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The eighth perek of Bava Kama begins by discussing the five elements of compensation one must pay for harming another – nezek (damage), tza'ar (pain), ripui (medical expenses), shevet (inability to work) and boshet (shame). A difficulty one might face is that the Torah states "an eye for an eye" (Shemot 21: 24). The simple understanding of the verse is that one is punished with the same physical injury that he caused. That is indeed the question of the Gemara (Bava Kama 83b).
The Gemara continues with several textual and logical proofs that the Torah in this instance is not meant to be taken literally and the compensation is monetary. For example, the Rambam (Chovel U'mazik 1:3) cites one of the textual proofs, where since the Torah states "Do not accept a ransom for the soul of a murderer", it implies that monetary payment would not be accepted to release a murderer, but payment would be accept in the case of physical injury. In contrast, the Ibn Ezra cites the logical argument that it would be impossible to inflict the exact wound as the original one caused.
One may ask, if the Torah was not meant to be taken literally why then did the Torah write "an eye for an eye"? The Torah could have simply written that one must pay to compensate the victim. There are a number of answers to this question also, however I will present the answer I heard from R' Yehuda Amital ztz"l.
The pasuk in Mishlei (1:8) states, "hear, my child, the discipline of your father (musar avicha), and do not forsake the teaching of your mother (torat imecha)." The Midrash (Mishlei 1:8) explains that musar avicha refers to torah she'bichtav – the written text of the Torah. Torat imecha however refers to the oral tradition that was also given at sinai.
The Midrash's description of torah she'bichtav as musar avicha and torah she'be'al peh as torat imecha is significant. It explains the relationship between the two and why specifically in our case both are needed and presented quite differently.
By way of example, if child misbehaves badly the reaction of the parent can necessarily differ. It may be that the father reacts very harshly threatening all forms of punishment, e.g. "I'm going to beat you! You are never leaving the house again!" The mother may present the calmer face tempering the father's response, e.g. "it's not so bad, we can fix this" etc. Why in some situations are both responses necessary? Because the child needs to appreciate the severity of what they have done even if not deserving a severe punishment.
Returning to our question. Had the Torah simply taught that compensation for a physical injury in monetary, then the severe nature of the crime would not be conveyed. It could give the impression that compensation in this case is no different to compensation when one damages another's property; both cases are resolved with a monetary payment. Consequently, musar avicha teaches that the crime is far more severe and having caused another harm, he really deserves the damage be reciprocated. Nevertheless, torat imecha tempers the punishment such that ultimately the matter is resolved commensurately with a monetary payment.
Indeed, the Rambam (cited above) explains in a similar manner:
That which the Torah states: "just as one caused any injury to a person, so you should give him" does not mean that you should injure him in the same manner as he injured the other. Rather that the person deserves to lose a limb or bear the same injury and must therefore pay for the damage he caused.
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