November 19, 2011

1. The Penn State Scandal

[One of the football coaches at Penn State, Jerry Sandusky, was arrested for child molestation.] Perhaps the Penn State scandal illustrates the theme of the aging king, a common theme in myth and legend. The king exerts a subtle but profound influence on his kingdom, he sets the tone for his kingdom. The aging king can’t keep his kingdom in order, his kingdom becomes a wasteland. Perhaps the root cause of the Penn State scandal is that head coach Joe Paterno was 84, far too old to keep his kingdom in order; he was even too old in the late 1990’s, when the scandal had its beginnings. Would this scandal have occurred if Paterno were 40 or 45? I doubt it.

Between 2002 and 2008, 46 Penn State football players were charged with a total of 163 crimes. “ESPN questioned Joe Paterno’s and the university’s control over the Penn State football program.”1 Would this have occurred if Paterno was 40 or 45?

Surely many institutions become unraveled when their leader is aging, when they’re living on the past. Penn State administrators tried to persuade Paterno to retire in 2004, visiting his house twice, but Paterno refused to retire. In many primitive societies, the king is ritually murdered — before he gets old, before his kingdom unravels.

There had long been reports of misconduct by football coach Jerry Sandusky. The first report was in 1998: a victim’s mother reported Sandusky to the university police, who provided material to District Attorney Ray Gricar. Gricar decided not to file charges against Sandusky.

Seven years later, in 2005, Gricar disappeared, and hasn’t been seen since. Suicide seems highly probable. Gricar took pains to destroy his computer, suggesting there was something on it that he didn’t want people to see. Assuming Gricar committed suicide, what was his motive? Had Gricar heard more reports of Sandusky’s misconduct? Did he anticipate that the sex-abuse scandal would someday burst into the public eye, as it’s doing now? Did he anticipate that people would blame him for not pressing charges in 1998, not ‘nipping the problem in the bud’? Or was there something in Gricar’s background, something in his family history, that inclined him toward suicide? Ray Gricar’s brother, Roy, committed suicide nine years before Ray’s disappearance; both brothers seem to have died in or near rivers.

As with any crime, Sandusky’s crime raises several questions: What drove him? Was he free to commit these crimes or not commit them, or was he in some way programmed to do what he did? Many child-abusers were themselves abused as children. Was Sandusky abused? The reports I’ve seen suggest that, in his early years, Sandusky enjoyed a healthy family environment. But if his upbringing was positive, how could he do what he did?

The Penn State scandal reminds many people of the sex-abuse scandals in the Catholic Church. The Penn State scandal might also be compared to the cover-up that Ibsen depicts in An Enemy of the People, or to the cover-up in Peter Benchley’s novel, Jaws, a novel that was inspired by Ibsen.

2. Sholem Aleichem

I discovered a Jewish writer named Sholem Aleichem, best known for his stories about Tevye the Milkman, which were the basis for the musical Fiddler on the Roof. In the late 1800’s, he was a pioneer in the use of Yiddish for literary works; previously, Hebrew was commonly used. “Sholem Aleichem” was a pen name, his real name was Solomon Naumovich Rabinovich. A Harvard professor, Ruth Wisse, published a book called The Best of Sholom Aleichem, and also published a critical essay on Sholem Aleichem in a book called The Modern Jewish Canon.2

Sholem Aleichem died on May 13, 1916, at the age of 57. Since he had a phobia about the number 13, his tombstone in Queens says that he died on May 12a. His funeral in New York City was attended by 100,000 people. He left instructions that his family read aloud one of his merry stories on the anniversary of his death. The annual reading attracted more and more people, and now it’s held at the Brotherhood Synagogue on Gramercy Park South. Some pieces are read in the original Yiddish, others in English translation.

He was known as the “Jewish Mark Twain” because of his light-hearted tone, and his busy lecture schedule. In 1908, while lecturing in Russia, he collapsed from tuberculosis. He said he had met his majesty, the Angel of Death, face to face, and he began writing his autobiography, From the Fair (also known as The Great Fair).

