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Economics Professors’ Salaries by Rank (6), 1965-66

 

 

This is the sixth table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. In the previous five tables The Cartel reports median or average incomes or ranges of salary offers by ranks across departments. In this posting we have Table 6c from the summary report that gives the salary distributions by rank for 335 professors, 143 associate professors and 185 assistant professors from all 27 departments.

Earlier postings gave the distribution for full-professors, the distribution for associate professors, and the distribution for assistant professors across departments. Two previous postings have the actual distributions for entering salaries for new Ph.D.’s for 1964-65 and 1965-66 and the anticipated range of salary offers for new Ph.D.’s for 1966-67.

Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

 

____________________

TABLE 6c

Salaries of Economists (9-10 month, academic year, 1965-66) in 27 of the 29 Departments of Economics (The Cartel):
N = Number of Persons

MID POINT OF RANGE PROFESSORS ASSOCIATE PROFESSORS ASSISTANT PROFESSORS
26,750/and over 2
26,500 0
26,000 2
25,500 1
25,000 8
24,500 0
24,000 4
23,500 2
23,000 7
22,500 2
22,000 12
21,500 7
21,000 10
20,500 5
2,0000 22
19,500 10
19,000 13
18,500 11
18,000 24
17,500 8
17,000 19
16,500 23
16,000 27
15,500 20 1 0
15,000 21 2 1
14,500 14 2 0
14,000 22 10 0
13,500 10 12 0
13,000 10 13 1
12,500 7 18 2
12,000 6 20 1
11,500 3 21 7
11,000 3 13 9
10,500 0 18 18
10,000 0 9 35
9,750 1 9
9,500 2 28
9,250 1 11
9,000 0 24
8,750 0 8
8,500 0 13
8,250 2
8,000 15
7,750 1
N=335 N=143 N=185

 

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Image Source:  “Me and my partner” by C. J. Taylor on cover of Punch, December 25, 1889. Library of Congress Prints and Photographs Division Washington, D.C.

 

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Expected New PhD Starting Salaries in U.S. Economics Departments (5), 1966/67

 

 

This is the fifth table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. Table 5c give figures for the anticipated range of salaries for “freshly completed PhD’s” for the coming academic year (1966-67) across the departments reporting. Earlier postings gave the distribution for full-professors, the distribution for associate professors, and the distribution for assistant professors. The previous posting has the actual distributions for entering salaries for new Ph.D.’s for 1964-65 and 1965-66. Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

The copy of this table in the Johns Hopkins University archives has a useful handwritten addition. It is noted that the median lower bound of the range is $9,250 and the median higher bound of the range is $10,000. Thus one might say a measure of the range of the anticipated, as of December 1965), 9-10 month salary offers for “freshly completed PhDs” for 1966-67 was ($9,250 — $10,000), though such a range was not necessarily anticipated by any one of the 27 departments responding to that question.

Compared to Table 4c, this table tells us that the range of offers for “freshly completed PhDs” was anticipated to move up $250 about a 2.67% nominal increase from 1965-66 to 1966-67.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

 

____________________

TABLE 5c
Departments Expect to Have to Offer to Get
“Freshly Completed PhD’s for Next Year, 1966-67

 

MID-POINT OF RANGE

FROM TO
13,000 0

0

12,500

0 0
12,000 0

1

11,500

0 0
11,000 0

6

10,500

0 7
10,000 5

6

9,750

0 0
9,500 8

4

9,250

1 0
9,000 8

2

8,750

1 0
8,500 1

1

8,250

0 0
8,000 3

0

N=

27

27

 

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Image Source:  Caption under the drawing: “No class of labor feels the grip of grinding monopoly more than our underpaid, overworked ball-players.”  “The base-ball Laocoon” by L. M. Glackens. Cover of Punch, May 14, 1913. Library of Congress Prints and Photographs Division Washington, D.C.

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New PhD Starting Salaries in U.S. Economics Departments (4), 1964/5-1965/66

 

 

This is the fourth table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. Table 4c give figures for the distribution of salaries for “freshly completed PhD’s” across the departments reporting. Previous postings gave the distribution for full-professors, the distribution for associate professors, and the distribution for assistant professors. The next posting has the anticipated (as of December 1965) range of salaries to hire freshly completed PhD’s for the coming academic year, 1966-67. Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

______________________

TABLE 4c
Entering Salaries of “Freshly Completed PhD’s” of New Staff Members
in the Fall of 1965-66 1964-65

 

