Month: May 2016

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Chicago Economists

Chicago. Friedman from Cambridge on Arrow, Tobin, Harry Johnson, Joan Robinson. 1953

Thank goodness for leaves of absence and sabbaticals! In an earlier age letters were actually exchanged between the lone scholar off to foreign groves of academe or government service and colleagues back at the home institution. When Milton Friedman went off to the University of Cambridge for the academic year 1953-54 (see Chapter 17 “Our First Year Abroad”  in Milton and Rose D. Friedman, Two Lucky People: Memoirs), he wrote detailed letters discussing departmental matters and impressions of Cambridge academic life to the chair of the department, Theodore W. Schultz. In this posting we encounter Milton Friedman’s views on possible candidates to take up the directorship of the Cowles Commission, his very positive impression of Harry Johnson, his utter shock regarding Joan Robinson’s views on China, and comparisons between Chicago and Cambridge training in economics. More to come:  Here a letter dated 29 March 1954.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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15 Latham Road
Cambridge, England
October 28, 1953

Dear Ted [Theodore W. Schultz]:

Many thanks for your letter of October 22. It contained a fuller budget of news then I had otherwise received. I am delighted to hear of the decision of the Rockefeller Foundation, and appreciate your taking the necessary steps including repairing my omission in not specifying the effective date. I am sorry to hear that the problems raised by my absence were still further complicated by Allen [W. Allen Wallis?]. The Harberger-Johnson [Arnold Harberger; D. Gale Johnson] arrangement seems, however, excellent.

It is certainly too bad about Arrow. Re Tobin, as you know, I have in the past had a very high opinion of his ability and promise though I would not have put him as high as Arrow. I regret to say, however, that my opinion fell somewhat this summer as a result of going over in great detail his article on the consumption function in the collection of essays in honor of [John Henry] Williams. As you may know, I drafted this summer a lengthy paper on the theory of the consumption function. One of the pieces of evidence I considered was Tobin’s paper, which reached conclusions in variance with most of the other evidence. On close examination, his conclusions turned out not to be justified by his own evidence, but rather to be a product of sloppy and incompetent statistical analysis. One swallow does not of course make a summer, but I am inclined to give this piece of evidence more weight than I otherwise would since it is the only bit of his work that I have gone over with sufficient care to feel great confidence in my judgment of it. My generally favorable opinion has been based on a rather superficial and casual reading of most of his other published work – indeed, on first reading, I had had an equally favorable opinion of the consumption paper. His memorandum on research that you sent me strikes me as being on the whole very sensible and very good.

In view of the above, I am very uncertain how to respond to your request for my “vote”. Everything obviously depends on the alternatives, and these are likely to vary if viewed in terms of the Cowles position in the department. Are either the former, Tobin may well be the best of the available people. Re: the latter, I much more dubious that he is than formerly. In view of my inability to participate in the discussion of the alternatives, the best thing seems to me to be to abstain from casting a definite vote either way, to make it clear that I shall cheerfully accept the decision of my colleagues, but to urge them strongly to canvass possible alternatives carefully and if possible to avoid letting an appointment to Cowles also commit the department to a permanent appointment in the department, unless the letter seems desirable on its own account.

May I complicate your problem further by introducing another name that the department ought to keep in mind in considering its long-run plans, namely Harry Johnson, now here at Cambridge, but originally a Canadian. Of the various younger people I have met around here, he impresses me as being by all odds the best and most promising, and as of the moment I would unhesitatingly rate him above Tobin. As you know, his specialty has been money and he lectures here on money and banking, but he has also been doing some work in international trade. More than most of the people here he has worked in technical and scientific economics instead of allowing himself to be diverted almost entirely to policy issues – which I suppose appeals to me partly because his policy position is so different from my own but impresses me partly also because I have been rather shocked by how large a part of intellectual activity around here is concerned almost exclusively with current policy issues. I have no idea whether Johnson would be interested in moving – he is certainly regarded as one of the clearly important and promising people at Cambridge and seems to have an assured future here – but the chance seems to me sufficiently great that we ought to keep him on our list.

Incidentally, back to Tobin, Dorothy Brady was having my piece on consumption typed up and was to send a copy to Margaret Reid when done, so that the detailed criticism of Tobin’s article that it contains could be made available to anyone who wanted to look at it.

Writing this paragraph just gave me a brainstorm – why not Dorothy for the Cowles post? In her case it would be easier to separate the appointment from a departmental commitment since she would almost certainly not demand tenure; she is a first-rate and experienced administrator; she has the necessary mathematical and statistical background; and she might give the research program a highly desirable shift toward closer contact with significant detailed empirical and economic problems – which is probably at the same time her strongest recommendation and the greatest obstacle to agreement.

On the other issue you raise, I am very much in favor – from our point of view – of Al Rees for the editorship. I think he would be an excellent editor. I am delighted that you were able to persuade Earl [Hamilton] to stay on for another year – I wish he felt able to keep it longer, as I am sure we all do, but Al seems to me clearly the next best alternative.

We have been enjoying Cambridge very much indeed, though I must confess that to date it has been too stimulating and active for me to have gotten much work done. I am enormously impressed – and in some directions, depressed – by the difference in atmosphere from the US. Educationally, the aim of education is to train the future ruling class rather than simply to educate people, which accounts for much more explicit emphasis in teaching and research on problems of immediate economic policy – economics is essentially taught as an art to be employed by rulers rather than as a science. There is enormous emphasis on form and cleverness, which reaches its peak in debates, of which I have participated in one (opposing the resolution “Yankee-eating baiting is unjustifiable and ungrateful” – tell me, how should I interpret the fact that on the vote of the audience, my side won?) And listening to another in the Cambridge Union. Surprisingly, the appeal is to the emotions rather than the reason; the level of wit and of phrasing is amazingly high, of intellectual content, abysmal. Politically, the atmosphere is incredibly redder than at home. This, I think, accounts for a good deal of the misunderstanding here of the state of civil liberties in the US. The right comparison to make is between tolerance of opinions equally deviant from the norm; the comparison that is made is between tolerance of the same opinion; but the normal opinion here would be regarded as clearly “left” at home, and moderately left opinion here is extremely radical; this difference in average opinion leads to the belief here that there is complete intolerance in the United States. These reflections are partly stimulated by a talk Joan Robinson gave on China a little over a week ago. It was an incredible talk to me; I was glad I went because I wouldn’t have believed anybody who had given me an accurate report, and you will have the same difficulty in believing mine. What is incredible is not alone that she sincerely believed the most extreme statements of the Chinese Communists about tremendous progress as a result of the “liberation”, but that she presented them without any examination of the internal consistency of her successive statements, without a sign of critical intelligence at work, without attempting to cite evidence of a kind she could have expected to acquire as a result of her brief visit there. Had the same talk been given by a faculty member in the US there undoubtedly would have been a fuss while here it passed over without a ripple. This difference may in part reflect a difference in tolerance of extreme opinions; but to a much greater extent it reflects the fact that her opinion is nothing like so extreme relative to British opinion as relative to American. The fair comparison is between the reception of her speech and one that, let us say, Maynard Krueger would make; and I doubt that there would be much difference in the reactions in that case.

The anti-American feeling is really extreme. It is widely accepted that America has concluded that war is inevitable, is no longer even interested in maintaining the peace and only waiting for an appropriate time to start a war. The American troops in England and Europe are said to be unwanted – though I’m sure an outcry would go up if they were to be withdrawn. England’s trade difficulties are America’s fault, because American productivity is growing so shockingly fast – this is a theme that in politer form is being increasingly put forth in academic circles, note especially Hicks in his inaugural address. All in all, these views, surprisingly enough, lead the left and not so left here to espouse essentially the Hoover-Taft position about the role America should play.

These are all of course first impressions for a highly biased segment of England, so I know you will take them with the mass of salt they deserve.

We’re all personally fine. The kids are quite happy in their schools. We are happy to be coming to the end of our month in a hotel – we move into the house we rented this Friday.

Our very best to everyone.

 

Yours,

[signed]

Milton

Source: Hoover Institution Archives. Milton Friedman Papers. Box 194, Folder “194.6 Economics Department S-Z, 1946-1976”.

Image: Left, Milton Friedman (between 1946 and 1953 according to note on back of photo in the Hoover Archive in the Milton Friedman papers). Right, Theodore W. Schultz from University of Chicago Photographic Archive, apf1-07484, Special Collections Research Center, University of Chicago Library.

Categories
Economic History Exam Questions Harvard Undergraduate

Harvard. A.B. Correlation Examination, American Economic History, 1939

Today’s posting is a transcription of the “correlation examination” questions for American economic history given at Harvard in May 1939.

