Jacob Marschak (* 23 July 1898
KievKiev or Kyiv , is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300...
, Imperial Russia, now capital of
UkraineUkraine is a country in Eastern Europe. It is bordered by Russia to the east; Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the southwest; and the Black Sea and Sea of Azov to the south. The city of Kiev is both the capital and the largest city of...
; † 27 July 1977
Los AngelesLos Ángeles is the capital of the province of Biobío, in the municipality of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123.445 inhabitants...
,
U.S.The United States of America is a federal constitutional republic comprising fifty states and a federal district...
) was an American
economistAn economist is an expert in the social science of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
of
UkrainianUkraine is a country in Eastern Europe. It is bordered by Russia to the east; Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the southwest; and the Black Sea and Sea of Azov to the south. The city of Kiev is both the capital and the largest city of...
Jewish origin.
Jacob Marschak (until 1933 Jakob) was born in
KievKiev or Kyiv , is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300...
as a son of a jeweller. During his studies he joined the social democratic
partyA party is a gathering of people who have been invited by a host for the purposes of socializing, conversation, and recreation. A party will typically feature food and beverages, and often music and dancing as well....
. As a
MenshevikThe Mensheviks were a faction of the Russian revolutionary movement that emerged in 1903 after a dispute between Vladimir Lenin and Julius Martov, both members of the Russian Social-Democratic Labour Party. The dispute originated at the Second Congress of that party, ostensibly over minor issues...
activist he was imprisoned by the Czar's secret police. Immediately after the
February RevolutionThe February Revolution of 1917 was the first of two revolutions in Russia in 1917. It occurred March 8–12 and its immediate result was the abdication of Tsar Nicholas II, the collapse of Imperial Russia and the end of the Romanov dynasty. The non-Communist Russian Provisional Government under...
he worked for the
UkrainianUkraine is a country in Eastern Europe. It is bordered by Russia to the east; Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the southwest; and the Black Sea and Sea of Azov to the south. The city of Kiev is both the capital and the largest city of...
government.
Jacob Marschak (* 23 July 1898
KievKiev or Kyiv , is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300...
, Imperial Russia, now capital of
UkraineUkraine is a country in Eastern Europe. It is bordered by Russia to the east; Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the southwest; and the Black Sea and Sea of Azov to the south. The city of Kiev is both the capital and the largest city of...
; † 27 July 1977
Los AngelesLos Ángeles is the capital of the province of Biobío, in the municipality of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123.445 inhabitants...
,
U.S.The United States of America is a federal constitutional republic comprising fifty states and a federal district...
) was an American
economistAn economist is an expert in the social science of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
of
UkrainianUkraine is a country in Eastern Europe. It is bordered by Russia to the east; Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the southwest; and the Black Sea and Sea of Azov to the south. The city of Kiev is both the capital and the largest city of...
Jewish origin.
Life and work
Jacob Marschak (until 1933 Jakob) was born in
KievKiev or Kyiv , is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300...
as a son of a jeweller. During his studies he joined the social democratic
partyA party is a gathering of people who have been invited by a host for the purposes of socializing, conversation, and recreation. A party will typically feature food and beverages, and often music and dancing as well....
. As a
MenshevikThe Mensheviks were a faction of the Russian revolutionary movement that emerged in 1903 after a dispute between Vladimir Lenin and Julius Martov, both members of the Russian Social-Democratic Labour Party. The dispute originated at the Second Congress of that party, ostensibly over minor issues...
activist he was imprisoned by the Czar's secret police. Immediately after the
February RevolutionThe February Revolution of 1917 was the first of two revolutions in Russia in 1917. It occurred March 8–12 and its immediate result was the abdication of Tsar Nicholas II, the collapse of Imperial Russia and the end of the Romanov dynasty. The non-Communist Russian Provisional Government under...
he worked for the
UkrainianUkraine is a country in Eastern Europe. It is bordered by Russia to the east; Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the southwest; and the Black Sea and Sea of Azov to the south. The city of Kiev is both the capital and the largest city of...
government. Later in 1918 he served as minister for labor in the short-lived Cossack-Menshevik Republic of
TerekThe Terek River is a major river in the Northern Caucasus, flowing through Georgia and Russia into the Caspian Sea. It rises in Georgia near the juncture of the The Greater Caucasus Mountain Range and the Khokh Range, to the southwest of Mount Kazbek, then flows north through North Ossetia and...
