Reviewing the Reviewers

Roger Ebert is my favorite movie reviewer. I don't always agree with him, and his left-liberal politics irk me, but his reviews make movies sound more interesting than they often are, and he always seems to recognize the little tidbits here and there that would otherwise go unnoticed by us unwashed masses. I often read his review before I see a movie to help me decide whether or not it is a movie worth watching, and I read his review after I see a movie to find out what I might have missed. So although I have not yet seen Goodbye, Lenin!, I found Ebert's review to be worthy of a review itself.

Judging from the plot, in which a family member must construct an elaborate pseudo-reality in order to shield a loved-one from the true nature of a totalitarian regime, the little David Spade inside me screamed: "I liked it better the first time when it was called 'Life is Beautiful.'"

Immediately after describing some of the many failures of East German communism--namely that "consumer shortages are still the rule"--Ebert gives us what might be considered the U.S. equivalent:

Imagine an American Rip Van Winkle who is told that President Gore has led a United Nations coalition in liberating Afghanistan while cutting taxes for working people, attacking polluters and forcing the drug companies to cut their bloated profits. Sorry, something came over me for a second...

Har har. So does Ebert realize that with this analogy he just compared the U.S. Democratic Party to the Sozialistische Einheitspartei Deutschlands? His yearning to cut the "bloated profits" of drug companies while at the same time acknowledging the notorious consumer shortages of communist countries leads me to believe that Ebert subconsciously recognized a relationship between cause and effect.

Ebert asks,

Many people backed [the communist regime] through fear, ambition or prudence, but did anyone actually love it and believe in it?

Indeed, Ebert, they did. And many still do. Perhaps not under its previous, now-unpopular name of communism, but under the harmless euphemisms of "Social Democracy" or "Welfare-State Capitalism."

Why is this so? Ebert suggests a possible reason, but then quickly dismisses it:

Toward the end of the movie, we get a surprise plot point that suggests Christiane [the loyal communist mother fooled by her son into believing that the Communist Party is still in power] may have replaced her husband with the party in an act of emotional compensation, but that seems to be stretching.

It's not stretching at all. Marxism has always prided itself on its antagonism towards traditional family relationships and traditional religious devotion (not that this antagonism is necessarily a bad thing, mind you). Why rely on a marital partner to support you when the state will provide? Why pray to God to give you health and happiness when the forces of dialectical materialism are an historical inevitability? There is no God and Country when God is Country.

Ebert does make one appropriate comparison towards the end of his review:

What "Goodbye, Lenin!" never quite deals with is the wrong-headedness of its heroine. Imagine a film named "Goodbye, Hitler!" in which a loving son tries to protect his cherished mother from news of the fall of the Third Reich.

If only more people were willing to make this equation between Hitler and Lenin, instead of continually remaining In Denial.

I shouldn't be so tough on Ebert, though. He does have his libertarian side. Of course, like most people, Ebert only becomes a staunch libertarian when it is his ox being gored. When asked by a reader, "What's your take on the call to crack down on smoking in the movies? Maybe we can treat product placement and unhealthy eating with the same seriousness, too?", Ebert responded:

Call me un-PC, but I believe movies reflect human behavior and should not be sanitized to match some do-gooder agenda. A movie is good or bad on its own, and the less interference with a director trying to get his ideas onto the screen, the better.

This peculiar demarcation between "The Market for Goods and the Market for Ideas" was first recognized by Ronald Coase over thirty years ago in his article by the same title:

