ABSTRACT OF PAPER
Title: Von Neumann and the formalist turn in economics
Author: sandye palermo
This paper deals with the scope and method of John von Neumann in economics with a special emphasis on his 1937 growth model. This model received contrasting interpretations, commentators insisting either on its classical or its neoclassical inspiration: on the one hand, supporters of a classical interpretation used to emphasise von Neumann’s assumptions that they thought were representative of the heterodox stream. For instance, Kaldor founded his position by insisting upon the assumption of infinite expansion of primary factors and Pasinetti stressed the circular aspect of the production process of the model; on the other hand, neo-classical supporters used to argue on the base of more technical demonstrations, trying to embedded von Neumann’s model in general Neo-classical scheme. That was the work of Morgenstern and Thompson, Morishima, Gale and Kemeny among others. Our objective here is to show that this debate missed the real issue at stake. Instead, we will argue that von Neumann’s growth model was first of all an attempt to extend Hilbert’s formalist program within the realm of economics and thus the question to know whether von Neumann was classical or neo-classical appears no more relevant. The original title of the 37 paper was more explicit: “On certain Equations of Economics and a Generalisation of Brouwer Fix-Point Theorem”. Von Neumann was first formed as a mathematician. He soon met Hilbert during his scholarship and got deeply influenced by the formalist program. Von Neumann became the official representing of Hilbert’s program during the twenties and the main objective of Hilbert’s program consisted in the extension of the metatheoretical method outside the field of mathematics proper. Physics was the first target, economics we will argue, the second.
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