How to Win a War (Make it Personal)

With Commander N.D. Nguyen (USN Retired) aboard the U.S.S. Midway.
With Commander N.D. Nguyen (USN Retired) aboard the U.S.S. Midway.

The Battle of Điện Biên Phủ started on March 13, 1954.  Both sides in the fight wanted to emerge as the victor to establish a favorable position in the planned negotiations about “the Indochinese problem”.  After fighting for fifty-five days, the besieged French garrison in French Indochina (Vietnam) was overrun, and all French positions were captured by the communist Việt Minh.

Although the resulting negotiations technically set up national elections across all of Vietnam, the country was effectively divided into two separate states, a communist controlled North Vietnam, supported by China and the U.S.S.R.; and a democratic South Vietnam, supported by the United   States.  Seven-year-old Nguyen Dinh Nguyen fled from his home in Hanoi, along with his parents and siblings, to the relative freedom of Saigon.

A dozen years later, America became fully engaged in the War in Vietnam, and coincidentally, N. D. Nguyen joined the South Vietnamese military.  He was sent to the United States to be trained as a pilot.

How he did it, I can’t say, but in April of 1975, with a murderous band of communist soldiers from the north closing in—and with the last contingent of American Marines valiantly defending and evacuating the U.S. Embassy and other installations—N. D. Nguyen evacuated his parents and siblings from Saigon to Guam.

Upon arriving in Guam, Nguyen’s mother asked, “Son, we ran from Hanoi to Saigon; now we run from Saigon to Guam; Tell me, where do we run to next?

One can only imagine how she must have felt.  But, it’s worked out OK.  Nguyen’s parents are still alive—they are now ninety-four and eighty-nine years old—and they reside quite happily and peacefully in southern California.  N. D. Nguyen himself is a retired U.S. Navy Commander.  And, he recently retired a second time, ending a long career at Spawar Systems, Inc. in San Diego.  His business card reads,  “N.D. Nguyen,  Scientist”.

Commander Nguyen graciously told Linda and me his story while we were visiting the flight deck of the U.S.S. Midway, an aircraft carrier much like those that Commander Nguyen had flown from during his military career.  (My thanks to Derek Kenney and Columbia Management for inviting us aboard.)  mh

A Notable September Birthday

September 29, 2013 will be the one hundred and thirty-second birthday of history’s most important economist, Ludwig Heinrich Edler von Mises.  He was born in the city of Lemberg in Galicia, Austria-Hungary in 1881.  He attended the University of Vienna, where he studied under the founder of the Austrian School of economics, Carl Menger.  In 1906 he was awarded a doctorate from the University’s School of Law.  His subsequent accomplishments are beyond counting, so I’ll leave it to one of Mises’ most accomplished students– my teacher, Dr. George Reisman—to introduce him to you:

It was my great privilege to have known Mises personally over a period of twenty years.  I met him for the first time when I was sixteen years old.  Because he recognized the seriousness of my interest in economics, he invited me to attend his graduate seminar at New York University, which I did almost every week thereafter for the next seven years, stopping only when the start of my own teaching career made it no longer possible for me to continue in regular attendance.

His seminar, like his writings, was characterized by the highest level of scholarship and erudition, and al­ways by the most profound respect for ideas.  Mises was never concerned with the personal motivation or character of an author, but only with the question of whether the man’s ideas were true or false.  In the same way, his personal manner was at all times highly respectful, reserved, and a source of friendly encouragement.  He constantly strove to bring out the best in his students.  This, combined with his stress on the importance of knowing foreign languages, led in my own case to using some of my time in college to learn German and then to undertaking the translation of his Epistemological Problems of Economics—something that has always been one of my proudest accomplishments.

Today, Mises’s ideas at long last appear to be gaining in influence.  His teachings about the nature of socialism have been confirmed in the most spectacular way possible, namely, by the collapse of the former Soviet Union, and by the substantial conversion of mainland China, Russia, and the rest of the Soviet empire to capitalism.

