Michael Moore vs. Thomas Sowell: A Hate Story – by Chanda Chisala

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Michael Moore is not a hypocrite. He may just be sincerely misguided.

Yes, he has made millions of dollars from his documentaries which attack the profit motive of the capitalist system, and this does indeed look like the most embarrassing irony for him. But when you understand him, or at least when you understand his misunderstanding of capitalism, you will see that he is not in fact consciously contradicting himself. He is merely a victim of a common but very subtle economic fallacy that has afflicted societies since ancient times.

In his many books on economics and sociology, the economics historian Thomas Sowell of the Hoover Institution has identified this fallacy that consistently occurs in all societies that have had to deal with what are called “middleman minorities” – small groups of people within a nation that tend to make their money from certain middleman occupations (retailing, money-lending, distribution, etc). The Jews in Europe, the Chinese in South East Asia, the Ibos in Nigeria,  the Armenians in the Ottomon Empire, the Indian Gujaratis in East Africa, and many other groups, were all middleman minorities in these regions.

These groups also happened to be hated in these communities, especially in times when the rest of the society was not doing so well economically. In explaining why they were despised so much, Sowell blames this most persistent of ancient economic fallacies: the idea that such people do not ‘make’ anything.

Everyone can see them build growing fortunes, but they can also see that they are not manufacturing any tangible thing. They simply transport goods from one point to another or they just charge interest on the money they lend, and so on.

What happens next in these societies follows a well-established script. Some charismatic individuals, usually from the elite class, start affirming the sentiments of the poor majority by telling them that the reason they are poor is in fact because of the same “parasitic” activities of these “greedy” minorities who contribute nothing to the economy.

Michael Moore betrayed his own susceptibility to this fallacy when he appeared on Fox News Channel’s Hannity Show to promote his latest documentary, ‘Capitalism: a love story.’

“I am not against capitalism,” Michael Moore confessed to Hannity, “I’m against what it has become…we don’t make things any more, Sean … We just make money off money now.”

This economic fallacy is so subtle that even the  oft-sharp Hannity conceded this point to his guest, with some grudging reservations of course.

Writes Sowell in Black Rednecks, White Liberals (Are Jews Generic?):

“… the seeming conjuring of wealth out of thin air, apparently by ‘overcharging’ others or making them pay more money than was lent, has been seen as a parasitic activity, rather than a contribution to the well-being of the community. Suspicions are aroused in an occupation where an income is generated, in Frederich Hayek’s words, ‘out of nothing’…”

The modern “middleman minority” of America and other Western nations are simply those companies that appear not to make anything while accruing big profits to themselves: the insurance companies, the banks, and large retailers with big distribution networks (and their executives, of course). It is not a coincidence that these are the kinds of companies vilified by Michael Moore in ‘Capitalism: a love story.’

Michael Moore never attacks the multibillion dollar Hollywood film industry, for example, because in his mind, these do at least make something. So, they contribute something “real” to the economy instead of just moving things around or charging money on money.

In truth, as Sowell explains, the middlemen do actually make a crucial contribution to the economy. Facts show that whenever they have been suppressed or chased from any community, the economies of those societies have suffered immediately.  It is worth quoting the exact words of Sowell again:

“The real measure of an economic function, however, is not its plausibility to observes but, rather, what happens to a society in its absence. Some countries had disastrous famines, not from a lack of food, but from a lack of distribution of food…In other economies, both production and consumption suffer from a lack of credit. More to the point, mass expulsions of supposedly ‘parasitic’ middleman minorities have created shortages, higher prices, and rising interest rates, in a number of countries and a number of periods of history.”

Luckily for Michael Moore, the elites in the White House are more likely to watch his films for economic analysis than to read Dr. Sowell’s incisive books.  But as George Santayana famously warned, those who cannot learn from history are doomed to repeat it.

  • 301

    Any history prior to the Obama regime is prehistory. Thus no written records available…think I'm wrong?…how about Obama's real birth certificate and all his school and legislative records? Gone..vanished..prehistory…only some fossils here and there.

  • kafir4life

    In the 1960's I stole Abbie Hoffman's “Steal this book”, to honor the author.
    In 2009 I snuck into “Capitalism: A Love Story” to honor the filmmaker. Both were trash, and worth every penny I paid for admission.

  • semus

    I always read Thomas Sowell I thank God he's there, but I do disagree with him on one point, I don't think Hannity's that sharp.

