Israeli elections: the retirees strike back

The Israeli elections look to be a clear-cut victory for the center- left led by the post-Sharon Kadimah Party (28-30 seats) which will likely enter into a coalition with Labor (around 20 seats) and Shas or Sephardic Religious Party (around 12 seats) excluding the hard right from any role in the new Government. Biggest surprise: the "only in Israel" Pensioners Party, led by former spymaster Rafael Eitan, which won 7 seats on a platform of defending Israeli retirees from further benefit cuts and may round out the new coalition. Together with continued pursuit of disengagement from the Palestinians, look for the new Government to take a more skeptical view of tax and benefit reductions, a pattern previously reported to be emerging in Italy, India, and other countries surveyed herein. Look also for Shas and other religious parties to begin talking more about social justice issues--the majority of religious voters have below medium incomes--along with their traditional cultural and school support issues. Likud leader Binyamin Netanyahu, who as Finance Minister imposed stringent tax and budget cuts, said after his defeat he still thinks his policies had saved the Israeli economy: perhaps so, but little consolation to him or his party now.

Scholarship, Antisemitism, and the Harvard Study

As someone who nearly attended the Kennedy School, but decided to go to Israel instead, I am unusually fascinated by the flak surrounding the Walt/Mearsheimer study, "The Israel Lobby and U.S. Foreign Policy," which has been making the rounds of the blogosphere during the past week (the paper is available at http://ksgnotes1.harvard.edu/Research/wpaper.nsf/rwp/RWP06-011
with a revised version at www.lrb.co.uk) Much of the flak that surrounds the paper has to do with the inevitable issues of antisemitism, free speech, and so forth. But it seems to me that there is a prior question about the role of scholarship and especially "public policy" programs, of which the Kennedy School is a prime example, in policy discourse.

The Kennedy School is, well, a strange animal. (My wife went to KSG, so I know something about it despite my untimely departure.) Modelled in large degree on the Harvard Business School, the Kennedy School was based on the idea that something called public policy could be taught as a distinct subject, in much the same way as law or business or (for that matter) ordinary academic disciplines. This approach works adequately well for, say, the design of a new power plant or retirement program, where the costs and benefits can be quantified with some precision and quantitative analysis applied to achieving the optimal solution. It works rather less well for abortion or homosexuality as well as for foreign policy, where ideology plays a larger role and it tends to be much more difficult to quantify the costs and benefits at stake (there was supposedly a KSG professor who figured out how much a human life was worth, but that wasn't the school's proudest moment). You can apply all sorts of models to the decision whether to bomb Iran, but if you believe the mullahs are going to hit Tel Aviv or New York on Day One, you're probably going to want to take action, even if a lot of statistical models tell you that that is somehow an "acceptable" risk.

Which brings me to the Israel study. As I read it, the arguments of this study are as follows:

1. U.S. support for Israel, of which the authors appear to include the Iraq War as an example, is well out of proportion to the size and strategic significance of Israel as measured by traditional, quantitave methods. (How exactly the Iraq War helps Israel has never been clear to me, but lets leave that aside for the moment.)

2. There is a powerful lobby for Israel consisting of primarily although not exclusively Jewish individuals and organizations who aggressively reward politicians, bureaucrats and academics that support Israeli policy and punish those who oppose it.

3. In the absence of alternate explanations, #2 above must be taken to account for #1 above, with grave implications for American Middle East policy and the future of American democracy.

Most of the discussion of the piece so far concerns item #2, i.e., the supposed stregth and ferocity of the pro-Israel lobby, and there are indeed some serious problems here. One is that the authors us the term "Israel lobby" without ever really defining it very precisely, so that the paper has a weird circular quality (why is there a pro-Israel policy? Because of the Israel lobby. How do we know that there is a strong Israel lobby? Because there is a pro-Israel policy.) The authors also never really explain why, if such a small percentage of the population is capable of manipulating opinion so effectively, their tactics are not borrowed by other, competing groups.

But the bigger problem seems to me to involve item #3, that is, the supposed absence of alternate explanations which throws the authors back on the Israel lobby as the only possible reason for American support. This is what lawyers call an "everything but the therefore" problem, that is, an argument that makes two distinct propositions but fails adequately to account for the link between them. This problem, it seems to me, relates directly to the author's failure to take ideology seriously, and to understand its implications for foreign policy.

All lobbies try to promote their client's interests, and all use more or less the same tactics. The reason that the Israel lobby has had disproportionate success is because the product it is selling has, by and large, proved more attractive than anything its opponents have on offer. There are numerous reasons for this, including the continuing identification of many Christians (and not merely evangelicals) with Israel; the western orientation of that country, which means that it will tend to state its positions in ways that are more consonant with American values than will its Arab neighbors; and, most significant, the behavior of the Arabs themselves, which has unfortunately tended to confirm negative stereotypes rather than refute them as one would wish to be the case. In this respect the 911 attacks, albeit the work of a relatively small number of people, surely did more to advance Israel's cause than years of propaganda by any lobby could possibly achieve. The authors argue that these arguments are no longer persuasive, but don't seem to accept that others might feel differently; in particular they are nearly deaf to the nonquantifiable, culture- and values-based arguments so important to many other observers. Their work thus proceeds inexorably on to its preordained conclusion.

In short it seems to be that the fault with Walt and Mearsheimer is not they are mean-spirited or antisemitic--at least, I have no reason to assume that they are--but that they have failed adequately to account for the role of idealism/ideology in political decisions. This is an old flaw in Kennedy School-type policy analysis, but one that probably won't go away anytime soon. Because something is not easily quantifiable does not mean that it isn't important: a lesson too easily forgotten.

