Toward a Theory of Loosely Coupled Systems: The Implementation of Federal Youth Employment Policies

Elizabeth Anne VanderPutten

Herbert A. Simon


 

HERBERT A. SIMON

I was born in Milwaukee, Wisconsin, on June 15, 1916. My father, an electrical engineer, had come to the United States in 1903 after earning his engineering diploma at the Technische Hochschule of Darmstadt, Germany. He was an inventor and designer of electrical control gear, later also a patent attorney. An active leader in professional and civic affairs, he received an honorary doctorate from Marquette University for his many activities in the community. My mother, an accomplished pianist, was a third generation American, her forebears having been '48ers who immigrated from Prague and Köln. Among my European ancestors were piano builders, goldsmiths, and vintners but to the best of my knowledge, no professionals of any kind. The Merkels in Köln were Lutherans, the Goldschmidts in Prague and the Simons in Ebersheim, Jews.

My home nurtured in me an early attachment to books and other things of the intellect, to music, and to the out of doors. I received an excellent general education from the public elementary and high schools in Milwaukee, supplemented by the fine science department of the public library and the many books I found at home. School work was interesting but not difficult, leaving me plenty of time for sandlot baseball and football, for hiking and camping, for reading and for many extracurricular activities during my high school years. A brother, five years my senior, while not a close companion, gave me some anticipatory glimpses of each stage of growing up. Our dinner table at home was a place for discussion and debate - often political, sometimes scientific.

Until well along in my high school years, my interests were quite dispersed, although they were increasingly directed toward science - of what sort I wasn't sure. For most adolescents, science means physics, mathematics, chemistry, or biology - those are the subjects to which they are exposed in school. The idea that human behavior may be studied scientifically is never hinted until much later in the educational process - it was certainly not conveyed by history or "civics" courses as they were then taught.

My case was different. My mother's younger brother, Harold Merkel, had studied economics at the Universtity of Wisconsin under John R. Commons. Uncle Harold had died after a brief career with the National Industrial Conference Board, but his memory was always present in our household as an admired model, as were some of his books on economics and psychology. In that way I discovered the social sciences. Uncle Harold having been an ardent formal debater, I followed him in that activity too.

In order to defend free trade, disarmament, the single tax and other unpopular causes in high school debates, I was led to a serious study of Ely's economics textbook, Norman Angell's The Great Illusion, Henry George's Progress and Poverty, and much else of the same sort.

By the time I was ready to enter the University of Chicago, in 1933, I had a general sense of direction. The social sciences, I thought, needed the same kind of rigor and the same mathematical underpinnings that had made the "hard" sciences so brilliantly successful. I would prepare myself to become a mathematical social scientist. By a combination of formal training and self study, the latter continuing systematically well into the 1940s, I was able to gain a broad base of knowledge in economics and political science, together with reasonable skills in advanced mathematics, symbolic logic, and mathematical statistics. My most important mentor at Chicago was the econometrician and mathematical economist, Henry Schultz, but I studied too with Rudolf Carnap in logic, Nicholas Rashevsky in mathematical biophysics, and Harold Lasswell and Charles Merriam in political science. I also made a serious study of graduate-level physics in order to strengthen and practice my mathematical skills and to gain an intimate knowledge of what a "hard" science was like, particularly on the theoretical side. An unexpected by-product of the latter study has been a lifelong interest in the philosophy of physics and several publications on the axiomatization of classical mechanics.

My career was settled at least as much by drift as by choice. An undergraduate field study for a term paper developed an interest in decision-making in organizations. On graduation in 1936, the term paper led to a research assistantship with Clarence E. Ridley in the field of municipal administration, carrying out investigations that would now be classified as operations research. The research assistantship led to the directorship, from 1939 to 1942, of a research group at the University of California, Berkeley, engaged in the same kinds of studies. By arrangement with the University of Chicago, I took my doctoral exams by mail and moonlighted a dissertation on administrative decision-making during my three years at Berkeley.

