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date: 03 July 2022

Marschak, Jacobfree

(23 July 1898–27 July 1977)

Marschak, Jacobfree

(23 July 1898–27 July 1977)
  • Robert W. Dimand
  •  and Harald Hagemann

Marschak, Jacob (23 July 1898–27 July 1977), economist (given name Jakob until 1933), was born in Kyiv, Ukraine, the son of Israil Abramovich Marschak, a Jewish jeweler, and Sophie, née Khailowsky, a homemaker. He attended (but did not graduate from) the Technological Institute of Kyiv where he studied with the mathematical statistician and economist Eugen Slutsky. Marschak was briefly imprisoned in December 1916, while still a teenager, as a Menshevik student activist in Tsarist Russia. Upon his release in early 1917, he became minister of labor in the short-lived Cossack–Menshevik republic of Terek in the northern Caucasus.

Marschak emigrated to Germany in 1919 to study economics, first with Ladislaus von Bortkiewicz at the University of Berlin and then with Emil Lederer and Alfred Weber at the University of Heidelberg. Marschak earned his doctorate at Heidelberg in 1922 with a dissertation on the equation of exchange in the quantity theory of money, supervised by Lederer. Marschak and Lederer wrote in the Grundriss der Sozialökonomik (Foundations of Social Economics) in 1926 about white-collar workers (der Angestellten und Beamten) whose social position was in the middle class but whose economic position was in the working class. The following year he married Marianne Kamnitzer, a psychologist (Ph.D., University of Frankfurt); they had two children, Ann in 1928 and Thomas in 1930. In 1928 Marschak joined the Department of Business Cycles at the Kiel Institute for World Economics, led by Adolf Lowe, and he became a privatdocent (senior lecturer) at the University of Heidelberg in 1930. He wrote a habilitation thesis on the econometric estimation of the elasticity of demand.

In April 1933 Marschak was dismissed by the Nazis and forced to emigrate a second time. After a visiting appointment at the University of Santander in Spain, Marschak went to All Souls College, Oxford, in 1933 as Chichele Lecturer in Statistics, soon becoming Reader in Statistics and the founding director of the Oxford University Institute of Statistics. With a one-year Rockefeller Foundation fellowship he moved to the United States in December 1938. There he was appointed economics professor at the “University in Exile,” the Graduate Faculty of the New School for Social Research, after the outbreak of World War II. From 1940 to 1942 Marschak and Oskar Lange conducted a National Bureau of Economic Research seminar on econometrics in New York.

At the beginning of 1943 Marschak moved to the University of Chicago as professor of economics and, until 1948, as research director of the Cowles Commission for Research in Economics, a center devoted to the advancement of formal mathematical and statistical methods in economics that was affiliated with the Econometric Society (of which Marschak was president in 1946, succeeding John Maynard Keynes). Marschak and his successor as Cowles director, future Nobel laureate Tjalling Koopmans, made the Cowles Commission the leading center of econometrics and mathematical economics, supporting crucial work by future Nobel laureates Kenneth Arrow, Gerard Debreu, Leonid Hurwicz, Trygve Haavelmo, Lawrence Klein, and Harry Markowitz.

Marschak made major contributions to Cowles monographs edited by Koopmans that established simultaneous-equations econometric modelling. He wrote the first graduate-level textbook of Keynesian macroeconomics, Income, Employment and the Price Level (1951). In addition to his own writings, Marschak was influential as doctoral supervisor of future Nobel laureates Hurwicz, Markowitz, and, at the New School, Franco Modigliani, as well as of monetary theorist Don Patinkin.

At the University of Chicago the Cowles Commission’s general equilibrium approach to economic theory and econometric approach to data analysis brought it into conflict, within the university’s economics department, with the emerging “Chicago school of economics” led by Milton Friedman. Friedman, with some justification, suspected the Cowles Commission of creating mathematical tools for Keynesian aggregate demand management and other forms of government intervention in the economy. Escalating frictions between the two groups led Marschak, Koopmans, and the Cowles Commission to leave the University of Chicago in 1955 for Yale University, where the Cowles Commission became the Cowles Foundation.

Marschak taught at Yale for five years before moving to the University of California at Los Angeles in 1960 as a professor of economics and operations research in the Graduate School of Management. He continued path-breaking research on information and decision-making in decentralized organization, leading to a Cowles monograph with Roy Radner, Economic Theory of Teams (1972). Marschak also published the three-volume work Economic Information, Decisions, and Prediction: Selected Essays (1974), edited by Koopmans. There Marschak upheld the axiomatic approach to rational choice theory under uncertainty against the criticisms of Maurice Allais, and, building on work he had published in the 1930s, pioneered the Cowles approach to the theory of money assets.

When he died of a heart attack in Los Angeles, Marschak was president-elect of the American Economic Association (which had honored him as Distinguished Fellow and Ely Lecturer ten years before) and had just finished organizing the annual conference program. Although he was commemorated within the discipline by the Econometric Society’s Jacob Marschak Lecture and by UCLA’s Jacob Marschak Colloquium in the Behavioral Sciences, the mathematical nature of Marschak’s writings and contributions made him less well known to the general public than other economists such as Friedman. Nonetheless, through his writings, his doctoral supervisions, and institution-building in the Cowles Commission and Econometric Society, Marschak did much to shape modern economics, bringing econometrics and mathematical economics from the periphery to the center of the discipline.

Bibliography

The Jacob Marschak Papers are housed at Department of Special Collections, Charles E. Young Research Library, University of California at Los Angeles. For more biographical information see Kenneth Arrow, “Jacob Marschak, 1898–1977,” National Academy of Sciences Biographical Memoirs, vol. 60, 1991Find it in your libraryGoogle PreviewWorldCat, ch. 9. For an oral history see Recollections of Kiev and the Northern Caucasus 1917–18 (1971). An obituary appeared in The New York Times, 28 July 1977.