Kenneth Arrow Commemoration at the Institute for Advanced Studies

July 15th, 2017

Tel Aviv, Jerusalem
July 5, 2017

I should say that there are many things I wish for in life. One of them is that I had the capacity for abstraction to follow the typical lecture at this remarkable seminar, which I know has done so much to shape so many careers and has meant so much to Kenneth. From discussions of gridlock in democratic countries, to issues of health insurance, to debates about how to discount the future benefits of environmental projects, to issues around derivatives markets, we see every day that albeit with long and variable lags, abstract economic theory moves the world.

I do not need to tell this group of Kenneth’s genius. You’ve all heard the stories of him, apparently asleep, waking up to ask exactly the right question in the middle of a seminar. You’ve all heard the story of the group of assistant professors that were tired of him knowing everything, and, so found an obscure issue of National Geographic on the sounds that dolphins make to communicate with each other and drove the conversation to that topic, figuring this would be a topic that they knew more about than Kenneth. Kenneth proceeded to explain that National Geographic had described a superseded theory, and that the most recent work in the area explained that what the assistant professors were saying was wrong.

I witnessed one of these moments at our annual family Thanksgiving in Philadelphia. We took the kids to see Independence Hall–that’s a relatively standard site when visiting the city. On the ride back, Kenneth recited the entire Declaration of Independence from memory. Later on that same trip, my wife Lisa, who’s a Professor of American Poetry at Harvard, found herself in conversation with Kenneth. They were discussing Emily Dickinson, who Lisa was writing about at that stage. Kenneth asked Lisa which of the two then recent biographies of the poet she felt had captured her better and discussed at length their respective merits.

Those stories could be multiplied, but one wonders when one thinks about genius, what other human qualities go along with it? I thought my comparative advantage might be commenting on a few aspects of Kenneth’s life that I think were inseparable from, but not the same as, his genius.

First, Kenneth the child: I didn’t know Kenneth, obviously, as a child, but I’ve heard many stories from my mother and two features of those stories stand out. One, that for someone so brilliant, he was extraordinarily patient and gentle in teaching his younger siblings about anything they wanted to know. When his ten-year-old sister, four years younger than he, inquired of Kenneth, “What exactly does the phrase, ‘make love’ mean?,” Kenneth found an appropriate and judicious answer. As I’ve heard it described, roughly speaking, as a child Kenneth did nothing wrong. This was good because there was the problem of how you punish a child like Kenneth. How do you punish normal children? You send them to their room. Well, there was no activity Kenneth liked better than being in his room, reading. Far, far better than trying to play baseball, or sitting outside on a hot day. What could be better than sitting in his room and reading? And he read and he read.

Second, Kenneth the teacher. Many have already referred to Kenneth as a teacher. As best I can tell, the only athletic ability at which Kenneth excelled was tossing a piece of chalk in the air and catching it. I experienced, when David and Andy were young, playing various ball games with Kenneth. I can reliably report that he was not able to catch a ball thrown from a distance of more than six feet, but with chalk he was excellent. For the right students, Kenneth was as good a teacher as there has ever been. But Kenneth had a real problem as a teacher, which is that he didn’t really think like the rest of us. From his Olympian perspective, it was very difficult to understand what students did and did not understand.

A story is told—and I’m not sure it’s true, but it’s a good story–that in the year that I was in Kenneth’s microeconomic theory graduate course, nobody was in any doubt about the profundity of what we were being exposed to, but there was some group in the class that was having substantial difficulty discerning the main points. So, a group of students very politely and humbly approached Kenneth and said, perhaps, he could work at explaining definitions and explaining terms, and just being a little more clear so people could follow the lecture. At the next lecture, very sweetly and innocently, Kenneth wrote, f(x) on the board, and he explained what f(x) means: a function. A function is something that maps one variable into another.

Now, if I had done something like that, it would have been because I was being sarcastic. If others had done that, it likely would have been because they were making a point about students needing to keep up or their frustration about students’ slowness. Kenneth was utterly sincere and in good faith. From his perspective, the Slutsky equation and the meaning of a function were equally elementary concepts.