When our research grant was exhausted, in 1942, jobs were not plentiful and my military obligations were uncertain. I secured a position in political science at Illinois Institute of Technology by the intercession of a friend who was leaving. The return to Chicago had important, but again largely unanticipated, consequences for me. At that time, the Cowles Commission for Research in Economics was located at the University of Chicago. Its staff included Jacob Marschak and Tjalling Koopmans who were then directing the graduate work of such students as Kenneth Arrow, Leo Hurwicz, Lawrence Klein, and Don Patinkin. Oscar Lange, not yet returned to Poland, Milton Friedman, and Franco Modigliani frequently participated in the Cowles staff seminars, and I also became a regular participant.

That started me on a second education in economics, supplementing the Walrasian theory and Neyman-Pearson statistics I had learned earlier from Henry Schultz (and from Jerzy Neyman in Berkeley) with a careful study of Keyne's General Theory (made comprehensible by the mathematical models proposed by Meade, Hicks, and Modigliani), and the novel econometric techniques being introduced by Frisch and investigated by the Cowles staff. With considerable excitement, too, we examined Samuelson's new papers on comparative statics and dynamics.

I was soon co-opted by Marschak into participating in the study he and Sam Schurr were directing of the prospective economic effects of atomic energy. Taking responsibility for the macroeconomic parts of that study, I used as my analytic tools both classical Cobb-Douglas functions, and the new activity analysis being developed by Koopmans. Although I had earlier published papers on tax incidence (1943) and technological development (1947), the atomic energy project was my real baptism in economic analysis. My interest in mathematical economics having been aroused, I continued active work on problems in that domain, mainly in the period from 1950 to 1955. It was during this time that I worked out the relations between causal ordering and identifiability--coming for the first time in contact with the related work of Herman Wold--discovered and proved (with David Hawkins) the Hawkins-Simon theorem on the conditions for the existence of positive solution vectors for input-output matrices, and developed (with Albert Ando) theorems on near-decomposability and aggregation.

In 1949, Carnegie Institute of Technology received an endowment to establish a Graduate School of Industrial Administration. I left Chicago for Pittsburgh to participate with G. L. Bach, William W. Cooper, and others in developing the new school. Our goal was to place business education on a foundation of fundamental studies in economics and behavioral science. We were fortunate to pick a time for launching this venture when the new management science techniques were just appearing on the horizon, together with the electronic computer. As one part of the effort, I engaged with Charles Holt, and later with Franco Modigliani and John Muth, in developing dynamic programming techniques-- the so-called "linear decision rules"--for aggregate inventory control and production smoothing. Holt and I derived the rules for optimal decision under certainty, then proved a certainty-equivalence theorem that permitted our technique to be applied under conditions of uncertainty. Modigliani and Muth went on to construct efficient computational algorithms. At this same time, Tinbergen and Theil were independently developing very similar techniques for national planning in the Netherlands.

Meanwhile, however, the descriptive study of organizational decision-making continued as my main occupation, in this case in collaboration with Harold Guetzkow, James March, Richard Cyert and others. Our work led us to feel increasingly the need for a more adequate theory of human problem-solving if we were to understand decisions. Allen Newell, whom I had met at the Rand Corporation in 1952, held similar views. About 1954, he and I conceived the idea that the right way to study problem-solving was to simulate it with computer programs. Gradually, computer simulation of human cognition became my central research interest, an interest that has continued to be absorbing up to the present time.

My research on problem-solving left me relatively little opportunity to do work of a more classical sort in economics. I did, however, continue to develop stochastic models to explain the observed highly-skewed distributions of sizes of business firms. That work, in collaboration with Yuji Ijiri and others, was summarized in a book published just two years ago.

