Arrow’s Early Life and Education
Kenneth Joseph Arrow (1921–2017) was born in New York City. His parents were both Romanian Jews who hailed from the eastern city of Iaşi and its surroundings, a stone’s throw from the present-day border with Moldova.
Growing up in New York during the Great Depression, Arrow came of age in a socialist-friendly environment. Although he first adopted and later abandoned socialism, his economic thought was always tinged with a rosy leftist hue.
After graduating from New York City’s public primary and secondary schools, Arrow attended City College of New York (CCNY) in Hamilton Heights, overlooking Harlem. He received his bachelor’s degree in mathematics from CCNY in 1940.
For graduate school, Arrow moved to Columbia University on New York’s Upper West Side. He obtained his master’s degree in mathematics from Columbia in 1941.
Between 1942 and 1946, Arrow served in the US Army Air Forces as a weather officer.
After the war, in 1946, Arrow returned to Columbia to finish his doctoral work.
While researching and writing his dissertation for Columbia, Arrow held three economics-related jobs simultaneously, as: (1) a professor of economics at the University of Chicago; (2) a research associate with Chicago’s Cowles Commission for Research in Economics; and (3) a researcher for the RAND Corporation in Santa Monica, California.
In 1951, Arrow obtained his PhD in economics from Columbia.
Arrow’s Career
In 1949, Arrow left Chicago for Stanford University, where he taught for most of the next two decades.
In 1957, Arrow won the John Bates Clark Medal for the best American economist under the age of 40.
During the 1960s, he appointed a staff member with the US government’s Council of Economic Advisers, along with Robert Solow.
In 1968, Arrow left Stanford for Harvard University in Cambridge, Massachusetts.
Arrow shared the 1972 Nobel Memorial Prize in Economic Sciences with John R. Hicks. His Nobel Lecture, “General Economic Equilibrium: Purpose, Analytic Techniques, Collective Choice,” was published in 1974 in American Economic Review (see “Selected Works Authored or Co-authored by Arrow” below).
In 1979, Arrow returned to Stanford, where he now became the Joan Kenney Professor of Economics and Professor of Operations Research, a title he kept until his retirement in 1991.
In 1995, Arrow was invited to teach at the University of Siena, in Italy. He also helped to found the Pontifical Academy of Social Sciences in Vatican City and sat on the Science Board of Santa Fe Institute in New Mexico.
Arrow also helped to found the Annual Review of Economics in 2009.
Four of Arrow’s former students went on to win the Nobel Memorial Prize in Economic Sciences, namely: John C. Harsanyi, in 1994; Michael Spence, in 2001; and Eric Maskin and Roger Myerson, in 2007.
Arrow’s Ideas
Arrow was a major figure in post-war neo-classical economic theory.
His work ranged widely over many fields of economics, but he is probably best known for his contributions to general equilibrium theory and, above all, social choice theory.
The latter discipline is largely founded on Arrow’s pioneering research. One of the most remarkable results in the field is the eponymous “Arrow’s impossibility theorem.”
Social choice theory may be defined as the analysis of the ways in which individual preferences may be combined to reach a collective decision based on the general or collective preference.
Arrow laid the mathematical foundations for the field in his Ph.D. dissertation, his 1950 article, and his 1951 book (see below).
Arrow’s Impossibility Theorem states, roughly, the following:
Given that individual preferences ought to be consulted in group decision-making (non-dictatorship condition), yet cannot be directly compared (utility subjectivity condition), together with a handful of other plausible assumptions, then no overall optimal ordering of the individual preferences is possible.
At the theoretical level, the Arrow Impossibility Theory led in many directions, as various emendations to the list of conditions were proposed. On the practical level, it was found to be a highly useful tool for analyzing everything from welfare economics to electoral systems.
In other work, Arrow, writing together with Gérard Debreu, presented the first rigorous proof that a general market-clearing equilibrium exists.
