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Time to Switch Over From Noach to Avraham…

where’s the passion?

I am hesitant to quote this Chasam Sofer because I only saw it quoted second hand and have not been able to find it inside, so buyer beware.  It’s a nice pshat anyway : )  The Midrash comments on the doubling of the name Noach in the first pasuk in the parsha, “Eileh toldos Noach, Noach ish tzadik, tamim haya b’dorosav,” that Noach was “neicha l’elyonim v’neicha l’tachtonim,” he was viewed pleasantly both by Heaven and by his fellow man (see Baal haTurim).  B’pashtus, you can’t ask for a bigger compliment than that.  Chasam Sofer, however, says exactly the opposite.  Avraham did not care about pleasanties when he demanded of G-d, “Chalila l’cha, ha’shofet kol ha’aretz lo yaaseh mishpat?!”  Moshe Rabeinu did not care about pleasantries when he went to bat on behalf of Klal Yisrael and argued with Hashem to not punish them.  David haMelech did not care about pleasantries when he said, “Anochi chatasi… v’eileh ha’tzon meh asu?” (Shmuel II 24:17).  Being a tzadik sometimes means arguing with G-d, not going along passively with the program.  And the same, kal v’chomer, holds true when dealing with other people.  Avraham smashed idols, Moshe Rabeinu called out the people when they did wrong, Eliyahu haNavi gave mussar.  Being a tzadik will not necessarily win you a popularity contest, and that’s as it should be.  Noach was “ish tzadik b’dorosav,” he wanted to get along with everybody, and “es ha’Elokim hishalech Noach,” he didn’t want to challenge G-d either.  The result is that those around him took no heed of his example and continued to do wrong, and G-d was not assuaged and brought a flood to destroy the world.  Noach, Noach — both are strikes against him.

These days the message everybody preaches is that the job of our Rabbis and leaders is to make sure everybody feels welcome, happy, warm and fuzzy.  We have so much noach going around it’s incredible.  G-d forbid anyone should actually try to tell someone that what they are doing is wrong and needs to change — oh no, that could only be done in past generations, not today.  If you are a rebbe or a Rav and see a group of teenagers dressed in sweatpants and T shirts on Shabbos on the way to play ball, the response is not to speak to them about Shabbos (then or at some other time), but aderaba, you are supposed to join the game, to show them that you are one of the boys, because only then will you be able to influence them.  And then you wonder why after 4 years of high school and over 100k in tuition these same boys probably wont keep Shabbos much better or know how to read a piece of gemara.  Am I wrong?

R’ Yehudah Deri puts together the Midrash which blames Noach for the flood because he did not give tochacha and the Rashi (7:) that says אף נח מקטני אמנה היה, מאמין ואינו מאמין שיבא מבול, ולא נכנס לתיבה עד שדחקוהו המים.  If you truly believe something, then you are passionate about it and can’t help but speak out and share your views.  Noach was “mi’ktanei emunah,” and when you need convincing yourself, you don’t stand much chance of convincing others.

(Parenthetically, everybody asks and I’ve posted about it before: how can Rashi describe someone who the Torah calls a “tzadik tamim” as “mi’ktanei emunah”?  R’ Yitzhok of Vorke reads the Rashi like this: אף נח מקטני אמנה היה מאמין Noach believed in those of small faith, meaning the people of his generation, ואינו מאמין שיבא מבול and therefore he did not accept that G-d would destroy the world.)

A certain person was all over the Jewish news last week, some people in favor of his actions, some opposed to his actions.  I was at a wedding this week and this guy was there and he was like a rock star, the way some people gathered around him for pictures, to talk to him to shake his hand.

What is this guy’s secret?  Why do people respond to him?

I think the answer is one word: passion.  You may disagree with what he did, with how he expressed it, but you can’t take away the fact that he showed passion.  Everyone else was busy being Noach, neicha to this politician, neicha to that entity, etc. sending the usual mealy mouthed letters that say nothing and mean nothing.  Is that all you can do when your yeshivos and shuls are having locks put on the doors???  In case it’s not clear, that does not mean rioting in the street is necessarily the best idea, but if that’s not the answer, then find some other way to at least show some passion for what you believe in!  Mordechai did not send a mealy mouthed letter to Achashveirosh — it was “sak v’eifer yutzah la’rabim.”  When you read those words in the nigun of Eicheh you get the message: this is a tragedy that’s unfolding.  Do we even think anymore that putting a lock on a beish medrash is a tragedy, or have we lost our feelings completely?  If closing down our shuls and yeshivos is not enough to spur the community to grave action — whether it is civic action or religious action in considering why Hashem is allowing this to happen — what will???

“Va’ya’as Noach k’chol asher tzivahu Hashem.”  Ksav Sofer explains that Noach did whatever he was commanded: he did the 7 mitzvos given to Adam, and he built the ark just as he was commanded.  But that gufa is the problem with Noach!  A command like “Build an ark because the world is going to be destroyed” is not a command like any other command.  Those words should have sent a jolt through Noach’s system.

There are tents in people’s backyards not too far from where I live that are even bigger I think than the shul I daven in.  A person can say who cares if they close the shul — I’ve got where to go.  I’m still doing what I have to do.  The problem is not that we are not doing what we are supposed to do — “Vayaas Noach k’chol asher tzivahu Hashem.”  The problem is where’s the jolt, where are the tears, where’s the feeling that our chiyus is being taken from us?

Where’s the passion?

SAY NO to Subsidies!

The Snare of Government Subsidies

08/31/2006 Gary North

In 1977, Lew Rockwell was the editor of Private Practice, a journal of medical economics. That year, he put together three teams of speakers to present evening seminars for physicians in three dozen cities. The teams made the case against tax-funded medicine.

On each team was a physician from Canada, one from England, and maybe one from Australia, each with horror stories to tell on the practice of medicine under tax-funded medical health care delivery. There was also an American physician and one non-physician. As I recall, there was also a Congressman.

I was on one of those teams. We hit a dozen cities in fourteen days. It was the toughest speaking assignment I have ever had.

The reaction was not spectacular. The physicians in the audience did not seem to recognize the threat to their practices that bureaucratic medicine involved. Most of those physicians are in retirement today. Before most of them had retired, they saw American medicine move in the direction of bureaucratic medicine, just as we had warned.

Younger physicians today do not recall what it was like to practice medicine in the good old days. But the good old days of 1977 were not all that good. From the era preceding World War I, when the Rockefeller Foundation promoted the government-licensing system that restricted entry into the profession by controlling medical education, the march into the trap of tax-funded medicine began.

When I returned from my whirlwind tour, I decided that I would write an essay on the threat to American medicine posed by the State. I wrote it. It was published in The Freeman in May, 1978. I titled it, “Walking into a Trap.”

Walking into a Trap

There is some justification at least in the taunt that many of the pretending defenders of ‘free enterprise’ are in fact defenders of privileges and advocates of government activity in their favor rather than opponents of all privilege. In principle the industrial protectionism and government-supported cartels and the agricultural policies of the conservative groups are not different from the proposals for a more far-reaching direction of economic life sponsored by the socialists. It is an illusion when the more conservative interventionists believe that they will be able to confine these government controls to the particular kinds of which they approve. In a democratic society, at any rate, once the principle is admitted that the government undertakes responsibility for the status and position of particular groups, it is inevitable that this control will be extended to satisfy the aspirations and prejudices of the great masses. There is no hope of a return to a freer system until the leaders of the movement against state control are prepared first to impose upon themselves that discipline of a competitive market which they ask the masses to accept.” – F. A. Hayek1

The idea that businessmen are strong defenders of the free enterprise system is one which is believed only by those who have never studied the history of private enterprise in the Western, industrial nations. What businessmen are paid to worry about is profit. The problem for the survival of a market economy arises when the voters permit or encourage the expansion of government power to such an extent that private businesses can gain short-term profits through the intervention into the competitive market by state officials. Offer the typical businessman the opportunity to escape the constant pressures of market competition, and few of them are able to withstand the temptation. In fact, they are rewarded for taking the step of calling in the civil government.

The government’s officials approve, but more to the point, from the point of view of the businessman’s understanding of his role, shareholders and new investors also approve, since the favored enterprise is initially blessed with increased earnings per share. The business leader has his decision confirmed by the crucial standards of reference in the market, namely, rising profits and rising share prices on the stock market. No one pays the entrepreneur to be ideologically pure. Almost everyone pays him to turn a profit.

This being the case, those within the government possess an extremely potent device for expanding political power. By a comprehensive program of direct political intervention into the market, government officials can steadily reduce the opposition of businessmen to the transformation of the market into a bureaucratic, regulated, and even centrally-directed organization. Bureaucracy replaces entrepreneurship as the principal form of economic planning. Bureaucrats can use the time-honored pair of motivational approaches: the carrot and the stick. The carrot is by far the most effective device when dealing with profit-seeking businessmen.

