The Miracle of Economic Faith

The Faith of Entrepreneurs

Ludwig von Mises didn’t like references to the “miracle” of the marketplace or the “magic” of production or other terms that suggest that economic systems depend on some force that is beyond human comprehension. In his view, we are better off coming to a rational understanding of why markets are responsible for astounding levels of productivity that can support exponential increases in population and ever higher living standards.

There was no German miracle after World War II, he used to say; the glorious recovery was a result of economic logic working itself out through market forces. Once we understand the relationship between property rights, market prices, the time structure of production, and the division of labor, the mystery evaporates and we observe the science of human action making great things happen.

He is right that understanding economics does not require faith, but there are actions undertaken by market actors themselves that require faith (and Mises would not disagree with this)—immense faith, faith that moves mountains and raises up civilizations. If we accept the interesting description of faith by St. Paul (“evidence of things unseen”) we can understand entrepreneurship and capitalist investment as acts of faith.

Everyone who is in business understands this. It requires a thousand daily acts of seeing the unseen future to be in business. The reality of the marketplace is that the consuming public can shut you down tomorrow. All they need to do is to fail to show up and buy.

This is true for the smallest business to the largest. There is no certainty in any business. Nothing is a sure thing. Every business in a market economy is only a short step from bankruptcy. No business possesses the power to make people buy what they do not want. All success is potentially fleeting.

Success does yield a profit, but that provides no comfort. Every bit of profit you take for yourself comes out of what might otherwise be an investment in the development of the business. But neither is this investment a sure thing. Today’s smash hit could be tomorrow’s flop. What you perceive to be a solid investment could turn out to be a short-term craze. What you see, based on past sales, as having a potential mass appeal could actually be a market segment that was quickly saturated.

Emperors can rest on their laurels but capitalists never can.

Sales history provides nothing but a look backwards. The future is never seen with clarity but only through a glass, darkly. Past performance is not only not a guarantee of future success; it is no more or less than a data set of history that can tell us nothing about the future. If the future turns out to look like the past, the probabilities still do not change, any more than the probability of the next coin toss landed on heads increases because it happened previously five times in a row.

Despite the utter absence of a road map, the entrepreneur-investor must act as if some future is mapped out. He or she must still hire employees and pay them long before the products of their labor come to market, and even longer before those marketable products are sold and turn a profit. The equipment must be purchased, upgraded, serviced, and replaced, which means that the entrepreneur must think about today’s costs and tomorrow’s and the next day’s saecula saeculorum.

Especially now, the costs can be mind boggling. A retailer must consider an amazing array of options concerning suppliers and web services. There must be some means of alerting the world to your existence, and despite a century of attempts to employ scientific methods for finding out what makes the consumer tick, advertising remains high art, not positive science. But it also an art with high expense. Are you throwing money down a rathole or really getting the message out? There is no way to know in advance.

The heck of it too is that there are no testable causes of success because there is no way to perfectly control for all important factors. Sometimes not even the most successful business is clued into what it is, precisely, that makes its products sell more as compared with its competitors. Is it price, quality, status, geography, promotion, psychological associations people make with the product, or what?

Back into the 1980s, for example, Coca Cola decided to change its formula and advertise it as New Coke. The result was a catastrophe as consumers fled, even though the taste tests said that people liked the new better than the old.

If the historical data are so difficult to interpret, think how much more difficult it is to discern probable outcomes in the future. You can hire accountants, marketing agencies, financial wizards, and designers. They are technicians, but there are no such things as reliable experts in overcoming uncertainty. An analogy might be a man in a pitch-black room who hires people to help him put one foot in front of the other. His steps can be steady and sure but neither him nor his helpers can know for sure what is in front of him.

“What distinguishes the successful entrepreneur and promoter from other people,” writes Mises, “is precisely the fact that he does not let himself be guided by what was and is, but arranges his affairs on the ground of his opinion about the future. He sees the past and the present as other people do; but he judges the future in a different way.”

It is for this reason that an entrepreneurial habit of mind cannot be implanted through training or education. It is something possessed and cultivated by an individual. There are no entrepreneurial committees, much less entrepreneurial planning boards.

The inability of governments to engage in the entrepreneurial act of faith is one of many reasons why socialism cannot work. Even if a bureaucrat can look at history and claim that his agency could have made a car, dry wall, or a microchip, that same person is at a loss to figure out how innovations in the future can take place. His only guide is technology: he can speculate about what might work better than what is presently available. But that is not the economic issue: the real issue concerns what is the best means given all the alternative uses of resources to satisfy the most urgent wants of consumers in light of an infinity of possible wants.