Concentrators in Economics will have to pass in the spring their Junior year a general examination on the department of Economics, and in the spring of their Senior year an examination correlating Economics with either History or Government (this correlating exam may be abolished by 1942), and a third one on the student’s special field, which is chosen from a list of eleven, including economic theory, economic history, money and banking, industry, public utilities, public finance, labor problems, international economics, policies and agriculture.
Courses in allied fields, including Philosophy, Mathematics, History, Government, and Sociology, are suggested by the department for each of the special fields. In addition, Geography 1 is recommended in connection with international policies or agriculture.
[Source: Harvard Crimson, May 31, 1938]

A printed copy of questions for twelve A.B. examinations in economics at Harvard for the academic year 1938-39 can be found in the Lloyd A. Metzler papers at Duke’s Economists’ Papers Project. 

Economic Theory,
Economic History Since 1750,
Money and Finance,
Market Organization and Control,
Labor Economics and Social Reform.

  • Six Correlation Examinations given to Honors Candidates.

Economic History of Western Europe since 1750,
American Economic History,
History of Political and Economic Thought,
Public Administration and Finance,
Government Regulation of Industry,
Mathematical Economic Theory.

______________________

If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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DIVISION OF HISTORY, GOVERNMENT, AND ECONOMICS
CORRELATION EXAMINATION
AMERICAN ECONOMIC HISTORY
(Three hours)

Answer either FOUR or FIVE questions, including TWO from each group. If you answer FOUR questions, write about an hour on ONE of them and mark your answer “Essay.” This question will be given double weight.

A
Use a separate blue book for the questions in this part.

  1. Did the colonies profit economically from their position in the British colonial system?
  2. Describe and contrast the land policies of Massachusetts and Virginia in the colonial period.
  3. How much of the weakness of the government under the Articles of Confederation would you attribute to the economic condition of the country?
  4. Why die New York rather than Boston, Philadelphia, Baltimore, Norfolk or Charleston become the pre-eminent port of the United States?
  5. Was slavery profitable?
  6. Can the Republican party on its record 1865 to 1900 be spoken of as the “sound money party”?
  7. Describe the efforts of state governments to regulate the railroads in the period before 1887.
  8. How do you account for the triumph of the American Federation of Labor over the Knights of Labor?
  9. Is there a continuity between the Progressive movement of the early part of this century and the economic policies of Franklin Delano Roosevelt?

 

B
Use a separate blue book for the questions in this part.

  1. “The real forces behind the trust movement were very plain and simple. A lot of excellent bankers in Wall Street found that they could buy two and two, put them together and sell to the public for six or seven or eight.”
  2. “The farmers have always tried to put the blame for their ‘troubles’ on some external factor—money, railroads, trusts—but the real cause was always the same: overproduction.”
  3. Sketch the more important consequences of immigration into the United States in the period 1870-1914.
  4. “The momentary flowering of canal transport in this country a hundred years ago had little basis outside the alluring fantasies of that generation of state planners.”
  5. What important consequences of the public land policy in the nineteenth century remain today?
  6. Discuss the effects of the Napoleonic Wars on American economic life.
  7. “In industrial production America went directly from the handicraft stage to the factory system.”
  8. Explain briefly the attitudes in different regions of the country on questions of monetary and banking policy during the period 1820-1850.
  9. What methods were used by the United States Government to mobilize its economic resources during the World War?

May 12, 1939.

 

Source: David M. Rubenstein Rare Book & Manuscript Library, Duke University. Lloyd A. Metzler Papers, Box 7; [Harvard University], Division of History, Government and Economics, Division Examinations for the Degree of A.B., 1938-39.

 

 

 

Categories
Economic History Exam Questions Harvard

Harvard. A.B. Correlation Exam for W. European Economic History since 1750. 1939

Today’s posting is a transcription of the “correlation examination” questions for the economic history of Western Europe since 1750 given at Harvard in May 1939.

Concentrators in Economics will have to pass in the spring their Junior year a general examination on the department of Economics, and in the spring of their Senior year an examination correlating Economics with either History or Government (this correlating exam may be abolished by 1942), and a third one on the student’s special field, which is chosen from a list of eleven, including economic theory, economic history, money and banking, industry, public utilities, public finance, labor problems, international economics, policies and agriculture.
Courses in allied fields, including Philosophy, Mathematics, History, Government, and Sociology, are suggested by the department for each of the special fields. In addition, Geography 1 is recommended in connection with international policies or agriculture.
[Source: Harvard Crimson, May 31, 1938]

A printed copy of questions for twelve A.B. examinations in economics at Harvard for the academic year 1938-39 can be found in the Lloyd A. Metzler papers at Duke’s Economists’ Papers Project. 

Economic Theory,
Economic History Since 1750,
Money and Finance,
Market Organization and Control,
Labor Economics and Social Reform.

  • Six Correlation Examinations given to Honors Candidates.

Economic History of Western Europe since 1750,
American Economic History,
History of Political and Economic Thought,
Public Administration and Finance,
Government Regulation of Industry,
Mathematical Economic Theory.

______________________

If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

 

______________________________

DIVISION OF HISTORY, GOVERNMENT, AND ECONOMICS
CORRELATION EXAMINATION

Economic History of Western Europe since 1750
(Three hours)

 

Answer either FOUR or FIVE questions, including TWO from each group. If you answer FOUR questions, write about an hour on ONE of them and mark your answer “Essay.” This question will be given double weight.

A
Use a separate blue book for the questions in this part.

  1. Discuss the economic causes, or the economic effects, in France, of the French Revolution.
  2. Discuss the relationship between economic developments and changes in the English imperial policy during the late eighteenth and early nineteenth centuries.
  3. Outline the history and discuss the economic importance of canals in any major European country.
  4. The beginnings of agricultural science.
  5. “If, under the surface of frequent political disturbances, France retained her social equilibrium throughout the nineteenth century, that was due in no small degree to the peculiarities of her economic development.”
  6. Economic factors in the unification of Germany.
  7. “In the middle of the nineteenth century England occupied a paradoxical position: she was the center of a world economy, and yet she was entirely dependent on the rest of the world.”
  8. Outline and discuss the movement towards federation and amalgamation among trade unions in England, France or
  9. Discuss the principal stages in the development of the Soviet agrarian policy.

 

B
Use a separate blue book for the questions in this part.

  1. “The ‘industrial revolution’ means the change from production with hand tools to production with power-driven machinery. It was brought about, first, in the textile industries, by a series of inventions made in England around the end of the eighteenth century, and gradually introduced, later on, into other countries.”
  2. “The free trade policy of nineteenth century England sacrificed her permanent, national interests to the temporary interests of her manufacturers, disguised at the time in the imaginary, permanent principles of her economists and pacifists; the result is the present economic and military weakness of England.”
  3. Discuss the reasons why France has remained so largely an agricultural country, attaining high industrial rank in only a few particular industries.
  4. Discuss the economic policies of Gladstone and his party affiliations.
  5. What economic and political interests did England have in the Suez Canal? By what means did she secure control of it?
  6. “The German cartel was not, as many observers predicted, a step on the road to great trusts.”
  7. What considerations have dominated British policy in respect of petroleum and petroleum resources, since 1914?
  8. Discuss the development of protection for agricultural products in France or Germany during the latter part of the 19th
  9. “It is paradoxical that a labor party appeared later in England, than in European countries where industrial capitalism was relatively less advanced throughout the nineteenth century.”

 

May 12, 1939.

Source: David M. Rubenstein Rare Book & Manuscript Library, Duke University. Lloyd A. Metzler Papers, Box 7; [Harvard University], Division of History, Government and Economics, Division Examinations for the Degree of A.B., 1938-39.

 

 

Categories
Economists M.I.T.

MIT. Suggestions for New Fields. Domar, Kuh, Solow, Adelman, 1967

The following set of memoranda from the MIT economics department is found in a folder marked “Correspondence: Peter Temin” in Evsey Domar’s papers. The bulk of the material in the folder are letters of support that Domar solicited for the committee he chaired (which consisted of Domar, Charles Kindleberger and Frank Fisher) to review Peter Temin for tenure. It thus appears that Domar’s proposal to strengthen economic history at MIT in February 1967 was seen (at least by him) to have led later to granting Peter Temin tenure at MIT. See Peter Temin’s reflections on “The Rise and Fall of Economic History at MIT.”

In response to a request by the Head of the department, E. Cary Brown, for input to a long-range plan (1967-1975), we have here not only Evsey Domar’s response but also memos from Edwin Kuh (more econometrics!), Robert Solow (“poverty-manpower” or “a really high-class macro-numbers man”) and M. A. Adelman (energy economics).

Even Robert Solow’s intradepartmental memos sparkle with wit!