What is the general view that I will be examining? It is that, in the market for goods, government regulation is desirable whereas, in the market for ideas, government regulation is undesirable and should be strictly limited. In the market for goods, the government is commonly regarded as competent to regulate and properly motivated. Consumers lack the ability to make the appropriate choices. Producers often exercise monopolistic power and, in any case, without some form of government intervention, would not act in a way which promotes the public interest. In the market for ideas, the position is very different. The government, if it attempted to regulate, would be inefficient and its motives would, in general, be bad, so that, even if it were successful in achieving what it wanted to accomplish, the results would be undesirable. Consumers, on the other hand, if left free, exercise a fine discrimination in choosing between the alternative views placed before them, while producers, whether economically powerful or weak, who are found to be so unscrupulous in their behavior in other markets, can be trusted to act in the public interest, whether they publish or work for the New York Times, the Chicago Tribune or the Columbia Broadcasting System. Politicians, whose actions sometimes pain us, are in their utterances beyond reproach. It is an odd feature of this attitude that commercial advertising, which is often merely an expression of opinion and might, therefore, be thought to be protected by the First Amendment, is considered to be part of the market for goods. The result is that government action is regarded as desirable to regulate (or even suppress) the expression of an opinion in an advertisement which, if expressed in a book or article, would be completely beyond the reach of government regulation?

My argument is that we should use the same approach for all markets when deciding on public policy. In fact, if we do this and use for the market for ideas the same approach which has commended itself to economists for the market for goods, it is apparent that the case for government intervention in the market for ideas is much stronger than it is, in general, in the market for goods?

[C]onsider the question of consumer ignorance which is commonly thought to be a justification for government intervention. It is hard to believe that the general public is in a better position to evaluate competing views on economic and social policy than to choose between different kinds of food. Yet there is support for regulation in the one case but not in the other. Or consider the question of preventing fraud, for which government intervention is commonly advocated. It would be difficult to deny that newspaper articles and the speeches of politicians contain a large number of false and misleading statements ? indeed, sometimes they seem to consist of little else. Government action to control false and misleading advertising is considered highly desirable. Yet a proposal to set up a Federal Press Commission or a Federal Political Commission modeled on the Federal Trade Commission would be dismissed out of hand.

- "The Economics of the First Amendment: The Market for Goods and the Market for Ideas," American Economic Review, 64 (May, 1974): 384-391. [Link available for JSTOR users]

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Good insight on Ebert -- I,

Good insight on Ebert -- I, too, appreciate and enjoy his reviews, while disagreeing with much of his politics. His insight and knowledge of movies and human nature (as expressed on film) make movies more enjoyable and thought-provoking for me.

How interesting and

How interesting and encouraging that Ebert is now willing to draw the connection between Soviet Communism and Nazism.

When I pointed out to him his inconsistency in dealing with Sergei Eisenstein and Leni Riefenstahl, he didn't seem concerned. Good to see that he may be coming around.

And you are right, of course: Ebert is the best critic, and his reviews are essential reading after viewing any movie.

I wonder if your email

I wonder if your email influenced his newfound willingness to compare the two?

hmmm... Ebert's my favorite

hmmm... Ebert's my favorite reviewer also, just because he's a thoughtful writer. I don't always agree with his opinions (and have basically no knowledge of his politics- seems a little silly to me.) I basically always agree with Peter Travers of Rolling Stone, though he just doesn't write as well.

as for the "cause and effect" part, do you mean to imply that low profits cause food shortages? I wonder why you think so.

Also, I don't think that welfare capitalism and social democracy are effectively identical to communism by any means (or to each other for that matter.) All the serious books on political science that I've read treat "liberal" arguments as distinct from marxist ones. And for good reason- democracy is a form of government, which is rather different from the totalitarian governments called (by themselves as well) "communist."

I suppose I agree with Mr. Coase, that ideally the marketplace of ideas should remain unregulated. I wonder about his treatment of the media though- "producers... who are found to be so unscrupulous in their behavior in other markets, can be trusted to act in the public interest..." is one of the lamest "arguments" I've ever heard. He happens to be glossing over the major problem.

Glad you guys are still around, I was bored and figured it was a good time for an argument.

-Matt

Matt, I mean to imply that

Matt,

I mean to imply that getting rid of "excessive" profits, as Ebert would propose--and as the communists have done--causes shortages.

Why is this so? I discussed this issue in my recent article for Tech Central Station.

