Koopmans in the Soviet Union

A travel report of the summer of 1965

Till Düppe1 December 2013

Abstract: Travelling is one of the oldest forms of knowledge production combining both discovery and contemplation. Tjalling C. Koopmans, research director of the Cowles Foundation of Research in Economics, the leading U.S. center for mathematical economics, was the first U.S. economist after World War II who, in the summer of 1965, travelled to the Soviet Union for an official visit of the Central Economics and Mathematics Institute of the Soviet Academy of Sciences. Koopmans left with the hope to learn from the experiences of Soviet economists in applying linear programming to economic planning. Would his own theories, as discovered independently by Leonid V. Kantorovich, help increasing allocative efficiency in a socialist economy? Koopmans even might have envisioned a research community across the iron curtain. Yet he came home with the discovery that learning about Soviet mathematical economists might be more interesting than learning from them. On top of that, he found the Soviet scene trapped in the same deplorable situation he knew all too well from home: that mathematicians are the better economists.

Key-Words: mathematical economics, linear programming, Soviet economic planning, Cold War, Central Economics and Mathematics Institute, Tjalling C. Koopmans, Leonid V. Kantorovich.

Word-Count: 11.000

1 Assistant Professor, Department of economics, Université du Québec à Montréal, Pavillon des Sciences de la gestion, 315, Rue Sainte-Catherine Est, Montréal (Québec), H2X 3X2, Canada, e-mail: [email protected]. A former version has been presented at the conference “Social and human sciences on both sides of the ‘iron curtain’”, October 17-19, 2013, in Moscow. I thank Ivan Bolyrev, Olessia Kirtchik, and Wade Hands for comments received at this meeting. I also profited from helpful comments by Roger Backhouse, Johanna Bockman, and Martin Weitzman.

Koopmans in the Soviet Union

A travel report of the summer of 1965

“Marco Polo imagined answering that the more one was lost in unfamiliar quarters of distant cities, the more one understood the other cities he had crossed to arrive there and he retraced the stages of his journeys, and he came to know the port from which he had set sail, and the familiar places of his youth, and the surroundings of home, and a little square of Venice where he gamboled as a child.” (Calvino, Invisible Cities)

Travelling is one of the earliest forms of knowledge production that exists in almost all cultures:

Those who know are those went away, found out, and came back with something to tell.

Travelling combines two aspects of knowledge: discovery, that is the encounter with the foreign and the novel, which is the kind of experience that we associate with modern knowledge. But it is also contemplation and self-reflection, that is, the encounter with oneself and the familiar, which is a rather low-ranked experience in the modern industry of knowledge.

These two aspects describe also Tjalling C. Koopmans’s voyage, jointly with his wife Truus

Koopmans, to the Soviet Union in the summer of 1965. Koopmans was the research director of what was the hotbed of mathematical economics in the U.S., the Cowles Foundation of Research in Economics hosted at Yale University. Cowles stands for a profound transformation of the intellectual culture of economics during the decades following World War II away from a policy

1 oriented discipline towards a modeling science (Düppe and Weintraub 2014a). His trip led him to the Central Economic-Mathematical Institute (CEMI, also TSEMI) of the Academy of Science of the USSR, founded two years before in 1963. CEMI would become the hotbed of research in mathematical economics in the USSR that launched a profound transformation of the orthodox-

Marxist oriented discipline of political economy to what become labeled “economic cybernetics”.

Like an ambassador of these two transformations, Koopmans travel carried the hope of a merging intellectual culture in East and West beyond the ideologies surrounding economic science here and there.

The trip was part of the Inter-Academic Exchange Program between the two Academies of

Science that was run under the auspices of the American Council of Learned Societies (Byrnes

1969). The program existed since 1958 and was a result of the post-Stalinist liberalization of science. Yet it was still the Soviet Academy that informed the U.S. Academy about the fields of research for which they wished and allowed an exchange. Until 1965, they did not call for an economist to come over. Koopmans indeed was the first official U.S. economist visiting the post-

War Soviet Union.2

In what follows, I reconstruct Koopmans’s travel on the base of his official report to the

American Council of Learned Societies as well as his correspondence with Soviet and U.S. scholars relevant to this trip.3 As there is little recent historical work about the post-Stalinist rise of mathematical economics in the Soviet Union, this account introduces the reader, through

2 Some other economists have visited the Soviet Union before such as Abram Bergson who travelled already during the Stalinist around 1940 and also Raymond Powell in 1957. But these were not official Academy of Science exchange visits. 3 “Report of the visit to the USSR, May 9 as exchange scholar in economics under the auspices of the American Council of Learned Societies”, Tjalling Charles Koopmans Papers (TKP), Carton 22, “Trip to the Soviet Union, Information Sheets, 1963-1969” (cited in the following as Report). 2 Koopmans’s eyes, to the main actors and institutions of this emerging community.4 Whom did he meet? What did they talk about? And, relevant not only for the historical records of priority and influence, what difference did his visit make to the development of mathematical economics in both East and West? Adapting Koopmans’s first person perspective might come at the cost of a selective portrayal of the Soviet scene, but allows asking a more pricy question: With what hopes and expectations did Koopmans leave, what surprises did he encounter, what questions remained open, and, having gone through these experiences, what did he learn about himself and the U.S. community of mathematical economists? Thus, reconstructing Koopmans’s trip to the Soviet

Union adds a piece to the puzzle in the history of scientific experience in 20th century economic science.

Out of New Haven

The fact that Koopmans was the first economist invited to the Soviet Union is little surprising.

The Soviet sensitivities regarding the profession of economists were without doubt greater than regarding other sciences that were practiced on more equal terms on both sites of the iron curtain.

Koopmans, as a child of the socialist calculation debate, believed strongly in the idea of equal terms of capitalism and socialism. His entire scientific ethos drew from this attitude that economic science should be practiced prior to the specification of institutional terms, and only as such can contribute to the scientific design of economic institutions in whatever system.

4 For other more recent accounts see Sutela 1991, 2008, Gerovitch 2002, Bockman and Bernstein 2008, Bockman 2011, Bockman 2011, Boldyrev and Kirtchik 2012. The older literature of the 1970s (e.g. Zauberman 1975, Ellman 1973, Kassel 1971, and also Katsenelinboigen 1980, 1986) often lacks the historical distance to see the intellectual change in context. 3 “From my explorations of Marxist thinking in my student years, I have retained a lifelong

interest in the prior formulation of that fundamental part of economic theory that does not

require specifying the institutional form of society to be used as a framework for the

description and comparison of different economic systems.” (Koopmans 1974 [1992]: 235)

This basic belief in the pre-institutional content (not only form) of economic theory was at stake when traveling to the Soviet Union. To some extent, this belief was shared among his U.S. colleagues. Being a mathematical economist during the early Cold War was not a self-evident intellectual practice and impinged by contradictory demands. Many U.S. scientists responded defensively to the ideological pressures on the Cold War academic milieu, exerted by phenomena such as McCarthyism, anti-Semitism, and military secrecy (Düppe 2013). The rhetoric of de- politicized research appealed to many scholars, specifically those who applied methods that stem from the military context that was easily confused with non-democratic uses of science. Also

Koopmans, a physicist trained economist, contributed to military war planning as a statistician for the British Merchant Shipping Mission in Washington by analyzing efficiency problems of the transportation of tanks (1939, 1942). It was in this research that he formulated the principles of what he would after the war call the “activity analysis” (Koopmans 1951, Düppe and

Weintraub 2014a).

But Koopmans basic belief also differed from that of other scholars. When Koopmans spoke of pre-institutional theory, he did not only want to establish formal neutrality as many others, but also an actual equivalence of economic problems across political systems. If economic theory is institutionally neutral, then it should play the same role in a free market economy and a socialist economy. Koopmans was thus the ideal candidate for approaching Soviet economists on eye- level. Eastern and Western economists, more than merely sharing universal but inconsequential

4 reason, could learn something from one another. Koopmans operated simultaneously in what for others were two separate spheres: universal reason and institutional design. He left New Haven with the hope of creating a trans-political community of mathematical economists that each in their own country could help one another optimizing their system.

