by Morgenstern
[Title Page and Publication Information]: Title page and bibliographic metadata for Oskar Morgenstern's lecture on the theoretical foundations of economic policy, published in 1957. [Introduction: The Awakening of Economics]: Morgenstern introduces the lecture by arguing that economics is emerging from a 'dogmatic sleep.' He highlights the shift toward numerical evaluation, the possibility of controlled experiments in economics (specifically regarding utility measurement), and the need for new conceptual systems that move beyond metaphors borrowed from classical mechanics. [Game Theory and Combinatorial Mathematics]: The author discusses the profound shift in economic thinking necessitated by John von Neumann's game theory. He argues that traditional calculus (analysis) is often inadequate for economic phenomena, which are better served by combinatorial and discrete mathematics, drawing a parallel to the shift toward quantum mechanics in physics. [Value Judgments and the Solvability of Economic Problems]: Morgenstern affirms the principle of value-judgment-free science (Werturteilsfreiheit), following Max Weber. He explores the logical solvability of economic problems, arguing that whether a problem is 'solvable' depends entirely on the instruments and constraints (e.g., wage flexibility vs. state intervention) permitted by the policy framework. [Mathematical Models and the Objective Function]: The text explains how mathematical models force politicians to define their goals more precisely. Morgenstern argues that for a model to be useful, the government must define an 'objective function' to be maximized or minimized, requiring quantitative clarity on goals like unemployment reduction. [Temporal Complexity and Economic Forecasting]: Morgenstern analyzes the difficulties of economic policy as a continuous process with long time lags. He compares economic forecasting to weather prediction, distinguishing between historical pattern matching and theoretical calculation (hydromechanics), noting that both suffer from data limitations and theoretical imperfections in the social sciences. [The Political Process and Public Investment]: The author discusses the friction between economic theory and political reality, particularly regarding the timing of public investments. He uses the rapid growth of Los Angeles to illustrate how urgent social needs (schools, hospitals) often force investment during expansions, contradicting counter-cyclical economic principles. [Optimization and Technical Feasibility]: Morgenstern addresses the problem of ranking and selecting projects when resources are limited and expertise is fragmented. He discusses technical feasibility and optimization using examples like the Berlin Airlift and machine scheduling, highlighting the difficulty of finding optimal solutions even with few variables. [Case Study: Manganese Supply and Strategic Planning]: A detailed case study on the US manganese supply chain. Morgenstern demonstrates how linear programming, input-output analysis, and game theory can be combined to determine the 'optimal' mix of imports, domestic processing, and stockpiling while accounting for potential technological breakthroughs and international competitors. [Strategic Interaction and Game Theory Solutions]: The author contrasts situations where the government controls all variables with those involving 'opponents' (unions, cartels). In strategic interactions, there is no single 'optimum' but rather a set of stable 'imputations' (solutions). He also critiques standard statistics for assuming nature is not 'malicious,' whereas social actors may intentionally deceive. [Conclusion: Mixed Strategies and Rule Changes]: Morgenstern concludes by suggesting that because no single best policy exists in strategic games, governments must use 'mixed' or 'statistical' strategies (often appearing as secrecy). He warns that governments also have the power to change the 'rules of the game' entirely, moving from negotiation to coercion. [Discussion: Leo Brandt and Walther Hoffmann]: The discussion begins with Leo Brandt emphasizing the ideological neutrality of mathematical methods. Walther Hoffmann argues for the better utilization of economic science in West German policy-making to facilitate objective social dialogue between partners (unions and employers) based on rigorous data. [Discussion: Post-War Research and International Comparisons]: Leo Brandt discusses the lag in German research due to post-war restrictions, comparing it to British successes in atomic energy and aviation which stemmed from wartime operational research being transitioned to civilian use. [Discussion: Wilhelm Fucks on Mathematical Resistance]: Professor Wilhelm Fucks defends mathematical methods against common critiques in the social sciences. He argues that science often describes structures before understanding 'deep reasons' and that new fields require the development of new mathematical tools rather than just applying existing ones. [Discussion: Theodor Wessels on Interest Groups and Coordination]: Professor Theodor Wessels discusses the danger of uncoordinated economic measures leading to inflation. He highlights the reliance of government ministries on 'experts' who are often biased interest groups, stressing the need for independent research institutes to provide objective data. [Morgenstern's Response on Dominance and Stability]: Morgenstern elaborates on the concept of 'imputations' and 'dominance' in game theory. He explains that a 'solution' is a set of distributions that define a behavioral standard for society, where no single distribution is strictly better than all others, reflecting the true complexity of social interaction. [Discussion: Walter Weizel on Mathematical Optima]: Professor Walter Weizel poses a technical question regarding why an economic optimum might not exist, listing seven mathematical possibilities including non-state variables, discrete values, or lack of a closed range. [Final Response: The 3-Person Game and Coalitions]: Morgenstern uses a 3-person game example to show that whenever players can benefit from forming coalitions, a simple maximum does not exist. He concludes that economic theory must account for the fact that firms, unions, and associations always find it advantageous to organize, necessitating new conceptual tools. [Discussion: Eugen Flegler on Engineering Education]: Professor Eugen Flegler comments on the statistics of engineering students in Germany, arguing that quality is more important than quantity and warning against lowering university standards to accommodate less talented students. [Bibliography: Natural Sciences Series]: A comprehensive list of publications (Heft 1 to Heft 72) from the Natural Sciences series of the Arbeitsgemeinschaft für Forschung des Landes Nordrhein-Westfalen. [Bibliography: Humanities Series]: A comprehensive list of publications (Heft 1 to Heft 76) from the Humanities series of the Arbeitsgemeinschaft für Forschung des Landes Nordrhein-Westfalen.
