Powell was born in Norfolk, Virginia and grew up on Long Island. His father, Frank Coburn Powell, was a partner in a company that principally manufactured high quality phonograph turntables and cartridges. His mother, Madeline Shields Powell, was a catalog librarian. Both were from Indianapolis. Powell graduated from East Woods School (Oyster Bay, New York) and Millbrook School (Millbrook, New York) before entering the University of Chicago where he earned a B.A. in history. His professors included William H. McNeill (The Rise of the West), Donald F. Lach (Asia in the Making of Europe) and Earl J. Hamilton (War and Prices in Spain). As an editor of the student quarterly New Individualist Review, Powell helped publish articles by future Nobel Laureates F.A. Hayek, Milton Friedman and George J. Stigler. Other contributors included Ludwig von Mises, Murray Rothbard and Yale Brozen. Powell worked as a researcher for future Nobel Laureate Ronald H. Coase.

Powell started his career as a direct response advertising copywriter, doing the bulk of his work for financial services companies like J.P. Morgan, Merrill Lynch and GE Capital. In 1976, he began freelancing for Barron's, then for other business publications, then publications in the art market and general-interest magazines. Writing for travel magazines took him to China, Hong Kong, Japan, Korea, Taiwan, India, Belgium, Switzerland and Dubai.

Powell's early books were about the art market, commercial real estate and Japanese finance. By the late 1980s, Powell began to author books on liberty.