Kenneth Arrow, one of the greatest economists of the past century, died last week. His nephew, Larry Summers, wrote a eulogy that was published in the Wall Street Journal. Here is an excerpt from it, followed by an ungated link to the full eulogy. (more…)
Posts Tagged ‘profile’
This is a superb “Lunch with the FT”. John Authers, FT Senior Investment Commentator, interviews Ed Thorp, the famous mathematician, hedge fund manager and blackjack player. Here are excerpts from an exceptionally long, informative and entertaining column. Click on the link below to read the full column (highly recommended). (more…)
The American economist Thomas Schelling, who died last week, was a great man and a great economist. He will be remembered for many contributions, but for me his most important was help in prevention of nuclear war between the USA and the USSR.
Though not a pacifist, Schelling was a peacemaker. Tim Harford, ‘undercover economist’ for the Financial Times, highlights this aspect of his life in an obituary he wrote for last weekend’s newspaper.
Schelling used academia as a vantage point from which to advise the administrations of Presidents Kennedy, Johnson and Nixon. He was at Harvard University for 31 years, and said of one role there that it had given him a decade of “freedom to write and to consult, and I spent much of my time, especially during the summer, doing advisory work for the government.”
That advisory work drew on one discipline in particular.
Game theory had been dreamt up by the mathematician John von Neumann, as an attempt to model in mathematical terms human interactions from poker through to strikes or cartels.
The Hungarian-born von Neumann was a hawk (“If you say why not bomb [the Soviets] tomorrow, I say why not today?”) but Schelling took game theory in a new direction. He emphasised that even the most implacable foes could find areas of common interest — most obviously, during the Cold War, the necessity of avoiding mutual annihilation.
To this end, in the late 1950s and the 1960s, Schelling’s advisory work and his publications focused on issues of effective deterrence, communication, and the strategic limitation of arms. He was a consultant for Stanley Kubrick’s 1964 film Dr Strangelove, a nuclear annihilation comedy which introduces a “doomsday device”. The device is the ultimate deterrent: it will be triggered automatically in the case of war. Alas, it’s a secret, which limits the deterrent effect. ….
Schelling ended his advisory work with a letter opposing the 1970 US military campaign in Cambodia. ….
His father was in the US Navy, but despite Thomas Schelling’s crew cut, square jaw and family history, he did not fight in the war. For medical reasons, the military would not accept him. Instead he studied economics at the University of California, Berkeley and earned his PhD at Harvard. After a spell working on the Marshall Plan, he taught at Yale, Harvard and finally the University of Maryland.
Tim Harford, “Thomas Schelling, economist, 1921-2016“, Financial Times, 17 December 2016 (metered paywall).
Addition information can be found in Harford’s interview of Thomas Schelling, which took place shortly after Schelling won the 2005 Nobel Prize in economics.
Though he spent most of his life teaching economics at Harvard, he [Thomas Schelling] also lectured young officers on military strategy at the United States War College. The Kennedy administration was packed with intellectuals fresh from Schelling’s seminars, including McGeorge Bundy, national security adviser to Kennedy and Lyndon Johnson; Walt Rostow, Bundy’s deputy, and John McNaughton, who became a close adviser to defense secretary Robert McNamara.
Through these men, Schelling helped to create a taboo against the use of nuclear weapons. Eisenhower’s administration had argued that such weapons were no different to any others, but Schelling thought otherwise, and the Kennedy administration agreed.
Schelling stopped advising the government when the US invaded Cambodia in 1970. He led a team of a dozen colleagues to see Henry Kissinger, Nixon’s national security adviser, to resign en masse from their informal advisory positions. “We thought about it the way a lot of people think about Iraq now,” he says, “that there was subterfuge, there was misuse or manipulation of intelligence information.”
Tim Harford, “Lunch with the FT: The game of life“, Financial Times, 17 December 2005 (subscribers only).
Blessed are the peacemakers: for they shall be called the children of God. Matthew 5:9. Thomas Schelling, RIP.
Here my second (and final) blog on Nicholas Wapshott’s short book Keynes Hayek: The Clash that Defined Modern Economics (Norton, 2011). Despite the title, it is more a book of history, biography and politics than it is of economics.
The last chapter, for me, was the most rewarding. Here are extracts, from pp. 290-291, that concisely describe the political philosophy of Austrian economist Friedrich Hayek (1899-1992). (more…)
I just finished reading Nicholas Wapshott’s Keynes Hayek: The Clash that Defined Modern Economics (Norton, 2011). Herbert Gintis and Greg Ransom, two American economists whom I admire, wrote scathing reviews of the book at Amazon.com. In contrast, I enjoyed the book, especially the parts dealing with the life and personality of Hayek. The book is an easy, quick read (Gintis wrote that it is akin to reading an article in People magazine!), but that is all the more reason to read it. Don’t purchase it for reference, however. Borrow a copy from a public library.
