Tjalling Koopmans Quotes

If evolutionary selection is the basis for a belief in profit maximization, 'then we should postulate that basis itself and not the profit maximization which it implies in certain circumstances.

Decisions and plans made by others... [can be judged to be] quantitatively at least as important as the primary uncertainty arising from random acts of nature and unpredictable changes in consumers' preferences.

The solution of important problems may be delayed because the requisite tools are not perceived. Or the availability of certain tools may lead to an awareness of problems, important or not, that can be solved with their help.

Optimizing responses of economic agents are simultaneously feasible only if the proper prices are already known to them. But these prices must somehow themselves be the result of the same responses.

It is worth pointing out that in this particular study our authors have abandoned demand and supply functions as a tool for analysis, even as applied to individuals... [The problem] has been reformulated as one of proving that a number of maximizations of individual goals under interdependent restraints can be simultaneously carried out.

The principal customers aimed for are other economists or members of other professions, who are somewhat closer to the making of policy recommendations... The question of the clientèle is even more baffling when the problem concerns growth paths for time spans covering several generations. What can at best be recommended in that case is the signal the present generation gives, the tradition it seeks to strengthen or establish, for succeeding generations to take off from.

Without recognising indivisibilities — in human person, in residences, plants, equipment, and in transportation — location patterns, down to those of the smallest village, cannot be understood

According to a frequently cited definition, economics is the study of “best use of scarce resources.” The definition is incomplete. “Second best” use of resources, and outright wasteful uses, have equal claim to attention. They are the other side of the coin.

One is led to conclude that economics as a scientific discipline is still somewhat hanging in the air.

We look upon economic theory as a sequence of conceptual models that seek to express in simplified form different aspects of an always more complicated reality.

… a rather different class of applications of the idea of best allocation of scarce resources... usually referred to as the theory of optimal economic growth. In most studies of this kind made in the countries with market economies there is not an identifiable client to whom the findings are submitted as policy recommendations. Nor is there an obvious choice of objective function, such as cost minimization or profit maximization in the studies addressed to individual enterprises. The field has more of a speculative character. The models studied usually contain only a few highly aggregated variables. One considers alternative objective functions that incorporate or emphasize various strands of ethical, political, or social thought. These objectives are then tried out to see what future paths of the economy they imply under equally simplified assumptions of technology or resource availability.

Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.

The early thirties brought what liberal economists called the Great Depression and Marxist economists described as the great crisis of capitalism. It dawned on me that the economic world order was unreliable, unstable, and, most of all, iniquitous. I sought intellectual contacts and friendship with a group of socialist students and also with a small handful of communist-oriented students and unemployed workers.

While it was long possible and sometimes tempting for physicists to deny the usefulness of the molecular hypothesis, we economists have the good luck of being some of the ‘molecules’ of economic life ourselves, and of having the possibility through human contacts to study the behavior of other ‘molecules’.

One can in particular interpret the proposition as a statement conditions under which the simplicity of incentive structure and the economies of information handling characteristic of a competitive market organization can be secured without loss of efficiency of allocation... The price system carries to each producer, resource holder, or consumer a summary of information about the production possibilities, resource availabilities and preferences of all other decision makers. Under the conditions postulated, this summary is all that is needed to keep all decision makers reconciled with a Pareto optimal state once it has been established.