Dr. Kenneth Arrow was born in the United States of ancestry which had emigrated from Rumania. He was born in New York City in 1921. His parents were infants when they reached the United States. English was spoken at home while he was growing up, however, his grandparents spoke only Yiddish and Romanian. There was a desire in his home to rise and excel that influenced Arrow as he grew up. Arrow loved to read and desire added to his knowledge as he grew up. He studied history because it was more tangible to him as a young reader than science. He was somewhat sickly and out of school quite a bit. Reading became a means to educate him as a result. His parents often bought history books, as well as novels. He enjoyed expanding genealogical tables for the kings of England. His career moved instead to the theoretical world so the study of history was not extremely influential to him. He came of age in the Great Depression. He had painful memories due to the failure of his father's business. For five years, there was no steady source of income. His father was bankrupt due to the losses he had in the stock market. The family home was lost. There were many moves due to an inability to pay rent. There were at least five moves that Arrow remembered. The New Deal was a positive action by the government. It was a breath of fresh air. Hope was in the atmosphere. It may have saved the United States from a political and economic catastrophe similar to that of Europe. The National Recovery Act may have gone too far but at least something was being done. The worst aspects of the Depression were not over until 1939 with the war stimulus. [Annotator's Note: The New Deal and the National Recovery Act were all instituted by President Franklin D. Roosevelt in the 1930s to activate the economy and provide work for unemployed through government initiated projects to rebuild infrastructure in the United States.] In 1940, Arrow received a BA degree in Mathematics from CCNY [Annotator's Note: City College of New York]. It was the only opportunity Arrow had for a higher education considering his financial position. Arrow's father worked his way through college, and that was a possibility. Arrow had applied to Columbia with the idea that he could live at home during his college education. Arrow had skipped through years of classes in his elementary and high school education because of his accelerated educational abilities. Arrow attended a special high school run by City College and this resulted in him being three years ahead of normal attendance.

Dr. Kenneth Arrow applied for Columbia University at 15 years old. The minimum age of acceptance was 16 years old. After a successful interview, Arrow asked the dean some procedural questions. He was told not to bother. He would not be accepted. A month later, he received a letter saying he was on the wait list. Later he would come to opine that an anti-Semitic influence caused his rejection. It appeared to be his only opportunity to attend college. Arrow did enter Columbia and ultimately received a Master's Degree after his father borrowed the money. With his mathematics degree, Arrow began to concern himself with his means to earn a living. This was a particular concern with his father's history in the workplace. Arrow could not picture himself as a professor, but he did perform some practice teaching work in a high school. The job competition for a position as a mathematics teacher was very difficult. Arrow considered the study of statistics in the Economics Department. He also looked to the Mathematics Department for a course in Probability and Statistics. Arrow decided to become a statistician. It was not a recognized field. The most serious statistician in the United States was Harold Hotelling who was a professor of economics. Arrow enrolled in the Mathematics Department. There he found condescension for the field of statistics. He found that Hotelling was offering a course in mathematical economics. Columbia's Economics Department had a dominant influence which was anti-theoretical. The faculty largely participated in the National Bureau of Research. The result was the department members were hardly ever in their offices. At this stage, Hotelling influenced Arrow to become an economist. Hotelling told Arrow that if he moved from a mathematics focus to economics, he could potentially assist him with financial aid. Arrow was brought into economics as a result. He enrolled in the Economics Department with the idea of learning what they had to offer. He took a course from Arthur F. Burns who would later become Chair of the Fed [Annotator's Note: Federal Reserve]. Arrow took an exciting year long seminar held by Burns on business cycles. At this time, Hotelling could not get support for any additional statistics faculty. He did get a grant from the Carnegie Institute and used it for teaching. In 1940 and 1941, Arrow was first involved with Mathematics but then switched to Economics.

Dr. Kenneth Arrow's concern for the rise of Hitler [Annotator's Note: German dictator Adolf Hitler] was intense. He remembered the German elections in the early 1930s when Hitler's party had won 20 percent of the vote. People were appalled. There was fear of riots in the streets and stormtroopers, not just the rise of Hitler. Arrow's family and other well informed Jewish families were fearful of the danger the Nazis represented. In 1938, the Munich crisis was watched with ambivalence. They knew that World War 1 had been a horror. Arrow's father had only reached training camp when the war ended. In 1938 and 1939, there was a concern that President Roosevelt [Annotator's Note: President Franklin D. Roosevelt] was trying to get the country into war. Arrow was a pacifist. Despite the President's promises about Americans not fighting in foreign wars, Arrow felt Roosevelt was being deceptive. Arrow came to realize that he was right about Roosevelt's intent, but at the same time he was wrong about the need to avoid war. Arrow had no illusions about the Soviet Union and the way it treated its own population. The stories of the Ukraine did not appear in the respectable press but rather in the Hearst papers. There were purges also. The stories of the Spanish civil war occurred at the same time. By the time the Germans and the Russians made a non-aggression pact in 1939, Arrow knew that it meant war. It could mean nothing else.

