MEMORANDUM

observations would be sufficiently different to allow identification. Leontief had enlisted
the help of a mathematician of Kiel University, Robert Schmidt, to work on the formulae to
be used in the estimation. Schmidt wrote an appendix to Leontief (1929) to set out the
mathematical derivation of the key formulae and later also published a separate paper,
Schmidt (1930).
Leontief’s method would then supposedly determine the two structurally invariant
elasticities but also the shifts of the supply and demand curves. From this information
various parameters could be calculated such as the average elasticity over a certain period,
etc. Leontief (1929) comprised a number of examples to demonstrate the feasibility of the
method and acknowledged that the method would only work under conditions that were not
always fulfilled.
No other paper made Leontief’s name internationally known so widely and quickly as
this paper. This was not least due to the efforts of Bernhard Harms, the publisher of
Weltwirtschaftliches Archiv, in distributing offprints together with a personal letter to a
large number of scholars in economics and statistics in several countries. The article itself
had an initial Vorbemerkung by Bernhard Harms, as follows:
“The current dissertation comprises an attempt at developing a new method for
statistical market analysis. A continuation of the statistical-methodological work
and the market analyses conducted by means of this method is intended. The
publication of this treatise, which still has a number of open problems, is due to our
wish to make the statistical method available for scientific discussion.” (Leontief
1929, p.1*, transl. by ob).
There is a discernible element of publisher’s pride in the programmatic announcement
of a “new method” but also a guarded allusion to “a number of open problems,” perhaps a
cautious admonition that had come from Leontief?
After completing the 50-page article, submitting it for approval by the Institute, and
undertaking the first round of proof reading it, Leontief left Kiel abruptly on a ship bound
for Shanghai months before the article was published. The further proofreading was taken
care of by one of his Astwik colleagues, Gerhard Meyer, who served as the relay between
Leontief and the Institute during his absence.
The Chinese interlude
In 1929 there was thus an odd interlude in Leontief’s career as he interrupted his work
at the Kiel Institute to spend most of a year in China. It is merely a parenthesis in
Leontief’s scholarly career. But it was a detour he obviously appreciated, after being a
hardworking student for so many years. It gave him a glimpse of the orient, and, more
important, an opportunity to practice as an economic advisor in the field. Many of
Leontief’s students and friends would have heard him tell about his Chinese adventure.
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