Book Advice from Ayaan Hirsi Ali: Hayek’s Constitution of Liberty

(p. 6) Do you and your wife, the activist and writer Ayaan Hirsi Ali, share similar taste in books? What books has she recommended to you, and vice versa?

Very similar, so books frequently cross the bedroom from one nightstand to the other. A good example was Hayek’s “The Constitution of Liberty,” her favorite work of political philosophy, which she urged me to read.

. . .

Which books do you think capture the current social and political moment in America?

I shared the widespread enthusiasm for J. D. Vance’s “Hillbilly Elegy” last year, but the must-read book for Trump’s election and presidency remains Charles Murray’s astonishingly prescient “Coming Apart.” I wish the contemptible “students” who disrupted his lecture at Middlebury College earlier this year — not one of whom I’ll bet had ever read a word of his — would read “Coming Apart” and then look in the mirror and realize: “Oh God, I’m a member of that loathsome coastal cognitive elite that is completely out of touch with middle America.”

. . .

Disappointing, overrated, just not good: What book did you feel as if you were supposed to like, and didn’t? Do you remember the last book you put down without finishing?

. . . To give an example of a book I found overrated, Thomas Piketty’s “Capital in the Twenty-First Century” was both conceptually unsound and tediously executed.

For the full interview, see:

“BY THE BOOK; Niall Ferguson.” The New York Times Book Review (Sunday, January 14, 2018): 6.

(Note: ellipses added, bold in original. Bold questions are by the anonymous NYT interviewer. Unbold answers are by Niall Ferguson.)

(Note: the online version of the interview has the date Jan. 11, 2018, and has the same title as the print version. The last question and answer quoted above, appeared in the online, but not in the print, version. Neither version gives the name of the interviewer.)

Ayann Hirsi Ali’s favorite political philosophy book, mentioned above, is:

Hayek, Friedrich A. The Constitution of Liberty. Reprint ed. Chicago: University of Chicago Press, 2011 (1st ed. 1960).

Outspoken Admirer of Friedman and Hayek Disappears in Communist China

(p. A19) The disappearance of Mr. Ren, a longtime critic of the Chinese government, adds to fears that China is sliding backward and abandoning the reforms that saved it from extreme poverty and international isolation. Mr. Ren was no radical — he was a decades-long loyal Communist Party member, the former leader of a state-run company and a friend to some of China’s most powerful politicians. He emerged in what now seems a distant time, from the 1980s to the period before Mr. Xi became top leader, when the party brooked no challenge to its rule but allowed some individuals to question some of its choices.

Mr. Ren’s fate remains unclear. But if he was punished for his writing, it suggests China’s leadership won’t tolerate criticism no matter how justified it might be.

. . .

He was influenced by free-market economists like Milton Friedman and Friedrich Hayek. He believed government control needed to be checked.

“State power in any country is greedy, so it needs to be subject to public supervision,” he wrote in his autobiography. “Otherwise, the power will be abused and everybody will suffer from it.”

. . .

In 2011, near the peak of China’s openness to new ideas, Mr. Ren, an avid reader, started a book club. It drew China’s top entrepreneurs, intellectuals and government officials. Books included Alexis de Tocqueville’s “Democracy in America” and Hannah Arendt’s “The Origins of Totalitarianism.” The events became so popular that people had to apply through a lottery system to join. Some people flew to Beijing from all over the country to attend.

Mr. Ren said his goal was to help China’s young generation develop independent thinking so it would not follow the orders of authority slavishly. The government said no to some topics and speakers, but left it largely alone.

By early 2016, he had nearly 38 million followers on Weibo. But party attitudes toward expression were changing.

That same year, Mr. Xi declared that all Chinese news media had to serve the party. No Chinese leader since Mao Zedong had made that obligation so explicit. Mr. Ren shot back on Weibo, writing that the news media should serve the people, not the party, or the people would suffer.

Retribution was swift. His Weibo account was deleted. His party membership was suspended for a year. His passport was taken away. Members of his family weren’t allowed to leave the country. He faced constant investigations and interrogations.

. . .

Then came the coronavirus outbreak. When doctors working with the disease tried to publicly warn China about the outbreak, they were threatened by government officials. For Mr. Ren, friends said, this confirmed his argument that a media that serves the party couldn’t serve the people.