Dr. Kenneth Arrow was surprised when war came with Japan. Japan's actions had been terrible but the anticipation was that the conflict would be with Hitler [Annotator's Note: German dictator Adolf Hitler] and Germany. The sinking of the Reuben James [Annotator's Note: USS Reuben James (DD-245)] and Roosevelt [Annotator's Note: President Franklin D. Roosevelt] pushing the United States into war led him to feel war would be with Germany. He heard about Pearl Harbor when the Sunday broadcast of the New York Philharmonic orchestra was interrupted by the news. He knew that his pacifism was selfish and war had to be fought. He chose to enlist in the United States Army Air Forces. His background was in research so he was placed in the area responsible for long range forecasting. He was sent to Washington and assigned to work in the forecasting research unit. He was a second lieutenant and worked for a captain. His superior officer had little confidence in Arrow. The captain drew upper level pressure maps as opposed to ground level maps. Arrow never participated in making the forecasts. The captain was the chief forecaster for the D-Day invasion. He projected the tidal conditions in anticipation for the invasion. Forecasting was very imprecise. Arrow worked on verification of forecasts by using his background in probability and statistics and regression analysis to determine a good versus bad probability of the dependability of a forecast for the weather conditions. During his training in New York, he lived in a dormitory type room. The men were made to clean their room and make their beds for inspection as well as march in formation. He was assigned to Washington, D.C. in the Forecast Research Unit of the Weather Wing of the United States Army Air Forces. He used a slide rule [Annotator’s Note: a mechanical device that looked like two sets of rules that when adjusted could produce solutions to complex mathematical problems] so he would have a leather case attached to his belt. Arrow stayed in Washington less than a year. He was transferred to Ashville, North Carolina for the rest of the war. It was a beautiful area. He would go wilderness hiking in the Blue Ridge National Park. It was an exciting time for a city boy. Hiking became the great discovery of his life. He would keep it up as long as he could. While in the South, he witnessed racial segregation. As a symbolic gesture, he would sit with the blacks. Even if it did not do much good, it satisfied his need to show his feelings. That area of the South had many mountains and some of the folks inhabiting the area could be classified as hillbillies. The local population loved to sing folk music and have festivals. Arrow gained an appreciation for that musical genre. Arrow also enjoyed the differences between the local population and his own language background. Although the area of North Carolina was a dry area without liquor, moonshine was still available. There was a coalition between preachers and moonshiners that proved worthwhile to both. Arrow enjoyed meeting the local people near his post. Following the war and V-J Day, Arrow was transferred to Langley Field near Norfolk, Virginia where he was promoted to captain. Although it seemed like an automatic promotion, he was discharged from the service with the rank of captain. [Annotator's Note: Arrow was separated from service in 1946.]

Dr. Kenneth Arrow was doing research into statistical fitting with WACs [Annotator’s Note: Women's Army Corps] during World War 2. He spent a lot of time with a desk calculator. It would take him eight hours to calculate the forecasts for the Pacific Ocean for the following two to three days. The forecasts were not very accurate. Subcontractors would provide other methods to improve the forecasts. Arrow would have to review those recommendations. Arrow would ultimately focus on the question of how to fly bombers to a destination over a 12 hour flight plan, all the while taking advantage of prevailing winds and atmospheric pressures. Two famous mathematicians had considered this problem and solved it. The problem was that they had considered the Earth as flat and not round. The problem focused on efficient delivery of bombers from the United States to Europe via a northerly route. The consumption of fuel was the main concern. Speed of the flight was not the determinate except as it related to fuel use. The main determinate for the solution was how much fuel was used. There was enormous demand for the scarce fuel supplies in the Second World War. Rationing for domestic consumption was critical so it was important to solve the problem of reduction of fuel usage. Arrow solved the problem and he and his WACs made conformal maps using his computations. Although his proposal yielded a theoretical 15 to 20 percent savings in fuel, his superiors could not appreciate it. His findings were published but never got traction with his commanding officers. Articles would be written later explaining further how this method of navigating should be accomplished.

