Since I shall be indicating my disagreement with some of the points made by Professor Israel Kirzner, let me stress that I am in complete sympathy wi… - Leonid Hurwicz

My work in this area started around 1950 when I was still with the . I was writing a more or less expository paper dealing with activity analysis…and happened to use the term “decentralization,” which was then often applied to the market mechanism as a sort of a selling point. But when I used the word “decentralization” I thought I should explain what I meant. So I made a footnote mark, went to the bottom of the page, and began writing, “By decentralization we mean…” But then it struck me that I did not know what we meant by decentralization. That was the beginning of many years of work trying to clarify the concept, because I thought that if we think this property is so important, we should be able to define what it is.

Traditionally, economic analysis treats the economic system as one of the givens. The term "design" in the title is meant to stress that the structure of the economic system is to be regarded as an unknown. An unknown in what problem? Typically that of finding a system that would be, in a sense to be specified, superior to the existing one. The idea of searching for a better system is at least as ancient as Plato’s Republic, but it is only recently that tools have become available for a systematic, analytical approach to such search procedures. This new approach refuses to accept the institutional status quo of a particular time and place as the only legitimate object of interest and yet recognizes constraints that disqualify naive Utopias.

Had it merely called to our attention the existence and exact nature of certain fundamental gaps in economic theory, the Theory of Economic Behavior by von Neumann and Morgenstern would have been a book of outstanding importance. But it does more than that. It is essentially constructive: where existing theory is considered to be inadequate, the authors put in its place a highly novel analytical apparatus designed to cope with the problem. It would be doing the authors an injustice to say that theirs is a contribution to economics only. The scope of the book is much broader. The techniques applied by the authors in tackling economic problems are of sufficient generality to be valid in political science, sociology, or even military strategy. The applicability to games proper (chess and poker) is obvious from the title. Moreover, the book is of considerable interest from a purely mathematical point of view.