Koopmans had good reasons for his hope. In the early 1960s, the same basic belief in pre- institutional, scientific foundations of economic policies became fashionable also in the Soviet

Union. In the same years when the wall was build in Berlin, reconnaissance aircrafts were sent to

Cuba, and the war escalated in Vietnam, scientific optimism about reforming economic planning took off in the Soviet Union under the label of economic cybernetics (Kassel 1971, Gerovitch

2002, Ellman 1973, Sutela 1991). In 1958 the Academy of Sciences’ Laboratory of Economic-

Mathematical Methods was established thanks to the initiative of Vasily S. Nemchinov (1894-

1964). In 1959, two book publications marked the turn: Nemchinov gathered five essays by him,

Lange, Novozhilov, Kantorovich, and Lur’ie; and Kantorovich published his long-awaited

“pamphlet” on the efficient use of resources. The subsequent debate among economists took place at a much-cited conference in April 1960 on the use of mathematical methods in economics

(Campbell 1961, Ellman 1973).5 As a result, Nemchinow became a chairman of a mathematical economics Council of the Academy of Science with represents from GOSPLAN and Moscow

State University. In 1961 cybernetics was made the official party line at the 22nd Congress of the

Communist Party. Basically all fields of research that were in some way related to the idea of automated planning were headed under the new label of cybernetics (which included far more

5 Koopmans mentions in his report also a second conference on mathematical methods in economics and planning held by the Academy of Science in Moscow, March 18-25, 1964. Compared to the 1950s in the West, one cannot avoid the impression that mathematics arrived in economics less silently in the Soviet Union, which is an obvious sign for its value being less symbolically laden as in the U.S. (see Düppe 2011). 5 than in the West: operations research, game theory, and mathematical linguistics, among others).6

Even the official Philosophical Section of the Academy of Sciences re-interpreted dialectical materialism in terms of cybernetics such that “information” could not spoil “matter”. The main supporters of economic cybernetics were Leonid V. Kantorovich (1912-1986), Viktor V.

Novozhilov (1892-1972), and Vasily S. Nemchinov (1894-1964).7 In 1965, they received jointly a Lenin prize, the highest academic honor in the Soviet Union. Koopmans could not meet

Nemchinov as he died the winter before his visit, the year after he founded CEMI (Medow 1965).

The economic cybernetics boom happened on the background of the resistance of the Marxist economic orthodoxy, Stanislaw Strumilin, and Adolf I. Kats among others (Katsenelinboigen

1980: 140 ff.). This orthodoxy refused the formal equivalence of the two systems, considered any diversion from the labor theory of labor bourgeois, thought of the plan as a “living plan”, as

Stalin taught them, and was afraid of losing power once its living bureaucratic labor would be substituted by a machinated plan. Koopmans’s invitation by the Soviet Academy of Science was a clear sign that this orthodoxy lost influence (Sutela 2008).

“Compared with the economics of the Stalin period, scientific discussion of economic

problems in the USSR has gone a long way in freeing itself from the shackles of doctrine.

One can infer that the highest authorities now support a systematic scientific effort to bring

tools, ideas and manpower from mathematics, mathematical programming, cybernetics,

economics and statistics to bear on the problems of economic planning.” (Report)

6 Aksel’ Berg, one of the leading figures of the cybernetics hype, distinguished 96 branches of cybernetics (in Gerovitch 2002: 262). 7 Kantorovich was the mathematician among the three who represented the greatest challenge to the Marxist orthodoxy; Novozhilov tried to combine mathematical modeling and the Marxist labor theory of value, and Nemchinov mediated between the two (see Campbell 1961). Katsenelinboigen wrote of the Novozhilov’s “mastery in camouflaging optimality theory as Marxism” (1978: 143). Most extensive source on these three approaches is still Ellmann 1973. 6

The cybernetics boom was indeed paralleled by an actual reform of economic planning. The months before and after Koopmans’s visit the public debates surrounding the so-called Liberman reform were at their peak before being launched in September 1965. The Liberman reforms granted more independence to firms in reducing its amount of targets. Firms would employ their own funds which, so the expectation, would induce growth by increased efficiency (Sutela 1991:

54 ff.). It was exactly this kind of reform that would suggest using a model very similar to

Koopmans’s own model of production. Koopmans would, as we see below, discuss with most economists “the choice of objective function of planning”, though never directly about the still rather contested Liberman reforms.

Koopmans curiosity about Soviet research was not only caused by the cybernetics hype in the years preceding his visit. Already eight years before his travel, he learned of the work of Leonid

Kantorovich on linear programming that he considered equivalent to his own model of activity analysis (1939 [1960]), 1942 [1958], 1959 [1962]). Prior to this discovery Koopmans considered himself to be in the first row, jointly with George Dantzig, of the pioneers of linear programming.

His model stem from WWII military research and informed much of the emerging research after the war, including general equilibrium theory, growth theory, computational methods and also game theory (see Düppe and Weintraub 2014a). The activity analysis model was a theory of optimal production where inputs and outputs are in fix relations and subject to a set of inequalities. Of specific interest was the interpretation of the Lagrange multiplier in terms of marginal costs, which could be, but did not have to be interpreted as market prices. Koopmans himself was uncertain how to interpret the multiplier, and pondered between the concepts of

“values” and “prices” and finally called them “shadow prices” (Düppe and Weintraub 2014a).

Koopmans activity analysis model presented a tool for planning production with shadow prices

7 as the objective variable, even though “planning”, for Koopmans was thought of as an organizational necessity rather than a political option.8

Koopmans learned of Kantorovich’s work from Merill Flood who in turn knew it from the mathematician Max Shiffman (Koopmans 1960: 363). In November 1956, with the help of

Raymond P. Powell’s knowledge of Russian, he read Kantorovich (1940) and immediately wrote to him:

“Dear Prof. Kantorovich: Recently I had the opportunity to see a copy of your article On the

Translocation of Masses in the Comptes Rendus of the Academy of Sciences of the U.S.S.R

of 1942. It became immediately clear to me that you have in part paralleled but in greater part

anticipated a development of transportation theory in the United States which has stretched

out over the period from 1941 to the present and is still continuing…Your brief article

contains in beautiful summary the mathematical essence of what was developed here.”

The methods that Koopmans invented at the intersection of military and economic research during and after WWII in the U.S. were independently developed in the same years in a rather different social context in the Soviet Union. Despite the apparent different social pressures exerted on economics, the theoretical innovations resulting from them were the same.9 Koopmans put considerable efforts into the diffusion of Kantorovich’s work during the late 1950s

(Koopmans 1959: 68n; 1960; 1962). But the dialogue with Kantorovich was sparse, and the one with his U.S. colleagues spiked with prejudices. Even Robert Dorfman did not trust Koopmans

8 See also his AEA speech saying that the “price concept … is independent of the notion of a market. The foundations on which this price concept is erected consist only of the technological data (input-output coefficients of all activities) and the requirement of efficiency)… The price concept is found to be a mathematical consequence of an efficient choice of activity levels.” (Koopmans 1951b: 461-2) 9 For a comprehensive discussion on questions of priority as well as credit in regimes of impersonal knowledge, see Düppe and Weintraub 2014a. 8 claim of the equivalence of Kantorovich’s model (1984: 287). A fascinating reconstruction by

Bockman and Bernstein (2008) describe these negotiations between Koopmans promoting the translation and publication of Kantorovich, the translators Campbell and Marlow trying to sort out Western interpretation and Russian meaning, skeptical scholars in operation research such as

Abraham Charnes and William Cooper (1962), and the journal editors of Management Science about different views of originality and equivalence.10 Not everybody was ready to accept the priority that Koopmans wished to grant to Kantorovich which led Koopmans to speak of an element of “national pride” when rebutting the critique of Charnes and Cooper (1962: 265).

