"My research, even before 1972, moved in directions beyond those cited for the Nobel Memorial Prize. Most of it, in one way or another, deals with information as an economic variable, both as to its production and as to its use"
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Arrow is doing two things at once: quietly correcting the public record and sketching the real arc of his intellectual project. The Nobel citation (1972, for general equilibrium and welfare theory) risks freezing him as a theorist of elegant, closed systems. His first sentence pushes back on that museum label. “Even before 1972” is a timestamp with teeth: the most important parts of his thinking were already bending away from the tidy world the prize could easily canonize.
Then comes the pivot that makes the quote work. He doesn’t say information “matters” (banal); he calls it “an economic variable,” a phrase that drains romance from the topic and gives it accounting weight. Information is not atmosphere; it’s an input, something produced with costs, distributed unevenly, and consumed strategically. That framing contains Arrow’s signature move: take what economists treat as a background condition (everyone knows what they need to know) and make it the central constraint that explains why markets misfire.
The subtext is a critique of economics’ own self-image. When information has to be produced, someone pays; when it’s used, someone gains. Suddenly the invisible hand needs footnotes: incentives for discovery, problems of secrecy, the logic of insurance, the inevitability of asymmetric knowledge between doctors and patients, lenders and borrowers, managers and shareholders. Arrow is also defending a kind of economics that looks outward, toward institutions and uncertainty, rather than inward, toward equilibrium proofs.
In today’s data economy, the line reads less like autobiography than prophecy: information isn’t just in the market. It is the market.
Then comes the pivot that makes the quote work. He doesn’t say information “matters” (banal); he calls it “an economic variable,” a phrase that drains romance from the topic and gives it accounting weight. Information is not atmosphere; it’s an input, something produced with costs, distributed unevenly, and consumed strategically. That framing contains Arrow’s signature move: take what economists treat as a background condition (everyone knows what they need to know) and make it the central constraint that explains why markets misfire.
The subtext is a critique of economics’ own self-image. When information has to be produced, someone pays; when it’s used, someone gains. Suddenly the invisible hand needs footnotes: incentives for discovery, problems of secrecy, the logic of insurance, the inevitability of asymmetric knowledge between doctors and patients, lenders and borrowers, managers and shareholders. Arrow is also defending a kind of economics that looks outward, toward institutions and uncertainty, rather than inward, toward equilibrium proofs.
In today’s data economy, the line reads less like autobiography than prophecy: information isn’t just in the market. It is the market.
Quote Details
| Topic | Science |
|---|---|
| Source | Help us find the source |
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