The Potentials and Limits of Economic Analysis: The Contributions of Kenneth J. Arrow

Abstract

It is not difficult to detect in these revealing lines a self-portrait of their author. Keynes used them, however, as a spring board for his analysis of Marshall’s ‘double nature’. Surely many economists (including perhaps our protagonist) would balk at the incongruity of a comparison between Arrow and Marshall. We are, of course, referring to the ‘Vision’ or Weltanschauung of the economists and not to their methods or products.¹ Moreover, it is probably futile to compare the intellectual make-up of economists primarily, but not only, because of differences in historical setting as well as cultural, educational, genetic, and psychological influences. However different they are, neither Marshall nor Arrow (and for that matter, not even Keynes) can be credited with all of Keynes’s ‘ideal many-sidedness’, though each possesses the quality albeit in different configurations.

The study of economics does not seem to require any specialised gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent economists are the rarest of birds. An easy subject, at which, very few excel! The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must reach a high standard in several different directions and must combine talents not often found together. He must be mathematician, historian, statesman, philosopher — in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician (Keynes, 1951, pp. 140–41).