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'Economics will miss him': Remembering Kenneth Arrow

PHOTO CREDIT: STEVE CASTILLO

He is renowned as one of the most important economists of the 20th century — the founder of a new realm of scholarship, the youngest in his field to win a Nobel Prize, and a teacher who mentored several future winners of that top honor.

Even in the days before his death at 95, Kenneth Arrow was still adding to his life’s work.

“He lived the full life of the mind, and he died surrounded by his books,” said Alvin Roth, a fellow Stanford economist and Nobel Prize winner who visited Arrow about a week before his death on Feb. 21 and found him sitting in front of a computer, trying to finish his latest paper.

“Economics will miss him.”

The days following Arrow’s death at his Palo Alto home have been filled with recollections of his achievements, remembrances of his kindness, and respect for his brilliance.

He was a senior fellow emeritus at the Stanford Institute for Economic Policy Research (SIEPR) and Stanford’s Joan Kenney Professor of Economics and Professor of Operations Research, Emeritus who pioneered the fields of economic theory and research operations.

In addition to the Nobel Prize, he was awarded the National Medal of Science in 2004, among numerous other awards.

“Kenneth Arrow was one of the greatest economists,” said John Shoven, a SIEPR senior fellow and professor of economics. “But he was also humble, warm and a great friend to all of us at Stanford.”

Shoven highlighted Arrow’s work in a 2009 talk he delivered as part of the Stanford Pioneers in Science lecture series. In his remarks, Shoven said Arrow’s contributions “conservatively deserve two Nobel Prizes, and a case could be made for three or four."

Arrow’s groundbreaking contributions to general equilibrium theory and welfare theory led him to become the youngest person to date to win the Nobel Memorial Prize in Economic Sciences, which he received in 1972 together with British economist Sir John Hicks.

“Ken was an outstanding economist who made tremendous contributions in several different areas of economics, with his Nobel Prize standing as just one of his many accomplishments,” said Mark Duggan, the Trione Director of SIEPR. “He was also a dedicated teacher and advisor to countless students and a wonderful and warm person to all who knew him. Our thoughts are with Ken’s family at this time, and we will miss him as a vital member of our SIEPR community.”

In addition to his contributions as a senior fellow emeritus at SIEPR, Arrow had also been a long-serving member of the institute’s Steering Committee.

Arrow’s 1951 book, “Social Choice and Individual Values,” was one of his most influential works and started the field of social choice theory. It publicized what would later be known as “Arrow’s Impossibility Theorem,” which addresses issues of collective decision-making.

The theorem states that a group of people cannot make decisions that are reflective of individuals’ desires, other than in a dictatorship situation. As his friend Alvin Roth put it, there is no ideal voting system.

“Ken was a giant in an astonishing way,” said Roth, also a SIEPR senior fellow who described Arrow as an Albert Einstein of economics. “He is arguably one of the best economists of the 20th century.”

His Nobel-winning work on the general equilibrium model — where all prices affect the demand and supply of each and every good — greatly expanded the theory formulated by Leon Walras in 1874.

“While the general equilibrium model was recognized as the ultimate model of the market, even a proof that such an equilibrium set of prices exists proved tremendously challenging,” Shoven wrote in his 2009 remarks.

But Arrow — using developments in mathematical topology — was able to prove that existence.

Arrow’s knowledge and accomplishments extended beyond the world of economics and statistics, according to his colleagues and family members. He was interested in a myriad of other subjects, from politics and music to mathematics and Chinese art.

“He was as gentle as he was brilliant,” said Arrow’s nephew, Lawrence Summers, a former Treasury Secretary and former president of Harvard University who is currently a distinguished visiting scholar at SIEPR. “He was always an inspiration to me.”

David Arrow recalled a line from Hamlet when talking about his father: “I shall not look upon his like again.”

“I really think my father is that kind of man,” David Arrow said. “His intellectual life and influence is perhaps as profound as any in his field.”

Ken Arrow with his nephew, the former U.S. Treasury Secretary Lawrence Summers, during an event on global health security at SIEPR in March 2016.

Photo credit: Steve Castillo

He was also vocal about social issues. In 1988, Arrow, whose parents were Romanian-Jewish immigrants, wrote an open letter to then Israeli Prime Minister Yitzhak Shamir, challenging Shamir’s stance on an “undivided land of Israel” and pleading for an end to violence between Israelis and Palestinians. He also supported the Free South Africa Fund, which supported black South Africans’ efforts for freedom while challenging Stanford to rethink its ties with South African companies.

The issue of climate change was also dear to Arrow. He was a co-author of the “Economists’ Statement on Climate Change,” issued in 1997 and signed by more than 2,400 U.S. economists, detailing the hazards of global warming. He contributed to research on sustainability and ethics, co-authoring many papers with biologists, environmentalists and other experts at Stanford and elsewhere.

Lawrence Goulder, a Stanford professor of environmental and resource economics and a SIEPR senior fellow, said he worked on several academic papers with Arrow as recently as 2014, when both co-authored an article in Nature about climate change modeling.

Goulder said when he came to Stanford in 1989 he helped form a discussion group with Arrow that focused on tackling environmental problems.

“He had this disarming way of winning respect and admiration and fondness even from people with whom he’d disagree,” Goulder said. “He was terrific at bringing people together and finding common ground.”

Originally from New York City, Arrow earned a bachelor’s degree from the City College of New York in 1940 and a master’s degree in mathematics from Columbia University in 1941. His academic career was interrupted by World War II, and he served as a weather officer in the U.S. Army Air Corps from 1942 to 1946.

After the war, he returned to Columbia for his doctorate and spent time as a research associate and assistant professor at the University of Chicago. He joined Stanford’s faculty as an assistant professor of economics and statistics in 1949, and remained there until 1968 when he left to teach at Harvard University for about 11 years.

But he visited Stanford almost every summer for seminars and considered the area his home, eventually coming back, his son said.

“He was proud to come back,” David Arrow said. “He loved Stanford and the community here.”

Arrow served on Stanford’s Faculty Senate and was a member of the board of directors for Hillel at Stanford, his son said.

Arrow also valued teaching and advising students in his emeritus position until his last days, according to his son. In fact, at least five of his students also have become Nobel Prize winners.

“He was an academic through and through, and he had an amazingly broad knowledge about everything,” Arrow said. “But he also cared a lot about his students.”

Arrow, who became a professor emeritus in 1991, retired with his wife, Selma, at Stanford, where they lived until moving to a retirement community in Palo Alto.

David Arrow said his father will be remembered for his brilliant mind, but he was also a family man who helped out with chores and washed the dishes at the end of the day.

“He led a humble life,” David Arrow said. “To me, to our family, he was just a very generous, loving, caring, unpretentious man.”

Arrow is survived by his sister, Anita Summers of Philadelphia; sons David and Andrew, both of New York City; his daughter-in-law, Donna Lynn Champlin, of New York City; and his grandson, Charles Benjamin Arrow, of New York City.