In earlier issues, I discussed the modern Jewish writers Isaac Bashevis Singer and Isaak Babel, both of whom are discussed in Wisse’s Modern Jewish Canon. But somehow I never discussed one of the most prominent modern Jewish writers, S. Y. Agnon. Born in what is now Ukraine, Agnon immigrated to Palestine in 1908, when he was 20. Except for ten years in Germany, he spent his adult life in Israel, and died in Jerusalem in 1970. He won the Nobel Prize in 1966. Though some of his early works are in Yiddish, most of his works are in Hebrew. One of his chief works is The Bridal Canopy, a novel about East European Jews in the early 19th century. In his later years, the authorities posted a sign on his street, “No Vehicles, Writer at Work.”

3. Kissinger and Kennan

Kissinger is now 88, but his mind is sharp, if we can judge by his recent review of a biography of George Kennan. In his review, Kissinger notes what is perhaps the central fact about Kennan: he was “a singularly gifted prose stylist.” This is what makes Kennan’s books a pleasure to read, this is what ensures Kennan’s immortality.

But Kissinger also notes Kennan’s shortcomings as a statesman. Kennan was widely respected for his intellectual vision, but less respected in the area of day-to-day tactics. He was rarely entrusted with a high position, and when he did have a high position, he didn’t last long in it. Kissinger says that Kennan had the vision to understand that Communism wasn’t monolithic, that a communist China might clash with a communist Russia, and that the U.S. could benefit by balancing these foes against each other.

But Kissinger complains that “Kennan often shrank from the application of his own theories.” When Nixon and Kissinger made overtures to China, hoping to use China as a counter-weight to the Soviet Union, Kennan feared that the Soviet Union might go to war, and he tried to persuade Kissinger to change course. Kissinger complains that Kennan was “too intellectually rigorous to countenance the partial steps needed to reach the vistas he envisioned. Yet policy practice — as opposed to pure analysis — almost inevitably involves both compromise and risk.”

Kennan was the architect of the Cold War strategy of “containment,” but he clashed with those who implemented this strategy. Kennan insisted that containment shouldn’t be a matter of military strength and military alliances; he believed that the Soviets weren’t aiming at world conquest. Kennan anticipated that the Soviet Union would eventually crumble from within. Kennan was wary of alliances, and opposed the creation of NATO.

Meanwhile, Dean Acheson and other statesmen were building military alliances, and Kissinger approves of Acheson’s approach. “Acheson considered Kennan more significant for literature than for policy making and wholly impractical. Kennan’s reaction was frustration at his growing irrelevance to policy making.”

While Acheson pursued a policy of nuclear deterrence, Kennan was so uncomfortable with nuclear weapons that he suggested it would be better to permit Soviet domination of Western Europe rather than have a nuclear war. Kennan took the absolute position that you shouldn’t pursue a policy that involved even a remote risk of nuclear war. Acheson realized that if you retained the option of using nuclear weapons, however abhorrent this option was, you could deter your adversary and maintain peace. Acheson was willing to get his hands dirty in practical policies. Kennan, on the other hand, had an “innate perfectionism.”

Kennan deplored the influx of Hispanics into the American Southwest, fearing that American culture wouldn’t survive. He advocated independence for Vermont and other states; only through independence, Kennan believed, could such states maintain their cultural traditions. Kissinger doesn’t mention this aspect of Kennan, though it strengthens his thesis that Kennan was an impractical visionary.

[Update 2015: It should be noted that Kennan anticipated the Iraq debacle, and warned against invading Iraq, while Kissinger supported the Iraq invasion.]

Kissinger’s prose isn’t as elegant as Kennan’s. For example, Kissinger writes, “If Europe was to be secured, America did not have the choice between postponing the drawing of dividing lines or implementing a diplomatic process to determine whether dividing lines needed to be drawn at all.” I read this sentence eight times, and still don’t know what Kissinger means, though I detected a glimmer of meaning after my fifth reading.