Those individual enterprises that are expected to benefit from some new government program have every short-run financial incentive to promote the intervention, while those whose interests are likely to be affected adversely — rival firms, foreign enterprises, and especially consumers — find it expensive to organize their opposition, since the adverse effects are either not recognized as stemming from the particular government program, or else the potential opponents are scattered over too wide an area to be organized inexpensively. The efforts of the potential short-run beneficiaries are concentrated and immediately profitable; the efforts of the potential losers are dispersed and usually ineffective.

The expansion of political power in the market process has been going on in the West for about a century, at least in the modern form of interventionism, starting with the social security legislation of Bismarck’s Germany in the 1870s. Governments have evolved a strategy by which whole industries or professions are captured by the bureaucratic state. While this strategy is not the only one used, in peacetime it has proven enormously successful. (Nothing, of course, favors political centralization more than war.) I have outlined this strategy by means of the following analogy:

  1. Baiting the trap
  2. Setting the trap
  3. Springing the trap
  4. Skinning the victim

1. Baiting the Trap

Extra-Market Benefits

The politicians enter an otherwise competitive market situation with an offer to promote certain industrial or professional programs. Taxpayers’ money is used to finance this program, but it is rare for the potential short-run beneficiaries to reject the offer on these grounds. Certainly, a majority of those who are to be the recipients of the special favor gladly accept it. They see their goals as being part of the public interest, and they view an offer of government aid as being only natural. They see it as their due. Those who refuse to take the special favor risk lower profits in the immediate future, since competitors in the industry or professional association will take the favor. The general attitude is this one: “If I don’t take it, somebody else will.” As a statement of fact, rather than principle, it is absolutely correct. Somebody else will.

There are several possible forms in which the aid may come. Industrial groups may receive tariff protection, which is a tax levied on consumers on both sides of a border over which trade had been carried on or over which it might be carried on in the future. Consumers pay higher prices on both sides of the border. There can be no grants of government economic benefits without someone or some group bearing the costs. A tariff is a tax.

For professional groups, another approach is offered. It is usually in the form of licensing, which is a grant of monopoly rents to those inside the protected profession. The profession elects representatives who sit on government boards, or who actually make up the whole board. They can police entry into the profession’s ranks by unqualified competitors, meaning those who have not passed certain educational and/or skill requirements established by the board. Most professionals believe that such restrictions on entry are entirely natural for the sake of preserving the present-day standards of practice that the majority of the profession accepts.

Like the businessmen, they see these benefits as normal, natural, and altogether beneficial to the public. Result: higher fees and fewer choices. Another way to buy off almost any industry or professional association is by means of direct grants of money. The government may simply buy products from a company. It may establish government research grants. It may subsidize certain industries directly. In the case of the great railroads in the United States which were built in the 1860s and 1870s, the government offered millions of acres of land to the railroad companies as an incentive to begin and complete construction.

Perhaps the most popular form of subsidy is tax relief. Certain occupations, companies, or organizations receive tax breaks. In an era of growing taxation, this approach has been one of the most effective; the higher the tax level, the more advantageous is tax exemption. The American oil industry was the recipient of multiple tax breaks until quite recently, and they are still substantial.

All of these special favors are adopted in the name of the general welfare of the public. All of them involve the financial incentives for private individuals and firms to conform themselves to the goals set forth by the sponsoring agency, the government. All of them involve the transfer of wealth from consumers and taxpayers to the beneficiaries. All of them involve a temporary suspension of market forces and a redirection of those competitive pressures. All of them necessarily involve a reduction of the sovereignty of the recipients, since they become partially dependent on the government for continued benefits.

In short, the bait is most tempting.

2. Setting the Trap

Extra-Market Costs

The government is a political organization. Its justification is that it is an agency of the popular will, an agent of the public in its political capacity. It is therefore an agency of public defense. The general public is to be protected from adversaries, including domestic adversaries. In a limited-government system, this means that those who use fraud or violence against their neighbors are to be penalized. In modern interventionist states, the concept of public defense is much broader.

The government cannot lawfully make grants of power or money to any group unless it is in the public interest to do so. In short, the state must police those who are subsidized by the state. The money cannot be used exclusively for the benefit of private citizens. The long arm of the law is at the end of the strings attached to every grant of monopoly power or special favoritism. In theory, every dollar spent by the government must be accounted for, to make sure that the public’s interest is upheld in each expenditure. The result, among others, is an endless proliferation of forms.

The state grants a particular group special favors. But it cannot do so randomly. It must have a purpose, officially and unofficially. The official purpose is not nearly so important as the unofficial purpose. The official purpose is offered to calm the public (which must finance the grants) and to make sure that the judiciary does not intervene. The unofficial purpose is almost universally this one: the expansion of political power at the expense of private associations.

Once the grant has been made, the beneficiaries use it for their purposes. The money is spent. Parkinson’s Law takes over: expenditures rise so as to equal income. But expenditures are always difficult to reduce, especially in large, bureaucratic organizations. The firms become used to the higher income. The income becomes part of annual forecasts. Managers expect it to continue. After all, they are all agreed that such subsidies are in the national interest. Would the nation (the politicians) revoke their trust? Never! The organization is hooked. It has become dependent on the continued favors, meaning the continued favor, of the state.

Inevitably, one firm or some individual begins to take advantage of his position. He exercises the monopoly grant of power which the state provided for him. He charges a bit too much. He starts running a “factory.” Or the firm or individual cuts quality. In short, someone actually begins to milk the system.

The Patterned Response

Some of us have become cynical over the years. We have so often seen this pattern, and the government’s equally patterned response, that we have been inclined to come to a startling conclusion, namely, that the government establishes the system in order that some beneficiary will milk it. That is a primary purpose of the system of government favors.

Once the pattern of “exploitation” is detected by citizens or government officials, not to mention bureaucrats at any level of government, the response is politically inevitable. Someone calls for the government to do something about the unfair use which is being made of the government’s trust. Some firm or some professional must be stopped, and stopped now. The industry or guild must be policed. The consumer must receive protection from the unscrupulous.

The industry leaders naturally resent this intrusion into the semi-free market. They resent the fact that someone is milking the system. That person, for one thing, is trying to get more than his “fair share” of the booty. Also, he is making the government angry. He is threatening the continuation of the subsidy. He is violating professional standards.

This appeal to professional standards is very important. The government knows what appeals to make, and this is a good one. (The industrialist is not nearly so alert to such violations, since the agreed-upon standards are not so clear.) The ethics of the professional association are at stake. They must be defended. Yet it is extremely expensive to enforce standards on a colleague. Friendships are at stake. Careers are at stake. And counter-suits are at stake. Yet a small percentage of incompetents (usually said to be about 3 percent by every representative of the professional association) threaten the semi-autonomy of the group. (There is no real autonomy if the government has granted some sort of favor.)

Need for Policing

The government demands that the industry or professional group police itself. The market as a policeman has been compromised by the original grant of power or money. This compromised policeman — the consumers — cannot enforce its decisions inexpensively, given the government grant. So the government calls on the group to police itself, and it draws up certain standards that should be met. The “partnership” between government and professionals grows strained. So the industry or professional group elects (or more likely accepts) certain spokesmen who will “work with” the other partner. This supposedly will insure that the interests of the government and the favored group will mesh, and that the group will continue to receive its favors. On this point, I can do no better than to quote Enoch Powell, the former M.P. in Great Britain. He makes quite clear what the industry can expect.

“They start more than half-beaten, by the very fact that they are, or claim to be, the spokesmen and representatives. It has been their pride and occupation to ‘represent’ industry to the Government. Yet the safest posture for an industry confronted by Socialism would be not to have an organization or spokesmen at all. Instead of being able to coax, browbeat or cajole a few ‘representative’ gentlemen into co-operation, the Government would then, unaided and at arm’s length, be obliged to frame and enforce laws to control, manage or expropriate a multitude of separate undertakings — the true picture of private enterprise — with no means of getting at them except the policemen.”

Powell is here speaking of an industry which is not on the receiving end of major government favors. If government has the industry on a string, it need not have to resort to the policeman. All it needs to do is to cut off the subsidies, and the whole industry is put into a financial crisis. The existence of the subsidies calls forth the “industry’s spokesmen.” And to quote Powell, “As soon as ‘our President, Lord So-and-So’ is in a position to talk about what such-and-such an industry ‘wants’ or ‘thinks’, that industry is on the road to the scaffold…. The Association of these, the Federation of those, present just that one neck to the Socialist garroter.”2

Once the government uses the bureaucratic garrotte to strangle the representative of the industry who stands in place of all the members, there is no way out except to repudiate the compromiser who stuck their collective necks into the garrotte. If they do not pull out their own necks, they will suffer the same fate.

