Armen Alchian
Encyclopedia
Armen Albert Alchian is an American
economist
and an emeritus professor of economics
at the University of California, Los Angeles
.
Alchian was born in Fresno, California
into an Armenian
family. He attended California State University, Fresno
for two years before transferring to Stanford University
in 1934, which awarded him the B.A.
(1936) and Ph.D.
(1944). He was a statistician with the USA Army Air Corps, from 1942 to 1946. In 1946, he joined the Economics Department at UCLA, where he spent the rest of his career. For many years, he was affiliated with the Rand Corporation. Alchian was elected a Fellow of the American Academy of Arts and Sciences
in 1978. In 1996, he became a Distinguished Fellow of the American Economic Association
and in 2010 he received an honorary doctorate degree from Universidad Francisco Marroquín
.
Alchian is the founder of the "UCLA tradition" in economics, a member of the Chicago school of economics, and one of the more prominent price theorists of the second half of the 20th century. He is the author of pathbreaking articles on information and uncertainty, and the theory of the firm
. Through his writings on property rights and transaction costs, he is a founder of the new institutional economics
. A surprising fraction of Alchian's writings have touched on topics conventionally viewed as macroeconomic: money, inflation, unemployment, and the theory of business investment. His writings are characterized by lucid witty exposition and a minimum of mathematical formalism.
Alchian is the coauthor (with William Allen
) of the curious and influential introductory economics text Exchange and Production. While the technical level of this text is unusually low, the demands it makes of the student's economic intuition are unusually high. Its content and organization differ radically from those of other American university economics texts written during the second half of the 20th century. This was the first American introductory text to discuss information, transaction costs, property rights, and a market economy as a discovery process. This text also contains the classic statement of what has come to be known as the Alchian-Allen Theorem
. This proposition, colloquially known as "ship the good apples out," states that when output varies in quality, the lower quality output is consumed nearby while the higher quality output is shipped long distances. The reason is simple: transportation costs vary with the weight and bulk, but not the quality, of that which is transported. The added per-unit amount decreases the relative price of the higher-grade product.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
and an emeritus professor of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
at the University of California, Los Angeles
University of California, Los Angeles
The University of California, Los Angeles is a public research university located in the Westwood neighborhood of Los Angeles, California, USA. It was founded in 1919 as the "Southern Branch" of the University of California and is the second oldest of the ten campuses...
.
Alchian was born in Fresno, California
Fresno, California
Fresno is a city in central California, United States, the county seat of Fresno County. As of the 2010 census, the city's population was 510,365, making it the fifth largest city in California, the largest inland city in California, and the 34th largest in the nation...
into an Armenian
Armenians
Armenian people or Armenians are a nation and ethnic group native to the Armenian Highland.The largest concentration is in Armenia having a nearly-homogeneous population with 97.9% or 3,145,354 being ethnic Armenian....
family. He attended California State University, Fresno
California State University, Fresno
California State University, Fresno, often referred to as Fresno State University and synonymously known in athletics as Fresno State , is one of the leading campuses of the California State University system, located at the northeast edge of Fresno, California, USA.The campus sits at the foot of...
for two years before transferring to Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
in 1934, which awarded him the B.A.
Bachelor of Arts
A Bachelor of Arts , from the Latin artium baccalaureus, is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, the sciences, or both...
(1936) and Ph.D.
Ph.D.
A Ph.D. is a Doctor of Philosophy, an academic degree.Ph.D. may also refer to:* Ph.D. , a 1980s British group*Piled Higher and Deeper, a web comic strip*PhD: Phantasy Degree, a Korean comic series* PhD Docbook renderer, an XML renderer...
(1944). He was a statistician with the USA Army Air Corps, from 1942 to 1946. In 1946, he joined the Economics Department at UCLA, where he spent the rest of his career. For many years, he was affiliated with the Rand Corporation. Alchian was elected a Fellow of the American Academy of Arts and Sciences
American Academy of Arts and Sciences
The American Academy of Arts and Sciences is an independent policy research center that conducts multidisciplinary studies of complex and emerging problems. The Academy’s elected members are leaders in the academic disciplines, the arts, business, and public affairs.James Bowdoin, John Adams, and...
in 1978. In 1996, he became a Distinguished Fellow of the American Economic Association
American Economic Association
The American Economic Association, or AEA, is a learned society in the field of economics, headquartered in Nashville, Tennessee. It publishes one of the most prestigious academic journals in economics: the American Economic Review...
and in 2010 he received an honorary doctorate degree from Universidad Francisco Marroquín
Universidad Francisco Marroquín
Universidad Francisco Marroquín is a private, secular, university in Guatemala City, Guatemala. According to the school's website, "the mission of Universidad Francisco Marroquín is to teach and disseminate the ethical, legal and economic principles of a sociey of free and responsible persons."...