Some of Mises’s ideas have been propounded by the Nobel prizewinners F.A. Hayek (himself a former student of Mises) [PhD. Univ. of Vienna] and Milton Friedman.  His ideas inspired the “miracle” of Germany’s economic recovery after World War II.  They have exerted a major influence on the writings of Henry Hazlitt [1894-1993], Murray Rothbard [1926-1995], and the staff of the Foundation for Economic Education, as well as such prominent former students as Hans Sennholz [1922-2007; PhD. NYU] and Israel Kirzner [b. 1930; PhD. NYU].  They live on with increasing power and influence in the daily work of The Ludwig von Mises Institute, which publishes books and journals and holds conferences, seminars, and classes on his ideas.

Mises’s works deserve to be required reading in every college and university curriculum—not just in departments of economics, but also in departments of philosophy, history, government, sociology, law, business, journalism, education, and the humanities.  He himself should be awarded an immediate posthumous Nobel Prize—indeed, more than one.  He deserves to receive every token of recognition and memorial that our society can bestow. For as much as anyone in history, he labored to preserve it.  If he is widely enough read, his labors may actually succeed in saving it.


Dr. George Reisman is the author of Capitalism: A Treatise On Economics, which itself should be required reading.  He now holds the title Professor Emeritus of Economics at Pepperdine University.  The material quoted above is an excerpt from a speech Dr. Reisman presented to an audience of his peers and their students at the Ludwig von Mises Institute in Auburn, Alabama on the occasion of Mises’ 125th birthday.  The entire text of that speech can be found on Dr. Reisman’s website  

Ludwig von Mises wrote more than twenty books.  The most important are The Theory of Money and Credit, 1912, and Human Action, 1949.  The most accessible to lay readers is Planned Chaos.  That book of only forty-three pages is available (at no cost) at  The book shows that rather than creating an orderly society, the attempt by governments to centrally plan and administer has precisely the opposite effect. By short-circuiting the price mechanism and forcing people into economic choices contrary to their own wishes, central planning destroys the capital base and creates economic randomness that eventually ends by killing prosperity.  To say that the book’s message is still timely would be a gross understatement.   mh

Keep Calm and Carry On

First, my thanks to Dr. Mark Dotzour and to Simon Sinek for bringing the “Keep Calm and Carry On” poster (displayed on the back of this newsletter) to my attention.  Both Mark and Simon have written excellent blog posts featuring this poster, and I encourage you to become familiar with their websites.

Dr. Dotzour1 is Chief Economist and Director of Research for The Real Estate Center at Texas A&M University in College Station.  A native Wichitan, he earned a PhD. at the University of Texas at Austin, and for the better part of four decades, he’s been married to my cousin Lu Ann.  Obviously, Mark’s a very smart guy.

Simon Sinek2 was born in Wimbledon, England.  He is the author of Start With Why:  How Great Leaders Inspire Everyone to Take Action, published by Portfolio Hardcover in 2009. Simon now lives in New York City, and teaches a graduate level class on strategic communication at Columbia University.

This is the time of year that traditionally has given us weakness—indeed, in some cases, panic—in the equity markets.  Countless reasons have been given for this seasonal tendency, and some of those reasons even seem credible, though none can provide us with certainty.

I myself could offer a dozen what-if scenarios for why a market setback might still happen this year.  But, as I’ve said many times prior, if we sell out now and wait for the smoke to clear, only you would know when to get back in.  Heaven knows I wouldn’t. 

But please don’t mistake my attitude for complacency.  It is anything but that.   Unlike Britain in 1939, we’re not facing annihilation.  But, it might not hurt to remember that a grossly outmanned people—the land of the stiff upper lip—were the first to successfully push back the Nazi juggernaut.  In so doing Britain helped send a monster to, uh … his just end.  Without doubt it was the British attitude of defiance and self-assuredness—embodied in Winston Churchill and our poster of the month—that gave that tiny island nation its inestimable advantage.

Let us then be Churchilian investors, assuming the same attitude of persistence and fortitude—and yes, Patience, and Discipline, and Confidence in the Future; and come what may—keep calm and carry onmh

The Real Arab Spring

Originally published in Flourishing July/August 2013.


I wrote about this two years ago, when the Arab Spring was first making the nightly news reports.  At that time most commentators in the media presented the protestors as student idealists or as pawns of the Muslim Brotherhood, or both.  I’m back to say I told you so; the media were wrong back then (with one notable exception), and they’re still wrong today.  The real Arab Spring was/is about economic freedom and opportunity.