MINIMUM MEDIAN MAXIMUM
MID-POINT OF RANGE 1965-66 1964-65 1965-66 1964-65 1965-66

1964-65

Over 10,999

0 0 0 0 1 0
10,500 0 0 0 0 2

1

10,000

2 0 4 3 7 0
9,750 2 0 4 0 1

0

9,500

4 1 2 0 2 4
9,250 1 2 3 3 1

3

9,000

3 6 0 5 3 6
8,750 1 1 3 5 0

1

8,500

4 5 3 5 2 5
8,250 1 1 0 2 0

1

8,000

2 3 1 0 1 0
7,750 0 0 0 0 0

1

7,500

0 1 1 2 0 1
7,250 1 1 0 0 0

0

N=

21 21 21 25 20 23
Median $9,000 $8,500 $9,250 $8,750 $9,750

$9,000

Mean

$8,952 $8,583 $9,190 $8,820 $9,600

$8,913

 

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

 

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Assistant Professors’ Salaries in U.S. Economics Departments (3), 1964/5-1965/66

 

 

This is the third table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. Tables 3c give figures for the distribution of assistant professor salaries across the departments reporting. Last posting gave the distribution for full-professors and the distribution for associate professors. The next posting has the distribution for entering salaries for new Ph.D.’s. Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

Also there is a table of the anticipated (as of December 1965) range of salaries to hire freshly completed PhD’s for the coming academic year, 1966-67.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

____________________

TABLE 3c
ASSISTANT PROFESSORS 1965-66, 1964-65

(1)
Median Salaries
All Assistant Professors

MID-POINT
OF RANGE

1965-66 1964-65
Over 11,249 0

1

11,000

0 0
10,500 3

0

10,000

7 1
9,750 2

0

9,500

6 6
9,250 3

2

9,000

4 5
8,750 1

6

8,500

1 2
8,250 1

3

8,000

1 2
7,750 0

0

7,500

0 0
7,250 0

1

N=

29 29
Median $9,500

$8,900

Mean

$9,402

$8,936

 

 

TABLE 3c
ASSISTANT PROFESSORS 1965-66, 1964-65

(2)
Average Salaries
“Superior Assistance Professors”
(Top 1/3)

MID-POINT
OF RANGE

1965-66 1964-65
Over 11,249 4

1

11,000

3 2
10,500 8

5

10,000

7 3
9,750 2

2

9,500 3 4
9,250 0

3

9,000

1 3
8,750 1

3

8,500

0 0
8,250 0

2

8,000

0 0
7,750 0

0

7,500

0 0
7,250 0

1

N=

 

29

 

29

Median $10,250

$9,500

Mean

$10,333

$9,575

 

 

TABLE 3c
ASSISTANT PROFESSORS 1965-66, 1964-65

(3)
Average Salaries
“Average Assistant Professors”
(Lower 2/3)

MID-POINT
OF RANGE

1965-66 1964-65
Over 10,749 0

1

10,500

1 0
10,000 5

0

9,750

2 0
9,500 4

3

9,250 7 1
9,000 2

8

8,750

4 3
8,500 1

5

8,250

2 3
8,000 1

1

7,750

0 2
7,500 0

1

7,250

0 1
N= 29

29

Median

$9,300 $8,800
Mean $9,251

$9,063

 

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Image Source: Brussells conference, cartel magnate (detail). Postcard from 1902. Library of Congress Prints and Photographs Division Washington, D.C. 20540 USA.

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Associate Professors’ Salaries in U.S. Economics Departments (2), 1964/5-1965/66

 

This is the second table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. Tables 2c give figures for the distribution of associate professor salaries across the departments reporting. Last posting gave the distribution for full-professors. Future postings include the actual salary distributions for assistant professors and freshly completed PhD’s 1964/65 and 1965/66. Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

Also there is a table of the anticipated (as of December 1965) range of salaries to hire freshly completed PhD’s for the coming academic year, 1966-67.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

____________________

TABLE 2c
ASSOCIATE PROFESSORS 1965-66, 1964-65

(1)
Median Salaries
All Associate Professors

MID-POINT
OF RANGE
1965-66 1964-65
Over 13,749 3 0
13,500 2 0
13,000 2 1
12,500 6 3
12,000 5 2
11,500 4 3
11,000 3 11
10,500 2 4
10,000 0 0
9,750 0 1
9,500 0 2
N= 27 27
Median $12,000 $11,000
Mean $12,173 $11,093

 

 

TABLE 2c
ASSOCIATE PROFESSORS 1965-66, 1964-65

(2)
Average Salaries
“Superior Associate Professors”
(Top 1/3)

MID-POINT
OF RANGE
1965-66 1964-65
Over 16,249 0 1
16,000 1 0
15,500 1 0
15,000 2 0
14,500 2 0
14,000 5 2
13,500 6 4
13,000 4 6
12,500 3 3
12,000 0 4
11,500 1 3
 [sic, cell empty] 1 2
 [sic, cell empty] 0 1
N= 26 26
Median $13,000 $12,186
Mean $13,082 $12,159

