Welcome to the Nishma Moral Hazard Discussion Forum blog.

MORAL HAZARD, a regular column on the Nishma website, looks at Halachic issues from an economic mindset. Behind the pragmatics of economics is the scientific process of economics, and it stems from a unique outlook on society and decision-making, providing an effective language for investigations into Halacha.

If you have a comment on an article within this column, we invite you place your comments here; then we invite everyone to join the discussion.

Thursday, May 13, 2010


Available on the Nishma website.


  1. How does this column specifically discourage complacency?

    This column was very intriguing, and made a lot of great points. But I was wondering: what about this column makes it specifically geared toward discouraging complacency, as indicated at the end?

  2. Complacency: “A feeling of smug or uncritical satisfaction with oneself or one’s achievements.” For the religious individual there is the potential for comfort in the face of any horror. We believe in God’s Hand. Jews, particularly, are immersed in a religion that has planted its roots deep, and we often do not have to reach up to the branches to pick our fruit—the fruit falls from the tree into our laps: even ignoring modern computer search engines and databases, the accessibility of Rambam’s Mishna Torah meant those less motivated individuals could now survive our religion like never before. (This is obviously not the place to debate the pros and cons, intentions, accomplishments or true purpose of the Yad.) Economics also believes in an Invisible Hand, but not the Hand of God; Adam Smith’s Invisible Hand of the marketplace. There is a certain relationship between God’s Hand and the Invisible Hand as both are inherent in the continued existence of the system of which they are a part. But whereas it is generally obvious to most people that the Invisible Hand of the marketplace maintains the existence of the market due to the participation of buyers and sellers, the relevancy of the individual’s incentives and actions to God’s Hand is often dismissed. It is the unique perspective of Economics—that each and every individual’s each and every action must and will come from somewhere and lead to something (what the Torah calls Justice)—that seems to me to be the perfect perspective with which to combat the potential complacency of belief. Thank you very much for your comment. -Chai

  3. Is teshuva a Moral Hazard?

    This was a beautiful column and I have enjoyed reading it very much. Can the case of the purchase of Fire Insurance, where the insured individual reduces his personal level of care for fire safety and is therefore inefficient due to the redistribution of risks, be compared to the process of teshuva, where a sinner, knowing he can later repent and minimize the punishment, reduces his care not to sin(although it is forbidden to sin and think "I will repent", with the existence of teshuva there is the potential of such a thought)? Is teshuva a Moral Hazard? If so, can you discuss some of the ideas that have been proposed to increase the level of efficiency in cases such as the purchase of Fire Insurance? Do you think a discussion of this nature might strengthen one's disincentive to sin? Thank you.