William Allen, a professor emeritus of economics at the University of California, Los Angeles died Jan. 15 at 96. Few noted it, but Allens death was momentous. It represented a generational shift in the economics profession, one that bodes ill for economists and the public. Allen truly believed in economicssomething that is hard to say about most economists these days.
Allen was among the last of a generation of economists who were masters of their craft. He wrote, along with his friend and colleague Armen Alchian, an excellent economics textbook that conveys the power and potential of the economic way of thinking: Despite the complexities of markets, economists can get at the heart of how they work by focusing on prices. This insight is so important, it gives economists core tool kit a name: price theory. Nobody can be an economist who is unfamiliar with or uncomfortable using this tool kit.
Yet by this standard, there are not many economists left. Professional economists are abandoning price theory in droves. The new status quo has upended the field. Economics is increasingly less scientific and more susceptible to political influence.
The absence of price theory in todays economic research would have befuddled the great economists of the past. Contrary to the fields naysayers, the golden age of 20th-century price theory was never about neoliberalism or market fundamentalism.