Leonid Kantorovich
(1912 - 1986)
Leonid Vitalyevich Kantorovich was born on January
19, 1912, in Petersburg, Russia.
He was educated at Leningrad State University. At the age of 18 (1930),
Kantorovich received his Ph.D. in mathematics. From 1934 to 1960, he
was a professor in Leningrad. From 1961 to 1971, he headed the department
of mathematics and economics in the Siberian branch of the U.S.S.R Academy
of Sciences, and from 1971 until 1976, Kantorovich worked at the Moscow’s
Institute of National Economic Planning where he headed the research
laboratory.
Kantorovich was a Soviet mathematician and economist,
who worked for the government. He was given the task of optimizing production
in a plywood industry in the Soviet’s Laboratory of the Plywood
Trust. Kantorovich determined that the problem of distributing raw materials
was that one had to consider many limitations in order to maximize a
linear function of distribution. He came up with the mathematical technique
known as linear programming (1939), to be used in economic planning.
In his book The Mathematical Method of Production Planning and Organization,
Kantorovich illustrates that all problems of economic distribution can
be understood as maximizing a function dependent on limitations.
In his most successful book, The Best Uses of Economic
Resources, Kantorovich shows that every economy had to be concerned
with using prices to control distribution of goods and material resources.
In 1964, Kantorovich was selected to membership of
Academy of Sciences of the Soviet Union. The following year, he was
awarded the Lenin Prize. Kantorovich was awarded the Nobel
Prize in 1975, along with Tjalling Koopmans, for their development
of the “theory of optimal allocation of resources.”
Leonid Kantorovich died on April 7, 1986, in Moscow,
Russia, at the age of 74.
The following press release
from the Royal Swedish Academy of Sciences
describes Kantorovich’s work:
Optimum Allocation of Resources
Leonid Kantorovich and Tjalling Koopmans have both done their most
important scientific work in the field of normative economic theory,
i.e., the theory of the optimum allocation of resources. As the starting
point of their work in this field, both have studied the problem - fundamental
to all economic activity - of how available productive resources can
be used to the greatest advantage in the production of goods and services.
This field embraces such questions as what goods should be produced,
what methods of production should be used and how much of current production
should be consumed, and how much reserved to create new resources for
future production and consumption.
Improved Economic Planning
As they have formulated the problems and described the connection
between production results and productive inputs in new ways, these
two scholars have been able to achieve highly significant results. Early
in his research, Professor Kantorovich applied the analytical technique
of linear programming to demonstrate how economic planning in his country
could be improved. Professor Koopmans, for his part, has shown for instance
that on the basis of certain efficiency criteria, it is possible directly
to make important deductions concerning optimum price systems.
Leading Soviet Economist
Professor Kantorovich is today the leading representative of the
mathematics school in Soviet economic research. He made his first contributions
in the field of economic research as early as 1939 when he wrote an
essay on the meaning and significance of an efficient use of resources
in individual enterprises. In a number of publications, one being his
book, The Best Use of Economic Resources, Professor Kantorovich has
analyzed similar efficiency conditions for an economy as a whole, and
there, particularly demonstrated the connection between the allocation
of resources and the price system, both at a certain point in time and
in a growing economy. An important element in this analysis was to show
how the possibility of decentralizing decisions in a planned economy
is dependent on the existence of a rational price system, including
a uniform accounting interest rate to form a foundation for investment
decision.
Activity Analysis
Professor Koopmans has in a series of works, primarily, Analysis
of Production as an Efficient Combination of Activities, developed the
so-called activity analysis. Within this theory, new ways of interpreting
the relationship between inputs and outputs of a production process
are used to clarify the correspondence between efficiency in production
and the existence of a system of calculation prices. This shed a new
and interesting light on the connection between the normative allocation
theory and the general equilibrium theory. During the sixties, Professor
Koopmans studied the problem of finding criteria for an optimum growth
rate for an economy. In this work, he has paid particular attention
to factors which, in a more fundamental sense, determine the value individuals
and society place on comsumption at different times - such as population
growth and technological advance. In addition to the contributions he
has made to the normative theory of allocation of resources, Professor
Koopmans has done distinguished work in the field of econometric methods.
To sum up, Professor Leonid Kantorovich and Tjalling Koopmans, largely
independent of one another, have renewed, generalized, and developed
methods for the analysis of the classical problem of economics as regards
the optimum allocation of scarce resources.
Sources:
Wikipedia;
"Leonid Vitalyevich Kantorovich Autobiography"; The
Concise Encyclopedia of Economics; Press
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