The professional guild is perhaps the most vulnerable, since the very nature of the “bait,” namely, a monopoly position based of guild-policed licensure, creates the very policing organization necessary for the government to impose its will at lowest cost. They can be appealed to on the basis of professional standards and the guild’s responsibility to a vaguely defined public, irrespective of the individual professional’s ability to satisfy the needs of specific members of the public.

3. Springing the Trap

Extra-Market Crisis

More cheaters are discovered. The guild waffles. The cheaters continue to operate. The press scents blood and headlines. Politicians scent blood and votes. When they look into the actual operation of the industry, they find more examples of men or firms that have gouged the public, meaning people who are taking advantage of the very system that the government created – an eminently exploitable system. So the reports of cheating and fraud continue. The reports continue, but no prosecutions are begun by the government, since nothing specifically illegal has been detected. The guild is powerless, obviously, for the same reason. This means that the reports are going to continue. The guild will still be under pressure to do something to stop the causes of the reports. Finally, new laws are called for to clean up the industry, since the industry is seemingly incapable of policing itself.

For professional associations, this is a disaster. Members have been led to believe that there are standards of practice within the profession. Yet these reports keep hitting the front pages. Their self-esteem is challenged. They begin to wonder what has gone wrong. Maybe the reports are correct. Maybe the government needs to do something — not anything drastic, of course, but enough to clean up the temporary mess and let honest men continue to practice. They miss the point: the government’s task is to alter the practice of the honest men. The government wants to set all standards and enforce them. There will then be no doubt about who the senior partner is. Bureaucrats want control.

The crisis is not created by the negative reaction of consumers. Businessmen do not find that one morning sales are down 30 percent because the public has decided to walk away from the fraudulent segments of the industry. Professionals do not find their offices empty for weeks on end. In short, it is not the market which drives home the message to the supposedly crisis-bound industry or profession. The critics come from outside the market, probably from those who seldom use the products or services involved, or if they do, who find the products or services quite adequate in their particular cases. But the crisis is no less real, for the public and even members of the associations perceive it as a crisis. This means that the crisis is real politically. “Politically” is what counts in an era which is socialist or interventionist in its economic outlook.

What about the representatives of the industry? Will they co-operate? Powell answers straightforwardly:

“You bet they will. They are afraid not to. They are afraid of being pilloried by the Government and its political supporters as ‘unpatriotic’ or simply (damning word) ‘uncooperative.’ They feel that the eye of the public will be upon them, and they do not like the adjectives which they foresee would be liberally used inside and outside Parliament — and will be, anyhow, before the end of the day. Of course the line of true patriotism would be the opposite to the one they are going to take. It would be to protest, by all means in their power, short of breaking the law, against every kind of error and nonsense as it comes along, and to oppose in their own industry any measure which does not commend itself to their knowledge and experience. But they shrink from this because, although they have no seats to lose and no voters to offend, it takes courage of a special kind — political courage — to outface authority and the popular cry of the hour. These men have commercial courage, and no doubt physical courage too; but facing the political music is something they have neither been trained nor volunteered for. So they play along with the search for an incomes policy, or export incentives, or whatever else it may be.”

And, as Powell points out, “The effect is doubly damaging; for it also hamstrings any politicians who are prepared to raise their voices in protest.” The public thinks it strange that industry representatives have not protested the accusations by the government. Apparently, the leaders approve of the government’s policies. “Thus the co-operators effectively expose the flank of the anti-Socialist opposition and compel it to fall back on positions which are better protected.”3  But not much better protected, he might have added.

Once the crisis is admitted to exist by the leaders, though of course on a much reduced scale — 3 percent of our members, not 20 percent — the battle is pretty well lost. To clean up that 3 percent, the government will alter the entire foundation of financing, policing, and pricing of the industry’s services. The corruption will escalate, but now it will be a government problem, to be met by even more intervention. More laws can be passed, more penalties handed out, more regulations enforced: the government expands its control relentlessly. The trap has been sprung.

4. Skinning the Victims

Extra-Market Bankruptcy

There are any number of ways that the government can see to it that the former subsidies now become the straitjacket for the former beneficiaries. The most obvious method of control over professional groups is the establishment of government control boards that will enforce standards and price. The government begins to finance the guild more directly. The former monopoly grant now becomes direct payments. But these payments have no strings attached; they are ropes, or even chains. The government sets fees, allocates equipment, and assigns consumers (clients). The government directs the operation of the association through its captive agents, the profession’s representatives. Members of the profession are told what they will be paid, the kind of service to be offered, and the quantity of service to be dispensed.

The government also establishes some sort of quality-control standards. These are enforced by quality-control boards made up of compliant members of the profession and representatives of the public (pressure groups) and the government (bureaucrats). These quality-control boards do exactly that: control quality. If quality, meaning cost, starts going up, then they step in and control it. They ration equipment. They set lower standards of care, especially in government hospitals or clinics. They make sure that costs are held down, since the government, not the consumer, is paying the bill. No matter what guild is involved, the government makes sure the “irresponsible quality” is avoided, meaning irresponsibly high quality.

The government forces industries to operate at a loss. The classic example in economic history is the American railroad system. Created by government subsidy, controlled in the name of protecting the consumer, the railroads in the Northeastern part of the United States, as well as the Midwest, have been strangled to death. The Interstate Commerce Commission was the first Federal regulatory agency in the United States, established in 1887. It was established in the name of protecting the consumer, but as the New Left historian Gabriel Kolko has argued, along with free market economists like Milton Friedman, the result was a freezing out of new competition, since the ICC established rate floors as well as ceilings. So the railroad barons were already in trouble by the late 1880s, despite the millions of dollars in subsidies. The “protection” became a stranglehold, and by the late 1950s, the passenger-carrying railroads were in trouble. By the early 1970s, they were bankrupt. (Long-haul freight railroads are still able to compete.) The government now owns and mismanages many of them (Amtrak, Conrail).

The incomes of the members of the industries and professions that are now directly financed and/or directly policed by the government necessarily fall. Envy is loose in the land. The popular press and television reporters have accomplished their goal. The public will not permit “profiteering.” The politicians will not permit it. Prices, wages, and fees are controlled, and work loads increase. Regulatory agencies each claim a piece of the action, and the multiplication of paperwork is endless. The formerly independent producers, who answered directly to the formerly independent consumers, now answer to a multitude of bureaucrats and enraged customers who detect the collapse of productivity on the part of the now-controlled suppliers. Most suppliers lose, most consumers lose, and a real crisis is produced.

Conclusion: Avoid the Bait, Rely on Principle

The answer, philosophically, is to avoid sniffing at the bait. This must be done on principle. It would help if businessmen understood the chain of events which follows from the acceptance of a government subsidy. Yet even if this chain of events is not understood, men should still be able to recognize a violation of basic moral principle when they see it. They should understand that the coercive power of the state should not be used to benefit one group at the expense of another. Such power is inevitably misused, if not immediately, then ten years or fifty years down the road. The precedent is evil; the results following it will also be evil.

The problem, as indicated by Hayek’s statement which introduced this paper, is that businessmen like the seeming safety of a government-restricted market, at least in the early stages, when they are given some power to set standards and direct production. Businessmen can make very good bureaucrats, too. The market is relentless. It forces men to meet the demands of a fickle public. Businessmen think they can find an escape in some sort of government business partnership. That is the grand illusion.

Those who are offered the subsidy must say no very early. There are strings attached to government money or power, and they become chains if the subsidies are allowed to continue. It is easier to say no before the addiction process begins, before costs rise to meet income levels. The longer a violation of principle continues, the more difficult the “withdrawal” process becomes.

  • 1.Hayek published this in Individualism and Economic Order (University of Chicago Press, [1948] 1963), pp. 107-08. This is taken from Hayek’s address to the Mont Pelerin Society in 1947.
  • 2.Enoch Powell, Freedom and Reality (London: Batsford, 1969), p. 46.
  • 3.Powell, p. 47.
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Gary North is the author of Mises on Money; Honest Money: The Biblical Blueprint for Money and Banking; and Gertrude Coogan’s Bluff: Greenback Populism as Conservative Economics. He is also the author of a free 31-volume series, An Economic Commentary on the Bible.

From Mises.org, here.