What then about the issue of antisemitism? As noted I have no reason to think the authors are motivated by an anti-Jewish spirit; for all I know they could be Jewish, or part Jewish, themselves. The problem is that, by attributing vastly disproportionate power to Jews and ignoring or denying other more credible explanations for events--and specifically by denying that Jews could influence people by moral or ethical example rather than by self-interested political intrigue--they are wittingly or unwittingly recreating the historic accusations of a Jewish "conspiracy" to infiltrate or control activities that ought rightly be managed by others. Particularly disturbing is the notion that an amorphous "Israel lobby" permeates institutions (the Congress, the Administration, and so forth) where the actual Jewish presence is either small or nonexistant: an almost impossible charge to refute, and uncomfortably similar to previous allegations against international Jewry, Jewish "cosmopolitans," and the like. At a minimum, it seems to me, Walt and Mearsheimer owe a more systematic explanation of how such a small group became so allegedly powerful, and why alternate explanations for American foreign policy (ideology, common political goals, and so forth) are not in the end more convincing. In the absence of this they may be guilty of nothing more than shoddy and incomplete thinking. But that is sometimes all that it takes.

the italian elections: tax policy and the return of "solidarity"

The Italian elections, scheduled for April 9, seem likely to return the left-center coalition under former Prime Minister Romano Prodi to power, although some polls show the incumbent leader, Silvio Berlusconi, pulling a last minute upset. In a debate last week Berlusconi appeared testy and defensive, repeatedly complaining about the American-style debating rules, while Prodi, if hardly dynamic (he is after all a professor), appeared quietly confident. The endorsement of Prodi by Corriere Della Sera, normally a conservative newspaper, and incessant backbiting by Berlusconi's coalition partners didn't help him much, either.

One fascinating aspect of the campaign is the role of taxation and fiscal policy, which seems to occupy a rather more central position that in an American election. I reported previously on Prodi's proposal for a 20 percent tax on financial income, substantially higher than that collected today in most cases. The left has also experimented with proposals for new succession (inheritance) levies and other tax increases.

But more interesting than these technical proposals is the language used to discuss fiscal policy and its link to broader election themes. In Prodi's debate summation he referred at least three different times to the concept of solidarieta', variously translated as solidarity or coherence, but referring broadly to the obligations owed by members of society to one another--the responsibilities as opposed to the rights side of the liberal equation, to use the more familiar American terminology. Solidarity is an old concept, with roots in the Medieval Church and (legally speaking) in the commonality of interest between creditors of the same payor; although appropriated more recently by the secular left, it has never quite shed its spiritual aspect and its appeal to values beyond the day-to-day give and take between interest groups. By couching his appeal in the language of solidarity, Prodi was implicitly criticizing Berlusconi for allowing Italy to drift (his view) in the directon of short-term self-interest and calling for a Government that placed renewed emphasis on the common good.

The tax policy implications of solidarity are fascinating in theory if rather elusive in practice. What is attractive about the concept is that it attempts to justify progressive taxation as a means of shared social sacrifice without resort to redistribution or similar marxist doctrines. This might seem unexceptional in America, but remains somewhat novel in Italy, whose politics has traditionally divided between a marxist left and a fiercely anti-marxist (some would say neo-fascist) right with not terribly much in between. (Prodi himself is a moderate, but the bulk of his coalition would consist of one-time PCI (Communist Party) members.) In American terms it is perhaps most reminiscent of scholars like Marjorie Kornhauser who have attempted to locate progressivity in a broader sense of mutual assistance and communal responsibility. But the Catholic tradition, which has always been rather less individualist than Anglo-Saxon Protestantism, gives the concept a special appeal in France, Italy, and other similar countries: by appealing to it Prodi appears to be seeking a third way between American style capitalism and the anti-globalization reaction, but one with authentic local roots, and with taxes a small but not insignificant part of the overall equation.

A bit more solidarite' would surely be welcome in France, where protests over labor reforms have taken an increasingly ugly turn. Among other things, the protests show the difficulty of distinguishing reform from reaction in a changing world: the liberalized rules, which were originally designed to reduce unemployment in poorer neighborhoods, are vigorously opposed by students and labor unions who are theoretically defenders of the poor and underprivileged. Further tax reforms, and much else besides, will await the outcome of this struggle.

update re: india tax legislation

It's nice to have a growing economy. With the debate on the Finance Bill to open this week, the Indian Finance Minister, Mr. P. Chidambaram, has announced that gross tax revenues are continuing to grow at about a 20 percent annual clip, which the Government's proposed budget (reported here in February) will not affect. The Finance Minister also stated that India expects to have a full-fledged goods and services tax within the next four years; meantime the services tax would be converged with excise duties and the central VAT would be stablized at about 15 percent. Customs duties, which the new budget would reduce from a maximum of 15 to 12.5 percent, would eventually stabilize between 5 and 10 percent, i.e., a rate more or less comparable to the other big Asian economies. Mr. Chidambaram described the current year as a period of "consolidation" in tax matters, which appears to mean that--so long as the Indian economy keeps on growing at its current rate--tax revenues will continue to increase without any increase, perhaps even some decrease, in tax rates. This also means that the issue of distributional equity, alwalys important in India, is likely to express itself in spending rather than tax matters for the immediate future. Stay tuned for further developments.

international and comparative taxation: guide to the summer conference season

Most people who try to keep up with international or comparative taxation probably do so either on line, by reading selected publications, or by judiciously chosen trips to selected foreign venues. (Those who can get others to pay for the trips, either their Deans or (better yet) clients, so much the better.) An efficient, but sometimes frustrating, way to take the pulse of foreign developments is to attend one of a variety of conferences that deal annually with the subject. These conferences are nearly always fun to attend--not least for their exotic locales--and some may actually provide useful insights for your scholarship, although like their domestic counterparts they vary significantly in quality and appeal to rather different audiences. Herewith a guide to some of the more interesting alternatives:

A good introduction to the European tax scene is the annual conference of the European Association of Tax Law Professors (EATLP) which is held this year in Budapest, June 2-3. The EATLP is something like the equivalent of the AALS Tax Section, except that they meet every year and the locations (Paris, Naples, next year Helsinki) are, well, more interesting than Minneapolis in December. The attendance at EATLP varies somewhat with location--more Italians when it's held in Italy, more of everyone when it's in Paris, that sort of thing--but there's a pretty steady core of Northern Europeans who attend pretty much no matter what, and it's an unparalleled way to meet European colleagues and trade notes on comparative projects. (All of the conference sessions are conducted in English.) About 10 or 12 Americans and a number of other non-Europeans have been attending the conference in recent years, and they are invariably welcome although in theory you have to request permission to attend. One caution: European law professors tend to focus on legal (i.e., technical) issues somewhat more than their American colleagues, and the EATLP sessions are often devoted to esoteric issues such as the EU rules for tax coordination, the differences between fees and taxes, and so forth; one has to attend primarily for the networking opportunities and get what one can out of the formal sessions, which is what most of the Europeans do anyway, so you will pretty much feel at home. The website is www.eatlp.org, and the e-mail contact is j.straver@ibfd.org [the International Bureau of Fiscal Documentation, located in Amsterdam, with which EATLP is associated.]

A global alternative to EATLP, although somewhat more practice-oriented, is the International Fiscal Association (IFA), the closest thing to a United Nations of tax professionals. The IFA holds an annual global conference which is now large enough to sport its own website www.ifa2006.nl (held at Amsterdam, Sept. 17-22, 2006); there are also IFA-USA conferences and special meetings on a variety of bilateral and multilateral issues. In theory, you need to be sponsored by an IFA member to join the organization and attend a conference, but this will presumably not be difficult as the organization claims to have about 10,000 members.

Although they are not strictly speaking tax conferences, I have found a number of venues interesting for discussing taxation and fiscal policy issues. One is the International Atlantic Economic Society (IAES), which is a meeting of European and American economics professors and usually has one or two tax panels as well as many others that bear indirectly on tax issues. Like many such organizations IAES tends to alternate between European and American sites which gives you a chance to try it out before investing in a transatlantic ticket. The IAES tends to draw a fairly elite crowd, and the panels are usually of pretty high quality. The next IAES conference is in Philadelphia, October 5-8 2006; the website is www.iaes.org.

One interesting if quirky choice is the Society for the Advancement of Socio-Economics (SASE) which similarly alternates European and American locations on someting like a 2:1 ratio. SASE is a vaguely left-leaning organization which emphasizes the human/bevioral side of economics (no one has ever been able to explain to me what "socio-economics" is); in practice it amounts to an economics/sociology conference with an emphasis on issues of concern to the survival of the welfare state. While the tax people are likely to be few and far between, it can thus be a useful opportunity to "situate" your work in the broader issues regarding globalization and anti-globalization backlash. If you start early enough, SASE lets you put together a panel on just about anything, so if you wanted to meet your friends from Copenhagen and discuss the effects of tax cuts on health care, here's your chance. The upcoming SASE conference is in Trier, Germany, June 30-July 2, 2006, and has an emphasis on globalization-related issues; details at www.sase.org

To these frequently Europe-centered events are gradually being added more events in other regions, including the Asian Law and Economics Society, http://aslea.org, which is holding a December conference in India this year, and a number of interesting events, many of them relating to comparative tax, at Australian universities, of which I will speak further in a later post.

I noted above that foreign (and especially European) tax law professors are frequently more focused on technical issues than their American counterparts, with more policy-oriented work often done either on economics faculties or at business or public policy schools. The good news is that many more prominent tax professors may have cross-appointments in economics departments, and there are frequently collaborative projects between them. The SSRN tax, comparative law, and European law lists also frequently list tax projects: if one is willing to be a bit aggressive, one can often contact the authors directly, and (in small countries particularly) it usually does not take more than a few well-placed e-mails to figure out who is a player in the country in question. Not that different from here, when you get down to it, is it?

bush, the conservatives, and the 2008 election

Although I'm a Republican, I try to stay away from politics in this blog, because I'm not an expert and probably won't convince anybody, anyway. Certainly I can't defend President Bush from all of his many enemies, who blame him for everything from the war in Iraq to the weather on the Gulf Coast (OK, the response to the weather, but you get the idea). But one recent criticism bears a more considered response.

The critique is basically this: not only is Bush bad for liberals, but he has even ceased to be a real conservative, and has indeed abandoned the conservative cause in a way that justifies his rejection by both parties. The critique has a certain chutzpadik (nervy) quality to it--it's rather impressive to be bad for liberals and conservatives at the same time--but it has made the rounds of books and talk shows and appears to be catching on among a certain (mostly liberal) kind of audience.

As I understand it, the critique is based mostly on three areas: (i) taxes and spending, (ii) immigration, and (iii) defense and foreign policy, with a little bit of social and cultural policy thrown in for good measure. Let's consider these in reverse order:

Defense and foreign policy.--Bush is accused of substituting neo- for old time-conservatism because of the war in Iraq and supposed "giveaways" like the ports deal and assistance to India's nuclear program. But the opposition to the ports deal was pure jingoism, and the alliance with India is both vital and inevitable given the deterioration of relations with Russia and perhaps China, as well. In any case what moral basis is there to say that India, a peaceful nation with over one billion people, cannot have nuclear weapons while France (or Israel) can? As for Iraq, I have no more to say except this: would we really be better off with both a Saddam-headed Iraq and an Ayatollah-headed Iran on the road to nuclear weapons, and together controlling nearly half the world's oil supply? It is not Bush's philosophy but the facts that changed in each of these cases.