Dr. Kenneth Arrow did not have firsthand knowledge of the feelings of the local population toward the war effort. He was in a strange town during the war and could not detect any significant anti-war sentiment where he was located. As an economist, he was impressed with the production levels and transformation of American industry. Donald Nelson was in charge of the War Production Board and industry moved from manufacturing cars to tanks and airplanes. Bill Knudson, who was formerly head of General Motors, was also a major contributor to this metamorphosis. Large amounts of goods were produced by a fully employed American population. The ramp up of production was remarkable. Part of the factor that aided this was the tremendous idle capacity in the workplace in the prewar years. The thing that was striking was the rapid ramp up in production along with the transformation of industry. It seemed as if a planned economy could work. You would have to know exactly what you wanted to produce.

Following World War 2, Dr. Kenneth Arrow pursued his PhD in Economics from Columbia University. During this time, the G.I. Bill was used by Arrow as a supplement to the completion of the Columbia scholarship he had obtained prior to the war. There was a large influx of graduate students after the war. The G.I. Bill enabled an expansion in higher education. There were large scale changes in the economic environment during the postwar period. The Bretton Woods Agreement improved the international economic system that had not operated well in the interwar period. In the 1930s, there were nationalistic economic policies across the world. There were strong inclinations toward imperial preferences prior to the war. After the war, regulating foreign trade was used to protect domestic currency values. Many countries were embroiled in temporary internal problems so the need to create some kind of over arching institution was desirable. Countries were concerned with both domestic and foreign balance in trade and currency values. To help fill the gap with some sort of system, the Bretton Woods agreements were established. The Marshall Plan was another international policy that was a necessity considering the status of the economies of Europe and Japan. Planned economies resulted from participation in the Marshall Plan. Arrow and his wife went to Europe as part of a project for the statistical requirements for economic planning. What Arrow discovered was that most of what he encountered was just planning in response to some American demands. In the case of the Europeans, they were just responding to the United States bankers for information and data. The collection of national income data that Arrow witnessed was not in an effort to attain economic planning. It appeared that the data collection methods were not as professional or efficient as that of the Americans who were collecting better data on the Europeans from their overseas location.

Dr. Kenneth Arrow witnessed racial discrimination in the South during his service in the United States Army Air Forces. Additionally, there had been a "no strike" agreement reached with organized labor during the war. This was to keep vital industries and infrastructure supporting the war effort. The exception to this agreement came when the Philadelphia Rapid Transit did experience a major strike by white workers because of blacks who were hired because of personnel shortages. The war gave the blacks many opportunities to work. An example of added opportunity for blacks in industry could be found in the shipbuilding industry.

Dr. Kenneth Arrow joined the RAND Corporation in 1948. [Annotator's Note: RAND is the abbreviation for Research and Development, and is a global policy think tank for the United States that was organized at the end of the Second World War.] When Arrow entered the organization, there was no economics group. There were only mathematicians. With the advent of the atomic age, the potential for nuclear war meant that conflict resolution required ingenuity instead of sheer force. The RAND Corporation was challenged to help find solutions in this regard. At first, those working the issues were heavily oriented toward game theories being the means to discuss complex social problems. To all concerned, it became obvious that the Soviet Union represented the most significant danger to the United States. The Red Army was moving into Eastern Europe and swallowing up small countries. As more and more information became available, Arrow realized that the conditions in the Soviet Union were worse than he originally envisioned. The persecutions, purges, and famines revealed the hardships of living under the authority of the Soviets. This was verified by a former Soviet resident who became affiliated with the RAND Corporation. It was worse than the stories from the Hearst papers that Arrow had read earlier in his life. During his time at RAND, Arrow became interested in mathematical logic. With no courses available on the discipline, Arrow educated himself. He became acquainted at a conference with a mathematical logician named Alfred Tarski. Tarski was a Polish mathematician and philosopher who had been trapped in the United States at the outbreak of war [Annotator's Note: in 1939 when Germany invaded Poland]. Tarski taught about the theory of relations. The course taught Arrow quite a lot, and he did well in it. Tarski contacted Arrow to help in proof reading the translation of his Polish text. Tarski was an example of RAND hiring wild people. In his case, the RAND Corporation hired a philosopher.

