LEONTIEV Vasily Vasilyevich (Leontief Wassily; 1906, Munich - 1998, New York), American economist. Immediately after the birth of Leontiev, his parents, who were in Germany, returned to St. Petersburg, where the baby was baptized. His mother, Jewish Zlata Bekker, after baptism bore the name of Evgenia, his father, Vasily Leontiev, a well-known economist in Russia, came from a family of Old Believers. Leontiev graduated from Leningrad University in 1925, then continued his education at the University of Berlin (1925–28), while simultaneously working as a researcher at the Institute of World Economy at Kiel University (Germany). In 1928 he received a doctorate in economics. In 1929, Leontiev lived in Nanjing, served as an economic adviser to the Ministry railways China. In 1931 he emigrated to the USA and worked at the National Bureau of Economic Research. In the same year, Leontiev began his long career at Harvard University, where he founded the Center for Economic and Analytical Research. In 1946 he became an ordinary professor and later (1953–75) headed the department of economics.
In 1975, Leontiev retired and took up the post of professor of economics and director of the Institute economic analysis New York University (since 1985 - researcher at this institute).
Over the years, Leontiev has collaborated with many foreign countries as an economic adviser under the auspices of the United Nations. Leontiev made a significant contribution to the economic science of the 20th century. A broad-minded economist, he wrote fundamental monographs on the structure of the American economy, the future of the world economy, and many others. In the early 1930s. Leontiev developed and improved the method of economic analysis "costs - output", which he created to study intersectoral relations, the general structure of the economy and draw up an intersectoral balance. Leontief's method is based on general theory economic equilibrium, created by him in 1931 at the empirical level. Leontiev's focus is on interdependence economic relations, represented by a system of equations considering the economy as a whole. From the time of " economic table»by the physiocrat F. Kene (18th century), there were no such comprehensive attempts to present a complete picture of the economy in exact mathematical terms. Leontiev also relied on the theory of general equilibrium of the French economist of the 19th century. L. Walras and the experiences of Soviet economists in the 1920s. For the compilation of analytical tables "costs - output" Leontiev for the first time in 1935 used a large mechanical computer, and in 1943 (also for the first time) - an electronic one.
The use of computers allowed Leontiev to move on to compiling national balances (chess tables of the input-output balance) for various countries and them national economies(the so-called "Leontief-type models"). By 1963, under the leadership of Leontiev, such tables had been developed for more than 40 states. Input-output analysis remains a no less productive tool for fundamental economic research, in which Leontiev continued to work.
He opposed "implicit" (Leontiev's expression) economic theorizing, he considered economics an applied science. In 1973, Leontiev was awarded the Nobel Prize in Economics for his development of the input-output method and its application to solving important economic problems. Along with J. M. Keynes, Leontiev is recognized as a scientist who contributed largest contribution in economics in the 20th century.
Leontiev - author of the books: "The Structure of the American Economy, 1919-1929" (1941); "Essays in Economics: Theory and Theorizing" (1966); "A Structural Approach to the Analysis of International Economic Interdependence" (1971); "The economic system in the age of the absence of patterns" (1976); "The Future of the World Economy" (1977); "Military Expenses" (1983), etc.
Leontiev was awarded the French Legion of Honor (1968). He was a member of the American National Academy of Sciences, the American Academy of Sciences and Arts, the Royal Society of London and the Royal Statistical Society, the American Philosophical Society. Leontiev was president Economic Society in 1954 and the American Economic Association in 1970. He was awarded honorary doctorates from the universities of Brussels, York, Louvain, Paris, and others.
Russian economist, studied at the Leningrad and Berlin Universities. Winner of the Nobel Prize in Economics in 1973 "for his development of the input-output method and its application to the solution of important economic problems."
“Then what prompted you to emigrate?
Vasily Leontiev (hereinafter - VL). The censor banned my article from publication.
Only because of this?
V.L. But it was a very important event for me and explained a lot to me. I will tell now. As a student, I did a lot of work in the Public Library, studied the works of economists of the 17th and 18th centuries in primary sources. At that time no one but me took these books; maybe that's why the director of the library Ernest Nikolaevich Radlov drew attention to me, he is very deep, interesting person, an idealistic philosopher. He talked to me about the topic of my research and offered to write an article, which he submitted for publication to the journal Annaly to Academician Tarle. It was there that the censor banned it.
