Wassily W. Leontief was born on 5 August 1905 in Munich, where his father, also named Wassily W. Leontief, at the time was completing a doctorate in political economy.

Leontief was born into a merchant family established in St Petersburg since before 1750 (Kaliadina and Pavlova 2006). Leontief’s mother, born Zlata Bekker, was from Odessa and of Jewish extraction, renamed Evgeniia after conversion to the Orthodox faith in 1906.

Wassily Leontief is best known as the originator of input-output analysis, which, although rooted in his interwar work, he introduced around 1950 as “a method of analysis that takes advantage of the relative stable pattern of the flow of goods and services... to bring a much more detailed statistical picture of the system into the range of manipulation by economic theory” (Leontief 1986: 4). In 1986 he defined it more briefly and generally as “a method of systematically quantifying the mutual interrelationships among the various sectors of a complex economic system” (Leontief 1986: 19). The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1973 was awarded to Wassily Leontief “for the development of the input-output method and for its application to important economic problems”. The applications of Leontief’s invention have been very many and increasingly diversified. Leontief was a very gifted theoretical and mathematical economist whose interests and contributions covered a wide range of topics. Before proceeding with his scholarly contributions we sketch his path through life.

Wassily Leontief grew up in St Petersburg (from 1914 Petrograd). He entered Petrograd State University in 1921 and studied, according to his own account, philosophy, sociology and finally economics, receiving the degree Learned Economist in 1924. He also acquired considerable mathematical expertise. Leontief excelled in his studies and his talent for research was recognized. He was singled out for retention at the university with the following recommendation from one of his teachers: “In his work, Leontief revealed excellent research capacities in the field of political economy, good capacities in the field of economics work, good knowledge in the literature in theoretical economics, a subtle understanding of the basics of economic Marxism, and great assiduity in and love of science”.

(For further details of his studies, see Kaliadina 2006; Kaliadina and Pavlova 2006.) At the university Leontief completed an essay entitled “Laws in the social sciences - the experience of abstract-logical analysis”, accepted for journal publication but censored before it could be published.

Leontief’s study period in Petrograd was interrupted twice by often recounted incidents. After putting up posters protesting against the suspension of teachers from the university in 1922, Leontief and fellow students were arrested and interrogated by the Cheka. The other incident was a cancer diagnosis in 1923, a sarcoma in the jaw, resulting in surgery. Leontief in retrospect surmised that the bleak prospects for a recovery from the cancer might have been the major reason for the issuance to him of passport and permission to leave the country at the beginning of 1925. At that time he was listed for work at the university (which had become Leningrad State University) and simultaneously at a research institute in Moscow. However, Leontief left the Soviet Union in March 1925 and applied for permanent residency in Germany. He settled down in Berlin to study.

At the University of Berlin he was a doctoral student with Walter Sombart and later,

and more importantly, with Ladislaus von Bortkiewicz. The doctoral degree was conferred in 1928 for a dissertation submitted in 1927 (Leontief 1991). After Berlin, Leontief was a staff member of the Institute for World Economy in Kiel 1927-30 in a research group comprising Adolph Lowe, Hans Neisser and others. Leontief was engaged in research on a new method for the determination of supply and demand curves (Leontief 1929). At this point a curious interlude took place in Leontief’s life, an accidental meeting with a Chinese delegation led to an invitation to advise on railway trajectories in China. Leontief spent most of a year in China in 1929-30.

Leontief moved to the United States in 1931 as he won a one year fellowship as research associate at National Bureau of Economic Research (NBER) in New York City.

Simon Kuznets, who was on the research staff of NBER, and Mordecai Ezekiel were helpful in advising Leontief on how to get the fellowship. After having given a lecture in Harvard’s Economic Seminar Leontief was offered a position as instructor in 1932/33 and then in succession became Assistant Professor (1933), Associate Professor (1939) and Professor in Economics (1946). Joseph Schumpeter had played a role in easing Leontief’s entry into Harvard. Leontief established the Harvard Economic Research Project in 1948 with the Rockefeller Foundation and US Air Force as sponsors. He left Harvard in 1975 and became head of the Institute for Economic Analysis at New York University from which he retired at a very great age.

In his 1928 dissertation Leontief set out “a general scheme of the circular flow of an economy”, that is a representation of the economy as a reproductive process of causal relationships leading to a system of economic interrelationships represented as “a long path describing a wide circle and ending up again at its starting point” (Leontief 1991: 181). The stationary system of production of commodities by means of commodities included, naturally, prices accompanying the commodity flows. The largely verbal presentation, also discussing how shocks would reverberate through the system, was enhanced by formulae for increased precision and illuminated by ingenious graphs. Key concepts were coefficients characterizing the input structure as well as the output distribution. The dissertation also dealt with the treatment of capital within the system, dealing critically with the capital concept of contemporary authors. The dissertation had no empirical part but a stated intention of extending the scheme to empirical analysis: “The object of our analysis has not been the economic process itself, but rather a model of a system of economic flows. Our next task is to undertake the transition from this general scheme to empirical facts” (Leontief 1991: 198).

From a history perspective, Leontief’s 1928 scheme has classical roots as argued convincingly by Kurz and Salvadori (1995, 2000), going back to Franςois Quesnay and the Tableau economique or even further back to Petty and Cantillon.

Kurz and Salvatori (2000) point out similarities between Leontief’s work and that of Achille-Nicolas Isnard and survey other authors within the same classical vein, such as Karl Marx, V.K. Dmitriev and G. von Charasoff. Leontief’s work had similarities with contemporary work by Piero Sraffa (see Kurz and Salvadori 2006).