The Kennan biography that Kissinger reviewed is by John Lewis Gaddis, a Yale professor known for his books on the Cold War. Kennan cooperated with Gaddis, so the biography is called “official” or “authorized.” As for Kissinger, his authorized biographer is Niall Ferguson. Ferguson’s biography is expected in 2012; he isn’t waiting until his subject dies, as Gaddis did.

I didn’t realize that Kissinger’s origins were humble: he was the son of German-Jewish immigrants who fled the Nazi regime, and when he was a teenager in Manhattan, he worked in a shave-brush factory during the day, and attended high school at night. Then he studied accounting at the City College of New York, continuing to work on the side.

4. Anonymous

Saw the new Shakespeare movie, Anonymous, which I’ve been eagerly awaiting for years, since it’s The Oxford Theory’s first appearance on the big screen — or at least, its first appearance in many years.3 I enjoyed Anonymous, I recommend it. It doesn’t bring out the facts behind The Oxford Theory as well as the Frontline documentary, but it touches on many aspects of the theory, and weaves them into a lively whole. It might be somewhat confusing for a viewer who’s unfamiliar with The Oxford Theory, and there isn’t much suspense or humor or romance, but the scenes of old England are top-notch, as are the excerpts from Shakespeare plays. Roger Ebert liked it, though he’s opposed to the Oxford Theory. Ebert said it was, “a splendid experience: the dialogue, the acting, the depiction of London, the lust, jealousy and intrigue.”

The movie not only deals with The Oxford Theory, but also with the Prince Tudor Theory, which says that Oxford and Elizabeth had a secret child, the Earl of Southampton. But then it goes further still, and says that Essex was also Elizabeth’s secret child, and that Oxford himself was Elizabeth’s child. I think the movie goes too far — two bastards too far.4

Anonymous doesn’t show Oxford travelling — doesn’t show him in Venice, for example, or in Paris. His travels were a formative experience, and the facts surrounding his travels strengthen The Oxford Theory. Anonymous also doesn’t show one of the most dramatic incidents of Oxford’s life — the trial of his son, Southampton, in which Oxford was a judge, Essex was a co-defendant, Francis Bacon was a prosecutor, and Robert Cecil made a surprise appearance. Perhaps a future Oxfordian movie could show his travels and the trial of Southampton, and could present his life sequentially, instead of in flash-backs and flash-forwards. Or it could focus on one moment (preserving the classical unities — unity of time, of place, and of action), and present other moments as recollections. Perhaps the best moment to focus on would be the night after the Essex Rebellion, when the poet’s fondest hopes had been dashed, and he wrote Sonnet 27 during a sleepless night. Or a film could focus on the person who discovered the Oxford Theory, J. Thomas Looney, and move back and forth between Looney’s time and Shakespeare’s time.

Anonymous was greeted with fury by the Stratfordian establishment. The screenwriter, John Orloff, defended the film in a Huffington Post essay, and pointed out that Stratfordian James Shapiro refused to debate him publicly, and the New York Times refused to allow him to respond to Shapiro’s essay. The Stratfordian modus operandi is to fire a rhetorical broadside, then refuse to debate Oxfordians, and refuse to allow their arguments to be heard.

5. Roger Martin

As I was surfing the web, I stumbled across an essay by Roger Martin, a business writer and business-school administrator. The essay is called “The limits of the scientific method in economics and the world.” Since I’m a critic of the rational-scientific worldview, I was attracted by the title of Martin’s essay.

Martin begins by saying that most economists completely failed to predict the 2008 financial crisis, yet they continued using their sophisticated formulas with as much confidence as ever. Martin says that the rational-scientific approach was pioneered by Aristotle, but Aristotle said it was only applicable to things that ‘could not be other than they are,’ such as a tree or a stone. Aristotle said that the rational-scientific approach doesn’t apply to the human sphere, where things can be other than they are; this sphere is governed by rhetoric. The modern world, in Martin’s view, “routinely pushes the scientific method far past the limits for which it was designed.” Economists analyze the past, then treat the future as an extension of the past.

