Peter Bauer, Part I

“In recognition of his tireless and pioneering scholarly contributions to the understanding of the role of property and free markets in wealth creation, his demonstration of the negative effects on poor countries of government-to-government transfers, and his inspiring vision of a world of free and prosperous people.”

This was the inscription on the citation of the Milton Friedman Prize for Advancing Liberty, established by the Cato Institute in Washington DC. The prize was awarded to Peter Bauer in May of 2002, for is work in development economics, a field which he helped to pioneer. Bauer was a complex individual who had to wait until the end of his career before his ideas began to truly change the mainstream. He was an ardent defender of economic freedom, constantly arguing against the status quo. His primary intellectual battles were fought against a consensus among economists of his time, holding that poor people were continually caught in a poverty trap and needed aid to be set free.

Peter Bauer died just a week before traveling from London to Washington DC to claim the first ever, $500,000 Prize. He was 86 years old. Though Bauer was unable to accept his prize, he died knowing his legacy, and his ideas would live on. This was surely comforting news.

This introduction to the life and legacy of Peter Bauer is the first in a series of postings on this contrarian economist. The postings are largely drawn from the book entitled, “Peter Bauer and the Economics of Prosperity,” edited by James A. Dorn and Barun S. Mitra (Academic Foundation, 2009, New Delhi).

Barun Mitra writes this eulogizing Bauer, “In an environment dominated by a poverty of clear economic thought, Bauer built his theories of economic prosperity. He fought to free the poor from the tyranny of poverty.”

Since it was the Milton Friedman Prize being presented, I thought you might like to see this interview that Friedman did with Phil Donahue in 1979. It is somewhat of a classic. (For the record, I believe there is an important distinction between greed, and self-interest.)

Are you familiar with Peter Bauer? What do you think of his ideas?