Whether or not one granted priority was a matter of whether one thought of linear programming as belonging primarily to economics (favoring Kantorovich’s problem formulation) or to mathematics (favoring Dantzig’s algorithm). Kantorovich himself was not shy of claiming priority for himself, even in comparison to Dantzig.11

Next to the discovery of Kantorovich’s work, Koopmans’s curiosity about Soviet mathematical economics was also reinforced by first travel reports from his colleagues to Eastern

European countries. In November 1961, John Montias from the Cowles Foundation visited

Czechoslovakia and Hungary, and reported enthusiastically to Koopmans12:

10 The publication of the translation happened in almost all respects outside the ordinary norms of authorship and referee. Koopmans argued against the publication by RAND as he believed this would have unwanted consequences for the author in Russia; publication agreement of Kantorovich was implicit (which was not unusual: Kuhn learned of a translation of his book on game theory by chance years after its publication). As for Kantorovich, he intervened critically after reading a favorable review of his (1959) book by Montias (1961). Specifically the imperative of framing the work in the context of the labor theory of value, apparent in case of Novozhilov, made many suspicious of the Soviet’s achievement (Campbell 1961). 11 Kantorovich wrote his method “is similar to the algorithm that Dantzig et al. (1956) worked out much later” (quoted in Gass 2011: 160). 12 The year after Koopmans’s trip, in 1966, Montias was travelling again to Hungary and returned being spelled from this country as he was considered spying (Bockman 2011: 72). 9 “One young man at the Vysoka Skola Ekonomicka in Prague recently wrote his ‘diploma

thesis’ on a non-linear inter-industry model, a byproduct of which was what he claims to be a

new solution to concave programming problems; in Budapest, work will be started soon on a

large-scale L.P. problem where the inflow of raw material into the system is treated

stochastically.”

Stochastic use of linear programming was just what was happening on the front line of research in the U.S. starting from Dantzig (1955). Not only the methods appeared to be the same but also the aims: Mathematical economists in the Soviet Union appeared to be moved by the same dream that moved Koopmans’s for his entire life - economic efficiency. “Kantorovich has estimated (in his book of 1959),” Koopmans mentioned in his report, “that better planning methods alone could raise output of finished products by 30 to 50 percent.”

Koopmans was not the only U.S. scholar interested in Soviet economics. In the early

1950s, the Ford Foundation established so-called Area Studies on the Soviet Union in various disciplines though initially little economists were involved. Wassily Leontief brought together already since 1950 scholars from East and West in an annual conference series held in Western

Europe (Bockmann 2011: 65). The RAND foundation was leading in fostering research about

Soviet economics. Since 1958 Charles Hitch run a project called “Economic Analysis on Soviet

Union, Mathematical Programming and Industry”.13 In 1961, interest in Soviet planning arouse also in Norway when, with the support of Ragnar Frisch, the Journal of Economics of Planning was launched in the light of merging problems in East and West.14 Just the day before Koopmans took the plane, between May 7 and 9, a Conference on Mathematical Techniques and Soviet

13 However it was only in 1970 that RAND commissioned a first research report about CEMI (Kassel 1971), and in the same year launched a journal, the Soviet Cybernetic Review. 14 These merging problems have led no other than Jan Tinbergen to argue in 1961 for the convergence of the two systems on the base of a theory of a optimal social order. 10 Planning was held at the University of Rochester which brought together Sovietologists and economists.15 It was from this publication that the field of “comparative economics systems” took roots that would remain part of the U.S. economics curriculum until the 1980s.

Knowing of these intellectual changes in East and West, Koopmans left New Haven with the hope of learning something from his Soviet colleagues. He was curious how his theory could be applied in a context that he might have even considered more natural to the theory, at least insofar as socialism provides decisive conditions for “testing” his theory (Koopmans and Montias

1971). He might have even agreed with what Khrushchev said in 1962 when calling for Western rational management. “In the conditions of the planned economy,” Khrushchev said, “these techniques would be even easier to implement than under capitalism” (in Gerovitch 2002: 271).

Thus, Koopmans went to the Soviet Union with one big question in mind: how do they plan? Do they use linear programming to determine what he called “shadow prices”, and Kantorovich called “objectively determined valuations”? Does his theory of production inform the Soviet centralized allocation of resources leading to greater efficiency?

“I pressed and had persistently the question whether the mathematical methods were to be

used to perfect centralized planning (through the use of Kantorovich’s “objectively

determined valuations”, “shadow prices” is a western term), or to motivate and guide the

use of more centralized allocation through markets.” (Report)

15 For the conference program see Hardt (1965), and the proceedings Hardt et al. (1967). At the conference, doubts have been raised about the promises of computers and mathematical large-scale models in contrast to a more institutional approach to planning. Notable participants were Norman Kaplan, Robert Campbell, Lawrence Klein, Lionel McKenzie, Abram Bergson, Evsey Domar, Benjamin Ward, Leonid Hurwicz, Roy Radner, J. Michael Montias, Robert Dorfman, Thomas Marschak, Raymond P. Powell, Robert Summers. 11 Koopmans’s itinerary was packed: 4 days Warsaw, 10 days Moscow, 5 days Leningrad, stopover in Moscow for flying to Novosibirsk for 3 days only, to return then after another stopover in

Moscow to Budapest and then back to Yale. He would meet and talk to around 60 different scholars of considerable variety.16 Which were the most telling meetings?

Moscow

May 10, Koopmans arrived at the Central Economic-Mathematical Institute (CEMI), the host of his trip. CEMI was founded two years before in 1963 and was the immediate manifestation of the economic cybernetics boom described above. Before that date, there would have been no institution that could have hosted Koopmans as a mathematical economist. The institution was large-sized, certainly larger than Cowles at Yale, comparable in size rather to institutions such as

RAND or the Bureau of Labor Statistics than to Cowles. 300 researchers, he was told, worked for

CEMI in Moscow. Two other “branches” existed in Tallinn and Leningrad. At the time of

Koopmans’s visit these 300 researchers were spread out in buildings all over the city, and many worked from home. The CEMI building in Nakhimovskiy prospekt 47, where it is still located today, was build not before the early 1970s.

The institute was created in order to realize its core project for which previous institutions did not provide a sufficient infrastructure: a general theory and the implementation of a single, automated, nationwide system of economic control. The project was called SOFE - the System of

16 In his report, Koopmans counted 60 and mentioned following 31 scholars by name: Abramov, Aganbegian, Boldyrev, Diderichs, Fedorenko, Gel’fand, Gol’shtein, Gorstoko, Katzenellenbogen, Kolmogoroff, Konyus, Korbut, Liapunov, Lur’ie, Makarov, Masch, Michalievski, Modin, Novozhilov, Ovsievich, Pervozvvanskaia, Poletaev, Pugavech, Romanovsky, Rubinshtein, Shliapentock, Suvorov, Verschik, Volkonski, Vorob’ev, Zetlin (many of them are discussed in Katsenelinboigen 1980). 12 Optimal Functioning of the Economy (Sutela 1991: 37 ff.). Two vital elements were a mathematical model of the entire Soviet economy, and a central nation-wide network of information that is sometimes referred to as the (failed) Soviet Internet. Planning should be optimized by a decomposition of tasks on several levels of the economy, the coordination of which required some notion of prices. The practical aim was to provide continuous day-to-day planning on the basis of a “long-range” (15-20 years) growth plan that was to build up a communist society (Zauberman 1975). An early manifestation of this project was a substantial investment in the coal industry (growth was traditionally seen as a matter of choosing the right industry to invest in). The project design stem from Fedorenko and Victor M. Glushkov from the

Institute of Cybernetics (in Gerovitch 2002: 273). Nikolay P. Fedorenko (1917-2006) was the head of this project and director of CEMI. He was the first person Koopmans would meet after his arrival.

Fedorenko was an unlikely director of CEMI. He was a chemist without experience in computing technology who began working on national economic modeling not before he became the director of CEMI. His main research activity continued to be connected with the management of chemical industries (Kassel 1971). Fedorenko introduced Koopmans to the five departments of

CEMI - roughly said planning, theory, control, mathematics, and hard-ware, which were subdivided in further “sectors” and a total of around 50 “laboratories” only in Moscow.17 They also spoke about the institute’s research agenda as set in 1964:

(1) Elaboration of a theory of optimal planning and management, and the construction of

a general mathematical model of the national economy

(2) Development of a unified system of economic information

17 For a full list of the organizational structure as of 1969, see the Appendix. 13 (3) Development of a unified state network of computation centers

(4) Development of mathematical methods for the general model

(5) Creation of concrete planning and management systems based on mathematical

methods and computer technology

(6) Elaboration of standards and algorithms for planning and management (in Gerovitch

2002: 373, see also Kassel 1971: 94 f.).

This agenda might appear similar to that of the research department of GOSPLAN who had the primary responsibility for economic planning. But as Boldyrev and Kirtchik argued (2012),

CEMI was in fact allowed to conduct independent research free from the imperative of immediate relevance, specifically in its mathematical section. Many of their interviewees at

CEMI spoke of a special atmosphere more supportive of autonomous theoretical work as compared to other state-institutes doing economic research. The relationship between CEMI and

GOSPLAN in its first years was not obvious: data-intensive input-output analysis here, and theoretical visions of centralized networks there. “The State Planning Committee was always quite hostile in its attitude towards mathematical economics,” Katsenelinboigen recalls. “But still, under the pressure from “above”, it was forced to “flirt with and outwardly acknowledge the expediency of these methods” (1986: 92).18

18 Soon after its first enthusiasm the two main elements of the SOFE agenda (a complete model of the economy and the central computer network) crumbled. In 1970, some years after its foundation, Kassel reported that the grand SOFE project gave way to a more industry-oriented research supplementary to GOSPLAN activities. “Areas are covered very spotty,” he reported to RAND (1971: vi). The short-lived hope was paralleled at GOSPLAN itself that launched a research department for mathematical economics in the early 60s and closed it in the early 70s (Katsenelinboigen 1986: 92; for “phases” of reform of planning, see Sutela 2008). The enthusiasm about SOFE was also cooled down by the awareness of relative backwardness in terms of computing technology as compared to the U.S. that was omnipresent in the Soviet Union, let alone in the other Eastern European states. Systems of equations of 50 million variables and 5 million constraints would take about one month to compute, Pugachev worried (in Gerovitch 2002: 273). The terms of the calculation debate were valid throughout the Soviet period. 14 Koopmans also learned of a new journal edited by Fedorenko, Economics and

Mathematical Methods. He was given copies of the first two issues. He understood that CEMI staff does study the Western literature very carefully, and translate books and papers. They had access to a large range of Western periodicals, including Econometrica. Fedorenko understandably tried to show that his institute can compete with Western research on the same level. Koopmans, instead, had his “pressing question” in mind. Perhaps he has read Fedorenko’s first annual research report that made him hope for a vivid conversation. There Fedorenko drew an impressive image of the first planning successes:

“The institute conducts work on the creation of methods of optimal planning and

management of transportation in the country. Over 1000 optimal plans …have been

computed. The savings of this work have already reached about half a billion rubles.” (in

Kassel 1971: 94).

Yet, the first answer he got from Fedorenko must have been disappointing. He showed a map of the distribution of chemical plants that he contributed to without giving deeper insights into the functioning of the system – perhaps he could not, perhaps he wished not, perhaps he was not supposed to give Koopmans this insight. Holding a representative position and being only little trained as an economist, Federenko was one of those about which Koopmans would say later to be held at arms-length. His central position, however, was enough for Koopmans to suggest him later as a new member of the Econometric Society in 1966. Others, more mathematically minded economists, would have to wait longer for this honor.

During the coming days, Koopmans met several heads of CEMI sections of his interest. The first notable was, on May 11, the young Evgenii Gol’shten of the “mathematical programming”

15 section. Gol’shten was in his early 30s, and on his way to become the leading researcher on computational mathematics and programming: Block programming, duality theory, modified

Lagrange functions, non-differentiable convex optimization – very much Koopmans’s sort of things. Gol’shten translated in 1961 Saul Gass’s standard textbook on linear programming

(1958). He also wrote his own textbook on linear programming (including game theory) that became the standard of teaching programming in the Soviet Union. Gol’shten knew Koopmans’s work, and would also extend it. So much overlap has impressed Koopmans such that he would call Gol’shten, after Kantorovich, the second best programmer in the Soviet Union. His support might have likely had an impact on the career of Gol’shten. He became soon internationally known.

May 12, he met Aron Katsenelinboigen (1927-2005) and his collaborators Boris N.

Michaelievski, Victor A. Volkonski, Vladimir A. Masch, and Alexander L. Lur’ie.

Katsenelinboigen was the head of the Department of Complex Systems that later became the department of mathematical economics. The department employed many mathematicians, specifically, as Boldyrev and Kirtchik (2012) emphasize, many Jews who couldn’t find jobs elsewhere (see also Katsenelinboigen 1986, 1980: 55 ff.). Many of them, such as Masch, migrated to the US or Israel after 1972 when it became legal to do so.19 Koopmans talked with

Katsenelinboigen, as he mentioned repeatedly in his report, about “the choice of objective functions of planning,” – which comes down to the problem of either using the price mechanism, or giving direct order. That is, once more, he debated in the same terms of the calculation debate.

19 The U.S. careers of the Soviet migrants were not always fortunate. Masch, for example, after his prestigious position at CEMI, did not manage to integrate fully in the U.S. academic scene. From 1974 on, he worked for Bell Laboratories, but then became an independent scholar who contributes mainly to critiquing the mainstream of economics, while still elaborating a theory of “nudging” markets in socially beneficial directions. 16 May 14, Koopmans met with Anatol Modin (1935-1994), and spoke about “information flows in planning” (Report). Modin was already known to Jacob Marschak and was curious about

Koopmans’s impressions:

“I found the conversation with Modin somewhat disappointing. I think he is trained as an

engineer, and the conversation seemed to go in terms of writing down box-arrow-diagrams

showing how information flows between different levels. Language difficulties did not make

the conversation any easier.” (Koopmans to Marschak, October 27, 1965)

In fact, language was one the obstacles creating a natural distance for most of the meetings.

Koopmans initially planned to learn some Russian but did not get beyond the most basics. His

Soviet colleagues instead, specifically the young, studied English. Meeting Koopmans was for many the first occasion to talk to a native speaker. Makarov, for example, recalls that he was surprised by the fact that Koopmans appeared to understand the words that he uttered for his first time (personal conversation). For most conversations Koopmans had a translator, Mr. Altaev, an engineer at CEMI. Altaev was at the same time a guide and travelled with Koopmans to both

Leningrad and Novosibirsk. He unfortunately can no longer be traced as he left to the U.S. without further contacts to his former colleagues.

After the weekend, on May 17, Koopmans gave his first talk at CEMI. Projector slides of

U.S. standard size turned out to be too large for the overhead projectors from Eastern Germany.

The choice of talks was not obvious. Which topic would not be considered offensive, which useful, and which intelligible?

17 “In choosing topics for lectures, the main choice open to me was between a) theorems on the

efficiency of competitive market allocation and b) presentation of recent work by western

economists on models of optimal growth. I chose the latter in order to stay away from the

area of suspected dispute… Judging by facial expressions and subsequent comments, they

were well received. I was agreeably surprised by the almost total absence of “doctrinal”

debate in the often extended discussion periods.” (Report)

The four talks, given at about 15 occasions at universities and Academy of Science institutes of both mathematics and economics, were the following: first, an introduction to the von Neumann model of proportional growth; second, the turnpike theorem on maximal non-proportional growth; third, optimal economic growth paths for an indefinite future; fourth, on the existence of subinvariant measure and an application to economics. Once again, it is striking how central was von Neumann’s growth model (1937) as the starting point for the most significant developments in mathematical economics: for Koopmans’s model of activity analysis, for general equilibrium theory and its existence proofs in particular, indirectly also for akin proofs in game theory

(Düppe and Weintraub 2014a), but also, in the context of which Koopmans referred to the paper in the 1960s, for growth theory. Von Neumann’s work, due to his reputation among mathematicians, has been known in the Soviet Union to everyone working with an interest in cybernetics and specifically theory of automata (Makarov, personal conversation). Makarov has published already in 1962 a paper on von Neumann’s existence proof (see also Morton and

Zauberman 1969). It was thus not Koopmans who imported von Neumann’s growth model to the

Soviet Union, even if not all of his audience might have known it in detail. But Koopmans was certainly right when he would later claim that his other two presentations on growth theory did make an actual difference to the Russian scene. His growth paper of 1965 was quite successful in

18 the West, later labeled the Ramsey-Cass-Koopmans model. Optimal growth theory in the Soviet

Union, leading away from the notion of picking the right industry for investment then waiting for the spill-over, was a Koopmans-import – an import, as he would later claim in a paternalistic tone, in the name of reason:

“I believe I have been effective in the lecturing I did in 1965 describing to Soviet

mathematical economists work in optimal growth theory done in the West. This was

confirmed by Dr. Gvishiani, who stated to me in 1974 that I had an intellectual influence in

the U.S.S.R. I made these efforts, that apparently had a result, because I think it is important

to strengthen rational economic thinking in the second most powerful nation in the world.”

(Koopmans to Kaysen, February 8, 1977)20

Note that deeming himself as the ambassador of reason, Koopmans at this point shows to be sensible to local reason. Universal reason, in contrast, cannot travel.

Koopmans not only exported but also imported knowledge from the Soviet Union. Yet this import did not take place via economists but via mathematicians. Mathematical culture was, much in contrast to the U.S., deeply ingrained in Russian society and one of the strongest pillars in academia also of the Soviet period. In order to receiving audience from mathematicians,

Koopmans prior to his trip went to the Courant Institute of Mathematical Sciences at New York

University to ask advice from Jack Schwartz and Richard Courant. But it was CEMI that had to arrange the meetings in the last instance. Koopmans sensed some resistance of them doing so.

20 This was written in retrospect in the years after his Nobel Prize, in 1977. Carl Kaysen from MIT led a panel that reviewed all research visits of the Soviet Union for the NSF-NRC Board on International Scientific Exchange and asked Koopmans for an ex-post appraisal (TKP 29, “Soviet Exchanges, 1970- 1983). 19 “In Moscow my appointments and travel schedules were all arranged through a higher staff

member of the CEMI, Dr. Gorfan. I sensed some correlation between the ease and success in

getting an appointment or travel arrangement and my estimate of CEMI interest in such

appointment coming about. However, the foreign visitor who is held at arm’s length may also

mistake the effects of randomness and/or sloppiness in organization for deliberate intent.”

(Report)

Thus several meetings did not come off.21 He nevertheless managed to meet the crème de la crème of Russian mathematicians: He spoke to one of most known at the time, Andrei

Kolmogorov (1903-1987) who worked on the axiomatization of probability theory. Kolmogorov, so Koopmans, was well informed about mathematical economics at CEMI. He met Aleksei

Lyapunov (1911-1973) (not to be confused with Alexandre Lyapunov), the founding father of cybernetics in Russia. He also met Andrei Tichnov (1906-1993), an important topologist. But most importantly, thanks to Richard Courant, he met Israel Gelf’and (1913-2009) with his assistant Mikhael L. Zetlin. Gelf’and, a student of Kolmogorov, was known in East and West, held the Lenin prize, the Stalin prize, and the Lenin medal. The three meetings with Gelf’and and his collaborators led to an actual import of ideas to the U.S.:

“Dear Professor Gel’fand, I am writing to thank you again for the time you and Prof. Zetlin

have given me for what I have found to be extremely valuable discussion. In particular I think

that games with simple-minded players will turn out to be an extremely fruitful idea in the

21 In Moscow he wanted to meet the Academy of Science mathematicians Pontryagin, Dadaian, and university mathematician Girsanov and Yudin. He managed to meet Pugavech, mathematical economist on staff of Gosplan as well as Konyus, who was one of the few who has written on the theory of demand as a mostly missing element of economic theory in the Soviet Union (see Campbell 1961: 417). Konyus article of 1924 on “The Problem of the True Index of the Cost of Living,” was translated and published in Econometrica in 1939. 20 social sciences (I cannot asses their value in biology, but I take your word for it that the idea

is valuable there too.)” (Koopmans to Gel’fand, June 2 1965)22

Back home, Gel’fand’s work would be the only research that Koopmans wished to share with his colleagues. In October 1965, he would send a list of references (including e.g. Gel’fand et al.

1963) to everyone he knew was interested in game theory: to Robert Aumann, Gerard Debreu,

John Harsanyi, Oscar Morgenstern, Jacob Marschak, Anatol Rapoport, Thomas Schelling,

Herbert Scarf, Lloyd Shapley, Martin Shubik, Herbert Simon, Robert Strotz, Robert Thrall,

Albert Tucker, and Harold Kuhn. Koopmans explained:

“My purpose is to report briefly on conversations I had in Moscow last May with I.M.

Gel’fand … and M.L. Tsetlin … in constructing a theory of games in which the players are

extremely limited, in memory observation, and analytic powers – the opposite extreme to von

Neumann Morgenstern game theory. There appears to be an extensive literature in this field

in Russia…one of the motivations arose from looking at the operation of the nervous system

as an interaction of its cells. While the “behavior” of each cell is presumably simple, the

performance of the entire nervous system is of a much higher order of complexity and

effectiveness. I also have an impression that work along these lines has a potential bearing on

economics as well. Not all of us are perfect calculators in our economic decisions. The

22 Koopmans tried to profit from Gel’fand’s mathematical expertise and continued his letter: “I was also much encouraged by your interest in my work on “stationary utility”. I should like to mention that there are still several unresolved problems in this area, even in connection with the particular list of axioms I have used. These are at or beyond the limit of my mathematical equipment and understandings, and it is a less than optimal use of the intellectual resources if I should try to carry them through to solution (supposing this were possible). I would be delighted if you or one of your students should take an active interest in these problems, and solve some or all of them.” No service was offered. 21 analysis seems to be a search for cases or conditions in which the simple players unwittingly

achieve behavior that is asymptotically efficient or optimal under repeated play.”

Evolutionary game theory is a Soviet import! Or perhaps not – as hardly anyone was really interested, as Koopmans reported to Gel’fand on November 3, 1965:

“My experience so far has been that, the more the individual in question is actively doing

mathematical research in game theory, the less he is inclined to stop and contemplate quite

different formalizations of games... In closing, allow me to say that I found our conversations

among the most stimulating I have had in my month in the USSR”

Koopmans further tried to promote Gel’fand by asking the Econometrica editor Franklin M.

Fisher to ask Gel’fand to write a survey paper of the Russian literature on simple-minded games.

It did not happen. As many scholars in the research community across the iron curtain suffered from the political divide, so were there also others who profited from it.

After the divide was resolved, in 1990, Gel’fand moved to the U.S. at Rutgers University as a professor of mathematics and biology.

Leningrad

Friday, May 21, Koopmans traveled to Leningrad, where there was just opened another branch of

CEMI: Chaikovsky Prospekt 1. The atmosphere was less tense as in Moscow as there were no other institutions from which CEMI officials had to keep Koopmans away (Koopmans

22 emphasized that he was particularly friendly welcome in Leningrad). CEMI Leningrad was much smaller than that in Moscow, 100 employees, which was still much larger than the Cowles community (consisting of roughly a dozen varying, mostly non-tenured researchers). The institute emerged from the Computing Center of the, still today, prestigious Leningrad branch of

Steklov’s Mathematical Institute (LOMI) where Kantorovich was previously working. The departmental structure of CEMI Leningrad consisted of six laboratories: valuation, game theory and queuing theory were the most prominent (see Appendix). The central laboratory of valuation was run by one of the three main protagonists of economic cybernetics, the 73-year-old Viktor V.

Novozhilov.

