Abstract
Ragnar Frisch’s criticism of descriptive (or explanatory or interpretative) modelling has left some unanswered questions. In order to answer them, Frisch should have declared the descriptive and interpretative modelling to be not only useless and unreliable for rational planning, but also impossible for the science of man and his behaviours, for the same reasons already outlined in the discussion of Gunnar Myrdal (in Chaps. 1 and 2).
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Notes
- 1.
‘I am well aware that I am often considered almost not a part of the profession of establishment economists’. But he insisted, ‘I believe we are going to see a rapid development of economic science in the institutional direction, and that much that is now hailed as most sophisticated theory will in hindsight be seen to have been a temporary aberration into superficiality and irrelevance.’ See in the same tenor other quotations that I have reproduced in Chap. 2 in this book.
- 2.
See his autobiographical note which was prepared, as is the custom for every Nobel Prize winner, and delivered in 1973. (in Nobel Lectures, Economic Sciences 1969–1980, ed. A. Lindbeck, World Scientific Publ., Singapore, 1992, p. 153).
- 3.
Essays published in a volume in 1986, Input-Output Economics, (New York, Oxford University Press), which included 20 papers written between 1947 and 1985.
- 4.
Essays collected under the common title of Essays in Economics , in two volumes published over a period of ten years. The first is entitled Theories and theorizing, Blackwell Oxford 1966 (it includes 20 essays from 1933 to 1964); and the second, entitled Theories, Facts, and Policies, Blackwell 1977 (another 11 essays from 1925 to 1976).
- 5.
Leontief’s considerations recall the same objections to using economic trends that Frisch made about economic trends (which we spoke of in Chap. 3), those originating from another conception of the relation of theory and fact but arriving at a precise conclusion about the crisis in economic theory, being at times more sceptical and radical than Frisch’s. Leontief was among the economists who most sharply criticised the idea of observable statistics and its pitfalls, and he made a significant contribution in this direction that should receive greater consideration from current statisticians and econometricians.
- 6.
In ‘Quarterly Journal of Economics’, 1937, vol. 51, n. 2B, later put together in the first of the papers of the volume ‘Essays in Economic Theory’ in 1966, cited above.
- 7.
‘Or better the methods of the “new Cambridge”’, as Leontief says, which contrasts with the orthodox methods of the old Cambridge. However, he observes, ‘even if the confrontation will happen’ ‘[it] should be placed on the methodological plane’. However, Leontief intends, simultaneously, to free himself from one and from the other, emphasising the fallacious and irrelevant aspects of both roots.
- 8.
Immediately, we have the impression that the criticism involves not only the given school but also the entire arch of economic theorising of the time. He criticises that it did not assume, however, the necessary attention required, having linked Leontief too indissolubly to his name and image of the theory of structural interdependences of production (which, moreover, was founded on an empirical approach that is itself the basis of the scientific philosophy of his critical essays).
- 9.
Here Leontief adds in a note: ‘This example might explain why it is comparatively easy to discover similarity between some propositions of economic theory and thermodynamic, electro-dynamic, or other types of physical equations.’
- 10.
That which the philosophical tradition defines as (Kantian) analytical knowledge a posteriori (that is, implicit) and does not produce synthetic knowledge a priori (that is, explicit), intended as new knowledge.
- 11.
Incidentally, as Leontief adds, as much is ‘finally admitted with most commendable frankness by its author’.
- 12.
With regard to Keynes and the fundamental assumption of his “monetary theory of unemployment”, Leontief had already written a paper on this subject in 1936 and went on to write another in 1948 (both republished in Essays in Economics vol. I already cited, 1966).
- 13.
I find exhilarating the suffused irony that pervades Leontief’s observations, from 1939, on the authors of a different type who, nonetheless, represent an important part of the history of economic theory in the last century. In equal measure I am surprised by the concept of this implicit theorising, which passed without due recognition, as far as I know, from those very same authors and the academy by which they were recognised as representatives. Perhaps this was owing to arrogance (Leontief was always considered a statistician rather than an economist) or because of misinterpretation: perhaps for both reasons, in their ever-interlocking relationship.
Furthermore I cannot ignore how important ‘second-hand’ economists (and most of all, important historians of economics) were and that they are still rarely willing to recognise the volatility, and fundamentally the inconsistency, of a good part of economic thought (as developed at least for a century now). For many economists, such issues deal with the need to recognise the dissolution and the demise of the basis on which the very way of thinking their profession was constructed (as well as the reasoning behind their intellectual survival).