In this sketch, I have said less about my work on decision-making than about my other research in economics because the former is discussed at greater length in my Nobel lecture. I have also left out of this account those very important parts of my life that have been occupied with my family and with non-scientific pursuits. One of my few important decisions, and the best, was to persuade Dorothea Pye to marry me on Christmas Day, 1937. We have been blessed in being able to share a wide range of our experiences, even to publishing together in two widely separate fields: public administration and cognitive psychology. We have shared also the pleasures and responsibilities of raising three children, none of whom seem imitative of their parents' professional directions, but all of whom have shaped for themselves interesting and challenging lives.

My interests in organizations and administration have extended to participation as well as observation. In addition to three stints as a university department chairman, I have had several modest public assignments. One involved playing a role, in 1948, in the creation of the Economic Cooperation Administration, the agency that administered Marshall Plan aid for the U.S. Government. Another, more frustrating, was service on the President's Science Advisory Committee during the last year of the Johnson administration and the first three years of the Nixon administration. While serving on PSAC, and during another committee assignment with the National Academy of Sciences, I have had opportunities to take part in studies of environmental protection policies. In all of this work, I have tried - I know not with what success - to apply my scientific knowledge of organizations and decision-making, and, conversely, to use these practical experiences to gain new research ideas and insights.

In the "politics" of science, which these and other activites have entailed, I have had two guiding principles - to work for the "hardening" of the social sciences so that they will be better equipped with the tools they need for their difficult research tasks; and to work for close relations between natural scientists and social scientists so that they can jointly contribute their special knowledge and skills to those many complex questions of public policy that call for both kinds of wisdom.

From Nobel Lectures, Economic Sciences 1969-1980.

Source: The Official Web Site of The Nobel Foundation 


 

Herbert A. Simon, Nobel Winner for Economics, Dies at 84
The New York Times

February 10, 2001

By PAUL LEWIS
Herbert A. Simon, an American polymath who won the Nobel in economics in 1978 with a new theory of decision making and who helped pioneer the idea that computers can exhibit artificial intelligence that mirrors human thinking, died yesterday. He was 84. 

He died at the Presbyterian University Hospital of Pittsburgh, according to an announcement by Carnegie Mellon University, which said the cause was complications after surgery last month. Mr. Simon was the Richard King Mellon University Professor of Computer Science and Psychology at the university a title that underscored the breadth of his interests and learning. 

Mr. Simon also won the A. M. Turing Award for his work on computer science in 1975 and the National Medal of Science in 1986. In 1993, he was awarded the American Psychological Association's award for outstanding lifetime contributions to psychology. 

In 1994, he became one of only 14 foreign scientists ever to be inducted into the Chinese Academy of Sciences and in 1995 was given awards by the International Joint Conferences on Artificial Intelligence and the American Society of Public Administration. 

Awarding him the Nobel, the Swedish Academy of Sciences cited "his pioneering research into the decision-making process within economic organizations" and acknowledged that "modern business economics and administrative research are largely based on Simon's ideas." 

Professor Simon challenged the classical economic theory that economic behavior was essentially rational behavior in which decisions were made on the basis of all available information with a view to securing the optimum result possible for each decision maker. 

Instead, Professor Simon contended that in today's complex world individuals cannot possibly process or even obtain all the information they need to make fully rational decisions. Rather, they try to make decisions that are good enough and that represent reasonable or acceptable outcomes. 

He called this less ambitious view of human decision making "bounded rationality" or "intended rational behavior" and described the results it brought as "satisficing." 

In his book "Administrative Behavior" he set out the implications of this approach, rejecting the notion of an omniscient "economic man" capable of making decisions that bring the greatest benefit possible and substituting instead the idea of "administrative man" who "satisfices looks for a course of action that is satisfactory or `good enough.' " 

Professor Simon's interest in decision making led him logically into the fields of computer science, psychology and political science. His belief that human decisions were made within clear constraints seemed to conform with the way that computers are programmed to resolve problems with defined parameters. 

In the mid-1950's, he teamed up with Allen Newell of the Rand Corporation to study human decision making by trying to simulate it on computers, using a strategy he called thinking aloud. 

