The archive.

Cheap explosive energy is not the same as useful industrial work: this distinction anchors Oskar Morgenstern and Klaus-Peter Heiss’s 1967 assessment of peaceful underground nuclear explosions. Prepared for the U.S. Atomic Energy Commission, the report argues for experimental development while making commercial promise depend on unresolved recovery processes, contamination risks, and safety constraints. Its distinctive economic perspective emerges where apparent savings become misleading: cheaper copper extraction may leave too much valuable metal underground, and larger excavation blasts may face tighter safety limits. Equally revealing is its case for public research funding when experimental knowledge benefits firms that cannot individually justify paying for it. The reader encounters technological advocacy tested—though not always restrained—by calculations of uncertainty, foregone opportunities, and costs beyond the explosion itself.

Can an economy sustain balanced growth while maintaining activities that lose money? Oskar Morgenstern and Gerald L. Thompson address this question by opening the generalized von Neumann growth model to trade at externally fixed prices. Their distinctive move is to combine those trading opportunities with domestic bounds on production, allowing profitable industries to finance loss-making services rather than excluding them from equilibrium. Under the model’s assumptions, these controls permit a continuous range of expansion rates where the closed model offered only finitely many. Linear-programming proofs and numerical examples show how trade prices and production requirements shape feasible growth—and how openness can raise it. The article also makes a useful distinction: establishing what specified controls make possible is not the same as deciding which controls an economy should choose.

Strip a share of its metaphysics and nothing intrinsic remains—only a valuation sustained transaction by transaction. From that deflationary premise Granger and Morgenstern mount an empirical assault on market folklore, insisting first that 'prediction' be defined before it is tested. Deploying spectral analysis across daily, weekly, and monthly series, they find price changes broadly following a random walk—not because the future is unknowable, but because past prices yield no usable linear forecast. The book's discipline lies in its distinctions: absolute price versus relative movement, direction versus magnitude. Volume, they show, says nothing about whether a stock will rise or fall, yet tracks the size of its swings. Optimal-allocation claims, seasonal cycles, and profitable filter rules fall in turn.

The value of a stock is only what someone else will pay for it — in cash, in another stock or whatever it may be.

When does a growth model describe a genuinely open economy, rather than a closed economy with trade variables attached? In this corrective note, Oskar Morgenstern and Gerald L. Thompson sharpen the answer by replacing import prices with export prices in a key positivity assumption. They acknowledge criticism of their earlier formulation and explain why the revised condition repairs an existence proof without changing the theorem statements. The economic distinction is concrete: trade must involve goods of positive value, not merely exchanges of free goods. Readers can follow how a small mathematical correction changes the interpretation of production constraints, while seeing the authors distinguish properties of basic solutions from conditions that would require additional assumptions.

Economic theories address people who can learn those theories and change their behavior accordingly. This feedback is central to Oskar Morgenstern’s examination of what economics can describe, predict, and prescribe. In this article, reprinted in 1976 from its 1972 publication, he brings the perspective of game theory and axiomatic utility to bear on the limits of both aggregate measurement and predictive success. Stock-market regularities that disappear when exploited and mixed strategies that remain effective when understood sharpen the question: which economic propositions survive their own application? Morgenstern’s commitment to formal rigor accompanies a concern for expectations, institutions, and historical change. Readers can discover why a successful forecast need not validate a theory—and how theory can guide action without choosing the ends that action should serve.

Lower launch costs alone do not make the economic case for the Space Shuttle in this 1972 NASA contractor report. Directed by Klaus P. Heiss and Oskar Morgenstern, Mathematica’s study treats reusable transportation as an investment in an entire future space program: its justification depends on mission demand, payload reuse and refurbishment, development budgets, and risk. The tension is concrete: substantial expenditure must precede savings from missions whose scale and composition remain unsettled. Across the executive summary and three volumes, readers can examine how engineering alternatives become competing uses of public resources—and why changing a flight forecast, discount rate, or payload assumption can change the preferred system. The report’s conditional recommendation also draws a useful boundary between reducing the cost of space activity and establishing that activity’s social value.