But why? What was "criminal" about her?
V.L. That's the thing, nothing. It was an article about the ways of development of science, about casual and normative approaches in it. I have considered the development of these two methods among philosophers since the eighteenth century, through Kant and Hegel, and ending Bergson. It was a historical and analytical article, terribly far from politics, from ideology. And even if it was banned... I realized that it would be impossible to do science here.
Well, maybe, and partly possible, but there will be no normal working conditions. My work is the most important thing in my life. When I understood all this, I decided to leave.
But how did you do it? Leaving Russia at the beginning of 1925 was not an easy task. There was no "Iron Curtain" yet, but the border was already firmly locked.
V.L. You're right, it was almost impossible. But I got lucky. I got sick, I had a tumor on my jaw. Doctors performed an operation, removed part of the bone and decided that it was a sarcoma. Then I asked to be given a passport. And they gave me a passport. We decided - let him go, he will die soon anyway. When I was leaving, the doctor gave me a jar with the bone removed. And when I went to the doctors in Germany, they examined it and said that it was not a sarcoma, and I remained alive. So sarcoma helped me a lot. Agree, it does not help many people ... "
Kalyandina S.A., V.V. Leontiev and the repressions of the 1920s (interview with V.V. Leontiev), in Sat: Repressed Science / Ed. M.G. Yaroshevsky, Issue II, St. Petersburg, "Nauka", 1994, p. 190.
Since 1931 Vasily Leontiev works in the USA. He developed a multidimensional method of economic and mathematical analysis "costs - output" (input - output) to study intersectoral economic relations.
"Trouble modern economy in that, thought Vasily Leontiev that "many of his colleagues pay homage to elegant but useless theorizing." In his presidential address to the Detroit Economic Association, he announced that “The vice of modern economics is not indifference to practical problems, as many practitioners believed, but the complete unsuitability of the scientific methods with which they are trying to solve them.” And, perhaps, we will add, the most striking example of this unsuitability is the inability of economists to foresee the economic collapse of communism, at least five years in advance, at least in 1985. They foresaw the little things, but did not notice the main thing - the impossibility of the existence of a social combat-ready. Some prophets, who correctly set the terms for the death of communism in 20-25 years (for example, the Soviet historian Andrei Amalrik or David Sarnov), reasoned purely intuitively and were mistaken in the symptoms of this death (for example, Amalrik saw a war between the USSR and China). It is now clear that economic reason lay in the inefficiency of production; all ties went to the production of ties and did not enter the market - it was impossible to buy a tie, even with money ... "
Mark Reitman, Famous emigrants from Russia. Essays on Russians who have achieved success in the USA, Rostov-on-Don, "Phoenix", 1999, p. 60.
In the input-output method, the research talent of the brilliant economist Vasily Vasilyevich Leontiev was most fully revealed.
The basis of Leontiev's approach to planning was laid by the French "Physiocrats" in the 18th century, led by Francois Quesnay. They proceeded from the incorrect thesis that only agricultural activity makes economic sense, and all other industries only consume resources. But at the same time they were able to offer a correct methodological approach to the problem of economic planning. The Physiocrats used "technological tables" to take into account everything that any economic system produces and consumes. A similar approach was developed mathematically in the nineteenth century by the French economist Léon Walras.
Recognizing the Walrasian system of interdependencies, Leontiev was the first to put into practice the analysis of general equilibrium as a tool in the formation economic policy.
Vasily Vasilievich Leontiev (1905-1999) was born in St. Petersburg. The father of the future Nobel laureate was a professor of labor economics at St. Petersburg University. At the age of fourteen, Vasily graduated from high school and in 1921 entered Petrograd University, where he studied philosophy, sociology, and then economics.
Considered a child prodigy and despite the supremacy of the “only true” teaching, diamat, he allowed himself to be called a “Menshevik”. In 1925, Leontiev had already completed a four-year course at the university and received a diploma in economics. Education then was conducted neither shaky nor roll: but the young man read many books on economics in Russian, English, French and German in the university library.
After graduation, he got a job teaching economic geography, at the same time he applied for a visa to Germany to continue his education at the University of Berlin. Permission was granted six months later. In Germany, he continued his studies and began working on his doctoral dissertation at the University of Berlin under the guidance of the famous German economist and sociologist Sombart and a prominent theoretical statistician, a native of Russia, Vl. Bortkiewicz. The topic of Leontiev's dissertation was the study National economy as a continuous process. Without leaving his studies, he began his professional career as a research economist at the Institute for World Economy at the University of Kiel, studying the derivative of the statistical demand and the supply curve. In 1928, Leontiev received his Ph.D.