_________________________________

February 7, 1967

MEMORANDUM

 

To: Members of the Economics Department
From: E. Cary Brown
Subject: Long-Range Departmental Plans

President H. Johnson has asked that Departments submit long-range plans – by two-year intervals through the academic year 1974-5. The basic constraints, other than budgetary, are that the undergraduate student body is to remain fixed at its present level and that graduate students at M.I.T. Grow at only a 3% rate per year. The projection desired is of the expansion in existing fields, into new fields, the population of the department – faculty, staff, students, post-doctorals, and administration and supporting staff.

In order to get a dialogue started, I suggest that each of you send me a note on the need for new fields, the expansion of existing ones, and your views about our undergraduate and graduate size. I can then prepare an agenda for a meeting or two on this matter.

_________________________________

 

[Evsey Domar response]

  1. New Fields, etc.
    1. Economic History. Could tie in very well with our economic developers. Also help to create a better balance in the Department.
    2. Economics and Technology (Mansfield, etc.) MIT should be just the place for it.
    3. I hope Max continues to be interested in South-East Asia. The US will be involved there for a long time. Any chances for a South-east. Asia Center or something?
  2. Number of Students
    No strong feelings. A larger number of both faculty and students allows us to offer a greater variety of courses.

As you know, Economic History is my main concern.

_________________________________

 

[Edwin Kuh response]

February 13, 1967

MEMORANDUM

TO:                 Professor E. Cary Brown
FROM:          Professor Edwin Kuh
SUBJECT:     Some Economics Department Needs in the Long Run

Let me first grind my own econometric axe. We need additional support in two econometric areas. The first pertains to support for quantitative theses; Frank Fisher, Bob Solow and I carry a heavy load in this connection, which is unlikely to diminish. Second, we ought to have more strength than we do in econometric time series analysis, an important topic not covered by existing faculty. Marc Nerlove, for instance, ranks high on both counts. Less senior individuals include David Grether who combines both aspects (Stanford Ph.D. going to Yale this fall) and possibly Joseph Kadane also at Yale, who is more the statistician. Jim Durbin and Bill Phillips would be fine, too, qua statisticians contributing to econometrics.

Next, suppose we are fortunate enough to attract both Ken Arrow and C. V. Wiesacker [sic] ; the net balance in favor of theory would then become heavy indeed. There will be no need to panic and for instance, proceed instantly to hire Arthur Burns. But even so, it will behoove the department to push relentlessly on expanding the more empirical side. Since all tenure slots by then will have been sewed up, I don’t see how this can readily be done.

Finally, the department ought to raise more finance for computation. The burden has been disproportionately assumed by the Sloan School, even though several Economics Department research projects have made highly welcome and substantial contributions to the installation downstairs. In this connection, the department should seriously consider acquiring the long run services of someone with a major interest [in] computer systems; very different and high qualified individuals such as Mark Eisner or Don Carroll come to mind. The department will lag behind seriously unless it expands in this direction.

This has not been a balanced presentation of needs. I shall leave that to more balanced individuals.

 

_________________________________

 

[Robert M. Solow response]

MEMORANDUM TO: E. Cary Brown, Head
FROM: Robert M. Solow
SUBJECT: Yours of February 7

 

  1. Undergraduate program. I suppose basically we just passively accept as many majors as come along. We might attract more by improving the teaching and brightening up the course offering. So far we have got along just fine with a pretty dreary undergraduate program, and previous attempts to Do Something have petered out. Is history trying to tell us something? The only reason I can think of for trying again is this: if the department faculty is going to state bigger, especially among assistant professors, then we probably need some decent undergraduate teaching for them to do. (Not only them – I would volunteer to do some too.) Why not let the assistant professors do the planning – they probably have more ideas. Suggestions: new undergraduate subjects in mathematical economics, econometrics, “poverty”, transportation (or public investment); cancel one of the current Labor subjects (or convert to “poverty”), maybe cancel 14.06, 14.09; organize research seminar on one-big-project basis; keep 3 or 4 of the best seniors on as PhD candidates as a matter of course.
  1. Graduate program. Does it have to expand to justify slightly enlarged faculty? If so, then accept universe, but fight like hell for adequate space, scholarships, research funds. If not, think carefully. If faculty enlarges and improves, we should be able to do better on admissions. There will always be some lemons admitted; but it is a question whether one would not prefer current size of enrollment with improved bottom half to enlarged enrollment with current quality. If we get Arrow and Weizsäcker, and keep half-dozen assistant professors, some growth of graduate student body probably inevitable. But I’d keep it slow, and in line with admission quality, space, scholarships, research money. Aim for entering class of 40 by 1975? Certainly no more.
  1. New fields. If MIT goes into Urban Studies, I think we ought to move too. This means some joint research, perhaps offering a few fellowships specifically in urban economics, some new appointments (transportation, poverty, local finance), probably young guys. (I’d like to see Mike Piore and Frank Levy free to start something.) (Would Bill Pounds like to hire Joe Kershaw?) Maybe we ought to start looking next fall. This complex could be a major counterweight to theory. We could make a senior appointment, but I doubt we could find a good enough man. We also lack a really high-class macro-numbers man – like Art Okun or Otto Eckstein or George Perry. Should we try Les Thurow? Or try eventually for Steve Goldfeld? Goldfeld would help with Money, but Thurow would fit into poverty-manpower bit. I think I might seriously favor going for Thurow now if we can afford it.

_________________________________

 

[M. A. Adelman response]

March 16, 1967

Memorandum to:     Professor E. Cary Brown
From:                         M.A. Adelman
Subject:  President H. W. Johnson’s request to submit long-range plans: industrial organization field

  1. Enrollment in the graduate course has declined to the point where it is best given in alternate years. Theses written have not decreased, and there are six now in preparation. I wish to use the time made available to teach the course on energy economics when Paul Rodan retires. The remaining time is best devoted to undergraduate teaching (see below).
  2. Undergraduate enrollment seems to be on the increase in 14.02, 14.04, and 14.22. With the appointment of Robert Crandall, we are fully staffed. I would wish to have 14.02 taught exclusively by lecture and sections (teaching assistants) except where the undergraduates’ program will not permit it. Where we are compelled to fill in with three-recitation sections, I strongly urge that they should not be taught by teaching assistants. Since the transfer to lectures economizes manpower, these two changes should be offsetting, but will take more of my own time.
  3. I have given a joint seminar with Harvard (Economics Department and Middle East Center) on Eastern Hemisphere Oil, and will repeat it next year. It is still an uncertain venture, however, in a sensitive area, and the fuss about CIA influence in academic research may kill it.
  4. I join in concern over our weakness in economic history. East European economics might best be treated as an expansion of our current offering in Soviet economics, since there is sufficient unity of geography and practice. I wish some encouragement could be given to East Asian especially Japanese studies, where English sometimes suffices, but would not care to have it as a field of specialization.

 

Source: Duke University, Rubenstein Library. Evsey D. Domar papers, Box 7, Folder “Peter Temin” [apparently misfiled].

Image Source: MIT 1959 Technique (Yearbook).

Categories
Economists Irwin Collier M.I.T.

MIT. Samuelson at the Joint Economic Committee, 1973

Marina v.Neumann Whitman and Paul A. Samuelson

Backstory:

When I was an undergraduate I was extremely fortunate to have received an internship at the Council of Economic Advisers in Washington, D.C. Even though I was anything but a Republican and the semester-long internship began less than three months after the bungled Watergate break-in at the Democratic National Committee by the White House “plumbers”, I eagerly grabbed this opportunity when it was offered in August, 1972 to begin that September. I was assigned to two labor market economists, one of whom (June O’Neill) would be tasked to write chapter 4 “The Economic Role of Women” in the 1973 Annual Report of the CEA and for which I did all the tabulations and number-crunching at a time when research assistants at the Council had Wang calculators on their desks that were tethered to an “electronic package” with a data hose but that did possess the virtue of calculating logarithms (!) with a single keystroke. My bosses were sufficiently satisfied with my work that I was invited back for the Summer of 1973.

My time at the Council coincided not just with the Watergate scandal but also with some of the episode of wage-and-price controls. When concerned citizens wrote to the Council of Economic Advisers, their letters would be passed down the pecking order and most often landed on the desk of an intern to draft a polite, Econ 1 response. One of the women interns, came through the office in a rant because when she consulted Paul Samuelson’s Economics for some boiler-plate about shortages and price controls to include in a letter, she found a not untypical Samuelsonian wisecrack “Of course, there are always a few women and cranks, longer on intuition than brains, who blame their troubles on the mechanism of rationing itself rather than on the shortage.” Even though I was not even aware that I would be going to MIT myself a little more than a year later, I instinctively wanted to protect my hero, figuring my colleague consulted an old edition and times-have-changed-for-the-better. A nice thing about the Council of Economic Advisers is that it had economists of all generations in residence so that in a matter of no time we had multiple editions in which we could seek and then compare the offending passages. Indeed my intuition was correct, by the 1970 edition “women and cranks” was softened to “cranky customers” but to our procrastinating horror we discovered that the earliest edition referred to “women and soap-box orators” that was only later changed to the somewhat more offensive “women and cranks”.

Not long after this serendipitous discovery of Paul Samuelson’s personal journey in matters of gender awareness, I heard that Herbert Stein and Marina von Neumann Whitman were to testify before the Joint Economic Committee of the U.S. Congress in a set of hearings devoted to the “Economic Problems of Women” and that no less an economist than Paul Samuelson was to testify as well. I quickly wrote up a memo to my boss, June O’Neill, suggesting that perhaps this would be a cute opening remark for Marina Whitman, albeit at Samuelson’s expense, illustrating the gradual rise in consciousness of economists with respect to women’s issues.

Today’s posting includes the relevant part of Marina von Neumann Whitman’s testimony where the input from my memo can be seen. (Thank you for the memory FRASER!)

I was slightly disappointed when I read Paul Samuelson’s printed testimony, because he led off with a remark to the effect that “I am surprised, given the magnitude of the economic problems facing the United States, that the President’s Council of Economic Advisers would have the time to go back to uncover my past errors.” That statement did not get recorded in the official transcript however. My memory of his facial expression at the time was of unamused to slightly irritated. Later as a graduate student I never did have the courage to ask Samuelson if he remembered that particular moment in the hearing much less confess to my complicity.

My feeble attempt at a reparation for even providing the backstory to this Samuelson anecdote rather than mercifully allowing it to remain in the obscurity of a transcript from a JEC hearing is to place into my blog record a few paragraphs from near the end of Samuelson’s spoken testimony.

In today’s summer of the American white-male’s discontent Samuelson’s casual remarks about the differences in labor market experiences of men and women seem quite prescient. 

_______________________________

 

ECONOMIC PROBLEMS OF WOMEN

Tuesday, July 10, 1973.

Congress of the United States,
Joint Economic Committee,
Washington, D.C.

 

The committee met, pursuant to notice, at 10:12 a.m., in room S-407, the Capitol Building, Hon. Martha W. Griffiths (member of the committee) presiding.

Present: Representative Griffiths and Widnall.

[…]

Mrs. Whitman. […] In fact, this fourth chapter of the 1973 Economic Report of the President represents the first time that the report of the Council of Economic Advisers has directed considerable attention to the economic problems of women. The formation of the Advisory Committee on the Economic Role of Women is another first for the Council. The economics profession has been slow in developing expertise on the special problems of women; and Federal data sources have only begun to tailor surveys so that they can yield appropriate statistics about women. One role of the Committee is to fill in some of the deficiencies and expertise on this subject for the Council. The association of the Committee with the Council provides a channel through which the interests of women are represented in economic policy decisions.

Indeed, we are glad to observe that finally women and economics are being included in the same breath without a knowing wink by the male economist. One sign of this is the change in a passage found in various editions of Professor Paul Samuelson’s well-known economics textbook. Lamenting the popular reaction to the results of rationing, Professor Samuelson wrote in his first edition (1948):

Of course, there are always a few women and soapbox orators, who are longer on intuition than brains and who blame their troubles on the mechanism of rationing itself rather than on the shortage.

In the seventh edition (1967), we find soapbox orders dropped and the sentence is changed to:

Of course, there are always a few women and cranks, longer on intuition than brains, who blame their troubles on the mechanism of rationing itself rather than on the shortage.

By the liberated eighth edition (1970) he writes:

Of course, there are always some cranky customers, longer on intuition than brains, who blame their troubles on the mechanism of rationing itself rather than on the shortage.

So by 1970 “women” had disappeared from that rather slighting reference.

We have asked to insert into the record chapter 4 of the 1973 economic report. I would like here simply to talk about a few highlights of the chapter and primarily to report on some additional information and analysis that we have been able to acquire and develop since the economic report…

[…]

Source: United States. Congress. Ninety-Third Congress, First Session. Joint Economic Committee. Economic Problems of Women: Hearings, Part 1 (July 10, 11, and 12, 1973), p. 33.

[…]

Representative Widnall.  Mr. Samuelson, you infer in your statement and in your chapter on discrimination in the new edition of your textbook that the economic problems of women are due to “confinement to a limited group of industries and occupations within those industries.”

Could you explain what other factors you theorize to be significant in creating the female-male differential in that field?

Mr. Samuelson. We have learned about some of the detailed studies that are made to break down the different factors that explain an obviously large differential. It seems to me that these studies are excellent, the studies done by the Council of Economic Advisors, in comparison with earlier councils. It seems to me that we need more of them. But they must not have a soporific effect upon us, because, as in the case of all discrimination, there is a self-fulfilling and a self-perpetuating circle involved in discrimination. Women have less experience than men, and therefore you explain away the differential. But you have to ask yourself. “Why is the world run in such a way that the women get less experience for the good jobs?” A white male apparently is what all of Darwinian evolution has set out to create. Out of the slime came DNA, and then a backbone or something of a backbone was created, and then humans came down from the trees, and all this to create a white male. For, by census analysis of my colleague, Prof. Robert Hall, the only group who get automatic advances with age in the community, let’s say, after the age of 25, 27, 29, are white males. Women don’t get it, whether they are white or black. Black men don’t get it.

There is little good reason for a woman to have continuity in the labor force. She is given a rotten job by and large; then she leaves; and when she comes back, she again gets a rotten job. For a man, it is usually different. Only this last recession was a recession which hit MIT graduates and other professionals. As my suburban neighbors said while they were polishing their cars, why it’s people like us who have been thrown out of work. For a long time prior to that, all they had done was go through the coffee breaks and funeral by funeral move up the promotion and salary ladder. Now, that does not happen to the rest of the community. That is why, when I do an analysis of wage variance, or when Prof. Mincer does it, we pick up these same facts of discrimination once again, yes, women lack capital. The curse of the poor is their poverty. They lack human capital. Human capital is the ability to earn a large amount of money. And if you haven’t got it, you don’t earn a large amount of money. These are all attitude conditioned.

Let me give an example. It used to be said – I don’t know what the full truth was – that Jews had a bad occupational outlook in engineering. There was said to be great discrimination against them. There were very few Jews in engineering. And it was said, they are really not fitted for it. They don’t like work for pay, they like to be their own boss, probably lending money at high interest rates, and other such nonsense. And then a great change came. After World War II, in contrast to after World War I, go out to Route 128, or to Pasadena or the bay area, or Seattle, and you find that suddenly these people who previously had no human capital in that engineering-science line, no wish for it, no proclivity, no talent, they turned out to be, I would say, well represented in any random sample.

Attitude becomes self-reinforcing, and the statistics then prove for you what you already know, if you understand the attitudes involved.

So we are only talking about the visible peak of the iceberg of custom and discrimination. There have to be great changes. A 1-year change in legislation of course is only the beginning of a very long process.

 

Source: United States. Congress. Ninety-Third Congress, First Session. Joint Economic Committee. Economic Problems of Women: Hearings, Part 1 (July 10, 11, and 12, 1973), pp. 66-67.

_______________________________

 Addendum from a 1964 Oral History regarding the Council of Economic Advisers &c.

Thanks to a tip from Paul Samuelson’s biographer, Roger Backhouse, we have the following Samuelson quote that is probably as much a wise-crack aimed at a President who would appear to have confused home-economics with economics as it is an example of the way even liberal M.I.T. economists expressed themselves in the men’s locker-room. 

Samuelson. “…President Johnson made some reference to how a consumer-minded woman might be a good member of the Federal Reserve. Do you remember that, at one of the press conferences that he had? It seemed to me that in the first place one of the big issues will always be whether there will be undue concern over inflation. Women are very estimable but the Federal Reserve is not necessarily the best place for them and a consumer-minded woman would not be what the economists would generally…” [Samuelson was cut off here and the interview moved to a different topic]

Source:  Council of Economic Advisers Oral History Interview (Interviewer: Joseph Pechman. Interviewed: Walter Heller, Kermit Gordon, James Tobin, Gardner Ackley, Paul Samuelson)–JFK#1, August 1, 1964, pp. 365-6.

Categories
Courses Harvard Suggested Reading Syllabus

Harvard. Graduate Mathematical Economics. Goodwin, 1948

In the Fall term of 1948-49 assistant professor Richard M. Goodwin took over the graduate course in Mathematical Economics at Harvard from Wassily Leontief (who last taught the course during the academic year 1946-47).

