Enron of the Eggheads?

by Daniel on August 1, 2004

I had rather taken my eye off the ball, but was informed by a pal this week that a charge of civil fraud has been confirmed in a US Court against Andrei Shleifer and one of his assistants for investing in Russian companies while they were running the Harvard Institute for International Development’s project in Russia, contrary to their agreement with USAID not to do so. To be honest, it all looks pretty sleazy stuff, and not at all good for the international reputation of the American economics profession (Shleifer was a recent John Bates Clark medal winner).

On the other hand, I find it quite difficult to get wrapped up in moral outrage over this particular charge; the actual charge on which Shleifer and Hay were found to have committed civil fraud was that they acted in concert with Hay’s girlfriend to set up a mutual fund company and try to become the Fidelity of Russia. Which strikes me as a pretty silly idea at the time, but hardly on a par with Pol Pot.

On the other hand, it appears that nobody at the HIID is going to jail (or even being seriously criticised) for the genuine crime that was committed by that institute during the 1980s; their partisanship of Anatoly Chubais and the disastrous privatisation program associated with that government (here’s a potted summary by FAIR of why you should care, and my own analysis of why it was such a bad idea). This, in my opinion (which I hope to flesh out a bit next week) was a crime which does bear serious comparison with some of the middle-ranking atrocities of the last century. And of course, nobody cares, because such is the nature of things. JK Galbraith has a book out this week called “The Economics of Innocent Fraud”, in which he suggests that innocent frauds perpetrated by people acting in good faith are in general far more damaging than culpable frauds perpetrated by people who know what they are doing. It looks like l’affaire Shleifer is proving once more that even at 96 years of age, he’s got more marbles than most of the rest of us put together.

A name that will live in infamy

by Daniel on August 1, 2004

Herve Gaymard. Remember the name of this philistine, moron, horrific Gaullist placeman and all-around fils de putain. I suspect that if the revolution comes and some semblance of humanity, civilisation and decency is restored to the moral cesspool that we see around us, your grandchildren will be encouraged to ceremonially burn him in effigy once a year, on a ritual fire made of oak chips. You might also want to make a note of the name of Denis Verdier, who revisionist historians of fify years’ hence may even suggest deserves more of the blame than the hated Gaymard.

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