People were asked for the general reasoning processes they went through as they solved logical problems and these were then converted into computer programs that Professor Simon and Mr. Newell thought equipped these machines with a kind of artificial intelligence that enabled them to simulate human thought rather than just perform stereotyped procedures. 

The breakthrough came in December 1955 when Professor Simon and his colleague succeeded in writing a computer program that could prove mathematical theorems taken from the Bertrand Russell and Alfred North Whitehead classic on mathematical logic, "Principia Mathematica." 

The following January, Professor Simon celebrated this discovery by walking into a class and announcing to his students, "Over the Christmas holiday, Al Newell and I invented a thinking machine." 

A subsequent letter to Lord Russell explaining his achievement elicited the reply: "I am delighted to know that `Principia Mathematica' can now be done by machinery. I wish Whitehead and I had known of this possibility before we wasted 10 years doing it by hand." 

But in a much-cited 1957 paper Professor Simon seemed to allow his own enthusiasm for artificial intelligence to run too far ahead of its more realistic possibilities. Within 10 years, he predicted, "a digital computer will be the world's chess champion unless the rules bar it from competition," while within the "visible future," he said, "machines that think, that learn and that create" will be able to handle challenges "coextensive with the range to which the human mind has been applied." 

Sure enough, the I.B.M computer Deep Blue did finally beat the world chess champion Gary Kasparov last year about three decades after Mr. Simon had predicted the event would occur. 

Because artificial intelligence has not grown as quickly or as strongly as Professor Simon hoped, critics of his thinking argue that there are limits to what computers can achieve and that what they accomplish will always be a simulation of human thought, not creative thinking itself. As a result, Professor Simon's achievements have sparked a passionate and continuing debate about the differences between people and thinking machines. 

Born on June 15, 1916, the son of German immigrants, in Milwaukee, Herbert A. Simon attended public school and entered the University of Chicago in 1933 with the intention of bringing the same rigorous methodology to the social sciences as existed in physics and other "hard" sciences. 

As an undergraduate his interest in decision making was aroused when he made a field study of Milwaukee's recreation department. After receiving his bachelor's degree in 1936 he became an assistant to Clarence E. Ridley of the International City Managers Association and then continued work on administrative techniques in the Bureau of Public Administration of the University of California at Berkeley. 

In 1942, he moved to the Illinois Institute of Technology and in 1943 received his doctorate from the University of Chicago for a dissertation subsequently published in 1947 as "Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations." 

In 1937, he married Dorothea Pye, who survives him along with three children, Katherine Simon Frank of Minneapolis; Peter A. Simon of Bryan, Tex.; and Barbara M. Simon of Wilder, Vt.; six grandchildren, three step-grandchildren; and five great- grandchildren. 

A member of the faculty of Carnegie Mellon University since 1949, Professor Simon played important roles in the formation of several departments and schools including the Graduate School of Industrial Administration, the School of Computer Science and the College of Humanities and Social Sciences' psychology department. 

He published 27 books, of which the best known today are "Models of Bounded Rationality" (1997), "Sciences of the Artificial"(1996) and "Administrative Behavior"(1997). 

In 1991 he published his autobiography, "Models of My Life," and remarked then about his vision of that all-vanquishing computer hunched over the chess boards of the world: "I still feel good about my prediction. Only the time frame was a bit short." And so it was. 


 

Herbert Simon, Nobel Winner For Economic-Drive Idea, Dies 

By Martin Weil
Washington Post Staff Writer
The Washington Post
Sunday, February 11, 2001; Page C06 

Herbert A. Simon, 84, one of the nation's intellectual virtuosos, who combined hard-edged mathematics with humanistic inclinations to develop a theory of economic decision making that gave corporate and business leaders new insight and won him a Nobel Prize, died Friday in Pittsburgh.

Dr. Simon, a faculty member since 1949 of what is now Carnegie Mellon University in Pittsburgh, died at a hospital there of complications after an operation for a cancerous abdominal tumor last month.

