I wrote this brief post awhile back, and forgot to post it on April 12th, Armen’s 94th birthday. I’m late. But better late then never they say.
On Armen Alchian’s 94th birthday, it seems appropriate to reflect on some of his contributions to economics and economic analysis of the law. Armen has been described as “the Armenian Adam Smith,” and his name is frequently mentioned on the “short list” of Nobel candidates every year (at least it is on this blog). Armen’s influence on economics and law and economics is difficult to overstate. Armen’s classic paper with Harold Demsetz (AER, 1972) remains influential in the theory of the firm literature and is listed as the 12th most important paper in economics since 1970 by Kim et al. Klein, Crawford and Alchian’s seminal analysis of vertical integration and the holdup problem (JLE, 1978) ranks #30 on this list. Of course, though a sign of his significant intellectual contributions, citations to scholarly articles do not begin to measure the mark Armen left on the fields he touched. More generally, and harder to measure, is Armen’s general influence on the economics of property rights and the development of what has been called the “UCLA School” of economics.
In addition to his scholarly contributions, Armen’s teaching style is the stuff of legend. By the time I arrived in Westwood Armen was done teaching the graduate microeconomics class, so I missed out on that. But I was lucky enough to have him on my dissertation committee at UCLA and experience some of Armen’s approach first hand. Tales are abound of the careers of economists-in-the-making that Armen influenced in one way or another. Nobel Laureate William F. Sharpe captures some of this in his autobiographical exposition explaining Alchian’s influence on his own career:
Armen Alchian, a professor of economics, was my role model at UCLA. He taught his students to question everything; to always begin an analysis with first principles; to concentrate on essential elements and abstract from secondary ones; and to play devil’s advocate with one’s own ideas. In his classes we were able to watch a first-rate mind work on a host of fascinating problems. I have attempted to emulate his approach to research ever since. When I returned to pursue the PhD degree, I took a field in microeconomics with Armen and he also served as chairman of my dissertation committee.
Any Alchian student or fan knows that Armen also had a heavy influence in the training of judges and lawyers through the George Mason Law and Economics Center Program started by Henry Manne. In an important antitrust policy speech, former FTC Chairman Timothy Muris articulates a sentiment I’ve heard repeatedly from those who went through the program or watched Armen teach:
Armen Alchian was unexcelled in teaching economics to lawyers. He often presented economics socratically – a technique familiar to lawyers. For years Armen was one of the most popular instructors in Henry Manne’s programs for teaching economics to lawyers. In short courses, he taught literally hundreds of federal judges and law professors.
Of course, I suspect Armen’s socratic approach may have differed in style when delivered to graduate students rather than judges and lawyers. In many ways, Armen is as much a founder of the law and economics movement, and deserving of credit for its spread, as the those traditionally credited with the origination of that movement: Coase, Manne, Becker, and Calabresi.
Here are some Alchian links for interested readers:
- A Biography and another profile hosted at David Levine’s website
- Uncertainty and Economic Evolution: Essays in Honor of Armen A. Alchian (edited by John R. Lott, Jr.)
- A 2000 Liberty Fund interview by Daniel K. Benjamin in the Intellectual Portrait series
- Alchian’s collected works in two volumes
- Alchian’s “Property Rights” entry to the Concise Enyclopedia of Economics
- A profile of Alchian in the UCLA Daily Bruin in 2006
- My blog post making the case for a “UCLA School” Nobel Prize in honor of the contributions of Alchian, Demsetz & Klein
Happy 94th Birthday Armen.