The archive.

Whether taxation serves privileged rulers or citizens jointly providing public services is the central distinction in Oskar Morgenstern’s compact portrait of Antonio De Viti de Marco. This encyclopedia entry connects the economist’s fiscal reasoning with his practical commitments: opposition to protectionism, advocacy for agricultural southern Italy, and refusal to swear the fascist loyalty oath. Morgenstern shows how De Viti’s distinction between monopolistic and cooperative states changes the interpretation of taxes and public expenditure: a tax can lower citizens’ costs when collective provision is cheaper than private purchase. He also notes a revealing tension between De Viti’s use of marginal utility and his preference for proportional taxation. The result is a concise introduction to an economist whose abstract analysis remained closely engaged with political institutions and choices.

What changes when mathematics treats other people’s choices not as fixed conditions but as part of the problem? In this biographical encyclopedia entry, Oskar Morgenstern places John von Neumann’s contributions to social science within his wider mathematical career. Writing as his collaborator on Theory of Games and Economic Behavior, Morgenstern explains why strategic rationality can require randomized choices, and why economic equilibrium demands more than matching equations to unknowns. These examples sharpen the portrait’s central tension: empirical problems can stimulate mathematics, yet economics cannot simply borrow the structures of physics. The entry offers a compact account of how von Neumann helped reshape economic questions themselves, rather than merely supplying new techniques for answering them.

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.

Allowing international trade in a growth model does not guarantee that trade will occur—or that a feasible growth path will be efficient. In this 1971 contribution, republished in 2013, Oskar Morgenstern and Gerald L. Thompson revisit their open-economy extension of the von Neumann model by removing an assumption that had helped secure positive-valued trade. Their distinctive concern is the distance between mathematical possibility and economic interpretation. A numerical example permits the expansion factor to fall below the interest factor; two internal accounting indices then clarify why the authors regard such solutions as economically uninteresting for a one-country economy. Readers can discover how price and activity bounds shape that judgement, and why the authors favor economically transparent axioms over formal compression.

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.

When is an economic forecast strong enough to justify building a spacecraft? In this 1972 Senate testimony, Oskar Morgenstern and Klaus P. Heiss defend Mathematica’s case for the Space Shuttle while acknowledging its dependence on projected missions, engineering assumptions, and uncertain costs. Their distinctive emphasis falls on payload economics: reusable transport might save money not only on launches but by allowing satellites to be retrieved, repaired, and designed with less costly redundancy. Committee questioning exposes the boundary between comparing economical means and deciding national priorities. The witnesses argue that, given continued American space activity, development should proceed; they do not establish that space spending outranks other public uses of funds. The exchanges offer a concrete encounter with investment analysis at the point where qualified evidence becomes a recommendation to act.

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.

What counts as rational conduct when the outcome depends on someone else’s choices? In this encyclopedia entry, Oskar Morgenstern explains why strategic interaction cannot be reduced to an individual maximizing a quantity under personal control. Writing as a co-author of Theory of Games and Economic Behavior, he challenges economic models that make participants too small to influence one another and shows why deliberately randomizing a decision can be rational rather than evasive. Coalition bargaining raises a further difficulty: there may be several stable distributions of gains, not one uniquely best settlement. The entry offers a participant’s account of game theory’s conceptual ambitions alongside its limits, including computational obstacles and the possibility that people who learn a social theory will change the behavior it describes.

Rational behavior is not an assumption of that theory; rather, its identification is one of its outcomes.