Immigration.--Bush, it is suggested, is not a real conservative because he proposes amnesty for "illegal" aliens and doesn't spend millions on an electrified fence along the Mexican border. This seems to me the weakest accusation against him. Anti-immigrant sentiment is both morally distasteful and a sure political loser; just ask anyone in California. Pete Wilson's anti-immigrant stance ruined the Republican Party there for almost a generation.

Taxes and spending.--Bush is accused of abandoning conservative principles by running a deficit and increasing spending on Medicare and similar programs. This is the most serious accusation, and there is a real disagreement between different branches of conservatism on these issues (see below). But the issue is not that simple. The deficits result primarily from tax cuts which, like it or not, have been conservative gospel for thirty-plus years now. Medicare is admittedly way too expensive, but that results mostly from medical (especially pharmaceutical) advances, and paying these costs is consistent with a philosophy of compensating people for problems they cannot reasonably be expected to have avoided, on their own. There is also a certain, well, hypocrisy in liberal critics raising these issues. Does anyone really think that the Democrats would spend less on these programs, or reduce the size of Government in general?

Perhaps the real argument here is not whether Bush is a conservative, but what kind of conservative he is. Today's Republican Party is an uneasy marriage between the old GOP of small government/isolationism and the Southern or Tory Democrats who tend to be interventionist in foreign policy, conservative on social issues, and willing to use government to reward those kinds of behavior (entrepreneurship, religion, etc.) that they consider to be positive and punish those they consider destructrive. In this tug of war Bush leans about 2/3 of the way toward the second alternative. This may not please some northern Republicans (including myself), but it roughly reflects the balance within the party, and it is doubtful any other Republican president would do things a whole lot differently.

Whether all this matters much is a different question. If one plots the Presidential elections beginning in 1940 and 1980 respectively, and switches the two parties around, one notices an almost astonishing symmetry in the outcomes. Not only is the pattern of results identical so far (AAABBAA, with A the majority party in each era), but even the margins of victory are similar, together with other coincidences that are almost too spooky to talk about. To wit:

1940/1980 Majority party hero (Roosevelt/Reagan) wins decisively
1944/1984 Same as previous election
1948/1988 Majority party candidate who started as hero's VP (Truman/Bush I) wins come from behind victory
1952/1992 Minority party candidate (Eisenhower/Clinton) gets solid but not crushing win
1956/1996 Same as previous election
1960/2000 Majority party candidate, scion of a dynastic family (Kennedy/Bush II) reclaims the Presidency in a widely disputed election
1964/2004 Majority party candidate re-elected; returns to ranch in Texas and watches his popularity evaporate over an unpopular war

If this pattern holds up--we are now at the equivalent of 1966--the Democrats should win something like four of the next five elections regardless of what the Republicans do. This assumes that the newer pattern, under which all Presidential candidates must be named either Bush or Clinton, does not supersede it and turn our entire system, a la ancient Rome, from a democracy into an alternation of two or three powerful families. There is apparently someone in Italy who has written a book to this effect, finding American equivalents to Julius and Augustus Caesar and everyone else in the transition from Republic to Empire (I haven't read the book, although I'm guessing Bush wasn't Augustus Caesar, maybe I'm wrong here). As the prospectus would say, past performance is no guarantee of future results. But it sure is fun to talk about.

taxes, labor, property rights: notes on the anti-globalization backlash

The leader of Italy's left-leaning opposition, Romano Prodi, has proposed a tax increase on financial income as part of the run-up to the country's April 9 elections. According to Prodi's proposal, all financial income, including interest, dividend, and apparently capital gain would be taxed at a flat 20 percent rate, the additional revenues being used to address deficits in the country's existing welfare and retirement systems. Financial income is generally taxed at a 12.5 percent rate in Italy, although a 27.5 rate applies in some cases and much income is reported to escape tax altogether, either by transfer of assets to nearby Switzerland or by other methods. (The personal income tax is progressive, with a maximum 43 percent rate, in theory reverting to 39 percent after a "temporary" surcharge on high incomes has expired.)

Proposals of this sort are not unusual in Italian elections, but they come at a time of increasing agitation against tax reductions, free market labor reforms, and other supposedly "inevitable" consequences of globalization in various countries. An especially dramatic clash took place recently in France, where police were called in to evict students at the University of Paris who were protesting proposed changes to the contract of first employment (CPE), which would, among other things, have allowed employees below the age of 26 to be dismissed without cause. This would seem unobjectionable in an American context, except perhaps for extremely young tenured professors, but in France it provided violence--less, one suspects, for the issue itself than for its significance in the general trend toward reduced protectionism and American-style labor markets, in France and other countries.

An even more interesting, if less noticed, event took place in China last week. As reported in The New York Times, proposed legislation, which would have established a new regime of protection for property rights, was shelved indefinitely under pressure from what The Times described as "old-style leftist thinkers" concerned about the rising economic inequality that has accompanied China's rapid growth. An especially important role appears to have been played by a Beijing law professor, who circulated a critique of the proposal accusing it of a slavish copoying of western civil law and said that it offered equal protection to "a rich man's car and a begging man's stick." Particularly objectionable was the proposal's omission of the historic formula that socialist property is inviolable, which was seen as a particularly stark rejection of traditional marxist ideals.

Of the events above, only one (Italy) involves taxes, and it is not clear that the Italian proposal will be enacted or that the resistance to proposed changes in France and China will succeed in the long term . (Both France and China have rather steeply progressive income taxes, although at least in France there has been serious talk of reform.) But the combination of events suggest that there is still an awful lot of resistance to the kind of capitalist, free market-oriented reforms once thought to be an unavoidable part of globalization and international markets. The involvement of students and academics in two of the three countries--Prodi himself is a university professor but his proposal seems political rather than academic in origin--is particularly interesting here, as is the renewed concerned for vertical equity in each case. For better or worse, convergence remains a long and bumpy road, and history is far from ending.

why aren't italian americans a disadvantaged group?