Novozhilov was a Marxian economist with mathematical ambitions and knowledge of neoclassical doctrines - a figure comparable to Eugene E. Slutsky, or even Vladimir Dmitriev

(see Barnett 2005). He worked for most of his life on a theory of measuring costs as the key to economic planning, which was also key to Koopman’s activity analysis model. Even if he tried to reconcile his theory with the labor theory of value, he always acknowledged the relevance of the price mechanism (see Campbell 1961, Hagendorf 2012). Koopmans could have read his contribution to Nemchinov’s collection of essays (1959), translated in 1964, as well as a French translation of his work (Novozhilov 1964). But apparently Koopmans was little impressed by

Novozhilov as he did not mention more than his name in his report. Koopmans might have already given up pressing his question too hard with senior economists and preferred to establish friendly relationship by talking about shared passions of a different kind, such as music

(Koopmans had a life-long interest in classical and modern music, and also tried himself as a composer).

23 “I am most grateful to you for …. your sending me the record of Beethoven’s trios minus one

violin… On my turn I am sending you the record of Glinka’s opero “Ruslan and

Lyudmila”…Your book “Three Essays…” and the article “On the concept of optimal

Economic Growth” are wonderful with their deep thoughts and brilliant form.” (Novozhilov

to Koopmans, November 24, 1967)

The shared aesthetic appeal of art, apparently resembled in science, can establish more easily a shared sphere of scholars who do not share the same political worlds.

More substantial, one might expect, must have been the meeting with 40-year-old Nikolai

Vorob’ev (1925-1995). Vorob’ev is considered the founder of Soviet game theory. He was a student of the mathematician Andrey A. Markov, known as the creator of constructive mathematical logic, turned to probability theory, and then to game theory, specifically coalitional games. In 1955 he published the first paper in game theory in the Soviet Union (“Controlled

Processes and Game Theory”); his second on bimatrix games (1958) was later improved by

Harold Kuhn, and a third survey article (1959) became the entrance door for generations of

Russian scholars into Western game theory. In 1968 he would translate von Neumann’s and

Morgenstern’s book. Many of the early Russian game theorists limited themselves to zero-sum games following von Neumann’s lead, but under Vorob’ev the more recent literature was equally introduced to the Soviet scene (see for exemple Bondareva 1962). At the time of Koopmans’s visit, Vorob’ev worked on a generalization of Kuhn’s equivalence theorem (of mixed and behavioral strategies). All in all, the game theory that Koopmans could discuss with Vorob’ev was clearly an U.S. import and the conversation might not have been very different from those he could have with his colleagues at home. Perhaps for this reason, Vorob’ev is no more than

24 mentioned in Koopmans’s report – little to learn, specifically after the impressive discovery of

Gel’fand’s work.

After meeting several other researchers23, on May 26, he and his wife went for sightseeing in company with Alexander A. Korbut and Joseph V. Romanovsky. They drove 20 miles west of town to see the castle of Petrodvoretz, the Russian version of Versaille. Koopmans might have enjoyed the conversation with Romanovsky on dynamical programming as much as the castle

(likely in contrast to his wife) as he counted Romanovsky among the best minds he met. The little tour on the countryside was rushed as they had to be back in the afternoon in order to discuss the teaching program in mathematical economics at Leningrad University. The program was split between the mathematics and the economics department while the students were mainly math students – a recruitment dilemma that was also true at Cowles. Throughout the 1950s and even

1960s, mathematical economists were hardly ever recruited from economics departments.

Novosibirsk

June 5, after a short stopover in Moscow24, Koopmans flew 2000 miles to Novosibirsk to the

Siberian Branch of the Academy of Science, founded in 1957. 20 miles south of the city a vast

“Academy Town” (Akademgorodok) has been created that hosted around 50 thousand inhabitants. There, at the Laboratory on the Application of Mathematics in Economics of the

Institute of Mathematics, not part of CEMI, he finally got acquainted with Kantorovich (whom he only shortly met after his arrival in Moscow). Kantorovich, two heads smaller than the large

23 He met the mathematician Olga Ladyzhenskaia, talked with Ovsievich on automata, and with Pervozvanskaia “on the use of prices in planning and on their relations to the theory of value” (Report). 24 In Moscow, June 4, he met Rubinstein of CEMI and talked on his work on duality in mathematical programming, and on studies of hydroelectric reservoir operation. 25 Dutchman was already a symbol of the post-Stalinist mobilization of science. The reconstructions of his life unsurprisingly emphasize that his scientific struggle for increased efficiency was not always appreciated (Kantorovich 1990, Iljina-Kantorovich and Rosenhead 1990, Gass 2011).

Kantorovich, a precocious mathematician, trained as a functional analyst, was in the late

1930s commissioned by N.S. Voznesensky, GOSPLAN chief since 1937, to improve production processes of the plywood industry. Having thus formulated a first version of what was later called linear programming (1939, 1942), he saw its potential for national planning. He submitted his proposals twice to GOSPLAN, once in 1942 and in the mid 1950s, but without success. In 1949, as a Jew at the height of Soviet anti-Semitism, he received nevertheless the Stalin prize for his work in mathematics. But it was only after Stalin that his ideas of improved economic planning could be published to reach a broader audience. His book, The Economic Calculation of the Best

Use of Resources, written in 1942 and published in 1959, caused heated discussions about the use of mathematical methods in planning with respect to the official labor theory of value (such as in

Kats’s review of 1960). And this despite of the fact that, due to his early rejection, Kantorovich was very cautious in his ‘economic’ interpretations. His anticipation of the objection that mathematical methods are apologetic of Western economics, he wrote in retrospect about his book,

“forced me when writing a pamphlet (1959) to avoid the term ‘economic’ as much as

possible when talking about the organization and planning of production; the role and

meaning of the Lagrange multipliers [the “shadow prices”, T.D.] had to be given

somewhere in the outskirts of the second appendix and in the semi Aesopian language.”

(Kantorovich 1990: 31)

26 Koopmans, when developing an equivalent theory in the U.S., had similar problem when downplaying the meaning of prices as propagated by market socialists (Düppe and Weintraub

2014a).

At other moments, however, Kantorovich was less cautious, and even depicted as outspoken and rebellious in believing in the superiority of his methods:

“The computer cannot digest some of our economist’s scholarly products… Any attempt to

give them a logical-mathematical, algorithmic form in order to enter them into a computer

failed. It turned out that after removing everything that was said “in general” …and after

pouring out all the “water”, there was either nothing left, or just one big question mark, the

formulation of an unsolved problem.” (Kantorovich 1959, in Gerovitch 2002: 276)

But for the most parts Kantorovich avoided any confrontation also in order to see his ideas of improved planning realized. Untypical for an academician, he was according to his long-year assistant Makarov in good contact with Baibakov und Dymschitz, both influential GOSPLAN members (personal conversation). Such contacts required a certain political conformism emphasized by Katsenelinboigen (1978). Kantorovich would not be willing to declare in public that the labor theory of value contradicts his ideas.25 It is also noteworthy that Kantorovich’s assistant, Makarov, only understood after Koopmans’s visit the link between shadow and market prices that he has apparently never discussed with Kantorovich before (personal communication).

The first report that Koopmans received about the intellectual stricture of his soul mate presented

25 Katsenelinboigen was unable to keep his official from his private attitude regarding Marxist theory apart: “Kantorovich became identified with a labor theory interpretation of prices. It has become very hard for me to tell when he does this for tactical reasons and when he honestly subscribes to this position.” (1978: 141). 27 indeed a picture of a rather timid, if not intimidated, scholar. In 1957 Raymond P. Powell reported form his meeting with Kantorovich:

“I did succeed in seeing Kantorovich in Leningrad …The interview was the oddest of my

experiences in the Soviet Union… The peculiar aspect of the exchange was that Kantorovich

appeared almost paralyzed with nervousness. He barely spoke about a whisper. His hands

trembled markedly. If sweat did not break out of his forehead, it looked as though it should.