in the North Caucasus - before emigrating to
BerlinBerlin is the capital city and one of sixteen states of Germany. With a population of 3.4 million within its city limits, Berlin is Germany's largest city. It is the second most populous city and the eighth most populous urban area in the European Union...
in 1919. During his studies at the universities of Berlin and Heidelberg, Jacob Marschak came under the sway of the
MarxianMarxian economics are economic theories based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology, arguing that Marx's approach to understanding the economy is intellectually independent of his advocacy of...
economists
BortkiewiczLadislaus Josephovich Bortkiewicz was a Russian economist and statistician of Polish descent, who lived most of his professional life in Germany...
and
LedererEmil Lederer was a Bohemian-born German economist and sociologist.- Biography :Lederer was born in 1882 to a Jewish merchant family. He studied law and national economy at Vienna University...
. From 1922 until 1926 he was a journalist and in 1928 he joined the new
KielKiel is the capital and most populous city of the northern German state Schleswig-Holstein, with a population of over 236,000 .Kiel is approximately to the north of Hamburg. Due to its geographic location in the north of Germany, the southeast of the Jutland peninsula, and the southwestern shore...
Institut für Weltwirtschaft under
Adolph LoweAdolph Lowe born Adolf Löwe was a German sociologist and economist.- Life and work :Adolph Lowe was born to a middle-class Jewish family in Stuttgart, Germany. His father, Alexander Löwe, was a merchant, and his mother, Ottilie Mayer Löwe, was a homemaker. He was for a long time the "eminence...
.
Marschak's early work was certainly in the spirit of his masters: an anti-Austrian 1923 tract got him involved in the Socialist Calculation Debate - arguing that the monopolistic tendencies of capitalism made the socialist system inevitably more efficient at pricing. This was an early signal of a topic which would emerge time and time again: the economics of organization. His work on the "New Middle Class" - first a paper in 1926, then a book with Lederer with 1937 - which presented his thesis about the fall of
white-collar workerThe term white-collar worker refers to a salaried professional or an educated worker who performs semi-professional office, administrative, and sales coordination tasks, as opposed to a blue-collar worker, whose job requires manual labor...
s from the bourgeois class (where they remained socially) to the working class (where they now were economically), became classics of interwar theory. Since he could not become a full professor in Kiel because of his
JewThe Jews , also known as the Jewish people, are an ethnoreligious group originating in the Israelites or Hebrews of the Ancient Near East. The Jewish ethnicity, nationality, and religion are strongly interrelated, as Judaism is the traditional faith of the Jewish nation...
ish origin, he emigrated again to
EnglandEngland is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west and the North Sea to the east, with the English Channel to the south separating it from continental...
, where he went to
OxfordOxford is a city, and the county town of Oxfordshire, in South East England. The city has a population of just under 165,000, with 151,000 living within the district boundary. The rivers Cherwell and Thames run through Oxford and meet south of the city centre...
to teach at the Oxford Institute of Statistics, which was funded by the
Rockefeller FoundationThe Rockefeller Foundation is a prominent philanthropic organization and private foundation based at 420 Fifth Avenue, New York City. The preeminent institution established by the six-generation Rockefeller family, it was founded by John D. Rockefeller , along with his son John D. Rockefeller, Jr...
. Because of that he could move again to the
U.S.The United States of America is a federal constitutional republic comprising fifty states and a federal district...
in 1940. Here he taught at New School for Social Research, where he was reunited with Lederer and Lowe.
A master of the structural
growth economicsEconomic growth is a term used to indicate the increase of total GDP. It is often measured as the rate of change of gross domestic product . Economic growth refers only to the quantity of goods and services produced; it says nothing about the way in which they are produced...
of the Kiel strain, Marschak was impressed by the need for quantification of economics. His 1931 paper on the elasticity of demand was a landmark in
econometricEconometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. Econometrics combines economic theory with statistics to analyze and test economic relationships...
analysis. While at the New School, Marschak was instrumental in gathering together a mathematical and econometric seminar which brought together much of the fledgling quantitative community in the New York City area.
In 1943, Jacob Marschak was appointed head of the Cowles Commission during the crucial move to the
University of ChicagoThe University of Chicago is a private, coeducational research university in Chicago, Illinois, USA. It was founded by oil magnate and benefactor John D...