This weekend's season premiere of The Sopranos has attracted a great deal of media hype, but one group won't be enjoying it quite as much as the others. A number of Italian-American organizations have for years been waging a lonely campaign against the show for presenting a stereotypical and derogatory image of the group, which it by and large does, although that does not necessarily keep many Italians from watching it. One activist group even sued HBO, the show's producer, in Illinois for defamation although the suit was eventually dismissed.

Beyond the libel issue, The Sopranos controversy raises an interesting question: why haven't Italian-Americans ever quite succeeded (if that's the right word) in begin considered a legally or politically disadvantaged group, on the model of, say, African- , Hispanic- , or Asian-Americans and (at times) the Jewish or Islamic communities? There is a rather well-documented history of prejudice against Italians and other Catholic ethnic groups, the Irish being one obvious example, including a particularly infamous lynching in New Orleans early in the last century, and the group is pretty clearly underrepresented in the upper levels of higher education (although of course not on the Supreme Court). But Italian-Americans have never really qualified for much in the way of legal protection: I am aware of isolated instances, such as the inclusion of Italians on the list of disadvantaged groups at the City University of New York and a Yale Law Journal note suggesting the possibility of actions for group libel on their behalf, but no generic recognition of protected status on the model of comparable groups. Indeed members of the group, notably Justice Scalia, have been among the fiercest critics of affirmative action and similar programs.

Why does this situation persist, and what if anything does it tell us about the logic of protected status and its benefits and costs? Driving home from a conference on the image of Italian-Americans, held at a local university, I tried to list the possible reasons for the differential treatment. Here's what I came up with:

1. Italian-Americans are not as disadvantaged as African- , Hispanic-, or Asian-Americans, or as Jews or Muslims were (are) in Europe and in some cases here.

2. The discrimination against Italian-Americans, such as it is, is informal rather than formal in nature, and never had legal sanction in the manner of the Jim Crow laws or European antisemitic legislation; the lack of legal discrimination vitiates the need for a legal response.

3. The most common complaint by Italian-Americans has to do not with discrimination but with negative portrayal by the media, which cannot really be addressed without unacceptable free speech limitations. These stereotypes are in any event not entirely negative, as witness the popularity of Sopranos or Godfather logos among Italians themselves.

4. Italian-Americans prefer to think of themselves as members of the dominant culture and don't really want legal protection in the first place, as witness statements by Scalia and others mentioned above.

5. The divisions within the Italian-American community, including differences based upon geographic origin, date of arrival, and ethnic vs. cultural definitions of "Italian-ness," weaken the lobby for preferential treatment and sometimes make it difficult even to identify the group or its members.

6. Italian-Americans simply came along before it was fashionable to think of minority status as a positive benefit; by the time this changed, it was too late for them to benefit (see # 4 above).

Arguments 1, 2, and 3 are especially appealing because they purport to justify rather than merely explain the differences in treatment between (e.g.) Italian- and Hispanic- or Asian-Americans (African-Americans are such a unique case that it may be best to leave them aside for the moment). The problem is that none of these arguments is entirely convincing. Argument 1 (less discrimination) is I think unconvincing on the facts: although I have not conducted a systematic survey, I am willing to bet that there are proportionately fewer Italian-American than African- or Asian-American law professors, certainly if the historically Catholic universities are excluded from the count. Argument 2 (no legal discriminaton) is I think historically dubious, since there were established practices of excluding Irish, Italians, and others from various forms of occupation, and logically unpersuasive, since most discrimination against Asians and Hispanics has been social or economic rather than legal in nature and no one says that they should'nt qualify. The weakness of this argument is especially pronounced if diversity rather than compensation for past discriminaton is the policy goal. Argument 3 (negative stereotypes and free speech) is in a sense irrelevant, since the underrepresentation of the group could be addressed without free speech limitations, but I think also circular in nature, since it avoids the question of why negative images of Italians are plainly more acceptable than (say) equivalent images of Jews, Blacks, or other minorities. (I am not bothering to respond to the "Italians like Mafia movies" point since I don't think it is really a serious argument and the same could be said about Jews liking The Apprenticeship of Duddy Kravitz, or whatever; it just doesn't affect the persuasiveness of the case.)

That leaves #4, 5 and 6 which explain without really justifying the differences in treatment. #4 and # 6 (timing and politics) are pretty much self-explanatory although I think there is a variety of views among Italian-Americans that these simple syllogisms don't capture (Scalia and Alito are respected, but the major Italian-American groupings are politically neutral and have always sought good relationships with other minority organizations). #5 (the effect of divisions among Italian organizations) is particularly intriguing. At a recent conference on the image of Italian-Americans I was stunned by the number of different organizations handing out items in the entrance hall, from NIAF which is rather high-tone and Washington-based to organizations with regional or cultural bases many of them only marginally attuned to national issues. Because of the enormous crises that faced Jews, Blacks, and other groups they were forced to create at least some form of umbrella organizatons that spoke for the group on certain issues (the Holocaust experience was a vital if tragic lesson for Jews on this score). Italian-Americans, being more regionally divided and never having faced quite the level of immediate crisis (or not since 1945, anyway) have never really quite succeeded in unifying in this manner. For example the Sopranos protests, the efforts to secure affirmative action treatment, and similar issues have tended to be handled by ad hoc or local coalitions: there is no real sense that Italians generally speaking would boycott HBO or DreamWorks for producing works with anti-Italian themes, or that legislatures would sanction such organizations in the way they might for anti-Jewish or anti-Black prejudice.

