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This question is hotly debated in Israel, mostly in connection with army service, but also in connection with haredim receiving welfare. Is it a valid way of life to do nothing else but study Tora?

So, what does the Talmud have to say on the issue?

“Rabban Gamliel the son of Rabbi Judah Hanassi says, Torah study is good together with an occupation, for busying oneself with them both makes sin forgotten. All Torah study that is not joined with work, will in the last resort, cease to exist” (Pirke Avot 2:2)

If someone only studies and does not work, he will not earn any money and be poor. We see this with the haredim in Israel and elsewhere. First, to be poor is not desirable in itself and to propagate being poor to the next generations is even less desirable. Second, to be poor means one needs to worry about the future. This is not the best condition for concentrated study. The sages even say this later on:

“If there is no flour (dough?), there is no Torah; if there is no Torah, there is no flour” (Pirke Avot 3:21)

Additionally, being poor may cause people sin: A poor person may steal to survive (search yourself with keywords haredi and fraud). To live on stipends is also not the best solution. Stipends always come with strings attached and you need to keep in good standing with those who give the money (see haredi parties in the Israeli government). To be dependent on others also destroys your self-esteem and your feelings of achievement. You could also consider a stipend stealing, it takes money away from others that might need it more (we could argue about this all day, it’s of course one way to look at it and we can argue that organizing a concert takes money away from starving children in Africa – let’s don’t go there).

And finally, what is the ultimate goal of studying Tora? Yes, we should not study to make a "spade" out of Tora (Pirke Avot 4:17), but aside from finding fulfillment in the studying alone, the goal should be to become a better person, to fulfil more mitzvot, to use our abilities to create something good (Aish), as said by the sages:

“The main thing is not study, but action.” (Pirke Avot 1:17)

In summary, Maimonides has a clear statement about people who do not work:

“Whoever thinks he will study Torah and not work and will be supported from charity, profanes G-d’s Name, shames the Torah, darkens the light of knowledge, causes harm to himself, and takes his life from this world. For it is forbidden to derive benefit from the Torah in this world.” (Mishne Torah, Talmud Torah 3:10)

So I how do the haredim explain that they are doing exactly that?

One much-quoted argument is the Yisas’char-Zevulun relationship. Zevulun works and pays Yisas’char to study Tora all day. Someone who pays another person to study Tora is considered as having studied himself (Rema on Yoreh De’ah 246:1, Chabad). But what is off in the comparison is, that Zevulon agreed to pay Yisas’char. Those who make direct donations agreed to pay for the Tora study of someone else. This is fine with me. But nobody ever asked all taxpaying Americans or Israelis if they want to be Zevulon for the haredim that live from wellfare.

The other argument is that some people are so great that they do not worry, they won’t fall for sins and they have such great faith that G’d sees it and provides for them (R. Rosenfeld). So they need not work. This may be the case. But some argue, that this "greatness" really means everyone nowadays and this ist statistically impossible (Ohr Somayach): "Rabbi Israel Meir Kagen (Chofetz Chaim) rules that even the Rambam would agree that nowadays one may learn full-time., since it is so difficult for someone to simultaneously devote himself to a livelihood and also master the Torah." – and it wasn’t like this 100 or 1000 years ago? Why?

I would be curious to read more arguments and interpretations of the sayings in Pirke Avot.

Read more:
The Challenge of Wealth by Rabbi Tamari at Torah.org,
Striking a balance between the world of the spirit and the world of the body by Rabbi Goldson at Aish,
Torah Study vs. Earning a Livelihood, Part I by Rabbi Rosenfeld at Torah.org,
Torah Study vs. Earning a Livelihood, Part II by Rabbi Rosenfeld at Torah.org,
How Can People Justify Studying Torah All The Time at Ohr Somayach,
Torah Study & Working: Shulchan Aruch (156) vs Mishneh Berura by Daas Torah (read comments),
Hilchos Choshen Mishpat, Volume III, Number 15, ‘Yissachar – Zevulun’ Arrangements by Rabbi Tendler at Torah.org,
The Torah-Business Partnership by Rabbi Citron at Chabad.