MEMORANDUM

covering the entire economy. The commodities were dealt with in terms of supply and
demand curves, carried over from the Versuch and Eisenaufsatz papers, characterized by
“structure”, conceived as an (autonomous) elasticity, and “shifts” or “level movements”,
induced by changes in “neighboring” markets (or in later terminology by forward or
backward linkages). It is hardly correct to denote Leontief’s analytical structure in 1931 as
an early version of the input-output framework. Possibly it could be denoted as a precursor;
it is any case a significant indication of the direction in which he was heading. 174
Leontief had joined Econometric Society while still in Europe. In New York he joined
the American Economic Association (AEA) and at the end of December 1931 took part in
the joint meetings of the social science associations in Washington D.C. He registered as
an AEA member and in a letter to Schumpeter shortly afterwards he referred to the meeting,
perhaps with tongue-in-cheek, as a trade union congress [Gewerkschaftskongress]. It was
his first economist meeting in USA and he was positively impressed, not suppressing that it
would have been a better meeting if the poorer papers had been rejected. The joint
meetings comprised also an Econometric Society meeting, the first ever on American soil.
Irving Fisher, President of the Society, was present and had taken upon himself to write the
official report from the meeting.
Leontief had not submitted any paper but had accepted to open the discussion of two
papers in AEA sessions. One was by Ezekiel on the relationship between price analysis
and mathematical economics, the other by Henry Schultz “on shifting demand.” It was the
first meeting with Schultz for Leontief who had his sharp criticism of the Versuch paper
fresh in mind. Leontief had not heeded Schumpeter’s advice of responding to Schultz,
because the Kiel Institute leadership discouraged him. He reported to Schumpeter about
the meeting with Schultz that “I was most happy thoroughly to settle accounts with Schultz.
Now we have made eternal peace.” 175
He added a miniscule remark about how his work was going: “My work is like a
Hydra. In the place of one resolved problem, two new ones immediately emerge. But it is
fun.” He had also looked into the capital accounts of NBER and drawn the conclusion that
the capital funding had shrank to an extent that seemed to rule out any hope of extended
employment with NBER.
Leontief’s year at NBER became much affected by Harvard’s interest in him. During
the year with NBER he received from Harvard University an offer of a teaching position
from the next academic year, with prospects for a professorship, as discussed below. The
174 But notice the opening of the preface of Leontief (1941): “Preliminary research for this
investigation was concluded in 1931 while I was holding the position of Research Associate in the
National Bureau of Economic Research.”
175 Leontief to Schumpeter, 6 Jan. 1932.
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