He insisted on speaking English, though his English was little better than my Russian… He

knew of ‘some’ practical applications of his ideas within single plants, though he spoke only

of his fright-flow proposals. When I pressed him on the extent of such applications…he

shrugged his shoulders, Perhaps! Had the State planning Commission shown any interest in

his ideas? “Well, they were in print; the people at GOSPLAN could read them if they wanted

to.” The impression which he very clearly conveyed…was that of a man who disclaimed all

responsibility for, and of interest in, his ideas, once they had left his pen…I met this small-

boy-in-the-cookie-jar attitude in talking with a few other Russians, though it was not

common, least of all among urban intellectuals.” (Powell to Koopmans, August 1957)

Koopmans would repeat this impression of a reticent scholar years later even after the joined

Nobel Prize. “His contributions are somewhat concealed by self-imposed political cautiousness in the style of writing, sometimes I think beyond the call of duty and necessity.” (Koopmans to

Kaysen, February 8, 1977). Anticipating Kantorovich’s sensitivity, it might well be that

Koopmans was equally cautious regarding his most pressing question. According to Makarov, they always used an interpreter when talking to one another, also at dinner at Kantorovich’s home. Whatever impression Kantorovich have made, Koopmans was convinced that he is the

28 outstanding scholar in the USSR. On coming home, he would distribute the table of content of a series of publications edited by Kantorovich on “optimal planning” to a long list of his colleagues

– who were nevertheless doomed to ignore it as hardly anyone read Russian.

The second day in Novosibirsk, Koopmans gave a survey lecture to an audience of 200 people. It was the final lecture of a conference on mathematical programming. Many in the audience were rather young scientists open for new ideas. The new academic town in

Novosibirsk was specifically attractive to young scientists to launch their career since the older generation was less mobile. Far away from the center of power, a new generation of scientists grew up that never experienced the Stalinist regime of science that their teacher’s generations still vividly remembered. It was with them that Koopmans felt more at ease talking. He met for example Abel G. Aganbegian, later Gorbachev adviser, who at the time was 32 years old but became the head of the newly founded Laboratory for Economic and Mathematical Research two years before in 1963. Aganbegian took Koopmans on a tour of Academic town. They also visited a high school for boys and girls selected from all Siberia to receive intensive preparation for mathematics and the sciences.26

Another young and motivated mind was Kantorovich’s assistant, the 28-years old Valery L.

Makarov (together with his second assistant Gorstko). Makarov, CEMI president today, would have a steep career in Novisibirsk and the Academy of Science and the international scene.27

Koopmans was impressed by Makarov and mentioned him among one the few first-rate minds

(letter to Kaysen, 1977). With Makarov, one of a few trained economists and only self-trained

26 “Visit guided by Liapunov, who received the Lenin prize for this work on the program of this school.” (Report) Again the factor of art as a connecting factor played a role in this meeting with Liapunov. He was invited to his private house and they had conversations about new styles in music. They would exchange new recordings with each other over the coming years. June 5, he also met Shliapentock, who taught recent history of economic doctrines at the University. 27 In 1967 Makarov was appointed Laboratory Chief, then became Deputy Director. In 1980 he was appointed General Secretary of the Academy's Siberian Branch. In addition, he is a Fellow of the Econometric Society (1979) and a member of a number of Government Commissions. 29 mathematicians, Koopmans could talk about general equilibrium theory. He was the first in the

Soviet Union who in 1962 has published on this Cowles specialty. Makarov and many other mathematical economists did not perceive any contradiction when engaging in general equilibrium theory in institutions supposed to produce tools for planning. This was not because general equilibrium theory was considered a theory of planning, as Oskar Lange would have it.

Instead, abstract mathematical economics found support and interest because of a certain eclecticism that stem from a pragmatic approach to the use of science in politics. There was little dogmatism regarding the possible sources of inspiration for improved planning which made possible that, starting from Makarov, many contributions to general equilibrium theory were made by Soviet scholars (see Boldyrev and Kirtchik). The socialist dreams in Walrasian economics were more present when Hurwicz presented mechanism design to a Western audience than when Makarov presented an existence proof without the assumption of insatiability to an

Eastern audience (1965).

Koopmans’s assessment of this situation of the young mathematical economists is worth quoting. He identifies the two main tensions between mathematics and political commitments that applied in different degrees to both sides of the iron curtain:

“Among the younger people there is somewhat of a tendency toward abstraction as an end in

itself, of which we have seen so much more in the West. The fact that Russian mathematics is

more tolerant and supportive toward application than Western mathematics helps limit this

tendency. On the other hand, the risk in addressing really important economic problems

which the Soviet system has difficulty coping with works in the other direction, particularly

for the younger people.”

30 These two forces, the one pushing forward into application, the other pulling backward into abstraction were the very same present during the 1950s in the U.S. when military and industry demands were mingled with the social angst that found its peak in McCarthyism. The social pressures that the mathematician had to deal with, specifically the younger generation, resulted from the same “image conflict” between the pure and the applied that the historian Dalmedico has observed for the U.S. (2001).

After Novosibirsk, and a last stopover in Moscow, Koopmans left the Soviet Union and travelled, at June 10, to Budapest to see János Kornai’s group (see Bockman 2011: 105-132).

There, he encountered an entirely different intellectual climate. Away from the representative institutions of the Soviet Academy of Science, he could finally openly talk about his pressing question, the use of prices in a planned economy and his ideas of decentralized planning.

“Professional discussion is more explicit and frank in Poland and in Hungary than in the

USSR. Hungarian colleagues in particular are ready and perhaps eager to discuss the

problems inherent in their planning procedures.” (Report)

Back home

Back home in Yale, after a total of six weeks of travelling, how did Tjalling and Truus

Koopmans feel? One of the familiar things for which they were certainly grateful was their ordinary diet, as Koopmans expressed surprise of the low quality of the food. Though in general an appreciative person, he mentioned that “the inefficiency of the catering industry in Russia must be seen to be believed.” (Report) They also must have been grateful for ordinary

31 conversations in their second language as well as the infrastructure of services that he was used to: “Another surprise is the unpredictability of the outcome of any approach to a counter, window or door, at or behind which some service is expected or hoped for. I would have found it hard to remain fit and cheerful without the company and help of Mrs. Koopmans.” (Report) But all in all, besides some tensions in Moscow, they might have told their neighbors how friendly they were welcome. “We met with great friendliness and cordiality from the professional colleagues visited, especially in Leningrad and in Novosibirsk…We were also taken around by colleagues to see sites and museums in the most charming and relaxed manner.” (Report) Three times they were invited into a private house. All of them, Koopmans added, were houses of mathematicians.

However, compared to his enthusiasm before his trip, there was also a sense of disappointment. He was not too much impressed by many economists, specifically senior economists:

“My discussions were most free and spontaneous with mathematicians. I also had quite

informal and frank discussions with the younger mathematical economists. The exchanges

with the (better informed) senior mathematical economists were relatively more affected by

caution and hesitation. As a result, the flow of research ideas was better than that of

information about their contemplated use in the Soviet economy.” (Report)

In his letter to his colleagues in game theory cited above he spoke of “the hesitant and diplomatic arms-length attitude that affected many of my conversations with economists” (Letter to Aumann et al). But most disappointingly, he did not receive any answer for his “pressing question” regarding the use of prices for economic planning. “I pressed and had persistently the question whether the mathematical methods were to be used to perfect centralized planning…The

32 vagueness of the answers received suggests that this is still under discussion, if not dispute.”

(Report) Koopmans thus came home with a mixed feeling of appreciation for some economists, but also the assurance of the superiority of U.S. economists. His accounting of the quality of

Soviet economists was cool: “At the Moscow CEMI I met about 25 professional people in discussion, in Leningrad about 15, in Novosibirsk about 20. In each of these places I was impressed by the professional competence of about 8 or 10.” (Report) Regarding the question whether or not one should continue these sorts of meetings, he was cautious:

“It is recommended that exchanges in the field of mathematical economics (in the wide

Soviet sense of the term) be continued. It might be good if the next person to go were more

interested in algorithms and in industrial applications of mathematical programming that I

have been, because of the strong Soviet interest in these problems, and because they can be

discussed by our Russian colleagues with less inhibition.” (Report)

The major problem according to Koopmans was related to the organization of Soviet science:

They lacked a peer process, which was the central dogma of U.S. post-war organization of science:

“The main problem seems to be the absence of clear standards of quality of work in

appointments and in publication. (It is somewhat like the early days of the Econometric

Society, when one encountered a mixture of talents, with Ragnar Frisch, Charles Roos, Irving

Fisher, Louis Bean, Henry Schultz and Theodore Yntema, all marching in the same ranks)”

(Letter to Kaysen, February 8, 1977)

33 However, in all these criticisms, one group was excluded: the mathematicians. He added to the quality count of “8 to 10 competent scholars”: “These estimates do not include the “pure” mathematicians I have met, who were universally of high caliber, and more favorable to the various applications of mathematics than their U.S. counterparts generally are.” (Report) The hierarchy between mathematics and economics, including the quarrels and misunderstandings that existed between these two groups and that Koopmans knew better than many other U.S. scholars, applied in the very same sense also in the Soviet Union: Mathematicians, he may have like it or not, are the better economists.