 

 

TABLE 2c
ASSOCIATE PROFESSORS 1965-66, 1964-65

(3)
Average Salaries
“Average Assoc Professors”
(Lower 2/3)

MID-POINT
OF RANGE
1965-66 1964-65
14,500 0 0
14,000 1 0
13,500 0 0
13,000 4 1
12,500 4 1
12,000 2 2
11,500 3 2
11,000 7 8
10,500 3 4
10,000 2 4
9,750 0 1
9,500 0 2
9,250 0 0
9,000 0 0
8,750 0 1
8,500 0 0
N= 26 26
Median $11,265 $10,775
Mean $11,640 $10,760

 

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Image Source: “The monopolists’ may-pole” by F. Opper.  Centerfold of Puck, vol. 17, no. 425 (April 29, 1885). Library of Congress Prints and Photographs Division Washington, D.C. 20540 USA.

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Professors’ salaries in U.S. economics departments (1), 1964/5-1965/66

 

 

From my March 2017 expedition to the Johns Hopkins University archives’ collection of material from the Department of Political Economy, I came across one of those documents that help to provide an empirical baseline for the history of the market for economics professors. It is worth savouring the sets of tables one by one. In all, this so-called “cartel” summary with information collected from 29 departments in October 1965 consists of eight sets of tables.

On the last page of this summary for full-professor salaries can be found the name of the presumable compiler of the tables: Francis M. Boddy, Graduate School, University of Minnesota. It is dated December 21, 1965.

Two documents later in the same folder I found the list of 30 members of the Chairmen’s Group, dated December 13, 1965. With 29 responses to the salary questionnaire from which the “cartel” data have been assembled, it leaves only to guess which department did not report back to the “cartel”. I do believe that the ironic self-designation of cartel is not entirely contrary to functional fact here.

The salary distributions across the participating departments for associate professors, assistant professors, and for the starting salaries for newly minted Ph.D. hires have been posted in the meantime. Also there is a table of the anticipated (as of December 1965) range of salaries to hire freshly completed PhD’s for the coming academic year, 1966-67.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

___________________________________

About Francis M. Boddy

Boddy, Francis M, 1115 Bus. Admin., West Bank, Dept. of Econs., U. of Minn., Minneapolis, MN 55455. Phone: Office (612)373-3583;Home (612)926-1063. Fields: 020, 610. Birth Yr: 1906. Degrees: B.B.A., U. of Minn., 1930; M.A., U. of Minn., 1936; Ph.D., U. of Minn., 1939. Prin. Cur. Position: Prof. Emer. Of Econs., U. of Minn. At Twin Cities. 1975-. Concurrent/Past Positions: Acting Exec. Secy., Bd. Of Investment, State of Minn., 1978-79; Assoc. Dean of Grad. Sch. U. of Minn., 1961-73.

Source: “Biographical Listing of Members.” The American Economic Review 71, no. 6 (1981): p. 67.

___________________________________

Research Hint:
Boddy’s data go back to 1957/58

“I have, over the past six years, conducted an informal survey of some 30 of the leading departments of economics in the country, defined largely as being those departments which have been major producers of Ph.D.’s in economics.”

Source:  Boddy, Francis M. “The Demand for Economists.” The American Economic Review 52, no. 2 (1962): 503-08.

 

Also of interest from about the same time is the AER Supplement:

Tolles, N. Arnold, and Emanuel Melichar. “Studies of the Structure of Economists’ Salaries and Income” The American Economic Review 58, no. 5 (1968):

