There was this whole controversy at the time dofirms maximis profits. But that's not where alchan went alchen said, you probably don't know enough to maximise profits. There's so much uncertainty. It's not a sual equation you plug in a bunch of numbers and figure out. So he said, here's what we can say, the firms that make closer to optimal decisions are going to do better. The environment will select them for survival and select the others for failure. And i really love that it's actually quite an unhealthy problem for a healthy way to look at economics. I think economists need to hold on to that idea as long as they're working emotionally
Economist and author David Henderson talks about his book (co-authored with Steve Globerman) The Essential UCLA School of Economics with EconTalk host Russ Roberts. Much of the conversation focuses on the work of Armen Alchian and Harold Demsetz, who both saw economics as a powerful tool for understanding human behavior and how the world works.