Not everything Kenneth did succeeded. There was a movement in the Harvard Economics Department in the early ‘70s (this is an experiment that has not been repeated as best I know in the last 45 years) to assure that faculty rather than graduate students would teach introductory economics to college freshmen. This was accomplished in two ways: one is assistant professors were required to teach introductory economics, and the other is that generous souls were prevailed on. Kenneth was a generous soul and he was prevailed on. So, for a full year Kenneth was the teaching fellow for 24 fortunate freshmen. He reported afterwards, and I fear data confirms this, that he had not been quite able to find their level, and of 24 teaching fellows that year, he had been ranked 13th. The experiment was not repeated.

Third, Kenneth’s insatiable intellectual curiosity: You don’t become a prodigious contributor to a discipline like Kenneth, with the kind of insights that Kenneth offered us, without a certain extraordinary intellectual intensity. I remember the fall night in 1972, after Kenneth was awarded the Nobel Prize. The other American Nobel Prize winner at that moment, Paul Samuelson, also my uncle, hosted a party for Kenneth and the Cambridge economics community. I was a sophomore economics major at MIT, so I was hardly appropriate company for such an august gathering, but I was a little unique in being related to both the host and the honoree, so I was invited and I participated as best I could in the conversation. I have only one enduring impression of that evening, which is that seven o’clock, became eight o’clock, became nine o’clock, and then approached ten o’clock. Almost everybody left, and Paul and Kenneth were discussing turnpike theorems. Kenneth was discussing aspects of the Pontryagin’s maximum principle. Paul was discussing how stupid Joan Robinson was. Those of you who are old enough will really get this. And they were discussing the turnpike theorem, and the maximum principle, and the Hamiltonian and whatever. My aunt Marion, Paul’s wife, went upstairs. The caterers finished cleaning and left. Selma had her very heavy winter coat and looked on impatiently. I was waiting for my ride back to Cambridge Kenneth and Paul were still discussing the theorems. Until they got it straight, that discussion was not going to end. It made an impression on me that I never forgot. There were two people in that room who wanted to discuss economics for the longest period of time, with the least regard for social exigencies. And those were the two people in that room who had won the Nobel Prize.

Fourth, Kenneth and public policy. Some of you probably don’t know this, but Kenneth was proud of having been integral to the first cost benefit analysis of the US SST (Super Sonic Transit) proposal during his time on the staff of President Kennedy’s Council of Economic Advisers. He had the right to be proud as his analysis was part of the reason that the United States did not join Britain and France in their costly SST error.

Kenneth followed many, many aspects of public policy, closely. The two Americans who, in my experience, were able to discuss Israel’s dozen or so political parties with the most nuance were Bill Clinton and Kenneth Arrow. He would, each year at Thanksgiving, review with Eytan Sheshinski the progress of each of Israel’s political parties. While it was enough for me to get a sense of how the good guys were doing, Kenneth was on top of every twist and turn.

I think there was only one moment in the 62 years of my being Kenneth’s nephew, when we were seriously annoyed with each other, and I don’t actually know now which of us was right. In the summer of 1996, when I was in charge of international financial policy for the Clinton Administration, Boris Yeltsin was running for reelection against Zyuganov who was the full-fledged revanchist, the “return to the old way” Communist. Privatizations had taken place and were continuing. As history has recorded, the privatizations were not entirely legitimate, to put it mildly, and had substantial elements of unjust enrichment. It bears emphasis that some of the enterprises being privatized were being stolen from their state managers, so there was a reasonable argument that at least having some owner, even an illegitimate one, would improve the way in which they were being managed. The United States government, while not supporting the details of the privatization, was working very hard to support Boris Yeltsin against the Communist, and to support the idea of economic reform in Russia.

Just before the election Kenneth signed a letter, along with a group of pre-perestroika, pre-glasnost Soviet economists condemning the economic policies of the Yeltsin administration. It got enormous play in Russia. I thought it was an irresponsible and politically naïve act to intervene in a way that would predictably favor the communist without checking with the US government. He thought that I was losing my proper focus on what the right economic policy should be, in order to serve the political objective of the government. My poor mother had to hear my view of Kenneth’s actions and Kenneth’s view of my views. Fortunately, there were months that passed before Thanksgiving.

