The Truth lies in the Middle??

I just watched a movie that made me feel very uncomfortable.

Its called Defamation and you can find information about it here: http://www.imdb.com/title/tt1377278/. It is available in various forms on the internet (for free). I watched it on Netflix.

Although it is fairly recent, I would think that more people would have heard about it. I think I know why there is a strong avoidance impulse connected to it. It takes aim at some staple Jewish communal motifs connected to anti-semitism and at a prominent Jewish organization and its leader, the ADF (Anti-defamation League). But this is no simple-minded propaganda piece. It touches some sensitive nerves. It made me want to look away. Although it seems to have been carefully edited to support the author-film-maker's point of view, I found it hard to dismiss - and some of it was downright embarrassing. Maybe you will have a different reaction and a more critical appraisal. Let me know.

The film-maker's name is Yoav Shamir and he is a young Israeli who traveled to the U.S. and Eastern Europe (with a group of teenage Israeli, on a Holocaust memorial trip) to shoot this movie.

I don't want to say too much. Maybe you will want to watch it and you should make up your own minds. I will just say this:

I have emphasized that just because a particular statement or position critical of Israel may not be anti-Semitic it does not mean that it isn't - and I do think that Melshheimer and Walt, Norman Finkelstein and Noam Chosky and company - if not antisemitic are, at least, unconscionably opportunistic and biased in their approach (and at least two on the list are also seriously troubled).

But having said this, and having watched this movie, it also seems to me to be true that the notion of antisemitism can be and has been abused. This is very upsetting. (It is reminiscent of the refusal by many black Americans to give up the mantle of victimhood.) It is productive of its own insidious form of racism - against non-Jews (you see this in the movie).

The most disturbing idea is the exploitation of the Holocaust in this context. There is, unfortunately, an element of truth in Finkelstein's notion of a "Holocaust industry". This exploitation cheapens and desecrates the suffering of the victims and the enormity of the crimes against them. When it comes to the Holocaust, the events speak for themselves and the hype is distracting, sacrilegious noise.

I am in favor of the Holocaust memorial trips for teenagers and others (the "march of the living"). We need to remember and the world needs to know. But we need to be really careful to guard against the temptation to manipulate emotions into conformity with the communal slogans putting the Holocaust behind every anti-Jewish slur.

Finally, it seems clear to me that many Jews need (economically or emotionally) antisemitism to continue to be a perceived threat. Many are thus inclined to see antisemitism in every criticism of Israel or of individual Jews. Trivial events, and crazy outliers, are highlighted out of proportion and ultimately this leads to a loss of credibility and respect. This is particularly true in the context of the modern Israeli-Palestinian conflict. Double standards invoked against Israel can be tackled on their own merits (or lack thereof) - one does not need the Holocaust for this.

Does it need to be said that we need to keep a strong and critical sense of reality in our pursuit of the truth no matter what our personal affiliations?

The Power of Presuppositions

We probably all know this – that presuppositions often prevent clarity of thought and action. Yet when I encounter these presuppositions I am often surprised anew – even by the same cases over and over again. Here are some examples.

1. Consider this simple riddle: “Brothers and sisters have I none; this man’s father is my father’s son”. Who is “this man”?

Most people, upon hearing this, quickly assume that the answer is “I” – that I am this man. My late father-in-law could not be budged from this. Pushing him, I discovered that he began by assuming that the quote is from someone looking in the mirror – which means, if you are saying the quote, you are looking at yourself. I tried to point out that in this case the quote is contradictory or nonsense – it implies that you are your own father and son. I could never convince him.

But the solution is beyond simple, it is trivial. Let’s use the kind of math everyone can follow:

This man = X

This man’s father, X’s father = Y

Re-forming the quote: “X has no brothers and sisters; Y is X’s father. Y is my father’s son”.

So I am Y, X’s father and X is my son.

Answer: X, this man, is my son.

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2. More significant: I frequently put the following multiple choice question on my economics exams, even at a fairly advanced level.