The depth of economic thinking was combined with Leontiev's strong mathematical background. In the late twenties and early thirties, he conducted a number of original studies on the study of the elasticity of supply and demand, the statistical measurement of industrial concentration, the use of indifference curves to explain certain patterns international trade. One of Leontiev's first scientific articles was devoted to an analysis of the balance sheet of the national economy of the USSR for 1923-1924, which was the first attempt in the economic practice of those years to present in figures the production and distribution of the social product in order to obtain a general picture of the cycle of economic life. The balance was the prototype of the input-output method developed later by the scientist. The article was written in German and published in October 1925. Translation into Russian under the title “Balance of the national economy of the USSR. A Methodological Analysis of the Work of the CSO” appeared two months later in the December issue of the magazine “Planned Economy”.
In 1929, Leontiev went to Asia as an economic adviser to the Ministry of Railways in the Chinese government. After returning to Germany, he continued to work at the Institute of World Economy.
In 1931 director of the National Bureau economic research(USA), well-known American statistician, specialist in the field of analysis economic cycles and conjuncture W. Mitchell invited Leontiev to work in the bureau, and he moved to the USA.
Since 1932, Leontiev began teaching political economy at Harvard University. In the same year, Leontiev organized a research team at Harvard called the Harvard Economic Research Project, and headed it without interruption until it was closed in 1973. This Collective became the center of research economic processes using the input-output method. At the same time, all these years, Leontiev remained a professor at Harvard University, and from 1953 to 1975 he was also head of the department political economy them. Henry Lee.
The algebraic theory of input-output analysis proposed by Leontiev is reduced to a system of linear equations in which the production cost coefficients are the parameters. The realistic hypothesis and the relative ease of measurement determined the great analytical and predictive capabilities of the input-output method. Leontiev showed that the coefficients expressing the relationship between sectors of the economy (coefficients of current material costs) can be estimated statistically that they are sufficiently stable and that they can be predicted. Moreover, he showed the existence of the most important coefficients, the changes of which must be monitored in the first place.
At the end of the eighties, at a meeting in the editorial office of the Pravda newspaper, the scientist was asked to tell how the input-output method was born, what it is.
Here is what Leontiev said: “In order to predict the development of the economy, one needs systems approach. The economy of each country is a large system in which there are many different industries, and each of them produces something - industrial products, services, and so on, which are transferred to other industries. Each link, component of the system can exist only because it receives something from others...
Suppose we need to calculate the efficiency of bread production. We make a calculation: how much per ton to spend flour, yeast, milk, and so on for all components according to the recipe. Then we determine the labor costs in standard hours. All these calculations are done in natural (physical) terms. It is very important not to count immediately in money. Based on the calculations of the consumption of material resources and labor costs for a specific product or object in kind, the expected results in monetary terms are analyzed and compared.
A similar approach is used in the calculation of any type of product - steel, cars, shoes. All preparatory calculations take into account the consumption of components necessary for the production of this type of product. And only then, taking into account prices and the level of wages, the most effective option for the production of final products is selected. Based on this analysis, for example, textile industry at one time migrated from developed countries in developing, as it required a lot of labor. And now thanks new technology she's coming back."
In the seventies, Vasily Vasilyevich wrote in one of his works: “In order to understand the meaning of the transformation leading to the construction of the so-called reduced input-output matrix for the national economy, let us ask the reader to mentally imagine a situation in which all enterprises in the country are divided into two groups: Group I - "contract" industries, Group II - "subcontract" industries.
Any contract industry, that is, an industry from group I, covers its direct needs for the products of other industries of group I through direct purchases, and each industry of group II makes direct purchases from other industries of group II. However, the products of industries of group II, supplied to industries of group I, are produced on the basis of special contracts. Under the terms of such a contract, an industry of group I, placing an order in some industry of group II, provides the latter with the products of all industries of group I (including its own) in the quantity necessary to fulfill this order, for which this industry purchases all these goods (from industries that produce them). Group I) at your own expense. The relationship between the contract (I group) and subcontract (II group) industries, therefore, will be similar to the relationship between a consumer who independently purchases fabric, and a tailor who sews a suit from this fabric.
