Overview

In 1932, Guillaume completed his PhD dissertation, entitled "On the Fundamentals of the Economy with Rational Forecasting Techniques", in which the following seems to be thematic: [5]

“It is curious that in political economy, we have not yet succeeded in establishing very general laws, analogous to the fundamental principles of the physico-chemical sciences.”

In 1937, the Guillaume brothers, following fertile discussions of their work at the

Guillaume’s book is said to be critical of the “Lausanne mathematical school”, i.e. the Lausanne school of economics founded by Leon Walras, as not having based its abstractions upon sufficiently scientific concepts. [2]

In 1938, American mathematician Harold Davis published a joint review of the 1937 book by the Guillaume’s and of Jan Tinbergen’s

A noted recent scholar of the Guillaume brothers is Belgian economist Guido Erreygers.

Bridgman

The Guillaume brothers work is said to be based on the thermodynamics of Percy Bridgman. [8] There main argument or objection, supposedly, was that the subjective concept of value did not obey the principle of conservation. [7]

Neumann

In 1934, Abraham Flexner, the director of the Institute for Advanced Study at Princeton, sent Guillaume's

“I think that the basic intention of the authors, to analyze the economic world, by constructing an analogous fictitious ‘model’, which is sufficiently simplified, so as to allows an absolutely mathematical treatment, is—although not new—sound, and in the spirit of exact sciences. I do not think, however, that the authors have a sufficient amount of mathematical routine and technique, to carry out program out.

I have the impression that the subject is not yet ripe (I mean that it is not yet fully enough understood, which of its features are the essential ones) to be reduced to a small number of fundamental postulates—like geometry, or mechanics (cf. pgs. 77-78). The analogies with thermodynamics are probably misleading (cf. pgs. 69, 85). The authors think that the ‘amortization’ is analogous to ‘entropy’. It seems to me, that if this analogy can be worked out at all, the analogon of ‘entropy’ must be sought in the direction of ‘liquidity’. To be more specific: if the analogon of ‘energy’ is ‘value’ of the estate of aneconomical subject, then analogon of its thermodynamic ‘free energy’ should be its ‘cash value’.

The technique of the authors to set up and deal with equations is rather primitive, the way, for instance, in which they discuss the fundamental equations (1) and (2) on page 81-85 is incomplete, as they omit to prove that 1: the resulting prices are all positive (or zero), 2: that there is only one such solution. A correct treatment of this particular question, however, exists in the literature. Various other technical details in the setting up of their equations and in their interpretations could be criticized, too. I do not think that their discussion of the ‘stability of solutions’, which is the only satisfactory way to build up a mathematical theory of economic cycles and of crises, is mathematically satisfactory.

The emphasis the authors put on the possibility of states of equilibrium in economics (cf. pgs. 68-69) seems to me to entirely justified. I think that the importance of this point has not always been duly acknowledged. I cannot judge the value of their statistical methods, as they are given in the last part of the book for practical purposes. Their aim is to diagnose the present status of economics, and to lead to forecasts. But I think that the theoretical deduction, which lead to them is weak and incomplete.”

This incident is recounted in greater detail by Canadian economics historian

German physicist Albert Einstein's 1946 letter to the Guillaume brothers in support of the economics theories. |

Einstein

German physicist Albert Einstein, in a letter dated 24 Aug 1946, expressed support for the Guillaume brother’s work: [10]

“Dr. G. Guillaume, whose family was well known to me in Switzerland, has explained to me a method for mechanized determination of the relative values of the various commodities (in unction of time). I believe that the use of this method may be practical and useful in providing an objective way to obtain an incontestable measure of economic values.”

The quote appears in reproduced in their 1947 book

Education

Education Georges worked as a financial trader in the

Other

Guillaume is often classified as a "French economist" and was a member of the Centre d’Etude des Problemes Humains (Center for the Study of Human Problems), founded by Jean Coutrot in association with thinkers including: Aldous Huxley, and Pierre Teilhard. [6]

References

1. Guillaume, Georges and Guillaume, Edouard. (1932).

2. McCauley, Joseph L. (2003). “Thermodynamic Analogies in Economics and Finance: Instability of Markets.”

3. Mirowski, Philip. (2002).

4. (a) Leonard, Robert J. (1995). “From Parlor Games to Social Science: von Neumann, Morgenstern, and the Creation of Game Theory, 1928-1944” (abs),

(b) Leonard, Robert J. (2010).

5. Neumann, John. (1934). “Letter to Abraham Flexner”, May 25, Faculty Files, Folder 1933-35. VNIAS.

6. Zukin, Sharon and DiMaggio, Paul (1990).

7. Erreygers, Guido. (2013). “Mechanics Meets Economics, Once Again: On the Rationale of ‘Rational Economics’ of the Guillaume Brothers” (pdf), paper for conference “The Pioneers of Linear Models of Production”, EconomiX, Université Paris Ouest Nanterre La Défense, 17-18 January 2013.

8. (a) Fischman, Marianne and Lendjel, Emeric. (2000). “X-Crise et le modèle des frères Guillaume” (pgs. 370-72), in: Pierre Dockès, Ludovic Frobert, Gérard Klotz, Jean-Pierre Potier, André Tiran (eds),

(b) Erreygers, Guido. (2013). “Mechanics Meets Economics, Once Again: On the Rationale of ‘Rational Economics’ of the Guillaume Brothers” (pdf), paper for conference “The Pioneers of Linear Models of Production”, EconomiX, Université Paris Ouest Nanterre La Défense, 17-18 January 2013.

10. Erreygers, Guido. (2013). “Mechanics Meets Economics, Once Again: On the Rationale of ‘Rational Economics’ of the Guillaume Brothers” (pdf) (pg. 13), paper for conference “The Pioneers of Linear Models of Production”, EconomiX, Université Paris Ouest Nanterre La Défense, 17-18 January 2013.

11. Guillaume, Georges and Guillaume, Edouard. (1947).

12. (a) Davis, Harold T. (1938), “[Book review]”,

(b) Erreygers, Guido. (2013). “Mechanics Meets Economics, Once Again: On the Rationale of ‘Rational Economics’ of the Guillaume Brothers” (pdf), paper for conference “The Pioneers of Linear Models of Production”, EconomiX, Université Paris Ouest Nanterre La Défense, 17-18 January 2013.

External links

● Guillaume, Georges – WorldCat Identities.