Martin says that the American philosopher Charles Sanders Peirce wouldn’t be surprised at the failures of economists. Peirce insisted that “no new idea was ever derived from the analysis of the past using inductive and deductive logic — the two forms of logic our modern scientific method utilize.” These forms of logic can only prove things in the past, they can’t anticipate the future, they can’t make bold conceptual breakthroughs.

Peirce recommended a different kind of logic, which he called abduction, and which he sometimes described as a guess or hypothesis, “a logical leap of the mind.” Peirce illustrated abductive reasoning thus:

The surprising fact, C, is observed;
But if A were true, C would be a matter of course,
Hence, there is reason to suspect that A is true.

For example, let C, our “surprising fact,” be that we have no letters to or from the Stratford man, no books owned by him, no manuscripts, and no mention of books or writings in his will. Now let A be “he didn’t write the works that tradition ascribes to him.” If A is true, then C is a matter of course. And so we begin to suspect that A is true, that is, that the Stratford man didn’t write the works of “Shakespeare.”

Now let C, our “surprising fact,” be that Lincoln anticipated he would be assassinated. Let A be “time doesn’t have the linear sequence that we commonly suppose, the future exists in the present, and the future can be discerned by psychics and even ordinary people.” If A is true, then C is a matter of course. And so we begin to suspect that A is true, that the future already exists.

In an earlier issue, I quoted the scholar Steven Sage:

Anomalies were the keys to Sherlock Holmes’s success.... Holmes would delve for that which did not fit [Peirce’s “surprising fact”]. Oddities, he knew, led the way to solutions. He worked back from seeming trifles.... This process differed from either deductive or inductive logic. Deductive reasoning proceeds from a general rule to a specific case. Inductive reasoning tests general rules by experiment.... But where a phenomenon is intrinsically aberrant, these forms of reasoning are insufficient.

Sage recognizes what Peirce recognized — namely, that inductive and deductive reasoning often fall short, and a different kind of reasoning is needed — what Peirce calls “abductive” reasoning. According to Peirce, “Deduction proves that something must be; Induction shows that something actually is operative; Abduction merely suggests that something may be.” Abductive reasoning is formulating a hypothesis to explain something that’s odd, surprising, aberrant. Once the hypothesis is formulated, it’s tested against the facts.

For example, we have the surprising fact that Shakespeare’s 27th sonnet strikes a different tone than earlier sonnets (“Suddenly we are all adrift, because the spirit of the verses so obviously changes”). And so a hypothesis is formulated (by Hank Whittemore) to explain this anomaly: the poet’s son was involved in the Essex Rebellion, and he has just been imprisoned. Now the hypothesis is tested against Sonnet 27, and against other sonnets, and other circumstances. If it passes these tests, if it explains other sonnets well, then we begin to regard it as a solid theory, instead of a tentative hypothesis.

Steven Sage was looking for a way to describe the method he used. It wasn’t induction or deduction, so what was it? Likewise, I was looking for a way to describe Hank Whittemore’s method, which didn’t seem to be induction or deduction. Peirce’s notion of abductive reasoning fits both cases. This strengthens our confidence in our methods, and also strengthens our confidence in Peirce, whose theory seems to be widely applicable and highly useful, and whose criticisms of induction and deduction seem to be on target.

Scholarly work favors logic and number-crunching rather than intuition and creativity. Martin is trying to change this. “It is important,” Martin says, “that we not default reflexively to analysis rather than innovation.”5

Martin is known for developing “Integrative Thinking,” which Wikipedia describes as

the ability to balance two opposing models, and instead of choosing one at the expense of the other, generating a creative solution that contains elements of the individual models, but is superior to each. Martin argues that business leaders that master this mode of thinking have a unique ability to innovate and solve problems facing their company.