  • sflbib

    In “The Economic Organization of a P.O.W. Camp” in Economica, November, 1945, R.A. Radford describes how an economy evolved and the emergence of the middleman in an allied POW camp in WW-II:

    “…More interesting was opinion on middlemen and prices. Taken as a whole, opinion was hostile to the middleman. His function, and his hard work in bringing buyer and seller together, were ignored; profits were not regarded as a reward for labor, but as the result of sharp practices. Despite the fact that his very existence was proof to the contrary, the middleman was held to be redundant in view of the existence of an official Shop and the Exchange and Mart. Appreciation only came his way when he was willing to advance the price of a sugar ration, or to buy goods spot and carry them against a future sale. In these cases the element of risk was obvious to all, and the convenience of the service was felt to merit some reward. Particularly unpopular was the middleman with an element of monopoly, the man who contacted the ration wagon driver, or the man who utilized his knowledge of Urdu. And middlemen as a group were blamed for reducing prices. Opinion notwithstanding, most people dealt with a middleman, whether consciously or unconsciously, at some time or another.

    “There was a strong feeling that everything had its “just price” in cigarettes. While the assessment of the just price, which incidentally varied between camps, was impossible of explanation, this price was nevertheless pretty closely known. It can best be defined as the price usually fetched by an article in good times when cigarettes were plentiful. The “just price” changed slowly; it was unaffected by short-term variations in supply, and while opinion might be resigned to departures from the “just price,” a strong feeling of resentment persisted. A more satisfactory definition of the “just price” is impossible. Everyone knew what it was, though no one could explain why it should be so.

    “As soon as prices began to fall with a cigarette shortage, a clamor arose, particularly against those who held reserves and who bought at reduced prices. Sellers at cut prices were criticized and their activities referred to as the black market. In every period of dearth the explosive question of “should non-smokers receive a cigarette ration?” was discussed to profitless length. Unfortunately, it was the non-smoker, or the light smoker with his reserves, along with the hated middleman, who weathered the storm most easily.”

    http://www.albany.edu/~mirer/eco110/pow.html

  • trodaball

    The sin of envy by coveting other's property is an old habit, a killer and a pathetic cop-out for excusing one's own shortcomings. Obama is sooo not qualified to lead anyone for this reason alone.

  • bubba4

    I doubt Obama would covet anything in your life.

  • bubba4

    There was a great documentary on HBO about the clothing business in New York.

    A few short decades ago, 95% of the clothing in the US was made here…now it's 5%.

    Transporting goods is a service. Exchanging money is a service. The crazy mechanisms on wall street and in insurance companies cannot be compared with shipping goods. They quite literally DO NOTHING and carve wealth out of companies and the future with what amount to gimics.

  • trodaball

    Oh you're brilliant. Go move to Cuba where you'll fit in well. You can sit on you're a@@ and play dominoes all day. Sad, how 40-50 years of communist thought has poisoned, stripped and deprived otherwise normal people of any common sense or self worth.

  • davarino

    I'm not sure but I think the reason so many jobs have left America is because we allowed trading with communist countries. I believe communist countries artificially hold down wages. Thanks Bill Clinton. At least his heart was in the right place, if he has one.

    Evil capitalism…..snicker

  • CowboyUp

    Yet he and the rest of the dp won't leave me and my wallet alone. Go figure.

  • bubba4

    huh? You're a moron.

  • bubba4

    Huh? You guys need to figure out where to direct your ire…

    And it's all Bill Clinton's fault..yawn.

  • patkennedy

    Thomas Sowell is the smartest man in America. Hayek and Friedman are gone now but Dr. Sowell is still among us. I anxiously await his forthcoming book on The Intellectuals- sure to be another timeless and enduring work in the tradition of Knowledge and Decisions and A Conflict of Visions.

  • coyote3

    I may agree with you , to some extent, on this one. However, whether I like it or not, what defines goods and services is determined by, and if, there are people who are willing to pay for what someone else does. If there is a market for it, it will sell, regardless of what I think.

  • bubba4

    They shouldn't be able to invent new and exotic “products” on Wall Street, especially with taxpayers absorbing the risk. This kind of esoteric number shuffling should not be permitted…it is an abomination that comes from people trying to make money without contributing anything to the economy. And much of it is only possible because of modern computers…

  • coyote3

    Who the hell put you in charge?

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