Each industry of group I, determining the volume of purchases of goods and services produced by industries of the same group, will have to add to the direct needs of its own industry the goods and services that, according to the contract, will be processed for it by various industries of group II. The calculation of these total purchases gives the final vector of costs for any of the industries of group I ...
These two tables differ from each other in the same way that an abbreviated train schedule, indicating only some major stations, differs from a complete detailed schedule, where all intermediate stops are also highlighted. The division of all sectors of industries into groups I and II must, of course, depend on the specifics of the task for which the aggregation serves.
Using the reduced matrix in the planning process, we can be sure that if the flows of costs and output reflected in it in the industries of group I are balanced correctly, then the balance between the output and costs of all industries of group II that are not included in the matrix will also be ensured.
“Input-output calculations (in Soviet science they began to be called economic and mathematical models of input-output balance) require modern computing technology, without which they really do not invade the world of economic analysis, forecasting and planning,” they write in the preface to Leontiev’s book Academician S.S. Shatalin and Doctor of Economics D.V. Volovoy. “Starting from 1933-1934, Leontiev focused on overcoming these difficulties by collecting coefficients for the 44-industry input-output table (about 2000 coefficients) and draws up a work plan. Since the solution of a system consisting of 44 linear equations turned out to be far beyond the limits of what was possible, 44 industries were combined into 10 for calculation purposes.
The result of this study (A Quantitative Analysis of Input-Output Relationships in the US Economic System) was published in 1936. The central place in it was occupied by a table of coefficients compiled for the US economy in 1919, with a dimension of 41x41. The following year, V.V. Leontiev published the work “Internal Relationships of Price, Output, Savings and Investments”. Around the same years, V.V. Leontief works with MIT professor John B. Wilbur, the inventor of a computer capable of solving systems of nine linear equations. V. Leontiev reduced the 41-dimensional matrix to a 10-dimensional one and used the Wilbur computer to obtain the coefficients of the total costs of gross output for the production of a unit of final output. Leontiev may have been the first to use the computer in the study of the structure of economic systems.
In 1941, a 41-dimensional table of interbranch flows was compiled, calculated for 1929, and then aggregated into a 10-dimensional table. On its basis, the volumes of gross output needed to meet final demand (gross capital formation, current consumption, government purchases) were calculated.
Comparison of the tables made it possible to check the stability of the coefficients of material costs and find out the possibilities of effective forecasting. Although the comparison of tables did not allow us to come to an unambiguous conclusion, nevertheless, intersectoral tables for forecasting were found to be quite appropriate. The Statistical Bureau of Employment of the United States, inviting Leontief as a consultant, compiled a table that includes 400 industries. It was used to predict the employment of the population in the postwar period. The input-output method has become widely used throughout the world.
In 1944, Leontiev compiled a table of coefficients for current material costs for 1939 and, comparing it with the previous ones, found a sufficient degree of stability of most of the coefficients over two decades. Using the latter table, he published three articles between 1944 and 1946 in the Political Economy Quarterly, where, using his method, he estimated the impact of employment, wages and prices for the gross output of individual branches of American industry.
Since the late forties, after the founding of the Harvard Economic Research Project with the aim of applying and disseminating the input-output method, Special attention Leontiev paid attention to the development of interregional input-output analysis and the compilation of a matrix of investment coefficients, with the help of which it would be possible to judge the consequences of changes in the final demand for investment. This was the beginning of the dynamic input-output method, on the basis of which it became possible to analyze the economic growth. During the fifties and sixties, Leontiev improved his system. With the advent of more sophisticated computers, he increased the number of sectors of the economy to be analyzed, freed himself from some simplifying assumptions, primarily from the condition that technical coefficients remain unchanged despite price changes and technical progress. Based on the input-output method, Leontief and the staff of the Harvard Economic Research Project assessed the inflationary impact on wage regulation, calculated the costs of armaments and their impact on various sectors of the economy, forecasted the growth rate of sectors of the economy and the capital investments required for this.
