The Idea Factory, by Jon Gertner

The author is a staff writer at NYMag. The book is a history of Bell Labs, a technology incubator that was for most of its existence one of three legs of the AT&T monopoly. Bell Labs developed an amazing array of technologies, including transistors, fiber optics, the first American satellite, cellular telephony, early work on radar, and a lot of advances of telephones. It yielded seven Nobel laureates. And it eventually became the Lucent part of Alcatel-Lucent.

There’s a lot of science in the book, but most interesting are the implications for how research might be funded.

It was neither a university nor a strictly government-run research center, but the industrial lab of a for-profit company; and yes it had quite a bit of government support, but not as much as you might think: many of its important inventions (including the transistor and the mobile phone) didn’t enjoy much in terms of subsidies. Instead the author attributes the success of the Labs to simply gathering great minds together and giving them a lot of freedom. And it totally belies the idea that monopolies can’t be innovative. Which other research lab can claim to have kickstarted inventions as important and diverse as the transistor, satellite, and cell phone telephony?

Worldly Philosopher: The Odyssey of Albert O. Hirschman, by Jeremy Adelman

This is a biography of Albert Hirschman. I can’t recall exactly when it was that I first heard about Hirschman. If I’d heard of any of his exploits, then I wouldn’t have forgotten about it. Here are a few of the most interesting things.

He spoke French, Italian, English, and Spanish fluently in addition to his native German. He grew up in Berlin, getting quite involved in the socialist movement, and was active in resisting the Nazis. He left for Paris when he was a teen. In the course of three years Hirschman moved around four countries, enlisted in a civil war, joined an underground resistance, and got his Ph.D in economics. He helped thousands of refugees escape from France; these included Marc Chagall, Marcel Duchamp, and Hannah Arendt. He worked for the OSS and was an interpreter for a Nazi general in the first Allied war crimes trial. He never really talked about these afterwards.

He worked for the Fed after coming to America, but was denied further government work because the American government found his background suspicious.And he spent a great deal of his academic life studying South America, an interest that was ignited when he decided on a whim to move his family to Colombia. He spent most of his life at the Institute for Advanced Studies. It’s an amazing life.

Hirschman started his academic career with a focus on development economics. To me his most interesting work is in two fields: the study of the effects of commerce on mores; and how people respond to unsatisfactory situations. On the former he discussed how commerce softens tribalism. And on the latter he described why we choose between leaving a poor situation, or staying and trying to change it.

One insight I found revelatory: Sometimes monopolies like a little bit of competition. When you allow limited competition, your most active customers who complain the loudest will leave. Monopolists are relieved when their most outspoken critics go away.

He was one of those old-school economists who never had a great love for math. His two favorite books seemed to be Montaigne’s Essays and Machiavelli’s The Prince. He also drew on Brecht, Flaubert, and Kafka. Indeed, every one of the epigraphs that the author has chosen to each chapter comes from Kafka. You don’t see a great deal of Kafka- and Montaigne-reading economists.

It’s because he so loved words that you get fabulous book titles like Exit, Voice, and Loyalty, and The Passions and the Interests; you also get metaphors like “the hiding hand” and the “tunnel effect.”

He was an optimist; he named one of his books A Bias for Hope.

He lived to the age of 97, but was not the same after a concussion sustained on a hike. It’s quite sad to read about how he lived his last years.

The biography discusses all of his other major ideas. They’re all worth getting to know.

Once, when they went to a film together about the Spanish Civil War, as they left the theater Sarah turned to Albert and asked him: “Was it like that?” He replied evasively, “Yeah, that was a pretty good film.”

Uncertainty means that you think you may be wrong; doubt means you are not sure you know.

The change was more evident in the ways that grants forced people to learn how to solve their problems; even if they did not finally solve the problem they set out to lick, they had acquired skills, created movements, and marshaled social energy that they could apply to other problems.

Hirschmann took Hayek, in particular, seriously and appreciated the rigorous individualism after his previous diet of “lumpy” collective categories like social class.

Hirschman was skeptical of overarching models, he was less inclined to pathologize backwardness.

By the end of Strategy, the core of Hirschman’s thinking about what was scarce in traditional societies becomes clear. It was not capital. It was not a middle class. It was not “entrepreneurship” or the right kind of cultural bedrock of striving individualism. It was altogether more original: the capacity to problem solve in a capitalist world, the “ability to make development decisions.”