I got to know Bernie Madoff through his service to Yeshiva University’s Sy Syms School of Business. Until news of the scandal broke, he served as chairman of our board. I, and other faculty members, worked closely with him on an academic committee, meeting frequently at his now-infamous Midtown office.
He is charming, soft-spoken and fatherly. Like the old E.F. Hutton commercials, when Bernie spoke, people listened. As he presumably did for many others, he provided us with charismatic leadership and a strong sense of security and optimism. There was little doubt when Bernie Madoff was in the room about who was the decision-maker.
Now, of course, the money is gone, the charisma has evaporated and, instead of security and optimism, there is fear, uncertainty and concern about the future.
Personally, I begin to wonder, does my work teaching business ethics even matter? Can an academic course on business ethics really stop a would-be Bernie Madoff? Not likely.
Bernie Madoff stole gigantic sums of money, but perhaps more importantly he has diminished society’s stock of social capital. In a single stroke, the revelation of his actions has made it more difficult for us to trust one another. He has loosened the taken-for-granted connections that bind us together and robbed us of some of our faith and hope in the future. If yesterday, some of us were naïve idealists, today we are all hard-headed realists. And that is a shame.
But, of course, we all know that Bernie Madoff was not acting alone. He had many enablers. There are those who invested other people’s money with him and did not engage in the due diligence their position of responsibility required. There were likely others who invested with him suspecting that all was not kosher but assuming that he was earning real profits with inside information or by front-running.
Perhaps the biggest enabler though is the prevailing ethos of the business world. We live in a world that has become increasingly oriented toward a bottom-line mentality. Ours is a culture of money first. In every business school I know of, we teach our students to maximize profits. Good enough is never enough.
Our Jewish communities, which once honored rabbis and scholars, now almost exclusively honor those with the biggest bank accounts. Our students and children surely take note of this.
Bernie Madoff should be punished for his wrong-doing, but we simply fool ourselves if we think that jailing Madoff will solve the deeper problem of which he is just the most recent symptom.
With every crisis, however, comes a new opportunity. We need to stop looking for mechanical solutions to our ethics failures and start discussing more meaningful ones. We face a defining moment. We can go back and try to do what we were doing before, only better, or we can move forward and critically reconsider our goals and priorities. This demands not only a change in actions but a change in consciousness, as well.
I suggest that in business we replace profit-maximization with sustainability. We should supplement traditional financial statements with triple bottom-line statements that measure social and environmental performance in addition to economic performance. The latter should stress long-term success and not just short-term profitability. The Jewish tradition, a 3,000-year-old and ongoing project, has much to contribute to this discussion.
Further, I suggest we challenge those who separate completely business and economic affairs from the rest of life. I suggest we resurrect and reinvigorate the biblical vision of combining earning a livelihood and acting in a just and caring way. The institutions of the jubilee and sabbatical years have much to teach us today if we give up on a literal interpretation of the Torah text and seek to understand the egalitarian spirit and caring ethos underlying these ideas. The mitzvah of loving the stranger takes on an added dimension and urgency in a global economy and interconnected world.
We should stop looking for outsized heroes and begin to participate in lively ethical dialogue with one another. The Torah speaks of brit, or covenant, in nearly every one of its books. We need to re-imagine the meaning of covenant — a shared agreement among equal partners — and demand that it speak appropriately to a pluralistic and postmodern world.
I will continue to teach business ethics but I have learned through recent events that this is only a tiny part of a much larger job. Unless we all become informal ethics teachers, none of us will get where we want to go.
Moses L. Pava is the Alvin Einbender Professor of Business Ethics at the Sy Syms School of Business. He is the author of “Business Ethics: A Jewish Perspective” (Ktav, 1997), “Leading with Meaning: Using Covenantal Leadership to Build a Better Organization” (Palgrave Macmillan, 2003) and the forthcoming “Jewish Ethics as Dialogue,” due out from Palgrave Macmillan in 2009.
"if we give up on a literal interpretation of the Torah text and seek to understand the egalitarian spirit and caring ethos underlying these ideas" - We're not going by the true interpretation of the Torah text. The whole point of swapping ownerships every seven and fifty years was for the moral value in it. We need to actually keep the Halachic laws out of the condition of internalizing the morality of ownership and that none of our belongings belong to us. Second, we should all move to the Land of Israel and act morally there, in order to be a light to the nations who live here, in exile. All of Israel's problems are because we're not doing that. Just by living here we are showing greed and lack of faith in our tradition.
Well said sir.
Thank you for this - did you write all these learned comments in your previous books ? did you impart those values onto your students and relations ? did you speak out when members of your community or your family did not exemplify those values ? if not, why speak out now ? what has changed apart from the revelation of a good deal gone sour ?
Well said, Professor! It's great to see someone truly care and practice ethical guidelines in class and in the business world. Have some ethical rachmones for us on the final too!
