Santa Monica, CA: The RAND Corporation, 1951. First edition.
The Prolegomena presents a framework within which to make descriptive analyses of centrally-directed organizations. It is extremely rare: in his 1998 reprint of this report, Michael D. Godfrey states that “the original report has long been unavailable and the only known remaining copy was Morgenstern’s personal copy.” There is no copy in OCLC.
“In the 1951 paper, ‘Prolegomena to a Theory of Organization,’ [Morgenstern] introduces Nature’s benevolence when discussing the signaling system of an organization. For a signaling system of an organization there is no distinction between event and signal: An event becomes only known through a signal, so for an organization they are inseparable. Morgenstern classified the events relevant to an organization into ‘events of the organization’ and ‘other events’ which are either ‘physical, i.e., produced by Nature’ or ‘other organizations choices.’ ‘Events of Nature’ are determinable if their probability distributions are known. But even if their probabilities cannot be estimated, Morgenstern emphasizes that ‘Nature is never malevolent, i.e., bent on impeding the organization in the pursuit of its aim’.” (qss.stanford.edu/~godfrey/Morgenstern/prolegom.pdf).
Oskar Morgenstern (1902-77) was groomed in the Austrian tradition, but was considerably less dogmatic in his tastes. Succeeding Hayek in 1931 as director of the Austrian Institute for Business Cycle research, Morgenstern’s research interests were not in the Hayekian monetary overinvestment theory, but rather in speculation and economic prediction (the subject of his 1928 habilitation thesis). A professor at the University of Vienna in 1935, Morgenstern was also an active participant in Karl Menger’s Vienna Colloquium and employed Abraham Wald in his institute. He was also one of the great critics of the Austrian theory of capital, helping to bury the notion of the “average period of production.”
His 1935 article on the difficulties of perfect foresight, which stemmed partly from his Austrian training, and the greater generality of “strategic behavior” over “Robinson-Crusoe” price-taking behavior, led the mathematician Edward Cech to put him in touch with John von Neumann’s 1928 article on game theory. After Morgenstern was dismissed by the Nazis in 1938, he moved on to Princeton, where he finally met von Neumann. Together, Morgenstern and John von Neumann wrote their famous treatise on the theory of games (1944), which not only launched game theory but also the theory of choice under uncertainty. Morgenstern provided much of the economic analysis in that book.
Large 4to (283 x 218 mm), offset typescript, ff. , 122, original printed wrappers.