Месечни архиви: October 2015

Wonderful, Bickering Ghosts

Richard Termine/Abrons Arts Center

Joey Arias and Julie Atlas in Basil Twist’s Sisters’ Follies: Between Two Worlds, 2015

Asked to design a production to commemorate the hundredth anniversary of the Lower East Side theater now known as the Abrons Art Center, puppeteer and director Basil Twist has created a spectacle that delivers many pleasures and surprises. Watching Sisters’ Follies: Between Two Worlds, one feels a giddy, childlike sense of wonder and awe—but without the terror that an actual child might experience at a play that features two extremely spooky and persuasive ghosts. What’s astonishing about the show, cowritten by Twist and the play’s stars, Joey Arias and Julie Atlas Muz, is not the drama itself—a series of comic sketches (very) loosely patterned after plays performed at the theater during the early years of the twentieth century—but the ingenious use of live actors, costumes, sets, puppets, music, dance, and video projection.

The specters haunting the stage are those of Alice and Irene Lewisohn, wealthy New York philanthropists, producers, and actresses who, in 1915, established the Neighborhood Playhouse at the Henry Street Settlement, in the building where the current theater now stands. When we first meet the sisters, they are quite literally suspended between two worlds, in this case between the stage and the flyspace high above it. Twist—whose works include puppet shows such as Symphonie Fantastique, Dogugaeshi and Rite of Spring, who has contributed to the Broadway production of The Addams Family and the film of Harry Potter and the Prisoner of Azkaban, and who was recently awarded a MacArthur grant—has here devised two gravity-defying human marionettes, trussed up in harnesses and yanked about by mostly invisible strings.

The plot, such as it is, posits a sibling rivalry between Alice (Arias)—the more aggressive and ambitious of the sisters—and Irene (Muz), who feels that her talents as a dancer are being overshadowed by her sister’s powerful presence and her penchant for hogging the limelight. Irene’s anxieties are more than justified by the first “performance” we witness, a version of Jepthah’s Daughter, which marked the opening of the Neighborhood Playhouse in February 1915. In its current iteration, Alice nearly edges her sister off the stage; she is burned at the stake to fulfill the foolhardy vow that their father, the Old Testament judge (played by the scantily dressed and almost comically hunky Jonothon Lyons) has made to God. Irene’s fears of being underappreciated are intensified when Alice stars in the Egyptian-themed The Queen’s Enemies, and later when Irene appears in a dance production, Kairn of Kordiwen, whose title her sister can’t be bothered to learn or pronounce correctly. The competition continues as both sisters don beards to play Walt Whitman in Salut au Monde, a dramatic adaptation of his poetry, and The Little Clay Cart, a show with a Southeast Asian motif. The jokes are amusing enough, and the actors are appealing, but what’s most exciting are the stage effects: the masks and the billowing flames (made of red cloth) in Jephthah’s Daughter, the puppet fish leaping out of the “waters” of the Nile in The Queen’s Enemies, the boat on which the two Walt Whitmans navigate the shark-infested sea, the camel and the cobra enjoying Alice’s performance of “Midnight at the Oasis.”

Wearing diaphanous gowns trailed by streaming ribbons of cloth and skillfully lit in ways that make it impossible to judge how tall they are or where their bodies begin and end, the ghost-siblings swoop and glide through the air against a black background. Alternately bickering and declaring their love, collaborating and competing, Alice and Irene together suggest two campy, vaudevillian Peter Pans.

The production includes a great deal of physical comedy, pratfalls, fights, and manic dance routines, one of which Muz, a performance artist and choreographer whose career has lately focused on burlesque, performs almost entirely nude. The fact that Alice is played by the gifted Arias not only intensifies the general oddness and hilarity of the piece but provides an additional level of nuance and complexity. Like the best drag performers (Charles Ludlam and Justin Vivian Bond, among others) Arias doesn’t so much impersonate or mimic femininity but rather suggests a more fluid and imaginative notion of gender: the possibility of a culture in which conventional ideas of what it means to be male or female are not only questioned but subverted.

In the program notes for Sisters’, Twist writes, “I’ve been inspired by this Playhouse for many years. It’s a REAL theater and somehow that seems so rare….A space like this one with a flyspace, proscenium, orchestra pit and balcony inspires an artist to really use it.” In fact Twist has made extraordinary use of the entire area: the flyspace through which the actors soar; the orchestra pit in which a full orchestra plays original music and standards such as “Midnight at the Oasis”; the backdrop, on which old photos of the neighborhood and the theater materialize at intervals; and even the proscenium arch, on which films of the sisters’ faces are projected, so that the masks of comedy and tragedy appear to be continuing the conversations and disputes that the actors have begun on stage.

Richard Termine/Abrons Arts Center

A scene from Basil Twist’s Sisters’ Follies: Between Two Worlds, 2015

Ultimately, the competition between the sisters escalates into sibling aerial war. They threaten and swoop at one another, attack each other with weapons (a hatchet, an anvil, a bomb) that are essentially puppets at the end of poles that the black-clad puppeteers manipulate from below. There are flashes of electricity, lightning, an explosion, and the sisters’ heads appear to separate from their bodies.

Near the end of the show, Arias and Muz appear on stage, without their Alice and Irene wigs and wearing only their underwear and the harnesses in which they’ve been gliding above the stage. They thank the cast and crew, the staff of the theater, and Basil Twist, and they suggest the possibility that—as Twist remarks in the program notes—the ghosts of the Lewisohn sisters really do haunt the playhouse. The point of our seeing the actors out of character and stripped of their costumes is, it would seem, to demystify what we’ve been watching, to reduce the illusion of flight by revealing the mechanism that has enabled it, to explain the magician’s tricks. And yet this brief, nervy moment in which “reality” is allowed to intrude only serves to increase the beauty and poetry of the sequence that follows. It’s as if Twist is suggesting that, contrary to what we’ve always been told, it makes no difference if we know how the magician does what he does. We’ll still feel the same astonishment when the rabbit emerges from his top hat.

The final section of Sisters’ features Twist’s take on Ansky’s The Dybbuk: Between Two Worlds, which debuted at the Neighborhood Playhouse in 1926 and was one of its most successful, popular, and elaborate productions. Among crooked tombstones that evoke the Old Jewish Cemetery in Prague, Leah (Arias), dressed in a white gown and long black braids, wanders mournfully through the graveyard, seeking communion with her beloved Chanon, played with typically frenetic energy by Muz. As the lovers embrace, a monstrous dybbuk or golem—in any case, an otherworldly creature—appears behind them, ghost-white, growing alarmingly larger and larger until it becomes gigantic and occupies much of the stage.

The moment is at once aesthetically satisfying and emotionally affecting, reminding us of the vision and the accomplishment of the Lewisohn sisters, of the neighborhood’s past, of the immigrants who flocked to plays such as The Dybbuk, of the early residents of the Lower East Side now resting in cemeteries not unlike the one that decorates on stage. It shows what can be done when a talent as formidable as Twist’s is encouraged to consider an important moment in the history of the city, and of the American stage. In celebrating the achievements of one theater, Twist has paid homage to “the theater” and to its enduring power to delight, enchant, and haunt us.


Basil Twist’s Sisters’ Follies is playing at the Abrons Art Center through November 7.

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The Man Who Flew


Introduction

On October 8, the Nobel Committee announced that the 2015 Nobel Prize for Literature was being awarded to Svetlana Alexievich, a writer and journalist whose body of work is unique both in scope and in genre.

The bare facts of Alexievich’s biography reflect the nature of her greater subject: the memory, aspirations, tragedy, and fluid historical identity of Homo sovieticus. She was born in Ivano-Frankivsk, a city in western Ukraine that lies at the eastern edge of the Carpathian Mountains, about 85 miles south of Lviv, and a mere 150 or so miles from the borders of Poland, Romania, Hungary, and Slovakia, respectively. The city was annexed by the USSR only a few years before her birth in 1948. Her mother was Ukrainian and her father Belarussian. She grew up in Minsk, Belarus, where she studied journalism, developed her own exceptional voice, and became a Russian writer.

Over the course of several decades and numerous books, Alexievich has pursued a distinctive kind of narrative based on journalistic research and the distillation of thousands of firsthand interviews with people directly affected by all the major events of the Soviet and post-Soviet period. She has uncovered the unknown but crucial work that Soviet women did in World War II, recounted the memories of children caught up in the “Great Patriotic War,” documented the realities facing soldiers in the Soviet-Afghan war, which were kept from the Soviet public, and recorded the experiences of those who lived through the Chernobyl nuclear disaster.