One of the most important results of these studies was the so-called. “paradox” or “Leontief effect”, which consists in the fact that if we take into account direct and indirect costs in the process of reproduction, then exports for the United States turn out to be more labor-intensive and less capital-intensive than imports. This means that although the US has a very strong investment environment and high wages, it imports capital and exports labor. I
Since the input-output method proved its usefulness as an analytical tool in the field of regional economics, Leontief chess balance sheets began to be compiled for the economy of individual American cities. Gradually, the preparation of such balance sheets became a standard operation. Control intersectoral economy within the US Department of Commerce, for example, began publishing such balance sheets every five years. UN, The World Bank and most of the governments of various countries of the world, including the USSR, adopted the Leontief method as the most important method of economic planning and budget policy. He became the main integral part systems of national accounts of most countries of the world, is still used and improved by government and international organizations and research institutions around the world. Input-output analysis is recognized as a classic tool of economic analysis, and its author is considered the scientist who made the largest contribution to the economic science of the 20th century.
In 1973, Leontief was awarded the Nobel Prize in Economics "for his development of the input-output method and its application to the solution of important economic problems."
Vasily Vasilievich Leontiev was born on August 5, 1905 in St. Petersburg. Leontiev's ancestors were simple peasants, but his great-grandfather got off the ground and moved to St. Petersburg. Vasily's grandfather got rich by opening a weaving factory there. One of his sons married an Englishwoman, from where the British branch of the Leontief family came from. The father of the future Nobel laureate was already a Russian intellectual, a professor of labor economics at St. Petersburg University. So Vasily followed the beaten path, but he went incredibly fast: at the age of fourteen he graduated from high school and in 1921 entered Petrograd University, where he studied philosophy, sociology, and then economics.
Being at the university in the status of a child prodigy, despite all the attempts of the “only true” teaching, diamat, he allowed himself to be called a “Menshevik”. In 1925, Leontiev had already completed a four-year course at the university and received a diploma in economics. Education then was conducted neither shaky nor roll: but the teenager read many books on economics in the university library in Russian, English, French and German.
After graduation, he got a job teaching economic geography, at the same time he applied for a visa to Germany to continue his education at the University of Berlin. Permission was granted six months later. In Germany, he continued his studies and began working on his doctoral dissertation at the University of Berlin under the guidance of the famous German economist and sociologist Sombart and a prominent theoretical statistician, a native of Russia, Vl. Bortkiewicz. The topic of Leontiev's dissertation was the study of the national economy as a continuous process. Without leaving his studies, he began his professional career as a research economist at the Institute for World Economy at the University of Kiel, studying the derivative of the statistical demand and the supply curve. In 1928, Leontiev received his Ph.D.
The depth of economic thinking was combined with Leontiev's strong mathematical background. In the late twenties and early thirties, he conducted a series of original studies on the study of the elasticity of supply and demand, the statistical measurement of industrial concentration, the use of indifference curves to explain some of the patterns of international trade. One of the first scientific articles by Leontiev was devoted to the analysis of the balance of the national economy of the USSR for 1923-1924, which was the first attempt in the economic practice of those years to present in figures the production and distribution of the social product in order to obtain a general picture of the cycle of economic life. The balance was the prototype of the "cost-output" method developed later by the scientist. The article was written in German and published in October 1925. A translation into Russian entitled "Balance of the National Economy of the USSR. A Methodological Analysis of the Work of the CSB" appeared two months later in the December issue of the magazine "Planned Economy".
To earn money, the scientist had to write articles in commercial journals. A year earlier, his father had arrived in Berlin on a business trip, having by that time replaced the university with the People's Commissariat of Finance. Yes, in the same place, in Berlin, he stayed: the Cheka was already approaching him.
Somehow, during a break, the scientist met over coffee with Chinese businessmen who somehow ended up in Kiel. Word for word, and the Chinese offered him a year of contract work in ... Nanjing, the then capital of China! This made him a specialist in the economic planners of developing countries. So in 1929 he went to Asia as an economic adviser to the Ministry of Railways in the Chinese government. After returning to Germany, he continued to work at the Institute of World Economy.
In 1931, the director of the National Bureau of Economic Research (USA), a well-known American statistician, specialist in the field of analysis of economic cycles and market conditions, W. Mitchell, invited Leontiev to work in the bureau, and he moved to the USA. Then Leontiev turned to Harvard University. Professor Gay responded from there, offering Leontiev a professorship on the condition that he would do the statistical calculations he needed. In response, the applicant proposed his own topic for research on economic planning. Then Gay wrote that, according to the decision of the department, the proposed topic was not very interesting, but Leontiev could still be given a tiny one-year grant for a scientific position and the right to give a lecture. You need to know the manners and customs of this ultra-prestigious university in order to understand: it was a victory for a young scientist, albeit a small one. In cozy Cambridge, a suburb of Boston, where Harvard University is located, Leontiev went with new hopes and a new wife, the poetess Estelle Hellen Marx, whom he married already in America. Since 1932, Leontiev began teaching political economy at Harvard University. Soon, Leontiev's parents also moved to America. The fate of this family was dedicated to the memoirs "Zhenya and Vasily" by the mother of Vasily Vasilyevich, who lived to an advanced age and died in the early seventies.
