The archive.

Morgenstern’s brief, signed preface places two advance chapters at a precise moment in the revision of On the Accuracy of Economic Observations: on July 9, 1962, he expected the rewritten second edition to reach the printer within weeks. Its interest is documentary rather than argumentative. Readers can establish the chapters’ relation to the larger book and trace the acknowledged contributions of Econometric Research Program collaborators and typist Lois A. Crooks. The preface records publication circumstances and working relationships, not a thesis about statistical accuracy.

Can stock-price changes look random while price levels retain a structure that a random walk cannot explain? In this 1962 research memorandum, Clive W. J. Granger and Oskar Morgenstern use spectral analysis to separate movements at different time scales. Their distinctive finding is not a dependable market cycle, but a methodological tension: differencing prices can obscure slow fluctuations, making a model appear more adequate than it is. Short-run movements largely support the random-walk benchmark; longer-run variation exceeds its predictions. Yet weak seasonal and business-cycle components offer little support for cyclical investment rules. The memorandum shows readers why evidence against a simple model need not yield a usable forecast—and how statistical transformations can conceal precisely the features an inquiry seeks to understand.

Destroying an enemy’s communications might unleash the weapons it was meant to disable. This possibility gives Oskar Morgenstern’s 1962 memorandum, a lightly revised invited address, its central tension: nuclear security depends not only on the capacity to strike but on preserving political control on both sides. Morgenstern treats command as an organizational problem involving human judgment, selective information and resilience under attack—not simply faster signals or more reliable electronics. Safeguards against unauthorized action can impede legitimate orders; economical networks can prove dangerously fragile. His case for survivable communications available to adversaries offers a concrete way to examine why military advantage and strategic safety may diverge, and why an opponent’s ability to restrain its forces and negotiate can be a condition of one’s own security.

Are there limits to the use of mathematics in economics? The question, this essay answers, is wrongly posed: the obstacle lies not in the subject but in whether economists understand what mathematics is and formulate their problems well. Morgenstern dismisses the usual objections — psychology, non-quantitative data, expectations, unmeasurable utility — by noting that mathematics is not merely quantitative, that no deep gulf separates a simple addition from an integration. Economics erred not by too much formalism but by shallow model-building, borrowing equilibrium from mechanics and casting agents as solitary maximizers under fixed conditions. Game theory marks the conceptual break, supplying a mathematics fitted to strategic interdependence; expected utility, axiomatized, replaces cumbersome indifference curves. Since natural science once remade mathematics, he expects social science to do the same, leaving no fixed boundary that can honestly be drawn.

Nichts ist leichter, als die eigene Beschränktheit für die der Methode oder des untersuchten Gegenstandes zu halten.

English translation: “Nothing is easier than to mistake one's own limitations for those of the method or of the subject under investigation.”

When an economic model fails, has mathematics reached its limit—or has the economist posed the wrong problem? In this 1963 research memorandum, Oskar Morgenstern defends mathematical economics while challenging the substitution of formal elegance for economic understanding. Drawing on his work with von Neumann, he argues that uncertainty and strategic interaction demand more than techniques borrowed from mechanics: they may require new concepts and new mathematics. His examples make the distinction concrete. Counting equations does not prove that an equilibrium exists; treating agents as isolated maximizers can miss their dependence on one another’s choices. Readers encounter a defence of rigorous reasoning that grants no automatic prestige to symbols or axioms, and insists that historical, experimental, and statistical inquiry remain indispensable.

When economists identify cycles by picking peaks and troughs, how much information do they leave unused? In this 1964 foreword to C. W. J. Granger’s Spectral Analysis of Economic Time Series, written in association with M. Hatanaka and republished here in 2015, Oskar Morgenstern sets computational methods against familiar habits of economic interpretation. His account is also personal: he recalls plans with John von Neumann to apply Fourier analysis to economic data, frustrated by computing constraints and ultimately ended by von Neumann’s death. The distinctive interest of this brief introduction lies in Morgenstern’s view of computers not merely as calculating aids but as tools for exploration that could guide theory—and force economists to reconsider what they believed they saw in fluctuations.

What counts as a fair objection to a theory that deliberately leaves things out? In this 1964 address, Oskar Morgenstern defends game theory without claiming that it can encompass every decision or resolve the problem of war. His sharpest distinction concerns rationality: strategic analysis, he argues, does not merely assume rational conduct but seeks to define it when each actor’s prospects depend on others’ choices. He acknowledges unresolved mathematical problems while challenging critics to explain how appeals to intuition or judgment handle complexities that formal models omit. Readers can discover why multiple solutions might reflect social relations rather than theoretical failure—and why acknowledging a model’s limits need not mean abandoning its discipline.

A gift can leave everyone else’s possessions untouched yet give its recipient power over them. This possibility anchors Oskar Morgenstern’s challenge to the apparent simplicity of Pareto improvement: who can establish that nobody is worse off when additional resources change what people can do? In this 1964 research memorandum, he treats bargaining, strategic testimony, and shifts in economic power as central to welfare analysis rather than inconvenient exceptions. His examples range from money sufficient to establish a firm to adaptive computers entrusted with decisions whose consequences their designers cannot fully anticipate. The resulting critique shows how judgments about resource distributions depend on assumptions about knowledge, cooperation, and future action. Morgenstern points toward game-theoretic standards of behavior, while acknowledging that the required reconstruction remains unfinished.

How can an action be judged rational—or morally defensible—when its consequences depend on uncertain events and other people’s deliberate responses? In this 1966 paper, Oskar Morgenstern approaches that problem through economics, game theory, and a reconsideration of Jacques Rueff’s account of scientific knowledge. He distinguishes learning from physics’ standards of inquiry from borrowing its models: a strategic opponent cannot safely be treated as a passive source of statistical regularities. The ethical stakes become concrete in resource depletion, pollution, and remote warfare, where distant or dispersed harms complicate responsibility. His speculative question about nature’s possible hostility remains unresolved; it tests confidence in discovery rather than asserting a cosmology. The paper’s distinctive connection is between economic decision and moral judgment: both require reasoning about consequences that knowledge cannot fully secure.

Production technology alone does not determine how an economy holds together or how fast it can expand. In this 1966 research report, Oskar Morgenstern and Gerald L. Thompson extend von Neumann’s growth model to distinguish the effects of private and public consumption and saving. Their example of wheat, entertainment and diamonds makes a precise point: consumer demand can connect sectors that production requirements leave separate. The extension also breaks the original model’s equality between expansion and interest factors. Using matrix games and numerical examples, the authors distinguish proving that equilibrium exists from explaining which equilibrium will prevail. Readers can discover how preferences and government allocations reshape a formal growth economy—and why identical technological and preference data may still leave its outcome undetermined.

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.

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.