Last Updated on September 24, 2023
Armen Alchian’s H-Bomb Method is the intersection between economics and espionage. It interlinks rational economic thinking with intelligence-gathering.
This article will examine Alchian’s H-Bomb Method, exploring how economic principles found a home in secret services’ strategies.
Background of Armen Alchian
Armen Alchian was an economist of Armenian descent. He was born in California in 1914. He earned a Ph.D. from Stanford with a dissertation titled “The Effects of Changes in the General Wage Structure.”
Alchian later worked as a teaching assistant at Stanford from 1937 – 1940. From 1940 to 1941, he worked at the National Bureau of Economic Research (NBER) and Harvard University.
In 1942, he served as an instructor at the University of Oregon.
Between 1942 and 1946, he worked as a statistician with the Army Air Corps.
This eventually led to his position as an economist at the RAND Corporation. The acronym RAND stands for Research and Development. The company is a nonprofit think tank initially doing research exclusively for the US Armed Forces.
One of the things Alchian is most famous for is his work on what influences prices.
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Armen Alchian’s H-Bomb Method
The USA carried out the first test of an H-bomb in 1952. Armen Alchian was an employee of RAND during the bomb’s development. His colleagues in the economics department were curious about how the bomb was made. However, as you can expect, the physicists and engineers would not disclose such sensitive information to them.
Alchian was determined to figure it out himself. He looked at documents from the Department of Commerce and cross-referenced the information about chemicals and other constituents that could be used in the H-bomb.
He watched the stock prices of companies engaged in offering these components for the six months leading up to the bomb test.
Through publicly available data, he found that the stock price of Lithium Corp of America jumped from around $3 to $13 (and fell back down after the test). That way, he identified Lithium as the main fuel.
He wrote a paper at RAND about his discovery. Shortly after, they asked him to withdraw it because it was perceived as a threat to national security.
He then sat on this story for decades before sharing.
The Interplay Between the H-Bomb Method, Economics and Espionage
Alchian’s H-Bomb Method involves an innovative strategy of applying economic principles and reasoning to intelligence gathering.
The technique utilizes economic analysis to guide the decision-making process in covert operations. It enables a more strategic and calculated approach to intelligence activities that showcases how, with the right focus, even the best-kept information can be unveiled.
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Takeaway: Armen Alchian’s H-Bomb Method as an Effective Method For Deduction
Armen Alchian’s H-Bomb Method is an unexpected fusion of economics, rational thinking and covert operations.
As his journey was informed by economic theories, he uncovered a pathway that led to insights into the uncharted territory of espionage. His method underlines how, with the right research approach, effort and dedication, one can uncover even the most protected secrets.
