Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit

303 Pages·2014·2.06 MB·English

by  Till Düppe

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Finding Equilibrium
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Finding
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Equilibrium
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Arrow, dEbrEu, mcKEnziE And
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thE ProblEm oF SciEntiFic crEdit
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till düPPE And E. roy wEintrAub 27
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PrincEton univErSity PrESS
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PrincEton And oxFord
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Copyright © 2014 by Princeton University Press
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Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540
2 In the United Kingdom: Princeton University Press, 6 Oxford Street,
Woodstock, Oxfordshire OX20 1TW
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press.princeton.edu
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5 Jacket Photographs: Detail of Kenneth Arrow courtesy of the National Science and
6 Technology Medals Foundation. Photograph of Gerard Debreu courtesy of
Biblioteca Universidad de Alcalá/D-Space/Creative Commons. Photograph of Lionel
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McKenzie courtesy of the University of Rochester. Background: Gerard Debreu
8 papers, 1949–2001. Collection number BANC MSS 2006/218, Carton 8, research
notes. Courtesy of The Bancroft Library, University of California, Berkeley.
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10 All Rights Reserved
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Library of Congress Cataloging-in-Publication Data
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Düppe, Till, 1977–
13 Finding equilibrium : Arrow, Debreu, McKenzie and the problem of
scientific credit / Till Düppe and E. Roy Weintraub.
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pages cm
15 Summary: “Finding Equilibrium explores the post–World War II transformation of eco-
16 nomics by constructing a history of the proof of its central dogma—that a competitive
market economy may possess a set of equilibrium prices. The model economy for which
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the theorem could be proved was mapped out in 1954 by Kenneth Arrow and Gerard
18 Debreu collaboratively, and by Lionel McKenzie separately, and would become widely
known as the “Arrow-Debreu Model.” While Arrow and Debreu would later go on to win
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separate Nobel prizes in economics, McKenzie would never receive it. Till Düppe and E.
20 Roy Weintraub explore the lives and work of these economists and the issues of scientific
21 credit against the extraordinary backdrop of overlapping research communities and an
economics discipline that was shifting dramatically to mathematical modes of expres-
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sion. Based on recently opened archives, Finding Equilibrium shows the complex inter-
23 play between each man’s personal life and work, and examines compelling ideas about
scientific credit, publication, regard for different research institutions, and the awarding
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of Nobel prizes. Instead of asking whether recognition was rightly or wrongly given, and
25 who were the heroes or villains, the book considers attitudes toward intellectual credit
26 and strategies to gain it vis-à-vis the communities that grant it. Telling the story behind
the proof of the central theorem in economics, Finding Equilibrium sheds light on the
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changing nature of the scientific community and the critical connections between the
28 personal and public rewards of scientific work”—Provided by publisher.
Includes bibliographical references and index.
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ISBN 978-0-691-15664-4 (hardback)
30 1. Equilibrium (Economics) I. Weintraub, E. Roy. II. Title.
31 HB145.D87 2014
339.5—dc23
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2013050578
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British Library Cataloging- in- Publication Data is available
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This book has been composed in Minion Pro and Trade Gothic Lt Std.
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Printed on acid- free paper. ∞
36 Printed in the United States of America
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For Harald, Brigitte, Jens, and Benjamin (TD) 7
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For Lauren, David, Molly, Alexa, Nico, Lucie, Henry, and RJ (ERW)
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7 In some ideal sense, life philosophies, like economies, may be
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9 ence, and intellectual interaction with the past and the present
10 until they come into an equilibrium independent of initial con-
11 ditions. In fact, neither is ever independent of history.
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13 Arrow 1992, 43
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contEntS
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Preface ix
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Chronology xxiii
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Part I People 1 11
Chapter 1 Arrow’s Ambitions 3 12
Chapter 2 McKenzie’s Frustrations 24 13
Chapter 3 Debreu’s Silence 47 14
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Part II Context 65
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Chapter 4 Sites 67
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Chapter 5 Community 98
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Part III Credit 129 19
Chapter 6 Three Proofs 131 20
Chapter 7 Aftermath 172 21
Chapter 8 The Proofs Become History 204 22
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Conclusion 231
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Coda 245 25
Acknowledgments 249 26
References 251 27
Index of Names 267 28
Index of Subjects 273 29
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PrEFAcE
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I think I finally understand the difference. We mathematical 10
economists take a work, for example take Walras’ Elements, and 11
put it in boiling oil until all there is left is the skeleton, its es- 12
sence or true character. You historians are instead interested in 13
the skin and the flesh. 14
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wErnEr hildEnbrAnd 16
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In the years following World War II, three mathematical economists— 20
Kenneth Arrow, Gérard Debreu, and Lionel McKenzie— put, in Hil- 21
denbrand’s words, economic theory in boiling oil and obtained one 22
and the same skeleton: axiomatized general equilibrium theory. In 23
their own histories, in their personal skin and flesh, they were as dis- 24
similar as it was possible for economists to be in the mid-t wentieth 25
century. 26
Arrow grew up in immigrant Jewish New York. He was the preco- 27
cious son of an established middle- class banker- lawyer who lost his 28
job in the Depression and as a result the family found itself in greatly 29
reduced circumstances during the 1930s. He was one of the Depres- 30
sion generation’s bright kids educated at City College of New York, 31
where he graduated at the head of his class in 1939. His academic 32
career was superlative. As an undergraduate he took mathematics 33
courses and was asked by Alfred Tarski to check the English transla- 34
tion of his German- language book on logic (Tarski 1941, xiv). Want- 35
ing to learn more about statistics because he thought he might find 36
employment eventually as an actuary, Arrow ended up at Columbia 37
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