Born in New York City on May 1, 1925, Manne was an only child. He received his bachelor's degree in economics from Harvard College at 18 years of age. Following graduation, he served out the last days of World War II in the Navy before heading back to Harvard, where he earned a doctorate in economics in 1950. He stayed on there as an instructor before accepting a position at the Rand Corporation as an economic analyst from 1952 to 1956.
Manne spent the next five years at Yale as an associate professor of economics. But he was not destined to remain on the East Coast.
Manne served as a professor between 1961 and 1967 at Stanford's Graduate School of Business. In 1967, he became a faculty member of the Department of Economics and a founding member of the Department of Operations Research; he remained on campus until 1974. During a brief hiatus from the Farm, Manne traveled to Vienna, Austria, as an economist for the International Institute for Applied Systems Analysis before returning to Harvard as a professor of political economy from 1974 to 1976. Later that year, he reclaimed his Stanford post within the Department of Operations Research, and held it until 1992, when he retired from teaching. Remaining active within the department as a professor emeritus, Manne continued to publish through 2004.