Earlier postings at Economics in the Rear-View Mirror for Goodwin:

Reading list for a course on business cycles,
Letters from Burbank and Schumpeter on Goodwin’s behalf to Columbia,
and a 1951 Harvard Crimson feature written by the Edward Snowden precursor, Daniel Ellsberg (who leaked the Pentagon Papers in 1971).

Some might see “physics envy” in Goodwin’s selection of reference texts. But do remember, there was hardly a plethora of books on mathematical methods in economics to choose from at that time.

__________________________________

[Course Announcement]

Economics 204b (formerly Economics 104b). Mathematical Economics
Half-course (fall term). Tu., Th., 2:30-4. Assistant Professor Goodwin.

Properly qualified undergraduates will be admitted to this course.

 

Source: Harvard University. Final Announcement of the Courses of Instruction offered by the Faculty of Arts and Sciences for the Academic Year 1948-49, p. 77.

____________________________________

[Course enrollment]

[Economics] 204b (formerly 104b). Mathematical Economics (F). Assistant Professor Goodwin.

2 Graduates, 3 Seniors, 1 Junior, 1 Public Administration, 2 Radcliffe: Total 9

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1948-49, p. 77.

____________________________________

 

1948-49
Economics 204b

A
Partial Analysis

  1. The Role of Logical and of Empirical Elements in Economics
  2. Power Series and Linear Approximations
  3. Marshallian Static Market
  4. Dynamical Partial Equilibrium with examples of first and second order differential equations
  5. Durable Goods Markets, The Acceleration Principle and Simple Aggregative Mechanisms
  6. The Cob-web Theorem and the Multiplier
    First Order Difference Equations
  7. Inventory Cycles
    Second Order Difference Equations

Reading Assignments:

P. Frank, Foundations of Physics, Parts I, II and Section 14.
P. A. Samuelson, Foundations of Economic Analysis, Chs. I, II, IX, and X, pp. 302-307
Marshall, Principles of Economics, Book V, Ch. I, II, III
R. Frisch, “The Interrelation between Capital Production and Consumer Taking”, Journal of Political Economy, 1931.
M. Ezekiel, “The Cob-web Theorem,” in Readings in Business Cycle Theory
R. M. Goodwin, “The Multiplier,” in The New Economics, ed. S. E. Harris
L. A. Metzler, “The Nature and Stability of Inventory Cycles,” Review of Economic Statistics, 1941.
Ibid., “Factors Governing the Length of Inventory Cycles,” Review of economic Statistics, 1947.

 

B
General Interdependence

  1. The Leontief Matrix, Linear Systems
  2. The Multiplier as Matrix: Static Analysis, Inhomogeneous Systems
  3. The Multiplier as Matrix: Dynamic Analysis, Dynamical Difference Equation Systems
  4. Linear Dynamic Systems in Economics

Reading Assignments:

T. Haavelmo, “The Interdependence Between Agriculture and the National Economy, J.F.E. [Journal of Farm Economics], 1947.
W. Leontief, The Structure of the American Economy, pp. 1-42.
Ibid., “Output, Employment, Consumption, and Investment,” Q.J.E., 1944.
R. M. Goodwin, “Dynamical Coupling,” Econometrica, 1947.

Reading Period: (Read all of the following)

J. Tinbergen, “Econometric Business Cycle Research,” in Readings in Business Cycle Theory.
P. A. Samuelson, “Interactions between the Multiplier Analysis and the Principle of Acceleration,” in Readings.
Ibid., “Dynamic Process Analysis,” in A Survey of Contemporary Economics, ed. by H. S. Ellis.
Ibid., Foundations of Economic Analysis, Chs. XI and XII.

 

[Handwritten on back of library copy
of reading list by Richard M. Goodwin]

To be put on reserve for
Ec 204b

A. C. Aitken, Determinants and Matrices
F. L. Griffin, Introduction to Mathematical Analysis
R. Courant, Differential and Integral Calculus vol I and II
L. A. Pipes, Applied Mathematics for Engineers and Physicists
R. G. D. Allen, Mathematical Analysis for Economists
P. A. Samuelson, Foundations of Economic Analysis

____________________________________

 

[Handwritten note by Richard M. Goodwin]

 

Oct. 22, 1948

Reading Room
Widener Lib.

Dear Sirs:

I would like to have the following books put on reserve for Economics 204b.

A. C. Aitken, Determinants and Matrices
R. Courant, Differential and Integral Calculus vol I and II
L. A. Pipes, Applied Mathematics for Engineers
R. G. D. Allen, Mathematical Analysis for Economists
P. A. Samuelson, Foundations of Economic Analysis
P. Frank, Foundations of Physics
S. Harris, editor, The New Economics

Thanking you, I am

Sincerely

[signed]
Richard M. Goodwin

 

Source: Harvard University Archives. . Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1), Box 4, Folder “Economics 1948-1949 (2 of 2)”.

Image Source: Harvard Album, 1946.

 

Categories
Courses Harvard Suggested Reading Syllabus

Harvard. Advanced Economic Theory. William Fellner, 1950-51

As mentioned in the previous posting, William Fellner of the University of California was called in to fill for Wassily Leontief’s graduate course in Advanced Economic Theory during the academic year 1950-51 at Harvard. Another course taught by Fellner that year was history of economics for undergraduates. Still only available in libraries or from used-book dealers is the 1992 “Bio-Bibliography” of William J. Fellner by James N. Marshall. Of course “Bio” means “biography” here.

_____________________________________

If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

_____________________________________

[Course Announcement]

Economics 202 (formerly Economics 102a and 102b). Advanced Economic Theory
Full course. Tu., Th., and (at the pleasure of the instructor) Sat., at 11. Professor Fellner (University of California).

Economics 201 or an equivalent training is a prerequisite for this course. Other properly qualified students must obtain permission to register from the instructor.

 

Source:  Final Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences During 1950-51. Official Register of Harvard University, Vol. XLVII, No. 23 (September, 1950) , p. 83.

________________________________________

1950-51
Economics 202
Fall Term

Value Theory (Costs of Production, Demand, Principles of Pricing under Various Market Structures, and the Bearing of These on Welfare Problems)

The list of readings is not final. It will be adjusted to the classroom discussion. Some readings will be assigned, others recommended.

 

  1. Difficulty of “placing” the economies of the Western world in terms of concepts such as capitalism, socialism, individualism, collectivism, etc. Problems arising for theory from the multiplicity of more or less rigidly (or loosely) organized groups.

 

  1. Costs of Production

Production functions, the law of variable proportions.

Cost functions of single-plant firms, of multiple-plant firms and of industries. Short and long-run analysis. Internal and external economies. Relationship between supply functions and cost functions. The particular expenses function. The demand for factors of production. Technological and organizational improvement.

Readings:

Cassels, The Law of Variable Proportions (in Explorations in economics, Essays in Honor of F. W. Taussig).
Hicks, Value and Capital, Chs. 6 and 7.
Viner, Cost Curves and Supply Curves (reprinted from Zeitschrift fuer Nationaloekonomie, 1931).
Harrod, Doctrines of Imperfect Competition (reprinted from Q.J.E.)
Stigler, Production and Distribution in the Short-run (Readings in the Theory of Income Distribution).
Chamberlin, Proportionality, Divisibility and Economies of Scale (Q.J.E., February 1948).
Patinkin, Multiple-Plant Firms, Cartels and Imperfect Competition, (Q.J.E., February 1947).
Joan Robinson, The Economics of Imperfect Competition, Ch. 10 and Ch. 20.
Marshall, Principles of Economics, Appendix H.
National Bureau of Economic Research, Cost Behavior and Price Policy, Ch. 5.

  1. Demand Functions

The assumption of rational consumer behavior. Marginal utility and the indifference curve approach. The measurability problem. Consumer surplus. Complementarity and the rival relationship. Marginal utility of money. The significance of price-elasticity and of income-elasticity. Inferiority and the Giffen Effect. How much validity is there in criticisms of the rationality assumption?

Readings:

Marshall, Principles of Economics, Book IV.
Hicks, Value and Capital, Part I.
Henderson, Consumer Surplus and the Compensating Variation, Review of Economic Studies, February 1941.
Friedman-Savage, Utility of Choices Involving Risk, J.P.E., August 1948.
V. Neumann-Morgenstern, The Theory of Games, pp. 15-20.
Veblen, Marginal Utility Economics (in The Place of Science in Modern Civilization).

 

  1. Market Structures (monopoly, competition, monopolistic competition in large and small groups)

The industry concept and various measures of relationships between firms. The relationship between the size of the market and the size of the firm. The dependence of this relationship on real economies of scale, on exploitative advantages of scale, and on product-differentiation. The bearing of these on welfare. The concept of profit-maximization in various market-structures. Limitations of profit-maximization. “Institutional” considerations.