Nicholas Wapshott (born 1952) is a British journalist and writer who has a degree in politics from the University of York. Cardiff Garcia recently interviewed him for an Alphaville podcast.
What to me was most valuable is the attention that Wapshott pays to differences in the personalities of Hayek and Keynes. The differences are, indeed, quite striking. Here are a few passages from the book that caught my attention. I am more familiar with Keynes than with Hayek so, for this reason, ignore Wapshott’s many comments on the personality of Keynes. (more…)
Financial journalist Michael Lewis (born 1960) is author of numerous bestselling books, including Liar’s Poker (1989) and The Big Short (2010).
Just before Donald Trump’s electoral victory, Lewis was adding finishing touches to his latest book, The Undoing Project: A Friendship that Changed Our Minds (Norton, 2016). The 368-page volume is an homage to contributions to behavioural economics of two Isreli psychologists: Danny Kahneman (born 1934) and the late Amos Tversky (1937-1996).
Gary Silverman, the FT’s US national editor, recently caught up with Lewis.
“Every which way, Trump is exploiting the faulty mechanisms in people’s minds,” Lewis says over lunch at César, a restaurant in his adopted home town of Berkeley, California. “It feels like we are in a world where, to me, some meaningful part of the electorate is beyond reasoning with — beyond fact, anti-science. All the mental faculties that lead to human progress, they are opposed to.” ….
“I think of this as echoing of the 2008 financial crisis,” he says. “The marketplace for politicians just did something as weird as the marketplace for securities did ….”
Given their histories, Lewis makes a natural critic of the president-elect. Apart from having two ex-wives apiece, as Lewis jokes, he and Trump have little in common. Lewis made his name as a writer with an account of 1980s capitalist excess — Liar’s Poker, a memoir of his stint as a young bond salesman at investment bank Salomon Brothers. Trump, meanwhile, was an unapologetic poster child for the era — a property developer and casino owner who put his name on a book that described his deals as art. ….
One of the reasons that Lewis finds Trump so worrisome is that he appears so resistant to criticism. “He seems to think his own impulses are ingenious, even when they are fraudulent, idiotic or stupid. He tells himself a story that ‘I won, I am a success,’?” says Lewis. “He really is as fallible as the stupidest American citizen.”
Trump, in other words, is one of us — and that’s a problem.
“We are hard-wired to stereotype,” Lewis says. “When you are fighting racism or bigotry of any sort, or stereotyping of any sort, you are in combat with the way the mind works. You are, in a weird way, in the world where you are trying to overwhelm impulses. It’s so hard to get rid of it. This is how people think.”
Gary Silverman, “American psyche: Michael Lewis on the triumph of irrational thinking“, Financial Times, 9 December 2016 (metered paywall).
There is much more in Mr Silverman’s full column, which TdJ highly recommends.
FT columnist Simon Kuper has written the best profile of President Barack Obama that I have ever seen. Here are extracts from his outstanding column.
Obama … has identified the “dominant figure in my formative years” as his mother, Ann Dunham. She was an anthropologist — a scholar who studies foreign cultures. Being an anthropologist’s son myself (though, unlike Obama, I actually was born in east Africa), I’ve always sensed that the family business explains a lot about his presidency. ….
When he was six, his mother took him to Indonesia, where she had married a local man. There she began what became her magnum opus: a study of peasant blacksmiths on Java. ….
Aged 10, he returned to Hawaii, where he was born, to live with his grandparents but he continued visiting his mother in Indonesia. ….
Even in Hawaii, Obama remained an outsider. The state was nearly five hours’ flight from the continental US, and hardly any black people lived there. …. It’s wrong to understand Obama chiefly as a product of his ethnic identity, or as a mainstream American liberal like his mother. Rather, he wasn’t raised in any group.
The “birther” jibes, therefore, aren’t simple racism against a black president. After all, although black Americans suffer horrible discrimination, hardly anyone questions their Americanness. Instead, birthers are pointing up Obama’s perceived foreignness.
Viewing the US from the outside, President Obama never seems to have bought the notion that it is an exceptional country with a superior culture and God-given duty to save the world. Asked on his first trip overseas as president whether he believed in American exceptionalism, he replied: “I believe in American exceptionalism. Just as I suspect that the Brits believe in British exceptionalism, and the Greeks believe in Greek exceptionalism.”
That upset some voters. Obama can seem apart from his own country, haughty, almost a foreigner in the White House.
Simon Kuper, “Barack Obama: anthropologist-in-chief“, Financial Times, 22 September 2016 (metered paywall).
There is much more in the full column. If you are not a subscriber to FT, I encourage you to register at the link above for a free download of Mr Kuper’s essay.
