A Fond Farewell to the “Midnight Economist”

By: Gary Galles

This month, UCLA economist William R. Allen, whom Peter Boettke called “a force in the great UCLA tradition of economic education,” passed away at ninety-six. As I was privileged to work with him both as a graduate student and subsequently, I would like to offer a few thoughts.

Bill influenced me even before graduate school. I used his phenomenal book with Armen Alchian, University Economics, as an undergraduate. I was blown away by its clarity and power (Don Boudreaux called it “Among the ten greatest books ever written in economics,” with “keener instincts into economic forces at work than are had by some Nobel laureates in economics.”), which was a major reason I chose UCLA for graduate school. Then I used it there as a teaching assistant.

I was unable to take classes from Bill. But I worked with him on various free market projects. Mainly, I worked in connection with his famed Midnight Economist broadcasts. Named for its radio time slot, it clearly and consistently developed the principles of economics to a lay audience from 1978 to 1992. In doing so, I “caught” some things that have stuck with me. I saw the importance of good writing. My “tastes” became for a good argument were heightened. And I became (and stayed) sold on communicating economic principles to “real” people in understandable language, because I think that has the greatest potential to change the world for the better.

After leaving graduate school, Bill let me use his Midnight Economist scripts for a booklet of some of my favorites, which I edited, with added questions, to stimulate class discussion.

Since my closest connection to Bill Allen is via The Midnight Economist, I would like to mark his passing with some of my favorite wisdom from it, which stands in sharp contrast with public policy discourse.

  • Economic analysis…elegant tools and rigorous techniques of thought must be supplemented with accumulated learning and developed wisdom in order to distinguish the profound from the superficial, the appropriate from the inapt and the inept, and the feasible from what cannot work well.
  • A world of scarcity is inherently a hard world. But…what ground rules and institutions can we evolve and adopt which will enable people to live together peacefully and productively?
  • People usually have done as well in their personal affairs as they have been permitted to do….Much of our misery has stemmed from dumb economics—inefficient institutions, inappropriate property fights, wasteful processes, debilitating policies.
  • The best of achievable worlds will still be a world of scarcity—and thus a world of choices, costs, and competition. But good economics will help us to do best, even if not well, in a hard world.
  • Market processes, with efficient production and exchange…do not require that we like one another and are inspired by purity of heart to cooperate with one another. Market institutions and prices provide options and incentives to use our privately-owned resources well…we individually prosper by supplying valuable goods and services to others.
  • With appropriate ground rules of the market, we canquite amazinglychannel acquisitive instincts and aggressive inclinations to mutual advantage and the common good.
  • Do we ration goods among competing claimants through fighting and force? That is suicidal anarchy. Do we ration through governmental directives? That is stultifying repression. Do we ration through market processes? That is efficient freedom.
  • Negotiated harmony…[is] a matter of rights to use of property. When those rights rest with a governmental third-party dispenser of privileges, the society and the firms inevitably fight and resources are badly used as alternatives are restricted and costs are ignored. But when those property rights are privately owned, market negotiations replace grabs for politically exercised power and persuasion is used through appeals to the interests of the other party. The choice…is not difficult.
  • Freedom of individual choice is compatible withand, indeed, required forsocially efficient use of a scarce resource, with people paying and receiving market-clearing prices….To obtain more, one efficiently produces what others want… neither producer nor consumer…imposes his will on the other. Each has only the right to offer for sale or to purchase.
  • Each person is the appropriate, relevant judge of his own condition…no matter what the preferences and assessments of others may be.
  • Freedom must mean the right to choose among offerings….Give me optionsand then stand aside while I make my own choices.
  • When the objective is efficiency in using resources, the mind of man has not conceived, and the machinations of man have not evolved, a better arrangement than a private property, price-directed economy.
  • The market produces sinews of adaptability to and survival in an unfriendly world.
  • Economics is not to be the ultimate arbiter of morality and ethics. Indeed, economics is amoral, being simply a technique of thought to help explaindispassionatelycertain cause-and-effect relationships. In uncoerced exchange, both parties gain, and, if no one else is hurt, it might seem pretty clear that the transaction should be permitted.
  • Moral outrage…is not an adequate substitute for systematic thought.
  • In their own interests, people will listen to the market, and adjust to it, if government does not block the message….But…we can frustrate its beneficial operation.
  • Political sorts commonly are not very good economists.
  • There are those anxious to diddle with data, not to comprehend the world, but to promote a political purpose.
  • Controls…bring only regimentation, shortages, less wealth, and loss of much personal liberty.
  • In a purported spirit of “fairness” and a striving for “equity,” we sometimes stipulate maximum prices….Such stipulation does not eliminate scarcity. It does not eliminate competition. Rather, it simply curtails one form of competition, so alternative forms must now be used.
  • “Taxes are what we pay for civilized society,” observed Oliver Wendell Holmes in an era of very low taxation. But more taxes do not necessarily produce more civility.
  • Compared with the marketplace….The fundamental problem of government is not so much inadequate ethics as of deficient rules, which provide inadequate information, faulty guidance and ineffectual constraints.
  • No politician’s quickie gimmick of market subversion will make us wealthy.
  • In the world of economics….We can easily mislead ourselves by stopping the thought process too quickly, noting only immediate characteristics of problems and effects of policies, overlooking indirect implications and consequences.

Rest in peace, Bill. Thank you for the lessons.

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