January 2, 2011

Inversion as a good.

In the 1940's, Jerry Cornfield & Wassily Leontief invented econometrics. In one of their first studies on the "sectors" of the American economy, they used economic data to arrive at a 24 x 24 matrix that they then needed to invert. Inverting that 24 x 24 matrix by hand, would, they calculated, take several centuries.

Harvard University's IBM "Mark I" electro-mechanical computer, developed for the war effort, was in principle available to perform this calculation, but the work would have to be paid for, and Cornfield & Leontif's bosses at the Bureau of Labor Statistics refused to approve such an expenditure, because, according to policy, the government would pay for goods, but not for services – after all, so many experts were on the government payroll that they saw no need to pay for services.

In the end, the bureau issued a purchase order, for "one matrix, inverted" from Harvard.

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