November 2014

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I spent a the summer before starting my PhD voraciously reading *Economic Forces at Work* on Pete's advice, and it was one of the best human capital investments I ever made. The whole time I thought, "This is the way I want to think, and the way I want to write." Foolishly, at the time I worried that maybe even though I was in love with the style of thinking and writing I found in Alchian, I was deficient in the way "modern" price theorists thought and communicated. One thing I've realized over the past few years is that the deficiency that I (and probably all of us) have is that I wasn't thinking and communicating enough like Alchian. It's a sad day to mark his passing but his legacy will live on.

Alchian and Allen's "University Economics" is one of the great economics textbooks of the 20th century.

Any student who successfully goes through that book and masters the logic and method of economic reasoning developed there is way ahead in becoming an "economist."

It was recommended to me long, long ago, when I was still an undergraduate back in the 1970s. The months I spend with it on my own was one of the most rewarding "courses" in economics I ever experienced.

Then reading through "Economic Forces at Work" made clear to me what a non-Austrian economics could be at its very best.

It is unfortunate that the Nobel Committee did not see fit to award a prize to Alchian. He would truly have been deserving of that high honor -- far more than some recent recipients!

Richard Ebeling

A few days ago I chanced across http://alchian-allen.com/index.html

This site must be a legacy promo for their 2005 universal economics with table of contents and preface that can be downloading. An early draft of the first half of the 2005 book is on the web.

The web site for the paperback of universal economics has been down for several months.

Alchian had a most penetrating mind. He was always looking for a better answer.

He was at his most confronting and most creative when he said "Whatever is, is efficient." If it wasn't efficient it would have been something different. Of course, if you try to change anything that is there, that is efficient too.

Alchian would ask "If something is so optimal, why don't we see it then?"

The notion was essentially that there must be other costs that you left out of your model; either costs involved in the political system, in organizing support, or in changes for this other solution which might seem to be such a low-cost option.

The basic point was why are we weighing only some costs and not others?

Why are these costs (involved in minimizing particular dead-weight losses that would be involved in setting a particular tax) less important than other types of costs (involved in informing people of what the options are or of organizing them to adopt the alternative option)? Entrepreneurship is not a free lunch.

The recents deaths of Buchanan, Ostrom and now Alchian remind me that so many of the economists we Austrians think of as great are of the old generation. And now there are the predictable events. The obvious question, for me, is whether we are still in the same discipline as these people were in. In the prime of their days economics was not as obsessed with formalism as it is now. There was a more frequent effort not to lose contact with the "intuitive" roots of economics. True, there were many exceptions. But being that kind of economist did not preclude getting a job at a very top department. Now largely it does.

Economists is not defined by its subject matter nor its point of view, but by its method of analysis. This method now goes beyond simple maximization subject to constraint. It is rooted in the severe application of the axiomatic method. Inutition (so-called) is now just motivation; it is not fundamental.

It will take a long time for the relevant institutions to take account of the differences in the ways certain phenomena are studied. But it has to come. Just as in the 1960s and earlier many schools lumped sociologists and anthropologists into the same department, there will surely come a time when economics will break apart.

I do not know exactly how this will occur but I am convinced it will.

Mario Rizzo.

see http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=2136&chapter=195441&layout=html&Itemid=27 for STANLEY G. LONG's New individualist review of University Economics by Armen A. Alchian and William R. Allen. Belmont, California: Wadsworth Publishing Co., 1964,

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