A long time ago, when I had just started teaching at the University of Rochester, a blind man marched into my office, adopted a commanding stance, and announced in a booming voice that “it takes 150 condoms to prevent one birth in India”. Then he turned on his heels and marched out, leaving me to wonder what he had divided into what to get that number.
That’s what it was like working with Walter Oi, who died peacefully in his sleep on Christmas Eve after a long illness. Walter loved odd facts, and he loved to share them. It was Walter who told me that when all frozen pies had 12 inch diameters, apple was the most popular flavor — but when 7 inch pies came on the market, apple immediately fell to something like fifth place. His explanation: When you’re buying a 12 inch pie, the whole family has to agree on a flavor, and apple wins because it’s everyone’s second choice. With 7 inch pies, family members each get their pick, and almost nobody chooses apple.
Walter loved facts so much that he sometimes invented new ones, because the world could always use more. One day he walked into the department coffee room and announced that “A one hundred pound man and a three hundred pound man have exactly the same quantity of blood.” When this was met with considerable skepticism, Walter responded as he always responded to skepticism — by repeating himself more forcefully: “A one hundred pound man and a three hundred pound man have EXACTLY the same quantity of blood”.
In those pre-Internet days, some of us owned a device called an “encyclopedia”, which was sort of like a hardcopy printout of Wikipedia, but with fewer Simpsons references. A couple of my more enterprising colleagues went home and checked their encyclopedias that night, and came back the next morning to report that according to authoritative sources, a man’s blood volume is roughly proportional to his body weight. Walter’s response: “Nope. A one hundred pound man and a three hundred pound man have EXACTLY the same quantity of blood.”
If you watched carefully and didn’t blink, you might have caught him suppressing a smile.
It was a quirky brand of humor, and not to everyone’s taste, but it was assuredly to mine, and it was part of what endeared him to me. There are so many stories about Walter’s quirks that if I tried to type them all, I’d never get this posted. So first let me mention his real work. Walter was a superb economist. One of his best known contributions was the analysis of two-part pricing: Should Gilette sell cheap razors to increase the demand for razor blades, or should it sell cheap razor blades to increase the demand for razors? Should Amazon sell cheap e-books to increase the demand for Kindles, or cheap Kindles to increase the demand for e-books? Should Disneyland set high admission fees and low prices for the ride tickets, or vice versa?
Walter nailed this problem, with a complete analysis of when you should sell cheap razors and when you should sell cheap blades. For forty years, his ideas have formed the basis of everything we know about monopoly pricing. (You can read about some of these ideas in Chapter 16 of The Armchair Economist.) This was just one of Walter’s many landmark papers, on an extraordinarily broad range of topics. (See Eric Hanushek‘s appreciation here for a more complete picture.) But the work he claimed to be proudest of was his role in ending the military draft.
In 1967, people were still making the ridiculous claim that an army of underpaid draftees is cheaper than an all-volunteer force — based, apparently, on the ridiculous assumption that the cost of a soldier is well measured by his paycheck. But of course this isn’t true. The social cost of putting, say, a carpenter in the army is that we have one less carpenter doing civilian work. That’s true whether you pay him one dollar a year or a million.
To make this clearer: Imagine that I tax you $100,000 a year and offer to return it all to you in wages if you join the army, which you agree to do. Now instead imagine that I simply draft you and pay you nothing. By the ridiculous accounting of 1967, the first plan costs $100,000 and the second costs zero — even though there’s surely no important difference between them.
Despite the games he liked to play about quantities of blood and related matters, Walter Oi could, when he wanted to, be scrupulous with facts — and his scrupulous estimates of the true cost of a conscripted military were instrumental in ending the draft, which was abolished in 1973. It was a triumph for Walter’s (and others’) careful research, persistence and powers of persuasion. It was a victory of good economic sense, and a victory for freedom. You can read William Meckling’s account of the great battle, and of Walter’s central role in it, here.
