PURPOSE

The Cowles Commission for Research in Economics has as its purpose the conduct and encouragement of research in economics, finance, commerce, industry, and technology, including problems of the organization of these activities, and of society in general. Its approach is to encourage and extend the use of logical, mathematical, and statistical methods of analysis. It seeks to accomplish its purpose through research and instruction, through publication, and through other programs directed toward increasing the human resources devoted to such research.

The Commission is a not-for-profit corporation, founded in Colorado in 1932 and, since 1939, chartered under the laws of the State of Illinois. Its governing bodies are its faculty, an executive committee, and a board of trustees. Although it is an independent research organization with members of its staff in other research centers both in the United States and abroad, the Commission is affiliated in academic matters with the University of Chicago as a component of the Division of the Social Sciences. The Commission is also affiliated with the Econometric Society, an international society for the advancement of economic theory in its relation to statistics and mathematics.

INTRODUCTION

The development of economics and of the social sciences generally has come about through the constant interaction of theory and measurement. Theory starts from observation. It draws up propositions that generalize scattered observations. It then proceeds to make logical deductions of the consequences of these propositions. In this way it guides the choice of phenomena for further measurement. On the other hand, measurement also provides the basis for refuting, modifying, or refining theory. The word "measurement" is here used in its broadest sense of systematic observation. It ranged from mere classification of objects, through the establishment of preferences between objects, to the construction of numerical scales and measures.

This interplay of theory and measurement is common to all sciences concerned with the real world. In the social sciences, and particularly in economics, both theory and measurement are further influenced by the idea that knowledge should be of help in better attaining the goals of society, of organizations, or of individuals. "Welfare economics" is the clearest expression of this idea, but the same thought influences the choice of subject matter for theory and measurement throughout economics.

The traditional borderline between economics and the social sciences is beginning to disappear, largely as a result of the increasing abstractness in the formulation of theories. What promises to evolve is a science of man's pursuit of desired individual or social objectives, of the interaction among diverse interests, and of outright conflict and warfare. In this development, persons trained as economists have a contribution to make because of their traditional concern with the maximization of individual or social welfare, and because of their skill in the logical and mathematical techniques of such analysis.

The Cowles Commission for Research in Economics is an organized group of scholars dedicated to research in economic theory and measurement. It seeks to make additions to fundamental knowledge about society, through theory construction, through measurement for the testing of theory, through development of methods of measurement, and through application of results in specific areas. Its research staff blends many different educational and cultural backgrounds and unites economists engaged in theoretical and empirical inquiries with statisticians and mathematicians into a balanced cooperative research effort. Through consultant relationships with research workers at various universities in North America and abroad and through a constant flow of research fellows and other guests who visit for periods up to a year, the Commission maintains close contact with research workers who are pursuing similar objectives in economics and in other social sciences.

The story of the Cowles Commission, and of the men and ideas that have shaped its course, is told in this Twentieth Annual Report. The historical narrative by Carl Christ, a former staff member, describes the origins of the Commission, its early and continuing relationship with the Econometric Society, and its growth and development over a twenty year period. The report on research activities gives an account of the Commission's work in its twentieth year. A record of recent expansion and accomplishment is presented in the report on the Econometric Society. Further indicators of the activities and influence of the Commission are to be found in the list of biographies of the participants in its research over two decades, and in the lists of publications, papers, addresses, seminars, and courses which epitomize the nature and scope of its work.

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