What Martin calls Integrative Thinking is often used outside the business world. Newton combined earlier theories to make a new synthesis. My philosophy of history takes elements from Hegel, Nietzsche, and Freud. Jung anticipated that future thinkers would reject neither Freud’s theories nor his own, but rather take elements from each — and that’s just what I’ve done.

Furthermore, I’ve often argued that truth is contradictory, and that we should respect both sides of the contradiction, rather than choosing one side and rejecting the other. Our thinking should be “both/and” rather than “either/or.” Physics, for example, says that light is both a wave and a particle. This is a contradiction, but it’s better to accept both statements, contradictory though they may be, rather than to accept one and reject the other. Martin defines integrative thinking as

The ability to face constructively the tension of opposing ideas and, instead of choosing one at the expense of the other, generate a creative resolution of the tension in the form of a new idea that contains elements of the opposing ideas but is superior to each.

Martin’s “integrative thinking” strikes a chord with me. For more on the concept, see Martin’s book, The Opposable Mind: How Successful Leaders Win Through Integrative Thinking.

Martin is also known for developing “Design Thinking,” which “balances analytical thinking and intuitive thinking, enabling an organization to both exploit existing knowledge and create new knowledge.” For more on this concept, see Martin’s book, The Design of Business: Why Design Thinking is the Next Competitive Advantage. Apple Computer is known for its emphasis on design, and for its innovative thinking.

Martin’s latest book is Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL.6

6. Three Predictions About the Euro

A. Nouriel Roubini

The economist Nouriel Roubini, famed for predicting the 2008 financial crisis, is now predicting that Italy will abandon the euro. Roubini says that Italy has two problems, “stocks” and “flows.” The “stock” problem is a large stock of government debt — $2.6 trillion, or 120% of GDP. The “flow” problem is a trade deficit and a sagging GDP. The stock problem worsened recently when the value of Italian bonds sank, and Italy’s borrowing costs rose.

One way to address the stock problem is by a semi-default, a “forced restructuring,” such as we saw in Greece recently. But this solution for the stock problem would still leave the flow problem unsolved. The flow problem can only be solved by currency depreciation, which is anathema to inflation-wary Germany. So Italy will have to abandon the euro, so it can set its own monetary policy, and depreciate its currency as needed. If Italy abandons the euro, the whole project of a single currency for Europe will be in tatters.

The only way to keep the eurozone afloat, Roubini says, is for the European Central Bank to pursue a policy of generous loans and easy money, allow the euro to fall to parity with the dollar, stimulate the economies in the eurozone core (such as Germany), and cut government spending in the eurozone periphery (Italy, Greece, Portugal, etc.).

One of the striking facts about the eurozone debacle is that, like the sub-prime mortgage debacle of 2008, it has taken people by surprise. What seems obvious in retrospect was unnoticed until recently, even by “experts.” Until recently, Greek bonds and Italian bonds were considered safe investments, and paid only a slightly higher return than German bonds. Just as investors thought that bundles of sub-prime mortgages, with a AAA rating, couldn’t fail, so too investors thought that the sovereign debt of a eurozone country was a rock-solid investment. They seemed to think, “Everybody’s buying these bonds, it must be the thing to do.” Government defaults, though common in many parts of the world, couldn’t happen in the eurozone.

And then, in the twinkling of an eye, what seemed rock-solid began to seem highly risky, what had inspired serene confidence began to inspire panic fear, and everybody ran for the exits. In retrospect, it’s clear that Greece and other countries were seduced into over-borrowing by low interest rates, just as American home-buyers were seduced into over-borrowing by low interest rates. The very fact that European sovereign debt was regarded as risk-free made it risky, by keeping interest rates low and encouraging over-borrowing. Just as American ratings agencies earned juicy fees by assigning AAA ratings to bundles of sub-prime mortgages, so European banks earned fees by selling sovereign debt, and pretending it was risk-free. And so the party continued into the wee hours, as it had in the U.S. a few years earlier, until suddenly the music stopped.

