Susan Woodward Remembers Armen Alchian.  There's the Jack Hirshleifer approach to price theory, and the Armen Alchian way.
Hirshleifer approached price theory as geometry. Lay out the axioms, prove the theorems. And never introduce a new idea, especially one like “rent” that collides with standard usage, without a solid foundation. The Alchian approach is more exploratory. “Oh, here’s an idea. Let’s walk around the idea and see what it looks like from all sides. Let’s tip it over and see what’s under it and what kind of noise it makes. Let’s light a fire under it and just see what happens. Drop it ten stories.” The books were complements, not substitutes.
Yes, it's useful to be able to do both. But never lose sight of opportunity cost, specialization, and arbitrage.

No comments: