Hayek, F.A. – Page 2 – artdiamondblog.com

The Spontaneous Order of Houston Tunnels

"The three major sections of the tunnel system are connected under the building at 919 Milam Street in downtown Houston." Source of caption and photo: online version of the NYT article cited below.

Houston is one of the most vibrant, free-wheeling cities in the United States. It is the only major city that does not have zoning laws, (See: Bernard Siegan’s Land Use Without Zoning.)

The tunnels of Houston appear to be another great example of what Hayek called "spontaneous order."

(p. A14) HOUSTON, Aug. 20 — Where is everybody?

Seared by triple-digit heat and drenched by tropical storms, midday downtown Houston appears eerily deserted, the nation’s fourth-largest city passing for a ghost town.

On the street, that is.

But below, there are tunnels at the end of the light — nearly seven color-coded miles of them connecting 77 buildings — aswarm with Houstonians lunching, shopping and power-walking in dry, air-chilled comfort.

. . .

It was not centrally planned; it just grew, inspired by Rockefeller Center in New York. But it is not connected to a transit network. And, befitting Texans’ distrust of government, most of it is private; each segment is controlled by the individual building owner who deigns to allow the public access during business hours — and then locks the doors on nights and weekends. Some parts, like those belonging to the former Enron buildings now leased by Chevron, are closed to outsiders altogether.

Few claim mastery of the labyrinth.

“It’s one of Houston’s best-kept secrets,” said Sandra Lord, widely known as the Tunnel Lady, a Yankee transplant who dispels the mysteries for $10 a head and roams the downtown underworld with proprietary aplomb, sometimes stopping strangers to ask, “And you are?” Corporations pay Ms. Lord to orient new employees below ground, and nearly 45,000 natives and visitors have taken her Discover Houston Tours since 1988.

. . .

Ms. Lord, a writer and Houston historian, traced the origins of the tunnels to Ross Sterling, an oilman and governor during the Depression, who, inspired by Rockefeller Center, linked two of his downtown buildings underground in the early 1930s. Soon after, an entertainment entrepreneur, Will Horwitz, connected three of his vaudeville and movie theaters to save on air-conditioning.

And the tunnels grew from there, despite the private expense of digging connections. The oil bust of the 1980s forced many building owners to compete for business with amenities like tunnels.

Many were flooded by Tropical Storm Allison in 2001, prompting installation of submarine-type doors with inflatable rubber insulation for airtight seals.

For the full story, see:

RALPH BLUMENTHAL. "It’s Lonesome in This Old Town, Until You Go Underground." The New York Times (Tues., August 21, 2007): A14.

(Note: ellipses added.)

Top photo shows "Sandra Lord, owner of Discover Houston Tours, leading a tunnel excursion . . . " Bottom photo shows a map of the tunnels. Source of caption and photo: online version of the NYT article cited above.

Buchanan on Hayek, Rawls and Nozick

Sandy Peart talking to James Buchanan. Source of photo: me.

In an earlier blog entry, I mentioned a comment on disagreeing with journal referees, made by James Buchanan in conversation at the closing dinner of the 2007 Summer Institute for the Preservation of the History of Economics.

Hayek also came up at the dinner with Buchanan. Buchanan mentioned that he was not as enthused about Hayek’s later work, including The Fatal Conceit, and Law, Legislation and Liberty—he thought the best might have been The Constitution of Liberty.

He mentioned that some foundation had funded a couple of conferences in Europe of top free market scholars to offer advice to Hayek. They told Hayek that his manuscript was a mess, and that it would be an embarrassment to him to publish it. But he said he was already under contract. (I think this comment referred to The Fatal Conceit.) So someone (Bruce Bartlett?) helped Hayek clean it up.

Buchanan also spoke highly about Rawls. I think I mentioned that Hayek had said that his approach was similar to Rawls. I think Buchanan said he did not think that comment was surprising.

I also believe I remember Buchanan saying that he thought more highly of Rawls than of Nozick.

Dinner with Hayek

Recently (6/10/07) at dinner with a group of foreign graduate students at George Mason University, I learned that one of the students was from Venezuela, and so I mentioned to her that one of my friends during my graduate student days at the University of Chicago had been from Venezuela, and that he had been responsible for bring F.A. Hayek to speak at the University. When I said his name was “Cartea,” she said that she had had a professor named Cartea who was an admirer of Hayek, but who had unfortunately died in an accident a few years ago.