Rabbi Reuven Chaim Klein’s Teenage Writings…

The Happiness of Yom Kippur and Succos

by Reuven Chaim Klein

 

The Mishnah[1] teaches that the days of Tu B’Av (the fifteenth of Av) and Yom Kippur are the two happiest days of the Jewish calendar. The Talmud[2] explains that Yom Kippur is a happy day because it is a day of forgiveness and atonement, and because it is the day on which the second pair of tablets containing the Decalogue was delivered to the Jewish nation on Mount Sinai. Tu B’Av was historically a happy day for various reasons as discussed elsewhere.

 

Rabbi Yom Tov ben Avrohom Asevilli (1250–1330), also known as Ritva, asks[3] why the Mishnah says that Tu B’Av and Yom Kippur are the happiest days if another Mishnah states:[4] “he who has not witnessed the Simchas Beis HaShoeivah (“The Rejoicing of the Water Drawing”) has not witnessed happiness in his life.” This latter source implies that the Water Libations ceremony in the Holy Temple on the holiday of Succos is the happiest occasion in the Jewish calendar—not Yom Kippur.

 

The Ritva himself answers that Tu B’Av and Yom Kippur were only happy days for the women of the Jewish people, because on those days they met their future spouses; however, the Simchas Beis HaShoeivah was a happy occasion for all righteous Jews, whether male or female.

 

Nevertheless, the Ritva’s answer still requires further examination, because the reason for the happiness on Yom Kippur can be apply to men just as to the women, for if the women met their prospective spouses on that day, then, per force, so did the men. Furthermore, of the Talmud’s many reasons for the holiday of Tu B’Av, only one applies specifically to the women.[5] The other reasons given by the Talmud are not limited to the Jewish women to the exclusion of the men. Additionally, Ritva’s answer leaves a gaping ambiguity: according to Ritva, what is the happiest time of the year for the average simple Jew, who is neither righteous nor necessarily female? The Ritva only wrote that the Water Libations ceremony on Succos is a joyous occasion for the righteous Jews, but not for the common man, and Tu B’Av is only joyous for the women, not the men. So what does that leave for the average Jew?

 

Perhaps one can answer the apparent contradiction between the two Mishnahs by explaining that both Yom Kippur and Succos are the happiest time of the year! We may argue that in some ways, Yom Kippur and Succos can be considered one long period, and the superlative happiness extends throughout this entire period.

 

The Talmud says[6] that on Erev Yom Kippur, there is a commandment to have a special feast. Rabbeinu Yonah of Girondi (1180–1263) explains[7] that this feast is to express one’s happiness for the holiday of Yom Kippur, because there is no greater happiness than being absolved from all of one’s sins.[8] However, since HaShem decreed that we abstain from food on Yom Kippur, then the happiness of Yom Kippur must be expressed on the day before. Nonetheless, the upshot of this explanation is that Yom Kippur itself is to be considered an especially happy day.

 

In many communities, Kiddush Levana (a special blessing recited over the newly visible moon) is postponed until Motzei Yom Kippur, so that it can be recited in a happy mood.[9] In a similar vein, HaShem commands that one must “be [nothing] but happy”[10] on Succos. In fact, the numerical value of the Hebrew word selicha (סליחה, forgiveness), equals the value for the word Simcha (שמחה, happiness).[11] This shows that the greatest catalyst for happiness is complete and total forgiveness/atonement. There is no greater happiness than fully knowing that one is completely free from sin. In essence, the theme of Yom Kippur—forgiveness and atonement—is the same as that of Succos—happiness.

 

The parallel between Succos and Yom Kippur is quite clear. The Talmud says[12] that on Succos, the world is judged concerning its yearly quota of water. In fact, the day after Succos is over, on the holiday of Shemini Atzeres, Jews begin mentioning HaShem’s power to bring rain in their daily prayers. This parallels Yom Kippur on which every Jew’s fate for the year is sealed, and it is one’s final time to repent for sins. The nexus of these judgement is on the last day of Sukkos is known as Hoshana Rabbah (“the Great Salvation”). Extra prayers of repentance and requests for forgiveness are added to the Hoshana Rabbah liturgy, as if to suggest that one’s fate is not completely sealed on Yom Kippur, but rather on Hoshana Rabbah. This is because the motif of Yom Kippur actually continues throughout the festival of Succos, until Hoshana Rabbah.

 

There are four days in the Jewish calendar, which are known as the Yomim Nor`aim (“Days of Awesomeness”). Namely, they are the two days of Rosh HaShannah, Yom Kippur, and Hoshana Rabbah.[13] Only these four days is the word “awesome” added to the formula, “Our G-d is One, great is Our Lord, [and] holy is His name” recited by the Chazzan when removing the Torah Scrolls from the Ark. Now, the two days of Rosh HaShannah are considered like one long day (Yoma arichta[14]). To maintain the parallelism, one must say that Yom Kippur and Hoshana Rabbah are also to be considered one long period spanning twelve days. This period commences with Yom Kippur and continues through the entire Succos. In fact, immediately after Yom Kippur, one starts preparations for Succos by starting to build the Succah,[15] and Tachanun is not recited in the days between Yom Kippur and Succos, to show that all those days are bridged together by the theme of happiness.[16]

 

Furthermore, the Hassidic masters teach that each of the seven liquids (enumerated in the Mishnah[17]) that cause a foodstuff to become susceptible to ritual impurity corresponds to one of the seven holidays. According to this model, Dew corresponds to Yom Kippur and Water corresponds to Succos.[18] In essence, dew and water are chemically the same, except that dew is a specific type of water, which falls early in the morning. Similarly, Yom Kippur and Succos are in essence the same, only that Succos is the time for general happiness, while Yom Kippur is the time for the specific happiness stemming from the pardoning of sin.

 

Rabbi Avrohom Schorr writes[19] that Succos is a time when one is able to “do battle” with HaShem, and harness the power of true repentance to achieve absolution of sin—even in circumstances in which He does not typically grant forgiveness.

 

Rabbi Levi Yitzchok of Berditchev (1740–1810) writes[20] that the repentance during the Ten Days of Repentance from Rosh HaShannah to Yom Kippur is a repentance out of fear (fear from Heavenly punishment and HaShem’s awesomeness), while the repentance achieved during the holiday of Succos is a repentance from love. The difference between the two types of repentance is that repentance from fear only erases one’s sins, while repentance from love transforms one’s sins into fulfillments of positive commandments. It morphs a blot on one’s record into a merit.[21] Thus, Yom Kippur and Succos are simply two means to achieve the same end: the cleansing from sin.

 

A Jew is commanded to make the pilgrimage to the Holy Temple in Jerusalem three times a year—Pesach, Shavuos, and Succos.[22]When a person enters that holy space, one has a chance to draw from the Holy Spirit, which rested there. However, on the holiest day of the year, Yom Kippur, a Jew is not commanded to ascend the Temple Mount; rather, he is supposed to stay in his own town and pray wherever he might be. It seems counterintuitive to separate the place that epitomizes holiness (i.e. the Temple) from the time that epitomize such sanctity (that is, Yom Kippur). Why should this be?

 

Rabbi Yosef Shalom Elyashiv (1910–2012) explains[23] that this is because sometimes one is supposed to draw spiritual nourishment from a place, and sometimes, from a time. During the festivals of the pilgrimages, one is expected to draw spiritual nourishment from the place of the Holy Temple,[24] but on Yom Kippur, the spiritual nourishment comes from the day itself. When one sins, even if it is a small sin, that sin accompanies him and draws him to continuing sinning.[25] One sin causes another,[26] and when one sins, other sins appear to become permitted for him.[27] Therefore, even if a person sinned once in his life, he has been initiated into a vicious cycle of sinning, and it is almost inevitable that he will sin again. Therefore, the Day of Yom Kippur itself must come to cleanse one of all sins[28], so that one can stay pure and clean without being subject to the pull of previous sins. This explains why the Talmud says[29] that there is no better day for the Jewish nation than Yom Kippur; it is a day of complete forgiveness and atonement. Only after achieving such a deep cleansing can one be ready to draw from the sanctity of the location of the Holy Spirit in Jerusalem by attending the pilgrimage on Succos. In this way, Yom Kippur simply paves the path towards Succos…

 

***

 

Each of the holidays has an additional appellation by which it is described in the Torah and/or in certain liturgical prayers. Rosh HaShannah is also known as Zichron Terua (“A Remembrance of the Shofar Blasts”)[30] because it is the day that the Shofar is blown, Pesach (Passover) is also known as Zman Chayrusaynu (“A Time of Our Freedom”) because it signifies the Jewish exodus from Egypt. In that way, Succos is called Zman Simchasaynu—”A Time of Our Happiness”. What is the source of this special happiness that typifies Succos and no other holiday? On each holiday, there is a commandment to rejoice,[31] so why is only Succos described specifically as a time of happiness?

