Monday, March 12, 2007

The Accountant Is In

Continued from page 1

By Anne Murphy

"It helps to have someone knowledgeable, who's identified with the ideas and who can dignify people's questions," she says, downplaying her influence in what she calls a consumer "movement" in health care.

When Regina Elbinger left Crown Heights, Brooklyn, in 1961, having been voted most outstanding senior at her small Orthodox yeshiva, she was the first girl from the school to attend MIT or even, she says, to leave the confines of her immigrant Jewish enclave.

"It would have been unthinkable, except for the kind of freedom of thought I had been raised in," recalls Herzlinger, whose father, a rabbinical scholar, had given her the Qur'an and the works of Spinoza to read by the time she was 14.

Iconoclasm, a mathematical mind, and a dogged optimism were her family's legacy to her. Alexander Elbinger had fled revolutionary Russia in the 1920s, only to flee Nazi Germany in 1939 with his wife, Ella.

Elbinger's facility with languages and his gift for computing currency fluctuations almost instantly in his head had made him a successful trader, and he'd accumulated some wealth. "He was a Zionist," his daughter says, so before the outbreak of war in Europe, he had invested in land in the Jewish homeland. "Fleeing [Germany] saved their lives and made mine possible," says Herzlinger, who was born in Tel Aviv. Like most Jewish émigrés, the Elbingers had taken little with them. But Herzlinger's mother, a gregarious beauty and shrewd card player, helped support the family by beating gambling men at gin. The Elbingers survived Israel's War of Independence in 1948 and endured rationing and austerity in the early years of statehood before immigrating to the United States when Regi, an only child, was eight.

Precocious and ambitious, Regina mastered English in the New York Public Library, where she became fascinated by iconic Americans like Andrew Carnegie, who essentially built the public library system. Both predatory and beneficent, "he was this genius monster," she says. His ruthless exploitation of economies of scale sparked her curiosity about competitive advantage in American business. Carnegie's philanthropy got her interested in how to finance public goods, such as libraries, that capital markets can't efficiently produce.

MIT was virtually all male when Herzlinger enrolled to study economics, one of about 20 women in her class. Demographics, not her talent for science and math, led her to choose MIT over Radcliffe (Harvard was not yet coed). Intent on a career--"I was not going to be financially dependent on anyone else," she says--she knew she had to learn to work with men. And Radcliffe, she wagered, wouldn't teach her that.

Herzlinger expected to be challenged at MIT. She didn't expect to be prepped for failure. "There was a cruelty about the school," she says. "There was this expectation that people would fail and it was their fault." She recalls sitting in an assembly hall with incoming freshmen and being told by MIT's president, "Look to the left of you. Look to the right of you. One of the three of you will not be here at graduation."