British journalist Simon Kuper was born in Uganda of South African parents in 1969. His father was an anthropologist. Mr Kuper studied History and German at Oxford University and now lives in Paris with his family.
FT columnist Gary Silverman has written a surprisingly positive profile of John Stumpf, CEO of Wells Fargo, a huge bank that is embroiled in a huge scandal. Mr Stumpf, writes Mr Silverman, “still has friends on Wall Street”.
Mr Stumpf was … a country boy who grew up as one of 11 children on a Minnesota farm where he shared a bed with two of his brothers.
“I never got to sleep alone until I got married,” he likes to say. ….
[H]e was the rare big banker who emerged from the turmoil of the past decade with his public image relatively intact.
Last week, however, Mr Stumpf’s long run of good fortune came to an end. ….
Mr Stumpf, who is due to retire when he turns 65 in two years, said this week he has no plans to step down because of the scandal. But the pressure on him to go could very well increase.
Gary Silverman, “John Stumpf, the labrador of Main Street“, Financial Times, 16 September 2016 (metered paywall).
Edward Luce, the FT’s chief US columnist, interviews Robert McNeely, who for six years was White House photographer with the Clintons.
“People say she is only able to run for the presidency because she is married to Bill Clinton,” says McNeely. “That could be true. But I can’t imagine Bill would have made it to the White House without Hillary.” ….
I ask McNeely what Clinton’s years as first lady tell us about the kind of president she would be. McNeely evaluates what he sees as her core traits. “She is very quick to judge people,” he says. “If Bill senses someone doesn’t like him, he will spend hours trying to convert that person. Hillary doesn’t bother.” …. McNeely says the calibre of her hires was generally higher. But she is also less Socratic. “She would spend a lot of time selecting the right people,” he says. “But my sense is that any aide who disagrees with her on the big subjects won’t last very long in the job.” Most importantly, she will always know more about her brief than anyone else. Grasp of detail will never be her weak point, though lack of an overarching vision has been. “There isn’t a person in the world who can outwork Hillary Clinton,” says McNeely. “Isn’t it funny that her opponent in this election is the laziest mind in the western world?”
Edward Luce, “The making of Hillary Clinton: unpublished images of a would-be president“, Financial Times Magazine, 6 August 2016 (metered paywall).
This long column (with photos by McNeely) is interesting throughout. Robert McNeely’s book, The Making of Hillary Clinton: The White House Years, will be published in January 2017 by the University of Texas Press.
Charles Koch (born 1935) and his younger brother David (born 1940) are billionaires who contribute generously to conservative causes and Republican candidates. Leftist Americans view the Koch brothers as villains, as a danger to democracy. I was thus surprised to learn today that the elder Koch is unhappy with Donald Trump, a billionaire who leads the Republican race for nomination as candidate for president. Policies proposed by Ted Cruz, another Republican front-runner, are also anathema to him. Indeed, many of Koch’s views are close to those of Bernie Sanders, a self-styled socialist who seeks nomination as Democratic candidate for president.
All became clear once I understood that Charles Koch is not a conservative. He is a libertarian.
I ask [Charles Koch] … about [Donald] Trump’s assertion that the US could require all Muslims in the country to register with the government.
“Well, then you destroy our free society,” Koch says of the idea. “Who is it that said, ‘If you want to defend your liberty, the first thing you’ve got to do is defend the liberty of people you like the least’?” ….
It’s a view that also contrasts with that of another Republican frontrunner; Ted Cruz’s plan to carpet-bomb Isis strongholds is anathema to Koch. “I’ve studied revolutionaries a lot,” he says. “Mao said that the people are the sea in which the revolutionary swims. Not that we don’t need to defend ourselves and have better intelligence and all that, but how do we create an unfriendly sea for the terrorists in the Muslim communities? We haven’t done a good job of that.” With about 1.6bn Muslims worldwide “in country after country. What,” he asks, “are we going to do: go bomb each one of them?”
These particular views could almost have come from the mouth of Bernie Sanders, the socialist challenger to Hillary Clinton for the Democratic nomination and a regular basher of the Kochs. ….
Through our conversation, there seems to be no issue to which smaller government, freer markets and unfettered competition is not the solution. “Our worst example in this country is the way we’ve treated Native Americans,” he says at one point. “A great portion of the property of the American Indians is held in trust by the Bureau of Indian Affairs. They are not allowed to control their own.” Citing the high rate of unemployment among Native Americans, he says, “This is what this whole philosophy of control and dependency does. How do you have a life of meaning? It’s hopeless. So, you’re, oh well, they’re a bunch of alcoholics. Well, no kidding.”
Stephen Foley, “Lunch with the FT: Charles Koch“, Financial Times, 9 January 2016 (metered paywall).
There is much more in the full column.