I am obviously at an early stage of my thinking on this issue. A fuller analysis would involve much more research on the history of the Italian-American community and the public choice literature with respect to organizations and pressure groups. But the idea is intriguing: that protected or minority status may have as much to do with timing, marketing, and different political strategies as with any genuinely systematic evaluation of the social and historical situation of the group at issue. The diversity movement, which was part of a broader assault on indeterminate norms and "illegitimate hierachy" in education and elsewhere, may thus turn out to be both indeterminate and arguably illegitimate on its own terms. On the other hand, more people may be tempted to join it.

tax policy and globalization: the choice facing small (or not-so-small) countries

So far, I have written about the tax choices facing some pretty big countries (India and China) and one pretty big region (Eastern Europe) in a globalized economy. But small countries face no less daunting challenges, especially if they want to remain competitive without sacrificing whatever is, or they think is, distinctive about their own societies. Small countries also frequently serve as a sort of laboratory for tax experiments, which if successful may be and often are followed by their larger neighbors.

Broadly speaking, small countries can choose between two fiscal strategies for competing on the world stage, which mimic the choices faced by states in our own federal system. The first, which I will call the Irish strategy, is to keep taxes deliberately low in an effort to attract (some might say to steal) businesses from potential competitors. (This was also known as the Mississippi strategy in an American context, although the comparison is probably unfair to both parties.) Ireland is often cited as a successful example of this strategy, because its low tax rates clearly contributed to its astonishing economic growth over the last couple of decades, to the point where its per capita is actually higher than its British neighbor-- something that hasn't happen in at least four centuries. The Irish case is actually a bit odd, since the tax-cutting strategy applied primarily to corporate rather than individual taxes, and the advantages of EU membership were arguably at least as important as its tax policy choices; but the example remains an intriguing one.

An alternate strategy is to keep taxes relatively high but also provide a high enough level of services, job training, and infrastructure so that (or so one hopes) one will attract a satisfactory level of investment, especially in higher-tech areas, without undermining equality and welfare in the home country. To follow our analogy, we'll call this the Scandinavian or Danish model in an international context and the Massachussetts model in the U.S, although once again it's an uneasy comparison. This strategy has been rather successful in some cases, although often in countries or regions that had substantial competitive advantages in the first place. Thus, Denmark continues to maintain marginal tax rates on individuals approaching 60 percent, but boasts an enviable standard of living, although (like other Scandianavian countries) it has not been above business tax breaks where necessary to attract investment. Like Ireland, Denmark has many unique factors, including a highly innovative workforce and (at least until its cartoonists got busy) a long history of peace and stability, so it is not clear how good an example it really is; but it surely does demonstrate that high tax rates and a good standard of living are not necessarily irreconcilable.

To see the conflict between these models in action, it is useful to consider a small country but one that thinks big: Israel, which between wars and politics has still found the time to overhaul its tax system pretty regularly in the last few years. Until the last few years Israel had an essentially socialist philosophy complete with marginal tax rates in the 60-plus percent range, at least when income together with health and social welfare charges were included. Under a Likud Government and influenced by the legions of Israelis who study at top-drawer American universities, the country then began an ambitious round of tax-cutting, reducing the top rate to its current 49 percent while enacting various base-broadening measures relating primarily to capital gains and overseas income. These changes can probably be described as somewhere between an Irish and a Danish philosophy, although perhaps closer to the former: the emphasis is on rate reduction although, depending upon whom you believe, the various anti-loophole measures arguably made the system more progressive than it was previously. The conservative direction of Israeli fiscal policy is exemplified more dramatically by the cuts in family allowances (kitzva'ot) which had a pretty clearly regressive impact, as has been noted in various recent reports by nongovernmental bodies.

Where does Israel go now? The upcoming elections remain largely fixated on security issues, and the new Kadimah party, which leads in all polls, has had little to say on fiscal matters. The Labor Party, under new leader Amir Peretz, has limited itself to calling for a freeze on the implementation of previously enacted tax cuts, while the newly shrunken Likud--whose leader, Binyamin Netanyahu, implemented the previous changes as Finance Minister--could be expected to support further moves in the direction of a low-tax, American-style economy. Perhaps the real lesson here is that tax policy continues to be driven by local factors--security, ethnic differences, plain old politics--that vary enormously from country to country, and that the various "models" are important for framing the debate but do not ultimately determine real-world policy choices. It is a global world, but still very much a local one, and convergence remains a slow and agonizingly uncertain process.

antisemitism and islamophobia: are there common threads?

As I mention somewhere in my personal description, I am currently writing a book about the Italian Race Laws (1938-45), which were a sort of Italian version of the Nuremberg Laws and were enforced more severely than people realize, even before the German occupation of Italy and the subsequent deportations which killed 7,000-8,000 Italian Jews. If you've seen "The Garden of the Finzi-Continis," you have some idea what happened here, although not always an accurate one ("E' tutto falso," said one person I asked in Ferrara, "it's all made up.")

One thing that happens when you write a book like this is that you realize how much the various forms of discrimination--antisemitism, apartheid, the Jim Crow laws--have with each other, although also the differences between them. Almost all racial statutes share a common "core" of provisions against mixed marriages and other physical contacts (in school, at hotels or resorts, etc.) that might lead to miscegenation, which tend to be enforced with the greatest enthusiasm, sometimes including death for violators (especially violators from the disadvantaged group). The laws vary somewhat more in the "periphery" of rules that pertain to business, professions, and other less personal activities. They also vary rather considerably in their definitions: for example if the American "one drop" rule had been applied in Germany, a huge proportion of the population including many Nazi leaders would probably have been considered Jewish, while the German rule of "one Jewish grandparent" might, by analogy, have left some African-American leaders considered white. One additional common feature pertains to enforcement: unless they are terminated altogether, race laws tend to become harsher rather than more lenient with the passage of time, as the bureaucracy seeks new applications and the inevitable degradation of the disadvantaged group becomes a rationale for further discrimination.