I remember back in 2011, seeing Geraldo Rivera interview a group of Libyan millennials, during the battle to overthrow the certifiable Muammar al-Gaddafi.  To his great credit, Geraldo clearly understood those young people as seekers after freedom, economic opportunity, and the rule of law.  Clutching their smart phones as their most potent weapon against tyranny, they were obviously frightened, but hopeful.  They were trusting Geraldo to tell their story honestly and without the filter of partisan talking points.  It may have been his finest hour as a journalist.  But, if anyone in Washington heard him, we’ve seen no evidence of it.  To the contrary, in fact.

Hernando de Soto is a Peruvian economist and author of The Mystery of Capital1.  He recently published an article on the real Arab Spring—the one Geraldo reported on—in the July 13 issue of The Spectator.2   In it he wrote that the Arab Spring was an economic uprising, not just a fight for a “democracy” wherein the people get to elect their next dictator.  They were seeking the very things they had shared with Geraldo Rivera, economic opportunity, property rights, and the rule of law:

“The Arab Spring was a massive economic protest: a demand that the poor should have the basic rights to buy, sell and make their way in the world. I have the nerve to say this because just after the death of Mohammed Bouazizi, the Tunisian fruit seller who started the Arab Spring by setting himself ablaze, my researchers spent 20 months in the region to find out more …


…They were all, like Bouazizi, extralegal entrepreneurs—protesting for the right to get on. The right to own and better their lives; to accumulate capital; not to have their property expropriated on a whim. They were in businesses as diverse as restaurants, computing, real estate, opticians and taxis and their decision to commit suicide in public was usually taken after the authorities confiscated their wares or their documentation.

…Outside Cairo, the poorest of the poor live in a district of old tombs called the ‘city of the dead’. But almost all of Cairo is the city of the dead — that is to say, dead capital. Assets that cannot be used to their fullest, cannot be used as collateral for loans or changed for other assets. Seeds that can never grow. These people are working, but not in ways that western governments are prepared to recognise. Given the chance, they would pull themselves, and their countries, out of poverty. But they are denied the chance, because the rule of law is a cosy club to which only the elite belong.

If the West places Egypt and the Arab Spring into the category of ‘Islamist uprising’, it will not only misunderstand the hopes of millions but miss a remarkable opportunity. By our estimates, entrepreneurs who want a legal system with property rights like those in the West outnumber al-Qa’eda members in the region by a ratio of about 100,000 to one. [emphasis added]

…Britain is ideally placed to see the link between the 1688 Glorious Revolution, and what it did to ensure so many shared the benefits of the industrial revolution, and what is happening today in Egypt. If it did so,

much of the confusion of what underpins the Arab Spring would clear up. This is not only an Arab phenomenon. It needs an eloquent western advocate, who can point to the  economic potential in extending the rule of law, property and businesses to the many, not the few. [emphasis added]


Unfortunately, they don’t have one in either London or Washington. But, they do have Hernando de Soto and his research team, perhaps Geraldo Rivera, too; and therein lies the seed of a promise of a better future for young Arabs and many others still struggling for freedom and opportunity throughout the Middle East.  mh


The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, Hernando de Soto,

       Basic Books, 2000.

2     Arabs Are Rebelling Because They Want Capitalism,  

A Noteable August Birthday

Originally published in Flourishing July/August 2013.

Howard Homan Buffett was born in Omaha, Nebraska on August 13, 1903.  Like his famous son, Warren, Howard maintained a conservative lifestyle throughout his life, a lifelong resident of Omaha.

But, while Warren Buffett, America’s greatest and most famous investor, is aligned with the American left on most political issues, and a strong supporter of President Obama; Howard might well have supported someone like the libertarian, former Texas Congressman, Ron Paul.  Both Ron Paul and Howard Buffett had friendly, ongoing relationships with Murray Rothbard (1926—1995), a seminal figure in the early development of the libertarian movement.  Howard served four full terms as a Republican Congressman in the 1940’s and early 1950’s.

It’s interesting to me that Rothbard and Warren Buffett were about the same age, and both attended Columbia University.  While at Columbia, Buffett studied under the dean of value investing, Benjamin Graham; Rothbard was influenced by the greatest of the Austrian economists, Ludwig von Mises, attending Mises’ private seminars, while pursuing his PhD. in Economics.  Both Warren and his father earned their baccalaureate degrees at the University of Nebraska.

