The archive.

Strip a system of its outer layers and something eventually gives way, not gradually but all at once. Morgenstern's essay builds a vocabulary for that threshold, introducing compressibility, the selective reduction of an economy or organization that preserves its defining function, against the kernel, the minimal core below which the thing ceases to be what it was. He resists the picture of total connectedness implied by input-output schemes read as if every cell were indispensable, since such a system would collapse at the first loss. Real economies, armies, and bureaucracies instead shed activities, reorganize, and substitute; war, scarcity, and damage reveal cores that abundance ordinarily hides. Part II turns to economic constants, denying that economics has physics-like constants while insisting on firmer physiological and technological bounds, from caloric minimums to reproduction times, beneath the shifting surface of prices.

A system will be said to be totally connected if the destruction of any of its parts destroys the whole system, i. e., deprives it of all of its functions.

A passenger car may be expendable—or indispensable if workers need it to reach essential industries. Such distinctions drive Oskar Morgenstern’s 1954 RAND research report: how much can an economy or organization shed before it ceases to perform its basic functions? His concept of a “kernel” challenges the assumption that essential components can be identified once and for all. What must survive depends on technological arrangements, available substitutes, and how long reduced operations must last. Morgenstern distinguishes selective compression from indiscriminate contraction, showing why cuts in one activity can create new burdens elsewhere, such as increased repair needs. The report offers a tentative vocabulary, rather than a finished predictive theory, for examining the boundary between manageable loss and organizational collapse.

A definition of "essential" services implies a technology.

How much economic detail does an input-output model need to produce useful results? In this joint conference contribution, Oskar Morgenstern and Thomson M. Whitin report Princeton experiments in which two industries remain distinct while the rest of the economy becomes a single sector. These small systems often approximate selected results from a forty-four-sector model surprisingly well. The authors treat that success as a puzzle, not a universal rule: the larger model is itself an aggregate, and exact calculation cannot remove uncertainty in its underlying observations. Their distinctive combination of computational ingenuity and caution lets readers examine when selective detail matters—and why numerical precision alone cannot decide whether an economic approximation is adequate for its purpose.

Gold seemed the one balance-of-payments figure a statistician could trust: physically definite, internationally traded, central to gold-standard theory. Applying a single reciprocal test — country A's reported gold exports to B should match B's reported imports from A — Morgenstern finds the trust misplaced. For the United Kingdom, United States, Germany, France, and Canada in 1900, 1907, 1928, and 1935, the paired ratios refuse to cluster near unity and sometimes turn absurd, worst of all in the classical gold-standard years. Earmarking, transit trade, misclassification of gold and silver, and traveler-carried coin all corrupt the record, and no scientific ground exists for preferring one nation's figures over another's. If the best-looking data are this poor, he warns, a sound theory cannot rest on them — and trade statistics are likely worse still.

There is no reason why, say, an American economist or a man from Mars should prefer one set of these statistics over the others.

Science cannot supply political ends — but it can discipline the pursuit of them. That Weberian conviction anchors Morgenstern's 1956 lecture to the Nordrhein-Westfalen research society, which argues that no policy problem is even defined until one names the permitted means: unemployment looks wholly different if wage cuts, public works, or inflation are allowed. He welcomes mathematics, statistics, and electronic computation — linear programming, input-output analysis, a manganese-supply example — as ways to force objectives, quantities, and timing into the open. Yet formalization is not wisdom. Where the state truly commands its variables, quantitative methods improve decisions; where unions, cartels, and rival states react strategically, there is no single optimum, only game-theoretic solution sets and imputations. Calculation can rank feasible actions, he insists, but it cannot choose values or dissolve political conflict.

Die Theorie zeigt, daß es in diesen Fällen kein „Optimum“ gibt, keine „beste“ Lösung, sondern es gibt unendlich viele Verteilungsschemata oder „Zurechnungen“ für das Ergebnis, von denen jedoch nur einige zusammen als „Lösung“ angesehen werden können.

English translation: “The theory shows that in these cases there is no 'optimum,' no 'best' solution, but rather there are infinitely many distribution schemes or 'imputations' for the outcome, of which, however, only some together can be regarded as a 'solution.'”

For Oskar Morgenstern, von Neumann’s contribution to economics was not simply a supply of powerful mathematical techniques: it challenged what economists understood an economic problem to be. This 1958 obituary, written by his collaborator in game theory, explains why choices whose outcomes depend on other people’s choices cannot be treated as ordinary maximization problems. Morgenstern places that conceptual break within von Neumann’s wider conviction that empirical problems should stimulate mathematical invention, while resisting a final ranking of his achievements. Alongside the scientific assessment, recollections of his memory, humour and generosity give the portrait a personal register. Readers can discover how Morgenstern understood game theory’s still-unfulfilled promise at the moment of his collaborator’s death, rather than through the hindsight of its later development.

