Armen Alchian

A large portion of Alchian's contribution is in property rights. Henderson argued that Alchian has been most impactful on the economic analysis of property rights and summarized his work on it as follows: "You tell me the rules and I'll tell you what outcomes to expect." Alchian opined that "In essence, economics is the study of property rights over resources." Peter Boettke noted in 2015 that Alchian is "recognized as the founder of what was called 'property rights economics' in which he had to re-introduce to the economics profession the important role that property rights play in the determination of economic performance."

Alchian suffered from a neurodegenerative disease in the last six years of his life. Alchian died of natural causes, in his sleep, at his home in Los Angeles on February 19, 2013 at the age of 98.

In a 2011 survey of around 300 economics professors in the U.S., Alchian ranked 17th among favorite living economists older than 60. He received the same points as Robert Fogel and Gordon Tullock. In 1984 Friedrich Hayek named Alchian and George Stigler his favorite economists "among the not really young ones." William R. Allen described him as "one of the superb economic analysts and teachers of the second half of the twentieth century." Walter E. Williams and Donald J. Boudreaux describe him as one of the top economists of the twentieth century and probably the greatest microeconomic theorist.

Alchian was a lifelong golfer and a regular visitor to the Rancho Park Golf Course. He often played golf with fellow economist George Stigler. He greatly admired the sport and wrote an opinion piece for The Wall Street Journal in 1977, in which he argued that golf is "not merely a sport. It is an activity, a lifestyle, a behavior, a manifestation of the essential human spirit. Golf's ethic, principles, rules and procedures of play are totally capitalistic. They are antithetical to socialism. Golf requires self-reliance, independence, responsibility, integrity and trust." He preferred to stay home and play golf than to partake in a conference called by President Gerald Ford to "Whip Inflation Now" as it would be "more productive than anything likely to be said in Washington."

Alchian never received a Nobel Prize, but numerous economists, such as Hayek, Harry Markowitz, Michael Intriligator, William R. Allen, David R. Henderson, Donald J. Boudreaux, believe he deserved one. Hayek told Henderson in 1975: "There are two economists who deserve the Nobel prize because their work is important but won't get it because they didn't do a lot of work: Ronald Coase and Armen Alchian." Allen nominated Alchian for the Nobel Prize in 1986 and characterized him as "a giant who, because of his lack of pretension, is easily overlooked by laymen and even by some supposed professionals—who has greatly honored his profession and uniquely contributed to its usefulness." The Swedish economist Axel Leijonhufvud, who was a student and colleague of Alchian for thirty years, suggested in 1996 that "his lack of self-promotion and his abstentiousness from it I think is what more than anything else has kept him from the Nobel prize so far. I can find no other explanation of the behavior of my countrymen."

Hubbard argues that Alchian's 1972 paper "Production, Information Costs, and Economic Organization" influenced works in the economics of organization by Bengt Holmström, Oliver Hart, and Paul Milgrom.

In 1964 Alchian and William R. Allen co-authored University Economics, an influential general textbook that has undergone six editions under two titles. It appeared in 1969 under the name Exchange and Production. The collection of his works was first published in 1977 by Liberty Fund under the title Economic Forces at Work, which contains his main 18 papers. In 2006 Liberty Fund published The Collected Works of Armen A. Alchian in two volumes.

In classroom, Alchian adopted the Socratic method and disliked the traditional lecture method. James M. Buchanan, briefly a colleague in the late 1960s, classified Alchian as "the best blackboard economist" he had ever known. In 2006 John Riley, chair of the UCLA economics department, stated that Alchian was the "father of the modern-day economics department at UCLA, and set the future for it." William R. Allen noted that the department's "golden age" was from 1950 to 1980 because of Alchian's presence and leadership in the department.

In the 1960s, Alchian told Eastern Bloc economists that they had to "introduce more private property rights to make markets work the way you think they should work" or else the market allocation will seem to be "perverse or deficient." David Riesman noted that Alchian, like Friedman and Hayek, was "confident about the causal relationships that run from evolution to capitalism, from capitalism to meliorism." One left-wing commentator described Alchian as an "ultra-liberal" economist who vigorously defended the idea that capitalism is characterised by the absence of any substantial power relations between individuals. Alchian was apparently influenced by neo-Darwinism. He, like Friedman, "invoked Darwinism to prove that the market economy is natural." Alchian was critical of minimum wage laws.

A number of economists have been influenced by Alchian, including several Nobel laurates. Kenneth Arrow was "personally and intellectually closely linked" with Alchian and the latter's influence played a crucial role on Arrow's introduction of the concept of "learning curve" into an economic growth model. James M. Buchanan was inspired by Alchian's work on free tuition. William F. Sharpe, who took a graduate course taught by Alchian in 1956, named him one of his three mentors, whose approach to research he had attempted to emulate. Sharpe called him a "brilliant mind grappling (usually very successfully) with the most difficult concepts in economics in thoroughly creative and innovative ways." Elinor Ostrom, an undergraduate student of Alchian, noted that as an institutional theorist, she "really appreciate[s] Alchian’s approach" in the 1950 article "Uncertainty, Evolution, and Economic Theory". Walter E. Williams called him one of his "tenacious mentors." William R. Allen named Alchian one of the two individuals who had had the greatest influence on his life, calling him "an older brother." John Lott stated that University Economics was responsible for him becoming an academic and going to UCLA.

While working at RAND in 1954, Alchian conducted the first event study to infer what kind of fuel material was used in the development of hydrogen bombs, the construction of which were secret at the time. He successfully identified lithium as the fusion fuel through publicly available financial data. However, the paper was confiscated and destroyed because it was seen as a threat to national security.

Alchian was also influenced by the Austrian School, especially by the ideas of Ludwig von Mises and Friedrich Hayek. He was influenced by Mises' Human Action (1949). Alchian famously interviewed Hayek in 1978, during which Alchian told him that he was particularly influenced by two of his articles: "Economics and Knowledge" (1937) and "The Use of Knowledge in Society" (1945). In his turn, Alchian has influenced contemporary Austrian School economists.

Alchian joined the Department of Economics at University of California, Los Angeles 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 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 and "became the conduit through which many Chicago stalwarts such as Ronald Coase, Gary Becker, and others received lucrative consultancies from 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 resided in Mar Vista, Los Angeles. In 1940 he married Pauline (née Crouse, 1916–2017), an elementary school teacher, who he had met at Stanford. They had two children: Arline Ann Hoel (b. 1943) and Allen Alexander Alchian (b. 1947).

Alchian worked as a teaching assistant at Stanford (1937–40), and then in 1940–41 he worked at the National Bureau of Economic Research 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 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."

Armen Albert Alchian (/ˈɑːltʃiən/; April 12, 1914 – February 19, 2013) 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.

Armen Albert Alchian was born on April 12, 1914 in Fresno, California to Armenian-American parents. His father, Alexander H. Alchian (1884–1979), was born in Erzurum, Ottoman Empire and emigrated to the U.S. in 1901, while his mother Lily Normart (1889–1976) was born to Armenian immigrant parents in Fresno. Her parents were among the first Armenians to settle in the San Joaquin Valley and she was the first Armenian born in Fresno. His parents married in 1909, and Armen had a younger brother, Robert Haig Alchian (1917–1995). His father worked as a musician and a jeweler and the family was of "modest means." He grew up in the Armenian community, which was initially "subject to intense discrimination." He himself was reportedly subject to anti-Armenian discrimination early in his life. Alchian was called "the Armenian Adam Smith" by Michael Intriligator.