"What is the effect of imposing a minimum wage in an economy at a level below the already existing (uniform) market wage”?

a. The average wage will rise

b. The average wage will fall

c. The average wage will be unaffected

d. It is impossible to tell.

This is a question anyone, including anyone with absolutely no economics training whatsoever, should be able to answer correctly. But presuppositions get in the way.

Most people go immediately to option b. “The average wage will fall”. In a class of 21 bright high school seniors that I just taught this semester, everyone picked this option, in spite of repeated explanation of this very case in class over the preceding weeks. The mental barrier is formidable.

Here is what is going on: people’s intuition is to assume that laws imposed by government are more important than the spontaneous, hidden workings of the market place – aka, the private decisions of buyers competing with buyers and sellers competing with sellers. When people hear that in the question the government imposes a minimum wage lower than the wage currently paid, their minds immediately translate this as “permission” to pay a lower wage and they see no constraints against doing so. Its almost as if employers of labor operate in a vacuum and this new minimum wage law now allows them to pay less than they were paying – because, we all know after all, that they pay a little as they can.

Of course, the correct answer, again trivially, is option c. “The average wage will be unaffected”. It is a “minimum” wage law; not a “maximum” wage law. It does not prevent employers from paying more than the minimum, which, by assumption, they are already doing. Yet most people cannot see it. [Notice how the simple meaning of the words is missed.]

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3. More topical: “Tax-breaks” for the oil companies.

The politicians are much exercised about (see a political opportunity in) the question of repealing tax-breaks currently in place for the oil companies.

This resonates with much of the public, because they hate having to pay such high prices for gasoline – it really bites. The most common initial reaction is to welcome the initiative to repeal the tax-breaks.

As I understand it, two things are going on here – punish the oil companies and bring down prices. People are angry with the oil companies. They see prices going up and oil company profits going up. So they think if the tax-breaks are removed that will hurt oil company profits. They are right about that. They also seem to think that it will cause oil and gas prices to fall. They are completely wrong about that – I can’t even see how they get there. But when I point out that removing the tax-breaks will force prices even higher I am mostly met by blank stares. Some sort of presumption is getting in the way.

Let’s be clear about one thing, removing a tax-break is just another way of imposing a tax. Imposing a tax clearly leads to higher prices paid by the buyer (and lower prices received by the seller). Money is taken out of production by the government. The amount supplied at any price goes down, so prices will rise for any given amount demanded. Not rocket science.

It is also relevant to point out, as I always do, mostly to no avail, that companies do not pay taxes in any meaningful sense. A tax imposed on a company is actually “paid” by the customers, workers, suppliers and others connected with the company. The ones who probably pay the least are the fat-cat executives whom the politicians love to scapegoat and the public loves to punish. It’s all a grand and harmful illusion signifying destruction of value.

It probably all boils down to the power of language to shape thought. Wittgenstein would be proud.

A difference in philosophy? I don't think so.

Not everyone who opposes rational and responsible economic policy can be stupid, and not even the majority can. But they can be, and I think they are, ignorant. Their ignorance is protected by their hard-held presuppositions. This enables them to dismiss any deviant views as "extreme," as "cooky". I have people tell me I am wrong who cannot tell me why. I have people tell me it is a "difference in philosophy". But actually it isn't. It is a difference in understanding of how reality works. It is a difference in models of reality. A shared understanding of reality would produce an agreement on economic policy. Disagreements over economic policy come not from wanting different things, they come from wanting the same things (peace, prosperity and individual freedom) but disagreeing on how to get there. I don't think it is helpful or accurate to call that a difference in philosophy. To do so is to cut off debate, to suggest there are unbridgeable differences, when actually what it means is "I don't want to seriously consider what you have to say".

When it comes to macroeconomic policy, it would seem that it takes an economic earthquake to shake the belief in government job-creation. No amount of argument can do the trick. Does this mean more mindless inflationary stimulus is around the corner? Let's hope not.