(where he took an appointment, which he held until 1948). As a result, Jacob Marschak can be given credit for getting the ball rolling for the development of
Neo-Walrasian economicsGeneral equilibrium theory is a branch of theoretical neoclassical economics. It seeks to explain the behavior of supply, demand and prices in a whole economy with several or many markets, by seeking to prove that equilibrium prices for goods exist and that all prices are at equilibrium, hence...
and econometrics in the post-war era. His work with Andrews (1944) brought him to the fore of the econometric world, a theoretical explanation for employing the statistical techniques of
causalCausality is the relationship between an event and a second event , where the second event is a direct consequence of the first....
analysis in the spirit of
Trygve HaavelmoTrygve Magnus Haavelmo was an economist with main research interests centered on the fields of econometrics and economics theory. During World War II he worked with Nortraship in the Statistical Department in New York City. He received his Ph.D...
- what was to become the methodological groundwork of the Cowles approach.
His early contributions to economic theory were dominated by the concept of
uncertaintyUncertainty is a term used in subtly different ways in a number of fields, including philosophy, physics, statistics, economics, finance, insurance, psychology, sociology, engineering, and information science...
. Already in his classic 1938 papers (one with Helen Makower) on
monetary theoryMonetary economics is a branch of economics that historically prefigured and remains integrally linked to macroeconomics. It provides a framework for analyzing money in its functions as a medium of exchange, store of value, and unit of account. It considers how money, for example fiat currency,...
, Marschak set down the basic ideas for portfolio theory, in which risk was acknowledged to play a role. His encounter with the work of
John von NeumannJohn von Neumann was a Hungarian American mathematician who made major contributions to a vast range of fields, including set theory, functional analysis, quantum mechanics, ergodic theory, continuous geometry, economics and game theory, computer science, numerical analysis, hydrodynamics John...
and
Oskar MorgensternOskar Morgenstern was a German-born Austrian economist. He, along with John von Neumann, helped found the mathematical field of game theory .Morgenstern was born in Görlitz, Germany...
(1944) led him to write his famous 1950 exposition of the axiomatization of
choiceChoice consists of the mental process of thinking involved with the process of judging the merits of multiple options and selecting one of them for action. Some simple examples include deciding whether to get up in the morning or go back to sleep, or selecting a given route for a journey...
under uncertainty, when he introduced the infamous "independence axiom".
Maurice AllaisMaurice Félix Charles Allais is a French economist, and was the 1988 winner of the Nobel Memorial Prize in Economics "for his pioneering contributions to the theory of markets and efficient utilization of resources."-The economist:...
's critique of the axiom led him to his famous "normative" defence of
expected utility theoryIn economics, game theory, and decision theory the expected utility theorem or expected utility hypothesis predicts that the "betting preferences" of people with regard to uncertain outcomes can be described by a mathematical relation which takes into account the size of a payout , the probability...
(1951).
It was specifically in the
theory of informationInformation theory is a branch of applied mathematics and electrical engineering involving the quantification of information. Historically, information theory was developed by Claude E. Shannon to find fundamental limits on compressing and reliably storing and communicating data...
, the theory of "teams" and decentralized organizations where Marschak was to make his name (1954, 1968, 1971, 1972). He is renowned for having developed the theory of stochastic design as a way of statistically measuring demand. It was Marschak who helped introduce modern
information theoryInformation theory is a branch of applied mathematics and electrical engineering involving the quantification of information. Historically, information theory was developed by Claude E. Shannon to find fundamental limits on compressing and reliably storing and communicating data...
into economics via Shannon's formalization of information via the mathematical theory of communication. His contributions on information were further developed by his colleagues and students at the Cowles Commission, such as Kenneth J. Arrow, Roy Radner,
Franco ModiglianiFranco Modigliani was an Italian-American economist at the MIT Sloan School of Management and MIT Department of Economics, and winner of the Nobel Memorial Prize in Economics in 1985....
,
Helen MakowerHelen Makower was a British economist. Graduating from Newnham College, Cambridge Helen Makower (* 1 June 1910 London; † 17 May 1998 Marlborough) was a British economist. Graduating from Newnham College, Cambridge Helen Makower (* 1 June 1910 London; † 17 May 1998 Marlborough) was a British...
and others.
In 1948 Tjalling C. Koopmans took over as director of the Cowles Commission, which gave Marschak more time for his own research. When in 1955 the Cowles Commission left Chicago for
YaleRapidMiner is an environment for machine learning and data mining experiments. It allows experiments to be made up of a large number of arbitrarily nestable operators, described in XML files which are created with RapidMiner's graphical user interface...