In the same year, Leontief organized a research team at Harvard called the Harvard Economic Research Project and headed it until its closure in 1973. This team became the center of research on economic processes using the input-output method. At the same time, all these years, Leontiev remained a professor at Harvard University, and from 1953 to 1975 he was also head of the Department of Political Economy. Henry Lee.
In the thirties, Leontiev studied the role of aggregated economic indicators output and the general price level. In 1937, in the "Quarterly on Political Economy" published an article "Blind" theorizing. Methodological criticism of the neo-Cambridge school", which received a wide response. In it, he analyzed the methodology based in late XIX century by the English economist A. Marshall of the Cambridge School, feature which was a subjective-psychological approach to the definition economic categories and the predominance of mathematical methods in explaining economic processes.
In March 1938, in an appendix to the American Economic Review, Leontiev placed the work " Modern meaning economic theory K. Marx", which contained an attempt to objectively analyze the economic theory of Marx from the standpoint of science of the thirties. Noting that Marx was a great connoisseur of the nature of the capitalist system and had his own rational theories, not always, however, consistent, the scientist concluded that the internal weakness of Marx's theory " manifests itself as soon as other economists who are not endowed with exceptional common sense Marx, are trying to develop Marxist theory on the basis of his projects.
Leontiev's research talent was most fully revealed in his main scientific achievement - the development of the input-output method. The basis of Leontiev's approach to planning was laid by the French "physiocrats" in the 18th century, led by Francois Quesne. Although they proceeded from the incorrect thesis that only agricultural activity makes economic sense, and all other industries only consume resources, they proposed a correct methodological approach to the problem of economic planning. The Physiocrats used "technological tables" to take into account everything that any economic system produces and consumes. This approach was developed in mathematical form in the 19th century by the French economist Léon Walras.
Recognizing the Walrasian system of interdependencies, Leontiev was the first to put into practice the analysis of general equilibrium as a tool in the formation of economic policy. The algebraic theory of input-output analysis proposed by Leontiev is reduced to a system of linear equations, in which the parameters are the coefficients of production costs. The realistic hypothesis and the relative ease of measurement determined the great analytical and predictive capabilities of the input-output method. Leontiev showed that the coefficients expressing the relationship between sectors of the economy (coefficients of current material costs) can be estimated statistically, that they are quite stable and that they can be predicted. Moreover, Leontiev showed the existence of the most important coefficients, the changes of which must be monitored in the first place. Calculations according to the Leontiev method (in our science they began to be called economic and mathematical methods of interbranch balance) required modern computer technology, without which the solution of linear equations turned out to be beyond the limits of the possible. Beginning in 1933, Leontief focused on overcoming these difficulties by collecting coefficients for a 44-industry input-output table (about 2,000 coefficients). Since the solution of a system consisting of 44 linear equations was impossible at that time, he combined 44 industries into 10 for calculation purposes. To check the stability of the coefficients of current material costs in the United States, inter-industry balances were compiled for 1919-1929. The result of this study, titled "A Quantitative Analysis of Input-Output Relationships in the US Economic System", was published in 1936. The central place in it was occupied by a table of coefficients compiled for the US economy in 1919, with a dimension of 41x41. Around this time, Leontief worked closely with MIT professor John B. Wilbur, the inventor of a computer capable of solving systems of nine linear equations. Leontiev reduced the 41-dimensional matrix to a 10-dimensional one and used the Wilbur computer to obtain the coefficients of the total costs of gross output for the production of a unit of final output. He may have been the first to use the computer in the study of economic systems.