.
Alchian is the founder of the "UCLA tradition" in economics, a member of the Chicago school of economics, and one of the more prominent price theorists of the second half of the 20th century. He is the author of pathbreaking articles on information and uncertainty, and the theory of the firm
Theory of the firm
The theory of the firm consists of a number of economic theories that describe the nature of the firm, company, or corporation, including its existence, behavior, structure, and relationship to the market.-Overview:...
. Through his writings on property rights and transaction costs, he is a founder of the new institutional economics
New institutional economics
New institutional economics is an economic perspective that attempts to extend economics by focusing on the social and legal norms and rules that underlie economic activity.-Overview:...
. A surprising fraction of Alchian's writings have touched on topics conventionally viewed as macroeconomic: money, inflation, unemployment, and the theory of business investment. His writings are characterized by lucid witty exposition and a minimum of mathematical formalism.
Alchian is the coauthor (with William Allen
William Allen
- Politicians :* William Allen , Canadian politician from Toronto* William Allen , American congressman from Ohio* William Allen , American politician from Ohio...
) of the curious and influential introductory economics text Exchange and Production. While the technical level of this text is unusually low, the demands it makes of the student's economic intuition are unusually high. Its content and organization differ radically from those of other American university economics texts written during the second half of the 20th century. This was the first American introductory text to discuss information, transaction costs, property rights, and a market economy as a discovery process. This text also contains the classic statement of what has come to be known as the Alchian-Allen Theorem
Alchian-Allen Theorem
The Alchian-Allen Theorem was developed in 1964 by Armen Alchian and William R. Allen in the book University Economics...
. This proposition, colloquially known as "ship the good apples out," states that when output varies in quality, the lower quality output is consumed nearby while the higher quality output is shipped long distances. The reason is simple: transportation costs vary with the weight and bulk, but not the quality, of that which is transported. The added per-unit amount decreases the relative price of the higher-grade product.
Selected works
- 1950, "Uncertainty, Evolution and Economic Theory," Journal of Political Economy 58: 211-21.
- 1959, "Costs and Outputs" in Moses AbramovitzMoses AbramovitzMoses Abramovitz was an American economist. He was born in Brooklyn, New York. He studied economics at Harvard University and earned a doctorate at Columbia University. In 1945 and 1946, he was economic adviser to the United States representative on the Allied Reparations Commission...
, ed., The Allocation of Economic Resources. - 1969 "Information Costs, Pricing and Resource Unemployment," Economic Inquiry 7: 109-28.
- 1972 (with Harold DemsetzHarold DemsetzHarold Demsetz is a professor emeritus of economics at the University of California at Los Angeles .-Career:Demsetz includes a short intellectual autobiography....
) "Production, Information costs and Economic Organization," American Economic Review 62: 777-795." - 1978 (with Robert Crawford and Benjamin Klein) "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics 21: .
- 1978. Economic Forces at Work. Indianapolis: Liberty FundLiberty FundLiberty Fund, Inc. is a private, educational foundation established and headquartered in Indianapolis, Indiana, USA. It is dedicated to the study of the ideal of a society of free and responsible individuals...
. A number of Alchian's better known articles are reprinted here. - 1983. Exchange and Production. Wadsworth Publishing. A revision of part of University Economics, first published in 1964.
- 1993, "Property Rights" in The Concise Encyclopedia of Economics", Liberty Fund.
See also
- Alchian's Generalization
- It states that when an equal amount of payment is added to two competitive goods, the price of the dearer one will fall relative to the cheaper one. Therefore, there will be a tendency for consumers to substitute the dearer one for the cheaper one.
External links
- "Armen Alchian," The Concise Encyclopedia of Economics, Liberty Fund.
- Alchian's profile at UCLA.
- Alchian's profile at the New School for Social Research.
- Article on Alchian from the UCLA student newspaper, the Daily Bruin.
- http://newmedia.ufm.edu/gsm/index.php/Listados:Armen_A._Alchianvideo collection from NewMedia Universidad Francisco MarroquínUniversidad Francisco MarroquínUniversidad Francisco Marroquín is a private, secular, university in Guatemala City, Guatemala. According to the school's website, "the mission of Universidad Francisco Marroquín is to teach and disseminate the ethical, legal and economic principles of a sociey of free and responsible persons."...
]
Audio link
- "The Intellectual Portrait Series: A Conversation with Armen A. Alchian (2000)" at The Online Library of Liberty