, Marschak followed. He later became
emeritusEmeritus is an adjective that is used in the title of a retired professor, bishop, or other professional. Emerita is often used as the female equivalent, although avoided by purists, since phrases such as professor emerita are ungrammatical in Latin...
at University of California.
Shortly before he should have become president of the
American Economic AssociationThe American Economic Association, or AEA, is a learned society in the field of economics. It publishes one of the most prestigious academic journals in economics: the American Economic Review. The AEA was established in 1885 by religious and social reformer Richard T...
he died from a coronary artery spasm.
Major publications
- "Wirtschaftsrechnung und Gemeinwirtschaft", 1923, Archiv für Sozialwissenschaft
- "Der Neue Mittelstand" with E. Lederer, 1926, in Grundriss der Nationalökonomik (trans. "The New Middle Class", 1937, WPA)
- "Das Kaufkraft-Argument in der Lohnpolitik", 1930, Magazin der Wirtschaft.
- Die Lohndiskussion, 1930.
- Elastizität der Nachfrage, 1931.
- "Annual Survey of Statistical Information", 1933, Econometrica.
- The New Middle Class, with Emil Lederer, 1937.
- "Money and the Theory of Assets", 1938, Econometrica.
- "Assets, Prices and Monetary Theory", with H. Makower, 1938, Economica.
- "A Discussion on Methods in Economics", 1941, JPE.
- "Random Simultaneous Equations and the Theory of Production", with W.H. Andrews, 1944-5, Econometrica.
- "A Cross-Section of Business Cycle Discussion", 1945, AER.
- "Von Neumann's and Morgenstern's New Approach to Static Economics", 1946, JPE.
- "Mathematics for Economists", 1947, Econometrica.
- "Statistical Inference from Non-Experimental Observation: An Economic Example", 1949, Proceedings of the International Statistical Conference
- "The Role of Liquidity under Complete and Incomplete Information", 1949, AER.
- "Rational Behavior, Uncertain Prospects and Measurable Utility", 1950, Econometrica.
- "The Rationale of the Demand for Money and of `Money Illusion'", 1950, Metroeconomica
- "Optimal Inventory Policy", with K.J. Arrow and T. Harris, 1951, Econometrica
- "Why "Should" Statisticians and Businessmen Maximize Moral Expectation?", 1951, Proceedings of the Second Berkeley Symposium
- "Three Lectures on Probability in the Social Sciences", 1954.
- "Towards an Economic Theory of Organization and Information", 1954, in Thrall et al., editors, Decision Processes.
- "Note on Some Proposed Decision Criteria", with Roy Radner, 1954, in Thrall et al., editors, Decision Processes.
- "Elements for a Theory of Teams", 1955, Management Science
- "Experimental Tests of a Stochastic Decision Theory" with D. Davidson, 1959, in Churchman and Ratoosh, editors, Measurement Definitions and Theories
- "Efficient and Viable Organizational Forms", 1959, in Modern Organization Theory
- "An Identity in Arithmetic", with H.D. Block, 1959, Bulletin of the AMS
- "Random Orderings and Stochastic Theories of Responses" with H.D. Block, 1960, in Contributions to Probability and Statistics
- "Remarks on the Economics of Information" 1960, in Contributions to Scientific Research in Management
- "Theory of an Efficient Several-Person Firm" 1960, in General Systems
- "Binary-Choice Constraints and Random Utility Indicators", 1960, in Arrow, Karlin and Suppes, editors, Mathematical Methods in the Social Sciences.
- "Economics of Inquiring, Communicating, Deciding", 1968, AER.
- "Economics and Information Systems", 1971, in Intriligator, editor, Frontiers of Quantitative Economics.
- Economic Theory of Teams, with Roy Radner, 1972.
- Economic Information, Decision and Prediction, 1974.
Honours
- 1946 President of the Econometric Society
The Econometric Society, an International Society for the Advancement of Economic Theory in its Relation with Statistics and Mathematics was founded on December 29, 1930 at the Stalton Hotel in Cleveland, Ohio....
- 1963 Honorary Fellow of the Royal Statistical Society
The Royal Statistical Society is a learned society for statistics and a professional body for statisticians in the UK. It was founded in 1834 as the Statistical Society of London . At that time there were many provincial statistics societies throughout Britain, but most have not survived...
- 1967 Distinguished Fellow of the American Economic Association
The American Economic Association, or AEA, is a learned society in the field of economics. It publishes one of the most prestigious academic journals in economics: the American Economic Review. The AEA was established in 1885 by religious and social reformer Richard T...
External links