Given these various parallels, one would think there would be a lot of comparative work done in this area, and yet (at least where law professors are concerned), there doesn't seem to be a whole lot. (There is a very sophisticated sociological literature on the nature of prejudice, but it tends to be rather abstract.) I think this relates partly to the usual reasons for the lack of comparative work--too hard, too demanding, too many different sources--but also to a sort of competitive victimization at work in the area. Put simply, nobody wants to believe anyone else has suffered as much as they have, the very thing comparative work might suggest. When I talk to Jews or Blacks about my work, I find that the conversation turns quickly to the fact that the other group doesn't understand how much we have suffered, which sort of makes my point.

One area I have become especially fascinated with lately is the parallel between antisemitism, in the 1930s and today, and Islamophobia or anti-Islamic prejudice. While there are obviously many differences here, the two groups are accused of some remarkably similar things:

1. They have large families that are made easier for them because they don't respect the rights of women (said historically of traditional or Orthodox Jews; said of Muslims today).

2. They pray to a God who emphasizes justice or vengeance as opposed to the Christian God of mercy and love.

3. They are hypocrites, because they want to see their rights as a minority protected, but are cruel and intolerant to minorities in their own countries (Arabs in Israel, Jews, Christians, or secular Muslims in the Islamic nations).

4. When push comes to shove, they are ultimately loyal either to a foreign movement (Zionism, international Jewry, global Islamic radicalism) rather than to their home country.

5. They cannot be analogized to other minorities, because a combination of items 1-4 above makes them for all intents and purposes unassimilable.

Of course, there are also many differences between the two situations, among the obvious ones being different sizes (there are a lot more Muslims than Jews), different levels of assimilation and economic achievement (Jews tend to be better integrated although the difference can be exaggerated at times), and most of all different historical circumstances (antisemitism held a central place in Western culture while the contact with Islam has been more intermittent). These in turn result in a rather different set of legal challenges, Jews having historically faced laws designed to restrict their allegedly "disproportionate" success while Muslims, at least in a European context, have faced a generalized indifference coupled with rising efforts to compel their conformity to wider cultural norms (e.g., the French law against headscarves in school). Yet the similarities remain striking, even beyond those that would apply to race, gender, or alternate kinds of prejudice.

One problem for an academic--and one reason for the relative dearth of comparative work--is exactly what to do with an observation of this sort. Merely pointing out the similarities tends toward the banal and may result in the not especially exciting conclusion that (i) there are a lot of prejudices that have lots of things in common, and (ii) it would be better if there were fewer of them. (My publisher calls these comparisons "ahistorical" which I think is a polite way of saying "wrong.") For now, I am thinking of a more focused study that looks at the progress of these twin prejudices in one country or one period of time, and also at the effect of various different legal norms (free speech vs. protection from group insult, affirmative action vs. individual rights, etc.) on the ultimate outcome. I would appreciate hearing from anyone who has considered these issues, or knows somebody else who has.

gerald solomon, lawrence summers, and the right to unpopular (and probably mistaken) opinions

The Supreme Court's upholding of the Solomon Amendment strikes me as the right conclusion, both as a matter of law and policy, although it leaves me with a rather empty feeling. I think it's right on the law, because the law schools wanted to have their principles (so to speak) and eat them too, and on the policy, because it seems bizarre to keep the military off campus during wartime so as to protest a policy that everyone knew the law schools disapproved of, anyway. The hypocrisy of the AALS, which argued for free speech but then tried to muscle law schools into following its own preferred position, made its stance especially weak.

The problem is that the policy that the military is seeking to protect--the so-called "don't ask, don't tell" or residual discrimination against homosexuals--makes little sense and is reportedly being ignored by officers in the field, anyway. Nor does any vital conservative principle seem to be at stake in the policy: it is perfectly logical to disapprove (or approve) of homosexuality without wanting to it to be used as a grounds for exclusion from activities it is not relevant to. That many other countries, notably Israel, have avowed homosexuals in their armed forces makes the argument that much weaker.

In short I see the decision in much the way that I saw the resignation of Lawrence Summers as Harvard President following his remarks about women and math/science ability. I think Summers had a right to his opinions, and I am sorry that (unlike the Solomon case) the forces of political correctness have at least temporarily silenced him. But I think his suggestion that women are inherently less capable of quantitative thought is highly improbable, there being numerous alternate explanations for the dearth of women scientists and mathematicians that society has hardly begun to explore. (My wife was taught quantitative analysis, at the same university Summers headed, by an instructor who used exclusively sports analogies: is there a necessary correlation between mathematical ability and an interest in baseball?) Moreover, as universities pretty much run on the natural sciences, the acceptance of Summer's views would consign them to a more or less indefinite second class status. Perhaps the saddest thing about Summer's resignation is that these issues may never be joined: everyone will continue to go about with his or her preconceived prejudices on the issue, and nothing very much will change.

Eastern Europe: riding the flat tax bandwagon?

Does progressive taxation have a future or is it caught in terminal decline? I have written about this topic a couple of times, most recently emphasizing the "I" countries (Italy, Israel, India) (the title of this blog is derived indirectly from that article). But events have a way of overtaking academics, and right now the biggest assault on progressivity is taking place not in Milan or Mumbai but somewhere between Munich and Moscow, in the swath of land we used to call satellite countries and Donald Rumsfeld referred to famously as "the new Europe."

