Wednesday, December 28, 2005

Lethal economic ignorance.

The (too) common notion that there are savings to be had from "cutting out the middleman" is grist for any principles of economics class. We highlight the pervasiveness of transactions costs and the value added from reducing them.

Yet, many cannot conceive of value added without a tangible visible product. It is also true that ignorance of economic principles can be lethal.

Thomas Sowell masterfully addresses both problems in his essay, "Are Jews Generic?" to be found in his recently published Black Rednecks and White Liberals.

Sowell is typically scholarly yet clear.

"In any given country, a particular minority may be hated for any number of reasons peculiar to that country or that group. However, in a worldwide perspective, the most hated kinds of minorities are often defined not by race, color, religion, or national origin. Often they are generically 'middleman minorities,' who can be of any racial of ethnic background, and in fact are of many. Many of the historic outbreaks of inter-ethnic mob violence on a massive scale have been against the Jews of Europe, the Chinese minorities in various Southeastern Asian countries, against the Armenians in the Ottoman Empire, the Ibos in Nigeria, and against other middleman minorities in other times and places."

Interestingly, he adds that the Nazis were typical but simply more technologically advanced than the others who went about victimizing middlemen. Sowell also re-tells Eric Hoffer's re-telling of E.A. Voigt's recounting of the Japanese mission that tried to study the Nazi movement in the early 1930s. A member of the mission is quoted saying: "It is magnificent. I wish we could have something like it in Japan, only we can't, because we haven't got any Jews."