Robert (Bob) Hessen 1936-2024

All the new criticisms of capitalism are old ones repackaged as stunning new insights.

Robert Hessen

Take Away

Alongside Leonard P. Liggio, Murray M. Rothbard and Isreal M. Kirzner, Robert (Bob) Hessen belonged to the 5th generation of the Austrian School of Economics, which was mainly active in the USA. After receiving his Ph.D. in contemporary history from Columbia University, he taught there until 1974 and then moved to Stanford University, where he conducted research as a specialist in American economic and business history at the Hoover Institution from the fall of 1974. Three of his books, “In Defense of the Corporation”, “Steel Titan: The Life of Charles M. Schwab”; and “Breaking with Communism: The Intellectual Odyssey of Bertram D. Wolfe” became classics. His countless essays on American economic and social history have appeared in both academic and popular publications.

With the death of Robert (Bob) Hessen, the 5th generation of ‘Austrians’, mainly active in the USA, has lost one of its sharpest thinkers after Leonard P. Liggio, Ralph Raico or Henry S. Hazlitt and many others. Hesse still belonged to that group of American social scientists whose work emerged from a comprehensive view of mutually dependent disciplines. Even though Ludwig von Mises, F. A. von Hayek, G. von Haberler and James M. Buchanan, for example, had long before him laid the theoretical foundations for the free market economy, Hessen made a significant contribution to the understanding and dissemination of the 'Austrian School of Economics' in the USA as a teacher and author of countless articles.
It was easy to tell from the tone of his language that Bob Hessen grew up in modest circumstances in the New York borough of The Bronx and initially studied political science at the neighboring Queens College. He earned his master's degree in modern history at Harvard University and then returned to New York to earn a Ph.D. in social history from Columbia University. During the violent student unrest of the late 1960s, Hesse wrote the article that first brought him into the national spotlight. His essay “;Campus or Battleground? Columbia Is a Warning to All American Universities” appeared prominently on the front page of Barron’s on May 20, 1968 and reads like an alarming report on the current state of not only many U.S. universities, but also major European schools.

During his studies at Columbia University, Hessen, like his friend Alan Greenspan (later Chairman, Board of FED) and many of his fellow students, was attracted to Ayn Rand’s work. He worked closely with her for several years, and contributed numerous articles to Rand’s “The Objectivist Newsletter" and "The Objectivist”. Some of these essays became part of Ayn Rand’s famous book Capitalism: The Unknown Ideal, which had a considerable impact, especially in the US, on students who had apparently never heard that free markets or capitalism could be described and justified in other than technical terms. The great works of the Austrians, such as Ludwig von Mises’ Human Action (1949) or F.A. von Hayek’s monumental books such as The Counterrevolution of Science (1952), The Constitution of Liberty (1960) or Hayek’s seminal essay The Spiritual and Moral Significance of Free Enterprise (1961) were still largely unknown to them.

Unsatisfied and largely “cured” of Ayn Rand’s Objectivism, Hessen began his academic career at Columbia University in 1968 as a professor of contemporary history, specializing in American economic and business history. Soon a group of Hessen's friends, among them George Reisman, Leonard P. Liggio, Murray N. Rothbard, and Ralph Raico, formed the so-called “Circle Bastiat”, which they named after the liberal French thinker Frederic Bastiat (1801-1850). This small circle soon tried to make contact with Ludwig von Mises at New York University and met a number of like-minded students there under Isreal Kirzner’s leadership. Although a regular appointment of Mises would have honored any American university, it should not go unmentioned here that only New York University was willing to allow Mises to give a modest guest lecture/seminar per week after World War II. Mises allowed the Circle Bastiat to participate in his seminar and soon became the hard core of this course. Just as Mises’ famous Vienna Private Seminar became the cradle of the 4th generation of Austrians, almost the entire American 5th generation emerged from the New York
Seminar. In this seminar, Mises not only presented a new form of academic sociality for discussion, but also a method of economic thinking that seemed foreign in the USA at the time, which stood in contrast to the prevailing neoclassical paradigm and was an authentic liberal doctrine. According to all participants, Mises was an inspiring teacher with almost inexhaustible knowledge.

After a successful teaching career, Hesse left New York and accepted an appointment at Stanford University’s Hoover Institution in the fall of 1974. As a Senior Research Fellow, in addition to his research work in the archives of the Hoover Institution, he also had a mostly crowded lecture on the “History of American Business” at Stanford’s Graduate School of Business. Hesse’s three major books, Steel Titan: The Life of Charles M. Schwab (1975), In Defense of the Corporation (1978) and Breaking with Communism: The Intellectual Odyssey of Bertram D. Wolfe (1990) have become classics. His “In Defense of the Corporation” has gone through 5 editions and remains a highly topical and uncompromising defense of corporate freedom. This book offers a reinterpretation of the nature and historical origins of corporations and challenges the current widespread condemnation of giant corporations. Hessen explains here the crucial difference between the so-called concession and inherence theories of
corporations.

In Breaking With Communism, Hessen documents the second half of Wolfe’s life, drawing on his secret papers acquired by the Hoover Institution in the mid-1980s. This volume describes Wolfe’s honest struggle to expose the truth about the creation of Soviet Russia and the terror of Lenin and Trotsky. He was the principal editor of the Hoover Archival Documentaries, a multi-volume series publishing historically significant materials from the archives of the Hoover Institution. In early 2015, he sold a large part of his enormous library to the newly founded Austrian think tank “Agenda Austria”. This collection of important English books in the tradition of the Austrian School of Economics is probably unique in Europe. Robert Hessen’s academic work comprises important contributions to the economic and social history of the USA and is characterized by an internal coherence and systematic development.

His honest scholarship and academic influence, but not least his typical New York humor, modesty and proverbial helpfulness are legion. He died yesterday in Palo Alto at the age of 87, surrounded by his family.