In her most recent book, she deftly orchestrates a great chorus of diverse voices to chronicle the human toll—emotional, physical, economic, and political—of the collapse of the USSR, a country that once made up a sixth of the world’s land mass.1 Alexievich’s oeuvre comprises nothing less than a history of epic proportions, which she has called “Voices of Utopia.” This undertaking has brought the writer many awards and accolades from Western European countries in particular, and from Russia, where her books have been printed and reprinted many times; she is a well-known critic of the Putin regime. In her home, Belarus, however, under the dictatorship of Aleksandr Lukashenko, she has been subject to the same political censorship and pressure as many of her colleagues (as Timothy Snyder pointed out in the NYR Daily
2). For over a decade she lived in various European cities, because it was not safe to return to Minsk (though she did in 2011), and her books have not been published in Belarus since 1994.

In announcing the award, the Swedish Academy called Alexievich’s “polyphonic writings…a monument to suffering and courage in our time.” “By means of her extraordinary method—a carefully composed collage of human voices,” the Academy went on to say, “Alexievich deepens our comprehension of an entire era.” As she writes:

I don’t just record a dry history of events and facts, I’m writing a history of human feelings. What people thought, understood and remembered during the event. What they believed in or mistrusted, what illusions, hopes and fears they experienced. This is impossible to imagine or invent, at any rate in such multitude of real details. We quickly forget what we were like ten or twenty or fifty years ago….

I’m searching life for observations, nuances, details. Because my interest in life is not the event as such, not war as such, not Chernobyl as such, not suicide as such. What I am interested in is what happens to the human being….

Svetlana Alexievich’s interest in what happens to the human being is evident on every page of her writing. Among other things, her work testifies to the immense power of compassion to create understanding of our fellow human beings.

The text below is from a collection of more than a dozen tales of suicide that Alexievich published in Russia in 1994 under the title Zacharovannye smert’iu (Enchanted by Death). In the introduction she wrote that she sought to “distinguish…the lonely human voice. They all sound different. Each one has its own secret.”

—Jamey Gambrell

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Archive of Svetlana Alexievich

Svetlana Alexievich

The Story of the Man Who Flew Like a Bird:

Ivan Mashovets—Graduate Student of the Philosophy Department

From the account of his friend, Vladimir Staniukevich, graduate student in the Philosophy Department:

…He wanted to leave unnoticed, of course. It was evening. Twilight. But several students in the nearby dormitory saw him jump. He opened his window wide, stood up on the sill, and looked down for a long time. Then he turned around, pushed hard, and flew… He flew from the twelfth floor…

A woman was passing by with a little boy. The youngster looked up:

“Mama, look, that man is flying like a bird…”

He flew for five seconds…

The district police officer told me all this when I returned to the dormitory; I was the only person who could be called his friend in any sense. The next day I saw a photo in the evening paper: he lay on the pavement face down…in the pose of a flying man…

I can try to put some of it into words… Although everything is slipping away… You and I won’t make it out of this labyrinth… It will be a partial explanation, a physical explanation, not a spiritual one. For instance, there’s something called the trust hotline. A person calls and says: “I want to commit suicide.” In fifteen minutes they dissuade him. They find out the reason. But it isn’t really the reason, it’s the trigger…

The day before he saw me in the hall:

“Be sure to come by. We have to talk.”

That evening I knocked on his door several times, but he didn’t open it. Through the wall I could hear he was there (our rooms are adjacent). He was pacing. Back and forth. Back and forth. “Well,” I thought, “I’ll drop by tomorrow.” Tomorrow I talked to the policeman.

“What’s this?” The policeman showed me a vaguely familiar folder.

I leaned over the table:

“It’s his dissertation. There’s the title page: Marxism and Religion.”

All the pages were crossed out. Diagonally, in red pencil, he’d written furiously: “Nonsense!! Gibberish!! Lies!!” It was his handwriting… I recognized it…

He was always afraid of water… I remember that from our college days. But he’d never said that he was afraid of heights…

His dissertation didn’t pan out. Well, to hell with it! You have to admit you’re a prisoner of utopia… Why jump from the twelfth floor on account of that? These days how many people are rewriting their master’s essay, their doctoral dissertation, and how many are afraid to admit what the title was? It’s embarrassing, uncomfortable… Maybe he decided: I’ll throw off these clothes and this physical shell…

Behavioral logic didn’t lead to this, but the act was committed nonetheless… There’s the concept of fate. You’ve been given a path to follow… You rise to it… You either rise, or fall… I think he believed that there is another life… In a thin layer… Was he religious? This is where speculation begins… If he believed, it was without intermediaries, without cultish organizations, without any ritual. But suicide is impossible for a religious person, he wouldn’t dare violate God’s plan… Break the thread… The trigger mechanism works more easily for atheists. They don’t believe in another life, aren’t afraid of what might be. What’s the difference between seventy years or a hundred? It’s just a moment, a grain of sand. A molecule of time…

He and I once talked about socialism not resolving the problem of death, or at least of old age. It just skirts it…

I saw him make the acquaintance of a crazy guy in a used bookstore. This guy, too, was rummaging around in old books on Marxism, like we were. Then he told me:

“You know what he said? ‘I’m the one who’s normal—but you’re suffering.’ And you know, he was right.”

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Art Resource

‘Marx as Prometheus’; engraving, 1843

I think that he was a sincere Marxist and saw Marxism as a humanitarian idea, where “we” means much more than “I.” Like some kind of unified planetary civilization in the future… When you’d drop by his room he’d be lying there, surrounded by books: Plekhanov, Marx, biographies of Hitler, Stalin, Hans Christian Andersen stories, Bunin, the Bible, the Koran. He was reading it all at once. I remember some fragments of his thoughts, but only fragments. I reconstructed them afterward… I’m trying to find meaning in his death… Not an excuse, not a reason… Meaning! In his words…

“What is the difference between a scholar and a priest? The priest comes to know the unknown through faith. But the scholar tries to comprehend it through facts, through knowledge. Knowledge is rational. But let’s take death, for instance. Just death. Death goes beyond thought.

“We Marxists have taken on the role of church ministers. We say we know the answer to the question: How do you make everyone happy? How?! My favorite childhood book was The Human-Amphibian by A. Belyaev. I reread it again recently. It’s a response to all the utopians of the world… The father turns his son into a human-amphibian. He wants to give him the oceans of the world, to make him happy by changing his human nature. He’s a brilliant engineer… The father believes that he’s uncovered the secret… That he’s God! He made his son into the most miserable of people… Nature doesn’t reveal itself to human reason… It only entices it.”

Here are a few more of his monologues. As I remember them, at least.

“The phenomenon of Hitler will trouble many minds for a long time to come. Excite them. How, after all, is the mechanism of mass psychosis launched? Mothers held their children up crying: ‘Here, Führer, take them!’

“We are consumers of Marxism. Who can say he knows Marxism? Knows Lenin, knows Marx? There’s early Marx… And Marx at the end of his life… The halftones, shades, the whole blossoming complexity of it all, is unknowable to us. No one can increase our knowledge. We are all interpreters…

“At the moment we’re stuck in the past like we used to be stuck in the future. I also thought I hated this my whole life, but it turns out that I loved it. Loved?… How can anyone possibly love this pool of blood? This cemetery? What filth, what nightmares…what blood is mixed into it all… But I do love it!

“I proposed a new dissertation topic to our professor: ‘Socialism as an Intellectual Mistake.’ His response was: ‘Nonsense.’ As if I could decipher the Bible or the Apocalypse with equal success. Well, nonsense is a form of creativity, too… The old man was bewildered. You know him yourself—he’s not one of those old farts, but everything that happened was a personal tragedy for him. I have to rewrite my dissertation, but how can he rewrite his life? Right now each of us has to rehabilitate himself. There’s a mental illness—multiple, or dissociated, personality disorder. People who have it forget their names, social positions, their friends and even their children, their lives. It’s a dissolution of personality…when a person can’t combine the official take or government belief, his own point of view, and his doubts…how true is what he thinks, and how true is what he says. The personality splits into two or three parts… There are plenty of history teachers and professors in psychiatric hospitals… The better they were at instilling something, the more they were corrupted… At the very least three generations…and a few others are infected… How mysteriously everything eludes definition… The temptation of utopia…

“Take Jack London… Remember his story about how you can live life even if you’re in a straitjacket? You just have to shrivel up, sink down, and get used to it… You’ll even be able to dream…”

Now that I analyze what he said…follow his train of thought… I can see that he was preparing for departure…

We were drinking tea one time, and out of the blue he said:

“I know how long I have…”

“Vanya, what on earth are you saying!” my wife exclaimed. “We were just getting ready to marry you off.”

“I was joking. You know, animals never commit suicide. They don’t violate the course…”

The day after that conversation the dormitory housekeeper found a suit, practically brand new, in the rubbish bin; his passport was in the pocket. She ran to his room. He was embarrassed and muttered something about having been drunk. But he never ever touched a drop! He kept the passport, but gave her the suit: “I don’t need it anymore.”

He’d decided to get rid of these clothes, this physical membrane. He had a more subtle, detailed understanding than we did of what awaited him. And he liked Christ’s age.

One might think he’d gone mad. But a few weeks earlier I’d heard his research presentation… Water-tight logic. A superb defense!