___________________________________

MEMBERS OF THE CHAIRMEN’S GROUP, 1965-66
December 13, 1965

  1. Professor Gerard Debreu
    University of California
    Berkeley, California 94720
  2. Dean R. M. Cyert
    Carnegie Institute of Technology
    Pittsburgh 13, Pennsylvania
  3. Professor Arnold C. Harberger
    University of Chicago
    1126 East 59th Street
    Chicago 37, Illinois
  4. Professor Carl McGuire
    University of Colorado
    Boulder, Colorado
  5. Professor William Vickrey
    Columbia University
    New York 27, New York
  6. Professor Douglas F. Dowd
    Acting Chairman
    Cornell University
    Ithaca, New York
    (Professor Frank H. Golay, the Chairman, is on leave in 1965-66.)
  7. Professor Robert S. Smith
    Duke University
    Durham, North Carolina
  8. Professor John Dunlop
    Harvard University
    Cambridge, Massachusetts 02138
  9. Professor John F. Due
    University of Illinois
    Urbana, Illinois 61803
  10. Professor George Wilson
    Indiana University
    Bloomington, Indiana 47405
  11. Professor Karl A. Fox
    Iowa State University
    Ames, Iowa 50010
  12. Professor Carl F. Christ
    Johns Hopkins University
    Baltimore, Maryland
  13. Professor Robert F. Lanzilotti
    Michigan State University
    East Lansing, Michigan
  14. Professor Warren L. Smith
    University of Michigan
    Ann Arbor, Michigan
  15. Professor E. Cary Brown
    Massachusetts Institute of Technology
    Cambridge 39, Massachusetts
  16. Professor Emanuel Stein
    New York University
    New York 3, New York
  17. Professor John Turnbull
    University of Minnesota
    Minneapolis, Minnesota
  18. Professor Ralph W. Pfouts
    university of North Carolina
    Chapel Hill, North Carolina
  19. Professor Robert Eisner
    Northwestern University
    Evanston, Illinois
  20. Professor Paul G. Craig
    Ohio State University
    Columbus, Ohio
  21. Professor Irving B. Kravis
    University of Pennsylvania
    Philadelphia 4, Pennsylvania
  22. Professor Richard A. Lester
    Princeton University
    Princeton, New Jersey
  23. Dean Emanuel T. Weiler
    Purdue University
    Lafayette, Indiana
  24. Professor Lionel McKenzie
    University of Rochester
    Rochester 20, New York
  25. Professor Edward S. Shaw
    Stanford University
    Stanford, California
  26. Professor Carey Thompson
    University of Texas
    Austin, Texas
  27. Professor James W. McKie
    Vanderbilt University
    Nashville, Tennessee
  28. Professor Alexandre Kafka
    Acting Chairman
    University of Virginia
    Charlottesville, Virginia
    (Professor Warren Nutter, the Chairman, is on leave in 1965-66.)
  29. Professor David B. Johnson
    University of Wisconsin
    Madison, Wisconsin
  30. Professor Raymond Powell
    Yale University
    New Haven, Connecticut

 

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

 

___________________________________

 

CARTEL
SUMMARY of the October-1965 Questionnaire to Departments of Economics in the United States

SUMMARY of the salary (1965-66 and 1964-65 academic years, 9-10 month basis) and other data of 29 (out of 29) Departments of Economics. N = Number of Departments reporting.

 

TABLE 1c
PROFESSORS 1965-66, 1964-65

(1)
Median Salaries
All Professors

MID-POINT
OF RANGE

1965-66

1964-65

Over 20,249

2 1
20,000 4

0

19,500

0 1
19,000 3

1

18,500

2 3
18,000 2

1

17,500

3 1
17,000 2

4

16,500

2 4
16,000 1

4

15,500

2 0
15,000 2

1

14,500

0 2
14,000 3

1

13,500

0 1
13,000 1

4

N=

29 29
Median $17,500

$16,500

Mean

$17,377

$16,319

 

 

TABLE 1c
PROFESSORS 1965-66, 1964-65

(2)

Average Salaries
“Superior Professors”
(Top 1/3)

MID-POINT
OF RANGE

1965-66

1964-65

Over 23,749

3 1
23,500 2

0

23,000

0 0
22,500 3

0

22,000

1 2
21,500 4

3

21,000

1 2
20,500 4

2

20,000

0 3
19,500 2

2

19,000

2 4
18,500 1

0

18,000

3 1
17,500 1

2

17,000

0 0
16,500 2

1

16,000

0 4
15,500 0

1

15,000

0 0
14,500 0

1

14,000

0 0
N= 29

29

Median

$20,600 $19,500
Mean $20,677

$19,093

 

 

TABLE 1c
PROFESSORS 1965-66, 1964-65

(3)

Average Salaries
“Average Professors”
(Lower 2/3)

MID-POINT
OF RANGE

1965-66

1964-65

Over 18,749

4 2
18,500 0

1

18,000

3 1
17,500 1

1

17,000

3 1
16,500 3

2

16,000

5 8
15,500 1

4

15,000

2 1
14,500 1

1

14,000

2 0
13,500

2

2

13,000

1 4
12,500 1

0

12,000

0 1
11,500 0

0

N=

29 29
Median $16,100

$15,390

Mean

$16,192

$15,119

 

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Image: From left to right: Monopolies, Uncle Sam, Trusts.