With regard to Coase, he is taking it as a given that left-liberals generally oppose strict government regulations of the media. His article was written long before Chomsky came out with Manufacturing Consent, and I don't think Coase would have addressed his critque at hard-leftists like Chomsky anyway: they avoid the inconsistency by favoring both regulations on the market for goods and the market for ideas. Not that consistency is necessarily a good thing...

Hey- Well I suppose by the

Hey-
Well I suppose by the article that you linked you mean to respond by use of the "body" analogy. Supose that because of venal blockage, life giving blood is hardly reaching the left leg (to make it more accurate, it'd be a much larger area) and it's starting to gangrene (hopefully that's a verb.) Well I suppose you could call a doctor, but that would be interfering with the all-knowing body/market.

I just don't see the answer there: capitalism "causes" shortages as well, shortages of distribution to be sure, but talk to the people who aren't getting the neccesities, I doubt they see it much differently. But I guess the question is, where's the evidence that curbing profits causes shortages?

As far as Coase goes, that's a good point that he's writing prior to M.C., but if I'm reading his sentence correctly he's still being silly. He says (approximately) "The Homicidal Maniac, so harmful to 1-7 year-old boys, can be trusted alone with boys other than that because I said so."

I might also point out that in no way are corporate-run media outlets "unregulated" unless "regulated" can only refer to gov'ts. The sheer size and power of the media outlets make their (quite obvious) "regulation" more problematic than Coase wants to admit. And... while we're on the subject of Noam, I posted an "offer/challenge" on the Nader message board from the 31st of March. You especially should check it out.

-Matt

You guys do realize that

You guys do realize that Coase doesn't actually buy the stuff in that first quoted paragraph, right? That's the argument he's setting up to attack.

"But I guess the question is, where?s the evidence that curbing profits causes shortages? "

Any Econ 101 textbook, ie: basic supply & demand. Destroy the profitability in producing something, and it won't be produced.

If you want a current, concrete example, look at the recent flu vaccine shortage. Governments, which are the majority purchasers of the vaccines, offered lowball prices for them, so producers quit producing. End result: vaccine shortage.

Any Econ 101 textbook, ie:

Any Econ 101 textbook, ie: basic supply & demand. Destroy the profitability in producing something, and it won?t be produced.
possibly true. I doubt this Blog is particularly profitable along with countless other things provided as a result of people's natural passions and interests. I think what you're saying is rather that profitability would tend to guarantee that a thing will be produced, which is a different statement altogether. Let me also remind you that we're discussing "bloated profits" not simply profits, in which case I still don't see the argument.

If you want a current, concrete example, look at the recent flu vaccine shortage. Governments, which are the majority purchasers of the vaccines, offered lowball prices for them, so producers quit producing. End result: vaccine shortage.
I wouldn't call this evidence, but anyway... There are plenty of reasons beyond supply and demand that a company would do this. Assuming that the lowball prices still allowed for the company to profit (if not, please see above) there are still other "good" reasons
why a company would chơse to do this. They happen to parallel closely the reason why Mafia dons won't consistently take lower contributions than those they ask for, and why the Agricultural Sector is willing to sell it's products below cost for awhile in Jamaica: foresight.

I haven't got stuck into

I haven't got stuck into either your post yet or Roger Ebert's review. I started on the review but came screaming to a halt on just the second sentence which is just plain incorrect.

A loyal communist named Christiane (Katrin Sass) sees her son, Alex (Daniel Bruhl), beaten by the police on television

Did he watch the film? She's there in the flesh.

Christiane is on her way to some function to co-incide with the 40Jahre DDR celebrations when the taxi can't get through to the Palast der Republik because of the crowds of demonstrators. She gets out to walk the rest of the way and sees her son being carted off by the police across the street, he tries to break away to reach her when he is coshed by a policeman and she then suffers a heart attack.

I don't know about you but whenever I read an article and notice factual errors it immeadiately throws doubt on the whole of the rest of the piece.

"Let me also remind you that

"Let me also remind you that we?re discussing ?bloated profits? not simply profits, in which case I still don?t see the argument."

