Two papers about Wassily Leontief

Cleaning out the closet

Early in graduate school, I wrote two term papers about the economist Wassily Leontief, most famous (to the extent that he is famous at all) for inventing input-output economics. I-O was basically about creating double-entry matrices showing how the outputs of one sector become the inputs of another sector. Using matrix algebra, you can then solve problems such as: How many tons of steel will we need to build this many tanks and this many refrigerators and this many machine tools? And what goes into the steel itself? And which sectors will need the machine tools?

The first paper was about the global history of I-O, with an international conference as the focus. Part of what was interesting about I-O to contemporaries, and to me as a historian, was that it was presented as a tool that could be used in capitalist, socialist, or mixed economies (Leontief was born in Russia and cited early Soviet planning debates as an important influence on his work, though ironically Stalinism meant that Leontief’s techniques were off limits to Soviet economists for several decades).

The second paper was about Leontief’s experience with American politics, particularly the history of national economic planning in the 1930s and 1970s crises and in the (relatively) stable period in between. The main lesson I took was the intensity of business opposition to planning (which was intense enough that Eisenhower’s business dominated Defense Department ended U.S. government funding for I-O; for awhile in the 1950s the U.S. was one of the few countries in the world without a public I-O program, despite the technique having been invented by U.S. government funded research). In the 1970s, many (including Leontief) expected that business would end up demanding central planning, and some powerful business figures did briefly ally with Leontief and certain labor unions to form the Initiative Committee on National Economic Planning. But this sort of corporatism failed to launch, and has been nearly forgotten. Despite these failures, the experience shows, minimally, that there is a planning tradition in the United States, and that the history of the “Keynesian era” of the 1940s to the 1970s cannot actually be understood solely in terms of Keynesian aggregative macroeconomics. If you make it to the end of the paper, you’ll see it’s actually a prehistory of supply-side liberalism.

When I wrote the papers (around 2016), there did not seem to be much interested in Leontief or input-output. Today, there are at least a few hundred people interested in this stuff, presumably because of its obvious relevance to the revival of industrial policy and investment planning (for one example, consider the work of Isabella Weber, who has become perhaps the most important economist working today). On the chance that a subset of these people are interested in Leontief’s intellectual background and political experiences, I’m posting here the two papers. Obviously, this is student work written years back; I won’t be offended if no one clicks on the links; I would love nothing more than for these to become completely outmoded by a new Leontief biography. But in my life I’ve benefited a lot from random PDFs hosted on people’s websites, so perhaps this will pay back a small part of that debt. If you use them, I would appreciate a citation but otherwise do as you wish. If I said something dumb, feel free to tell me politely in the comments.