Rabbi Dovid Povarsky (1902–1999) explains[32] that the happiness on Succos stems from the assurance that the judgment passed on Rosh HaShannah concluded with a favorable verdict. Rabbi Yaakov ben Asher Ba’al HaTurim (1270–1340) similarly writes[33] that is the meaning of the verse, “Go eat your bread in happiness and drink your wine in good heartedness because G-d has approved of your deeds.”[34] HaShem absolving our sins is the greatest reason for happiness.

 

Indeed, the Midrash explains[35] that the Holy Temple is described as the “happiest [place] in the entire world” (sorry Disneyland), because as long as the Holy Templestood, no Jew was ever despondent. This was because when a Jew would simply enter the Holy Temple in a state of sinfulness, he would then offer sacrifices and be forgiven of his sins. The Midrash concludes that there is no greater happiness than one who was pronounced innocent in judgment, and this is why the Holy Temple is called “the happiest place on earth.”

 

Perhaps one can add, as Rabbi Elyashiv insinuated above, that Succos is a happy day squarely because of its location (because people are in a Sukkah, or in Jerusalem, or in their Synagogue), while Yom Kippur does not signify happiness of place, but happiness of time (because the day of Yom Kippur itself creates happiness by bringing forgiveness). It is perhaps for this reason why there is a custom amongst many Jews to sing and dance immediately following the N`eilah services at the conclusion of Yom Kippur.

 

Rabbi Shlomo Zalman Braun (d. 1994) offers another twist on this idea. He writes,[36] based on Rashi,[37] that when one’s sins are atoned, one is especially joyous. This is the basis for the words of the above-cited Midrash[38] that applies the verse “Go eat your bread in happiness”[39] to the night after Yom Kippur. Throughout the entire day of Yom Kippur, the Jews fast and ask for His forgiveness. After that pardon is granted, a heavenly voice calls out to the Jews, “Go eat your bread in happiness.” This explains the opinion of Tosafos[40] who write that on the night after Yom Kippur, there is a special commandment to eat a festive meal. This obligation stems from the fact that after Yom Kippur, there is an extra special sense of happiness stemming from the forgiveness of sins.[41]

The happiness on Yom Kippur is a sort of controlled happiness. The rejoicing on Yom Kippur should be a rejoicing while shaking in fear of what His judgment might entail. About this, the Psalmist writes, “…And rejoice with trembling.” [42]

 

Rabbi Yosef Shalom Elyashiv says that the verse customarily said before Kol Nidrei on Yom Kippur Eve is a prime example of this type of rejoicing. That verse reads: “The light is sown for the righteous, and for those of an upright heart, happiness.” [43] The happiness in this verse refers to the happiness on Yom Kippur that comes from the atonement of sin, hence it is associated with the “righteous” and “upright.” In fact, The Mishnah in the end of the Tractate Yoma (which deals with the laws of Yom Kippur and the Temple services on that day) says that just a Mikvah purifies the impure; so does HaShem purify Israel from their sins. This is the happiness of Yom Kippur.

 

In a similar vein, we find that the happiness of Succos is also related to the cleansing from sin. The Talmud says[44] that at the Simchas Beis HaShoeivah on Succos, the pious men would dance and declare how happy they are that they did not sin in their youth, because it would embarrass them in their old age. Meanwhile, the penitents would dance singing that they are happy that their older years serve as atonement for the sins of their younger years. Both groups of men would join for the refrain, mutually agreeing that “happy is one who did not sin.” This shows that even the happiness of Succos comes from being free of sin—a direct result of the atonement achieved on Yom Kippur.

 

In describing the commandment of Lulav and Esrog on Succos, the Torah says, “And you shall take for yourselves, on the first day, the fruit of a citron tree, branches of date palms, twigs of plaited [myrtle] trees, and brook willows, and you shall be happy in front of HaShem, your G-d, for seven days.” [45]

 

The other holidays listed in the same passage are referred to by their date in the month. This leads the Midrash to ask[46] why the Torah calls the first day of Succos “the first day,” if it is actually the fifteenth day of the month, not the first. The Midrash answers that Succos is called “the first day” because it is “the first day” since the accounting of sins. This means that one’s slate is cleared on Yom Kippur and he begins anew on Succos. During the days between Yom Kippur and Succos, no one can possibly sin because everyone is so busy preparing for upcoming holiday; but once the holiday arrives, the new accounting of sins for the year can begin.[47] (Rabbi Elyashiv asks whether this reasoning applies in present times, for who is to say that they remained completely free of sin between Yom Kippur and Succos.)

Rabbi Elyashiv reiterates the point that the entire happiness on Succos is a result of the atonement of sins from Yom Kippur, five days earlier. This explains why in the Talmud’s description of the Simchas Bais HaShoeivah that all the songs sung concerned repentance and freedom from sin.

 

***

 

The Torah relates an episode in which the Jews in the desert demanded from Moses that he provide them with meat (after having eaten only manna until then). When HaShem told Moses about the fatty birds that He intended to feed the Jewish People, He said, “Not for one day shall you eat it, nor for two days, nor for five days, not for ten days, not for twenty days, [rather] a month.”[48]

 

The Tosafists explain the significance of these various intervals of days that HaShem specified.[49] They explain HaShem meant to stress that He will not send the fatty birds for a certain interval of time for which there is already a precedent of happiness and celebration, but will instead send the birds for a hitherto unexperienced interval of thirty days. The Tosafists then explain how each of the numbers stated represent a significant set of days on the Jewish Calendar: “one day” refers to Yom Kippur, “two days” refers Rosh HaShannah or Shavous, “five days” refers to the five days from Yom Kippur to Succos, “ten days” refers to the Ten Days of Repentance between Rosh HaShannah and Yom Kippur, and “twenty days” refers to the twenty-one days on which the entire Hallel is recited.[50] From the Tosafists’ explanation one sees that the five-day period spanning from Yom Kippur to Succos is considered one long continuation of happiness.

 

We see this in another context as well: The Talmud[51] writes that the word “the Satan” equals in gematria three hundred and sixty-four, alluding to the fact that the Satan only maintains his accusatory powers for three hundred sixty-four days a year, but for one day a year he remains powerless: Yom Kippur.

 

Rabbi Chanoch Zundel of Bialystock (d. 1867) asks in the name of Rabbi Yehonasan Eyebschitz (1690–1764) the following question:[52] While the numerical value of “the Satan” equals three hundred and sixty-four, the Satan’s name is not “the Satan,” as the word “the” is not part of his name; it is simply the definite article and serves a grammatical function. Rather, his name is “Satan” which only equals three hundred and fifty-nine, so how does this jive with the Talmud’s exegesis concerning the number of days on which the Satan has permission to prosecute?

In his conclusion, Rabbi Chanoch Zundel ultimately concurs with the basic premise of the question, and instead readjusts what the Talmud says. Essentially, he asserts that the Satan remains powerless for an additional five less days not mentioned in the Talmud: the five days between Yom Kippur and Succos. This again shows us that the period between Yom Kippur and Succos is viewed as one long continuation, spanning all the days in between the two holidays as well. This can be understood based on the abovementioned principle that the happiness of Succos is attributable to the exoneration and absolution of sin as introduced by Yom Kippur.

 

***

 

I would like to suggest that perhaps we can take this discussion in another direction. Perhaps we can argue that the happiness on Succos directly results from the sealing of one’s fate on Yom Kippur. A popular Hebrew dictum states, “There is no happiness like the answering of a doubt.”[53] Indeed, the feeling of doubt is potentially the most negative and destructive emotion possible. Uncertainty can cause one to resort to drastic measures as a means of achieving closure.

 

In fact, a famous Hassidic lesson related in the name of the Ba’al Shem Tov, Rabbi Yisroel ben Eliezer (1698–1760) illustrates this very point. He explains that the numerical value of the Hebrew word for “doubt” (ספק, safek) equals that of the word “Amalek” (עמלק), because just as Esau’s grandson Amalek can attack a person and adversely affect one’s sanity through his venom of cloudiness, so does a doubt hit at the core of a person’s functionality to destroy him from the inside. Accordingly, it serves to reason that there can be no greater feeling than the feeling of relief in answering a doubt.[54]

 

The Talmud[55] states that on Rosh HaShannah those who are completely righteous are written and sealed with a favorable judgment, and the those who are completely wicked, the opposite. But everyone in between completely righteous and completely wicked remains in a state of limbo until Yom Kippur—at which time they are judged  according to their actions and are finally written and sealed. This state of limbo which representation the Divine indecision about one’s fate is surely the worst situation in which one can be. With this in mind, we can now appreciate the happiness of Yom Kippur. When all of one’s sins are forgiven, one can finally rest-assured that HaShem’s judgment concluding favorably and can now revel in the happiness of knowing that his destiny has been finalized. This finality serves as the underlying reason for the happiness of Yom Kippur and the subsequent days including Succos.

