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Finding Equilibrium

Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit

Copyright Date: 2014
Pages: 304
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  • Book Info
    Finding Equilibrium
    Book Description:

    Finding Equilibriumexplores the post-World War II transformation of economics by constructing a history of the proof of its central dogma-that a competitive market economy may possess a set of equilibrium prices. The model economy for which the theorem could be proved was mapped out in 1954 by Kenneth Arrow and Gerard Debreu collaboratively, and by Lionel McKenzie separately, and would become widely known as the "Arrow-Debreu Model." While Arrow and Debreu would later go on to win separate Nobel prizes in economics, McKenzie would never receive it. Till Düppe and E. Roy Weintraub explore the lives and work of these economists and the issues of scientific credit against the extraordinary backdrop of overlapping research communities and an economics discipline that was shifting dramatically to mathematical modes of expression.

    Based on recently opened archives,Finding Equilibriumshows the complex interplay between each man's personal life and work, and examines compelling ideas about scientific credit, publication, regard for different research institutions, and the awarding of Nobel prizes. Instead of asking whether recognition was rightly or wrongly given, and who were the heroes or villains, the book considers attitudes toward intellectual credit and strategies to gain it vis-à-vis the communities that grant it.

    Telling the story behind the proof of the central theorem in economics,Finding Equilibriumsheds light on the changing nature of the scientific community and the critical connections between the personal and public rewards of scientific work.

    eISBN: 978-1-4008-5012-9
    Subjects: Economics, History of Science & Technology

Table of Contents

  1. Part I People

      (pp. 3-23)

      Kenneth Arrow was never shy about engaging his past. In contrast to our other two protagonists, he gave a large number of interviews and on various occasions written sketches of different portions of his life and the development of his interests. Likely his openness to interviewers and biographers is the result of his ebullience and his lifelong interest in thinking about how ideas develop and how individuals’ natures are formed. At the same time Arrow was hesitant about claiming the last word about his past. When asked to write about his “life philosophy” he began, “it is part of my...

      (pp. 24-46)

      The 2009–10 telephone directory for the town of Montezuma, in Macon County, Georgia, lists nineteen McKenzies in a total population, from the 2010 census, of 3,460. These residents are nearly double the number reported in the 1920 census population of Montezuma of 1,827, the year after Lionel McKenzie was born there in 1919. The town, racially then as now approximately one-third Caucasian and two-thirds African American, was an agricultural town in an agricultural county in an agricultural state.

      Apart from a few short notes on web pages, author information for books and articles, and some award citations, there is...

      (pp. 47-64)

      Gérard Debreu was, in many respects, the odd man out. It was not only that he was French and not American but also that both his family and his education differed significantly from Arrow’s and McKenzie’s. In order to understand his role in the existence proof story, personality matters. Unlike both Arrow and McKenzie, Debreu was introverted, silent, shy, self-protective, and rather dogmatic. During research seminars, Debreu hardly ever spoke to pose a question—and when he did, he already knew the precise answer. He never debated with others; he only informed others about his final and incontestable thoughts. In...

  2. Part II Context

      (pp. 67-97)

      The end of World War II reconfigured the institutions of U.S. science. While in continental Europe the conflagration and aftermath of the war froze optimism about reason and science, in the United States it created the mind-set that the scientific achievements that had enabled victory could similarly enable a prosperous peacetime society. The centrally planned wartime economies of the United Kingdom and United States had succeeded in defeating the Axis Powers. The war-ending shock of the August 1945 atomic bombs and the resulting Japanese surrender reinforced the idea that planned government support of science would sustain Western freedoms. Based on...

      (pp. 98-128)

      In December 1948, in one of the hotel rooms at the annual meeting of the American Economic Association, several scholars with various backgrounds but similar interests conceived the idea of a conference (Kuhn 2008). Tjalling Koopmans, Harold Kuhn, George Dantzig, Albert Tucker, Oskar Morgenstern, and Wassily Leontief were all involved in projects that had the idea of linear programming in common. Koopmans, who in summer of 1948 had become the research director at the Cowles Commission, would take the major initiative in organizing the conference in the context of a research contract with the RAND Corporation, signed in January 1949,...

  3. Part III Credit

      (pp. 131-171)

      In his presidential address to the Econometric Society (given in Ottowa and Vienna in 1977), a revision of which was published in 1981, McKenzie said he wished to

      discuss the present status of a classical theory on existence of competitive equilibrium that was proved in various guises in the 1950s by Arrow and Debreu, Debreu, Gale, Kuhn, McKenzie, and Nikaido. The earliest papers were those of Arrow and Debreu, and McKenzie, both of which were presented to the Econometric Society at its Chicago meeting in December, 1952. They were written independently. The paper of Nikaido was also written independently of...

      (pp. 172-203)

      Arrow and Debreu traveled on different scholarly paths after publication of their jointly authored paper. For Debreu, the paper with Arrow had delayed further work and extension of what he considered to be his genuine contribution. He sought a more general existence proof. He took a six-month leave from Cowles to return to France, but he continued searching for a different proof and by spring 1954 completed the version that would later appear in hisTheory of Value(1959).¹ Nevertheless, he was not completely satisfied with it since he considered that proof still too close to what he had done...

      (pp. 204-230)

      By the early 1960s our protagonists had found stable intellectual homes. Debreu contributed to the growing strength of the Berkeley economics department, McKenzie built a theory-inflected economics department in Rochester, and Arrow, after having built up a network including economics, statistics, and operations research at Stanford, moved to a Harvard that once had eschewed Jewish scholars. Although independent one from another, credit for the existence proof given to one of them, and not another, would disturb their professional equilibria.

      It is a truism in intellectual history that creative works, in gaining significance through their use by others, develop a life...

    (pp. 231-244)

    At age eighty-one Arrow commented that life philosophies, like economies, are never independent of history (1992, 43). In the previous chapters we explored this history of the professional careers of Kenneth Arrow, Gérard Debreu, and Lionel McKenzie as the discipline of economics changed in the post–World War II era. Neither their work nor their scientific selves were causal one for the other. Instead we have insisted that their own scientific identities, and the work that they did, mutually stabilized each other. Their scientific persona and their work became coherent together and can be best understood in relation one to...

  5. CODA
    (pp. 245-248)

    I haven’t done collaborative work on my historical projects [except for my two articles with Ted Gayer], but I’m about to coauthor a book on the history of existence of general equilibrium with a young German researcher Till Düppe. He and I have been corresponding back and forth because he’s unearthed, and has access to, the Debreu papers, [and he has] lengthy interviews with members of the Debreu extended family. I’d been planning to make my McKenzie material into a book, because I have so much of it, and I started thinking, “God, I wish I had the Debreu papers.”...