Introvert Was Student of Schumpeter and Hayek

(p. A9) As a boy, David Rockefeller idolized his big brother Nelson, a self-assured bon vivant who didn’t let the family name stand in the way of a good time–and sometimes furtively shot rubber bands at his siblings during the morning prayer periods imposed by their austere father.
David, by contrast, was shy, insecure and often lonely, retreating into his hobby of collecting beetles and reliant on tutors for companionship.
. . .
A family friend advised him that studying economics would dispel the idea that any job he obtained was due to his family’s influence. He took graduate courses at Harvard, including an introduction to economics from Joseph Schumpeter.
He furthered his studies at the London School of Economics, where his tutor was Friedrich von Hayek, a future Nobel laureate. He won a doctorate in economics from the University of Chicago in 1940 after writing a dissertation on overcapacity in industrial plants.

For the full obituary, see:
James R. Hagerty. “Former Chase Leader Overcame Shyness as Child.” The Wall Street Journal (Sat., MARCH 25, 2017): A9.
(Note: ellipsis added.)
(Note: the online version of the obituary has the date MARCH 24, 2017, and has the title “David Rockefeller Overcame Youthful Shyness and Insecurities.”)

Political Freedom Depends on Economic Freedom–Hayek Was Right

(p. A12) The Commercial Press bookstore does not carry the banned political books. Instead, the collected speeches of China’s president, Xi Jinping, are prominently displayed, as are at least four biographies of Lee Kuan Yew, the late Singaporean leader who was widely admired by Chinese officials.
It is the same pattern in 13 other Hong Kong stores owned by the parent company of Commercial Press, Sino United Publishing, the biggest bookseller and publisher in the city. Despite the interest from mainland tourists, books that paint Chinese politicians in a bad light are either not available or tucked out of sight on shelves far from heavily trafficked areas.
. . .
According to Hong Kong corporate records and one of the company’s top executives, Sino United is owned, through a series of holding companies, by the Chinese government.
The company’s dominant position in the city’s publishing and bookselling industry is a major breach in the wall between the communist mainland and Hong Kong, a former British colony whose civil liberties — including freedom of the press — were guaranteed by treaty for half a century after it returned to Chinese sovereignty in 1997. It also illustrates how the central government in Beijing wields influence here not through force, but through its financial clout.
That influence has become even more apparent in the nearly three years since Mr. Xi became the top leader in China.

For the full story, see:
MICHAEL FORSYTHE and CRYSTAL TSE. “Hong Kong Bookstores Display Beijing’s Clout.” The New York Times (Tues., OCT. 20, 2015): A12.
(Note: ellipsis added.)
(Note: the online version of the story has the date OCT. 19, 2015,)

Institutional Improvements Can Sometimes Be Designed, Rather than Only Spontaneous

A distinguished school of libertarian and neo-Austrian economic thought argues, following F.A. Hayek, that institutional improvements only arise from spontaneous order, and never from conscious design. There is something to their argument, but the designs of Alvin Roth provide counter-examples.

(p. A13) Mr. Roth’s work has been to discover the most efficient and equitable methods of matching and implement them in the world. He writes with verve and style, describing many market malfunctions–from aboriginal tribes in Australia arranging marriages for children not yet born to judges bending every rule in the book to hire law clerks years before they have graduated from law school–and how we ought to think about them.

Mr. Roth’s approach contrasts with standard debates over free markets versus government regulation. We want markets to be thick, quick, timely and trustworthy, but without careful design markets can become thin, slow, ill-timed and dangerous for the honest. The solution to these problems is unlikely to be regulation legislated from on high. Instead what Mr. Roth practices is nuanced market design created mostly by market participants. Mr. Roth found, for example, that even though the problems in the market for gastroenterologists and law clerks looked the same (hiring started years before schooling ended), the solutions had to be subtly different because of differences in culture, history and norms.

For the full review, see:
ALEX TABARROK. “BOOKSHELF; The Designer of Markets; In some markets, price isn’t the determining factor. You can choose to go to Harvard, but Harvard has to choose to accept you first.” The Wall Street Journal (Tues., JUNE 16, 2015): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date JUNE 15, 2015, and has the title “BOOKSHELF; Matchmaker, Make Me a Market; In some markets, price isn’t the determining factor. You can choose to go to Harvard, but Harvard has to choose to accept you first.”)

The book under review is:
Roth, Alvin E. Who Gets What — and Why: The New Economics of Matchmaking and Market Design. New York: Houghton Mifflin Harcourt Publishing Co., 2015.

Lippmann Attacked FDR’s Socialist National Industrial Recovery Act

(p. A13) . . . Duke economic historian Craufurd D. Goodwin employs the writings of the once-famous newspaper columnist Walter Lippmann to describe the fervid U.S. debates that began with the 1929 stock-market crash.
. . .
Lippmann established his intellectual credentials in the 1920s, writing several well-received books. They included “Public Opinion,” which excoriated the press for sloppy coverage of government policies and actions. The book is often seen as a call for top-down rule by experts, but Mr. Goodwin argues that Lippmann had something else in mind–that he was eager for expert opinion and “reasoned study” to be widely disseminated so that self-government would be more fully informed and the citizenry less easily manipulated.
. . .
At first, Lippmann embraced the Keynesian argument that government could ameliorate downswings in business cycles through deficit spending, but he later had second thoughts about economic engineering and became more attuned to the free-market ideas of Friedrich Hayek, whom he knew and consulted.   . . .    Lippmann attacked as ill-conceived the most ambitious New Deal brainstorm, the 1933 National Industrial Recovery Act, which attempted to organize all business and industry into cartels to boost prices.