Five years ago I was involved in forming a commission of various former officials and scholars on global health. Dean Jamison, who is a former student of Kenneth’s, and was my collaborator in this venture, asked whether we should have Kenneth join. I said, “No, he’s 89 years old. The commission’s going to meet in Oslo. The commission’s going to meet in Addis Ababa. Who knows where this commission is going to meet? This is surely not what he wants to be doing at this stage in life. I don’t think that really makes sense.” And Dean said, “Really??” I thought about it and I decided that consumer sovereignty was a good principle in which Kenneth believed, and so I worked very hard to figure out a way of asking him whether he’d be interested in doing it, that was designed to make “no” as easy an answer for him as possible. Kenneth said, “Yes, absolutely, I’d be happy to do it. And just one more thing, as I’m approaching my 90th birthday, I probably won’t be able to write a section of the report myself.” And I said, “That will be okay.” I can report in a style that I do not think has been passed onto the next generation of academics, Kenneth joined the commission before learning that it would be possible to fly business class to its meetings. He would have been wholly prepared to fly coach, if that is something that had been requested.

Fifth, Kenneth, the person: One of the things that has never stopped impressing me about Kenneth was that while he was obviously extraordinary and he was obviously treated by people, like the people in this room and so many others, as extraordinary, he never had a sense of himself as special. I remember many, many years ago, probably 35 or 40 years ago, the American Economic Association, for some reason, had its meeting in Atlantic City. Atlantic City is about an hour, maybe an hour-and-a-quarter from Philadelphia, and after the meeting Kenneth was coming to my parents’ home. There are many ways one could make the journey. Kenneth went to the Atlantic City bus terminal, got on the bus, rode the bus to Philadelphia, and wanted to be picked up at the bus terminal. My mother explained, “You know, you were given a fair amount of money, we read in the paper a few years ago, when you won the Nobel prize. There are taxis, there are limos, there are many Penn faculty who, undoubtedly, would have been delighted to give you a ride in order to spend an hour with you. Did you really need to take the bus?” He said, “Oh, really? I guess I could have done those things but I never really thought of anything else.”

This was something that ran very deep. Four or five years ago, Kenneth found himself in Stanford Hospital needing surgery, and there were different surgical options. For whatever reason, the process of finding the way to the right option was not happening in an especially effective and efficient way. My mother and I said to Kenneth, “Kenneth, you know, you are not just any patient at the hospital of Stanford University. You have devoted much of your life to Stanford University and you are, perhaps, the most distinguished person associated with Stanford University. They really should take care of you and they should see you quickly, not slowly.” Kenneth said, “Really? Well, what should we do?” And I said, “Well, just kind of make it clear.” And it was clear that he didn’t really quite know what I meant, or how to do it. I asked, “Would it be okay if I made a couple of phone calls?” And he said, “Yeah, I suppose, if you want to.” The appropriate things then started to happen.

A final example of this, just slightly ethereal quality: I remember being in a conversation, with Kenneth and Selma in their kitchen in Cambridge, many years ago. We were discussing annuities. We were having a highly-animated conversation about intemporally separable utility, the nature of the bequest motive, risk aversion, adverse selection and whether purchasing annuities was optimal. A group of economic theorists like those here can more or less imagine all the propositions. Selma didn’t really find the conversation very interesting, but said, “Well, wait a minute, annuities? , We’re approaching retirement. Do we have our plan?” And Kenneth said, “Oh, I don’t know. Whatever, it will work itself out. It will work itself out in some reasonable way.”

Finally, Kenneth as an uncle and as a great uncle: If there’s a lot of ruin in a nation, there’s a fair amount of ignorant assertion in a family of 17, with many young persons present. I have never heard Kenneth treat a comment other than utterly seriously. If a nine year old or a twelve year old was trying to figure out whether it was true, false, or sometimes that all equilateral triangles are isosceles, he was prepared to devote himself to that question with the same thoughtful seriousness that he was prepared to devote himself to questions of mechanism design or the limits of information. If an opinion was being expressed about gambling or football betting, he was prepared to devote himself to at least the quantitative aspects of the betting, if not the content of the sport, in the same way that he would devote himself to the Savage axioms of risk and utility theory. He was there for everyone, expecting nothing in return, and, therefore, for his family, as for all of us here, he made us feel like we were smarter, more noble, and better than we actually were.

I miss him today, and the world will miss him always. Rest in peace, gentle genius.