Readings:

Chamberlin, The Theory of Monopolistic Competition.
Joan Robinson, Economics of Imperfect Competition, Book V.
Fellner, Competition Among the Few, Chs. 1 (incl. Appendix) and 4 through 9.
Sweezy, Demand under Conditions of Oligopoly, J.P.E., June 1939.
Lerner, The Concept of Monopoly and the Measurement of Monopoly Power, Review of Economic Studies, June 1934.
(Possibly also Rothschild, Economica, February 1942, and Bain, ibid, February 1943).
Buchanan, Advertising Expenditures: A Suggested Treatment, J.P.E., August 1942.
Marschak, Neumann and Morgenstern on Static Economics, Journal of Political Economy, April 1948 (reprinted in Cowles Commission Papers No. 13).
Ellis (ed.), Survey of Contemporary Economics, Ch. 1 (Haley).
National Bureau of Economic Research, Cost Behavior and Price Policy (Sections in Chs. 9-11).

 

  1. The Nature of the General Equilibrium Approach

The coexistence (for methodological reasons) of two types of General Equilibrium approach. Difficulties arising from this. Characterization of the general theory of allocation, given the level of aggregate activity; and of the theory of the determinants of aggregate activity. Brief discussion of the first (the second will presumably be left to the Spring Term).

Readings:

Stigler, Theories of Production and Distribution, Chapter on Walras.
Leontief, Output, Employment, Consumption and Investment, Q.J.E., February 1944.
(Probably also assignments in Phelps-Brown, The Framework of the Pricing System).

__________________________________________

Econ. 202B (Spring Term) [1950-51]

Employment Theory (including introduction to National Income Concepts) and the Theory of Distribution

The list of readings is not final. It will be adjusted to the classroom discussion. Some readings will be assigned, others recommended.

I

Introductory discussion of the changing content of concepts expressing the “net” yield of economic activity. References to Quesnay, Smith (W. of N. Book II Chs. 2 and 3), Ricardo (Principles Ch. 26), Marx, Fisher (Nat. of Cap. and Int. Ch. 7), Pigou (Ec. of Welfare, Book I Chs. 1-8).

 

II

Determinants of aggregate output and employment in terms of “savings-investment” concepts such as the Wicksellian, Robertsonian, Keynesian. Translation of the analysis into terms of contemporary national income concepts. The savings-investment approach and the velocity approach. The search for links between value theory and the aggregative approach.

Readings:

Keynes, General Theory of Employment, Interest and Money; and The Ex-ante Theory of the Rate of Interest, Economic Journal, December 1937.
Ellis, (ed.), Survey of Contemporary Economics, Ch. 2; Ch. 8
Lange, The Rate of Interest and the Optimum Propensity to Consume (Readings in Business Cycle Theory).
Robertson, Saving and Hoarding (Economic Journal, September 1933).
Survey of Current Business, July 1947 Supplement.
Angell, Investment and Business Cycles (Chs. 9 and 11 and appendix on income velocity.

 

III.

Bearing of national income concepts on welfare problems. How near can we get to a directly relevant welfare judgment by using “objective” data of this sort? The main qualifications (changes in tastes, distribution, working conditions, natural resources, difficulties inherent in “net” income concepts, etc.). Long-run trends.

Readings:

Pigou, The Economics of Welfare, Part I, Chs. 1-8.
Fisher, The Nature of Capital and Income, Ch. 7.
The Hicks-Kuznets discussion in Economica, May 1940; February, May and August 1948 (only specific sections will be covered)
Kuznets, National Product Since 1869 (sections relating to long-run trends in terms of “overlapping decades”).

 

IV

The statistically distinguished income shares (their short- and long-run behavior); the problem of the functional shares proper.

Readings:

Annual Report of the Council of Economic Advisers (sections in text and appendix relating to distribution in terms of compensation of employees, income of individual owners, corporate profits, etc.)
Fisher, The Theory of Interest, Chs. 5-11.
Boehm-Bawerk, The Positive Theory of Capital, Book V (mainly Chs. 3-5).
Robertson, Mr. Keynes and the Rate of Interest (Readings in the Theory of Income Distribution).
Hicks, Value and Capital, Ch. 12.
Hicks, The Theory of Wages, Ch. 5.
Fellner, Competition Among the Few, Ch. 10, and pp. 311-328).
Knight, Capital and Interest; and Monetary Policies and Full Employment, pp. 152-166 (Readings in the Theory of Income Distribution).
Knight, Risk, Uncertainty and Profit, Ch. 7.
Schumpeter, The Theory of Economic Development, Ch. 4.; and references to Business Cycles.

 

V

The meaning of the functional-distribution problem on the one hand and of distribution by size of income on the other.

Readings:

Selma F. Goldsmith, Statistical Information on the Distribution of Income by Size in the United States, A.E.R., May 1950, Papers and Proceedings
Annual Report of the Council of Economic Advisers

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1), Box 5, Folder “Economics 1950-1951 (2 of 2)”.

Image Source: AEA portrait of William Fellner, Number 71 of a series of photographs of past presidents of the Association, in American Economic Review, Vol. 60, No. 1 (1970).

Categories
Courses Harvard Syllabus

Harvard. First year Graduate Economic Theory. Haberler, 1950-51

The first theory course for economics graduate students around mid-20th century, Economics 201 (earlier 101), was taught most of the time by Edward Chamberlin. But in 1950-51 Chamberlin was on leave in France as a Fulbright Scholar and Gottfried Haberler taught the first year of theory instead. 

New addition: Here is the link to the two semester final exams.

Somewhat peculiar is Haberler’s written intention to include Keynesian Economics together with Marxian Economics as the last item of his Fall semester course. However one can see that by the time the second semester rolled around, Haberler had decided to throw Marxian economics under the bus and Keynesian Economics then became the sole final theory to be discussed in his course. Also worthy of note are references to the recommended textbook treatments in German and French.

I’ll note here that the second year of theory, Economics 202, was usually taught by Wassily Leontief who, like Chamberlin, was also not listed in the course announcements for 1950-51 (he had been award a John Simon Guggenheim Memorial Foundation Fellowship for the year). Instead the second year course was taught by William Fellner from Berkeley (the syllabus for his undergraduate History of Economics course has been posted earlier). I’ll post the Fellner reading list for Economics 202 soon. Thus we see that Austro-Hungarian hands were rocking the cradle of baby economists at Harvard at the exact midpoint of the twentieth century.

The last time I saw my undergraduate mentor William Fellner was when he took me to lunch at the Mayflower Hotel in Washington, DC. in 1976 or 1977. He was accompanied by his American Enterprise Institute colleague Gottfried Haberler, who was William Fellner’s regular AEI lunch buddy. Only with this posting did I realize that the two of them overlapped 1950-51 at Harvard.

_____________________________________

If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

_____________________________________

[Course Description]

Economics 201 (formerly Economics 101a and 101b). Economic Theory
Full course. Tu., Th., and (at the pleasure of the instructor) Sat. at 10. Professor Haberler.

This course is normally taken by graduate students in their first year of residence.

 

Source: Harvard University. Official Register of Harvard University, Vol. XLVII, No. 23 (September 1950). Final Announcement of the Courses of Instruction offered by the Faculty of Arts and Sciences During 1950-51, p. 83.

______________________________________

 

Fall Term, 1950
Economics 201 – Economic Theory

I.       Introduction

“Scope and Method”
Types of Economic Theory
Historical Sketch

II.      General Survey of The Economic Process

The Institutional Setting
Income Flows
System of Markets

III.    Demand and Supply Analysis

Cost vs. Utility Theory of Value
Stability of Equilibrium
Some Formal Relationships
Demand and Supply Curves
Elasticity of Demand and Supply
Marginal, Average, Total Revenue
Marginal, Average, Total Cost

IV.     Theory of the Household and Consumption

Utility Theory
Indifference Line Analysis
Complementarity and Substitution
Income Effects, Substitution Effects, Price Effects
Application of Indifference Line Analysis to Theory of Exchange
Measurability of Utility
Interpersonal Comparisons
Joint Demand

V.      Theory of the Firm and Production

Cost Curves
Production Function
Marginal Productivity
Joint Supply

VI.     Theory of Distribution

A.      General
B.      Theory of Wages
C.      Theory of Rent
D.      Theory of Interest and Capital: The Time Factor
E.      Theory of Profits: Uncertainty

VII.   Theory of Market Structures

Competition
Monopoly
Discriminating Monopoly
Monopolistic Competition and Imperfect Competition
Duopoly and Oligopoly
Bilateral Monopoly
Theory of Games

VIII.  Welfare Economics

IX.     Keynesian Economics, Marxian Economics

 

Bibliography and Reading Assignments

The literature on the subjects covered by this course is enormous and is growing rapidly, textbook literature as well as monographs and articles on special topics. No hard and fast assignment will be made but rather suggestions from which students should choose according to their individual needs and preparation.

