- Person
- Leonid Kantorovich
- Lived
- 1912–1986
- Field
- Mathematical economics
- From
- Soviet
The story
By the end of the 1930s Leonid Kantorovich, a mathematics professor in Leningrad, had shown that many practical production problems could be solved by a new method, later called linear programming. He wanted to go further, applying the same ideas not just to single factories but to whole industries, regions and the national economy, and to the structure of economic indicators such as prices.
The Second World War interrupted his research. Drafted into the armed forces with the rank of major, Kantorovich taught at military engineering schools, including one evacuated from Leningrad to Yaroslavl. Even so, he found time to write the first version of a major book on economics in 1942. It could not be published for many years. Only in the mid-1950s, when interest in improving economic management in the Soviet Union grew and conditions for using mathematical methods became more favourable, did he prepare it for print.
The Best Use of Economic Resources finally appeared in 1959. It applied optimisation to central questions of economics, including planning, pricing, the valuation of rent, the efficiency of investment and the decentralisation of decisions. Kantorovich also proposed a theory of the economics of technological innovation, which weighed the effect on producers, the effect on consumers and the growth in economic potential that an innovation creates.
The Royal Swedish Academy of Sciences later highlighted the book when it awarded him the Nobel Memorial Prize. It noted that he had shown how the allocation of resources across a whole economy is connected to the price system, both at a given moment and in a growing economy, and that decisions in a planned economy can only be decentralised if there is a rational price system, including a uniform accounting interest rate to guide investment.
Some Soviet economists greeted the methods warily, but a special conference on mathematical methods in economics, held by the Academy of Sciences, approved the new direction. Through contacts with Western scholars, and at Tjalling Koopmans's initiative, Kantorovich's 1939 booklet was published in English in the journal Management Science, and the 1959 book was translated as well. The book helped make prices, understood as signals of scarcity, a central tool of rational planning.
Why it matters
By showing how prices carry vital information about scarcity, Kantorovich helped economists everywhere understand how to use resources efficiently.
About Leonid Kantorovich
Leningrad mathematician who invented linear programming in 1939 while solving a plywood factory’s puzzle, and the only Soviet economist to win the Nobel Prize, in 1975.
More about Leonid Kantorovich
- Leonid Kantorovich pioneered parallel computing ideasIn the late 1940s Leonid Kantorovich organised parallel calculations on punched-card machines and proposed computer designs based on large-block processing.
- Leonid Kantorovich linked pure maths to practical computingLeonid Kantorovich's paper Functional Analysis and Applied Mathematics showed how abstract mathematics could power numerical methods, earning a State Prize in 1949.
- Leonid Kantorovich reshaped the mathematics of transportLeonid Kantorovich's work on the transportation problem gave mathematics the Monge-Kantorovich problem and the Kantorovich-Rubinstein metric.
- Leonid Kantorovich invented linear programming in 1939Asked in 1938 to help a Leningrad plywood trust get more from its machines, Leonid Kantorovich devised the method now known as linear programming.
- Leonid Kantorovich's methods cut waste in steel sheetsFrom 1948 to 1950, work guided by Leonid Kantorovich at the Leningrad Carriage-Building Works used linear programming to cut steel sheets with less waste.
- Leonid Kantorovich trained a new kind of economistIn Novosibirsk from 1960, Leonid Kantorovich built a laboratory and school that trained a generation of mathematician-economists.
- Leonid Kantorovich kept the Road of Life trucks on the iceDuring the Siege of Leningrad, Leonid Kantorovich calculated safe spacing for supply trucks crossing frozen Lake Ladoga on the Road of Life.
Sources
- Leonid Vitaliyevich Kantorovich: Biographical NobelPrize.org
- Leonid Vital'evich Kantorovich MacTutor, University of St Andrews
- Leonid Kantorovich Jewish Virtual Library
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