Dr. Kenneth Arrow learned from Alfred Tarski that although most of the RAND Corporation colleagues used game theories in their exploration of world problems, there was a dilemma. The issue was that the policy problems did not deal with people but rather dealt with countries. This concept had been discussed previously in terms of differentiation between individual and group aggregate preferences. Following Tarski's recommendation, Arrow wrote an expository statement that dealt with the phenomenon. It reflected a complicated type of voting. It involved secondary voting, but it yielded problems in and of itself. When there are two candidates between which to chose, after the second candidate is eliminated, it seems the first choice changes. In another consideration, when the choice of option A is preferred to B, but B is preferred to C, and C is preferred to A there is a contradiction. Within a week, Arrow had his solution and the structure of his revised dissertation. He had been attempting to critique an unknown economist, John Hicks', work Value in Capital but changed his topic to the impossibility theorem as it regards the contradictions he discovered. [Annotator's Note: Arrow and Hicks would later be jointly awarded the 1972 Nobel Memorial Prize in Economic.] The discovery for Arrow had been a revelation. He found other colleagues who had similar revealing moments in their careers. Arrow found that the problems are exacerbated with the introduction of a partner into the mix. Expectations for what constitutes success or sufficient profit will vary according to individual perception. As a result of his exposure to Tarski, Arrow arrived at a series of examples that led him to his impossibility theorem. He put the idea aside as a nuisance, but then arrived at the conclusion that it would make a better dissertation than the critique of Hicks. It was only later that he recognized that the same theory had been proposed by the Marquis de Condorcet in 1785 [Annotator's Note: this is referred to the Condorcet method and Condorcet’s paradox]. Arrow never applied the impossibility theorem to the presidential election of 1948 where candidates Truman, Dewey, Strom Thurman, and Henry Wallace ran for the highest office. There were extenuating legislation factors dealing with segregation that were strong enough to invalidate the candidates as the sole factors. [Annotator's Note: The 1948 vote between Democrat incumbent President Harry Truman and Republican candidate Thomas Dewey was close, but the participation of the other two candidates who were former Democrats was of little consequence to the outcome.]

Dr. Kenneth Arrow introduced his ideas on the efficiency of competitive economies and the government should rely on redistribution of wealth through lump sum taxes. The use of price controls to rearrange income should be avoided. The theory had been proposed before but without the consideration of zero consumption. That was Arrow's contribution to the question. He remains generally skeptical of price controls but does not eliminate the effectiveness of the possibility. There have been no total wars since World War 2. Today, the ranks of the armed forces are filled by price not mass conscription. The nature of war has changed. People need more extended training today for the sophistication of warfare. There likely will be no further total wars. Technology will play a much larger role in the wars of the future. There were no options for price control in the Second World War; it was just a necessity. There were analyses after the war about how price controls could have been used to benefit the effort. There were attempts at price control in the 1970s as it involved the price of oil.

Dr. Kenneth Arrow explains his ideas on the contingent market concept. Contingent markets could have softened the impact of factors leading to the economic crisis in 2008. Life and health insurance are discussed in this regard.

Dr. Kenneth Arrow has advised presidents. He did not feel that his military background was a significant contributor to his background. He did see authoritative communication as being critical because of the lack thereof in his senior officers. Arrow had been chastised in the military because he did not follow the proper chain of command. Nothing came of it. As a fellow at Churchill College in the United Kingdom, Arrow studied under a professor of economics. He had been granted a fellowship by the economics professor. Arrow saw Winston Churchill as a strong opponent to freeing the countries in the British Empire. Churchill was regarded favorably as a great opponent to Hitler [Annotator's Note: German dictator Adolf Hitler].

Dr. Kenneth Arrow shared the Nobel Prize in Economics with John Hicks in 1972. The prize had only been awarded for four previous years. The award was unexpected and Arrow is still puzzled as to why he received it. Arrow recounts his experience in receiving the award and the ceremony related to the activity. Arrow had been told ahead of time that the ceremony was a fairyland. While in Sweden, Arrow and his family visited an Oriental museum. The museum was opened especially for him. The archeologist who had performed the museum's excavations in China served as the docent on the tour of the exhibits. Otherwise, the ceremony for the Nobel award was not particularly dramatic.