Does a person really need to know when his time will come? I once knew a guy who knew it. A friend of my father’s. When he left for the war, a gypsy woman prophesied: he needn’t be afraid of bullets because he wouldn’t die in the war, but at age fifty-eight at home, sitting in an armchair. He went through the whole war, came under fire, was known as a foolhardy fellow, and was sent on the most difficult missions. He returned without a scratch. Until age fifty-seven he drank and smoked since he knew he’d die at fifty-eight, so until then he could do anything. His last year was terrible… He was constantly afraid of death… He was waiting for it… And he died at age fifty-eight, at home…in an armchair in front of the television…

Is it better for a person when the line has been drawn? The border between here and there? This is where the questions begin…

Once I suggested he dig into his childhood memories and desires, what he’d dreamed of and then forgotten. He could fulfill them now… He never talked to me about his childhood. Then suddenly he opened up. From the age of three months he had lived in the country with his grandmother. When he got a bit older he would stand on a tree stump and wait for his mama. Mama returned after he’d finished school, with three brothers and sisters—each child from a different man. He studied at the university, kept ten rubles for himself, and sent the rest of his stipend home. To Mama…

“I don’t remember her ever washing anything for me, not even a handkerchief. But in the summer I’ll go back to the country: I’ll repaper the walls. And if she says a kind word to me, I’ll be so happy…”

He never had a girlfriend…

His brother came for him from the countryside. He was in the morgue… We began looking for a woman to help, to wash him, dress him. There are women who do that sort of thing. When she came she was drunk. I dressed him myself…

In the village I sat alone with him all night. Amid the old men and women. His brother didn’t hide the truth, although I’d asked him not to say anything, at least to their mother. But he got drunk and blabbed everything. It poured for two days. At the cemetery a tractor had to pull the car with the casket. The old ladies crossed themselves fearfully and zealously:

“Went against God’s will, he did.”

The priest wouldn’t let him be buried in the cemetery: he’d committed an unforgivable sin… But the director of the village council arrived in a van and gave his permission…

We returned at twilight. Wet. Destroyed. Drunk. It occurred to me that for some reason righteous men and dreamers always choose these kinds of places. This is the only kind of place they are born. Our conversations about Marxism as a unified planetary civilization floated up in my memory. About Christ being the first socialist. And about how the mystery of Marxist religion wasn’t fully comprehensible to us, even though we were up to our knees in blood.

Everyone sat down at the table. They poured me a glass of homemade vodka right away. I drank it…

A year later my wife and I went to the cemetery again…

“He’s not here,” my wife said. “When we came the other times we were visiting him, this time it’s just a tombstone. Remember how he used to smile in photographs?”

So he had moved on. Women are more delicate instruments than men, and she felt it.

The landscape was the same. Wet. Dilapidated. Drunk. His mother showered us with apples for the trip. The tipsy tractor driver drove us to the bus stop…

English translation © 2011 by Jamey Gambrell

1
To be published in 2016 under the tentative title Time Second Hand by Fitzcarraldo Editions, London. 

2
“Svetlana Alexievich: The Truth in Many Voices,” October 12, 2015. 

  1. 1

    To be published in 2016 under the tentative title Time Second Hand by Fitzcarraldo Editions, London. 

  2. 2

    “Svetlana Alexievich: The Truth in Many Voices,” October 12, 2015. 

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The Cure for Corporate Wrongdoing: Class Actions vs. Individual Prosecutions


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Lithograph by Honoré Daumier, 1847

In 2009, the Securities and Exchange Commission charged that the top executives of Bank of America, in connection with asking their shareholders to approve the bank’s $50 billion acquisition of Merrill Lynch, defrauded those shareholders by failing to reveal the full extent of Merrill’s huge and growing losses and by secretly agreeing to pay Merrill’s executives year-end bonuses of up to $5.8 billion. That is, the SEC charged that the bank was obliged by law to reveal these important facts to its shareholders and did not. If the shareholders had known these facts, they might have voted against the acquisition.

The SEC, which sued only the bank and none of its executives, settled the case in early 2010 for $150 million, to be paid to the defrauded shareholders. Meanwhile, however, a private class action on behalf of those same shareholders was brought against the bank and certain of its officers and directors, based on the same allegations. To mount such a suit requires considerable effort, usually undertaken and financed by law firms that specialize in such cases. The class action was settled in 2012 for $2.4 billion, or sixteen times the SEC settlement.

At first glance, this would suggest that the private class action was a much better vehicle for bringing justice to the victims of the alleged fraud (which the bank and its management “neither admitted nor denied”) than the relatively paltry efforts of the SEC. Many other similar cases over the past two decades would seem to suggest the same. For example, in 2002, the SEC settled its fraud cases against Enron for $450 million, while the parallel class action was settled for $7.2 billion, or again about sixteen times the SEC settlement.

More recently, in 2010, the SEC settled for $75 million its case against Citigroup for concealing the riskiness of the securitized mortgages sold by the bank, while the parallel class actions were settled for $1.3 billion, or more than seventeen times the SEC settlement. In an even more extreme example, the SEC in 2006 settled its fraud case against Tyco—in which two executives were shown to have illegally taken $600 million—for $50 million while the parallel class action was settled for $3.2 billion, or a full sixty-four times the SEC settlement.

But the story is not quite that simple. In most such class action suits, the monies awarded to the victim shareholders are paid not by the executives responsible for the frauds, but by the companies themselves—which means, in effect, by the current shareholders (or, if the company is in bankruptcy, by its secured creditors).

These current shareholders (or other stakeholders) are as blameless for the fraud as the shareholders they are paying. Indeed, in many instances they are classic small shareholders who purchased their shares before the fraud (and are therefore not part of the plaintiff class) and held on to their shares not only throughout the period of the fraud but thereafter. Unlike hedge funds, which are more adept at getting in and out of an investment, these “retail” investors are now punished twice for the fraud they had no role in committing, first by the decline in the value of their shares upon the fraud’s exposure and second by the large payments subsequently made by the company they own to settle the class action.

From this standpoint, many securities class action settlements have a circular quality—one group of innocent shareholders paying another group of innocent shareholders—and the prime beneficiaries appear to be the lawyers who brought the cases and who typically receive very large fees in return. In the Tyco case the lawyers obtained $464 million of the $3.2 billion settlement. In the Bank of America case the plaintiffs’ lawyers received over $150 million in fees, plus another $8 million in expenses.

As one might infer from these examples, class actions are among the most controversial forms of litigation in the United States today. To their advocates, they provide an opportunity for interested private citizens to have a meaningful role in combating corporate misconduct, to serve in effect as “private attorney generals,” supplementing or even substituting for inadequate regulatory oversight. To their detractors, however, class actions are not much more than a racket, doing little to penalize the executives responsible for the alleged misconduct and chiefly serving, instead, to line the pockets of self-interested lawyers, who get a large share of the settlements.

Two recent trends exemplify these competing views. On the one hand, Congress and the Supreme Court have repeatedly taken steps in the past two decades to limit class actions substantially, though not to eliminate them entirely. On the other hand, foreign governments, which had long regarded class actions with suspicion, have over the past decade or so begun to recognize their benefits, so that no fewer than twenty-one countries now permit class action lawsuits to be brought at least in some circumstances.

What has been largely missing from this debate over the merits and demerits of class action litigation is a judicious appraisal of its strengths and weaknesses, unaffected by ideological biases. That gap has now been filled by the publication of Entrepreneurial Litigation by John C. Coffee Jr. A Columbia Law School professor, Coffee has long been regarded as perhaps the preeminent expert on US securities law, but his book is not limited to securities class actions. Rather, it covers the full spectrum of class actions, including mass tort class actions, employment discrimination class actions, antitrust class actions, consumer class actions, merger and acquisition class actions, and much more. Not only is the book more comprehensive than prior studies of class actions, it also probes more deeply, placing today’s class actions firmly within the setting of the modern trend toward turning the practice of law ever more into a business. Perhaps most impressively, Coffee’s book offers specific prescriptions (the most original of which is discussed below) for reducing the weaknesses of modern class action litigation while enhancing its strengths.

Coffee begins by tracing the rise of class actions in the US. The general reader—and his book is aimed at the general reader—may be surprised to learn how recently that rise has occurred. While there were vague precedents going back to medieval times, and more specific US provisions dating from 1842, a real need for class actions was not perceived until the rise of large corporations and mass production. A mass-produced product with a hidden defect, for example, might not be worth the price paid for it, but no reasonable purchaser was about to spend hundreds of dollars in legal fees to recover the few dollars she had been, in effect, overcharged. She had what Coffee terms a “negative value” claim. Yet if the defective product had been sold to several million purchasers, the collective economic injury was considerable.