A man whose broad learning united many disciplines, Dr. Simon was known as a student of political science, a leader in cognitive psychology, a pioneer in the use of computers and a father of artificial intelligence. He saw himself as a lifelong student of human problem solving and decision making.

In essence, the ideas for which he won the 1978 Nobel Prize in economics replaced the long-cherished theory that much of economic reality could be explained by the simple human drive to make as much profit as possible.

Dr. Simon, taking account of the complexities of human existence and the modern world, saw much of what motivated modern corporations and their leaders as merely the desire to perform acceptably in reaching a variety of goals.

This, he proposed, stemmed from necessity. It was just not possible, he said, to gather, absorb and analyze all available information bearing on any given issue in time to achieve the ideal outcome.

Rather than insist on a maximum return, as Dr. Simon saw it, the participant in the modern marketplace, bowing to the limitations of the real world, may often seek only to achieve an outcome that is satisfactory.

His idea, with its emphasis on human limitations, is often known as the theory of "bounded rationality."

Although he was skeptical about the possibility of attaining "the best of all possible worlds," Dr. Simon thought it was possible to create what he called "a good enough world." The term he favored -- constructed from the words satisfy and suffice -- was "a satisficing" world.

In his way, Dr. Simon himself made a major contribution to the torrent of information and analyses available to decision makers.

In 1947, long before he was recognized with the Nobel, he published the first edition of "Administrative Behavior," an influential text on decisions and decision making.

Including updated editions of that work, the most recent published in 1997, he was the author of 27 books. He also propounded his theories in more than 600 papers and articles.

Herbert Alexander Simon was born in Milwaukee on June 16, 1916, into an intellectually accomplished family. Ancestors had come to this country after the revolution of 1848 in Germany. His father was an electrical engineer who became a patent lawyer; his mother was a pianist. Both encouraged him in his curiosity.

As a teenager, he acquired an interest in applying to social science the mathematical precision of the physical sciences. As a college undergraduate at the University of Chicago, he studied the operation of the Milwaukee recreation department, whetting his interest in how choices are made within organizations.

After graduation, he pursued this interest as an assistant to the chief of the International City Managers' Association and then in the Bureau of Public Administration at the University of California at Berkeley.

Starting in 1942, he taught for seven years in the political science department at the Illinois Institute of Technology, in Chicago. Shortly after arriving there, he obtained a doctorate in political science from the University of Chicago. The dissertation became his book "Administrative Behavior."

In it, he wrote that decision making is the heart of administration and that the language of administrative theory "must be derived from the logic and psychology of human choice."

In 1949, he moved to Carnegie Institute of Technology, which was later merged into Carnegie Mellon University. There he began intensive studies and observation of business decision making.

By 1957, the year when the second edition of "Administrative Behavior" was published, he had concluded that the classical theory of economic decision making -- profit maximization -- did not stand up to real-world scrutiny. He proposed the idea of a search for outcomes that were not the best but still "good enough."

His ideas did not win overnight acceptance, but, confident in the combination of thought, theory and field observation that characterized his work, he was undaunted.

"Prominent American economists do not agree," he said in 1978. "But they are mistaken."

He was quick to recognize the value of computers in his work and, particularly with Allen Newell of the Rand Corp., simulated problem solving with computer programs. By 1966, in testimony to his intellectual migration, he was made professor of computer science and psychology at Carnegie Mellon.

A man of intimidating intellect, with a breadth of interests that in 1977 led him to teach an undergraduate history course in the French Revolution, he was a painter, pianist and mountain-climber, but he had his share of less formidable traits. In the best professorial tradition of absent-mindedness, he was known to be forgetful enough to miss classes from time to time. Isn't that "part of the job description?" he once asked an interviewer.

Survivors include his wife, Dorothea; two daughters, Katherine Simon Frank of Minneapolis and Barbara M. Simon of Wilder, Vt.; and a son, Peter Simon, of Bryan, Tex.

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