Founder of New institutional economics (NIE)
Armen Albert Alchian was an American economist. He spent almost his entire career at the University of California, Los Angeles (UCLA). A major microeconomic theorist, he is known as one of the founders of new institutional economics and widely acknowledged for his work on property rights.
Early life and education
Armen Albert Alchian was born on April 12, 1914, in Fresno, California, to Armenian-American parents.
Alchian attended Fresno High School, where he excelled academically and athletically. He initially enrolled in Fresno State College in 1932 and transferred to Stanford University in 1934, obtaining his bachelor’s degree in 1936. He earned his PhD in Philosophy from Stanford in 1943. His dissertation was titled « The Effects of Changes in the General Wage Structure. » Anthony J. Culyer quoted Kenneth Arrow as saying that Alchian was the « brightest economics student Stanford ever had. » Alchian was called « the Armenian Adam Smith » by Michael Intriligator.
Career
Alchian worked as a teaching assistant at Stanford (1937–40), and then in 1940–41 he worked at the National Bureau of Economic Research (NBER) and Harvard University and in 1942 at the University of Oregon as an instructor. He went on to serve in the Army Air Forces as a statistician between 1942 and 1946.
Alchian joined the Department of Economics at University of California, Los Angeles (UCLA) in 1946. He was initially assistant professor (until 1952), then associate professor (until 1958), and eventually named professor in 1958. He retired from UCLA in 1984 and was named professor emeritus of economics. It was not until 2007, at the age of 93, that he closed his campus office.
Alchian was also affiliated with the RAND Corporation between 1946 and 1964 and was a consultant to business firms. At RAND, he is remembered for his work on the hidden costs of regulation. Alchian was the first economist to be employed at RAND. Alchian was also involved for around 20 years with the Law and Economics Center, initially affiliated with the University of Rochester, which provided « insight into economic theory to legal scholars and judges. » Timothy Muris opined that Alchian was « unexcelled in teaching economics to lawyers. »
Alchian, along with James M. Buchanan and Ronald Coase, served as a bridge between the « Old » and « New » Chicago School. Boettke and Candela argue that these three economists founded the following branches in economics: New Institutional Economics, Law and Economics, and the economics of property rights. Indeed, Alchian is widely considered one of the founders of the New Institutional Economics.
Recognition
Honors
- Member of the Mont Pelerin Society (1957)
- President of the Western Economic Association International (1975)
- Fellow of the American Academy of Arts and Sciences (1978)
- Distinguished Fellow of the American Economic Association (1996)
- Adam Smith Award by the Association of Private Enterprise Education (2000)
- Honorary Fellow of the Institute of Economic Affairs
Honorary doctorates
- University of Rochester (1983)
- Universidad Francisco Marroquín (2010)
Tributes
- The Armen A. Alchian Chair in Economic Theory at UCLA was established in July 1997.
- The Armenian Economic Association presents the Armen Alchian Award since 2014.