But you can’t talk about Walter without coming back to his eccentricities. You could always count on him to derail a boring conversation by saying something perfectly irrelevant and perfectly incomprehensible, and then forcing everyone to guess what he was talking about. Once in the midst of a dreadfully dull discussion about the possible future business strategies of the Xerox corporation, Walter interjected (in that booming voice, always that booming voice): “I’ll tell you what scares me, boy. It’s that Ukrainian guy.” Of course, someone — it might have been me — fell for it and asked “Ummm…what Ukrainian guy?”. To which the answer was a perfectly predictable booming affirmation: “That Ukrainian guy. That’s what scares me, boy. That Ukrainian guy.” After several equally uninformative rounds, we dragged it out of him: Sometime in the mid-nineteenth century, some Ukrainian guy bought some land in Canada, then rode out in a stagecoach to inspect his land, and somehow got abandoned in the woods. “Scares the hell out of me, boy — being lost in the woods like that.”
He loved that kind of guessing game, and I fear that I’ve failed to convey how charmingly he pulled it off. (In fairness, I know there were some who were immune to that charm. I was decidedly not). Once, in an academic seminar, the speaker had just launched into talking about “a public good, which we’ll call X, ” when Walter silenced the room by asking “What is the one example of a pure public good?”. (A public good, in economic jargon is — more or less — a good that you and I can consume at the same time without interrupting each others’ enjoyment — like, perhaps, an outdoor concert.) When it became clear that the seminar couldn’t go on until he got an answer, someone ventured to offer “Ummm…national defense?” (This is a textbook answer, since you and I are both protected by the same army at the same time.) Walter’s response: “NOPE. What is the one example of a pure public good?” We pretty much went all around the room offering examples (“A non-crowded highway?” “NOPE!”) until it became clear that we’d exhausted all our ideas. Walter broke into a grin of triumph before announcing that “It’s the Saint Louis Arch. Because no matter how much you look at that arch, it doesn’t stop me from looking.”
Surreal? Sure, but no more so than being told that a one hundred pound man and a three hundred pound man have exactly the same quantity of blood. Aside from the bizarre choice of Saint Louis Arch (instead of, say, Niagara Falls or the Chicago skyline) note the locution: “It doesn’t stop me from looking.” Walter, the blind man, took every opportunity to speak in visual images. Once at a seminar, commenting on the Indian accent of the speaker, he leaned over to a colleague and whispered “Gee, if you closed your eyes, you’d think this guy was G.S. Maddala.” And the day after a party, he was always eager to deconstruct the fashions (“Did you SEE how bright her dress was?”), presumably after getting the rundown from a co-conspirator.
He must have cultivated these traits for a very long time, because the Economics Department at the University of Chicago has a long (but sometimes broken) tradition of awarding, at the end of each academic year, the “Walter Y. Oi Award” to the graduate student who has asked the most irrelevant question — presumably in commemoration of something Walter asked in his own student days at Chicago over half a century ago. I’m not sure anybody knows what that question was, but according to one rumor, it came in the midst of a fairly technical lecture in Milton Friedman‘s Price Theory class, where Walter suddenly raised his hand and asked “Do you just make this stuff up as you go along, or what?”.
And somehow this reminds me of the time he walked into the coffee room and asked: “How much would you have to pay for a block of stainless steel?”. I asked him what size. He waved off the question and said “Not too big”. I will forever regret that I failed to answer “Not too much.”
As the child of parents born in Japan, Walter (at the age of 14) was interned at Camp Amache during World War II, along with the rest of his family, and he was always (quite understandably) bitter about the experience. Sometimes he wanted to talk about that, and occasionally I drew him out. Once I asked him if they separated families in the camps. “Not usually”, he said — “But if they declared you a dangerous alien, which they could do whenever they wanted, then your family got separated. It was completely arbitrary. And that happened to us. They called my father a dangerous alien, and they separated us”.
I asked him if he could think of any reason why they might have chosen his father to pick on. Only after several rounds of denial did he grumblingly admit that “It might have been because he was the Treasurer of the Committee to raise funds for the Japanese Navy.”
Walter always made me laugh and (more often than I’ve hinted at in this already-too-long post) he often made me think. I learned a lot of economics from him, and I’m grateful for that. I’m grateful too for the inspiring and bittersweet stories he shared about a 14 year old boy, rapidly losing his sight, assigned to load watermelons on trucks in the internment camp where his government had sent him — a boy who emerged as a champion of intellectual inquiry, a champion of liberty, the curator of a unique persona that was a living work of art, and the subject of countless anecdotes, all recollected with love.