Here’s a letter to the Wall Street Journal co-written with my dear friend Ken Elzinga:
We applaud Larry Summers’s fine remembrance of Kenneth Arrow (“Farewell to Kenneth Arrow, a Gentle Genius of Economics,” Feb. 25). Yet we’re surprised by this sentence: “Arrow’s impossibility theorem regarding voting and combining preferences is the only theorem that I know of that is named for an economist.”
There are other theorems named for economists, the most well-known being the Coase theorem. Named for the late Nobel laureate Ronald Coase, the Coase theorem explains that, under certain conditions, the kinds and amounts of economic activities that occur are unaffected by the initial assignment of property rights.
Indeed, Coase’s theorem is more famous than Arrow’s impossibility theorem. Google Scholar reports that Prof. Arrow’s 1951 monograph (Social Choice and Individual Values) – the chief source of Arrow’s theorem – has 14,601 citations. That’s less than half of the 29,634 citations to the chief source of the Coase theorem: Prof. Coase’s 1960 article “The Problem of Social Cost.” Furthermore, Google searches of “Coase theorem” and “Arrow [and Arrow’s] impossibility theorem” turn up 183,000 links to the former and 95,800 links to the latter.
Another theorem named after an economist that’s relevant today is Lerner’s Symmetry theorem (named after the late Abba Lerner). Lerner showed that, under certain conditions, import restrictions are equivalent to export restrictions. The practical lesson of Lerner’s theorem is that governments that make it more difficult for citizens to import also make it more difficult for citizens to export.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
Kenneth G. Elzinga
Robert C. Taylor Professor of Economics
University of Virginia
Charlottesville, VA 22904