Happy 100th birthday to Arnold Harberger

‘Triangle Man’ has now been around for 100 years.

Economist from the University of Chicago Arnold Harberger turned 100 today. Unless I’m mistaken, he’s still going relatively strong, even in class.

The Wikipedia article on some of Harberger’s achievements is actually quite good and so I won’t attempt to repeat them.

Instead, I will tell three stories about my interactions with and observations of Al.

Number one: I first met Al at a cocktail party at my colleague Ron Hansen’s in the late 1970s, when I was a young assistant professor of economics at the University of Rochester’s Graduate School of Management (now the Simon School). he was already a god because of his ability to use basic price theory to reach important conclusions. But he didn’t act like a god. He was a normal and very hospitable person.

Number two: When I was working at the Cato Institute in 1979, Al helped me with data for an article my friend Roy Childs was writing. Here are the details.

Number Three: While the Chatham House Rule applies to the proceedings of the Mont Pelerin Society meetings, I can follow the spirit of the rule in telling this story without naming names. At one of the events at the MPS meetings at the Hoover Institution in January 2020, if I remember correctly, there was a breakfast at which Al spoke; he talked about what was going on in Chile. In the 1970s and beyond, Harberger had been very important, much more important than Milton Friedman, in helping to move the Chilean economy toward the free market. I discuss his role very briefly my review from Sebastian Edwards’ excellent 2023 book, The Chile Project: The Story of the Chicago Boys and the Demise of Economic Liberalism. (I suspect that his support for the Chicago Boys, even though he didn’t support Pinochet, is one reason he never got the Nobel Prize in Economics.) He had a long and affectionate relationship with several “Chicago Boys” from at least two generations, and it showed in the way they questioned him and, to put it bluntly, showed their love for him.

If you’re wondering why I call him ‘Triangle Man’, check this out clutch. It is a nicely comprehensive and understandable treatment of Harberger’s classic 1954 article in the American economics magazine, “Monopoly and Resource Allocation.” Economists have argued for decades that monopoly causes the loss of capital, but he was the first to attempt to estimate the magnitude of the loss of capital. Harberger found that U.S. industry was unlikely to exceed 0.1 percent of GDP. (Gross National Product was the conventional measure of the size of an economy at the time.) There are certainly several criticisms of his argument and estimate. The point is that he did it and no one before him had done it. The deadweight loss from monopoly is usually measured with a triangle. Hence the nickname, one used in several University of Chicago student skits and one he wore proudly.

Note: The photo above is of Al Harberger and me after his breakfast speech.