In 1941, a 41-dimensional table of interindustry flows was compiled, calculated for 1929, which was then also aggregated into a 10-dimensional table. Based on it, Leontiev calculated the volumes of gross output needed to meet final demand (gross capital formation, current consumption, government purchases). Both cross-industry tables were published in the monograph The Structure of the American Economy 1919-1929: An Empirical Application of Equilibrium Analysis. Comparison of tables by Leontiev made it possible to check the stability of the coefficients of material costs and find out the possibilities of effective forecasting. However, it did not allow to come to an unambiguous conclusion, partly due to the lack of sufficiently clear criteria for the stability of the estimated coefficients. Nevertheless, cross-industry tables were considered quite appropriate, and their creator was invited to the US Bureau of Employment Statistics as a consultant. Using the input-output method, the bureau compiled a table of four hundred industries that was used to predict employment in the post-war period.
In 1944, Leontiev compiled a table of coefficients for current material costs for 1939 and, comparing it with the previous ones, found a sufficient degree of stability of most of the coefficients over two decades. Using the latter table, he published in 1944-1946 three articles in the Political Economy Quarterly, where, using his method, he estimated the impact of employment, wages and prices on the gross output of individual branches of American industry.
Since the late 1940s, after the founding of the Harvard Economic Research Project with the aim of applying and spreading the input-output method, Leontiev paid special attention to the development of inter-regional input-output analysis and the compilation of a matrix of investment coefficients with which one could judge the consequences changes in the final demand for investment. This was the beginning of the dynamic input-output method, on the basis of which it became possible to analyze economic growth. The results of the research were published in Leontief's The Structure of the American Economy, 1919-1939: An Empirical Application of Equilibrium Analysis (1951) and Studies in the Structure of the American Economy (1953). One of the most important results of these studies was the so-called. "paradox", or "Leontief effect", which consists in the fact that if we take into account direct and indirect costs in the process of reproduction, then exports for the United States turn out to be more labor-intensive and less capital-intensive than imports. This means that although the US has a very strong investment environment and high wages, it imports capital and exports labor.
During the fifties and sixties, Leontiev perfected his system. With the advent of more sophisticated computers, he increased the number of sectors of the economy to be analyzed, freed himself from some simplifying assumptions, primarily from the condition that technical coefficients remain unchanged despite price changes and technical progress. Based on the input-output method, Leontief and the staff of the Harvard Economic Research Project assessed the inflationary impact in wage regulation, calculated the cost of armaments and their impact on various sectors of the economy, forecasted the growth rate of sectors of the economy and the capital investments required for this. Since the input-output method proved its usefulness as an analytical tool in the field of regional economics, Leontief chess balance sheets began to be compiled for the economy of individual American cities. Gradually, the preparation of such balance sheets became a standard operation. The Office of Interindustry Economics within the US Department of Commerce, for example, has begun publishing such balance sheets every five years. The UN, the World Bank and most of the governments of various countries of the world, including the USSR, adopted the Leontief method as the most important method of economic planning and budgetary policy. It has become the main component of the systems of national accounts of most countries of the world, is still used and improved by government and international organizations and research institutions around the world. Input-output analysis is recognized as a classic tool of economic analysis, and its author is considered the scientist who made the largest contribution to economic science of the 20th century.
Throughout its scientific activity Leontiev strictly followed the principle that economic concepts are meaningless and can only be misleading if the relevant processes cannot be realistically assessed using economic practice. He views modern economics as applied, empirical, the real usefulness of which is assessed depending on how economic theories are applied in real life. Theorizing, according to Leontiev, requires inspiration and technical skills, and the collection of facts - in particular, to develop complex models - is much more sweat and tears and an ever-increasing amount of time and cost.
Not surprisingly, he notes, we are faced with an overabundance of theoretical models and a paucity of the data needed to keep those models alive. Leontiev recommended to treat the use of mathematical models in economic analysis with particular caution, believing that complex mathematical constructions of a formal nature do little to comprehend the structure and principles of functioning of a real economic system. He devoted his speech to the relationship between economic theory and applied research after he was elected president of the American Economic Association in 1970. In his presidential address to the Detroit Economic Association, he declared that "the vice of modern economics is not indifference to practical problems, as many practitioners believed, but the complete unsuitability of the scientific methods with which they are trying to solve them." And perhaps the most striking example of this unsuitability was the failure of economists to foresee the economic collapse of communism.
Leontiev was not a Keynesian in principle, since he did not share the approach of the English economist John Keynes, according to which, in order to manage an economic system, it is enough to choose two or three or four main, aggregated indicators, with which you can control the entire economic system without managing each of the products. Apparently, in an effective system of control levers there should be few, but still more than two. However, Leontiev believed that Keynes's approach could help stabilize the economy, prevent the failures that occurred in the twenties and thirties in the form of world crises.
