The following story is part of Walter Block's Autobiography Archive.

Malice in Blunderland:
The Transformation from Soft-Headedness to Hard Core

by James T. Bennett

Most of my early economic-issue troubles started with my parents who were highly skeptical of government. My mother used to tell me that if the Republicans got in office, there was a recession; if the Democrats got in, there was a war. Dad had roughly the same views – one did not lightly disagree with Mom. But then, these were my parents, so what could they possibly know that was intelligent? I was getting another treatment at Messick High School in Memphis, Tennessee, where our aging and very earnest teacher gave a twelfth-grade civics course that was scripted from the movie, Mr. Smith Goes to Washington. Of course, my parents paid taxes; my teacher, Mr. French, was paid by taxes and had to follow religiously the pablum produced by the curriculum committee of the Memphis Public Schools which in the good old days of the 1950's brooked no Communist nonsense; after all, there must have been some modicum of truth in all the insinuations of Senator Joseph McCarthy.

In those halcyon days of high school, with hormones raging on all fronts, I really didn't think much about government or, in fact, the world about me at all. The whole scene was summed up in a joke about President Eisenhower that was popular at the time: Question: What does an Eisenhower doll do when you wind it up? Answer: One of two things: It either does nothing or it plays golf. One could reasonably conclude that if the president was on the golf course or doing nothing most of the time, the government couldn't be doing much of anything important. And, in relative terms, there was some truth to that. Camelot (or whatever) hadn't come to the nation's capital with the Kennedy clan, and the ask not question hadn't been asked as yet.

In any event, I stumbled into an engineering school, then known as Case Institute of Technology (now Case Western Reserve), in Cleveland (how clueless can a guy get?). My undergraduate degree required a single course in Principles of Economics, i.e., both micro and macro in three hours. Samuelson's principles book, then in single-digit edition, was the text, and everything was done mathematically so consumption theory, production theory, and all that took a total of about three weeks. Macro had a decided Keynesian orientation, and the multiplier and consumption functions and the simplistic thinking (it was Samuelson's book, after all) were de rigueur. It was all so neat and came in a complete package that appealed to the engineering mindset. Monetary and fiscal policy were just wonderful; computers were coming into their own in the technical institutes; a new day was dawning in the economic sciences.

Somehow, I again managed to get another diploma without thinking very much at all about government, public policy, or the world around me. I headed to Columbia University's School of Business for an MBA. Mistake! New York City wasn't my idea of the idyllic student setting (well, I was a native of Tennessee, remember – that explains a lot) and in many respects the courses were boring for a person who had undergone the rigor of an engineering degree. Frankly, I knew about as much as the grad student who taught the statistics course that I was required to take. Eli Ginsburg who taught the macroeconomics course mumbled (he was always sucking on lemon drops or something during his lectures) about his great role in policy making and advising the federal government. Things weren't in very good economic shape at the time, so I didn't know whether Eli knew what he was talking about or whether he knew, but he was being ignored. Neither I nor anyone else learned much of the economics then in vogue, so little damage was done.

Also in vogue at Columbia at the time was James W. Kuhn's course on the Ethical Foundations of Business. In the early 1960's a number of big electrical equipment firms were found guilty of price fixing, and the business schools of America (Columbia as an Ivy League school probably one of the leaders of the pack) needed to inculcate ethics and such in students. I got an overdose of the corporate social responsibility stuff from this course, and it never quite set well. But, that's another story...

Fed up with the Big Apple, I returned to Case Institute and the beauty of Cleveland winters (Yes! In some areas of life, I'm a slow learner) where I sought my PhD in Economics. [In my defense, I got fellowships the whole time and left school with no debt; Sputnik was a bonanza for engineering schools and their students.] And, with no malice aforethought, my professors were pushing the latest topics about externalities, social welfare, the role of government in curing everything but the heartbreak of psoriasis (that too was likely in the public sphere because externalities supposedly abounded). I wasn't really a hell raiser in grad school, so did what most good students did – I soaked the Keynesian dogma up like a sponge and regurgitated it back on exams and comps.

With degree in hand in 1970 and in the footsteps of Mr. Smith, Dr. Bennett went to Washington to teach at George Washington University while living in the relative safety of the Virginia suburbs. Given my technical background, I was teaching graduate and undergraduate econometrics (yes... but read on before getting out the Wolfsbane, garlic, and wooden stakes) and doing research for the Office of Naval Research on Navy and Marine Corps problems during the Viet Nam War.

There is nothing like living close to, if not being in, the belly of the beast. In the Virginia 'burbs, most of my neighbors were federal bureaucrats; at GWU, most of my graduate students were federal bureaucrats getting their degree at taxpayers expense; many of the GWU faculty were doing various work on some government contract or project or other. Forget about social welfare, externalities, the public interest, and all the other buzz words that were so prevalent at the time and used to justify the growth and intrusiveness of government. Trust me, casual conversation at every turn showed that private self-interest was rampant throughout the public sector; government largely served the interests of those in government. But where did all my Keynesian training and the public policy and the .... fit in? Simple answer: It didn't.

Something was totally out of whack. I needed a new perspective, a new paradigm. So, in desperation, I hiked over to George Washington University's Gelman Library and started checking the card catalog (that's what it was back in those days) for books about bureaucracy. I found Ludwig von Mises's classic work, Bureaucracy. Mises made perfect sense. Reading Bureaucracy was my equivalent of Saul seeing the light on the road to Damascus. Then, I found Gordon Tullock's book, The Politics of Bureaucracy. My thinking was transformed. To me, Mises's arguments were cogent, persuasive, and totally compelling. Tullock's work confirmed Mises's brilliance and supplemented his insights.

