My good friend and coauthor John E. (Jack) Calfee died suddenly of a heart attack last month. He was bon in 1941 and was 69 years old.
Jack came late to economics. After graduating from Rice with a major in mathematics, he studied international relations at the University of Chicago and then worked for AT&T in California. It was only in 1980 that he received his Ph.D. in Economics from Berkeley. He then went to work at the FTC (where I met him), mostly as Special Adviser to Wendy Gramm when she was Head of the Bureau of Economics. The issues he studied there – advertising, markets for health, including pharmaceuticals, tort law – were the basis for the rest of his career. From the FTC, Jack went to the University of Maryland (my daughter was his student) and then to Boston University, where he taught marketing. He returned to Washington in 1993 and worked for a year at the Brookings Institution, and then at the American Enterprise Institute, where he remained until his death.
Jack’s work had both scholarly and policy impacts. Google Scholar lists about 150 papers with about 2000 citations, a very respectable number for anyone, and especially for someone who was not primarily an academic. But Jack’s work had important policy implications. In addition to his scholarly work Jack wrote innumerable policy papers and articles, and testified both before Congress and before regulatory agencies. Many of his policy articles appeared in AEI publications, but there were also op-eds in the many newspapers and magazines. Indeed, Jack’s final publication, an analysis of the costs of the Massachusetts health plan appeared posthumously in the Wall Street Journal, one of many publications in that newspaper.
Jack contributed to our understanding of several areas of knowledge. His 1997 book, Fear of Persuasion is the best exposition of the way advertising works of which I am aware. In this book and numerous articles, Jack illustrated the benefits to consumers of advertising and showed the dangers of regulation. For a well known example, in a paper in Regulation magazine he showed that the cigarette companies advertised tar and nicotine levels and reduced these levels voluntarily until the FTC made them stop. In this as in other areas his knowledge and understanding of advertising blended with his understanding of health care and pharmaceutical markets to show how advertisers are forced by market forces to provide benefits, and he also showed that regulators generally do not understand these benefits and so often harm consumers by reducing the amount of information advertisers are allowed to provide. His research also provided insights about tort law, about patents, and about the sources of new medicines. The overarching theme of his research is that Adam Smith’s “invisible hand” works not only through prices, but also through information and through other subtle and non-obvious benefits of free markets.
More recently, Jack’s work was increasing in importance. He has been one of the leading voices pointing out the costs and harms of Obamacare. Moreover, as a pro-regulatory administration has put in more active regulators at agencies like the FDA and the FTC, Jack’s deep expertise in understanding the costs of these regulations and the indirect effects of interfering with both product and information markets has been extremely valuable.
Those of us who knew him personally mourn his untimely death. I would see Jack and his lovely wife Brenda for dinner when I was in Washington and will sadly miss these meetings. But everyone in America will be harmed because we have lost a wise and knowledgeable defender of the benefits of markets when they are under sustained attack.