This was surprising and distressing news.

Cartea had charisma, and was not afraid to use it. He was not always a model of responsible behavior, but he had such child-like enthusiasm, that it was hard to be mad at him for long. One of his main weaknesses is that he loved books. Often he would bring me his latest purchase from the Seminary Co-op Bookstore, hold it up, and say in his inimitable accent and cadence: “Pure Gold!”

In Chicago, I had a car, and Cartea did not. He asked if I would drive him to pick up Hayek and Hayek’s wife at the airport. When we got to the airport, Cartea was hungry and wanted to stop and get a hamburger. I thought it was not prudent to take the time to do this, but Cartea was insistent, and we stopped.

We ended up getting to the gate just barely by the time of the Hayeks’ scheduled arrival (these were the innocent pre-terrorism days when you could actually meet guests at their gate). But to our dismay, we learned that the flight at arrived early, and apparently Hayek had grabbed a cab to the University.

So we drove to the Center for Continuing Education where the Hayeks were staying. There we learned that they had headed to the then-best restaurant in Hyde Park, called something like the “Courtyard.”

At some point along the way, while still in the airport I think, Cartea purchased a single rose. We walked into the restaurant, and found the Hayeks. And then, with a charm that I could admire, but not imitate, he flamboyantly presented the rose to Mrs. Hayek, to her obvious delight. (I do not remember what he said, or how he explained-away our absence from at the airport—I do remember that the word “hamburger” did not pass his lips.

The pleased Hayek invited us to join them for dinner. We did. It was just me, Cartea, and the Hayeks, and it stuns me to think that of the four, only I am still alive.

I would like to be able to report that some deep issues of classical liberal political theory were discussed, but if they were, I have no memory of that. My memory is that the discussion was mainly of a personal, small-talk variety. For example, one or both of the Hayeks had long wanted to view a solar eclipse, so they had recently flown to somewhere in the world where such an eclipse had occurred.

And I remember Hayek teasing Mrs. Hayek for delaying their being together by marrying someone else before Hayek, and I remember her teasing him back that he should have made his intentions clear earlier. (This was the second Mrs. Hayek; at some point I learned that he had divorced the first Mrs. Hayek.)

I only have a couple of other memories of this visit of Hayek to Chicago. One was when (the next day?) Cartea had me drive Hayek to a press conference downtown. Hayek thought I was going the wrong way, and was annoyed. I was pretty sure I was going the right way (and it turned out I was right), but it was stressful for a graduate student to be disagreeing with an insistent, and highly admired, Nobel-prize-winner.

Another disjointed memory is that sometime during the visit I asked him to sign my copy of the first volume of Law, Legislation, and Liberty. This he did with a disdainful frown, seeming to be annoyed that I would bother him with such a foolish request.

(Note one: I do not remember when the dinner described above occurred, although it could be learned; I bet David Theroux of the Independent Institute would remember. I was at the University of Chicago from the fall of 1974 through the spring of 1981; and I think the Hayek visit occurred sometime during the latter half of this period.)

(Note two: this was not the first time I had encountered Hayek. I drove down to St. Louis with Joe Cobb and another libertarian Chicago student whose name I regrettably cannot remember. I believe that it was on this occasion that I had a good talk with Phylis Schlafly’s son, who made an articulate economic argument against patents; I think he even gave me an article by someone to bolster his case. Ben Rogge introduced Hayek. What I remember about the introduction was that in part of it, Rogge made a polite, but strong, swipe at Ayn Rand, saying I think, that Hayek’s thinking was a much sounder grounding for a libertarian philosophy. Rogge knew I was a strong Rand enthusiast, so I imagined that he was making the comment mainly for my benefit. Before the introduction, Rogge offered to take me over to introduce me to Murray Weidenbaum, who was at the event. I regret that out of some temporary shyness, I declined the offer. Anyway, on the way back from St. Louis, the discussion was so intense and interesting that I neglected to attend to the gasoline indicator, and we ran out of gas in some small town in Illinois. I managed to get us to the town gas station, but it was closed because the owner, and all employees, were attending some local social function. We ended up having to stay overnight in this God-forsaken berg. Joe was very mad at me.)

(Note three: the blog entry above was written on 6/11/07.)