“Without a media representing the interests of the people by publishing the actual facts,” he wrote in the essay that circulated this year, “people’s lives are being ravaged by both the virus and the major illness of the system.”

He shared the essay with a few friends. Three days after his 69th birthday, he disappeared. His assistant and his son have disappeared, too.

For the full commentary, see:

Li Yuan. “THE NEW NEW WORLD; A Longtime Party Insider Vanishes, in a Blow to China’s Future.” The New York Times (Wednesday, April 1, 2020): A19.

(Note: ellipses added.)

(Note: the online version of the commentary was updated April 2, 2020, and has the title “THE NEW NEW WORLD; A Loyal Chinese Critic Vanishes, in a Blow to the Nation’s Future.”)

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

AyauManual2010-10-23.jpg

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.

Socialist Chávez Quashes Free Speech in Venezuela

Here is evidence of the continuing relevance of Hayek’s The Road to Serfdom:

(p. A5) CARACAS, Venezuela (AP) — A cable television channel that has been critical of President Hugo Chávez was taken off the air on Sunday after defying new government regulations requiring it to televise some of Mr. Chávez’s speeches.

Venezuelan cable and satellite television providers stopped transmitting the channel, Radio Caracas Television, after it did not broadcast a speech by Mr. Chávez on Saturday at a rally of political supporters.
. . .
. . . the cable channel, known as RCTV, said the telecommunications agency “doesn’t have any authority to give the cable service providers this order.” It said in a statement, “The government is inappropriately pressuring them to make decisions beyond their responsibilities.”
The channel switched to cable in 2007 after the government refused to renew its license to broadcast on the regular airwaves.

For the full story, see:
THE ASSOCIATED PRESS. “Cable TV Station Critical of Chávez Is Shut Down.” The New York Times (Mon., January 25, 2010): A5.
(Note: the online version of the article has the date January 24, 2010.)
(Note: ellipses added.)

Reference for Hayek book:
Hayek, Friedrich A. Von. The Road to Serfdom. Chicago: Univ of Chicago Press, 1944.

“Churchillian Steadfastness” Versus “Sullen Paralysis and Futile Efforts”

(p. A15) . . . beyond amelioration and providing the judicial (or in the case of the FDIC, quasi-judicial) procedures for reorganization, there is little more that the government can do to accelerate the unwinding and renewal necessary to put the economy back on an even keel.

The process involves a sequence of negotiations and experiments that cannot be truncated by throwing in more resources. As Frederick Brooks wrote in his celebrated book on software development, “The Mythical Man-Month: Essays on Software Engineering”: “When a task cannot be partitioned because of sequential constraints, the application of more effort has no effect on the schedule. The bearing of a child takes nine months, no matter how many women are assigned.” “Brooks’s Law” suggests that increasing the size of software teams may delay development.
The wide variety of problems and circumstances in an economic downturn precludes the effective use of a single solution. And the federal government doesn’t have the capacity to determine adjustments on a case-by-case basis. The late Nobel Laureate Friedrich Hayek taught that the “man on the spot” with the appropriate local knowledge was much more capable of making good investment decisions than a central planner.
. . .
Suppose that, when the financial crisis broke two years ago, our leaders had shown a Churchillian steadfastness and allowed the normal realignment to play out under a predictable judicial and regulatory regime. The prices of stocks, bank debt and houses would still have crumbled and unemployment risen. Although recovery wouldn’t have been immediate, we’d at least have progress, instead of a sullen paralysis and futile efforts to turn the clock back.
More loans would have been renegotiated and foreclosed properties auctioned off. The FDIC would already be engaged in finding a good home for the loans and deposits of a megabank or two. That agency, now operating with about one-third the staff it had in the 1980s, could also have used some of the bailout money that helped pay for bonuses at AIG and its counterparties to recruit, train and retain more employees.
Best of all, more entrepreneurs and innovators, who capitalize on the opportunities to be found in the midst of turmoil, could have been building the foundations of a prosperous future.

For the full commentary, see:
Amar Bhidé. “You Can’t Rush a Recovery; While small business struggles, Goldman Sachs was protected from its AIG mistakes.” The Wall Street Journal (Thurs., APRIL 9, 2009): A15.
(Note: ellipsis added.)