A personal hero of mine passed away yesterday.
Ken Arrow was an economist, best known for his work on General Equilibrium (also called the Arrow-Debreu Model), for which he became the youngest person ever to win the Nobel Prize in Economics in 1972. He also did extensive work on social choice theory, creating “Arrow’s Impossibility Theorem,” which proved mathematically that a fair voting system is not compatible with aggregate preference ordering when there are more than two options. He developed the Fundamental Theorems of Welfare Economics, mathematically confirming Adam Smith’s “Invisible Hand” hypothesis in ideal markets. Essentially, he spent the first part of his extensive career formalizing the mathematics underlying virtually every rationalist model in the latter half of the 20th century, providing the basis for Neoclassical Theory for decades. And then, presented with overwhelming evidence that actual markets do not adhere to general equilibrium behavior, rather than allowing himself to be trapped by the elegance of his own theories, he spent the rest of his life trying to understand why.
He worked on endogenous growth theory and information economics, trying to understand phenomena that traditional rational models could not predict. He was an early and outspoken advocate for modern behavioralist models after they first came to his attention at a seminar presentation by Richard Thaler in the late 1970s. He was a close friend and collaborator of W. Brian Arthur, the father of Complexity Economics, enthusiastically recognizing the potential of complexity theory in revolutionizing our understanding of market dynamics, even though that would mean his own Nobel Prize winning theory about how markets work was completely wrong. Ken Arrow was never afraid to listen to new evidence and admit the possibility of his own errors and misunderstandings. When he saw something that explained the evidence better, he never hesitated to pursue it wherever it led.
Because he was a scientist. I know no higher praise.