| Gitin
One of the most famous rabbinic enactments is that of the pruzbul, enacted by the great sage Hillel, which allowed a loan to be collected even after the sabbatical year. The pruzbul is often touted as an example of the flexibility of Jewish law and the boldness of Hillel who established the pruzbul in seeming contravention of Biblical law which states that any outstanding loans at the shmitta year[1] are to be cancelled: "this is the manner of the shmitta: every creditor shall release that which he has lent his neighbour; he shall not exact it of his neighbour and his brother; because a shmitta has been called for the Lord (Devarim 15:2)." Yet mipnei tikkun olam, in order to make the world a better place, Hillel instituted the pruzbul to allow just that.
"A pruzbul prevents the remission of debts [in the Sabbatical year]. This is one of the regulations made by Hillel the Elder. For he saw that people were unwilling to lend money to one another and disregarded the precept laid down in the Torah, 'be careful lest there be a base thought in your heart saying 'the shmitta year is coming and your eye be evil against thy needy brother, and you will not give him; and he cry unto the Lord against you, and it be sin for you. Hillel stood up and instituted the pruzbul (Gittin 36a)." A pruzbul ,the Gemara explains, transfers the debt owed to the courts which, unlike individuals, may collect a loan even after the shmitta[2].
The Torah demands that we open our hearts to the poor; as important as writing a cheque may be it is not enough. We are to feel emotionally connected to those less fortunate than us. Difficult as it is - and it is very difficult - we must try to feel the hardship of the poor. It is for this reason we fast, enabling us to feel, if only temporarily, what hunger is like. Our Sages teach that "the reward for fasting is charity (Brachot 6b)."
Only those with these feelings of empathy are able to follow the Torah directive to lend to the poor as the shmitta year approaches. Sadly many were unable to do so and preferred violation of Torah law to the potential risk that a loan might not be paid back[3]. This situation was intolerable and Hillel "stood up" and changed it.
Leaving aside the religious and social aspects for a moment, Hillel had a clear understanding of the economics of money. He understood that the way to help the poor is by helping the rich. Only when the wealthy feel that their money is secure will they be willing to help those less fortunate. That may not be the way the Torah preferred it but such was the reality. Money does flow from the top down.
It is was this same idea that led the Sages to do away with the Torah's requirement of drisha and chakira, of detailed cross-examination of witnesses in monetary matters (Sanhedrin 2b). This requirement may have filtered out unreliable witnesses but it also "closed the door for borrowers" as lenders, fearing that this requirement would make it harder to collect monies owing them, stopped lending money - and not just before the shmitta year. Our Sages understood that our economic growth is dependent on access to capital and changed the law to reflect such.
This is all very nice but Jewish law is just that - a legal system - and with the Torah serving as our constitution, how can a rabbi or group of rabbis come along and make a constitutional amendment, allowing loans to be collected after the shmitta year? To this the Gemara has two responses. Abaye, living some 300 years after Hillel, agrees that Hillel had no authority to change Biblical law. However he did not do so. Hillel was rather dealing with shmitta "in our time" when it applied only on a rabbinic level. This is in accordance with the view that Rebbe Yehuda HaNassi would develop that absent the Yovel there is no remission of loans (nor any requirement to let the land lie fallow). In order for the Yovel to be operative the majority of the Jewish people must be living in Israel and during the Second Temple period the vast majority of Jews resided elsewhere, with Bavel, the birthplace of Hillel having the largest populace. With no Yovel[4], shmitta was observed by rabbinic decree only, allowing Hillel to amend the law.
Abaye's frequent debater Rava is not bothered by Hillel changing the law even regarding a Biblical law. The legal principle of hefker beit din hefker, declares that in monetary matters the courts may declare assets ownerless at will. Hillel was well within his rights to declare that loans would not be cancelled during shmitta.
In theory the courts could declare loans not cancelled even without the use of a pruzbul. But such would be a more blatant dismissal of the law something we like to avoid where possible. With the use of the pruzbul the non-cancellation of loans is done by the lender through regular legal channels instead of invoking "meta- halachic" principles.
As the Gemara explains, Abaye too must allow overriding a Biblical law for the pruzbul to work. If, as he claims, Hillel is working on the premise that shmitta is only rabbinic the Gemara then turns its original question on its head. Once shmitta no longer applies and loans are no longer cancelled, by what right did the rabbis reinstitute shmitta on a rabbinic level declaring that loans are to be cancelled? Abaye explains that the non-payment of loans is done passively, shev v'al taaseh. And the rabbis do have the right to declare that we ignore a biblical law passively something we are familiar with from the fact that we do not blow shofar when Rosh Hashannah falls on Shabbat. Abaye[5] thus understands the pruzbul not as a mechanism to circumvent Biblical law but to uphold it.
[1] Medieval authorities debate whether loans are cancelled at the beginning or end of the shmitta year with most ruling they are cancelled at the end. Nonetheless it is likely much preferred that a pruzbul be written at the beginning of the shmitta year.
[2] As one could always give one's loan documents to the court there seems to be little need for a pruzbul - just hand over the documents and collect the loan. The commentaries explain that Hillel's innovation lay in allowing the pruzbul even in cases where it would not be possible to hand over the loan documents, for example a loan given without any written documentation or in a case when one does not want to hand over the actual documents to the court.
[3] I do not know what that actual risk was. If we can extrapolate from today it is likely that well under 10% of loans were uncollectible. While the risk upon lending the "poor" may be higher when one considers that the Torah allows the taking of a collateral it is unlikely that the risk was much higher.
[4] Such follows Rashi. Tosafot disagrees claiming Yovel and thus the cancellation of loans was observed on a Biblical level during the Second Temple period. Rather, Hillel ordained the pruzbul for the time after the Temple would be destroyed. We have previously discussed other rabbinic decrees based on the dire economic situation after the destruction and the refusal to lend money fits nicely into this pattern. Such would seem to fit better with the words of the Gemara that Hillel was speaking bezman hazeh, a term that usually refers to the period after the destruction of the Temple.
[5] Rava would not disagree with this. We explained his answer of hefker beit din hefker as referring to the Gemara's original question of how could Hillel violate Biblical law by declaring loans not be cancelled. But this answer also (and perhaps primarily) is used to answer the question on the Rabbis right to reinstitute shmitta.