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Friday, February 20, 1987
THE DETROIT JEWISH NEWS
compassion to the world?" Kelman speaks
about the emphasis in Jewish tradition on
being a mensch. On asking oneself, What
does a decent human being do in this situa-
tion? On acting without the expectation of
a reward.
I asked Rabbi Kelman to address the
moral and religious questions of secretly
taping conversations — a strategy that has
simultaneously helped the indicted men to
lower their fines and sentences and the
S.E.C. to widen its net.
His response: "Being an informer is con-
temptible." And then, more softly, he adds,
"But, of course, it depends on the motive.
If it's to help bring in someone, like a drug
dealer, who is disobeying the law, I might
do it myself, if I had the courage. On the
other hand, if it's only to benefit
oneself . . ."
During a telephone conversation, Hillel
Levine and I discuss what the Jewish com-
munity's response to such events as the in-
dictments might be. "First, we have to
raise questions simultaneously about both
our position in the American economy and
our Jewish values," he says. He suggests
that Judaism hasn't sufficiently developed
values for living in a modern, pluralist,
capitalist society. "Should there be a
Jewish position on arbitrage?" he asks.
Answering himself with a forceful "Yes!"
he outlines some of the issues that would
underly this position. Does arbitrage lead
to greater centralization of wealth? Does
it lead to greater worker productivity?
Does it put people to work? Does it provide
liquidity at moments when the economy
needs it? "These are all questions rabbis
should be raising," he says.
Obviously, though such questions are in-
teresting and might be useful in getting
people to think about their lives, it is
unlikely that they would generate a com-
mon Jewish point of view. Though some
contemporary Jewish scholars read the
ribrah as the first model for socialism,
others, equally devout, are certain that it
supports all the basic elements of free
enterprise. -
Even the question of whether specula-
tion by those with special knowledge and
advance tips really hurts anyone is open to
opposing viewpoints both within and out-
side the Jewish community. In "Merger
Mania, Ivan Boesky claims that "the func-
tion of merger arbitrage is to make sec-
urities markets work more efficiently." (Not
surprisingly, Boesky's book pays little
attention to the source or timing of infor-
mation used by the person who speculates
on mergers.) Moreover, according to Boe-
sky, the speculation of an arbitraguer on-
ly forces up the price of the target company
"closer to what is, in his opinion, its
realistic value."
On the other side, the statement made
by John Phelan, chairman of the New York
Stock Exchange, before the insider-trading
hearings last June, represents a more com-
mon point of view about the effect of in-
sider trading. "There are those who see this
as a victimless crime," he said. "They
are . . . mistaken. Three out of every four
Americans are vulnerable because they
have a stake in the securities market,
either as individual investors or as share-
holders participating through institutions
such as insurance and pension funds."
Robert Lekachman observes, "It must
appear to the people playing around that
these are victimless crimes. Even the small
investors are getting some money — and
why should amateurs expect to make as
much as pros?"
The burgeoning of
M.B.A.s has created a
new type of Wall
Street professional: a
person trained in
"number crunching,"
though not necessarily
in humanities or
the arts.
Though in every discussion stockholders
were invariably identified as the "victims"
of insider trading, I didn't hear much
about the effect of insider trading on the
companies themselves — including the
people who work in them. When I asked
Lekachman about it, he said, "Well, of
course, insider trading also affects the in-
dustry and its employees. Because money
will be needed to pay these shareholders
something, what might have been used to
redo a plant or provide new jobs simply
won't be there.
"It's a victimless crime only ia the sense
that it's hard to identify who exactly is
hurt," he says. "There are large numbers of
people potentially harmed: some are in-
vestors, others are workers using outdated
equipment, still others are among the
unemployed who might otherwise have
jobs."
❑
Carol Ascher's novel "The Flood" will be
published this spring. She is a previous con-
tributor to Present Tense, from which this piece
is adapted with permission.
©Copyright 1987. Present Tense. All rights
reserved.