Sam Fuller called Dances With Wolves "homage" because it took on a similar approach to his film, Run of the Arrow. Homage was a good word because parts of Costner's film took after things unique about Fuller's film, but both films were pretty different. Shutter Island borrows from Cabinet of Dr. Caligari as a basis of logic all the way through. It's more than paying homage because it's trying to correlate a pattern of logic how the psychosis is built up and finally revealed. You don't just borrow from that logic and skip out in the end with a piece of dialogue and call that a clear break from the original. If Shutter Island was only taking elements of the logic of Cabinet of Dr. Caligari, I would be with you, but it's pretty thorough.
I can't agree with you here. Not by a second. Both films are about insanity, about mentally disturbed characters, and that's why I see Scorsese looking at Caligari to pick some ideas, on how to approach the themes and the visuals. Whatever you think about Teddy in the end, he's always insane. That he already was from the beginning, that's a different story. If P.T. Anderson shows Network to his production crew before filming Magnolia, or Giant before filming There Will Be Blood, it doesn't mean he's going to make those exact same movies. It means those are good examples on how to successfully approach similar themes. That's point number one.
Point number two, let me tell you, after thinking about it for a while, I think I have more reason to believe Teddy Daniels suffered from a conspiracy than you have to believe he was insane all along. It isn't, and never was, about a line of dialogue. The movie opens with a federal marshall on a mission to find a missing patient. It hopens on a boat trip, we see Teddy and his partner getting in the island. You see him taking meds given to him by Ben Kingsley's character. You see another character in a cave telling him it's all a conspiracy. However, other people base their assumpion that Teddy was always crazy because a doctor who lobotomizes his patients tells him so. That's it. A man who cuts people's brains on an island somewhere. And you don't understand why I find it hard to believe that he'd get into all the trouble of creating a complete make up world just to see his patient recover? And then, since he doesn't recover, he lobotomizes him? I think I have every right to believe it's a conspiracy as you have to believe it's a cure. And again, that final line of dialogue doesn't make anything clear at all. Teddy either accepts being lobotomized and to die like the good man he is, or he refuses to believe that he killed his own wife, and keeps on pretending to be a marshall, a good man, and dies as such. It doesn't give you answers, it keeps you asking questions, and that's what's great about it.
I'm not arguing my position is full proof, but it's as full proof as artistic understanding can get. It's like evaluating science. Science isn't based in fact but it's more about probabilities. Religion can have a technical theoretical basis in an argument just because science can't say it fully knows all, but that lack isn't a reason to say there is a real argument for the opposing side. For me, the only thing the opposing side has in this debate is that one piece of dialogue. It's not enough to reconsider all the purposeful structure and style points that specifically want you to assume certain things about the film as you're watching it. I could technically argue the Cabinet of Dr. Caligari isn't what it seems and is about a world gone mad instead of the man, but I wouldn't have much as far as substantive points go.
Well, I'm not sure, but I believe you wrote here many times that film criticism should be about going further than what the movie tells you. Apart from the fact that I have far more in this debate than a mere line of dialogue, as I wrote above, but now I want to comment on your analogy. What science doesn't or shouldn't do, is ignore small pieces of evidence (small as they might be) in order to keep it's theories right. If there's a small detail that can put it into debate, it should be analysed, not ignored.
And yes, you can argue that Caligari is about a world gone mad. I mean, the character's gone mad, but was he always mad, or did the world transform him? If we put the movie into context, we're talking about a picture made in post-WWI Germany (1920), in a time where germans were facing an identity crisis that ultimately lead to Hitler coming to power. The movie was written under that state of identity crisis, and the character reflects that. That screenplay might not refer to it directly, but the context shouldn't be separated from the product at all. And that brings me back to what I said before on a sidenote about Shutter Island reflecting the state of paranoia going on in the world during the time its action takes place. It may, or may not be relevant to the way you see the movie, but two different pairs of eyes rarely see the same thing.