In memory of
Armen A. Alchian April 12, 1914 - February 19, 2013 Professor Armen A. Alchian, among the most innovative and influential economists of the past half-century, died of natural causes at age 98 on February 19, 2013. Alchian, the son of Armenian parents, was born on April 12, 1914 in Fresno, CA. His father Alex emigrated to the United States in 1901 at the age of 16. His mother Lily Normart was the first Armenian baby born in Fresno in 1889. He was raised in the Armenian community in Fresno, CA among many friends who formed a large extended family and were affectionately called "aunts" and "uncles." He attended Fresno High School where he excelled in academics and participated in track and field. His athletic coaches mentored him and one of them set Alchian's sights on Stanford University. After earning Bachelor of Arts (1936) and Doctor of Philosophy (1942) degrees from Stanford University and serving in the Army Air Force as a statistical analyst, he joined the UCLA Department of Economics in 1946. At the same time, he began an eighteen-year association with the RAND Corporation (Santa Monica). Alchian was the modest leading presence in a UCLA Economics Department which grew into prominence beginning in the 1950s. For several decades it was recognized, along with the departments at the University of Chicago and the University of Virginia, as a fruitful center of unusual economic perspective and purpose. A splendid technician himself, Alchian was distinguished by a subtle feel for the way the world works and for the solution of real questions. As observed by Karl Brunner, one of his eminent colleagues, Alchian "avoided the fashionable game of analytic overkill and the pursuit of contrived problems." Alchian and his colleagues attracted a stream of promising graduate students, many of whom were inspired to follow conspicuous careers in academia and in government. His exacting and exciting two-quarter course in price theory was the cornerstone of the advanced curriculum. He was the doctoral dissertation advisor of William F. Sharpe, later a Nobel laureate, who has written: "Armen Alchian ... 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 on a host of fascinating problems. I have attempted to emulate his approach to research ever since." His enormous influence was manifest in undergraduate teaching as well, where he regularly taught a unique course in the Principles of Economics. Along with instructing at different levels, guiding Ph.D. dissertations, critiquing work of associates, Alchian compiled a brilliant research record. An astonishing number of his journal articles, book chapters, and encyclopedia essays are universally applauded as classics, the first of his path-breaking papers appearing in 1950. With highly uncommon virtuosity, Alchian, sometimes with co-authors, probed numerous areas and aspects of market operations, business organization, and personal behavior, along with vexing formal questions of theory. In his 1996 designation by the American Economic Association as a Distinguished Fellow, he is described as "an applied economist of enormous intellectual curiosity," and a 1983 citation from the University of Rochester refers to him as "a scholar of formidable energy, power, and originality." He insightfully dealt with a great array of topics and issues, including the nature, role, and survival of business firms; the basic concept of cost; information costs, uncertainty, and unemployment; organizations, transactions costs, and contracting arrangements and efficiency in the market; property rights and individual conduct and decision-making; interrelations of economics and law; and inflation, its measurement, and its consequences. Two collections of Alchian's papers are available: Economic Forces at Work (Liberty Fund, 1977) and The Collected Works of Armen A. Alchian (Liberty Fund, 2006, two volumes). In addition to his contributions to formal scholarship, he prepared, with William R. Allen, a large general textbook "University Economics" which, under two titles, appeared in six editions, and had great influence in the study and the teaching of economics. There is another facet to Alchian's career that is less known but of huge significance outside of purely academic economics. In 1971 Professor Henry Manne, then a professor at the University of Rochester and later Dean of the George Mason University School of Law, organized a summer institute in economics for law professors. Professor Manne selected Alchian and Allen's University Economics as the basic text for the course, since it was then the only introductory text that dealt with the then unfamiliar idea of property rights economics, an Alchian innovation and a foundational part of the later worldwide ballooning of the field of Law and Economics. These "summer camps" for law professors continued at various universities for a total of 23 years and were attended by a total of over 600 law professors from the United States and abroad. Armen Alchian did the lion's share of the teaching in every single one of these programs and thus may be said to be, in a way not generally recognized, a founder of the field of Law and Economics, an enterprise that has revolutionized legal scholarship around the world. Certainly he was the main economics instructor of the many brilliant and prolific legal scholars who attended his classes and then spread the idea of economics as essential to an intellectual analysis of law. University Economics for a long time was the most cited work of economics in the country's many academic law journals. Emboldened by the success of the law professors' program, Professor Manne extended the idea of economics for legal figures to the Federal Judiciary. Nothing of this order had ever been done in the legal history of the United States, and no professors of economics had ever encountered a more distinguished, experienced and influential group of students. Joining Alchian, who still did the bulk of the teaching, were such luminaries as Milton Friedman, Paul Samuelson, Harold Demsetz and Martin Feldstein, perhaps as distinguished an economics faculty as has ever been assembled. The judges responded with enormous enthusiasm to the intellectual feast that was offered them. The influence of the program has been remarked widely, and some observers even credit it with being an essential factor in the sea change in Federal antitrust law that occurred around that time. Alchian always said that the judges were the best students he ever taught and, if that was so, the judges certainly reciprocated in their appreciation for him. Many of the judges developed a special bond with Professor Alchian and stayed in touch with him for years after their time as his students. Alchian continued to be the faculty mainstay of that program for over 25 years and thus had an influence on law which is probably greater than that of any non-legal academic. At one time near the end of his judicial teaching career, over two-thirds of the entire federal judiciary had gone through this program. The once "unheard of" idea of "continuing education" for judges in now a well-established and robust phenomenon, no doubt in large part due to the auspicious beginning it had at the hands of Professor Alchian. With other honors, he was a president of the Western Economic Association, a Fellow of the American Academy of Arts and Sciences, a member of the Mt. Pelerin Society, and the Armen A. Alchian Chair in Economic Theory at UCLA was named after him. Alchian was an avid golfer throughout his lifetime. He rose very early and teed off at day break at nearby Rancho Park Golf course for an early morning round of golf. He still arrived at the office before many of his colleagues for a full day of work. When he traveled to conferences around the world, his golf clubs accompanied him. In his eighties he could look at his collection of golf score cards and describe the holes he had played on many of the courses he enjoyed. Daniel K. Benjamin, who edited The Collected Papers, summarize that Alchian showed "the beauty and power of economics and demonstrated that both could be transmitted in the classroom and through the written word. The science of Economics is an enriched discipline because of Armen Alchian, and ... the world is a better place because he has graced us with his wisdom, his kindness, and his love of liberty." Professor Alchian is survived by his wife, Pauline, of 73 years, and their two children, Arline Hoel and her husband Carlton of Dallas, Texas, and Allen Alchian and his wife Ann of Monument, Colorado, and six grandchildren and three great grandchildren.
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