In his practical assessments, Leontiev was able to correctly assess a number of trends in global economy USA, Japan, Germany and other countries, as well as in the behavior of markets for goods and services and the market position of individual companies.
In 1969, Leontiev visited Cuba and gave a skeptical assessment of Fidel Castro's plans to boost the country's economy. Reality showed that this assessment was close to reality. The scientist also traveled to China, and the recent rise Chinese economy contains elements of his recommendations. His contribution is also in the Japanese "economic miracle". In 1973, Leontief was awarded the Nobel Prize in Economics "for his development of the input-output method and its application to the solution of important economic problems." As one of the first economists to be concerned about the impact economic activity person on environment, Leontiev, in his Nobel Lecture entitled "The Structure of the World Economy. Fundamentals of a simple formulation of the input-output method", outlined the input-output model in relation to the world ecology, where environmental pollution figured as an independent sector.
In 1975, Leontiev went to work at New York University. Three years later, he organized the Institute of Economic Analysis at the university and until 1986 was its director. And leaving an administrative post at the age of eighty, Vasily Vasilyevich continued active research work.
In recent decades, Leontiev increasingly turned to the problems of the growth of the world economy, its impact on the environment, analysis of the needs for natural resources, to the study of the relationship between developed and developing countries. Within the framework of the United Nations, in the mid-seventies, he led a global research project, the task of which was to forecast the development of the world economy until the year 2000. The results of this work were published in the book "The Future of the World Economy" (1977).
Recently, Leontiev lived in New York. The only daughter of the Leontiefs, Svetlana Alpers is a professor of art history at the University of California at Berkeley. V last years Vasily Vasilyevich established a close relationship with his homeland, he and his relatives repeatedly came to their native city of St. Petersburg. Leontiev died in the winter of 1999.
Vasily Vasilievich Leontiev (August 5, 1905, Munich - February 5, 1999, New York) - American economist of Russian origin, creator of the theory of interindustry analysis, winner of the Nobel Prize in Economics for 1973 "for the development of the input-output method" and for its application to important economic problems».
Vasily Leontiev grew up in Petrograd in the family of Professor of Economic Sciences Vasily Vasilyevich Leontiev and his wife Zlata Bentionovna (later Evgenia Borisovna) Becker.
In 1925 he completed his studies of philosophy and sociology at Leningrad University. Leontiev later studied economic sciences in Berlin and for the dissertation "Circulation of the economy" received a doctorate.
In 1928, Leontiev received an official invitation to come to China as an adviser to the Minister of Railways. He was given the task of calculating the optimal variant of China's communications and freight transportation system.
In 1931, Vasily Leontiev moved to America and became an employee of Wesley Mitchell, director of the National Bureau of Economic Research. Subsequently, he passed the test and became a teacher at Harvard and New York Universities, the founder and head of the American Institute for Economic Analysis, and was a UN consultant.
In 1932, Leontiev married an American citizen and the following year he himself received US citizenship.
After the outbreak of World War II, he worked as an economic planning consultant for the US Air Force. Under his leadership, an input-output matrix was built for the German economy. The matrix served as the basis for selecting Air Force targets.
1954 - President of the Econometric Society.
1970 - President of the American Economic Association.
Doctor honoris causa of Brussels (1961), Paris (1972) and Leningrad (1990) universities. Officer of the Order of the Legion of Honor (France, 1968), awarded the Order of the Rising Sun (Japan, 1984) and Arts and Letters (France, 1985). Winner of the B. Harms Prize (1970) and the Nobel Prize (1973) "for the development of the input-output method and its application to important economic problems." Since 2005, the Vasily Leontiev Server has been operating.
Wife (since 1932) - Estelle (Estella) Marx ( Estelle Marks, 1908-2005), poetess, author of the most complete biography of the Leontiev family "Genya and Vasily" ( Zephyr Press, Sommerville, Massachusetts, 1987). Daughter - Svetlana Alpers (born 1936), a well-known art historian, professor at the University of Berkeley (California).
Scientific achievements
Leontiev developed input-output analysis, for which he received the Nobel Prize in 1973. A series named after Leontiev economic phenomena- for example, the Leontief model and the Leontief paradox.