Legal systems might deal with such collective injuries in any of several ways. For example, a legal system geared to a capitalist economy might choose to ignore such claims altogether, on the basis that one by one they were too “de minimis” to be worth the expenditure of legal resources, while collectively they would cause the manufacturer to lose customers and so be “self-correcting” in the long term. Alternatively, a legal system geared to a welfare-state approach might create governmental administrative agencies with powers to regulate and discipline errant manufacturers.

The first approach was typical of most Western countries well into the nineteenth century, while the second approach came to greater prominence in the twentieth century; but neither was wholly satisfactory. The laissez-faire approach ignored the fact that many sophisticated frauds, such as those in financial markets, might go undetected for years, if not forever, in the absence of regulatory disclosure requirements. But regulation had its limitations as well, for regulatory agencies, in addition to being perennially underfunded and therefore unable to monitor more than a small fraction of those they were supposed to supervise, were constantly subject to political pressures and occasionally subject to being “captured” by those they were supposed to regulate.

A third alternative, the class action—by which a single consumer, shareholder, or the like could sue on behalf of all those injured by the corporate misconduct—originated in the United States, largely for historical reasons centered around the strategies of lawyers who specialized in litigation. Personal injury lawyers in the US had already introduced the concept of the “contingent fee,” by which an impecunious but injured plaintiff could be afforded free legal services, in return for agreeing to pay the lawyer a sizable percentage of any monies obtained. Since the lawyer thereby assumed the risk and expense of a litigation loss, he was motivated to hedge his bet by bringing a large volume of cases, as did his fellow plaintiff’s lawyers.

Thus, where a common injury was suffered by many individuals—as, for example, in the case of a prescription drug that caused undisclosed side effects—many similar cases would be brought in many different jurisdictions. This in turn created pressure on the courts to find a way to deal with the flood of separate but similar cases. Different solutions were eventually devised, such as, for example, consolidating all separate but similar cases before a single judge in a single jurisdiction; but since the courts in the United States were split among numerous jurisdictions, this was a halfway measure at best when the alleged misconduct was national in scope.

An initial response at the federal level was to include a form of class action, modeled on an 1842 rule, in the code of federal civil procedure enacted in 1912, and this provision was broadened in 1938 during the Great Depression. But it was not until 1966 that the federal code of civil procedure was amended in a way that opened the door to class actions as we know them today. The driving force was that most intractable of all US problems: combating racial prejudice. In particular, the civil rights movement of the 1960s, to the extent that it sought reform by means of judicial rulings, could be effective only if those rulings benefited similarly situated black persons, i.e., the class of those affected by the racism the litigation was intended to correct, such as segregation in schools or exclusion from obtaining mortgages. Rule 23 of the Federal Rules of Civil Procedure was accordingly modified to make it easier for a litigant to sue on behalf of all those similarly situated except for those who chose affirmatively to “opt out” (i.e., not to be covered)—and in the case of suits seeking injunctive relief, even them.

As the drafters of the amended Rule 23 intended, the number of class actions in the federal courts hugely increased in the years following the amendment. Less foreseen was that the increase would not be limited to civil rights cases. According to a study undertaken by the federal judiciary in the early 1970s, in 1972 there were 3,148 class actions pending in the federal courts, up nearly 20 percent from just the year before; but while about 43 percent of these were civil rights cases, another 20 percent were securities cases, and still another 10 percent were antitrust cases.

What was common to virtually all these cases was that they were “lawyer-driven.” Sometimes this was ideological in nature. Legal action groups—such as the NAACP’s Legal Defense Fund—would identify broad areas of concern and then seek out interested plaintiffs who, because they were personally affected, had standing to bring a class action to rectify the concerns. But more often the lawyers’ impetus was financial. By combining contingent fees with class actions involving monetary damages, lawyers created a situation where, if they were successful, the financial return to them could be huge. They were therefore motivated to investigate different kinds of commercial and financial misconduct and, once convinced that they had a case, seek out individual plaintiffs in whose names a class action could be brought.

Litigation originated by lawyers does not fit comfortably with the assumptions of most legal systems, including that of the United States. But in this instance it was thought to be justified by the concept of the “private attorney general.” At least since the time of the Civil War, various federal laws had provided “bounties,” i.e., financial incentives, for private parties to bring actions that would supplement federal enforcement. Thus, the False Claims Act, enacted in 1863, provided that a private party could bring a lawsuit for a fraud committed against the federal government that the government itself had not yet detected; and if the case was successful, the private party could receive as much as 50 percent of the recovery. The Sherman Antitrust Act, enacted in 1890, guaranteed that victims of antitrust violations who successfully sued the violators would receive mandatory treble damages, plus their attorneys’ fees—the theory being that these rewards would both motivate antitrust victims to expose violations of which the government was not yet aware and enhance deterrence of violations even in those instances where the government had already discovered the misconduct.

Based on such precedents, proponents of private class actions argued that while the cases might be originated by lawyers, those lawyers—who had an incentive to ferret out misconduct not yet known to undermanned government regulators, as well as to supplement the deterrence provided in cases that “piggybacked” on government investigations—were serving the “established” role of private attorney generals.

Although critics have claimed that this argument is simply a rationalization for a system by which class action lawyers line their pockets, many judges with whom I have spoken have come to believe that, particularly in the civil rights matters that gave rise to the modern expansion of class actions, this rationale has a modicum of truth. For example, class actions against employment discrimination appear to have led to a considerable increase in minority hiring and promotion well beyond what would have likely occurred in their absence.

Even in non–civil rights cases, class actions have sometimes served to illuminate the magnitude of misconduct that otherwise went undetected or underprosecuted. Thus, as the cases cited at the outset of this article suggest, securities class actions, for all their limitations, have served to spotlight the substantial abuse evident in many recent cases of corporate misconduct that the SEC’s much more modest approach appeared to trivialize.

The problem, of course, is that the huge financial incentive provided to lawyers by combining class actions with contingent fee arrangements easily leads to abuses. One such abuse is a form of legalized extortion known as a “strike suit,” which takes advantage of the considerable cost of modern litigation and the perceived unpredictability of juries. A corporation facing a weak class action claim that nevertheless will cost millions of dollars to defend and, if somehow successful, will result in possible damages of hundreds of millions of dollars is motivated to settle the suit, even if the company has committed no wrong.

A related problem is that of collusion between the class action attorney and the company he is suing. In a weak class action case like the one just described, an unscrupulous attorney, recognizing the long odds or just wanting a quick buck, and secure in the knowledge that his free-riding client will agree to whatever the lawyer recommends, may be motivated not only to settle cheap but also to agree to terms binding on the class that will preclude future related litigation by lawyers and plaintiffs who might have much better cases—thereby saving the defendant a great deal of money down the road.

Much of the legislation and Supreme Court limitations on class actions in recent years have been directed at curbing such abuses, and Coffee is more optimistic than some that illegitimate suits have been substantially curtailed as a result. But he points to a more insidious problem. Even the best class action lawyers, as well as their clients, are primarily interested in suing the “deep pockets” from which they can recover the most money. In practice, this means focusing on the corporation, rather than the executives actually responsible for the misconduct.

To be sure, a few executives might also be named as defendants, but the settlement with them, if any, will typically be limited by the limits on their company-paid insurance. The big money will come from the settlement with the company. However, because of the circularity problem previously described, that money will effectively come from the pockets of innocent shareholders. Sometimes, as in the case of people who purchased both before and during the period of the fraud, they will even be the same shareholders who are suing—in effect, suing themselves.

It is hard to believe that the settlements in such cases have much of a deterrent effect on the individual executives who actually committed the alleged misconduct. This is why, in my view, class actions are no real substitute for criminal and regulatory prosecution of the individuals actually responsible for corporate misconduct. In recent years, however, such governmental prosecution of high-level executives has been notoriously rare. It is true that on September 9 of this year, the Justice Department—in reaction to public criticism of this failure—announced that prosecution of such individuals would be given priority “effective immediately,” but only eight days later, on September 17, the Justice Department entered into a “deferred prosecution” agreement with General Motors for intentionally concealing a defective ignition switch linked to at least 169 deaths. Although those responsible for this purposeful concealment would seemingly be responsible, at a minimum, for manslaughter, no individuals were named.

Coffee, while also strongly advocating for more governmental action against individuals, proposes an interesting innovation that he thinks would make class actions more socially useful and less liable to abuse. Overall, he suggests making good on class action’s promise of a “third way” by combining its profit-seeking tendencies with oversight of the class actions themselves by public agencies. Specifically, he proposes, among other reforms, that government regulators in matters where class actions are common should employ private class action lawyers, on a contingent fee basis, to bring class actions supervised by the regulatory authority but for the benefit of the victims, to whom any recovery would be distributed.

As a result, the regulator could bring many more and bigger cases than it does currently and would be represented by lawyers with considerable expertise in suing large companies. The lawyers would be motivated by the contingent fee to achieve the best results. But at the same time, the government agencies overseeing the lawyers would have the power not only to prevent suits, but also to direct that more attention be paid to pursuing individuals than at present. And the agencies would be more motivated than they currently are to pursue individuals along with the companies, since they could do so without any additional expenditure of their own resources. All this, moreover, could be achieved without new legislation.

In my view, this is a sound proposal. Indeed, as Coffee points out, some smaller governmental agencies, such as the FDIC, have already arranged for private attorneys to bring similar actions with the agency overseeing the cases but the lawyers being paid as a percentage of any money recovered. And while the proposal would pose more problems if undertaken by state and local agencies, where the selection of counsel would likely be affected by political considerations and campaign contributions, at the federal level agencies like the SEC enjoy sufficient independence that selection of counsel would likely be on the merits.

It must be acknowledged that Coffee had already floated this idea before publishing his book, but it failed to attract much support. Why is this? He suggests that big agencies like the SEC have too much invested in their self-image to acknowledge that private counsel could do a better job than their own staff in litigating these cases. He also acknowledges that his suggested approach might be subject to public and corporate criticism that it favored a particular part of the bar. For these and other reasons, I am not optimistic that Coffee’s idea, good though it may be, will be widely adopted in anything like the near future.

But this hardly means that class action litigation will be the same tomorrow as it is today. A conservative majority of the Supreme Court remains skeptical that the benefits of the class action lawsuit outweigh its shortcomings, although they have refrained from killing it altogether. At the same time, foreign nations, especially those with common law legal systems like Australia and Canada, have increasingly widened the opportunities to bring class actions, a clear recognition that they believe the class action serves important functions not otherwise served. But each country has its own variations. In Canada, if the plaintiff loses the case, he must pay the defendant’s often considerable legal fees. And in Australia—which has the most robust class action bar outside the US—contingent fees are prohibited, but private companies, though not themselves plaintiffs, are permitted to fund such actions and thereby absorb the risk.

In short, class action litigation continues to evolve, all the while remaining highly controversial. To predict how it will operate even ten years from now, in the US let alone elsewhere, would be foolhardy. Its lucrative nature virtually guarantees that it will not disappear, short of judicial or governmental prohibition. Nor is it likely that even a conservative judiciary or legislature will accept the nineteenth-century view that large groups of people who sustained losses that are individually too small to warrant their own lawsuits should be left with no remedy whatever.

How much class actions will actually serve as a private attorney general remains more questionable. Yet at least when it comes to securities class actions, this deterrence function should arguably be the chief measure of class actions’ value—not the number of zeroes on settlement agreements that largely reflect a recycling of money from one innocent group of shareholders to another, sometimes overlapping group of innocent shareholders. The contrast between SEC settlements and private class action settlements, though revealing in its own right, should not obscure the real question of deterring future misconduct.

While I am personally persuaded, as is Coffee, that securities class actions do serve such a function, the proof is anecdotal and the extent of such deterrence may be quite modest. If the proponents of class actions cannot better perfect its use for this purpose, as for example by closer coordination between the government regulators and the class action bar, the “private attorney generals” will in effect be no better than private attorney privates.

Source Article from http://feedproxy.google.com/~r/nybooks/~3/2zDlzLLHLzs/

‘The Pope & the Planet’: An Exchange


In response to:

The Pope and the Planet from the August 13, 2015 issue

Pope Francis; drawing by James Ferguson

To the Editors:

Professor William D. Nordhaus [“The Pope and the Planet,” NYR, October 8] writes that water in California is not scarce, but only underpriced. The snow-packs in the Sierras, however, are at a five-hundred-year low and market forces cannot make it snow. Professor Nordhaus’s argument about cap-and-trade is on the level of ways and means, a level different from Laudato Si’, which, among other things, is concerned with magical thinking and market idolatry.

Papal encyclicals are not research papers. They are intended to apply the teaching of the Church to current circumstances, so some attention to the state of scientific knowledge is appropriate, but as expressions of the moral and doctrinal tradition, their primary sources are previous encyclicals, not secular research.

The usual method is to begin with first principles (such as “God intends human beings to be stewards of creation, so it is wrong for us to wreck the common home”). Encyclicals consist mostly of more specific imperatives—called middle maxims—that apply these first principles in the current situation (such as “we ought to reduce carbon footprints and CO2 emissions”). How best to fulfill these middle maxims is a matter of prudential judgment, the appropriate prerogative of well-informed people of goodwill. This is sometimes called the “principle of subsidiarity”: the Church’s magisterium does not extend to ways and means; an encyclical is not a detailed manifesto for action.

So it is not surprising that Pope Francis “points out the need to replace fossil fuels with renewable energy and conservation” (a middle maxim), but does not try to answer prudential questions such as “who will develop the new energy technologies that will replace fossil fuels?” To ask why people would “use more expensive fuels when cheap fossil fuels are available” is like asking why people would refrain from robbing their neighbors: because it is morally wrong to behave otherwise. Of course, sometimes human law needs to incentivize right behavior, and that is where cap-and-trade policies may be useful, on the level of prudential judgments about ways and means.

In my reading of Laudto Si’, the pope does not oppose such policies, but warns against their corrupt manipulation and, above all, against the idolatrous claim that the market can solve all our problems—against thinking that the market can make it snow in the mountains.

The Rev. William J. Teska

Retired Episcopal priest

Adjunct Instructor in Ethics

Argosy University

Orange, California

To the Editors:

William Nordhaus’s thoughtful reaction to Pope Francis’s Laudato Si’ proves that the pope has achieved one of his stated purposes. He has used the world’s bulliest pulpit to spark an urgent discussion on how we can best care for “Our Common Home.” But by understandably restricting his reply to the economics, Nordhaus misses something the pope is even more concerned about, namely that we live not just in a market economy, but also a market society and culture, one that increasingly warps our deepest values. Francis is worried that we are beginning to view not just the earth but the meaning of life and death through a narrow monetary prism. But this means we miss out on the joy of living while falling prey to a “globalization of indifference.” I don’t believe Francis wants to abolish markets, but he realizes, as Nordhaus seems to as well, that we need a system that puts persons instead of profits first, and that unguided and unregulated markets can wreak havoc both with our planet and with our souls.

Harvey Cox

Hollis Research Professor of Divinity

Harvard University

Cambridge, Massachusetts

To the Editors:

William Nordhaus’s timely and eloquent review of Laudato Si’ failed to mention one of the most powerful effects of bringing market forces to bear on climate change: increasing the investment and effort into innovation in the fields of energy conservation, fuel alternatives, and methods for reducing CO2 emissions. In an age of warp-speed technological change, when new improved products hit the grocery shelves and electronics stores at an ever increasing pace, the innovation in these fields has been stymied by a lack of financial rewards for those who would come up with new ideas. As suggested, market forces are not antithetical to the solution; on the contrary they will generate the solution. We need to have a price on CO2 emissions to unlock the Lever of Riches that is human ingenuity to solve this crisis.

Rebecca Stein

Director

Microeconomics Principles Program

University of Pennsylvania

Philadelphia, Pennsylvania

William D. Nordhaus replies:

The letters by William Teska and Harvey Cox share a common response to Pope Francis’s encyclical and my review of it. Like the pope, and like the comments I made in my review, they have deep reservations about the way that economic forces and incentives have penetrated the deepest corners of our society, even the furthest corners of the world, through the process of globalization. In Cox’s view, even “the meaning of life and death” is viewed through a narrow monetary prism. We need to put “persons instead of profits first.”

I emphasized in my review the limitations of the market, both in generating high levels of inequality and in leading to environmental degradation. But to focus my response on the environment, it is insufficient to reverse environmental degradation by relying on first principles and middle maxims (to use the language of Reverend Teska’s letter). These principles and maxims may help educate people about the goals of the Catholic Church or of different societies, but they will do little to curb the 32 billion tons of annual carbon dioxide emissions of seven billion people, each making multiple decisions about energy use 365 days a year.

To solve environmental problems, we need to move to the practical arts of economics and politics. When scientists and economists began studying climate change four decades ago, neither the scope of the problem nor the solutions were evident. After years of experiments with different approaches, it has become clear that the most reliable approach to bending the curve of emissions and slowing climate change is market-based instruments like near-universal carbon taxes or cap-and-trade policies that raise the price of carbon emissions. Voluntary measures, actions of people of goodwill, and even regulatory actions on cars and power plants will not come close to meeting the targets of governments and Pope Francis.

Perhaps what Reverend Teska calls “prudential judgments” about the environment, the ways and means, are not appropriate subjects of an encyclical. If that is so, then it would have been better to refrain from condemning market instruments (carbon credits) and leaving the subject open to “well-informed people of goodwill.” It might have been better to emphasize the morality and importance of the “polluter pay principle” and to point to possible ways that that principle can be implemented. By condemning carbon credits, Pope Francis discouraged the exploration of market-based approaches.