His sense of disappointment is most apparent in his letter ten years after his visit to Carl

Kaysen. There is little to learn from the Soviets, he remarks, but rather to learn about them, specifically how they fail in applying mathematics to economics efficiently:

“The principal direct U.S. gain from further…exchange activities in economics that I perceive

is not so much to learn from our Soviet colleagues (I have been disappointed on that score) as

to learn about them, about their clumsy economy, and about the extent of their impact on

management and planning of the economy, which likewise falls short of its potential.”

(Koopmans to Kaysen, February 8, 1977)

In the years to come, Koopmans was active in the booming field of comparative economic systems – an interest that gained shape only after and through his travel experience. Comparing the two grand systems within a framework beyond these systems, ex post, appeared to be his actual interest that drove his “pressing question” (Koopmans and Montias 1971). Such direct comparison, however, required more openness from the Soviet scholars than he could expect.

34 Nevertheless, in 1970, Koopmans was travelling again to the Soviet Union for a conference organized by Kantorovich. He revisited some of the places and people, in addition to the Institute of Automation and Telemechanics, the research institute of GOSPLAN, and the Laboratory of the

Institute for the Management of the National Economy that was about to be taken over by Leonid

Kantorovich. The field of mathematical economics grew enormously in the last five years and was no longer limited to CEMI. Even the Institute for World Economics and International

Relations of the Academy of Sciences, a former Marxist bastion, launched a department for econometrics (headed by Stanislav M. Menshikov). At the conference, among the papers presented by colleagues from the USSR, he reported, were papers of equal quality to the best work in mathematical economics in other parts of the world.

“This overlap in theoretical focus in the mathematical economics of “East” and “West” may

well leave the authorities in “East” a little impatient. However, I regard this particular

development as important and beneficial for two reasons: (1) Good abstract “pre-

institutional” economic theory ultimately promotes good economic policies in any system,

and (2) meanwhile a climate favorable to exchanges of ideas and visits and to collaborative

efforts is being established.”

Koopmans, after all his travels, kept on his initial vision of a shared discourse of East and West.

After two visits he still hoped for the convergence of the two intellectual spheres: Soviet and

Western economics might free themselves from their political tights and merge into one unified effort of searching the same truth by means of the same theories.

35 “It is recommended…that exchanges in regard to mathematical methods in economics be

pursued further and intensified because of a mutually perceived mutual interest in problems

in this area. If difficulties arise or have arisen in regard to exchanges in other areas of

economics (including that of the comparative evaluation of economic systems) the thought is

expressed here that it may be best not to let exchanges in an area where they are desired by

both sides suffer from difficulties encountered in other areas. The most important reason

behind this thought is that the fundamental unity of all economic thinking will in time bring

about the spread of ideas from areas in which exchanges are at present favored into other

areas.”

In fact, in terms of the Nobel Prize in 1975, Koopmans vision was publically confirmed: Two economists from East and West, joined in the “fundamental unity of all economic thinking” – though the one might be little more at ease with the situation than the other.

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42

Appendix

Organizational Structure of CEMI as of 196928

Moscow Branch I. Department of economic planning and forecasting, S. S. Shatalin Sector I: Methodology of economic forecasting, A. D. Smirnov 1) Methodology of social-economic forecasting, V. S. Dadaian 2) Forecasting the economic growth of the USSR, G. G. Pirogov 3) Forecasting the economic growth of socialist countries, (Not in operation.) 4) Forecasting the economist growth of the developing countries, Kuz’min 5) Forecasting the economic growth of capitalist countries, (not in operation) Sector II: Models of economics planning, B. N. Mikhalevskii 1) Systems of models for describing the national economic plan, B. N. Mikhalevskii 2) Models of financial planning, B. L. Isaev 3) Models of foreign trade, Shagalov 4) Mathematical problems of national economic planning, V. A. Volkonskii 5) Programming, (not in operation) Sector III: Experimental description of multistage systems of optimal planning of the national economy 1) Optimizing models of the economy, E. F. Baranov 2) Methodology for describing multistage systems of optimal planning of the national economy, V. I. Danilov-Danil’ian 3) Modelling optimal national economic proportions, V. F. Pugachev 4) Optimal location of production, V. A. Masch 5) Modelling optimal territorial proportions, M. G. Zabel’skii 6) Macroeconomic information, (not in operation) Sector IV: Optimal branch planning, A. S. Nekrasov 1) Methodology of optimal branch planning, A. S. Nekrasov 2) Problems of optimal planning of the chemicalization of the national economy, Shukin 3) Problems of optimal functioning in the fuel-energy sector (not in operation) Sector V: Problems of the standard of living of the population, Rinashevskaia 1) Problems of the standard of living of the population, Rinahevskaia 2) Problems of commodity distribution, I. Lakhman 3) Sociological models, I. N. Gavrilets

II. Department of theoretical problems of the optimal functioning of the socialist economy, Petranov Sector I: Optimal functioning of complex systems, A. I. Katsenelinboigen 1) Theory of optimization of complex systems, A. I. Katsenelinboigen 2) Mathematical analysis of complex systems, B. Mitiagin 3) Probability problems of control theory, (not in operation) Sector II: Economic problems of the optimal functioning of the national economy, Petranov

28 See TKP 22. For a full list of CEMI researchers, see Kassel 1971: 186 ff. 43 1) Models of prices formation, Petranov 2) Models of economic accounting 3) The economic valuation of the optimal use of natural and labor resources, (not in operation)

III. Department of systems of control Sector I: Automatic systems of control of production 1) Methodological elaboration of automatic control systems 2) Automatic control systems for branches with discrets production characteristics 3) Automatic control systems for branches with continuous production characteristics 4) Automatic control systems for enterprises 5) Automatic control systems for motor transport Sector II: Systems of planning-economic information 1) Automatic systems of perspective plan calculation 2) Information-programming support for plan calculation 3) Decision making systems 4) Systems for processing information 5) Systems for control of scientific research

IV. Department of mathematics and computer technology Sector I: Mathematics 1) Mathematical programming 2) Discrete programming 3) Probability theory and mathematical statistics 4) Systems of algorithms and programs 5) Functional analysis Sector II: Mathematical support of computer and simulation systems 1) Algorithmic languages 2) Simulation 3) Operational systems 4) Standard algorithms and programs Sector III: Computer technology 1) Engineering-technical problems 2) Methods for mechanizing economic-mathematical calculation

V. Department of material and technical services Informational-methodological section 1) Sector of scientific methodology 2) Sector of scientific information 3) Sector of publishing and editing 4) Sector of planning and coordination of scientific work (These are not coordinated into the general hierarchical organization.)

Leningrad Branch 1) Systems of economics valuation (optimal price systems) V. V. Novozhilov, F. F. Diderizh, S. S. Gdolevich 2) The construction of models of economic systems (optimal planning models of the individual firm) R. P. Sheinman

44 3) Game theory N. N. Vorob’ev 4) Cybernetics V. I. Varshavskii 5) Mathematical model of public services (queuing theory) B. G. Pittel’ 6) Mathematical programming of economic problems O. G. Faiane 7) Maintenance of computers 8) Programming language 9) Small scale computers 10) Other laboratories on computational methods for problems in specialized fields of science.

45