This is impossible for governments to do.

There are thousands of reasons why entrepreneurship should never take place but only one good one for why it does: these individuals have superior speculative judgment and are willing to take the leap of faith that is required to test their speculation against the facts of an uncertain future. And yet it is this leap of faith that drives forward our standards of living and improves life for millions and billions of people. We are surrounded by faith. Growing economies are infused with it.

Mises forgive me: this is a miracle.

From Lew Rockwell, here.

Demography Is Destiny: The American Birth Rate…

US Births Drop To The Lowest Level Since The 1970s

The years-long U.S. baby drought worsened last year, with births dropping 4% from 2019 to the lowest level since 1979.

The provisional data for 2020, at 3.6 million births, marks the sixth annual drop in a row. The decline will likely continue in 2021, when the brunt of the impact from the pandemic will be recorded — with a nine-month delay.

Fears of contracting the virus while pregnant, or while in hospital to give birth, combined with job insecurity and government measures limiting social contact and business activity, dissuaded Americans from having babies, according to surveys by Ovia Health, a women’s health technology company.

Read more at NEWSMAX.

From Matzav, here.

Six-Day War: At Least Now Jews Aren’t Murdered Upon Entering the Temple Mount!

The Murder at the Temple Mount

Monday, April 05, 2021

This article appeared originally at the Jerusalem Post Magazine and I’ve added more graphics here:

The Murder on the Temple Mount

On April 11, 1947, Asher Itzkowitz, along with his acquaintance – and despite the shared family name no family connection – Yitzchak Itzkowitz, walked from entered the Old City through the Damascus Gate and continued on towards the Western Wall.  It was Asher’s first time visit.

For some reason, perhaps first-time disorientation, they turned left towards a gate and proceeded towards the Temple Mount. Asher never made it to the Wall and never left the Old City alive.

–  – –

It was either during the late Ayyubid 1187-1250, or the early Mamluk (1250-1517) period, or perhaps from the time of Saladin’s victory over the Crusaders in 1189, that a ban was instituted forbidding non-Muslims from entering the compound of the Temple Mount.

Islam’s tenet was it was the sole true religion rather than Christianity or Judaism. It alone carried on the heritage of Abraham. That ban was extended also to the Cave of the Patriarchs in Hebron in the form of the infamous ‘seventh step’. It is quite possible that despite Jews visiting the Temple Mount in the previous centuries, notably, Maimonides, that ban was sublimated into later Rabbinic prohibitions on Jews from entering the site.

Nicholas Tavelić, Peter of Narbona, Deodatus of Ruticinio and Stephen of Cuneo became the first Franciscan martyrs of the office of the Custody of the Holy Land when, having been in Jerusalem since 1384, they decided to take their charge to spread their faith to the Qadi of the city who was singularly unimpressed.

On November 11, 1391, they entered the Temple Mound compound, appeared before the Qadi’s gathering and began to preach. They were arrested, refused an option to convert to Islam and near the Jaffa Gate on November 14, they were executed, beheaded, their bodies blown up and their remains completely burned. Their ashes were scattered. In June 1970, they were declared Saints in the Vatican Basilica by Pope Paul VI.

In May 1818, Sarah Belzoni disguised herself as a Muslim female and, retaining the services of a 9-year old Muslim boy in order to facilitate entry, she managed a peek inside the Dome of the Rock. On November 13, 1833, the English architect Frederick Catherwood dressed up as an Egyptian officer and entered the sacred precincts, eventually spending six weeks “investigat[ing] every part of the mosque and its precincts” and made the first complete survey of the Dome of the Rock.

In 1839, following the Tanzimat reforms in the Ottoman administration, non-Muslims were permitted to enter Temple Mount on receiving the special permit from the governor. In the 1850s, an Italian military engineer named Ermete Pierotti was engaged as architect and engineer to the Ottoman authorities in Jerusalem, a position that provided him unrestricted freedom to study the Temple Mount. His 1864 book, Jerusalem Explored, describes his findings.

In March 1855, the Duke of Brabant, the future King Leopold II of Belgium, toured the Temple Mount while club-wielding Sudanese from Darfur guards were locked in their quarters for fear they would attack the infidel. In June that year, Archduke Maximilian, the heir to the Habsburg Empire, also was permitted entry.