Leontief’s invention and development of input-output analysis took place after his arrival in America. It has often been interpreted as more or less directly related to the 1928 dissertation but can also be viewed as his current research concerns. In retrospect Leontief gave somewhat different clues about the historical roots of his input-output analysis. In 1965 he wrote that input-output analysis was “an adaptation of the neo-classical theory of general equilibrium to the empirical study of the quantitative interdependence between interrelated economic activities” (Leontief 1966: 134). Similar statements emphasizing the Walrasian roots made this the commonly accepted view. However, he also asserted in places that input-output analysis was “a practical extension of the classical theory of general interdependence which view the whole economy... as a single system and sets out to describe and to interpret its operation in terms of directly observable basic structural relationships” (Leontief 2008). Both views can be given a rationale.

Already at the NBER in 1931/32 Leontief conducted theoretical and empirical studies of the US industrial economy. This continued at Harvard where he got research assistance grants for using the Census of Manufactures and other data for 1919 and 1929 for constructing input-output tables, an idea apparently regarded with great scepticism. The outcome was a pair of articles (Leontief 1936, 1937), commonly regarded as the cornerstones of input-output analysis. Compared with Walras’s vision of a determinate general equilibrium system, the input-output system launched by Leontief was a simplification but with a shift in emphasis by putting the inter-industrial transactions at the centre, and above all a vitalization of a theoretical conception idea by filling in numbers based on direct observations.

The outcome was the input-output analysis.

Leontief’s development of input-output analysis, from the very first steps until it had matured into a new sub-discipline of economics, falls naturally into two phases. The first phase, which was completed with Leontief (1941), displayed what in the input-output terminology became known as a “closed input-output model” where the demand side was taken as given and the use of the operationalized equilibrium system was fairly limited. This phase showed however the viability of Leontief’s visionary idea as long as it could be supported by computational capacity. Leontief’s early work comprised by far the most comprehensive computations in the history of economic analysis. However, there were recognized shortcomings, such as large amounts of unspecified inputs, unsatisfactory treatment of saving and investment, and others in addition to the non-existence so far of adequate computers.

At the beginning of World War II the US Bureau of Labor Statistics (BLS) had been assigned the task of preparing for the post-war situation. Attention was paid to Leontief’s work and the input-output approach was found highly suitable for the task. A close cooperation followed between Leontief and the BLS which prepared the 1939 input-output table and later a huge table for 1947 (see Kohli 2001). It also led to the slight, but very important, reformulation of the theoretical structure as an “open inputoutput model”, turning out to be an immensely versatile tool for a wide range of policy analyses, when supported by computer tools increasingly available after World War II.

The second phase was marked by a new edition of the 1941 monograph enhanced by four papers introducing the possibilities and potential of the open input-output model (Leontief 1951). From here it was straightforward to worldwide distribution of inputoutput analysis.

Leontief continued as a leader of input-output developments and new applications, in particular in the analysis of military expenditure, environmental analysis, world development issues, implications of demographic development, and automation.

In his early years Leontief had written and published penetrating studies on a number

of issues, see Dorfman (1973). A repeated theme was methodology. Leontief was sharply opposed to the increasing separation between theoretical and empirical economics and expressed this view most prominently in his presidential address to the American Economic Association in 1970 (Leontief 1971), much of which may be read as equally valid today. Leontief’s methodological views were expressed throughout his career. He criticized the “implicit theorizing” of the circuit around Keynes, favoured detailed “direct observation” as exemplified by the input-output tables, and the use of engineering information, rather than econometric analysis of aggregates he tended to be doubtful about. In the famous methodological controversy between the Cowles Commission and the NBER in the immediate post-war period, Leontief was a bystander whose methodological position clearly differed substantially from both sides. Leontief had triumphed on his use of the highly simplistic assumption of constant input coefficients, basically because it worked in practice, although many felt called upon to denigrate his achievement. The relationship between Leontief and the Cowles Commission under Koopmans soured. Leontief defended his position in characteristic and polemic style: “The very process of aggregation obscures the sharp outlines of the underlying structural relationships to such an extent that one is naturally forced to give up the simpler methods of direct induction and take recourse to ‘blind flying’ by the complicated but hardly foolproof instruments of indirect statistical inference” (Leontief 1951: 210).

We finally deal with an oddity in Leontief’s curriculum vitae. Leontief’s passport stated that he was born in 1906. After visiting Russia in the early 1990s Leontief let his associates know that a Russian scholar interested in the Leontief family history had unearthed documents showing that the correct birth year was 1905 (Duchin 1995: 267). A similar confusion arose about his birthplace. At the time of Leontief’s death, in 1999, obituaries and encyclopedia entries displayed all four possible combinations of birth year 1905/1906 and birthplace St Petersburg/Munich. The core of the confusion about his birth year was later found to be that when the Leontief family returned to St Petersburg from Munich in August 1906 their one-year-old child was baptized and registered - with or without the connivance of the authorities - as born only three weeks earlier. By this deception it would appear as if the conversion of Zlata Bakker to the Orthodox faith had taken place prior to the childbirth. The story that Leontief passed on is hardly convincing; most likely he knew throughout his life his correct birth year and birthplace and just wanted to put things right towards the end of his life. Leontief died in 1999. A remnant of this curious confusion remains, as his gravestone in Connecticut, next to that of Schumpeter, gives correct birth year but states incorrectly his birthplace as St Petersburg.

Olav Bjerkholt

Wassily W. Leontief was born on 5 August 1905 in Munich, where his father, also named Wassily W. Leontief, at the time was completing a doctorate in political economy.

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