Education, economics and romance

Israelis have come to accept the Marxist perversion that profit must derive from exploitation.

money 224 ap (photo credit: AP)
money 224 ap
(photo credit: AP)
The crisis that afflicts our educational system threatens not only Israel's economic future, the quality of its human capital, but the very foundations of its society and its ability to survive in a hostile environment. For it is a crisis in our basic attitudes to life in economics as well as in interpersonal relations. It is part of a universal crisis, of a spread of nihilism and alienation afflicting all societies. But post-socialist Israel suffers from it in a more extreme form. I have been teaching hundreds of students in several universities. The students, from all faculties, are highly motivated and focused after army service. They are very intelligent, but their abysmal ignorance in all matters outside their very narrow field of study is shocking. Israeli high schools and universities have failed to give them the general knowledge that any educated person should possess. Worse, even in their fields of study, in the social sciences as well as the humanities, they have been mostly indoctrinated by dogmatic neo-Marxist and post-modernist (namely nihilist) professors dominating these faculties. They exclude any competing view. Students acquire a superficial technical ability but little capacity to think critically, to love knowledge, and to understand the basic philosophical premises that underlie every discipline. In economics, for example, students acquire great skills in using mathematical models and other technical and statistical innovations, but know precious little about the philosophical framework that underlies economics. No one teaches a course in the History of Economic Thought anymore. Students, even doctoral candidates in economics, have no conception of how markets work, the crucial role of competition and of the price system, the information and incentives it provides; in short why the market performs better than government intervention. Because they are so intelligent it takes only few lessons to teach these students the basics of a market economy. Israel provides such glaring examples of consistent, sometimes catastrophic failures of government intervention. It may not take long, but it is far from easy because their ability to learn new concepts and methods is severely limited by what and how they have been taught for years. They been educated to think uncritically and in slogans, "but markets do not assure equality," they invariably complain - as if there was ever any system that did. Nor do they examine what "equality" really means, whether it is possible to achieve and at what cost, given the blessed variety of people. Nor do they consider whether equality is even desirable since all creativity seems to stem from variety and the unequal division of labor. They also fail to understand that markets are a process rather than an entity providing "solutions". They blindly rely on partial or biased "information," believing they know everything about the failures of capitalism and its American model by uncritically accepting what they read in The New York Times or in Haaretz . They tend, more than is common in the soft social sciences to often employ what the philosopher Alfred North Whitehead termed "The Fallacy of Misplaced Concreteness" - namely to misleadingly treat abstract notions as if they were real entities with coherent volition, a sense of unified purpose and the ability to successfully act upon it. They usually claim that "society" or "the public" "want" or "need" this or that; and since markets fail to provide these (presumed) desiderata "government" must and can do. They get furious when it is pointed out that governments are not real entities like General Motors, say, but abstractions describing innately unstable and shifting coalitions of politicians with conflicting goals; so that it not surprising that over 70% of government decisions are never implemented and only about 30% are. HAVING BEEN taught that government, if only well led and provided with "enough" resources (by raising taxes, of course) can cure any ill in society they suffer a real cognitive dissonance when they discover that it may not be so, and that government not only lacks information to properly define a problem but being burdened with enormous bureaucracies it is also mostly unable to discharge even its basic legitimate tasks, provide security and law and order, let alone achieve the utopian goals they expect it to achieve. The resistance of many Israelis to market economics has a deep emotional core that is immune to rational argument. Israelis have come to accept, with their mother's milk, the Marxist perversion that profit must derive from exploitation (as it often is in monopolistic Israel) and that therefore every transaction is a zero sum game, where every winner creates a loser; that "winners" are by definition immoral and markets unjust. This zero-sum, win-lose model is so intractable because it is rooted in a much deeper bias embedded in male - female relations. Yes, we all praise this wonderful element of romance that blesses such relations, but we also suspect (often with reason) that male-female relations are also cursed by a streak of exploitation that converts what could be the most beautiful partnership into a power struggle and a win-lose interaction. This must be why the terms of sexual domination and abuse are extended into business relationships where people will often speak of someone being screwed in a certain deal. Difficult prejudices for education to overcome, these, but unless it does we will never be able to enjoy the fruits of cooperation in economics as well as in romance. The writer is director of The Israel Center for Social and Economic Progress.