 

In the beginning of this essay, we cited the Ritva’s question who notes that the Mishnah seems to contradict itself concerning the happiest time of the year. Is the happiest time of the year Yom Kippur/Tu B’Av, or is it Yom Kippur? In light of the above, the entire question is moot. We now understand that the happiness of Succos and Yom Kippur are indeed one and the same, and indeed they are the same as Tu B’Av.

 

The joy of Tu B’Av originated in the fortieth year of the Jews’ travels in the desert, when every year on Tisha B’Av, all the Jews slept in a grave and a segment of that population would not wake up the next morning. However, in the fortieth year, every person woke up on Tisha B’Av morning; no one died that year. The Jews assumed that they must have miscalculated the date, and they performed the same rite the next day. Yet, even the next night, no one died. They again assumed that they erred in calculating the date, and this continued until they saw the full moon on the fifteenth of the month at which point they know with certainty that Tisha B’Av had passed a no one died. This was the main cause for celebration on Tu B’Av.

 

This explanation also conveys the idea of rejoicing at the resolution of an uncertainty, for each night until Tu B’Av every man who slept in his grave was uncertain whether the next day he would wake up or not. But from Tu B’Av and onwards, he knew that he would survive. Therefore, the root of the happiness on Yom Kippur and Succos, which is based on the finality of HaShem’s judgement and the clearing away of uncertainty, matches the underlying basis for the happiness of Tu B’Av.

 

May HaShem forgive His nation from all of their sins so that we may merit the rebuilding of the Holy Temple, speedily and in our days and we should be able to appear before Him pure,[56] and continue the thrice-yearly pilgrimages to Jerusalem: Amen.[57]

* Rabbi Reuven Chaim Klein is the author of God versus Gods: Judaism in the Age of Idolatry (Mosaica Press, 2018), a scholarly study on all the stories related to the struggle against idol worship in the Bible. He is the founding editor of the Veromemanu Foundation for the study of Hebrew etymology and is also a freelance editor/translator/researcher. He lives with his wife and children in West Bank city of Beitar Illit. He originally penned this essay as a teenager and recently made some slight editorial revisions.

FOOTNOTES:

[1] In the end of Tractate Taanis.

[2] Taanis 30b.

[3] Chiddushei HaRitva to Bava Basra 121a.

[4] Sukkah 51a.

[5] That is, according to the reason that Tu B’Av is a joyous day because it allowed women who inherited real property to marry men from tribes other than their father’s tribe (see Pnei Shlomo to Bava Basra 121a).

[6] Rosh HaShannah 9a.

[7] Sha’arei Teshuvah 4:8-9.

[8] He also explains that the feast is in order to make easier the next day’s fast. See responsa Maharit (vol. 2, Orach Chaim, §8) who writes the exact opposite, i.e. that the feast is in order to make the next day’s fast more difficult. See also Chiddushei HaRitva (to Rosh HaShannah 9a) who mentions another explanation in the name of Rabbeinu Yonah of Girona.

[9] See Rema to Shulchan Aruch (Orach Chaim §602:1).

[10] Deuteronomy 16:15.

[11] Assuming that the letters sin and samech are interchangeable because they make the same sound.

[12] Taanis 2a.

[13] Although, according to Rabbeinu Yonah (Sha’arei Teshuvah 2:5) all Ten Days of Repentance from Rosh HaShannah to Yom Kippur are considered Yomim Nor`aim.

[14] See Beitzah 30b.

[15] Rema to Shulchan Aruch Orach Chaim, end of §624.

[16] Rema to Shulchan Aruch Orach Chaim §624:5.

[17] Machshirin 6:4

[18] The other five liquids are: Oil (Chanukah), Wine (Purim), Blood (Pesach), Milk (Shavuos), Honey (Rosh HaShannah).

[19] HaLekav V’HaLibuv.

[20] Kedushas Levi.

[21] See Yoma 86b.

[22] Deuteronomy 16:16.

[23] Divrei Aggadah.

[24] Tosafos to Succah 50b says that the Simchas Beis HaShoeivah is called so because one “draws” holiness in spirituality from HaShem’s presence, which rested at Holy Temple.

[25] Sotah 3b.

[26] Avos 4:2.

[27] Yoma 86b.

[28] Leviticus 16:30.

[29] Taanis 30b.

[30] Leviticus 23:24.

[31] E.g. see Deuteronomy 16:11.

[32] Yishmiru Da’as, Chol HaMoed Succos 5756.

[33] Tur, Orach Chaim §624.

[34] Ecclesiastes 9:7.

[35] Exodus Rabbah 36:1.

[36] Shearim Mitzuyanim B’Halacha to Bava Basra 48a.

[37] To Menachos 20a.

[38] Ecclesiastes Rabbah.

[39] Ecclesiastes 9:7.

[40] To Yoma 87b.

[41] Throughout Rabbinic literature, Succos is referred to as simply HaChag (“the holiday”). The numerical value of the Hebrew word “Chag” is eleven. Perhaps one may conjecture that the significance of the number eleven in this context is that it is the number immediately after ten. Ten is the day of the month of Tishrei on which Yom Kippur is observed. The fact that Succos is associated with the number eleven reveals a connection that Succos has with Yom Kippur which immediately precedes it.

[42] Psalms 2:10.

[43] Psalms 97:11.

[44] Sukkah 53a.

[45] Leviticus 23:40.

[46] Tanchuma, Emor §22.

[47] Yalkut Shimoni, Torah §651, see also Tur, Orach Chaim §581.

[48] Numbers 11:19.

[49] Da’as Zekanim to Numbers 11:19.

[50] That is, eight days of Chanukah, the first two days of Pesach, the first seven days of Succos, the two days of Shavous, the two days of Shemini Atzeres and Simchas Torah.

[51] Nedarim 32a.

[52] Eitz Yosef to Yoma 20a.

[53] See Metzudas Dovid to Proverbs 15:30.

[54] Maharam Schiff in Drashos Nechmados (back of Chullin, Pashas Nitzavim) writes that the fact that Deuteronomy’s rebuke consists of 98 revealed curses and two unknown curses bothered the Jewish People so much because the possible effects of those two unknown curses scared them to their wits.

[55] Rosh HaShannah 16b.

[56] Leviticus 16:30.

[57] Deuteronomy 16:16.

 

How to Make TORAH Discoveries (lehavdil)

The Bus Ticket Theory Of Genius

November 2019

Everyone knows that to do great work you need both natural ability and determination. But there’s a third ingredient that’s not as well understood: an obsessive interest in a particular topic.

To explain this point I need to burn my reputation with some group of people, and I’m going to choose bus ticket collectors. There are people who collect old bus tickets. Like many collectors, they have an obsessive interest in the minutiae of what they collect. They can keep track of distinctions between different types of bus tickets that would be hard for the rest of us to remember. Because we don’t care enough. What’s the point of spending so much time thinking about old bus tickets?

Which leads us to the second feature of this kind of obsession: there is no point. A bus ticket collector’s love is disinterested. They’re not doing it to impress us or to make themselves rich, but for its own sake.

When you look at the lives of people who’ve done great work, you see a consistent pattern. They often begin with a bus ticket collector’s obsessive interest in something that would have seemed pointless to most of their contemporaries. One of the most striking features of Darwin’s book about his voyage on the Beagle is the sheer depth of his interest in natural history. His curiosity seems infinite. Ditto for Ramanujan, sitting by the hour working out on his slate what happens to series.

It’s a mistake to think they were “laying the groundwork” for the discoveries they made later. There’s too much intention in that metaphor. Like bus ticket collectors, they were doing it because they liked it.

But there is a difference between Ramanujan and a bus ticket collector. Series matter, and bus tickets don’t.

If I had to put the recipe for genius into one sentence, that might be it: to have a disinterested obsession with something that matters.

Aren’t I forgetting about the other two ingredients? Less than you might think. An obsessive interest in a topic is both a proxy for ability and a substitute for determination. Unless you have sufficient mathematical aptitude, you won’t find series interesting. And when you’re obsessively interested in something, you don’t need as much determination: you don’t need to push yourself as hard when curiosity is pulling you.

An obsessive interest will even bring you luck, to the extent anything can. Chance, as Pasteur said, favors the prepared mind, and if there’s one thing an obsessed mind is, it’s prepared.

The disinterestedness of this kind of obsession is its most important feature. Not just because it’s a filter for earnestness, but because it helps you discover new ideas.

The paths that lead to new ideas tend to look unpromising. If they looked promising, other people would already have explored them. How do the people who do great work discover these paths that others overlook? The popular story is that they simply have better vision: because they’re so talented, they see paths that others miss. But if you look at the way great discoveries are made, that’s not what happens. Darwin didn’t pay closer attention to individual species than other people because he saw that this would lead to great discoveries, and they didn’t. He was just really, really interested in such things.

