Armen Alchian
Poor Albert Alchian ( born April 12, 1914 in Fresno, California, † February 19, 2013 ) was an American economist at the University of California, Los Angeles.
Life and work
Poor Albert Alchian was born in an Armenian- American family. He studied at the University of Fresno and Stanford economics and statistics, and obtained his doctorate in 1944 at Wilson Allen Wallis. From 1942 to 1946 he worked as a statistician in the U.S. Army. From 1946 he taught at UCLA from 1947 to 1962, he worked for the RAND Corporation.
His main interest was in the cost function. In Costs and Outputs (1959 ), he concludes that a faster production rate leads to higher unit costs because it is accompanied by a declining rate of profit.
Alchian argued for the use of statistical data to prove hypotheses. He argued against the prevailing view that inflation does lead to price increases, but not at the same time to wage increases. He showed that inflation affects the wages, which means that price increases do not benefit the company, at the expense of employees.
In his work, he comes to the conclusion that the markets reward ultimately efficient behavior; Companies that operate to maximize profits flourish, while inefficient firms perish. According to Alchian private ownership leads to higher risk-taking and efficiency, while collective ownership tend to inefficiency. In the 1970s he also worked on organization theory and employment.
Alchian influenced among other economists also the Nobel laureate economist William F. Sharpe.