Jeffrey Sachs “Has Apparently Spent More Time Studying the Economic Thinking of Salma Hayek than that of Friedrich”

Salma Hayek. Source of image: http://www.imdb.com/gallery/granitz/0273-spe/Events/0273-spe/hayek_sa.lma?path=pgallery&path_key=Hayek,%20Salma

(p. A18) Scientific American, in its November 2006 issue, reaches a "scientific judgment" that the great Nobel Prize-winning economist Friedrich Hayek "was wrong" about free markets and prosperity in his classic, "The Road to Serfdom." The natural scientists’ favorite economist — Prof. Jeffrey Sachs of Columbia University — announces this new scientific breakthrough in a column, saying "the evidence is now in." To dispel any remaining doubts, Mr. Sachs clarifies that anyone who disagrees with him "is clouded by vested interests and by ideology."

This sounds like one of those moments in which the zeitgeist of mass confusion about national poverty, world poverty and prosperity comes together in one mad tragicomic brew.

. . .

Mr. Sachs, who is currently best known for his star-driven campaign to end world poverty, has apparently spent more time studying the economic thinking of Salma Hayek than that of Friedrich.

. . .

Mr. Sachs’s empirical analysis purports to show that Nordic welfare states are outperforming those states that follow the "English-speaking" tradition of laissez-faire, like the U.K. or the U.S. Poverty rates are indeed lower in the Nordic countries, although the skeptical reader (probably an ideologue) might wonder if the poverty outcome in, say, the U.S., with its tortured history of a black underclass and its de facto openness to impoverished but upwardly mobile immigrants, is really comparable to that of Nordic countries.

Then there is the big picture, where those laissez-faire Anglophones in, first, the U.K. and, then, the U.S., just happened to have been the leaders of the ongoing global industrial revolution that abolished far more poverty over the past two centuries than a few modest Scandinavian redistribution schemes. Mr. Sachs apparently thinks the industrial revolution was led by IKEA. Lastly, let’s hear from the Nordics themselves, who have been busily moving away from the social welfare state back toward laissez-faire. According to the English-speaking ideologues that composed the Heritage Foundation/Wall Street Journal Index of Economic Freedom, Denmark, Finland and Sweden were all included in the 20 countries classified as "free" in 2006 (with Denmark actually ranked ahead of the U.S.). Only Norway missed the cut — barely.

Mr. Sachs is wrong that Hayek was wrong. In his own global antipoverty work, he is unintentionally demonstrating why more scientists, Hollywood actors and the rest of us should go back and read "The Road to Serfdom" if we want to know what will not work to achieve "The End of Poverty." Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history."

For the full commentary, see:

WILLIAM EASTERLY. "Dismal Science." Wall Street Journal (Weds., November 15, 2006): A18.

(Note: ellipses added.)

Hayek’s courageous masterpiece is:

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

Easterly’s great book on how to encourage economic development in poor countries, is:

Easterly, William. The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Cambridge, MA: The MIT Press, 2002.

Schumpeter Not Invited to Milton Friedman’s Dinner Party

Rose and Milton Friedman. Source of image: the online venison of the WSJ article cited below.

Milton Friedman is one of my heroes. But my dinner party invitation list would include Hayek and Schumpeter in place of Marshall and Keynes.

If they were to throw a small dinner party . . . for Mr. Friedman’s favorite economists (dead or alive), who’d be invited? . . . he reeled off this answer: "Dead or alive, it’s clear that Adam Smith would be No. 1. Alfred Marshall would be No. 2. John Maynard Keynes would be No. 3. And George Stigler would be No. 4. George was one of our closest friends." (Here, Mrs. Friedman, also an economist of distinction, noted sorrowfully that "it’s hard to believe that George is dead.")

For the full interview, see:

TUNKU VARADARAJAN. "COMMENTARY: THE WEEKEND INTERVIEW; Rose and Milton Friedman; The Romance of Economics." The Wall Street Journal (Sat., July 22, 2006): A10.

Tom Peters: Over-the-Top Schumpeterian

Source of book image: http://www.amazon.com/gp/product/customer-reviews/078949647X/ref=cm_cr_dp_2_1/104-2835260-2878345?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Tom Peters became famous as the co-author of the business classic In Search of Excellence (1982). His Re-imagine! is exuberant, optimistic, exaggerated, and stylistically over-the-top. I find it fun, bracing, entertaining, and sometimes edifying. If you like the prose of The Cluetrain Manifesto and Gilder’s Telecosm, then you may also like Re-imagine!