Darwin couldn’t turn it off. Neither could Ramanujan. They didn’t discover the hidden paths that they did because they seemed promising, but because they couldn’t help it. That’s what allowed them to follow paths that someone who was merely ambitious would have ignored.

What rational person would decide that the way to write great novels was to begin by spending several years creating an imaginary elvish language, like Tolkien, or visiting every household in southwestern Britain, like Trollope? No one, including Tolkien and Trollope.

The bus ticket theory is similar to Carlyle’s famous definition of genius as an infinite capacity for taking pains. But there are two differences. The bus ticket theory makes it clear that the source of this infinite capacity for taking pains is not infinite diligence, as Carlyle seems to have meant, but the sort of infinite interest that collectors have. It also adds an important qualification: an infinite capacity for taking pains about something that matters.

So what matters? You can never be sure. It’s precisely because no one can tell in advance which paths are promising that you can discover new ideas by working on what you’re interested in.

But there are some heuristics you can use to guess whether an obsession might be one that matters. For example, it’s more promising if you’re creating something, rather than just consuming something someone else creates. It’s more promising if something you’re interested in is difficult, especially if it’s more difficult for other people than it is for you. And the obsessions of talented people are more likely to be promising. When talented people become interested in random things, they’re not truly random.

But you can never be sure. In fact, here’s an interesting idea that’s also rather alarming if it’s true: it may be that to do great work, you also have to waste a lot of time.

In many different areas, reward is proportionate to risk. If that rule holds here, then the way to find paths that lead to truly great work is to be willing to expend a lot of effort on things that turn out to be every bit as unpromising as they seem.

I’m not sure if this is true. On one hand, it seems surprisingly difficult to waste your time so long as you’re working hard on something interesting. So much of what you do ends up being useful. But on the other hand, the rule about the relationship between risk and reward is so powerful that it seems to hold wherever risk occurs. Newton’s case, at least, suggests that the risk/reward rule holds here. He’s famous for one particular obsession of his that turned out to be unprecedentedly fruitful: using math to describe the world. But he had two other obsessions, alchemy and theology, that seem to have been complete wastes of time. He ended up net ahead. His bet on what we now call physics paid off so well that it more than compensated for the other two. But were the other two necessary, in the sense that he had to take big risks to make such big discoveries? I don’t know.

Here’s an even more alarming idea: might one make all bad bets? It probably happens quite often. But we don’t know how often, because these people don’t become famous.

It’s not merely that the returns from following a path are hard to predict. They change dramatically over time. 1830 was a really good time to be obsessively interested in natural history. If Darwin had been born in 1709 instead of 1809, we might never have heard of him.

What can one do in the face of such uncertainty? One solution is to hedge your bets, which in this case means to follow the obviously promising paths instead of your own private obsessions. But as with any hedge, you’re decreasing reward when you decrease risk. If you forgo working on what you like in order to follow some more conventionally ambitious path, you might miss something wonderful that you’d otherwise have discovered. That too must happen all the time, perhaps even more often than the genius whose bets all fail.

The other solution is to let yourself be interested in lots of different things. You don’t decrease your upside if you switch between equally genuine interests based on which seems to be working so far. But there is a danger here too: if you work on too many different projects, you might not get deeply enough into any of them.

One interesting thing about the bus ticket theory is that it may help explain why different types of people excel at different kinds of work. Interest is much more unevenly distributed than ability. If natural ability is all you need to do great work, and natural ability is evenly distributed, you have to invent elaborate theories to explain the skewed distributions we see among those who actually do great work in various fields. But it may be that much of the skew has a simpler explanation: different people are interested in different things.

The bus ticket theory also explains why people are less likely to do great work after they have children. Here interest has to compete not just with external obstacles, but with another interest, and one that for most people is extremely powerful. It’s harder to find time for work after you have kids, but that’s the easy part. The real change is that you don’t want to.

But the most exciting implication of the bus ticket theory is that it suggests ways to encourage great work. If the recipe for genius is simply natural ability plus hard work, all we can do is hope we have a lot of ability, and work as hard as we can. But if interest is a critical ingredient in genius, we may be able, by cultivating interest, to cultivate genius.

For example, for the very ambitious, the bus ticket theory suggests that the way to do great work is to relax a little. Instead of gritting your teeth and diligently pursuing what all your peers agree is the most promising line of research, maybe you should try doing something just for fun. And if you’re stuck, that may be the vector along which to break out.

I’ve always liked Hamming’s famous double-barrelled question: what are the most important problems in your field, and why aren’t you working on one of them? It’s a great way to shake yourself up. But it may be overfitting a bit. It might be at least as useful to ask yourself: if you could take a year off to work on something that probably wouldn’t be important but would be really interesting, what would it be?

The bus ticket theory also suggests a way to avoid slowing down as you get older. Perhaps the reason people have fewer new ideas as they get older is not simply that they’re losing their edge. It may also be because once you become established, you can no longer mess about with irresponsible side projects the way you could when you were young and no one cared what you did.

The solution to that is obvious: remain irresponsible. It will be hard, though, because the apparently random projects you take up to stave off decline will read to outsiders as evidence of it. And you yourself won’t know for sure that they’re wrong. But it will at least be more fun to work on what you want.

It may even be that we can cultivate a habit of intellectual bus ticket collecting in kids. The usual plan in education is to start with a broad, shallow focus, then gradually become more specialized. But I’ve done the opposite with my kids. I know I can count on their school to handle the broad, shallow part, so I take them deep.

When they get interested in something, however random, I encourage them to go preposterously, bus ticket collectorly, deep. I don’t do this because of the bus ticket theory. I do it because I want them to feel the joy of learning, and they’re never going to feel that about something I’m making them learn. It has to be something they’re interested in. I’m just following the path of least resistance; depth is a byproduct. But if in trying to show them the joy of learning I also end up training them to go deep, so much the better.

Will it have any effect? I have no idea. But that uncertainty may be the most interesting point of all. There is so much more to learn about how to do great work. As old as human civilization feels, it’s really still very young if we haven’t nailed something so basic. It’s exciting to think there are still discoveries to make about discovery. If that’s the sort of thing you’re interested in.

Continue reading…

From Paul Graham, here.

Deflation\Inflation\Stagflation\Mass Inflation\Hyperinflation?

Which Flation Will Get Us?

By 

September 5, 2009

One of them will. That’s if things work out really well. Two or three will if things go according to the Austrian theory of the business cycle.

Americans have been living in the eye of the monetary hurricane. Prices have been stable. In July, both the Consumer Price Index and the Median CPI were flat compared to June.

There are five flations to consider.

DeflationInflationStagflationMass inflationHyperinflation

We had better consider all of them.

FLATION: MONETARY OR PRICE?

We should always keep in mind the fact that there are two ways to define flation: (1) as a change in the money supply; (2) as a change in the price level.

This assumes two more things: (1) we can accurately define money; (2) we can accurately identify the price level. Both are questionable.

The Federal Reserve three years ago dropped M3. It said that M3 was useless as an indicator of future prices. That was a long time coming. The FED was correct. M3 was the most misleading of these M’s: M1, M2, M3, MZM. It always vastly overstated the looming rise in the CPI. There is no doubt which M is best in this regard: M1. For my detailed Remnant Review article on this, go here.

Furthermore, there is more to an M than predicting future consumer prices. There is also the question of predicting the business cycle. There is no agreement here among economists.

Then there is the price level. Which basket of goods and services should statisticians use? What relevance should a statistician place on any of a hundred commodities and services? This weighing will change when consumer tastes change. No index survives intact over time. They all are revised when there are major changes, from the CPI to the Dow Jones averages.

I look for trends. I use M1 and the Median CPI.

The crucial fact is monetary policy. According to the Austrian theory of the business cycle, the cycle is completely the outcome of prior central bank monetary policy. Booms and busts are the result of central bank monetary inflation, followed by reduced expansion. The other schools of thought reject this theory. The other schools of thought are wrong. For an introduction to this issue, see Chapter 5 of my mini-book, Mises on Money.

DEFLATION

Most of those who forecast deflation have in mind price deflation. A few think monetary deflation will take place because of bankrupt banks, but the position is difficult to defend. The FDIC can keep bank doors open. There are no runs on banks involving currency withdrawal. There are only runs involving the transfer of digital money to other banks. This does not affect the money supply.

Price deflation can come through the free market. It results from steady increases in economic output in an economy with stable money. Here is my slogan: “More goods chasing the same amount of money.” A gold coin standard economy provides such a world, as long as central banks do not protect insolvent banks. So does 100% reserve banking, which we have never had. This is not the scenario offered by deflationists.

