Reflections on the NYU Experience for Mario Rizzo’s 70th Birthday

by Robert P. Murphy

Like many others, I have been enjoying the birthday wishes offered to Mario. (Happy birthday Mario!) But these notes of congratulation have also included reminiscences of the Austrian Colloquium. As a PhD student on the Austrian fellowship at NYU from 1998-2003, I have some of my own reflections to share. (Disclaimer: I am fairly confident in these memories, but these events happened almost 20 years ago so proceed with caution.)

I had graduated undergrad a semester early (from Hillsdale in Michigan) and moved to Chicago in early 1998, intending to go to grad school in the fall. I remember I was doing secretarial work at CTE Engineers when Mario Rizzo called me to say I was being offered the fellowship at NYU. I told him I was in Chicago at the moment and was pretty proud of myself. (My truck had been broken into and my car stereo had been stolen, after all. This was the big time.) Mario said something like, “Yeah I went to school at Chicago but I always felt uncomfortable there, the city was too small.” Like Peter Boettke, I began humming the classic Sinatra tune in the office after that phone call. I’m sure the guy in the next cubicle appreciated it.

In retrospect, the weekly Austrian Colloquium at NYU was obviously a very rare gem, but at the time I didn’t fully appreciate it. (I am embarrassed to admit that at one point early on, after I had skipped some sessions because I was studying for my regular coursework, Mario had to tell me, “It’s expected that you attend every session.” I really didn’t know, and of course now I realize that the Austrian papers were more important than an extra couple of hours spent on separating hyperplanes.)

At least during that period, I am pretty sure that Mario always asked the initial question when someone would present, and truly 9 times out of 10, Mario put his finger on exactly what I thought was the major issue/problem in the presenter’s paper. I didn’t even bother raising my hand to get on the queue until hearing Mario’s question, because he would almost always bring up what I would have.

One time someone presented a paper on Social Security privatization. The presenter stated matter-of-factly that the implicit paternalism of the forced saving reduced welfare. Someone around the table asked if that was actually right, and a disagreement broke out. The presenter was taken aback that at a meeting of Austrian economists, this was even an issue. Mario clarified that it depended on the amount that an employee would have chosen to save voluntarily; if the mandatory amount were lower than that, then the constraint wasn’t binding and it didn’t reduce that particular worker’s welfare. (Don’t worry folks, we were isolating just the amount of saving in this analysis; we weren’t talking about investing “in” Uncle Sam versus private sector when arguing this point.) Later I complained to Glen Whitman that it was amazing a roomful of economists had to argue about such a basic point, but he just said something like, “Well sure but Mario said what the right answer was.” Looking back, perhaps that was a good illustration of different possible attitudes: I was choosing to be upset over the group dynamics, while Glen was happy that “Mario has the right answer.”

For me personally, I remember with great satisfaction when I had made a point that the group thought was useful. I am pretty sure it was David Harper who was presenting on a way to view economic interactions as playing a game with rules. I made the point that a critic of the market economy could say, “I never agreed to this game, these rules aren’t fair.” To be sure, I wasn’t saying the market’s rules were unfair, but I was just pushing back against David’s attempt to satisfy everybody with an ostensibly neutral framework. David replied to me, but then Israel Kirzner jumped in and said to David “…and that was Robert’s point.” The fact that Kirzner endorsed what I said, and called me Robert (not Bob), made it extra special. (So my advice to professors dealing with jittery young men who think they are underrated: Just publicly acknowledge one of their insights and—like me—they will probably calm down.)

Speaking of that, I remember once I was really upset that Kirzner was thanking a micro NYU professor for his help in clarifying the neoclassical position, because (in my opinion) that NYU professor wasn’t rigorous enough and was misleading Kirzner. So I sent an uppity email to Rizzo saying we needed to fix this. Mario wrote to me something like, “Bob,   My first bit of advice is to ‘calm down.’”  (Yes he put it in quotation marks.)  For those who knew me in grad school, yes this was definitely good advice.

My first presentation at the Colloquium was a (needlessly long) paper entitled “Interest in the Austrian Tradition” which was partly a pun but also a critique of the pure time preference theory of interest. I am not saying I was right on every point, but I felt like I parried every attack that I had anticipated coming from everybody at the table. EXCEPT the observations of Father Sadowsky. I don’t even remember what he said, but when he said it, I thought, “OK sure, from that point of view my paper is useless.” Fortunately I gave a brief response and we moved on to the next person on the queue. (I should also mention that after this presentation, I spent an hour “coming down” at a local bar where Master’s student Pete Johnson supplied me with beers. He was concerned about my health after going head to head against Israel Kirzner on capital & interest theory.)

Perhaps I should also report that Kirzner had urged me not to do my dissertation on capital & interest theory (for various reasons), though he gave me an out by saying “unless you really have a fire in your belly.” I flirted with the idea of doing something more sensible and marketable (like the relationship between morality and game theory—a topic that I discovered Ken Binmore had already done), but it was no use. After Joe Salerno presented a paper in the Colloquium on capital theory in Garrison’s book, I told Mario, “I have to do this.” And that’s why I was later telling nonplussed hiring committees about Eugen von Böhm-Bawerk during my job interviews.

The last anecdote I’ll mention is that I was a TA for Mario’s seminar (for advanced NYU undergrads) on—I believe—classical liberalism. At the time I didn’t appreciate just how bright these students were, but now with more experience I realize it. One of the students opened my mind when he remarked about “The Conquest of the United States by Spain” that he thought the U.S. had been corrupt from the beginning. I had gone into the class that day expecting the students to argue it the other way—i.e. “no way, the U.S. won that war!”—but the budding progressives were way ahead of me.

Because I was going on the job market at that time, I needed to have teaching evaluations. I actually didn’t have any because I never had my own class while at NYU. It just so happened that I was running the class by myself (because Mario was traveling I think) when it was time to hand out the evaluation forms for the semester, so I explained to the students what the deal was with my job search, and asked them to mention me in the comments if they felt so moved.

Later Mario sent me an email catching up about the grading for the class etc., and he said something like, “I also saw the teaching evaluations which were somewhat surprising, because many of the students said they liked the TA more than the professor.”

As far as Mario’s intellectual achievements, let me take this opportunity to reiterate that I think there is a lot in his book (with Jerry O’Driscoll) that would benefit modern Austrians. I understand that “radical subjectivism” runs the danger of breaking down into a hippie-dippie “whoa man how can we know annnnnything” but it is not that in the hands of Rizzo/O’Driscoll. There are very rigorous lines of argument (involving Gödel’s incompleteness theorem, machines predicting their future states, etc.) in this arena. As Shackle and others pointed out, in some contexts (such as the market for corporate stock) it’s not even obvious what “equilibrium” means in terms of individual expectations.

In my dissertation I tried to use their preferred notion of pattern coordination to move the ball forward on this front, but I didn’t do much except point out the importance of these issues; I hope to return to them in the future. I hope others will circle back and mine The Economics of Time and Ignorance for more gems.