General

The general texts coming nearest to covering the topics which are treated in the present course are:

Boulding, Economic Analysis (1st or 2nd edition)
Stigler, Theory of Price

In German:
Erich Schneider: Einführung in die Wirtschaftstheorie (Vol. I and II, Vol. III to appear later)
H. v. Stackelberg: Grundlagen der theoretischen Volkswirtschaftslehre

In French:
Jean Marchal: Cours d’Économie Politique (Vol. I) or (shorter and better) Le Mécanisme des Prix [et la Structure de l’Économie] (2nd ed.)

A. Marshall’s Principles is still indispensable

See also:

Survey of Contemporary Economics (Especially Ch. 1)
Readings in Economic Analysis (Ed., R. V. Clemence, 2 vols.)
Readings in the Theory of Income Distribution (Blakiston)

I.      Introduction

Literature on “Scope and Method” is on the whole arid. Many texts have introductory chapters on those subjects (e.g., Stigler’s Theory of Price). Some reading on that subject along with, rather than prior to, the study of substantive problems is advisable.

Suggestions:

Readings Volume I, by Clemence, First two chapters
L. Robbins: Nature and Significance of Economic Science
J. N. (not M) Keynes: Scope and Method of Political Economy
O. Lange: “The Scope and Method of Economics,” in Review of Economic Studies, Vol. XIII(1), 1945-46
L. Robbins: “Live and Dead Issues in the Methodology of Economics,” Economica, New Series, Vol. V, 1938
L. Robbins: “The Economist in the 20th Century,” Economica, New Series, Vol. XVI, 1949.
F. Machlup: “Why Bother With Methodology?” Economica, New Series, Vol. III, 1936.
M. Friedman, “Lange on Price Flexibility and Employment: A Methodological Criticism,” A.E.R., Vol. 36, 1946.
T. C. Koopmans: “Measurement Without Theory,” R.E.Statistics, Volume 29, 1947.
(Review of Economic Statistics, Vol. 31, 1949, Criticism by Vining and reply by Koopmans)
Numerous writings by F. H. Knight deal with methodological questions. Most of them are collected in The Ethics of Competition and Freedom and Reform
T. W. Hutchison: Significance and Basic Postulates of Economic Theory (Positivistic)
Of older writers, Cairnes (Logical Method of Political Economy), N. W. Senior (Outline), and W. Bagehot (Postulates of English Political Economy) may be mentioned.

II.      General Survey of Economic Process

Modern literature on National Income frequently presents graphic pictures of economic process as a whole. See Schneider, op.cit., Vol. I.

III.    Demand and Supply Analysis

Henderson: Supply and Demand, Ch. 2
Marshall, Principles, Book V, Chs. 1, 2, 3, 4, 5, 8, 9, Appendix I
Mill, Principles, Book III, Chs. 1-4
Stigler, Chapter 4
Boulding, Parti I (See especially Appendix on Elasticity, p. 137)
J. Robinson: The Economics of Imperfect Competition, Ch. 2

IV.     Theory of Household and Consumption

Hicks: Value and Capital, Part I
Boulding: 2nd ed., Chs. 29, 33
Stigler: Chapters 5 and 6
Relevant chapters in Marshall
Relevant chapters in Stackelberg and Schneider
Leontief, “The Pure Theory of the Guaranteed Annual Wage Contract,” J.P.E., February, 1946

V.      Theory of the Firm and of Production

Hicks: Value and Capital, Chs. 6 and 7
Viner: “Cost Curves and Supply Curves,” reprinted in Readings in Economic Analysis, Vol. II
Boulding: Economic Analysis, new edition, Chs. 20, 21, 22, 23, 24, 31
Readings in the Theory of Income Distribution, Chs. 6, 5
Knight, Risk Uncertainty, and Profits, Ch. 4
Marshall, Principles, Book V, Ch. VI, “Joint and Composite Demand and Supply”
Lerner: The Economics of Control, Chs. 10-18

______________________________________

Economics 201
Economic Theory — G. Haberler
Spring Term, 1951

I.       Theory of Distribution

A.      General
B.      Wages
C.      Rent
D.      Interest
E.      Profits

II.      Welfare Economics

III.    Theory of Market Structures

Perfect, pure, workable competition
Monopoly
Duopoly and Oligopoly
Bilateral Monopoly

IV.     Keynesian Economics

 

Literature

I.       Theory of Distribution

1.      General

Boulding, Economic Analysis, Ch. 11
J. M. Clark, Distribution in Encyclopedia of The Social Sciences and Readings in Income Distribution.
Douglas, Theory of Wages, Part I
Marshall, Principoles, Book V., Ch. VI, “Joint Demand”

Further Suggested Reading:

Stigler, Production and Distribution Theories
J. B. Clark, The Distribution of Wealth
Douglas, “Are There Laws of Production?” A.E.R., Vol. 38, 1948

2.      Wages

Hicks, Theory of Wages, Chs. 1-4
Readings in the Theory of Income Distribution, Ch. 12 (Robertson)
Lester-Machlup, Discussion on Marginal Analysis (A.E.R., 1946-47 and Readings in Economic Analysis, Vol. 2
Stigler, “The Economics of Minimum Wage Legislation,” A.E.R., 1949 and in Readings in Labor Economics
Keynes, General Theory, Chs. 1,2

Further Suggested Reading:

Douglas, Theory of Wages
Readings in Income Distribution, Chs. 14, 16, 17, 18, 19
Readings in Labor Economics

3.      Rent

Robinson, Economics of Imperfect Competition, Ch. 8
Readings in Income Distribution, Chs. 31, 32.

4.      Capital and Interest

Böhm-Bawerk, Positive Theory of Capital, Book I, Ch. II; Book II; Book V.
Wicksell, Lectures, Vol. I, pp. 144-218
Fisher, Part I, II, III, Chs. X, XI
Schumpeter, Theory of Economic Development, Chs. IV, VI
Readings in Income Distribution, Chs. 20, 21

Further Suggested Reading:

Metzler, “The Rate of Interest and the Marginal Product of Capital,” J.P.E., August 1950
Knight, “Interest,” in The Ethics of Competition and Encycloopaedia of the Social Sciences
Readings, Chs. 22, 23, 26
Hayek, The Pure Theory of Capital

5.      Profits

Beddy James, Profits, Ch. X
Readings in Income Distribution, Chs. 27, 29.
Schumpeter, Theory of Economic Development

Further Suggested Reading:

Readings, Ch. 30
Knight, Risk, Uncertainty and Profits, Part III.

 

II.      Welfare Economics

Hicks, “The Foundations of Welfare Economics,” Economic Journal, Vol. 49, 1939
Samuelson, Foundations of Economic Analysis, Ch. VIII

Further Suggested Reading:

A. Burk (Bergson), “A Reformulation of Certain aspects of Welfare Economics”, Q.J.E., February 1938, and Readings in Economic Analysis, Vol. I
Pigou, Economics of Welfare, Parts I and II
Lerner, Economics of Control
Reder, Studies in the Theory of Welfare Economics
Myint, Theories of Welfare Economics
Little, Critique of Welfare Economics
Samuelson, Evaluation of Real National Income
Ruggles, Nancy, “Marginal Cost Pricing,” two articles, Review of Economic Studies, Vol. 17, 1949-50.

 

III.    Market Structures

Chamberlin, Monopolistic Competition
Fellner, Competition Among the Few
Hayek, “The Meaning of Competition,” in Individualism and Economic Order
J. M. Clark, “Workable Competition,” A.E.R., and Readings in the Control of Industry, 1940
F. Machlup, “Competition, Pliopoly and Profit,” Economica, February, May, 1942
Rothschild, “Price Theory and Oligopoly,” Economic Journal, Sept., 1947

Further Suggested Reading:

Cost Behavior and Price Policy, National Bureau of Economic Research, 1943
Hall and Hitch, Price Theory and Business Behavior
Harrod, “Price and Cost in Entrepreneurs’ Policy,” Oxford Economic Papers, No. 2, May 1939
Pigou, Economics of Welfare, Chs. on “Discriminating Monopoly,” and “The Special Problem of Railway Rates”
Joan Robinson, Economics of Imperfect Competition, Book V

 

IV.     Keynesian Economics

Hicks, “Keynes and the Classics,” in Readings in Income Distribution, Ch. 23
J. H. Williams, An Appraisal of Keynesian Economics
Tarshis, An Exposition of Keynesian Economics
Lawrence Klein, “Theories of Effective Demand,” in Readings in Economic Analysis, Vol. I.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1), Box 5, Folder “Economics 1950-1951 (2 of 2)”.