Here is their scenario. Banks create credit. Fiat money lowers interest rates. People borrow. This is consistent with Austrian economics. This credit structure cannot be sustained indefinitely. Austrianism also teaches this.

Here is where the schools of opinion depart. The deflationist says that people in general cannot pay their debts. They default. So, prices fall. Not just prices of market sectors that were bubbles, but all prices.

There is a problem with this argument. If you find that half of the things you regularly buy cost less, you buy the same amount, or maybe a little more, and then buy more of something else. This includes the purchase of capital goods.

You don’t put currency in a mattress. You buy something with the money that falling prices allows you to keep. You buy more of B when the price of A falls . . . or more of A.

Simple, isn’t it? But those who call themselves deflationists do not understand it or believe it.

The same money supply is out there. Someone owns each portion of it. You own some. I own some. We both would like to own more . . . at some price. But the credit contraction of a popped market bubble does not affect the money supply if the central bank or the Treasury or the FDIC intervenes and prevents a fractional reserve bank from going bust and taking all of the digital money with it.

This is economic logic. If the logic is incorrect, then there should be detailed theoretical criticisms of it. Or, given the weaknesses of human thought, maybe logic does not correspond to reality. Economists are famous for constructing detailed theories that do not conform to reality. But the free market theory of price changes as the result of the supply and demand for money in relation to the supply and demand for products and services is straightforward. It undergirds all of economic theory. Throw it out, and what remains of economic theory?

If a central bank creates a boom with fiat money, and then ceases to inflate, it can create deflation. How? By refusing to bail out busted banks. It allows the money supply to contract as bankrupt commercial bank deposits disappear. Fractional reserve banking implodes. That will create a deflationary depression. We have not seen anything like this since 1934: the creation of the FDIC.

Don’t bank on this just yet.

INFLATION

Monetary inflation produces price inflation. On this, Chicago School monetarists and Austrian school economists agree.

If the central bank expands the money supply, prices will rise. This takes time. Economists debate about the lag time: 6 months, a year, 18 months. But monetary expansion will raise prices. The new money has to go somewhere. It has to wind up in someone’s bank account.

If the central bank expands the monetary base by buying assets of any kind, it creates money to buy them. The recipients of those assets spend the money. If the Treasury gets it, Congress spends it. (In both theory and practice, if Congress gets its collective hands on money, it spends it. All economists are agreed on this point.)

The expansion of money by the central bank is the source of economic booms and specific asset bubbles. The expansion of money temporarily lowers the interest rate. Someone borrows this newly created money.

America suffered from monetary inflation from 1914 to 1930. Then, with a 3-year hiatus of collapsing banks, we have suffered from 1934 until today. The dollar has fallen by 95% since 1914. No, I don’t believe the CPI tells us this exactly. But I can follow the trend. The trend is up for prices and down for purchasing power.

For as long as the Federal Reserve creates money, we will have price inflation. The only thing that can retard this is if the FED raises reserve requirements or commercial banks send excess reserves to the FED. The monetary effects are the same: increased reserves are the result. This reduces the multiplier of fractional reserve banking.

Price inflation of under 10% per annum is what I call inflation. But before we get to this, we will suffer from stagflation.

STAGFLATION

This was the burden of the 1970’s. There was monetary expansion and massive Federal deficits. Why, the Federal deficit was a staggering $25 billion in 1970, and as bad the next year. Unthinkable!

The dominant Keynesian theory was that Federal deficits would overcome recessions. The central bank need only inflate enough to cover part of the Federal deficit. But there were two major recessions in the 1970’s. Unemployment rose, and prices rose. That combination of events was dubbed stagflation.

That we can have economic stagnation in today’s world is obvious. Just about every mainstream economist and forecaster is predicting slow economic growth next year. The familiar V-shaped recovery is not a popular forecast these days. More typical is the forecast of Muhammed El-Erian, the CEO of PIMCO, the largest bond fund in the world. He calls this “the new normal.”

Global growth will be subdued for a while and unemployment high; a heavy hand of government will be evident in several sectors; the core of the global system will be less cohesive and, with the magnet of the Anglo-Saxon model in retreat, finance will no longer be accorded a preeminent role in post-industrial economies. Moreover, the balance of risk will tilt over time toward higher sovereign risk, growing inflationary expectations and stagflation.

This scenario is a combination of slow growth and rising prices. Today, we have no growth and flat prices. So, slow growth and rising prices is not much of a stretch conceptually.

I think stagflation is likely, once the recovery comes. But we are seeing a gigantic Federal deficit. Ross Perot in 1992 spoke of a giant sucking sound. He said that was the sound of jobs lost to Mexico. I think it is the sound of the Federal government sucking up all excess capital in the United States and much of the world. This money will not be going into the private sector.

What is the basis of a sustained economic recovery? Increased capital formation. We are seeing capital destruction.

For a time, we will suffer from stagflation. It will not be stag-deflation. It will be stag-inflation.

What do I envision? Economic growth under 2% per annum, coupled with price increases of 5% per annum or more.

MASS INFLATION

This phenomenon will appear when the Federal deficit cannot be covered by private investment and purchases by foreign central banks. This seems certain within a decade. I think it is likely before the end of the next President’s term. I think the Social Security trust fund will cease to provide a surplus that is used to purchase nonmarketable Treasury debt, as it is today. The trustees will have to sell some of these nonmarketable Treasury debt certificates back to the Treasury. The Treasury in turn will have to sell conventional Treasury debt to cover the redemptions by the trust fund.

This stage will be the indicator that the present borrow-and-spend model has failed. The FED will be called upon to supply the difference between purchases of T-debt by the public and borrowing by the government. When the FED complies, the rate of monetary inflation will rise. Prices will also rise.

I define mass inflation as double-digit price inflation above 20% but below 40%. Americans have not seen this. No industrial nation has seen this except after a major military defeat.

The disruption of the capital markets will be extreme. The government will absorb virtually all capital formation. There will be no net capital formation. There will be capital consumption.

The international value of the dollar will fall. But other Western nations will be pursuing comparable policies. It is not clear how far the dollar will fall. It depends on the competitive race to national self-destruction. Every Western nation faces the day of reckoning: the bankruptcy of Social Security/Medicare.

At this point, the FED will have to make a choice: put on the brakes or destroy the dollar.

HYPERINFLATION

The worst-case scenario is hyperinflation. Ludwig von Mises called this the crack-up boom. It leads to the destruction of the currency. The economy will move to barter or to alternative currencies. The division of labor will collapse.

No modern industrial economy has suffered this since the recovery after World War II. The West is not Zimbabwe. The West is not a backward agricultural nation that still has functional tribal organizations to help their members.

Think about the implications of your money not buying anything of value. How would you live? You are urban. You are dependent on a complex system of computerized production and distribution. It is all governed by profit and loss. The profit-and-loss system will cease to function at some point. That is when the economy shifts to a new monetary system.

This would be the destruction of wealth on the scale of a war. It would create a new social order.

I do not think the Federal Reserve will allow this. This would destroy the banking system. The FED’s unofficial but primary job is to preserve the biggest banks in the banking system. If it’s a question of providing fiat money for the government’s debt vs. destroying the dollar, the FED will cease buying Treasury debt.

That will be the turning point.

DEFLATION

Then we will get the crash. The FED will protect the biggest banks, which will swallow the assets of smaller banks. A lot of smaller banks will go under. They will take deposits with them.

We will get bank runs. People will demand currency. The FDIC will be busted. These banks will go under. So will depositors’ money. It will be “It’s a Wonderful Life” without the 6 o’clock escape hatch in the script.

You had better have your money in Potter’s Bank, not the Bedford Falls Building & Loan.

The contraction of digital money will be matched by a truly serious recession. Bankruptcies will be widespread. Unemployment may not rise, but only because the final phase of mass inflation had created so much unemployment.

This will be a period of restoration. The cost of the restoration will depend on how bad the dislocations of the mass inflation had been. If they are very serious, which I would expect, the time of recession will be tolerable if you have currency and a job. But the investment strategies of hedging against mass inflation will produce losses. An opposite set of strategies will appear. Be a debtor in mass inflation. Be a creditor in the post-inflation recovery.

If the Federal Reserve intervenes again, repeat the cycle from the top. But the numbers will be much larger.

CONCLUSION

Pick your flation. You can try to beat it, but each successive flation threatens your capital.

We are entering a period of capital consumption in the United States. I think this problem will afflict the West. The same political promises have been made. They will be broken.

He who sustains his lifestyle through these flations will be blessed indeed. Getting rich will be miraculous.

September 5, 2009

From LRC, here.