The archive.

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.

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.

"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.

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.

Behind Theory of Games and Economic Behavior lay a convergence of two unfinished programs. In this memoir, Morgenstern retraces the path from his 1928 work on economic forecasting, where the distinction between "dead" and "live" variables already anticipated strategic interaction and the Sherlock Holmes and Moriarty chase exposed the paradoxes of perfect foresight, to a Princeton encounter he describes as an instantaneous meeting of minds. What began as a short explanatory article grew, through walks and longhand collaboration, into a book that axiomatized expected utility, deployed minimax reasoning, and turned to convexity after his discovery of Jean Ville's proof. He recounts the Vienna Circle background, von Neumann's expanding-economy model, wartime printing by Princeton University Press, and the reviews and translations that followed, an origin story of game theory that doubles as a memorial to a friendship.

We did an enormous amount of work in a very short time, but it was unceasing pleasure and never a time of drudgery.