Arrow also made important contributions to several other fields of economics, notably, the fundamental theorems of welfare economics, the economics of information, and endogenous growth theory.
Selected Works by Arrow
1. Works Authored or Co-authored by Arrow
“A Difficulty in the Concept of Social Welfare,” Journal of Political Economy, 58: 328–346 (1950).
“Alternative Approaches to the Theory of Choice in Risk-Taking Situations,” Econometrica, 19: 404–37 (1951).
Social Choice and Individual Values (1951).
Studies in the Mathematical Theory of Inventory and Production, with Samuel Karlin and Herbert Scarf (1958).
Essays in the Theory of Risk-Bearing (1970).
General Competitive Analysis, with Frank H. Hahn (1971).
The Limits of Organization (1974).
“General Economic Equilibrium: Purpose, Analytic Techniques, Collective Choice,” American Economic Review, 64: 253–272 (1974).
Collected Papers of Kenneth J. Arrow, Volume 1: Social Choice and Justice (1983).
Collected Papers of Kenneth J. Arrow, Volume 2: General Equilibrium (1983).
Collected Papers of Kenneth J. Arrow, Volume 3: Individual Choice under Certainty and Uncertainty(1984).
Collected Papers of Kenneth J. Arrow, Volume 4: The Economics of Information (1984).
Collected Papers of Kenneth J. Arrow, Volume 5: Production and Capital (1985).
Collected Papers of Kenneth J. Arrow, Volume 6: Applied Economics (1985).
“Methodological Individualism and Social Knowledge,” American Economic Review, 84: 1–9 (1994).
“Some Developments in Economic Theory Since 1940: An Eyewitness Account,” Annual Review of Economics, 1: 1–16 (2009).
“Kenneth J. Arrow,” in Karen Ilse Horn, ed., Roads to Wisdom: Conversations with Ten Nobel Laureates in Economics. Cheltenham, UK: Edward Elgar Publishing; pp. 58–84 (2009).
On Ethics and Economics: Conversations with Kenneth J. Arrow, edited by Kristen Renwick Monroe and Nicholas Monroe Lampros (2016).
2. Books Co-edited by Arrow
Studies in Resource Allocation Processes, with Leonid Hurwicz (1977).
The Economy as an Evolving Complex System, with Philip W. Anderson and David Pines (1988).
Landmark Papers in General Equilibrium Theory, Social Choice and Welfare, with Gérard Debreu (2002).
Handbook of Social Choice and Welfare, Volume 1, with Amartya K. Sen and Kotaro Suzumura (2002).
Handbook of Social Choice and Welfare, Volume 2, with Amartya K. Sen and Kotaro Suzumura (2010).
Selected Works About Arrow
Chichilnisky, Graciela, ed., Markets, Information and Uncertainty: Essays in Economic Theory in Honor of Kenneth J. Arrow (1999).
Fishburn, Peter C., The Theory of Social Choice (1973).
Heller, Walter P., Ross M. Starr, and David A. Starrett, eds., Essays in Honor of Kenneth J. Arrow, Volume I: Social Choice and Public Decision Making (1986).
Heller, Walter P., Ross M. Starr, and David A. Starrett, eds., Essays in Honor of Kenneth J. Arrow, Volume II: Equilibrium Analysis (1986).
Heller, Walter P., Ross M. Starr, and David A. Starrett, eds., Essays in Honor of Kenneth J. Arrow, Volume III: Uncertainty, Information, and Communication (1986).
Kelly, Jerry S., Arrow Impossibility Theorems (1978).
König, Johannes, Arrow’s Impossibility Theorem in Practice: To What Extent Does Arrow’s Impossibility Theorem Constitute an Issue for the Practical Application of Voting Rules in a Democratic System? (2018).
Maskin, Eric S., “The Economics of Kenneth J. Arrow: A Selective Review,” Annual Review of Economics, 11: 1–26 (2019).
Maskin, Eric S. and Amartya K. Sen, The Arrow Impossibility Theorem (2014).