The letter by Rebecca Stein is by contrast right on target. We need high carbon prices to give incentives for inventors and innovators to develop and introduce low-carbon technologies. I will illustrate this with a simple example. Suppose you are in charge of research and development at a large company like General Electric, which had an R&D budget of $4 billion in 2014. You do research on energy from coal, natural gas, nuclear energy, wind, and other sources. If carbon prices are going to be very low, then gas- and coal-burning plants will continue to be an important source of profits, and you will continue to do substantial R&D on those technologies. On the other hand, if you expect carbon prices to rise sharply, zero-carbon technologies like wind, solar, and nuclear power will be the sources of energy on which to place your research bets. Market mechanisms for the environment will make carbon-rich processes unprofitable, and low-carbon sectors profitable. That is the proper role for profits in a well-regulated market economy.

Source Article from http://feedproxy.google.com/~r/nybooks/~3/SNU3xrOnR_M/

‘The Pope & the Planet’: An Exchange


In response to:

The Pope and the Planet from the August 13, 2015 issue

Pope Francis; drawing by James Ferguson

To the Editors:

Professor William D. Nordhaus [“The Pope and the Planet,” NYR, October 8] writes that water in California is not scarce, but only underpriced. The snow-packs in the Sierras, however, are at a five-hundred-year low and market forces cannot make it snow. Professor Nordhaus’s argument about cap-and-trade is on the level of ways and means, a level different from Laudato Si’, which, among other things, is concerned with magical thinking and market idolatry.

Papal encyclicals are not research papers. They are intended to apply the teaching of the Church to current circumstances, so some attention to the state of scientific knowledge is appropriate, but as expressions of the moral and doctrinal tradition, their primary sources are previous encyclicals, not secular research.

The usual method is to begin with first principles (such as “God intends human beings to be stewards of creation, so it is wrong for us to wreck the common home”). Encyclicals consist mostly of more specific imperatives—called middle maxims—that apply these first principles in the current situation (such as “we ought to reduce carbon footprints and CO2 emissions”). How best to fulfill these middle maxims is a matter of prudential judgment, the appropriate prerogative of well-informed people of goodwill. This is sometimes called the “principle of subsidiarity”: the Church’s magisterium does not extend to ways and means; an encyclical is not a detailed manifesto for action.

So it is not surprising that Pope Francis “points out the need to replace fossil fuels with renewable energy and conservation” (a middle maxim), but does not try to answer prudential questions such as “who will develop the new energy technologies that will replace fossil fuels?” To ask why people would “use more expensive fuels when cheap fossil fuels are available” is like asking why people would refrain from robbing their neighbors: because it is morally wrong to behave otherwise. Of course, sometimes human law needs to incentivize right behavior, and that is where cap-and-trade policies may be useful, on the level of prudential judgments about ways and means.

In my reading of Laudto Si’, the pope does not oppose such policies, but warns against their corrupt manipulation and, above all, against the idolatrous claim that the market can solve all our problems—against thinking that the market can make it snow in the mountains.

The Rev. William J. Teska

Retired Episcopal priest

Adjunct Instructor in Ethics

Argosy University

Orange, California

To the Editors:

William Nordhaus’s thoughtful reaction to Pope Francis’s Laudato Si’ proves that the pope has achieved one of his stated purposes. He has used the world’s bulliest pulpit to spark an urgent discussion on how we can best care for “Our Common Home.” But by understandably restricting his reply to the economics, Nordhaus misses something the pope is even more concerned about, namely that we live not just in a market economy, but also a market society and culture, one that increasingly warps our deepest values. Francis is worried that we are beginning to view not just the earth but the meaning of life and death through a narrow monetary prism. But this means we miss out on the joy of living while falling prey to a “globalization of indifference.” I don’t believe Francis wants to abolish markets, but he realizes, as Nordhaus seems to as well, that we need a system that puts persons instead of profits first, and that unguided and unregulated markets can wreak havoc both with our planet and with our souls.

Harvey Cox

Hollis Research Professor of Divinity

Harvard University

Cambridge, Massachusetts

To the Editors:

William Nordhaus’s timely and eloquent review of Laudato Si’ failed to mention one of the most powerful effects of bringing market forces to bear on climate change: increasing the investment and effort into innovation in the fields of energy conservation, fuel alternatives, and methods for reducing CO2 emissions. In an age of warp-speed technological change, when new improved products hit the grocery shelves and electronics stores at an ever increasing pace, the innovation in these fields has been stymied by a lack of financial rewards for those who would come up with new ideas. As suggested, market forces are not antithetical to the solution; on the contrary they will generate the solution. We need to have a price on CO2 emissions to unlock the Lever of Riches that is human ingenuity to solve this crisis.

Rebecca Stein

Director

Microeconomics Principles Program

University of Pennsylvania

Philadelphia, Pennsylvania

William D. Nordhaus replies:

The letters by William Teska and Harvey Cox share a common response to Pope Francis’s encyclical and my review of it. Like the pope, and like the comments I made in my review, they have deep reservations about the way that economic forces and incentives have penetrated the deepest corners of our society, even the furthest corners of the world, through the process of globalization. In Cox’s view, even “the meaning of life and death” is viewed through a narrow monetary prism. We need to put “persons instead of profits first.”

I emphasized in my review the limitations of the market, both in generating high levels of inequality and in leading to environmental degradation. But to focus my response on the environment, it is insufficient to reverse environmental degradation by relying on first principles and middle maxims (to use the language of Reverend Teska’s letter). These principles and maxims may help educate people about the goals of the Catholic Church or of different societies, but they will do little to curb the 32 billion tons of annual carbon dioxide emissions of seven billion people, each making multiple decisions about energy use 365 days a year.

To solve environmental problems, we need to move to the practical arts of economics and politics. When scientists and economists began studying climate change four decades ago, neither the scope of the problem nor the solutions were evident. After years of experiments with different approaches, it has become clear that the most reliable approach to bending the curve of emissions and slowing climate change is market-based instruments like near-universal carbon taxes or cap-and-trade policies that raise the price of carbon emissions. Voluntary measures, actions of people of goodwill, and even regulatory actions on cars and power plants will not come close to meeting the targets of governments and Pope Francis.

Perhaps what Reverend Teska calls “prudential judgments” about the environment, the ways and means, are not appropriate subjects of an encyclical. If that is so, then it would have been better to refrain from condemning market instruments (carbon credits) and leaving the subject open to “well-informed people of goodwill.” It might have been better to emphasize the morality and importance of the “polluter pay principle” and to point to possible ways that that principle can be implemented. By condemning carbon credits, Pope Francis discouraged the exploration of market-based approaches.

The letter by Rebecca Stein is by contrast right on target. We need high carbon prices to give incentives for inventors and innovators to develop and introduce low-carbon technologies. I will illustrate this with a simple example. Suppose you are in charge of research and development at a large company like General Electric, which had an R&D budget of $4 billion in 2014. You do research on energy from coal, natural gas, nuclear energy, wind, and other sources. If carbon prices are going to be very low, then gas- and coal-burning plants will continue to be an important source of profits, and you will continue to do substantial R&D on those technologies. On the other hand, if you expect carbon prices to rise sharply, zero-carbon technologies like wind, solar, and nuclear power will be the sources of energy on which to place your research bets. Market mechanisms for the environment will make carbon-rich processes unprofitable, and low-carbon sectors profitable. That is the proper role for profits in a well-regulated market economy.

Source Article from http://feedproxy.google.com/~r/nybooks/~3/SNU3xrOnR_M/

‘The Pope & the Planet’: An Exchange


In response to:

The Pope and the Planet from the August 13, 2015 issue

Pope Francis; drawing by James Ferguson

To the Editors:

Professor William D. Nordhaus [“The Pope and the Planet,” NYR, October 8] writes that water in California is not scarce, but only underpriced. The snow-packs in the Sierras, however, are at a five-hundred-year low and market forces cannot make it snow. Professor Nordhaus’s argument about cap-and-trade is on the level of ways and means, a level different from Laudato Si’, which, among other things, is concerned with magical thinking and market idolatry.

Papal encyclicals are not research papers. They are intended to apply the teaching of the Church to current circumstances, so some attention to the state of scientific knowledge is appropriate, but as expressions of the moral and doctrinal tradition, their primary sources are previous encyclicals, not secular research.

The usual method is to begin with first principles (such as “God intends human beings to be stewards of creation, so it is wrong for us to wreck the common home”). Encyclicals consist mostly of more specific imperatives—called middle maxims—that apply these first principles in the current situation (such as “we ought to reduce carbon footprints and CO2 emissions”). How best to fulfill these middle maxims is a matter of prudential judgment, the appropriate prerogative of well-informed people of goodwill. This is sometimes called the “principle of subsidiarity”: the Church’s magisterium does not extend to ways and means; an encyclical is not a detailed manifesto for action.