Taylor, Charles Jay, Artist. In the hands of his philanthropic friends / C.J. Taylor. , 1897. N.Y.: Published in Puck, March 10, 1897. . Retrieved from the Library of Congress, . (Accessed May 12, 2017). https://www.loc.gov/item/2012647652/

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ERVM

Second Anniversary of Economics in the Rear-View Mirror, 2017

 

 

Yesterday, May 8 (2017) Economics in the Rear-View Mirror celebrated its second anniversary of providing transcriptions of material culled from archives both physical and electronic. These artifacts are relevant, most of the time, to my research project on the history of economic graduate and undergraduate economics in the United States from the late 19th century through the early post-WWII years

As I did upon the first anniversary of Economics in the Rear-View Mirror, let me provide guests attending this anniversary celebration with a top-ten list of postings (with links!) according to page visits over the course of this second year.

  1. Harvard. Econ 113b. Schumpeter’s Grad Course on the History of Economics. 1940
  2. Harvard. Advanced Economic Theory, Schumpeter, 1941-42
  3. Swarthmore. Economic Theory Honors Exam Questions by Samuelson. 1943
  4. Chicago. Friedman from Cambridge on Arrow, Tobin, Harry Johnson, Joan Robinson. 1953
  5. Harvard. Taussig/Schumpeter/A.Sweezy’s final examination in value and distribution theory, 1935
  6. Harvard Economics. Economics 101. Econ Theory. Chamberlin, 1938-9
  7. Joseph Schumpeter on Methodological Individualism, 1908
  8. Harvard. Haberler Argues Against Galbraith And On Behalf of Samuelson, 1948
  9. MIT. Samuelson at the Joint Economic Committee, 1973
  10. MIT. Robert Solow’s Advanced Economic Theory Course, 1962

The top two spots were won by none other than Joseph Schumpeter. Indeed both of his postings achieved the identical ranks in the previous top-ten annual list. Chamberlin slipped only from 5th to 6th place in the ranking. All other top-ten items were posted during the past twelve months. It is interesting to note Schumpeter is absolute and relative click-bait, accounting for 40% of last year’s top ten. Samuelson was good for another 30%. 

I suppose I should not be surprised that the “Demand” is so much greater for artifacts associated with the giants of the relatively recent past than those artifacts from more distant times associated  with much less familiar or even unknown names.  I can only encourage visitors to check out the complete catalog of artifacts and sample some of the pre-WWII, indeed 19th century offerings. 

P.S. Two popular pages having absolutely nothing to do with the History of Economics:  Christmas 2016 and Springtime for Twittler. Both are satirical doggerel written for these times of Trump.

 

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Economists

Keynes vs. Marx. Abba Lerner responds to Daniel Bell, 1944

 

 

 

Both the economist Abba Lerner and the sociologist Daniel Bell can be seen in this 1944 exchange of letters to have considered themselves still at that time, to differing degrees of orthodoxy, of the Marxian persuasion. What caught my eye, in light of current macroeconomics debates, was Bell’s identification of “the confidence fairy” in Keynesian economics. Lerner’s response is that human psychology is something that Keynes rightly identified has a place in macroeconomic models. Lerner’s key conclusion: “If the theory of how the individual parts behave does not fit in with the theory of how the totality behaves that is evidence that at least one of the theories is wrong.”

In August 1938 Abba Lerner drove from Colorado Springs to Mexico City to meet Leon Trotsky. Lerner’s description of that encounter was transcribed earlier in Economics in the Rear-View Mirror.

_____________________

Letter from Daniel Bell to Abba Lerner
[presumably July or August, 1944]

49 East Ninth Street
New York 3, N.Y.

Dear Abba:

I was reading through Joan Robinson’s Introduction to the Theory of Employment, recently to check some thoughts on Keynesian economics and one point has stuck in my mind nagging me on. So I pass it along to you in the hope of clarification.

In the emphasis that the whole Keynesian school places on the role of demand, savings and investment, it seems that the cornerstone of the structure is actually a psychological explanation of depression and unemployment. For the theory seems to hinge on the decisions of entrepreneurs to invest based on a calculation of profit. On the one hand people save, so there is a decline in demand for consumption goods on the other business concerns fear to expand because of declining demand for capital goods by consumption goods industries. The use of word[s] such as fears, calculation etc are quite irritating. A Marxian theory, largely abstract and dealing in terms of ratios of constant and variable capital and declining rate of profit, seems more satisfying because of the total and more meaningful picture of a complete situation it provides.

Anyway, I’m interested in clearing up this issue of a psychological underpinning to Keynesian economics. If so, why all we need is a good publicity firm to convince the people to cheer up and spend and our worries are solved.

