Henry Manne on His Intellectual Influences

Henry Manne is a brilliant and original scholar who made important contributions to the literatures on takeovers, insider trading, higher education, and other fields and is a key figure in the modern law-and-economics movement. His contributions were featured in a session of the 2010 Austrian Scholars Conference. Henry has given an interview to the Securities and Exchange Commission Historical Society as part of its oral history project. There is an audio file and an edited transcript. He mentions in particular the influence of Mises and Hayek on his thinking:

Because of my dissatisfaction with what developed as my program at Yale, I began doing considerable reading in areas mainly I’d learned from Aaron Director, works of Hayek, whom I had met at Chicago, and Mises. I always used to joke that I was one of the few people in the world who probably sat down and read the whole of Human Action, Mises’ great work on philosophy and economics, which later on, you’ll see, played a role in my intellectual development.

And:

Just before the ’62 article ["The 'Higher Criticism' of the Modern Corporation," Columbia Law Review], probably the seminal intellectual event in my life occurred. I was invited to a small conference for young professors at Claremont College, in which three very distinguished people held seminars for these young professors. One was John [Jewkes] from Oxford, who had taken a very strong position against British socialism, then the Labour government. Another was Felix Morley, who was a political opponent of Roosevelt during the New Deal, a distinguished journalist and political theorist. The third was a then somewhat young economist from UCLA by the name of Armen Alchian. I mentioned before that the Mises I read at Yale in 1952 or 1953 came back in the early sixties, because Alchian began his seminar by reading a paragraph. It was a paragraph about property, and he asked if anyone in the group could identify it. I was the only one; I recognized immediately that that was from Mises’ Human Action. As he developed that first lecture – which became I think one of the most important economic articles of the twentieth century, “Economics of Property Rights” – it was like a light bulb went off in my head, it was incredible. All of a sudden, everything that I had done intellectually for thirteen years came together, with this one idea of Alchian’s about the real nature of property rights and the Misesian notion of people making choices, with every choice being a tradeoff, meaning that there is a cost – what you give away is the cost of what you get.

Comments

  1. Capn Mike,

    My first real macro econ class was in graduate school. I had taken micro and aced it with no sweat so I was anxious with the naiveté of youth. In the first class the teacher told us he was going to prove to us that taking money from the rich an giving it to the poor would stimulate the economy. My first impression was the man is kidding, but he was not. Every class I asked questions on everything he presented, because the concepts he was teaching simply did not make sense. Half way through the term he told me that he could not answer my questions to my satisfaction, but that someday I would understand – in other words “stop asking me questions I can’t answer.” For the rest of the class I remained silent. I memorized enough to get a B+ from the class.

    After that class I was somewhat crushed. I thought I was just too stupid to understand and it gnawed at me. Two years later I began to hear about an economist named Mises. My wife asked me what I wanted for my birthday and I told her “HUMAN ACTION.” I am the only person I know who has asked for an economics book for his birthday.

    When I got the book I simply devoured it. I suddenly understood that the reason my econ professor could not answer my question is because he didn’t understand economics. Mises answered all of my questions and pointed my way for learning real economics. I now attempt to lead Keynesian student out of the wilderness and toward the truth of Mises and the real Austrians.

  2. As a non-economist, it seems at times that Austrian Econ can be so simplistic. And then I try to follow the thread of the idea through its effects and conclusions, and it hits me. Wow. It is freakin’ profound.
    I’m an engineer, and some of the purported Keynesian macro math stuff is such total B.S.
    It’s completely arbitrary as to the true value of the variables.
    Garbage in, Garbage out.
    For instance, why is Govt. spending part of GDP? It should be a NEGATIVE value.
    Do any of you economists (wiser than I) have any comments? Am I right? Or naive? Or ???

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