First let me say that "Bloated profits" has no meaning in economics. None, zip, zilch, nada.

"I doubt this Blog is particularly profitable..."
Profits needn't be monetary. We do all sorts of things for intangible utility returns.

"Assuming that the lowball prices still allowed for the company to profit..."
Ah, but *some* profit is not sufficient! Producing the vaccine has to deliver more (or equal) profit than any other available use of resources. If it takes 1 unit of resources to make each a table and a desk, and tables and desks earn $1 and $2 profit respectively, how many tables will you produce, assuming you can sell as many as you make? Zero of course, because you earn more profit for the same resources by making desks, even though tables earn a profit. This is the difference between accounting profits, which are just revenues minus costs, and economic profits, which are accounting profits minus opportunity costs.

Opportunity cost is probably THE most fundamental concept necessary for understanding economics, you'd do well to learn about it.

"There are plenty of reasons beyond supply and demand that a company would do this."
Publicly-traded companies (like, I dunno, pharmaceutical manufacturers) have a legal obligation to maximize shareholder value. If selling vaccine were truly profitable (in light of the above reasoning), believe me, they'd be selling it.

Matt, Capitalism does not

Matt,

Capitalism does not cause shortages in the economic sense. It is always possible to purchase a good--for a price. That itself is a fundamental purpose of prices--to ration resources to those who value them the most.

But I guess the question is, where?s the evidence that curbing profits causes shortages?

I'll be glad to refer you to any introductory microeconomics textbook if that is what you are looking for. It's a pretty non-controversial economic truth that artificially reducing prices leads to shortages, as producers have less of an incentive to produce, while at the same time, consumers have a greater incentive to consume. This magnifies the shortage in both directions.

I'm curious, though: Do you agree with Ebert's factual claim that consumer shortages were the rule in communist countries? If so, what do you think caused these shortages?

As far as Coase goes, that?s a good point that he?s writing prior to M.C., but if I?m reading his sentence correctly he?s still being silly. He says (approximately) ?The Homicidal Maniac, so harmful to 1-7 year-old boys, can be trusted alone with boys other than that because I said so.?

Coase is stating a non-controversial belief shared by many left-liberals: that the government can trust people to figure out for themselves what is true or false; i.e. that the government should not regulate the media for content. Here is what he wrote, one more time:

    Consumers, on the other hand, if left free, exercise a fine discrimination in choosing between the alternative views placed before them, while producers, whether economically powerful or weak, who are found to be so unscrupulous in their behavior in other markets, can be trusted to act in the public interest, whether they publish or work for the New York Times, the Chicago Tribune or the Columbia Broadcasting System.

Do you disagree with Coase that this is the traditional view of free speech shared by left-liberals?

I might also point out that in no way are corporate-run media outlets ?unregulated? unless ?regulated? can only refer to gov?ts.

Coase is using the word "regulated" to refer to only government regulations.

The sheer size and power of the media outlets make their (quite obvious) ?regulation? more problematic than Coase wants to admit.

Actually, this is false. One of the two papers for which Coase received the Nobel Prize, "The Nature of the Firm," is about this very issue: what factors determine the size of the firm (Coase argues that this factor is transaction costs), and Coase notes that large private organizations can be just as inefficient due to hiearchical authority as governments.

Noah, First let me say that

Noah,
First let me say that ?Bloated profits? has no meaning in economics. None, zip, zilch, nada.
well that's all well and good, but since we began by discussing the term, and micha quoted it without translating, I'll assume that we know what it means. I'm not saying it's an easy question, but such hard questions abound. Take a needle out of a large haystack; is it still a haystack? How many times can you repeat the action until it ceases to be a haystack? What is a developed country? What is hot?

?I doubt this Blog is particularly profitable??
Profits needn?t be monetary. We do all sorts of things for intangible utility returns.

absolutely. The sentence of mine succeding that you quote acknowledges that obvious fact. If you trace the argument back a bit I think you'll find that there was a very little confusion over what sort of profits we were talking about. Otherwise, I'm not sure what "curbing profist" in such a case would mean. How do I make stop enjoying political arguments such as these? Maybe there are clockwork orange-ish ways, but I don't think a rational person would make the mistake of assuming we meant that.