In the last few years one Eastern European country after another has adopted some form or other of the flat tax, often with much political fanfare. According to the Christian Science Monitor, as of last year no fewer than nine countries in the region had adopted a flat tax (Georgia, Estonia, Latvia, Lithuania, Russia, Romania, Serbia, Slovakia, and Ukraine), six of them at rates lower than 20 percent and only one (Lithuania) at 30 percent or higher. Nor have the potential implications of these adoptions been lost on flat tax supporters or opponents: the CSM article contrasted the excitement of the young technocrats, many American-trained, who had helped enact the new flat taxes with the frustration of West European bureaucrats who saw them stealing jobs and undermining efforts at European tax harmonization.

The spread of the flat tax in Eastern Europe is especially interesting given what might be called the flattening out of tax rate schedules, still nominally progressive, in other European and non-European countries. For example, the Italian income tax now has only three rates (23, 33, and 39 percent) and the German two (15 and 42 percent) although there is an additional "temporary" contribution that forces the maximum Italian rate up to 43 percent. A similar process of flattening out may be observed in the United States since the 1986 Tax Reform Act, although that act also reduced a number of popular tax breaks and was thus at least theoretically neutral between income classes, as were several foreign tax reform processes. (Progressivity is always a combination of tax rates and tax base, although without some measure of progressivity in the tax rates it is obviously more difficult to achieve an overall redistributive result.)

Does the East European phenomenon portend a worldwide momentum toward a flat tax? I am skeptical on this point, for a couple of different reasons. First, I am always dubious about "global" movements that are concentrated in one geographic region. There is always the possibility or indeed likelihood that the nations in the area are influenced by each other, rather than following a larger ideological trend.

Second, the Eastern European countries have characteristics that are not shared by most industrialized nations. The communist heritage has made them uniquely suspicious of redistributive measures, and--lacking a tradition of private trust or voluntary cooperation with the central government--they may be happy to receive such tax revenues as they can, especially from newly developed economic sectors. As the CSM article noted, every flat tax country except Hong Kong is a former Communist nation, and that only a partial exception.

Third, as noted above, the "flat" tax systems tend to have substantial zero bracket amounts which render them at least partially progressive, and have often been accompanied by efforts to widen the tax base which (depending upon enforcement mechanisms) may actually result in an improved level of real tax fairness.

All of that said, political trends tend to take on a momentum of their own, and whether something ought to happen is often a different question from whether it does. In this respect it will be interesting to watch events unfold in the next few months. Greece, which is georgraphically in Eastern Europe but economically and culturally tied closely to the West, is a particularly interesting case to follow. If it were to adopt a flat tax, as has often been discussed, it might lead to greater political momentum in the larger European countries. Angela Merkel, the new and increasingly assertive German leader, has also toyed with a flat tax although Germany's budget problems complicate matters considerably. We will know that the flat tax has made it when it reaches (say) Denmark, where marginal rates remain around 60 percent: but that is a story for another column.

why are law professors so edgy?

A friend of mine has come up with a novel explanation as to why law professors, who would seem to have a pretty privileged life, are so persistently uneasy. According to my friend, the totality of human activities can be located along three axes, which for simplicity's sake may be labeled competitive vs. noncompetitive, personal vs. group endeavors, and objective vs. subjective modes of evaluation. Professional golf, for example, would be highly competitive and individualistic, but would have a relatively objective mode of evaluation, while professional football would share its competitive and (for the most part) objective characteristics, but lean toward the group rather than individual side of the equation. High school teaching, or parenting, would be tend to have more subjective standards but would also (for most people) be somewhat less competitive, and fall somewhere in the middle on the individual vs. group activity axis. As a general rule, the more competitive activities would be expected, over time, to develop more objective standards for success and failure, especially for individualistic endeavors in which any unfavorable results could not be blamed on the shortcomings of a larger group.

What distinguishes academics is not any one of these factors, but the combination of them. For the professorate, according to my friend, is one of the few activities that is (a) very competitive, (b) primarily personal (that is, noncooperative) in nature, and (c) almost entirely devoid of objective standards that might be used to measure success or failure in the activity. Competitive, both because of the kind of people who go into it and the endless run of tenure, promotions, offers at supposedly better institutions or publications, and so forth. Individual, because our teaching and scholarship is with very limited exceptions done alone. But almost entirely subjective, because beyond the sheer volume of articles or citations, no one has ever come close to a rigorous system for evaluating academic performance or even what such a system would try to measure. The situation is, one suspects, even worse for law teaching than (say) physics or sociology, where there is at least some accepted body of materials one is expected to have read and a more or less established system of peer review for books, articles, and other publications. In law, anything goes.

Like Einstein's theory of relativity, my friend's insight is deceptively simple but has enormous explanatory power. I have often marvelled at how a group of people with nearly 100 percent job security, writing articles that have no discernible impact on the world outside academia, both work so hard and are so obsessively worried about their standing in the pecking order. The answer is provided by the theory: they behave in this manner because they are doomed to compete, without anyone else to share the responsbility, in an activity in which they can never know whether they have succeeded or even what succeeding might mean. Like musicians singing to an empty hall, or athletes playing in an abandoned stadium, they have only themselves and a few ephemeral signposts--a good law review cover, a visit at a nominally "prestige" law school, what have you--to signal that they are advancing in their quest. It is a bitter fate indeed, although presumably someone has to do it.

As it happens, my friend writes a lot about organizational structures, and had she stayed longer the conversation would not doubt have turned to corrective measures. Tenure, for example, which would no longer be seen as a form of protectionism for incompetent academics, but a necessary countermeasure to prevent the suffering from becoming still more pronounced. Numerical rankings, which do little to relieve the anxiety or loneliness of teaching, but at least purport to restore a measure of objectivity, assuming (a pretty big assumption) one can agree what the criteria should be. (I was used as a ranker by one prominent survey, which should give you some idea of its accuracy.) And, of course, higher salaries, the market's inevitable response to the difficulty of attracting people to this odd combination of high anxiety and limited, or at least impossible to measure, impact. Wait, I feel an article coming on . . .