in his heart
ways how one can buy them [since the owner refuses to sell], one
transgresses the commandment, "You shall not covet and you shall not lust
after a neighbors house, nor a field ..nor anything that belongs to your
neighbor" (in the Ten Commandments in Deut.5 :18). That lusting leads to
coveting, the coveting leads to robbery in those cases where the neighbor
refuse to sell despite the buyer's raising the price or bringing social
pressure on seller, and to murder when the owner resists" (Mishneh Torah,
Hilkhot Gezeilah, chapter 1, halakhot 3,9, 10 and 11).
There is a further negation of coercion in the protection granted
halakhically through the concept of a just price, onaah, whereby a
transaction at a price differing from the market price by more than 1/6th
may be cancelled or the price differential refunded. This is usually seen
as protection against price fraud, but in reality should be seen as
protection from price oppression resulting from the ignorance of either of
the parties to a transaction-either buyer or seller-or the use of undue
influence by either of them. Full disclosure of market conditions
pertaining to a transaction obviating for instance insider trading, would
seem to be the only way to overcome the protection of ona'ah.
Onaah derives from the biblical verse "When you sell to your neighbor or
buy from your neighbor's hand you shall not oppress one another"
(Lev.25:14). In most places where the word ona'ah is used in the Torah, it
refers to the exploitation of status or strength as for instance in the
commandment "and a stranger you shall not oppress (Exodus
22:20). Furthermore, all the commandments forbidding theft or robbery are
understood to include non-Jews as well, whereas ona'ah applies only to
Jews. Thus it cannot be understood as fraud or theft but rather as an extra
duty devolving on the Jew to refrain from taking advantage of a position of
Price Onaah does not apply where both parties are made aware of market
conditions. "He who buys or sells in good faith cannot be guilty of ona'ah.
If the seller says, " This article which I am selling at 20 is sold in the
market at 10 ", there is no ona'ah" (Mishneh Torah, Hilkhot Mechirah,
chapter 13, halakhah 4 based on Bava Metziah 51b). It does however apply
where one of them claims that while he knew of the overcharge and agreed to
it, nevertheless he only did so under duress. This is based on the
Talmudical story of one, who fleeing from enemies who wished to kill him,
agreed to the overcharging by a ferryman. When they arrived on the shore,
he demanded a refund of the overcharge under the law of Onaah, since he
agreed only under duress. The Rabbis upheld his claim. Subsequently, based
on this Talmudical ruling, a rabbi upheld the claim of a clothing
manufacturer to protection of Onaah, since, under pressure of fulfilling a
major contract for army uniforms, he had agreed to the overcharge by his
"You may ask in your heart, how is it possible in our commerce not to try
to persuade the buyer of the uniqueness of the article and its value?
Remember that one must distinguish between 2 different things in this
respect: It is both good and honest to do everything necessary in order to
show the buyer the real value and beauty of the article [through proper
advertising and attractive packaging]. However, for us to hide and cover
defects [in information and pricing], is nothing less than deceit and is
forbidden" (Ramchal, Messilat Yesharim, chapter 21)
Copyright © 2003 by Rabbi Dr. Meir Tamari and Torah.org.
Rabbi Dr. Tamari is a renowned economist, Jewish scholar, and founder of the Center For Business Ethics (www.besr.org) in Jerusalem.