Copy also found in Hoover Institution Archives. Milton Friedman Papers, Box 80, Folder 8 “University of Chicago [sic] Syllabi by others”.

Image Source: Harvard Album, 1950.

 

Categories
Chicago Economists Funny Business

Chicago. HMS Pinafore parody about Milton Friedman

What is a faculty-student party without skits and songs in which popular texts are given a good burlesque once over? An even duller affair to be sure.

I am the first to admit that Economics in the Rear-View Mirror is a pretty dry boutique blog. Even my occasional attempts to liven things up are bound to fall flat for those who have not endured the rigors of graduate education in the dismal science. But in the genuine interest of preserving artifacts of graduate education in economics past, I have already included Professor William Parker’s hit parody of the hymn “Rock of Ages”, originally performed at a Yale skit party and later in 1976 at the Adam Smith Roast organized by M.I.T. graduate students of economics. This posting now adds a text (authorship unknown…any claimants out there?) from the University of Chicago. 

“A good parody is a fine amusement, capable of amusing and instructing the most sensible and polished minds; the burlesque is a miserable buffoonery which can only please the populace.” (translation from “Parodie” in Encyclopédie ou Dictionnaire raisonné des sciences, des arts et des métiers, 12:73–74 (Paris, 1765)). 

Readers may judge for themselves where this artifact falls in the spectrum running from “good parody” to “miserable buffoonery”.

Milton Friedman kept one folder in his files dedicated to humor from University of Chicago skits and student publications. The following burlesque aimed at Milton Friedman himself was considered good enough in Chicago that it was recycled at least once. Both versions in the Friedman folder are undated and I welcome blog visitors to express their opinions as to which version might have preceded the other (with explanation).

For those who don’t know the original, here is a video clip of “When I was a Lad” from the operetta H.M.S. Pinafore by Gilbert and Sullivan.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

_____________________________________

Version 1:

MEMBER OF THE FACULTY
(to the tune of “When I was a lad” from PINAFORE)

 

When I was a lad I served a term
Under the tutelage of A. F. Burns.
I read my Marshall completely through
From beginning to the end and then backward, too.
I read my Marshall so carefully that now I am professor at the U. of C.
(He read his Marshall so carefully that now he is professor at the U. of C.)

I learned the philosophy of “as if”
And now everything appears relatif.
Of exegesis I obtained such a grip
That soon I was granted a fellowship.
Oh, such a good fellow you never did see, so now I am professor at the U. of C.
(Oh, such a good fellow you never did see, so now I am professor at the U. of C.)

Since products all do clearly compete
From automobiles to babies sweet,
The very existence of monopoly
I explained away as sophistry.
This sophistry is so good for me, that now I am professor at the U. of C.
(This sophistry is so good for he, that now he is professor at the U. of C.)

Of Keynesians I can make mincemeat;
Their battered arguments now line the street.
I get them in their weakest assumption,
“What do you mean by consumption function?”
They never gave an answer that satisfied me, so now I am professor at the U. of C.
(They never gave an answer that satisfied he, so now he is professor at the U. of C.)

Of laissez-faire I am the champ,
Outstanding member of the liberal camp.
With social zeal I never have burned;
With feasibility I’m not concerned.
This ivory tower so suited me, that now I am professor at the U. of C.
(This ivory tower so suited he, that now he is professor at the U. of C.)

Now students all, whoever you may be,
If you want to climb the academic tree,
Stick close to your texts and never disagree
And you all may be professors at the U. of C.
(Stick close to your texts and never disagree
And you all may be professors at the U. of C.)

____________________________________________

Version 2:

MEMBER OF THE FACULTY:
(to the tune of “When I was a Lad” from H.M.S. Pinafore)

When I was a lad I served a term
Under the tutelage of A. F. Burns
I studied my Marshall completely thru
From beginning to the end and then backwards too
>
I studied my Marshall so carefully that now I am professor at the U. of C.

Chorus: (He studied his Marshall so carefully that now he is professor at the U. of C.)

[4 beats]

I learned the philosophy of “AS IF”
And now everything appears relatif
Of exegesis I obtained such a grip
That soon I was granted a fellowship
>
Oh, such a good fellow you never did see, so now I am prof. at the U. of C.

Chorus: (Oh, such ….)

Since every product does compete
From an automobile to a baby sweet
The very existence of monopoly
I explain away as sophistry
>
This sophistry is so good for me that now I am teaching at the U. of C.

Chorus: (This sophistry ….)

Of Keynesians I can make mincemeat
Their battered arguments now litter the street
I hit them in their weakest assumption
“What do you mean by consumption function?”
>
They never gave an answer that satisfied me, so now I am prof. at the U. of C.

Chorus: (They never….)

Of laissez-faire I am the champ
The outstanding member of the liberal camp
With social zeal I never have burned
With feasibility I am not concerned
X>
This ivory tower so suited me that now I am professor at the U. of C.

Chorus: (This ivory ….

Now students all whoever you may be
If you want to climb the academic tree
Stick close to your texts and never disagree
And you all may be professors at the U. of C.

Chorus: (And you …)

 

Source: Hoover Institution Archives, Milton Friedman Papers, Box 79, Folder 6 “University of Chicago, Miscellaneous”.

Image Source: HMS Pinafore performance by the Bryn Mawr Glee Club (April 1915).

 

 

Categories
Chicago Economists Yale

Chicago. James Tobin Autobiographical Letter from Faculty Meeting, 1950

The following autobiographical remarks by James Tobin were circulated among the University of Chicago faculty before its Monday, February 13, 1950 meeting. After discussing the “Old Business” of the Committee Report on Ph. D. Thesis requirements and Departmental policy on library acquisitions, a third item added by hand to the mimeographed agenda was “C. Appointment (Tobin)”. 

Cf. the Search Committee report on Tobin from Columbia University, also from 1950.

Robert Dimand has recently published the book James Tobin in the Palgrave Macmillan series Great Thinkers in Economics.

A list of major works and Tobin-related links are at the Gonseca History of Economic Thought Website.

_____________________________________

If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

_____________________________________

TO: Professor T. W. Schultz

DATE: January 27, 1950

FROM: J. Marschak

 

Following our conversation on Tuesday, I attach 20 copies of the biography of James Tobin, with the request that they be circulated among the members of the Department.

Please note that Tobin’s article “Tax Measures to Encourage Saving” has been published in the meantime in the recent issue of the American Economic Review.

Sincerely yours,

Jacob Marschak

 

 

JAMES TOBIN. (Letter of April 2, 1949)

I was born March 5, 1918, in Champaign, Illinois, attended the local schools and the University of Illinois High School. I went to Harvard College on a National Scholarship and was graduated in 1939. I majored in economics in college, and did two years of graduate work in economics at Harvard 1939-41. I worked at Washington at OPACS and WPB from June 1941 to April 1942, when I went into the Navy and served as a line officer on a destroyer. I was “separated” in January 1946 and returned to Harvard to write a thesis. I was a part-time teaching fellow until I received the degree of Ph. D. I am married and have one child, aged 8 months.

I have indicated my training in economics in the previous paragraph: it is better than my mathematical background. In college I had two years of calculus, and as a graduate student I took a half-year course in mathematical statistics and a half-year course in mathematical economics. One of my chief occupations as a Junior Fellow has been to try to improve my mathematical equipment, by attending some courses and by independent work. I have studied advanced calculus, probability, differential equations, modern algebra.

Publications: “Note on the Money Wage Problem,” QJE, LV, 1941, 508-15. “The Role of Statistical Forecasts in Planning for Defense,” Public Policy, III, 1942, 197-223. “Liquidity Preference and Monetary Policy,” Rev. Ec. Stat., XXIX, 1947, 124-131. “Rejoinder” (to Clark Warburton, on same subject), ibid., XXX, 1948, 314-317. “Money Wage Rates and Employment,” in The New Economics, 572-587. “The Fallacies of Lord Keynes’ ‘General Theory’” (By Jaccques Rueff): Comment,” QJE, LXII, 1948, 763-770. A note on “Tax Measures to Encourage Saving” will be published in the AER later this year.

My thesis was entitled “A Theoretical and Statistical Analysis of Consumer Saving.” In it I attempted to derive a saving function by using both budget data and time series—a device suggested by you—and to bring in variables other than income: asset holdings, capital gains, price level. An article based on the thesis is promised for the projected volume in honor of John H. Williams. I am very much interested in the problems involved in obtaining statistical demand functions and am at present completing work on one for food, again using both budget data and time series.

 

Source: Hoover Institution Archives, Milton Friedman Papers, Box 79, Folder 2 “University of Chicago Minutes, Economics Department, 1949-1953”.

Image Source: Yale University Manuscripts & Archives. Digital Images Database. “James Tobin in war uniform (1945-December)”.