Tribute to Leontief
Wassily Leontief, father of input-output analysis, died early in 1999. Below appears a short piece by journalist Dan Ford, formerly one of Leontief's students.
See also:
Short Autobiography of Leontief
Material about Johansen or Stone.
The Mozart of Economics
Wassily Leontief stretched his right arm toward the other side of the huge conference table in the Kremlin. Looking like a conductor trying to get the attention of a prima donna, he pointed directly at Soviet Prime Minister Nicolai Ryzhkov. "You have a problem," Leontief declared, speaking in blunt, slightly old-fashioned Russian. The meeting with Soviet leaders, in October 1988, had been organized by the financier George Soros to help advise the Soviets on economic reform. After hours of measured, technocratic discussion of alternative plans, Leontief -- a born showman, who knew how to make an entrance -- finally spoke. "When I have my apartment in New York repainted and fixed up, Imove into a hotel across the street, so it won't bother me," he said. "You need to fix up your whole economy -- but you have no place to go."
Sidestepping the complex policy alternatives outlined by Soros and others, Leontief proposed that the Soviet government focus on one immediate action: to use revenues from Soviet oil exports to import high quality Western consumer goods. Reform would be a long, miserable process, he noted, counseling, "You need to show the people at the outset that the reform process is for them -- or they will be at your throat."
Leontief knew, first hand, the tragedy of the seventy years of Soviet economic rule engineered by the leaders who had sat in the same cabinet room where we were meeting. Born in St. Petersburg in 1905, he had heard the gunfire of the Russian civil war when he was a child, seen Lenin speak, and, as a university student, had been repeatedly arrested for anti-communist activities. In a jail cell, he had stood on top of his bed so he could get close enough to the single light bulb to read, he told me during one of many interviews, over the years, for this magazine; he described his middle-of-the-night debates with his jailers, however, as among the most interesting in his life. "At this time they were intellectuals, you see." The communists were also, ultimately, after his life, and thanks to a Russian surgeon, who called a benign growth on his jaw cancerous, Leontief was allowed to go to Germany, in 1925, for treatment. He stayed abroad, and after earning a doctorate at the University of Berlin in economics, he went to China as an adviser to the government railroad ministry. A stint at the National Bureau of Economic Research in New York then led to an invitation to Harvard, in 1932, where he began research on an "input-output" model of the American economy as well as his married life with the poet Estelle Marks.
Leontief's input-output system, his most profound contribution to modern economics, took the form of an enormous table of numbers -- what is now called a spreadsheet. It was the first database ever constructed that showed how the various segments of a complex economy connected with each other. The mathematical system behind it was simple but painstakingly detailed: input-output calculations permitted forecasting of how changes in, say, consumer spending on automobiles would affect not just the automobile industry but all of the suppliers to the automobile industry, all those suppliers' suppliers, and so on. His input-output model could measure, in effect, each set of ripples when a new stone was thrown into the sea of ongoing economic activity. Funded by foundation and government grants, Leontief and squadrons of research assistants -- who were the first to use computers for economic research -- refined the input-output approach during and after World War II. Government economic planning departments throughout the world began organizing input-output models of their economies, and Leontief would often arrive at his weekly lectures at Harvard (and later at N.Y.U.) with a suitcase, coming or going to one of the many economic-planning agencies, such as Japan's, that regularly sought his advice. He was not an entrepreneurial professor-consultant, in the current mode, "leveraging" a university appointment into a lucrative adviser-for-hire business. As he said once, when I was giving him a ride after class to the airport, he enjoyed being an ambassador for economic common sense, his main demand being a first-class plane ticket -- which he would then trade in for economy seats for himself and his wife. Leontief was awarded the Nobel Memorial Prize in Economic Science, in 1973.
"I am not a political economist, in the sense of wanting to give policy advice," Leontief insisted. His focus, instead, was on building the tools -- and assembling the data -- for carrying out precise economic analyses. To his way of thinking, many academic economists simply missed the boat -- a point that he made, often scathingly, as in his Presidential address to the American Economic Society, in 1970, that accused the profession of playing mathematical parlor games instead of tackling real-world economic problems. Economists had to dirty their hands in data-collecting if they were to find out how economic systems actually worked, he argued, rather than build ever more subtle theories. Leontief had shown, for example, in a 1953 paper on foreign trade, that American exports tended to be goods that required a relatively high amount of labor to produce, a decided paradox since conventional economic theory said because of high American labor costs the country should be importing such goods. The profession gave him its highest praise for this type of short paper - treating it as required reading for graduate students and treating him as the Mozart of economics, capable of turning out such elegant little pieces in addition to his larger works. Nevertheless, mainstream economists did generally not flatter him by imitation: they kept playing the leaden economic symphonies of the past rather than writing new tunes of their own based on fresh data.
If the profession was slow to adopt Leontief's roll-up-your-sleeves model of empirical research, political leaders have been no quicker to take up his practical advice. Leontief, I noted when I was a student of his in the 60's, used a wrist watch with a built-in alarm, automatically setting it to 10 minutes every time a visitor entered his office. That would give him time enough to answer questions from government representatives, he told me, and time enough for them to reply, "But is that politically feasible?" He was relieved to be able to end these pro forma consultationswhen the buzzer went off. "Oh!" he could say, with apparent surprise. "I'm sorry, but our time is up."
Leontief had no illusions as the Soros delegation left the Kremlin, ten years ago, that the Soviet government -- any more than Western ones -- was going to act wisely to face up to the complex challenge of reform. It was an interesting exercise for him, nevertheless -- one of many in his long career -- to work toward that end. He handed me the pencil, marked "Kremlin" in Russian, that he had used to take notes. "Keep it," he said. "You don't get one of these very often." Wassily Leontief died last week, in New York, at the age of 93.
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