Category Archives: Madoff

Machers — The Jewish Oligarchy

The Madoff story has put the Jewish community in the news in the most prominent possible way. But not in ways that its members would have wanted. It seems that some, many, of the most prominent Jewish machers — movers and shakers — have left the community vulnerable at the hands of a stupendous Ponzi scheme. The man accused of guilt in the Ponzi scheme is Bernard Madoff. One of the men accused of facilitating the scheme — without being criminally responsible himself — is J. Ezra Merkin. Both have been known as big machers among the Jews of the land. (A front-page article by Diana Henriques in the New York Times of December 20 tells the story in great detail.)

[Here is a personal aside. I have had a bit of a mole-view of the Merkin family since my mother had been a baby nurse (domestic servant) in the Merkin and allied families some fifty years ago.]

Who are these machers, these movers and shakers, and what is their role ?

In a word, the machers constitute the oligarchy that has by and large run the Jewish community. The idea that nominally democratic institutions are actually run by oligarchies was most forcefully argued by the 19th century German-Italian thinker Robert Michels, especially in a classic description translated in English under the title Political Parties.

Michels speaks of an “iron law of oligarchy,” a view that has led later social scientists, notably Seymour Martin Lipset, to refine the concept and specifyy limits to the phenomenon. And indeed, macherdom was defeated in those institutions that, throughout, maintained a high degree of self-criticism and due diligence. The UJA-Federation of New York, with some others, stands out as a bastion of good sense.

Wikipedia describes the oligarchy concept as traditionally formulated:

Oligarchy (Greek Ὀλιγαρχία, Oligarkhía) is a form of government where political power effectively rests with a small elite segment of society distinguished by royalty, wealth, family, military powers or occult spiritual hegemony. The word oligarchy is from the Greek words for “few” (ὀλίγος olígos) and “rule” (ἀρχή arkhē). Such states are often controlled by politically powerful families whose children were heavily conditioned and mentored to be heirs of the power of the oligarchy. This type of power by its very nature may not be exercised openly; the oligarchs preferring to remain “the power behind the throne“, exerting control through economic means. Oligarchies have been tyrannical throughout history, being completely reliant on public servitude to exist. Although Aristotle pioneered the use of the term as a synonym for rule by the rich, for which the exact term is plutocracy, oligarchy is not always a rule by wealth, as oligarchs can simply be a privileged group.

President Joel (Yeshiva University) presents an honorary degree to Trustee J. Ezra Merkin as Ludwig Bravmann, vice chairman, Board of Trustees, looks on. November 26, 2003

J. Ezra Merkin & friends, charity function, June 16, 2008

Mr. Bernard Madoff

In the American Jewish community, as far as I can tell, the machers play a diffuse, inconsistent, but often dominating role.

I cannot offer a tightly delineated definition. Take the level of synagogue leadership. The concept of macher overlaps, but is not identical, with elected officer and board member. Not every macher has a formal role; not every formal leader is a macher. But as I have observed it in at least some synagogues, you cannot hold an elected post without the behind-the-scenes nod from a consensus of the machers. A macher tends to be rich, well-connected, and very influential. Influence, of course, is the stock in trade of macherdom.

Macher-led synagogues and other organziations have formal elections, but these elections are essentially sham because there is no more than one candidate per post. (I have heard of a venerable Orthodox synagogue in Manhattan, however, in which there is a lively democratic tradition with real, i.e. contested, elections.)

Literally tranlated, a macher is one who does things, who makes things happen. The membership of macher-run groups often could not imagine how things could happen without these machers. The machers tend to be thought of as despots, perhaps, but benevolent despots. The groups keep running, at least that seems to be the impression, largely because of the work and ceaseless energy of the machers.

Machers are thought to be very wise. During the planning for a synagogue renovation, it was the judgement and wisdom of the machers that prevailed, even though expert-backed contrary views were offered. Disagreement with machers — especially on problems where expert advice might suggest that the machers are actually beyond their depth — is scorned. As I see it, this is one of the greatest dangers to Jewish public life: an unwarranted faith in the wisdom and benevolence of the machers. Macherdom tends to prevent the one activity that saved some individuals and institutions in the current Madoff affair, due diligence.

How do you become a macher ? What are the qualifications ? These questions await careful treatment by scholars. But there are two institutions that seem to foster and develop macherdom. One is the honorary degree bestowed by prestigious institutions, the other — more important because much more pervasive — is the “award dinner” at which groups promote the idea that prestige can be fostered and created artificially. Awards are bestowed for apparent financial prowess, for handing over money to institutions, and for, well, being a macher.

No doubt there are many recipients of such “honors” whose merit can be objectively verified. A scientist or scholar who has made verifiable contributions to his field, or an artist or writer whose work can be independently assessed, may well have at least some of the merit that is attributed to him. But as for the merit of all those other honorees and awardees at award dinners and award dinner-dances, well, that merit partakes more than a little of the great investment returns offered by Mr. Bernard Madoff. It is widely talked about, very widely praised and admired, but it is not verifiable. It does not withstand due diligence.

It is often said that a synagogue, say, relies on such award dinner-dances to raise the funds that it needs. There are three problems with this proposition. 1) It has not been empirically tested — nobody has tried alternate, more ethical methods. 2) Whatever the financial value of such activity, there is a terrible moral price that is paid, viz. claiming merit where no such merit can truthfully be claimed. 3) At least in the current environment, it has been shown that there was no financial gain to the institutions in this counterfeit traffic in honor.

Finally, I wish to offer two thoughts on how to strengthen Jewish communal activity:

1) Due diligence. When the combined wisdom of the machers in your congregation, say, urges a path of action, resist. Ask for outside expert advice. Independent expert advice is the antithesis of macherdom. Insist on it. Be a trouble maker. You won’t earn an award at a dinner dance, but that, as I see it, is an added benefit.

2) Do not in any way approve of or participate in the bestowal of honorary degrees. Ever. Those who have the merit to deserve such degrees probably have earned, real degrees.

3) Do not, ever, attend an award dinner-dance. Do not praise the big machers in display ads. Do not be part of the macher claque. Ever.