This is the difference between accounting profits, which are just revenues minus costs, and economic profits, which are accounting profits minus opportunity costs.
this is a complicated argument, that assumes competitive markets and no distortion of information and so on. If you are arguing that pharmeceutical companies wouldn't sell their drugs for a penny less if they had to, or that if they did their children would starve, then I see the relevance. If not, It seems like we're arguing about la-la land.

Publicly-traded companies (like, I dunno, pharmaceutical manufacturers) have a legal obligation to maximize shareholder value. If selling vaccine were truly profitable (in light of the above reasoning), believe me, they?d be selling it.
this paragraph is rich with interesting questions: i.e. should CEO's be lagally bound like that? Is a system which provides more incentives to treat than to cure truly just? Unfortunately I can tie these to what we were talking about.

Capitalism does not cause shortages in the economic sense. It is always possible to purchase a good?for a price. That itself is a fundamental purpose of prices?to ration resources to those who value them the most.
that's probably true. The clear problem is that often people don't have anything to trade with. Philosophers often break down freedom as a triadic expression (which I'm sure you're familiar with): a is free from b to do c. Well who's "a" in your conception of freedom? One with the money to do "c", which makes any such conception of freedom flawed in my opinion.

It?s a pretty non-controversial economic truth that artificially reducing prices leads to shortages, as producers have less of an incentive to produce, while at the same time, consumers have a greater incentive to consume. This magnifies the shortage in both directions.
hmmm... You study philsophy right? Ever read the old epistemologists, esp. Descartes? It reminds of these economics arguments: you find a starting point (contentious as it may be) and argue everything from it. Anyway though, this isn't eveidence, as I'm trying to point out. MOre to the point, it seems theoretically flawed as well because it assumes competitiveness in markets. If markets were often oligarchical (as much contemporary economic theory holds) the price shift might have little effect on the incentive.

To explain: if the pricing tended more toward the intersection of a company's marginal cost and marginal revenue curves and the price change shifted it toward the supply and demand intersection, there wouldn't neccesarily be any effect except on profits.

I?m curious, though: Do you agree with Ebert?s factual claim that consumer shortages were the rule in communist countries? If so, what do you think caused these shortages?
the inefficiencies of a command economy, I'm sure. Combined with other regional, political, geological factors I'd imagine. Life under the Czar wasn't overly peachy either, and while that's hardly an argument for communism, is makes more sense to view communism in it's historical context in Russia, which controls (marginally) for other factors. Or look at life after communism, for another more recent example. It's estimated that the 90's brought on 10 Million extra deaths in Russia, meaning that Capitalism could make Stalin jealous.

"The sheer size and power of the media outlets make their (quite obvious) ?regulation? more problematic than Coase wants to admit."

Actually, this is false.
so you mean Coase does want to admit it? Okay.

that?s probably true. The

that?s probably true. The clear problem is that often people don?t have anything to trade with.

Again, Matt, this is a different subject. We were talking about economic shortages. Poverty is not an economic shortage. The closest you might come to connecting the two is unemployment.

MOre to the point, it seems theoretically flawed as well because it assumes competitiveness in markets.

No it doesn't. The same structure of incentives exists under any market structure, from perfect competition to pure monopoly. As I said before, artificially reducing prices leads to shortages, as producers have less of an incentive to produce, while at the same time, consumers have a greater incentive to consume. This magnifies the shortage in both directions.

Life under the Czar wasn?t overly peachy either, and while that?s hardly an argument for communism, is makes more sense to view communism in it?s historical context in Russia, which controls (marginally) for other factors. Or look at life after communism, for another more recent example. It?s estimated that the 90?s brought on 10 Million extra deaths in Russia, meaning that Capitalism could make Stalin jealous.

Matt, Ebert is talking about East Germany, not Russia.

Your site is really good.

Your site is really good.