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I know the story of TeX, but how did LaTeX come about, and come to be the only (as far as I know) system built on top of TeX?

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With respect to the first part of the question, in words of Leslie Lamport:

In the early 80s, I was planning to write the Great American Concurrency Book. I was a TeX user, so I would need a set of macros. I thought that, with a little extra effort, I could make my macros usable by others. Don Knuth had begun issuing early releases of the current version of TeX, and I figured I could write what would become its standard macro package. That was the beginning of LaTeX. I was planning to write a user manual, but it never occurred to me that anyone would actually pay money for it.

In 1983, Peter Gordon, an Addison-Wesley editor, and his colleagues visited me at SRI. Here is his account of what happened. Our primary mission was to gather information for Addison-Wesley "to publish a computer-based document processing system specifically designed for scientists and engineers, in both academic and professional environments." This system was to be part of a series of related products (software, manuals, books) and services (database, production). (La)TeX was a candidate to be at the core of that system. (I am quoting from the original business plan.) Fortunately, I did not listen to your doubt that anyone would buy the LaTeX manual, because more than a few hundred thousand people actually did. The exact number, of course, cannot accurately be determined, inasmuch as many people (not all friends and relatives) bought the book more than once, so heavily was it used.

With respect the second part, LaTeX is not the only system (macro package) based in TeX. Mainly you must be aware of the existence of ConTeXt, but see https://www.ctan.org/tex-archive/macros.

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