Title page and bibliographic metadata for Oskar Morgenstern's lecture on the theoretical foundations of economic policy, published in 1957.
Read full textMorgenstern introduces the lecture by arguing that economics is emerging from a 'dogmatic sleep.' He highlights the shift toward numerical evaluation, the possibility of controlled experiments in economics (specifically regarding utility measurement), and the need for new conceptual systems that move beyond metaphors borrowed from classical mechanics.
Read full textThe author discusses the profound shift in economic thinking necessitated by John von Neumann's game theory. He argues that traditional calculus (analysis) is often inadequate for economic phenomena, which are better served by combinatorial and discrete mathematics, drawing a parallel to the shift toward quantum mechanics in physics.
Read full textMorgenstern affirms the principle of value-judgment-free science (Werturteilsfreiheit), following Max Weber. He explores the logical solvability of economic problems, arguing that whether a problem is 'solvable' depends entirely on the instruments and constraints (e.g., wage flexibility vs. state intervention) permitted by the policy framework.
Read full textThe text explains how mathematical models force politicians to define their goals more precisely. Morgenstern argues that for a model to be useful, the government must define an 'objective function' to be maximized or minimized, requiring quantitative clarity on goals like unemployment reduction.
Read full textMorgenstern analyzes the difficulties of economic policy as a continuous process with long time lags. He compares economic forecasting to weather prediction, distinguishing between historical pattern matching and theoretical calculation (hydromechanics), noting that both suffer from data limitations and theoretical imperfections in the social sciences.
Read full textThe author discusses the friction between economic theory and political reality, particularly regarding the timing of public investments. He uses the rapid growth of Los Angeles to illustrate how urgent social needs (schools, hospitals) often force investment during expansions, contradicting counter-cyclical economic principles.
Read full textMorgenstern addresses the problem of ranking and selecting projects when resources are limited and expertise is fragmented. He discusses technical feasibility and optimization using examples like the Berlin Airlift and machine scheduling, highlighting the difficulty of finding optimal solutions even with few variables.
Read full textA detailed case study on the US manganese supply chain. Morgenstern demonstrates how linear programming, input-output analysis, and game theory can be combined to determine the 'optimal' mix of imports, domestic processing, and stockpiling while accounting for potential technological breakthroughs and international competitors.
Read full textThe author contrasts situations where the government controls all variables with those involving 'opponents' (unions, cartels). In strategic interactions, there is no single 'optimum' but rather a set of stable 'imputations' (solutions). He also critiques standard statistics for assuming nature is not 'malicious,' whereas social actors may intentionally deceive.
Read full textMorgenstern concludes by suggesting that because no single best policy exists in strategic games, governments must use 'mixed' or 'statistical' strategies (often appearing as secrecy). He warns that governments also have the power to change the 'rules of the game' entirely, moving from negotiation to coercion.
Read full textThe discussion begins with Leo Brandt emphasizing the ideological neutrality of mathematical methods. Walther Hoffmann argues for the better utilization of economic science in West German policy-making to facilitate objective social dialogue between partners (unions and employers) based on rigorous data.
Read full textLeo Brandt discusses the lag in German research due to post-war restrictions, comparing it to British successes in atomic energy and aviation which stemmed from wartime operational research being transitioned to civilian use.
Read full textProfessor Wilhelm Fucks defends mathematical methods against common critiques in the social sciences. He argues that science often describes structures before understanding 'deep reasons' and that new fields require the development of new mathematical tools rather than just applying existing ones.
Read full textProfessor Theodor Wessels discusses the danger of uncoordinated economic measures leading to inflation. He highlights the reliance of government ministries on 'experts' who are often biased interest groups, stressing the need for independent research institutes to provide objective data.
Read full textMorgenstern elaborates on the concept of 'imputations' and 'dominance' in game theory. He explains that a 'solution' is a set of distributions that define a behavioral standard for society, where no single distribution is strictly better than all others, reflecting the true complexity of social interaction.
Read full textProfessor Walter Weizel poses a technical question regarding why an economic optimum might not exist, listing seven mathematical possibilities including non-state variables, discrete values, or lack of a closed range.
Read full textMorgenstern uses a 3-person game example to show that whenever players can benefit from forming coalitions, a simple maximum does not exist. He concludes that economic theory must account for the fact that firms, unions, and associations always find it advantageous to organize, necessitating new conceptual tools.
Read full textProfessor Eugen Flegler comments on the statistics of engineering students in Germany, arguing that quality is more important than quantity and warning against lowering university standards to accommodate less talented students.
Read full textA comprehensive list of publications (Heft 1 to Heft 72) from the Natural Sciences series of the Arbeitsgemeinschaft für Forschung des Landes Nordrhein-Westfalen.
Read full textA comprehensive list of publications (Heft 1 to Heft 76) from the Humanities series of the Arbeitsgemeinschaft für Forschung des Landes Nordrhein-Westfalen.
Read full text