Apart from the frivolity, I’d appreciate your reactions.

sincerely,

[signed]

Dan Bell

_____________________

210 W 16, NY 11, NY
August 6th 1944

Dear Dan,

You write that you are irritated by the emphasis on psychology in the Keynesian theory of employment. The use of words like fears, calculations etc annoy you and you find that in this regard the Keynesian approach is less satisfactory than the Marxian which [is]“largely abstract and dealing in terms of the ratios of constant and variable capital and declining rate of profit, seems to be more satisfying because of the total and more meaningful picture of a complete situation it provides.”

So you [are] interested in clearing up the issue of a psychological underpinning to Keynesian economics. “If so,” you write, “why all we need is a good publicity firm to convince the people to cheer up and spend and our worries are solved.”

I react quite the other way. I can see no objection to psychology nor does it seem to me to be an illegitimate underpinning to a theory to have psychological elements. On the contrary any theory that purports to explain what happens to human society without having to pay any attention to the way the people in it behave would seem to [me] prima-facie a swindle. It is of course very pretty and aesthetic to have a plan that describes the working of any economy as if it had nothing to do with the way human being[s] behave — which is psychology — but appears to deduce it from a simple manipulation of mathematical ratios. The Marxian theory does this and to that extent it is false and the detailed analysis of the falsity of the argument has been abundantly demonstrated even in cases where the conclusions happen to be true.

The same tendency to accept a simple mathematical law without going behind it to see how it fits in with the fact that what we are describing is the total behavior of millions of people is quite common in economic and probably in other studies too. One that is very similar to the Marxian preoccupation with ratios is to be found in the proposition called “the acceleration principle” out of which economists have built theories of the business cycle, more complex and aesthetically more satisfying than the Marxian theory, but which have been discarded as soon as it was pointed out the apparently simple mathematical proposition concerning the effects of changes in the ratios of current consumption to replacement were only true because of an implicit assumption about the expectations of business men about the continuation of the current level or trend of consumption. I refer to the theories of the Business cycle by Harrod.

Of course it will not do to dismiss the Keynesian theory by saying that all we need is to persuade people to spend by appropriate advertising. Functional Finance is only an application of other means, which are much more powerful than advertising, to bring about the proper level of spending. As long as we have an economy, capitalist or socialist, in which what is produced is somehow related to the public’s money demand for the output, we can regulate the level of activity by working on the demand.

There are very strict limits as to what can be done in this direction by advertising or propaganda or ballyhoo. Individual citizens might perhaps to some extent be persuaded to increase their spending at the expense of their saving, though even this is very doubtful. At the present time saving by individuals is due much more to the inability to buy what they want than to the appeals to buy bonds even though these are backed by the touching appeal that by so doing we can win the war, save the lives of our loved ones in the army, and make a good profit at the same time. As regards investment by business men the effects of ballyhoo are even more doubtful, for even if they should temporarily be effective, the results in unprofitable investments would very soon become apparent and no advertising can for long hope to overcome this influence.

The basic point that interests me in your letter is the willingness you show to accept a theory if it is so simple that there is no room for bringing in the fact of human behavior even when that is indeed the thing we are trying to explain. It shows a willingness to believe in the crudest of magic provided it is called scientific and objective and overrides all objections by a declaration that it is “abstract” and refuses to listen [to] its error in every detail by declaring that it aims to provide a picture of the complete situation. The principle is that it does not matter if every element in it is false as long as the total picture it gives has some attractiveness if only because it paints a picture we would like to believe to be true.

Of course if the Keynesian theory were based upon some special theory of psychology, which otherwise we have little use for, or if it invented a peculiar psychology ad hoc, you would have a legitimate basis for objection. But all the psychology used here consists of well known and undisputed propositions such as that when people earn more they will on the whole spend more and also save more, and that business men are more likely to invest when business is good than when business is bad.

Some very conscientious economists have made very careful attempts to prove these propositions by statistics, and with some success. I do not think I am too dogmatic in declaring that in the light of our everyday experience we could legitimately assume these propositions to be true even in the absence of these carful studies. And if the propositions about spending etc are not fitted into a theory like the Marxian theory (to a great extent I think they can be so fitted in) the latter is unsatisfactory. I get the feeling I remember having when I was an undergraduate in economics and a much more orthodox Marxist than I am now. I then had the ambition of showing how the behavior of the individuals fitted in the Marxian generalities of the laws of motion of the society as a whole. If the theory of how the individual parts behave does not fit in with the theory of how the totality behaves that is evidence that at least one of the theories is wrong.

This seems a little long-winded, but I hope my attitude will be apparent. If this is not clear perhaps we can meet sometime and talk it out.

Greetings to Nora

Yours sincerely,

Abba P. Lerner.

 

Source: Library of Congress. Abba P. Lerner Papers. Box 6, Folder 8 “’B’ miscellany”.

