Leo Herzel

Diary Entry: March 3, 2025

We were discussing the history of property and regulation in my “Advanced Theories” seminar, and the Professor mentioned a name I’d never heard before: Leo Herzel.

He said Herzel was a student who, way back in the 50s, first proposed the idea of auctioning radio frequencies.

My ears perked up immediately. Auctioning frequencies? That’s the exact topic of Coase’s 1959 Federal Communications Commission paper — the one that set the stage for The Problem of Social Cost.

I went home tonight and pulled up the FCC paper again. I did a text search for “Herzel.”

And... there he is.

Ronald Coase, in his own 1959 paper, mentions a student named Leo Herzel. He cites Herzel’s 1951 article from the Chicago Law Review. I found Herzel’s article. It suggests the “FCC could lease channels for a stated period to the highest bidder”.

This is... this is the whole idea. Coase’s revolutionary concept of using the price mechanism to allocate spectrum... did it come from this Leo Herzel?

I kept digging. I couldn’t believe this. And then I found another connection. Herzel was opposed by “Professor Dallas W. Smythe of the Institute of Communications Research at the University of Illinois”. Herzel himself later recalled that he “went to Urbana and debated Dallas Smythe”.

He was here. I feel as if I am the reincarnated Leo Herzel. He was debating this idea at UIUC, and everyone told him it was “undemocratic, un-American, and impractical”.

Eight years later, Coase publishes a paper using the exact same idea, and it becomes a classic.

Interesting.