B. Bernard Connolly

One of the harshest critics of the euro, and one of the first to predict its downfall, is the Englishman Bernard Connolly. Connolly doesn’t mince words: he speaks of monetary union as “malignant lunacy,” and he wrote a book in 1995 called The Rotten Heart of Europe. He says the euro will lead to public discontent, and perhaps civil war and dictatorship. In 1998, he predicted that at least one of Europe’s weakest countries would eventually face a rising budget deficit, a shrinking economy and a ‘downward spiral.... a risk of sovereign default.’” Some have profited from Connolly’s advice — by avoiding the bonds of troubled countries, or by betting against these bonds via credit-default swaps. Connolly also receives credit for anticipating the 2008 financial crisis.

C. Milton Friedman

Another person who predicted the current troubles of the euro is Milton Friedman. Eleven years ago, in 2000, Friedman warned that different countries would probably need different monetary policies, but with a single currency, this wouldn’t be possible. Hence there would be the sort of stresses that we’re seeing now. Instead of fostering political harmony and integration, the euro would foster discord. (If you want to learn about Friedman’s views on monetary policy, the gold standard, etc., consider his 1994 book, Money Mischief: Episodes in Monetary History.)

Besides Connolly and Friedman, others expressed doubts about monetary union, including Martin Feldstein and Paul Krugman.

Update 2018: A WeeklyStandard article discusses a book by Ashoka Mody called EuroTragedy: A Drama in Nine Acts. Mody’s book mentions several people who predicted euro troubles:

The most farsighted hero among Mody’s forebears is Nicholas Kaldor, the Anglo-Hungarian economist. In March 1971, as the first dreams of Europe-wide money were being sketched out at conferences, Kaldor warned not only that such a currency would be economically inefficient but that it would undermine the political unity it was intended to promote. If there is a diversity of economies in the group, then the currency will be overvalued for some and undervalued for others. Without stabilizers and transfers, pressure will build up. Strong countries will receive stimulus overheat while weak ones will go into debt deflation and their economies will grind to a halt.

Maurice Obstfeld of Berkeley, who early saw that, in Mody’s words, “the eurozone’s financial framework encouraged investors to lend cheaply to governments with shaky public finances.” Forgetting that not everyone is equally creditworthy is the great common thread that runs through the American (subprime) and the European (euro) crises.

And Mody credits Alan Walters, an adviser to British prime minister Margaret Thatcher, for seeing in 1986 that a fixed exchange regime such as the champions of the euro envisioned would amplify credit booms by sucking money into those countries where inflation was high and productivity falling.

© L. James Hammond 2011
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1. Wikipedia back
2. The Best of Sholom Aleichem was edited by Irving Howe and Ruth Wisse. back
3. Leslie Howard tried to promote the Oxford Theory in his 1941 movie Pimpernel Smith, sometimes called Mister V. back
4. Was Oxford really the child of Elizabeth? I haven’t looked at the evidence, and don’t take a position. But even if the evidence is strong, even if he was the child of Elizabeth, I think the movie should omit that, and focus on its main themes. As for Essex, I doubt he was Elizabeth’s child, and I think it’s reckless for the movie to suggest that he was. back
5. In an earlier issue, I said that a new theory about Shakespeare was based neither on induction nor on deduction.

When you see how much space Wikipedia devotes to Peirce, you begin to understand how popular logic is among scholars/academics. Wikipedia devotes twice as much space to Peirce as it does to Emerson! Carlyle gets even less space than Emerson, Montaigne and Hoffer far less space than Emerson or Carlyle. back

6. In an earlier issue, I discussed Daniel Pink, another business writer who favors intuition and a non-rational approach. Click here for a short video featuring Pink and Martin. back