 

Image Source: Publicity photo of Abba Lerner from Beth Emet’s announcement of speakers in its 1958 Forum (that included besides Dr. Abba Lerner, the Rev. Martin Luther King, Jr. as well as the actor Theodore Bikel) in Library of Congress. Abba P. Lerner Papers. Box 6, Folder 8 “’B’ miscellany”.

Categories
Agricultural Economics Economists Harvard

Harvard. Memorial Minute for Agricultural Economist, J. D. Black, 1960

 

 

John Kenneth Galbraith was the chairman of a committee commissioned to write a faculty minute in honor of John D. Black (1883-1960) who taught courses in the economics of agriculture at Harvard from 1927 through 1959. Anyone familiar with Galbraithian prose can see that this minute was overwhelmingly, if not exclusively, the work of Galbraith. I do not think it an exaggeration to see in Galbraith’s praise of this or that aspect of Black’s career and scholarly style a projection of Galbraith’s own creed for academic life. Admiration, gratitude (Black pushed hard to get Galbraith promoted to a full professorship at Harvard), and affection all shine through this memorial minute, a genuine positive outlier in the art of the obituary.

Willard W. Cochrane wrote a profile “Remembering John D. Black” that was published in Choices (Magazine published by the Agricultural & Applied Economics Association in the 1st Quarter 1989 issue) pp. 31-32.

______________________

FACULTY OF ARTS AND SCIENCES

At a meeting of the Faculty of Arts and Sciences on October 18, 1960, the following minutes were placed upon the records.

JOHN DONALD BLACK

John D. Black, Henry Lee Professor of Economics, was the nation’s leading student of the economics of agriculture, and, to a greater extent than any other man, he gave the modern dimension and form to this branch of economics. His books, monographs, and papers were more widely and attentively read than those of any other scholar in the field; he was a premier source of ideas and a leader in research; his students have held and still hold a large proportion of the professorships in this subject; they have been equally influential in the United States Department of Agriculture and influential also in the colleges and departments of agriculture in foreign countries; and Black himself had a marked influence on the agricultural legislation passed in 1933 and thereafter. The price paid for milk in this community is set in accordance with a complex formula devised by Black. Not the least of his achievements was to make Harvard, an institution with no very intimate ties to farming, a major center during his lifetime of agricultural research and instruction.

Black’s first interest in life was as a teacher of advanced students — students who would find their career in one or another branches of his subject. His teaching had little style; preparation was at best an afterthought. But his students soon came to realize that they were, incomparably, the most important people in his life. They could count, literally, on his unlimited time and his impersonal but equally unlimited affection. And they discovered that beneath his formless lecturing were solid theoretical premises, a strong scientific attitude, and a profound contempt for anything suggestive of cant or pretense. He was immensely tolerant of students of average ability and was content if they became, in his hands, a little better than average. But he rejoiced in his good students and saw in all their achievements his own. Black’s students were his students for life. He knew them all by name; he expected to be consulted when they changed jobs; and he liked to be informed on their personal life. He was deeply concerned with the quality of instruction in agricultural economics not alone at Harvard but throughout the country. High level instruction he identified, not inaccurately, with this own students. So for many years he carried with him a small black book containing a list of former students and in his mind a list of college and university departments where he felt his influence could be enhanced. A vacancy in any of these institutions led promptly to a recommendation of a man who could be counted upon to extend what he did not hesitate to call “the Black point of view.”

Though subordinate in its claim on his time (during his nearly thirty years at Harvard his door was always open to students from nine until five) Black’s research and writing was of first importance and was prodigious in volume. His Production Economics, published in 1926, though unfinished in some respects, was a landmark in the development of the production function and in the theory of the competitive firm. It led Black to develop an entirely new approach to farm management research and instruction, one that reflected far more adequately the conceptual character of the farm firm and which in time largely supplanted the older methods based on comparative accounting data. Marketing, agricultural co-operation land tenure, land economics, price analysis, forestry, population theory, food and nutrition, farm labor, and national policy were among the subjects which engaged his attention at one period or another. A selection from his writings published last year by the Harvard University Press was from nearly three hundred books, papers, pamphlets, congressional submissions, reports, and manuscripts. Black had little patience with refinement in economic theory or method; he made no effort to conceal his opinion that much discussion of finer points was pretentious nonsense. He spoke often of the need to “open up a subject”—to initiate investigation and to offer the preliminary findings. This repeatedly he did. The results were never well formed or polished. But they were always supremely relevant, and they usually paved the way for the more detailed efforts of less original men.

