Jewish tradition views wealth and poverty as, essentially, psychological rather than monetary issues: Ben Zoma says in Avot 4:1: “Who is rich? One who is happy with what he has.” The inverse of which should be that one is poor if he or she are not satisfied with what they have. This statement challenges most learned studies of the economic status of modern societies, and would actually support the United Nations World Happiness Report which ranks countries’ national happiness based on respondents’ ratings of their own lives.
The 2018 happiness report found that Israel was 11th in the world in terms of its happiness, even though its per capita GDP was only 1.244, compared with the US in 18th place with 1.398, and United Arab Emirates in 20th place, despite a 2.096 per capita GDP.
Which brings us to the folks who are customarily considered Israel’s poorest population: the Haredim and the Arabs. A study published last year by Nitsa (Kaliner) Kasir of the Haredi Institute for Public Affairs, titled: “Who Is Poor? Various Aspects of Poverty and Financial Management among the Haredi Public,” concedes that, according to the official index compiled by the Israeli National Insurance Institute, the poverty rate in Haredi society is high and stands at over fifty percent. But there the similarities between Arabs and Haredim end.
With the understanding that poor people are more likely than others to be mired in debt, here’s a graph comparing Arab and Haredi society to the non-Haredi Jewish society in terms of dealing with debt: it appears that Arabs and Haredim who are on the same economic rung in terms of income, have a radically different approach to money. Israeli Arabs save little and borrow a lot, Haredim save a lot and limit their borrowing.
Kasir argues that the data show that in general society there is a high negative correlation between socioeconomic status and the ratio of debtors and those whose debts are being handled by the Enforcement and Collection Authority – a connection that is bi-directional, because poverty (difficult economic situation) is the main cause of falling into debt, and the debts deepen the poverty and hinder the extrication from it.
The debts likewise impact all areas of life and the debtor’s ability to cope with day-to-day difficulties in general, and the debts in particular.
Even so, with respect to Haredi society, this connection does not exist. In Haredi society, half of which is poor and seventy percent of which are classified as low-income earners, the ratio of debtors is low. In addition, in the Haredi communities that are in the lowest socioeconomic brackets, the ratio of those whose debts are being handled by the Enforcement and Collection Authority is very low and is similar to the ratio in the general population in communities in the higher brackets.
Kasir believes that the relatively low ratio of debtors in Haredi society can be explained in that while poverty in general society stems from failures and obstacles, in Haredi society the low-income levels and poverty are by conscious and discretionary choice (from the Haredi perspective) in a lifestyle that appears to be poor, but is also highly purposeful in accordance with the unique welfare factor in this society.
This being the case, many Haredim practice financial responsibility and adjust their expenses to their income. In addition, the community structure of Haredi society promotes the establishment and development of mutual aid organizations that help Haredim to maintain their economic balance. Some of the areas addressed by these organizations are: assistance for women following childbirth, tutoring for children with learning challenges, various forms of economic assistance (interest-free loans, charity via grants and grocery vouchers, economic consulting, etc.). All these organizations assist families in the lowest economic bracket to cope with financial hardships.
Kasir suggests that the Haredi unique economic management methods are a significant factor that results in the low ratio of Haredi debtors and Haredim with files against them at the Enforcement and Collection Authority.
She also notes that even those who need loans in Haredi society have broad access to inexpensive loans, which are provided by mutual aid funds, interest free and with manageable repayment terms, whose purpose is to relieve the financial pressure on the borrowers and enable them to live in dignity while gradually repaying their debts.
It is important to recognize that even when a person has difficulty repaying a loan, in many cases the mutual aid organizations approve additional loans for the repayment of old loans (debt rollovers). If a debtor does not repay his loans, whether to individuals or mutual aid organizations, the creditors appeal for assistance via the relevant channels in the community – the loan guarantors, the debtor’s relatives, and local rabbis – who can exert pressure. The deterrence of legal authority proceedings also influences this issue, and is another contributing factor to the low the ratio of those whose debts are being handled by the Enforcement and Collection Authority.
The Haredi Institute for Public Affairs was established in 2014 by businessman and philanthropist Eli Paley, to facilitate innovative thinking, cooperation, and progress on issues of mutual concern for Israel’s Haredi population and society at-large.
Having read all of the above, one gets a fresh perspective on the connection between the main categories of the UN happiness index and the corresponding values which can and should be recognized in Haredi society in Israel (surprise, surprise).
Besides raw wealth—GDP per capita, the index recognized the following values as crucial for human happiness: Social support; Healthy life expectancy; Freedom to make life choices; Generosity; and low public perception of corruption.
Let’s compare a few countries of interest in terms of freedom of choice:
Finland (the overall winner) scored 0.681
Israel (11th) – 0.464 – lowest rate for free choice
The US (18th) – 0.547
The UK (19th) – 0.533
Germany (15th) – 0.586
France (23rd) – 0.520
When it comes to generosity, here’s how the same countries are rated:
Finland (the overall winner) scored a measly 0.192
Israel (11th) – 0.262
The US (18th) – 0.291
The UK (19th) – 0.354
Germany (15th) – 0.273
France (23rd) – 0.098
Check out the entire chart. Fascinating.