For the full review, see:
GEORGE MELLOAN. “BOOKSHELF; The Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise.” The Wall Street Journal (Tues., Oct. 14, 2014): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date Oct. 13, 2014, and has the title “BOOKSHELF; Walter Lippmann: Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise.”)

The book under review, is:
Goodwin, Craufurd D. Walter Lippmann: Public Economist. Cambridge, MA: Harvard University Press, 2014.

Nader Enlists Mises, Hayek, Friedman and Stigler in Critique of Crony Capitalism

(p. A9) Mr. Nader, the consumer crusader who ran for president to the left of Al Gore, is perhaps the last person one would expect to admire a libertarian critique of the corporate state. But in “Unstoppable” he respectfully describes the views of Ludwig Von Mises, Friedrich von Hayek, Milton Friedman, George Stigler and other free-market economists. He praises their distrust of politicians, lobbyists and businessmen who seek to put government power in the service of corporate profit.
Not that the Republican Party is always guided by such thinkers. Mr. Nader neatly describes how corporatist RINOs (Republican In Name Only) co-opt the party’s anti-statist crusaders. “The corporatist Republicans,” he writes, “let the libertarians and conservatives have the paper platforms . . . and then move into office, where they are quick to throw out a welcome mat for Big Business lobbyists with their slush funds.” He cites Adam Smith’s suspicion of regulations that benefit special interests: “Such restraints favor the privileged interests that want to entrench their economic advantages through the force of law.”
These are profound observations and ones that I saw play out while editing the Americas column for this newspaper in the 1980s and ’90s. Mercantilist Latin American businessmen who claimed to cheer market forces often thrived only because of their contacts in government. They reached out to the Journal’s editorial page as allies but were more socialist in practice than some of their left-wing enemies. Little did I suspect that a similar form of mercantilism, or corporate statism, would take root in the U.S. It is a pleasure to see Mr. Nader doing battle against such cozy arrangements.

For the full review, see:
DAVID ASMAN. “BOOKSHELF; Let’s Make a Deal; Ralph Nader’s latest crusade is against the convergence of big business and government power. Let’s hope he succeeds.” The Wall Street Journal (Fri., July 18, 2014): A9.
(Note: ellipsis in original.)
(Note: the online version of the review has the date July 17, 2014, and has the title “BOOKSHELF; Book Review: ‘Unstoppable’ by Ralph Nader; Ralph Nader’s latest crusade is against the convergence of big business and government power. Let’s hope he succeeds.”)

Book under review:
Nader, Ralph. Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State. New York: Nation Books, 2014.

Private Property as the Guarantor of Free Speech

In the last year or two, some have called for government subsidized newspapers. Presumably they have never read Hayek, nor have they sufficiently pondered Liebling’s famous quip:

“Freedom of the press is guaranteed only to those who own one.”

Source: Abbott Joseph Liebling, The Press. New York: Pantheon Books, 1981, p. 32.
(Note: I believe that the 1981 Pantheon edition may be an exact reprint of the 1954 Ballantine Books edition. Also, I have not confirmed this, but have seen it claimed that the original location of this quote is Liebling’s essay “Do You Belong in Journalism?” New Yorker, 4 May 1960.)

Manuel “Muso” Ayau, RIP


Manuel “Muso” Ayau. Source of image: online version of the WSJ article quoted and cited below.

(p. A21) Lago Amatitlán, Guatemala

High on a hill overlooking this picturesque volcanic lake, Manuel “Muso” Ayau–arguably Latin America’s most influential champion of liberty in the second half of the 20th century–was laid to rest last month.
. . .
Ayau and his colleagues read voraciously and debated vociferously. “All of us were self-taught in these subjects, which would come to absorb much of our time,” he recalled. Over the next half century CEES would publish over 900 pamphlets in defense of the market. Ayau’s many contributions (98) had titles like “On the Morality of Government,” “Planning: Rational or Absurd,” and “Robinson and Friday Invent the Common Market.” In October 1978 he wrote an essay in a CEES pamphlet called “Price Controls,” while Milton Friedman penned “In Defense of Dumping” in the same publication.
Those pamphlets went all over the region. Peruvian Enrique Ghersi, one of the co-authors of the 1986 best-seller “The Other Path,” says that one called “Ten Lessons for Underdevelopment” was “key to awakening in me the vocation and commitment to defend liberty.” CEES brought to Guatemala such intellectual giants as Ludwig von Mises (1964), Friedrich Hayek (1965) and Ludwig Erhard (1968).

For the full commentary, see:
MARY ANASTASIA O’GRADY. “Manuel Ayau: Champion of Liberty; He opened Latin America’s eyes to the true source of prosperity.” The Wall Street Journal (Mon., SEPTEMBER 20, 2010): A21.
(Note: italics in original; ellipsis added.)
(Note: the online version of the article is dated SEPTEMBER 19, 2010.)

IMG_2452-2.JPGOn the left is a photo autographed by Ayau and Hayek. On the right is a bust of Hayek. Source of photo: taken by Art Diamond on April 4, 2009 at the APEE meetings held at Francisco Marroquín University (UFM) in Guatemala City.