Howard Buffett was never well known outside the confines of his own Congressional district, but he did gain notoriety for his opposition to the Korean War.  He tried, but failed, to have classified documents released, which he said would prove that the United States was the instigator of that conflict.  He was also opposed to the Marshall Plan and  the Truman Doctrine.  Very Ron Paul-like, don’t you think?

(Please see the comment on Howard’s character in the left hand column.  They may have had differing political views, but in almost every way that really matters, Warren Buffett is his father’s son.)

Howard Buffett died on April 30, 1964. mh

Renewable Energy Source-Natural Gas

Originally published in Flourishing July/August 2013.


You may remember that back in the days of “peak oil” hysteria, I told you that the “peak oil” theory was hogwash.  That was a safe proclamation on my part, because the oil industry had hardly scratched the surface of our planet, which as you know, has a diameter of about 8,000 miles.  That’s still true today.

But now—with the exception of a few demagogic politicians—we all know that “peak oil” theory is indeed hogwash, because the evidence has been found under the very land we live on.  The new technologies of horizontal drilling and hydraulic fracturing are releasing natural gas, natural gas liquids, and oil from shale formations all across America, most notably for this discussion, in North Dakota, Oklahoma, Texas, Louisiana, Pennsylvania, and yes, Kansas.

Some years ago, I read a book, The Deep Hot Biosphere1, written by the world-famous geophysicist Thomas Gold.   I won’t pretend that I understood every word, but I was fascinated by Gold’s idea that hydrocarbons are produced abiotically (chemically, as opposed to biologically) in the earth’s mantle, and that they have a natural tendency to migrate toward the surface, the Earth’s pressures being what they are.  Gold has been mocked and denounced as a crank by many, and most of the oil we know about probably does have biological origins. But, I’ve held my own judgment in abeyance, pending further scientific investigation.  The thing that hooked me on Gold’s theory was the knowledge that planets within our own solar system are swamped– if that’s the right word—with abiotic hydrocarbons.  Methane being the most prominent. 

Then, in June of this year, the U.S. Energy Information Administration (EIA) released a new study, Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States.  This study doesn’t prove—nor does it disprove—Gold’s theory of abiotic oil. 

But, it does admit that the EIA’s Annual Energy Outlook 2011 was off in its estimate of shale oil deposits by a factor of ten (32 billion barrels in the 2011 report vs. 345 billion barrels in 2013).  I’ll go out on a limb here, and suggest that two years from now, the number will have jumped again. 

Do you remember Matt Ridley?  He is the author of The Rational Optimist2, a book I’ve recommended on several occasions.  He’s also a geneticist and a member of the House of Lords.  More to the point, he maintains a terrific blog, which you may want to bookmark,, and from which I now quote:

But there’s increasing doubt about whether all natural gas (which is 90% methane) comes from fermented fossil microbes. Some of it may be made by chemical processes deep within the earth.

The ocean floor accumulates not just the soft bodies of plankton, but also their shells and skeletons, made in effect from dissolved carbon dioxide, which build up to thick layers of rocks (such as the white cliffs of Dover in England).

When the ocean floor is driven down deep into the molten mantle, in the so-called subduction zones where continents are barging their way over the oceanic crust, this carbonate gets heated and pressurized.  In 2004, Henry Scott and his colleagues at the University of Indiana discovered that ideal conditions exist for this carbonate to lose its oxygen and gain hydrogen instead, making methane on a massive scale.

In effect, this would recycle the Earth’s carbon dioxide by turning it back into the fuel from which it was made when burned or breathed.  Maybe this explains why so much methane bubbles up through hydrothermal vents on the ocean floor.

….Dr. Kutcherov3 thinks the evidence “confirms the presence of enormous, inexhaustible resources of hydrocarbons in our planet.” If he is right—and America’s new Deep Carbon Observatory aims to resolve the question in the next few years—natural gas may effectively never run out. (emphasis added)

Within this blog post Matt Ridley cites a March 2013 article4 published in the Journal of Petroleum Technology to the effect that Dr. Thomas Gold, who passed away in 2004,  may have been right after all; at least about abiotic methane.   mh


The Deep Hot Biosphere,  Thomas Gold, Springer, 1998.

The Rational Optimist, Matt Ridley, Harper, 2010.

Hydrocarbon, ed. Vladimir Kutcherov and Anton Kolesnikov, University of Stockholm, ebook3000, 2013.