W. Brian Arthur
On 6 November 2014, Kenneth Arrow gave an evening keynote talk at the Santa Fe Institute’s Annual Trustees Symposium. The meeting’s topic that year was Complexity Economics and Ken spoke about general equilibrium as a backdrop for the talks that would follow. His lecture was detailed, precise, and lengthy, and he spent much of it showing point by point how general equilibrium did not match with real economies. Ken was shining a keen light on the creation he was best known for: his work in the 1950s that established equilibrium as the basis both of economic theory and of our view of the economy. And he was showing a mismatch between theory and reality. I was struck by the sheer honesty of this. But it was more than just honesty. It was as if Ken, now 93, was looking back on his earlier ideas and was coming from a different way of thinking about them. He still regarded general equilibrium as important and elegant, but he also saw it as an ideal that might live in some Platonic world but not perfectly apply to this one. Kenneth Arrow was rigorous not just with mathematics but with his own thinking, and he was willing to reassess his own ideas if that furthered the truth.