Doug Allen on Alchian

19 February 2013 at 4:11 pm 2 comments

| Peter Klein |

A remembrance from our friend Doug Allen:

I only met Armen once, but his influence on me was profound. In the fall of 1980 I was taking intermediate micro economics to fulfill a Business Degree requirement. The course was taught by the great Art DeVany, who had been a student of Armen’s at UCLA. Naturally he used “Exchange and Production” as his text. I remember vividly the day — it was a Thursday, late on a cloudy afternoon — when I entered a corner of a large hallway on campus. I was thinking about the concept covered in class that week: “prices are not determined by costs.” I went into that corner thinking like an accountant, and when I came out the other side I was thinking like an economist. It was an epiphany. I came out thinking “of course prices are not determined by costs!”

I quickly changed majors, decided to postpone law school for a detour in graduate economics, and have never looked back. Fortunately for me my advanced undergraduate theory class was taught by Chris Hall, an intellectual grandson of Armen’s via Steve Cheung. His text for the course was “Economic Forces at Work.” I loved Armen’s writing, his style, and his ease in making life a big puzzle to solve.

I mentioned that I have only met the great man once. It was at a PERC conference in the early 1990s. The small group sat around tables in alphabetical order, and so Alchian was first and (Doug) Allen was second. I jokingly said “ah, Alchain and Allen, together again.” I thought it was quite witty, but Armen ignored the remark. I made some other comments that he was similarly impressed with. So, remembering that “even a fool is counted wise when he keeps his mouth shut,” I just sat back and listened. It was a great treat, and Armen didn’t seem to mind having me tag along for the weekend. My favorite recollection was a long discussion we had over how Rockefeller actually made money.

As I think about his passing, the one thought that strikes me is “where is the Armen Alchain for today?” Where is the economist’s economist? I suppose there just never will be another AAA.

Entry filed under: - Klein -, People.

Armen Alchian (1914-2013) My Response to Shane (2012)

2 Comments Add your own

  • 1. divineeconomyconsulting  |  19 February 2013 at 4:34 pm

    It might be that the halls of academia are too long and too full of the echos of socialism. I am sure there is a remnant though and maybe this kind of transition has led to a migration away from the halls of academia.

  • 2. Harold Mulherin  |  19 February 2013 at 10:58 pm

    as an undergrad at UGA, I had the good fortune to be taught out of the Alchian Allen text by the econometrician Carter Hill. Both my self and cousinn walter (as well as the prof) were intrigued by Alchian’s emphasis on oportunity cost. The accountants in the class were less enthralled. I was inspired to go to study with Alchian at UCLA. My cousin instead chose MIT under Fischer Black. I am not sure whether Armen and Fischer ever met, but my cousin and I founde their styles to be similar. Both profs would start with aparently simple questions and then classes (and possibly semesters} analyzing the details. Both Armen Alchisn and Fischer Black will be remembered as influencing countless students , and, unfortunately, not being awarded the Nobel Prize,

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