As for Jews, Moses Montefiore and his wife Judith toured the site on July 26, 1855 including the underground Ancient Al-Aqsa to the Southern Wall and, apparently, on other occasions. The Palestine Exploration Fund got Charles Warren of the Royal Engineers into the area in 1867 and his diary entry of April 8, 1869 begins, “I visited the Dome of the Rock.”

–    –    –

On Wednesday, January 29, 1873, the 56-year old Yosef Assa, like Asher Itzkowitz six decades later, erred while walking to his study session at an Old City bet midrash. Being blind, he missed a turning perhaps and entered to Temple Mount. As reported in HaLevanon on February 5th, his body was found the next day, seemingly tossed over the ramparts into the valley below. Obviously, unauthorized entry was an extreme danger.

In the few years prior to World War One and just after, matters were more relaxed. We know that Tel Aviv’s Herzliya school pupils toured the site during Passover 1912 as did others during the Second and Third Aliyah periods. Rahel Yannait did so in 1908, Berl Katznelson in 1918 and Uri Tzvi Greenberg in1924.

Asher Itzkowitz, most probably born in Ivanovice in the Máramaros district of north-east Hungary in 1927 although another source has his birthplace as Drohobycz, was taken to Auschwitz during the war. His parents, from whom he was separated, did not survive the Holocaust but a sister did. Making his way to Budapest, he joined a Dror Zionist youth group despite being religiously observant, boarded the Yagur clandestine immigration ship and was sent to a Cyprus detention camp. He arrived in Israel in late 1946. He lived in Tel Aviv and worked as a carpenter.

On the last day of Passover, Shvi’I shel Pesach, April 11, 1947, he walked from the Beit Yisrael neighborhood with a friend (but not a relative), Yitzhak Itzkowitz, 36, to the Western Wall. Becoming perhaps disoriented in the alleyways unfamiliar to them, they walked down David Street and missed the right-hand turn to the Western Wall.

They approached the Chain Gate at approximately three o’clock in the afternoon. The presence of non-Muslims so close to the Haram precincts incensed the crowds. Some records note that the Moslem holiday of Nebi Mussa, always a heightened time of potential violence since 1920, was coetaneous that day. Both were set upon by over 30 rowdies. They were beaten with heavy sticks, called nabbot, metal rods, stoned and stabbed. The newspaper reports were contradictory as to what happened next.

The first information was that they had unwittingly entered the Temple Mount. Such an act would have been cause for such violence. Indeed, as reported in this paper on December 16, 2020, over 70 years later, the Mufti of Jerusalem, Sheikh Mohammed Hussein, a Palestinian Authority appointee, declared there is “no place for non-Muslims in any way in this mosque, whether through schools, churches or other places of worship.”

In fact, the Palestine Government press office had issued a press release that was broadcast over the official Mandate’s Voice of Jerusalem radio that the murderous assault indeed took place inside the compound. Subsequent items appearing in the press related that they were attacked outside.

Yitzchak was saved by an Arab policeman, a corporal, who dragged him into the courtyard who then closed the gate on the mob. Asher was left outside to be finished off. Suffering severe loss of blood and critical head injuries, Asher died. The HaTzofe newspaper indicates the corporal, who was on duty inside the sacred compound, at the police station on the north side of the raised platform, found them inside the gate when he rushed over in response to the shouting.

Asher’s funeral service was conducted Saturday night in the courtyard of the Bikur Cholim Hospital and was addressed by Rabbis Aryeh Levin and Zalman Brizel. From there, his bier was carried through Meah Shearim until the police intervened and insisted it be placed in a van. Shouting and shoving then ensued. Eventually, the procession made its way to the Mount of Olives where Itzkowitz was buried. If you seek out his grave, you will find a barely recognizable plot with the text illegible.

The “Situation Committee” of Jerusalem’s Jewish Community Council decried the murder and demanded that the perpetrators be brought to justice. At the same time, they called for restraint on the part of Jews as on the Shabbat, two Arab ice cream vendors along Aggripas Street were beaten moderately by a crowd. The previous week, in a retaliation against the Palestine Police for the murder of Moshe Cohen on April 7, the Lechi underground had shot the 20-year old Basil Forth, who had been in the city but a week, killing him.