Yeshiva, like many other institutions and individuals, was lulled by the refrain of "he is one of us." Bernie Madoff, that titan of Jewish philanthropy, was able to ply his nefarious trade for so long because no one pulled the curtain to see if he was "real." Yet he's really an immoral, corrupt thief without a scintilla of ethics or empathy for the people he robbed. As long as he funded scurrilous charities dedicated to "reverse intermarriage and assimilation" no one dared ask for his bone fides. After Bernie stuck his hand in the pocket of everyone he knew in Merrick, he turned to the dreaded Goyim, the accursed enemy. Yet in reality, Madoff was the enemy -- he has confirmed the most paranoid fantasies played out on 1,000 anti-Semite websites. He is the poster boy for the New Right and will serve as the model for the re-make of the film "Jud Suss." OR he can be the model of the corrosive nature of worshipping money rather than G_d. It is a choice. The good Professor is wise to offer an alternative, I hope his students take heed.
Being a student of Professor Pava I'd like to defend his commitment to larger ethical values. No, he didn't wake up today screaming and shouting. He had been fighting an uphill battle for many years. I urge you look at his books to verify his unwavering commitment to larger ethical values.
No excuses Mr Pava, we are all not enablers. Where were the expert professors, the expert fund managers, the expert government regulators? Not one of these so called experts questioned the impossible returns decade after decade, allowing the greatest Ponzi scheme in the history of civilization to continue except for a deep economic recession that precipitated its downfall. If this recession never happened, the Ponzi scheme would have gone on for decades more, undetected. But now, while the professor writes and teaches about Jewish ethics in the face of his failure to recognize this scandal , we, the ordinary Jewish community, must now be subjected to a new plethora of anti-semitic rantings posted on the internet and heard through the corridors of our schools and the backrooms of our businesses. We are not all Madoff's enablers as you so claim Mr. Pava,its just the experts like yourself , experts who seem to know more and more about less and less.
Prof. Pava is an example of why Jews are, in the final analyisis, the central beam of Western moral culture. But that is generic "Jews," not all "Jews," mere little humans like the rest of us. Most freightening to me are those professional "Holocaustists: past, present and future," trying to make-up their losses by the hand of Madoff, stampeding Jews into fear of concequent anti-Semitism at the hand of a nation already victim of a Financial Industry-wide fraud, to dig into their lunch money to keep these shysters fat and comfy screaming "anti-Semite" for a living. Now is the time for dignity, not cattle-like stampede. Prof. Pava is a model to us all; his appeal to perseverance in teaching business ethics is akin to a physician's never ending struggle with death-- it winning in the end all the time. Most of those caring docs I can recall as an honor to work with side by side in the losing battle were, in fact, Jews applying to their profession the same ethic that drives Prof. Pava. As a Christian I took one message from that Jew Jesus: "divine" is the mere modesty of caring and giving the best of yourself for the sake of giving t others. And, in my Jewish education, I took away the story of Chanukah: that even the laws of physics cannot put out the flame of goodness in man's heart. It is no wonder that these were time points through which I sought to draw a streight line as the shortest distance to my own soul (though never an easy climb). Sure, there are a lot of "damned Jews" I can't stand. But these are not really Jews; these are mere humans like me, they born of a Jewish mother. Even as I decry fraud and inhumanity, I especially become aggitated when I see it in Jews; not because I judge Jews by a double stanadard but because I cannot help but judge them by my parents' Jewish friends who tutored me all through our common refuge from East Europe. These were survivors of a double Holocaust: Hitler's and Stalin's. Their memory is a hard act to follow. But anyone who calls me anti-Semite for comparing other Jews to those Jews is wrong. Those who do it for a living and for status only remind me of the professional anti-Communists of the last century that saw their neighbors as cattle that they can control only once stampeded in panic. Our species has a horrible and scaring history. But Prof. Pava's persistance in holding a road sign before the young, to my mind, puts him in league with my Jewish mentors. God bless him, even as He will judge Madoff for his flaws. We should not seek to blow out the Holy Flame just because it does not comfortably warmed us. It's light still guides us on the path of Prof. Pava.
Clannishness is necessity due to historic reasons like the HOLOCAUST; but not to the point of exclusive inclusiveness, which was practiced in-your-face by MADOFF's victims. Churning and chanting of injustice and victimization of one sect of people and then feigning absolute ignorance when the same sect is perpetrators isn't at all just. Sane voices, opinions and actions from the community are urgently needed in ISRAEL else, victimization and sympathy will cease to exist anywhere in the world for the past committed as well as future acts. It is deep within the soul of the community, where Scholars and Rabbis should journey, embark and impart ETHICS to their congregations and schools for true change to cometh.
I am not responsible for Madoff or enabler anymore than when Jesse Jackson said all white people are for black children born out of wedlock. Maybe I will the fool and the forward for printing this junk.