Here is an early, very brief passage:

(p. 9) My overall vision, in brief: Business is cool. It’s about Creativity and Invention and Growth and Service. It’s about Adam Smith’s "hidden hand." And Nobel laureate Frederick Hayek’s "spontaneous discovery process." And economist Joseph Schumpeter’s "gales of creative destruction." At its best, it’s about building things that make life less burdensome than it was in medieval times. About getting us beyond—far, far, far beyond—the quasi-slavery of the Middle Ages, the indentured servitude of the first 150 years of the Industrial Revolution, and the cubicle slavery of the last three-quarters of a century.

Yes, business is cool.

(Or at least it can be.)

The citation to the book is:

Peters, Tom. Re-Imagine! London: DK, 2003.

(Note: the italics in the above passage appears that way in the original.)

Leonard Read’s Comparative Advantage

When I was a student at Wabash College, Ben Rogge arranged for Liberty Fund to finance my attendance at a couple of weekend seminars at the Foundation for Economic Education in New York. The seminars were taught by Rogge, Edmund Opitz, and Leonard Read. I remember upon returning to Wabash after one of the seminars, Rogge asking me what I thought of Read. I said something along the lines that I didn’t much like his presentation style. I remember saying that he expressed himself in a way that I associated with used car salesmen. (So unlike Rogge’s low-key, witty, intensity.)

My memory is that Rogge did not respond directly to my comment, but (perhaps with a hint of a smile) mentioned that among many audiences, especially in business, Leonard Read was an extremely effective speaker.

I do not doubt that, and I also do not doubt that Read belongs in the pantheon of free market defenders. His essay "I, Pencil" is by itself sufficient for admission. But he did more than write and speak; he nurtured and called attention to others who had wisdom to offer. For one small example, many of us learned about Albert Jay Nock’s "The Remnant" through Leonard Read’s The Freeman.

I believe that the last time I saw Read was at the memorial service at Wabash College for Ben Rogge. I ended up sitting near Read and Opitz, who had flown in from New York. I introduced myself as a Rogge student who had attended FEE seminars.

I remember Read looking very sad, and depressed, and almost lost. I also remember that he expressed some mild indignation that more of Rogge’s students hadn’t made it back for the memorial service.

But as a serious reader of "The Remnant," Read on further reflection probably realized that the attendance at a memorial service is not a good measure of a teacher’s influence on his students.

Apparently one student, whom Read himself influenced, was Charles Koch:

(p. A8) Whereas the bookshelves of most of America’s leading CEOs are stocked with pop corporate management and "how to succeed" books, Mr. Koch’s office is a wall-to-wall shrine to writings in classical economics, or, as he calls it, "the science of liberty." The authors who have had the most profound influence on his own political philosophy include F.A. Hayek, Ludwig von Mises, Joseph Schumpeter, Julian Simon, Paul Johnson and Charles Murray. Mr. Koch says that he experienced an intellectual epiphany in the early 1960s, when he attended a conference on free-market capitalism hosted by the late, great Leonard Read.

For the full commentary, see:

STEPHEN MOORE. "THE WEEKEND INTERVIEW with Charles Koch; Private Enterprise." The Wall Street Journal (Sat., May 6, 2006): A8.

(Note: In the quotation above, I have corrected the WSJ’s misspelling of Read’s last name.)

Hayek Was Right: Free Speech is Fragile, When Property Can be Seized

For those who doubt the central message of Hayek’s The Road to Serfdom, something to ponder:

(p. 351) The Sandinistas called coffee farmers who cooperated with them "patriotic producers." Anyone who questioned their politics or policies was labeled a capitalist parasite. Throughout most of the 1980s, any farms that did not produce sufficiently, or whose owners were too vocal, were confiscated by the government.

Source:

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

When People Change

(p. 462) People don’t change when you tell them they should. They change when they tell themselves they must. Or as Johns Hopkins foreign affairs professor Michael Mandelbaum puts it, “People don’t change when you tell them there is a better option. They change when they conclude that they have no other option.”

Source:
Friedman, Thomas L. The World Is Flat: A Brief History of the Twenty-First Century. New York: Farrar, Straus and Giroux, 2005.

Thomas Friedman’s claim here is plausible, but I find it surprising, given his strong push for a worker safety net when the worker loses a job to creative destruction. The safety net Friedman proposes, in this book anyway, is one that does incorporate some incentives to find a job, but sounds like it could be ‘gamed’ to delay the tough decisions that might need to be made. Hayek had some useful observations on this issue way back in his Road to Serfdom.