“Triangle Man” celebrates its 100th anniversary this year.
Longtime economist at the University of Chicago Arnold Herberger Today he turned 100 years old, and if I’m not mistaken, he’s doing relatively well in the classroom.
The Wikipedia articles on some of Harberger’s work are actually quite good, so I won’t restate them.
Rather, I want to tell three stories about my interactions with Al and his observations.
First, I first met Al at a cocktail party at the home of my colleague Ron Hansen in the late 1970s. I was then a young assistant professor of economics at the University of Rochester Graduate School of Business (now the Simon School). To me, he was already a god-like figure because of his ability to use basic price theory to derive important conclusions. But he didn’t act like a god; he was just a regular, very approachable guy.
Second: When I was at the Cato Institute in 1979, Al helped me generate data for an article that my friend Roy Childs was writing. here Details:
Third: Mont Pelerin Society meetings are subject to the Chatham House Rule, but I can follow the spirit of the rule by telling this story without naming names. At one of the MPS conference events, held at the Hoover Institution in January 2020, if I remember correctly, there was a breakfast meeting, and Al spoke. He talked about what was going on in Chile. From the 1970s onwards, Herberger played a much more important role in moving Chile’s economy in a free market direction than Milton Friedman. His role was My Review Sebastian Edwards’s amazing 2023 book, The Chile Project: The Story of the Chicago Boys and the Fall of Economic Liberalism(I suspect that his support for the Chicago Boys, even though he did not support Pinochet, was one of the reasons he did not receive the Nobel Prize in Economics.) He had a long and close relationship with various “Chicago Boys” spanning at least two generations, which was evident in the way they questioned him and, frankly, showed their affection for him.
If you’re wondering why I call him “Triangle Man,” check this out LinkThis is an extensive and accessible treatment of Harberger’s classic 1954 paper. American Economic ReviewHarberger wrote a book called “Monopoly and the Allocation of Resources.” Economists had argued for decades that monopolies caused deadweight losses, but Harberger was the first to attempt to estimate the size of those losses. He concluded that deadweight losses in U.S. manufacturing were unlikely to exceed 0.1% of GNP. (Gross National Product was the conventional measure of economic size at the time.) Of course, his arguments and estimates are open to criticism. What matters is that he got it done, and that no one had done it before him. Deadweight losses from monopolies are usually measured in triangles. This is where the nickname came from, used in various skits performed by students at the University of Chicago, and worn proudly by Harberger himself.
Note: The photo above shows Al Harberger and me after the breakfast talk.