A defense system can become more dangerous as it becomes more powerful. In this separately published Sandia lecture, Oskar Morgenstern asks how American scientific and military capacity might preserve room for political choice rather than force an immediate, catastrophic response. Speaking after Soviet space successes, he connects deterrence to the everyday organization of research: interrupted funding, restricted information exchange, and failures of independent weapons evaluation. His case for survivable retaliatory forces rests on the same principle as his criticism of massive retaliation: security should allow time, restraint, and acceptance of limited defeat. Even civilian shelters, he argues, may threaten stability if their rapid construction signals preparations for attack. The report offers a concrete encounter with strategic reasoning in which better weapons are not enough; institutions and signals must sustain a negotiable balance.

If either opponent attempts to win too much from the other he stands to lose all.

A firm cannot control every variable that determines its payoff: its rivals also act, anticipate, and combine. In this 1959 foreword to Martin Shubik’s Strategy and Market Structure, Oskar Morgenstern argues that this dependence calls for more than refinements to conventional maximization. It requires a different starting point for economic theory. His case for game theory turns especially on coalitions: even large markets can reproduce small-number bargaining when participants gain by cooperating. Morgenstern’s appraisal of Shubik also draws a sharp distinction between genuinely reformulating economic problems and merely translating familiar claims into game-theoretical vocabulary. This brief contribution clarifies what Morgenstern expected a strategic economics to explain—and why assets, entry barriers, and costly information belong within its models rather than at their margins.

The classical gold standard is often imagined as a self-regulating machine; this dense National Bureau study replaces that image with a practical arrangement of tolerable deviations and institutional adaptation. Comparing monthly interest rates, exchange rates, gold points, arbitrage, and central-bank discount policy across the United States, Britain, France, and Germany for roughly 1870–1914 and 1925–1938, Morgenstern shows that mint par was rarely touched, that gold points depended on shipping costs and market practice, and that money markets displayed a bounded 'solidarity' rather than exact convergence. A new quantitative measure of inter-market 'effort' or stress runs through the analysis. World War I emerges as the great structural break, shattering a prewar coherence the interwar gold-exchange standard never restored — and throughout, he insists that fragile statistics cannot bear more theory than their quality allows.

Economic statistics are—in the overwhelming majority of cases—not scientific observations.

Nuclear weapons, delivery systems, and the sheer speed of technological change have made national defense a strategic problem that inherited military categories can no longer grasp. Treating the arms race as a grim equilibrium, Morgenstern argues that neither side can safely reduce effort unless reductions are mutual, credible, and enforceable, so survival becomes a constraint prior to any budget. Defense is never a matter of the single best weapon but of strategies tested against an adapting opponent: interception screens answer yesterday's threat while the next generation is designed to evade them, and stopgaps such as keeping bombers permanently airborne founder on fuel and logistics. Cities, valuable and hard to protect, pose the severest problem. Rejecting both panic and wishful thinking, he makes the case that creative technical thinking, not standardized production, will decide survival.

Unilateral action to reduce the arms race is impossible and not compatible with the desire for national survival.

Intelligent diplomats cannot substitute for an institution that prepares them to decide. In this 1960 article, Oskar Morgenstern asks what the United States State Department needs to turn information and expertise into workable foreign-policy alternatives. His case for decision theory begins with practical shortcomings: language skills unrelated to assignments, negotiators without relevant preparation, and military contingencies lacking an advance political framework. He advocates developing analytical methods specifically for diplomacy, rather than simply importing military techniques or expecting mathematics to deliver immediate answers. The revealing tension is between his confidence in systematic analysis and his acknowledgment that applications may fail. Readers can discover a concrete institutional argument for game theory: its value may begin in how officials frame choices, before it yields solutions.

A nuclear arsenal can invite the very attack it is meant to prevent if its weapons must be launched before they are destroyed. In this 1960 article, Oskar Morgenstern makes survivability—not sheer destructive power—the test of deterrence, then gives that distinction a concrete geography: mobile, concealed forces dispersed across the oceans, especially missile submarines. His striking contention is that Western security also requires a secure adversary, able to wait rather than strike on uncertain warning. Readers can examine how this reciprocal logic supports arms limits and changes the politics of allied bases, while remaining in tension with his advocacy of nuclear weapons for limited war. The Oceanic System offers not a promise of peace, but an attempt to preserve political judgment under the threat of annihilation.