Most papers did not carry the story on their front pages. By the following Monday, he murder disappeared from the pages of the Yishuv’s press. The Communist organ, Kol Ha’Am, devoted but seven lines to the incident. Other news, of the escape of Geula Cohen and the forthcoming hanging of Dov Gruner and his legal battle were more prominent.

There is no memorial plaque near where he was murdered. He lies in a forsaken near-unmarked grave. He has no progeny. He is a forgotten martyr.

Continue reading…

From My Right Word, here.

Money Is for Mitzvos!

On Amassing Money

Rabbi Hershel Schachter

Some sociologists opined that money is an evil of society. The Chazon Ish (Yoreh Deah 72:2) pointed out that halacha does not share that perspective. Rather, even in an ideal Torah world we would use kesef (money) to fulfill mitzvos.

The halacha declares that in most instances shoveh kesef (a commodity which has value) can be used in place of kesef. For example, we get married by having the chosson hand a ring, i.e. shoveh kesef, to the kallah, as opposed to giving her kesef, and this constitutes a form of kidushei kesef. Nonetheless, one can only fulfill the mitzvah of machatzis hashekel by giving kesef to the Beis Hamikdash for the purpose of purchasing the korbanos tzibbur (Bechoros 51a).

A variety of opinions are presented in Shulchan Aruch (Choshem Mishpat 369) regarding the extent to which halacha recognizes dina demalchusa. The Shach (Yoreh Deah 165:8) points out that all agree that dina demalchusa determines what is considered kesef. Whatever currency the government of any given country establishes has the halachic status of kesef. When the second Beis Hamildash was built there was no Jewish government ruling over Eretz Yisroel. As such, the mitzvah of machatzis hashekel had to be fulfilled by giving a coin recognized as kesef by the ruling non-Jewish government. After several centuries when the Chashmonaim established a Jewish government in Eretz Yisroel and minted their own coins, “Jewish” coins replaced the “non-Jewish” coins for this mitzvah.

The Talmud (Pesachim 54b) speaks of the concept of “money” being part of G-d’s initial plan for creating the world, just as the Torah and the mitzvos preceded the creation of the world. The rabbis of the Talmud (Shabbos 33b) tell us that Yaakov Avinu improved the life of the citizens of Shechem by introducing a monetary system for them. Money is something positive. Without money we can not function.

Judaism, as opposed to certain other religions, has never preached that poverty is an ideal. The Rema (Shulchan Aruch Orach Chaim 248) considers making a living something positive, comparable to a mitzvah. As such, one who lives in Eretz Yisroel is permitted to go to chutz la’aretz for the purpose of making a living. Even if one is making ends meet, but wants to go to chutz la’aretz to make a more comfortable living, the accepted opinion is that this too is permissible. However, we would not allow one who already makes a comfortable living to go to chutz la’aretz in order to become wealthy (see Moed Kattan 14a). There is no mitzvah to be poor, but there is also no mitzvah to be rich.

We all need food in order to survive, be healthy, and function. However, we should not love food. Many Americans suffer from obesity because they love food and overeat. Similarly, we all need money to live in this world. However, we should not develop a love for money. Koheles (5:9) teaches us that one who loves money will never be satisfied with the money he has. The Medrash (Koheles Rabbah 1:34) famously comments, “ein adam yotze min haolam vechatzi ta’avaso beyado“. When those who love money die, regardless of how much money they have amassed it will not be even half of what they desired.

The Talmud (Avodah Zarah 11a) tells us that R’ Yehuda Hanasi was extremely wealthy, which was necessary for his position as chief rabbi. But he did not love the money. In fact, he hardly took any pleasure from this world (Kesubos 104a).

The parsha tells us (Breishis 47:14) that Yosef amassed all of the cash from Egypt and Canaan by selling the grain that he stored. He understood that this was needed for the Egyptian government, and apparently saw this as part of the message of Pharoh’s dream. However, we do not get the impression that he became one who loved money.

The Medrash (Koheles Rabbah 5:8) distinguishes between two types of observant Jews: one who merely observes the mitzvos, and one who loves mitzvos. The one who observes, but does not love, mitzvos will be satisfied with keeping the mitzvos which come his way. But the one who loves mitzvos will always be on the lookout for additional miztvos. He will never be satisfied with the miztvos that he may have fulfilled already – “ohev mitzvos lo yisba mitzvos“.

Rather than love money, or love food, we should all develop a love for mitzvos.

From Torah Web, here.