Henry Manne passed away yesterday at the age of 86. Manne was a wonderfully smart, creative, and iconoclastic writer and teacher best known for his work on corporate and securities law, particularly his vigorous defense of insider trading and his pathbreaking analysis of the market for corporate control. He wrote on many other topics as well, including one near and dear to my heart, the organization and governance of higher education. Manne was also an academic entrepreneur, one of the founders of the law-and-economics movement. He was not only an intellectual but also a great organizer, establishing the first law-and-economics research center at Emory University (where one of his key lieutenants was Lew Rockwell), organizing seminars and workshops, and later serving as Dean of George Mason University Law School.
As Manne often explained, both Mises and Hayek were very important figures in his intellectual development. He recalls a 1962 seminar led by Armen Alchian:
Alchian began his seminar by reading a paragraph. It was a paragraph about property, and he asked if anyone in the group could identify it. I was the only one; I recognized immediately that that was from Mises’s Human Action. As he developed that first lecture -- which became I think one of the most important economic articles of the twentieth century, “Economics of Property Rights” -- it was like a light bulb went off in my head, it was incredible. All of a sudden, everything that I had done intellectually for thirteen years came together, with this one idea of Alchian’s about the real nature of property rights and the Misesian notion of people making choices, with every choice being a tradeoff, meaning that there is a cost – what you give away is the cost of what you get.
Manne told me in 2010 that “I have found over the last ten or fifteen years that I have backed . . . more and more into an Austrian mode of thinking.” Indeed, two of his last publications appeared in Austrian journals, “Entrepreneurship, Compensation, and the Corporation” (Quarterly Journal of Austrian Economics, Spring 2011) and “Resurrecting the Ghostly Entrepreneur” (Review of Austrian Economics, September 2014). He originally targeted the 2011 paper for the Harvard Business Review, but decided the audience wouldn’t get it and decided to appeal instead to an Austrian audience. “I think that Austrian Economics is now on a steep ascendency and that within ten years most of the major tenets will be part of the standard model.” A good prediction!
Henry had a sharp wit and did not suffer fools gladly, but he was friendly and warm, especially to younger faculty and to students. I hosted him at the University of Missouri in 2012, where he gave a research presentation to faculty on the history of US private colleges and universities, spoke to economics PhD students on agency theory and the takeover market, and delivered a wonderfully entertaining lecture to undergraduates on insider trading. It was one of the best “star” visits I can remember. He also participated in a session of the 2010 Austrian Economics Research Conference on his contributions to economics and law, and he provided a very kind dust-jacket blurb for my 2010 book (while chiding me, privately, for not paying enough attention to the issue of entrepreneurial compensation).
Just this last year, he and I were discussing a possible collaboration with Todd Zywicki on higher education, extending Henry’s paper on private colleges to evaluate university organization and governance more generally. I wish I’d devoted more time to getting that project going.
Here are tributes from David Henderson, Jane Shaw, and Don Boudreaux. See the recordings from the 2010 AERC session on Manne for comments from Tom DiLorenzo, Alex Padilla, Richard Vedder, and myself. Let me also take this opportunity to point to one of my favorite Manne papers, “A Free Market Model of a Large Corporation System” (2003).