Thwe professor might like to remind his colleagues at Yeshiva U that ethics entails fessing up to unsavory connections and colossal, persistent errors of judgment. When Bernie M dropped his bombshell to his dumbly ignorant sons (yeah, believe it), his name was off the roster of officials and donors on the Yeshiva/Syms website faster than Leon Trotsky being airbrushed out of a snap with Stalin. Never happened, nothing to do with us, Bernie Who?
power to you professor Pava, i completely agree with your point that we MUST apply the definition and values of our religion in all aspects of our lives, especially in business!! happy to have you as a student keep up the good work
*to be your student
There are a lot of sins that I have to beat my chest over on Yom Kippur; being a Madoff Enabler is not one of them. Madoff was a crook plain pure and simple. Like millions of others, I had nothing to do with him and I am sure not going to take the fall for those who made his thievery possible. If you are looking for Jewish enablers, you might want to look at those who supported the Regan-Bush bunk that led to the dismantling of the New Deal created infrastructure that made capatlism possilbe while protecting us from the abuses of capitalists. You might want to list those Jews who built million dollar mikvahs. You might want to list those Jewish organizations that sponsored flashy black tie dinners in fancy New York hotels so that college professors could enjoy the life of teaching from "endowed chairs." If everybody is guilty, than nobody is guilty. If we want to talk about enablers, we could always talk about the lax moral values of the Orthodox Union that continues to enable the Rubashkins. But we wouldn't to do that since that might mean those at Yishava had to actually take responsbility for morally dubious behavior and it is so much easier to deflect with smoke screens.
When five Vienna, Austria rabbis attended and supported the Iranian Holocaust Denial Conference, they were excommunicated. Why doesn't the Jewish Community formally treat those Jews who shame the Jewish people in such terrible ways, in a similar manner? This should particularly include those who wear their Judaism for all to see. It should include Washington lobbyists who parade their Jewish heritage and then end up in jail; ultra-orthodox sects who are abusive or steal from the government - like those pardoned by Bill Clinton; or Kosher butchers who have failed to live up to the standards required to be so designated as in Iowa.
And yet, it remains now as it ever has. The machers will always know better, and the rest of us don't even speak their language. The machers of Beit Podhoretz continue to insist that the Jewish community is inherently conservative and Republican even as 80% of us continue to vote Democratic, just as he machers of our philanthropic industry will certainly continue to insist that fundraising is the only measurable standard by which measure its increasingly cryptic goals. We may certainly count on new voices to be dismissed and denied. Nevermind that money is only one effective tool to actualize communal potential; as long as our goal remains the mindless self-preservation of our institutions in and of themselves, we will remain a poverty-stricken community.
The comments of Mr Pava are nothing but tripe. He must be one of the "Business School Professors" who have never had anything to do with running a business in his life. It should not take an incident of this kind to serve a wke-up cup of coffee to these uninformed, inexperienced "experts" in their classrooms; one month working for any small business should do the trick. When someone works in a large Corporation, Law Firm, or Hospital, it takes a while until he begins to understand what is really being done there. But in a smaller business, one learns much more quickly to see the "real picture." Ethics and business? What has one to do with the other? Politics, business, even the exact sciences--witness the recent scandals on original research in the professional Journals--all are subsumed to success, victory, winning, the bottom line, and money. I do not decry this; it is simply the way the world is. Any large organization--whether corporate business, governmental agency, even Charitable non-profit--is a haven of corruption. And it is NOT getting worse: In ancient Rome, Senators were routinely bribed by the Patricians in order to pass a certain piece of legislation. When the United States Congress passed the new Bankruptcy legislation a year or two ago, which prevented credit card debt from being treated the same way as all other debts, does anyone think there was one Member of Congress who genuinely believed that this was in the interest of his constituents? There is no need to name names, amounts of cash, or Banks to know what went on. Teapot Dome in 1924 was no exception; all this is a direct result of the simple fact that, when money is involved, it is extraordinarily difficult for a person not to surrender. Let us acknowledge that as part of human nature. While I don't necessarily think this is the best or most productive way to deal with such temptation, it is generally only the fear of being caught, coupled with the embarrassment and threat of punishment--whether incarceration and/or financial penalties--that deters succumbing to temptation, whether financial, sexual (former Gov. Spitzer), and otherwise. And as far as embarrassment or shame is concerned, it no longer exists, at least in 21st-century United States culture: Madoff, Spitzer, Geithner (with his unpaid taxes) et. al. are only concerned with the best book deal they can get, if they are caught. The book deal, the talk-show circuit, Oprah, Larry King, and the speech and lecture fees they will command, have all removed any vestiges of shame in our culture. But again, even in Egypt and Rome, the same behavior held sway. I can go on, but I think I've made the point.
The Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, the Forward requires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, the Forward reserves the right to remove comments for any reason.