The second epistemological criticism by Leontief on economic implicit theorising is that related to the abuse of statistical inference (which we will refer to below in Sect. 8.4 and that which was developed in an essay of 1953, almost 20 years later), which appears as the subverted complement to that of implicit theorising. Here it seems as if the critic condemns the excessively unconsidered use of statistical data without a sufficient logical criticism. The response which comes to mind is the fact that Leontief was a refined epistemologist who was mostly misunderstood and lonely amongst economists and statisticians¸ both beholden to their own totems: reason for the former, numerical data for the latter. And therefore he predicted with great perspicacity, but significant misunderstanding, the programming or planological approach Incidentally, as Leontief adds, as much is ‘finally admitted with most commendable frankness by its author’.
- 14.
‘The mathematics in economics’ lecture to the 1953 meeting of the American Mathematical Society (Baltimore 1953); and published in the Bulletin of the Society, 1954, n.3. (republ. In Essays in economics etc. vol. I, Theories and theorizing, cit. 1966, pp. 22–44).
- 15.
Here Leontief makes explicit reference to the research which between 1940 and 1950 sought a concentration never previously seen of intellectual efforts on the methodological issues, which, beyond the success obtained from the economic statistics, supplied numerous original contributions to the theory of stochastic systems and the methodology of indirect statistic inference. He quotes in this regard, for instance, the relevant studies by the Cowles Commission, gathered and published by T. Koopmans as editor (1950).
- 16.
At the 83rd congress of the American Economic Association (Detroit 1970); under the title ‘Theoretical Assumptions and Nonobserved Facts’, published in American Economic Review, 1971; (republished in Essays in economics vol. II (1977) pp. 24–34, Oxford, Blackwell. [trad. it. Etascompass, 1980]. It is a ‘presidential address’ (in his quality of pro-tempore President of the AEA), and shows great courage in facing toward that Congress against the stream so strongly (a great man’s quality).
- 17.
It seems almost a countermelody, that around the same time, Frisch was rumbling to the Econometric Society, which reunited at a Congress in Rome, in 1965 (as was amply discussed in Chap. 3). It is sad to observe that their own wavelength on this point (but also on many other ones), did not ever find (as far as I know) the way to be explicitly declared with reciprocal advantage for politically illuminated programming. Still their potential understanding had been demonstrated by the shared hostility, which was received from the respective ‘sanctuaries’ of mainstream economic theory: the Cambridge of New England (from which Leontief had escaped because of intolerance), and the Cambridge of Old England (from which Frisch did not ever obtain adequate recognition). In a different way, the controversy of ‘two Cambridges’ had developed much later—in the 1970s and 1980s—other aspects of economic interpretation.
- 18.
On this point see one on the last of synthetic approach by Leontief (1987).
- 19.
The Advisory Committee created in 1976 was committed to give advice about national growth policy processes, and published after eight months a report titled Forging America’s Future: Strategies for National Growth & Development. The Carter presidency was replaced in January 1981 by the Reagan presidency and the visions of the advisory committee were dispersed, even though they gained some attention during the Carter presidency.
- 20.
I due scritti sono:
‘Economic planning: methods and problems’, publ. in: The economic system in an age of discontinuity, New York University Press, 1976, pp. 29–41. Republ. in: Essays in economics etc. II, cit. 1977.
‘An Information system for policy decisions in a modern economy’ in Forging America’s Future. Strategies for National Growth & Development, (Report of the ‘Advisory Committee on National Growth Policy Processes’, Appendix Vol. III), Washington, Dec. 1974.
- 21.
His expression in a personal letter to me, and he also encouraged me to implement it when I presented the paper at the Seville Congress of the Input–Output Association. (see the Appendix).
- 22.
In Chaps. 1 and 3 of Vol. III and the Appendix to the Vol. III, I recall the moments when the system of models was conceived and discussed. It is, essentially, a model structured with a central input–output model of consumption and production, of a Leontiefian kind.
Bibliographical References to Chapter 9 (Vol. I)
Leontief, W. (1937). ‘Implicit theorizing: a methodological criticism of the neo-Cambridge school’, ‘Quarterly Journal of Economics’, vol. 51, No 2B, Feb. 1937. (re-pub. In Leontief, W. Essays in economics etc., Oxford: Blackwell, 1966.
Leontief, W. (1953). Mathematics in Economics, in Essays in Economics, 1966, pp 26–28.
Leontief, W. (1987). “The Ins and Outs of Input-Output Analysis.” in Mechanical Engineering (1987).
Robinson, Joan. (1933). Economics of Imperfect Competition. London, Macmillan.
USGPO Forging America’s Future. Strategies for National Growth and Development, 1976.
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Archibugi, F. (2019). The Pitfalls of Implicit Theorising and the Abuse of Indirect Statistical Inference: Leontief’s Criticism. In: The Programming Approach and the Demise of Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-78057-3_9
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