After five years of fighting traffic to get to work, and tired of the socialist bilge prevalent there, I left GWU and came to George Mason University in 1975. Even back then Mason's economics department had a very strong market orientation. GMU was young and growing, and it had a tremendous advantage: Very little bureaucracy to encumber your efforts and an economics department (very much in the Virginia mold) where ideology and philosophy were not issues. The atmosphere was most congenial to a free-market promoter. Bill Snavely was chair of the Department at the time, and he had been tutored well by his father, Tipton R., long-time chair of the UVA Economics Department. {And, I might add, Tipton's book, The Department of Economics at the University of Virginia, 1825-1956, remains famous for what was judiciously omitted.}

In my early days at GMU, I was still teaching primarily econometrics. But one day, roughly 1978 or so, a colleague came to me with a problem: the regression coefficient in his model had a positive sign and was greater than one; his theory required a negative value less than one. Like the three witches in Shakespeare's Macbeth, I started throwing poisoned entrails into the empirical cauldron. Instead of eye of newt and wing of bat, I transformed the data by taking logarithms and stuck in a couple of plausible dummy variables to bring some outliers back into the fold. Voila! The deed was done; he got the coefficient that he wanted. I got a revelation: I was a data Nazi. Torture the data enough, and it will tell you precisely what you want to know. Truth: I swore that I would never teach econometrics again, and I haven t run a regression since. My metamorphosis was complete. Aside: I'd make a lousy politician – at root, I am honest.

My first face-to-face experience with a dyed-in-the-wool, certified libertarian was the fateful day when I met The Great One late in the 1970s. No, not Jackie Gleason, but Gordon Tullock. I was in awe, and El Gordo quickly sensed this. I was convinced that he liked me because he immediately insulted me [and still never misses an opportunity]. Digression: My wife is one of Gordon's greatest admirers. Before the Public Choice Center came to George Mason, Gordon came up several times from VPI for seminars and stayed in our home which my wife lovingly furnished with beautiful antiques – many family heirlooms. As soon as Gordon came in, met my wife, and looked around, he told Sally, Why don't you get your husband to buy you some decent furniture? Sally has been his fan ever since.

The end of the 1970s was a rather interesting period in my professional development. Not only did I eschew mathematical pyrotechnics and hemorrhoidal least squares, but my move in new directions also got financial support. In 1979 the John M. Olin Foundation provided a generous grant to initiate the Journal of Labor Research which I have edited ever since. Olin has also supported much of my research over the years, and in 1992 provided substantial funding for me to establish the John M. Olin Institute for Employment Practice and Policy at GMU. The Olin Institute publishes books, conducts symposia, and sponsors research related to employment issues. If even a few more foundations were as supportive and committed to free market ideas and institutions as Olin has been over the years, so much more could be accomplished.

My success at fund raising can be partly attributed to my association with the Heritage Foundation. I became an Adjunct Scholar in about 1977 or so when Heritage was operating out of a small building (I heard that it was formerly a veterinarian's office) on C Street. Through Heritage, I met other scholars and public policy types, and through these connections, I became a member of the Philadelphia Society in 1981 and the Mont Pelerin Society in 1982. Many fascinating people were then and still are members of these two organizations. Of course, the usual suspects are also active members: Tullock, Buchanan, Friedman, to name three. My thinking was strongly influenced by a British member of MPS, Dame Barbara Shenfield, who understood all too well what happens when socialism takes root and flourishes in a nation.

Another major epiphany occurred when I met Tom DiLorenzo at the Public Choice Center's cocktail hour at the annual meeting of the Southern Economic Association in 1981. Tom saw my name tag and told me how much he had enjoyed reading my (then) recent book, The Political Economy of Federal Government Growth. No convincing was necessary: DiLorenzo was obviously both astute and brilliant. Trained at the Public Choice Center then at Virginia Polytechnic Institute in Blacksburg, Tom and I were in complete accord in our thinking. We shared a simple, basic premise: Government is rarely the solution to the nation's political, social, and economic difficulties; rather, government is far more likely to be the problem. Intellectually, Tom and I were soul mates from the outset. Eight books and numerous journal articles followed.

We set what I think must be a record worthy of Guinness (or at least Bass Ale): I never recall an argument or even a serious disagreement with Tom about our research. I vividly recall many times that we laughed and the many trips down the hall between our offices to share yet another Can you believe this idiocy! anecdote. I was always surprised at how attuned we were to each other's thinking and writing styles. For each book, we divided the work up by chapter, and I defy anyone to determine which of us wrote which chapters. Anyone who has the privilege of working with DiLorenzo will be pleased by his prolific and high quality output – and his never-failing sense of humor.

Working and living in the national capital area provides wonderful lessons in absurdity, banality, and inanity, and Tom and I exploited the craziness to the fullest. We also have tried to use humor and ridicule in our work – some of what goes on is so ludicrous (just sample the doings in the DC government, if you doubt my assertion) that it is impossible to treat it seriously. Long ago, we abandoned the idea of preaching to the choir or trying to convert the economics profession to some form of intelligent thinking. Rather, we have tried to write for general audiences and students who have not yet developed vested interests in the status quo. We know that we have made some progress, for we have made many enemies. For example, several of our books were reviewed by the New York Times; all were roundly trashed. Conclusion: We must be doing something right.

In the end, when all is said and done, I'm basically just a guy who got mugged by reality, and Mises and Tullock explained to me what happened and why. If only others would tread the same path.

James T. Bennett [send him mail] is an Eminent Scholar at George Mason University, holds the William P. Snavely Chair of Political Economy and Public Policy in the Department of Economics, and is Director of the John M. Olin Institute for Employment Practice and Policy.

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