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Kenneth Arrow Biography

Kenneth Joseph "Ken" Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972.

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Kenneth Arrow Quotes

I think the idea that a society has to be responsible for all of its citizens, those who do well and those who do not, is really a precondition of a good society.

Citizens, Ideas, Precondition, Responsible, Society, Thinking

I don't believe that unemployment is all voluntary, by anticipation of future wage movements or this sort of thing. I know you can modify the models by taking into account the indivisibilities, but I don't really think that people are voluntarily unemployed.

Believe, Know, People, Thing, Thinking

The trouble is that the risks that are being hedged very well by new financial securities are financial risks. And it appears to me that the real things you want to hedge are real risks, for example, risks in innovation. The fact is that you'd like companies to be able to take bigger chances. Presumably one obstacle to successful R&D, particularly when the costs are large, are the risks involved.

Companies, Costs, Involved, Real, Risk, Successful

Economics in college was very poor; I was not very impressed with it. I actually wanted to study statistics. I discovered mathematical statistics as an undergraduate and was fascinated with it.

College, Discovered, Statistics, Study

Now virtue may not always be its own reward, but in any case it is not usually bought and paid for at market rates.

Bought, May, Paid, Reward, Rewards, Virtue

Knowledge is a free good. The biggest cost in its transmission is not in the production or distribution of knowledge, but in its assimilation. This is something that all teachers know.

Assimilation, Biggest, Cost, Free, Teacher

One way of looking at Impossibility Theorem is that we proposed some criteria for what a good system should be: what is it you want from a voting system, and impose some conditions. And then ask: can you have a voting system that guarantees that?

Criteria, Good, Guarantees, Guarantees That, Voting, Want

When you look at any experimental work not directly related to economics, but trying to test rational behavior in other ways, experiments have conspicuously failed to show rational behavior. Macro evidence certainly suggests deviations from rationality, but I don't want to say the rationality hypothesis is completely wrong. If you have any introspective idea or experimental idea about people's behavior, it seems to be incompatible with the really full scale rational expectations.

Directly, Expectations, Ideas, Incompatible, People, Work

Markets are not, in my opinion, a full solution to any problem. The obvious problem they don't meet is the concerns of the welfare of individuals who may get lost in the operation of the system - the distributional question. We've seen this growing as we go further and further toward a market ideology in the United States and the United Kingdom. We've seen a decline in the welfare of the working poor, leaving aside any other pathologies, just the working poor, a very distinct increase at the very top levels.

Growing, Ideology, Leaving, Levels, Markets, Top

The Germans, for example, have some kind of compromise between single-member and broader districts. In Israel, you have nothing, you have only a national election. You have no local districts at all. And that's because of the idea that in addition to other ideological differences, locality matters. The question is does the congressman represent his district and the interests of his district? And as I said there's quite a variety of systems the democratic world. The implications need to be examined.

Congressman, Differences, Ideas, Israel, Question, World

The MD is well aware that the forecasts are no good but he needs them for planning purposes.

Aware, Good, Needs, Planning, Purpose

The health care provisions are presumably for individuals. And whoever pays for them, whether it's paid by the individual, state, whatever, the value is an individually based value. It has nothing to do with employment.

Based, Care, Employment, Nothing, Paid, Pay

The intrinsic social structure, the family structure and so forth, is certainly in a very bad state. And I think that this is showing up in productivity. I think part of the reason, and I can't prove this, we're seeing a decline in some places is the breakup of the family, which is partly the result of an extreme form of individualism.

Breakup, Intrinsic, Places, Reason, Showing Up, Thinking

Venture capital has done much more, I think, to improve efficiency than anything.

Capital, Done, Efficiency, Improve, Thinking, Venture

From the time I first understood economic principles, I was always concerned also that any system be operated on an efficient basis, which meant decentralization because knowledge is not concentrated anywhere. It's based on motivation, and so these are the advantages of, say, the cautious case for capitalism, that the market system is efficient.

Firsts, Motivation, Principles, Say

The general uncertainty about the prospects of medical treatment is socially handled by rigid entry requirements. These are designed to reduce the uncertainty in the mind of the consumer as to the quality insofar as this is possible. I think this explanation, which is perhaps the naive one, is much more tenable than any idea of a monopoly seeking to increase incomes.

Ideas, Mind, Quality, Seeking, Think, Thinking

I think the development of the venture capital system has been an example of something which is a successful improvement in risk-bearing. It doesn't exactly remove the risks at the beginning, but at least creates greater rewards at a slightly later stage and therefore encourages, say, small companies to engage in technologically risky enterprises.

Capital, Risk, Successful, Technologically, Thinking

In The United States, the only real change I know has been Instant Runoff, which is usually applied to municipal elections. I see no real improvement. There's another aspect which comes out of the two-party system, which the primary, a funny kind of two-stage election. And people certainly have complained.

Aspect, Change, Party, Real, Runoff, Two

One thing I learned from meteorology is that being an actual science was no guarantee of exactness.

Exactness, Guarantees, Meteorology, Thing

I think on the efficiency level, not only the distribution level, capitalism is a flawed system. It probably has the same virtues as Churchill attributed to democracy: It's the worst system except for any other. And I think that's right, but it cannot be thought that some unmitigated belief in free markets is a cure even from the efficiency point of view.

Churchill, Democracy, Thinking, View, Views, Virtues

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