"Optimum" sounds like a clear concept and is nothing of the sort. Responding as a discussant to Abram Bergson and Jan Tinbergen, Morgenstern presses two objections that unsettle the confident vocabulary of welfare planning. First, productivity, so intelligible for physical output, becomes one of the weakest ideas in economics once services dominate national income, leaving comparisons across systems on shakier ground than they claim. Second, an optimum invoked rhetorically is not an optimum proven to exist, and recent theory had produced cases where none does. From there he argues that society cannot in principle be fully formalized, that imposed equality raises the unanswered question of what keeps equal incomes equal, and that identical physical circumstances can sustain rival stable orders. Choosing among them, he concludes, is an ethical and political act, not a scientific result.

There is no scientific reason why one system should be preferred over the other.

Optimization tells us how to choose when the relevant variables are under our control. What does it explain when outcomes depend on other people’s choices? This distinction drives Oskar Morgenstern’s thirteen criticisms of economic theory, first published in 1972 and reprinted here in 1976. From a game-theoretic perspective, he challenges models that remove bargaining, strategic uncertainty and political decisions from the interactions they purport to explain. His concrete objections give familiar abstractions new friction: a durable-goods purchase need not reveal a stable preference ranking, and the effects of new money depend on where it enters the economy. Readers can discover why, for Morgenstern, greater formal precision and closer empirical scrutiny belong together—and why optimizing a decision is not the same as explaining an economic relationship.

Forecasting the future balance of power tempts planners to mistake projection for knowledge, and this collaborative study sets out to discipline the temptation. Morgenstern, Knorr, and Heiss treat power as a composite of economic capacity, technological change, military organization, and political will, elements that resist extrapolation to very different degrees. Engineering development can be projected within wide error bounds; decisive scientific breakthroughs cannot. They dissect the methods of the day, from the Delphi technique and Wilhelm Fucks's physics-styled power indices to Kahn and Wiener's scenarios and the Limits to Growth simulation, faulting each for suppressing the historical turning points that dominate real outcomes. Energy dependence emerges as their one firm warning, leaving Japan and Western Europe strategically exposed, while China's trajectory hinges on unpredictable political persistence. Armed force, they insist, becomes power only through the will to use it.

Our work has impressed us with the inherent difficulties of forecasting although we realize that objects of forecasting vary greatly in their conjecturability.

A strategy is not merely a permissible move: someone must have the resources to carry it out. In this short theoretical article, reprinted in 1976, Oskar Morgenstern asks what happens when resource allocation determines which strategies exist at all. Unlike chess, economic and political “power” games can change their own conditions: winnings may finance new strategic capacities, while coalition partners’ resources may reinforce or obstruct one another. His “integral game” extends this problem to the overlapping activities of earning, buying, and investing, where the same people may be opponents in one encounter and partners in another. The result is a research programme rather than a finished model, showing why, for Morgenstern, allocation cannot be understood through isolated optimization when other players help determine what resources can accomplish.

When John von Neumann published his expanding-economy model in 1937, he gave economics one of its rare transformative events. Morgenstern and Thompson build on it here, synthesizing two decades of work into the KMT model, which removes von Neumann's restrictive assumption that every good figures in every process and admits multiple expansion rates, subeconomies, and game-theoretic solution methods. Across fourteen chapters they extend the framework to open economies that import and export at world prices, to consumption and savings, to trading blocks and a world model bound by a common expansion rate, and, pointedly, to contraction and compression, since resource limits make endless growth no longer self-evidently desirable. Throughout, they insist the models apply to any economy regardless of political organization, deliberately omit money and stochastic elements, and treat expansion, stationarity, and collapse as problems of structure, optimization, and computable linear programming.

What does an anomalous choice refute: a mathematical construction, its empirical reach, or the experiment used to test it? In this essay, Oskar Morgenstern defends the expected utility theory he developed with John von Neumann while acknowledging experiences its axioms may not capture. His objections to tests involving minute probabilities and imaginary fortunes turn on whether respondents can meaningfully assess the choices offered. Yet his defence leaves room for the pleasure of gambling, the effects of time, and preferences that resist a complete ordering. Writing as a co-architect rather than a detached commentator, Morgenstern exposes a productive tension between confidence in formal proof and uncertainty about human preference. Readers can discover why preserving an axiomatic achievement need not mean treating it as a finished account of decision-making.