Dr. Kenneth Arrow was a Fulbright Scholar at the University of Siena in the 1990s. Arrow had always been interested in the world and other countries. He referenced the Econometrics Society which was founded in 1932 as a group of interest. The Econometrics Society dealt with quantitative statistical and theoretical approaches toward economics. Irving Cole, who was perhaps America's most famous economist, was a participant in the Society. The Society was an internationally focused group rather than purely nationalistic. In 1952, Arrow traveled to Europe on the fellowship from the Social Science Research Council. Arrow found that the economists in France, the Netherlands, and Norway were oriented more toward an international viewpoint than those in England, Germany, or Austria. The Rockefeller Foundation also contributed in the international exchange of scholars and economists.

Dr. Kenneth Arrow never discussed his father's World War 1 or his own World War 2 experiences. His father was in training at Camp Dix when the war ended. They made only incidental references to the experiences. Arrow discusses the impacts on World War 2 of economists John Maynard Keynes with his general theory of economics; Joseph Schumpeter who wrote Capitalism, Socialism and Democracy; and Friedrich Hayek who wrote The Road to Serfdom. Although the works of Keynes came out while Arrow was in high school, he was never introduced to the theories until after graduate school. Keynes ideas were rejected early on by the economic community and the anti-theoretical factions. After the war, Arrow's mentor and instructor Arthur F. Burns wrote an article related to the Keynesian approach that argued against the idea that investment is the driver of business cycles because consumption fluctuates also. This was a critique of secular stagnation [Annotator's Note: a period of slow economic growth often with ensuing elevated unemployment]. It argued that the major world economies can have sluggish economic rates, but the economies frequently rebound in the short run. By 1938, the question of when the rebound would happen was on the forefront. Joseph Schumpeter had written three volumes on business cycles. His idea was that democracy was essentially a competitive model in getting more votes. To Arrow, this raised the question of whether capitalism is a necessary prerequisite for democracy. The German post-Weimar example would indicate not because the democratic systems were extinguished without a fight by the capitalist class. Schumpeter was a provocative thinker. Arrow heard Schumpeter discuss the case of Europe with its centuries of the aristocratic class ruling over a well organized society. The United States has never had that situation, but has not had significant problems. The American Civil War was a problem that was not handled well; nor was the First World War a necessary conflict. The First World War had its start due to the assassination of an aristocrat. It could have been prevented by aristocrats instead of provoked by them. Arrow does not agree with the assertion of Friedrich Hayek that socialism leads to serfdom. Hayek's contention is that the dependence on government support turns the working class into serfs. That dependency further strengthens the power of the central government. Hayek's points do not resonate with Arrow even though they are well argued. To Arrow, Keynes has had a more fundamental and permanent influence. Schumpeter was very clever and has made very good points.

Dr. Kenneth Arrow sees the most important lesson of World War 2 as it is related to the costliness of war. War can be more costly than anticipated if a country is not rational before provoking the conflict. The example of Japan going to war with the United States is raised. The admiral in charge of the Pearl Harbor raid [Annotator's Note: Japanese Admiral Yamamoto Isoroku] was anxious about the attack because of the eventual outcome with the United States. Japan could have avoided the war. The Germans also could have avoided the war with the United States had they not declared war on America after Pearl Harbor. America would have likely focused on the war with Japan had Germany not declared war on the United States. The way accidental things lead to large events is dramatic when history is viewed. An example is the start of the First World War which evolved from the assassination of the heir to the throne. [Annotator's Note: Archduke Franz Ferdinand, the heir apparent to the Austria-Hungary throne, was shot in Sarajevo in June 1914 thus causing a declaration of war on Serbia. That event escalated rapidly into World War 1.] Today, the United States guarantees the security of Japan. There are strong instabilities in the world with the threat of nuclear weapons looming in the background. That nuclear threat bothers Arrow as much as the criticality of climate changes. The legacy of World War 2 is that there are two contradictory lessons. The first lesson deals with the horrors that can inevitably result. The second lesson is that a certain calm and yet steadiness is essential for the willingness to fight. People with some degree of rationality need to be involved. The comparison of 1938 and 1939 to the Cuban Missile Crisis is striking. What looked to be the complete end turned out not to be that at all. [Annotator's Note: In 1938 and 1939, Adolf Hitler coerced the Allied alliances into sacrificing small countries without a fight. In the 1962 Cuban Missile Crisis, the standoff between the United States and Cuba, as a surrogate of Russian nuclear power, was resolved through the steadiness of communication and negotiations between President John F. Kennedy and Soviet Premier Nikita Khrushchev. What could have turned into a nuclear holocaust was resolved through thoughtful rationality.]