So it is not surprising that Pope Francis “points out the need to replace fossil fuels with renewable energy and conservation” (a middle maxim), but does not try to answer prudential questions such as “who will develop the new energy technologies that will replace fossil fuels?” To ask why people would “use more expensive fuels when cheap fossil fuels are available” is like asking why people would refrain from robbing their neighbors: because it is morally wrong to behave otherwise. Of course, sometimes human law needs to incentivize right behavior, and that is where cap-and-trade policies may be useful, on the level of prudential judgments about ways and means.

In my reading of Laudto Si’, the pope does not oppose such policies, but warns against their corrupt manipulation and, above all, against the idolatrous claim that the market can solve all our problems—against thinking that the market can make it snow in the mountains.

The Rev. William J. Teska

Retired Episcopal priest

Adjunct Instructor in Ethics

Argosy University

Orange, California

To the Editors:

William Nordhaus’s thoughtful reaction to Pope Francis’s Laudato Si’ proves that the pope has achieved one of his stated purposes. He has used the world’s bulliest pulpit to spark an urgent discussion on how we can best care for “Our Common Home.” But by understandably restricting his reply to the economics, Nordhaus misses something the pope is even more concerned about, namely that we live not just in a market economy, but also a market society and culture, one that increasingly warps our deepest values. Francis is worried that we are beginning to view not just the earth but the meaning of life and death through a narrow monetary prism. But this means we miss out on the joy of living while falling prey to a “globalization of indifference.” I don’t believe Francis wants to abolish markets, but he realizes, as Nordhaus seems to as well, that we need a system that puts persons instead of profits first, and that unguided and unregulated markets can wreak havoc both with our planet and with our souls.

Harvey Cox

Hollis Research Professor of Divinity

Harvard University

Cambridge, Massachusetts

To the Editors:

William Nordhaus’s timely and eloquent review of Laudato Si’ failed to mention one of the most powerful effects of bringing market forces to bear on climate change: increasing the investment and effort into innovation in the fields of energy conservation, fuel alternatives, and methods for reducing CO2 emissions. In an age of warp-speed technological change, when new improved products hit the grocery shelves and electronics stores at an ever increasing pace, the innovation in these fields has been stymied by a lack of financial rewards for those who would come up with new ideas. As suggested, market forces are not antithetical to the solution; on the contrary they will generate the solution. We need to have a price on CO2 emissions to unlock the Lever of Riches that is human ingenuity to solve this crisis.

Rebecca Stein

Director

Microeconomics Principles Program

University of Pennsylvania

Philadelphia, Pennsylvania

William D. Nordhaus replies:

The letters by William Teska and Harvey Cox share a common response to Pope Francis’s encyclical and my review of it. Like the pope, and like the comments I made in my review, they have deep reservations about the way that economic forces and incentives have penetrated the deepest corners of our society, even the furthest corners of the world, through the process of globalization. In Cox’s view, even “the meaning of life and death” is viewed through a narrow monetary prism. We need to put “persons instead of profits first.”

I emphasized in my review the limitations of the market, both in generating high levels of inequality and in leading to environmental degradation. But to focus my response on the environment, it is insufficient to reverse environmental degradation by relying on first principles and middle maxims (to use the language of Reverend Teska’s letter). These principles and maxims may help educate people about the goals of the Catholic Church or of different societies, but they will do little to curb the 32 billion tons of annual carbon dioxide emissions of seven billion people, each making multiple decisions about energy use 365 days a year.

To solve environmental problems, we need to move to the practical arts of economics and politics. When scientists and economists began studying climate change four decades ago, neither the scope of the problem nor the solutions were evident. After years of experiments with different approaches, it has become clear that the most reliable approach to bending the curve of emissions and slowing climate change is market-based instruments like near-universal carbon taxes or cap-and-trade policies that raise the price of carbon emissions. Voluntary measures, actions of people of goodwill, and even regulatory actions on cars and power plants will not come close to meeting the targets of governments and Pope Francis.

Perhaps what Reverend Teska calls “prudential judgments” about the environment, the ways and means, are not appropriate subjects of an encyclical. If that is so, then it would have been better to refrain from condemning market instruments (carbon credits) and leaving the subject open to “well-informed people of goodwill.” It might have been better to emphasize the morality and importance of the “polluter pay principle” and to point to possible ways that that principle can be implemented. By condemning carbon credits, Pope Francis discouraged the exploration of market-based approaches.

The letter by Rebecca Stein is by contrast right on target. We need high carbon prices to give incentives for inventors and innovators to develop and introduce low-carbon technologies. I will illustrate this with a simple example. Suppose you are in charge of research and development at a large company like General Electric, which had an R&D budget of $4 billion in 2014. You do research on energy from coal, natural gas, nuclear energy, wind, and other sources. If carbon prices are going to be very low, then gas- and coal-burning plants will continue to be an important source of profits, and you will continue to do substantial R&D on those technologies. On the other hand, if you expect carbon prices to rise sharply, zero-carbon technologies like wind, solar, and nuclear power will be the sources of energy on which to place your research bets. Market mechanisms for the environment will make carbon-rich processes unprofitable, and low-carbon sectors profitable. That is the proper role for profits in a well-regulated market economy.

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When Killers Played Victims


In response to:

The Violent Mysteries of Indonesia from the October 22, 2015 issue

To the Editors:

I was honored by Ian Buruma’s insightful reflection on my films The Act of Killing and The Look of Silence [NYR, October 22]. However, Mr. Buruma’s review contains factual errors about the production that I feel should be addressed. Mr. Buruma writes, regarding The Act of Killing’s dramatization of the massacre of villagers at Kampung Kolam, North Sumatra:

In another brutal reenactment for the cameras, a village is raided, with actual villagers playing the victims of rape and cutthroat killings. Children can’t stop weeping once the filming is over.

I would never have contemplated creating this scene in the way Mr. Buruma imagines. I would never ask villagers to act in a dramatization of a massacre featuring—and directed by—the actual perpetrators.

The “villagers” are perpetrators and members of their immediate families. The “village” is a film set, and the weeping children were auditioned for their ability to cry on cue. (Children unable to cry were placed farther from the cameras, so that their giggling would be obscured by bonfires arranged in the foreground.) None of the children was told that the scene is based on actual atrocities carried out by their grandparents. Some children would continue to cry after we called “cut,” but this is not unusual in situations where child actors should cry, and they were immediately comforted by their families and the film crew.

Mr. Buruma describes a woman who appears on the verge of fainting. She is the wife of death squad leader Ali Usman, whom we see a few minutes earlier on an Indonesian state television talk show threatening, “God hates the Communists. There will be no reconciliation.” Mr. Usman’s wife would not say she fainted, but rather was kesurupan, or possessed. The paramilitary members whispering prayers in her ears are, in fact, conducting a quiet exorcism.

We had a rule that survivors should not participate in The Act of Killing. We were concerned, above all, for their safety: survivors could become easy targets of the perpetrators’ anger after the film’s release. We discovered later that one of the paramilitary leaders, Mr. Suryono, was also a survivor, in the sense that his stepfather had been killed. Yet Mr. Suryono’s participation was inadvertent: a second cameraperson not fluent in Indonesian filmed Mr. Suryono telling his stepfather’s story, and I became aware of the story only months later, while editing. Elsewhere in the film, we see Chinese shopkeepers being extorted by paramilitary leaders. I reimbursed each shopkeeper after filming, and explained that our purpose in filming was to expose the perpetrators’ crimes.

These may seem like minor clarifications, but for a filmmaker they are fundamental—examples of how we must find ways of working ethically in difficult circumstances, even when there may be no ethically perfect solution. Having spent so many years trying to expose mechanisms of fear and violence, the last thing I’d want is to replicate that violence in my own film production. We therefore did whatever we could to ensure that every scene was a safe space for all participants—even though all of us, in confronting such painful aspects of human experience, were necessarily pushed beyond our comfort zones.

Once again, I am grateful for Mr. Buruma’s generous review.

Joshua Oppenheimer

Copenhagen, Denmark

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El Sistema’s Enemy


In response to:

The Triumph of a Musical Adventure from the September 24, 2015 issue

To the Editors:

That Nicholas Kenyon, the director of a major orchestral venue, should leap to the defense of an orchestral training program, El Sistema, is predictable. More surprising is that such an important intellectual figure should fail to engage properly with my book El Sistema: Orchestrating Venezuela’s Youth [NYR, September 24]. He substitutes caricature for critical analysis, focusing on trivial details (e.g., Mozart in the Jungle) and disregarding serious issues (such as gender discrimination, bullying, exploitation, and allegations of sexual abuse and corruption). Instead of using his influence to push for change, he shoots the messenger and twists the message.

Beneath the media’s fantasy version lies a real Sistema, which I explore in depth; Kenyon, however, with his Hollywoodesque title, takes us back toward the shallows. He ignores rafts of evidence from musicians and scholars, relying instead on international Sistema advocates. Yet Tricia Tunstall described her book on El Sistema as “reportage, not scholarship,” designed “to proselytize on behalf of its mission.” Why does Kenyon give so much credit to boosterish opinions and so little to peer-reviewed research? One looks in vain for any scholarly foundation to his views.

Also lacking are the voices of Venezuelan musicians. Kenyon hears only the loudest opinions, those audible from his lofty London vantage point, whereas I spent more than a year in Venezuela, listening closely. He fails to understand ethnography, which analyzes the viewpoints of those at the coalface. Anonymization is not a “dubious scholarly method” but rather a standard procedure in social science and education research.

Ignoring research and recycling platitudes lead Kenyon into trouble. He believes that “only through musical agreement are the best performances realized—as anyone will testify who has witnessed musical performances where there is lack of agreement.” Yet the Simón Bolívar Orchestra, which he so loves, is a rigidly authoritarian ensemble, nicknamed the Venezuelan Slave Orchestra. Furthermore, exhaustive research by Richard Hackman found a correlation between orchestral performance quality and authoritarian leadership. Both the research and Kenyon’s own ears, then, contradict his conclusion; in fact, the sound of autocracy can be thrilling.

Kenyon recounts Alfred Brendel’s reaction to the Venezuelan Children’s Orchestra in Salzburg: “I look at the Venezuelan miracle with amazement…. Has the power of music ever generated such comprehensive social benefit?” Yet even a legendary pianist cannot assess the social benefits of music-making simply by going to a concert. Musical celebrities do not have superhuman powers of insight into complex social questions in distant parts of the world. A slick performance demonstrates intensive rehearsal, not social change.

Basic errors suggest that Kenyon failed to read the introduction. More interesting, however, is his moral stance. He does not counter the suggestion that José Antonio Abreu is ruthless, but rather argues that El Sistema’s leader was right to dismiss one of his longest-serving colleagues because he had a good replacement lined up. Like Abreu, Kenyon appears to believe that the ends justify the means.

Marshall Marcus, the director of Sistema Europe and a Kenyon ally, responded to my portrayal of El Sistema: “It may be an autocracy but it’s one that has allowed thousands of people to flourish.” But are ruthlessness and autocracy really a route to positive social change? Where are those values—teamwork, fraternity, justice—that El Sistema supposedly fosters? Or are they just empty words, employed to appeal to funders?

Geoffrey Baker

Director, Institute of Musical Research

Royal Holloway University

London, England

Nicholas Kenyon replies:

I am disappointed that Geoffrey Baker, while unsurprisingly critical of my review, does not acknowledge any of the positive points I made about his book. His reply is unwilling to admit a single positive aspect of El Sistema, ignores those areas where I do “push for change,” and instead reverts to his “scholarly” method of accusation by innuendo (“slick,” “lofty,” “celebrities”). This is a puzzling way to pursue a discussion about one of the most influential movements in music education today.

I did indeed pass over some of the more lurid accusations in his book because, as he concludes on page 229, “there is no concrete evidence that the allegations or suspicions are true.” Contrary to Baker’s reply, I do take a critical view of wholly positive assessments of El Sistema, including Tricia Tunstall’s book (see also the Times Literary Supplement, October 12, 2012), but in some respects, notably its willingness to quote founder José Antonio Abreu’s statements directly (rather than Baker’s refusal to talk to him and his reliance on unsourced gossip), Tunstall’s book is a more useful source. Baker says my views lack “scholarly foundation,” which may be the case; but I know balanced, thoughtful, informative scholarship when I read it, and I fear it is rather difficult to find this in his book.

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People for Hitler


In response to:

Max Planck: The Tragic Choices from the October 22, 2015 issue

To the Editors:

Freeman Dyson, in his review of Brandon R. Brown’s Planck: Driven by Vision, Broken by War [NYR, October 22], states that “Hitler won power in 1933 with solid public support, helped by a well-organized campaign of violence and intimidation.” He is certainly right about the latter, but on the former he is on less solid ground.

In the last German free election of November 6, 1932 (before Hitler was appointed chancellor by President von Hindenburg), the Nazis obtained 196 seats in the Reichstag versus 100 for the Communists and 121 for the Social Democrats. The results were similar in terms of total votes, the Nazis with 11.74 million (down from their high the previous July), the Communists with 5.98 million, and the Social Democrats with 7.24 million. Hitler was able to rule only with a coalition. Tragically, the two left parties were foes at the time. The next election, in March 1933, was a farce given the terror unleashed against the left. Nevertheless, even under the most dire conditions, the combined left still obtained more than 12 million votes against Hitler’s 17 million plus.

Martin Oppenheimer

Franklin Township, New Jersey

Freeman Dyson replies:

I am grateful to Martin Oppenheimer for providing the numbers of votes for and against Hitler in the 1932 and 1933 elections. The numbers confirm the fact that Hitler was elected by a solid plurality. In addition to the campaign of intimidation, there were other reasons for his victory. One reason was that he promised to put the country back to work, after long years of economic misery and high unemployment. He did what he promised, with the result that his public support endured.

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France: The Myths


In response to:

The Strangely Conservative French from the October 22, 2015 issue

To the Editors:

I am grateful for Mark Lilla’s generous and probing review of my book How the French Think: An Affectionate Portrait of an Intellectual People [NYR, October 22]. However it begins with a basic misunderstanding: on offer here is not a general survey of French thought, but an attempt to explain the style, the rhetoric, and the discursive techniques that are characteristic of French thinking. That said, the book deals extensively with many of the subjects Mr. Lilla claims are missing: thus, an entire chapter is devoted to utopianism, and therefore to the question of how the French think about the future.

I would also question Mr. Lilla’s assertion that television has become “the biggest gear in the French culture machine.” If we compare current levels of cultural programming on mainstream French channels with the late twentieth century, there has been an incontestable decline—the few surviving shows are now broadcast very late, and the cerebral atmosphere of Bernard Pivot’s Apostrophes has given way to the brash tone of Laurent Ruquier’s On n’est pas couché. A writer friend of mine who was recently invited on the show compared it to being a contestant on the Hunger Games.

Your readers will have been entertained by Mr. Lilla’s tirade against French intellectuals who contest the neoliberal global order. But would he seriously regard Thomas Piketty and Bruno Latour as nostalgic bourgeois hipsters? In this respect, his closing assertion that the French are “strangely conservative” is paradoxical: French thought is never one-dimensional. The French may be conservative, but they are also lovers of change—and typically of sudden and sweeping change.

Mr. Lilla also overstates the extent to which America continues to loom in the French mind. Tocqueville’s hold over the French imagination is over: those Gallic intellectuals and politicians who aspire to less economic regulation, more pluralism, and greater devolution tend to look nowadays to Britain, and America these days mostly inspires indifference rather than resentment. Indeed Mr. Lilla exhibits a glorious touch of ethnocentrism when he suggests that the French are currently divided between California dreamers and New York wannabes. Are these the only two available options? Perhaps your reviewer too has caught the French disease of reducing everything to binary oppositions.

Sudhir Hazareesingh

Balliol College, Oxford

Oxford, England

Mark Lilla replies:

Between World War II and the 1980s, getting a sense of what was going on in French culture and intellectual life seemed a simple matter. One read the papers Le Monde and possibly Libération (more seldom the conservative Le Figaro, whose circulation is slightly larger). One looked at a few literary revues and weeklies like L’Obs, glanced at the books on the tables at the bookstore La Hune, and tried to catch the latest episode of Apostrophes. That is no longer sufficient—or, since La Hune and Apostrophes have disappeared, even possible. As in most Western countries, today culture in France is being refracted into many different forms and media.

People watch much more television than ever before and thanks to cable the number of stations is now relatively large and diverse. Most are banal but some, like Arte and Canal+, represent something new. News websites focusing on investigative reporting and scandal, spanning the political spectrum, are challenging the staid traditional media. There are inventive sites for those interested in books, politics, art, dance, and music. Hip-hop, which is political and hugely influential in the banlieue housing projects, is its own island, with more bridges extending to North Africa than to the bourgeois arrondissements of Paris. The equally influential and isolated far right blogosphere is a force to be reckoned with, politically and intellectually. Do the same style, rhetoric, and discursive techniques Professor Hazareesingh thinks are characteristically French appear in these realms of contemporary culture as well? I’m curious to know, and I’m sure other readers of his stimulating book will be as well. He does not say, but his thesis depends on it.

As any reader of Tocqueville’s The Old Regime and the Revolution will attest, I’m not alone in thinking that French institutional and social conservatism almost always dashes dreams of “sweeping change.” What really deserves explanation is how the French myth of their political daring survives its almost daily refutation, much like America’s myth of itself as the land of common sense. As for French attitudes toward the United States, it’s true that Britain is far more attractive to young people and businessmen as a place to work today. But the inspiration of British neoliberalism was of course the US, as Mrs. Thatcher was the first to admit. And the French know that. If Professor Hazareesingh has never found himself at a Paris dinner party with, on his right, a bore just returned from a tour of Bay Area start-ups, and, to his left, a bore waxing nostalgic about his years working for a Wall Street hedge fund, he is a luckier man than I.

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