Throughout his life Black was a trusted adviser on a wide range of matters concerning agricultural policy. He could not be readily typed either as a liberal or as a conservative. But he was sympathetic and pragmatic. He mistrusted the men who resolved matters on general theoretical grounds, and he was profoundly interested in results. Thus during the thirties, when many economists opposed the farm legislation of the period as an improper interference with the free market, Black was concerned only with how it might be made to work. Similarly on other matters. As a result, he was called on constantly by a succession of Secretaries of Agriculture, by agricultural officials, farm leaders, congressional committees and, especially in recent years, by foreign governments.

John Donald Black was born in 1883 in the log house on the original family homestead in Cambridge, Wisconsin. He was fourth in a family of talented children — one that include three teachers, a distinguished chemist, and a leading businessman. Black made his way through normal school, became a high school teacher of algebra, botany, and physical geography and the coach of the high school athletic teams. With earnings from teaching, he proceeded to the University of Wisconsin and to a degree in English. He taught English first at Western Reserve University and then for four years at the Michigan College of Mines (as it then was) on the upper Michigan peninsula. This latter college was in a raw and bitter community; in the neighboring copper mines bitterness and strife were endemic. He became impressed, especially after a long strike in 1915, with the urgency of the social problems. It seems likely, also, that he had become increasingly less impressed by the urgency or even the feasibility of teaching English grammar to these engineers for, in any case, he had begun to smuggle economics into his courses in the form of assignments in English composition. But on returning to study labor economics at a University of Wisconsin summer school, his attention was caught by the fledgling work in farm economics of Henry C. Taylor. He turned to this subject and took his Ph.D. degree with a thesis on land tenure in Wisconsin. On completion of his degree in 1918, he went to the University of Minnesota. His academic progress there may well serve as a model for the ambitious young scholar. He was assistant professor for six months, associate professor for two years, and the head of his department from the beginning.

In the ensuing ten years, the University of Minnesota became by far the most interesting center for research and discussion of the social problems of agriculture in the United States. A brilliant group of scholars gathered to work with Black. From them came a striking series of pamphlets and monographs — those on empirical methods and the nature of market supply responses were especially noteworthy. Before long, Black had a disproportionate share of both graduate students and budget — a development which he never found it in his heart to deplore.

By the late twenties his work was widely known and, at the behest of Thomas Nixon Carver, he was invited to visit Harvard for a term. This he did in 1927, and the visit was soon followed by an offer of a professorship. Now the students came to Cambridge instead of St. Paul. Few of them had funds to afford Harvard tuition, and by an incredible exercise of energy and resourcefulness Black found them money with which to study and do research. In 1929 and the years following the Social Science Research Council awarded one hundred twenty scholarships to improve the level of teaching and research in agricultural economics and rural sociology. Of the recipients, no fewer than forty-five came to Harvard to work with Black. In some subsequent years as many as a quarter of all the students in economics belonged to what came to be called “the Black Empire.”

In 1917 Black married Nina Van Steenberg, a woman of serene good humor and keen intelligence who, with their three children — Guy, Margaret, and Alan — survives him. The Black house in Belmont was for hundreds of graduate students nearly as much a part of Harvard as were his rooms in Widener or (later on) in Littauer. Black, to the wonder of all who knew him, worked prodigiously, imperturbably, and without evident strain. The serenity, charm, and quiet good humor of his household is surely a part of the explanation.

In his relations to colleagues and university, Black was the epitome of the inner-directed man. His view of what he needed and wanted was extremely clear. Since, in the end, it invariably prevailed, the Department eventually adopted the wise course of acceding to his wishes at the outset. Where he found university rules inconvenient, he unhesitantly ignored them. The rule that members of the faculty, though sound in body and mind, should retire at some specified age, struck him as especially absurd. He continued to teach until last December when he was seventy-six. He had a certain quiet pride in the devices by which he accomplished this defeat of authority, and it was his belief that no one in the modern history of the university had approached his record.

Black was an early President of the American Farm Economic Association and one of the life Fellows of that organization. He had a founding role in the organization of the Food and Agricultural Organization of the United Nations, and in 1955 he was President of the American Economic Association.

Last January he was stricken by the first of a series of severe heart attack. He died on April 12.

Edward S. Mason
Arthur Smithies
John Kenneth Galbraith, Chairman.

 

Source: Harvard University Gazette, Vol. LVI, No. 7 (October 29, 1960), p. 36-8. Copy in the Papers of John Kenneth Galbraith (Box 527), John F. Kennedy Presidential Library.

Image Source: Harvard University. Class Album 1945.

Categories
Exam Questions Harvard

Harvard. Final exam from theory of production and distribution. Haberler and Leontief, 1942

 

 

According to my reckoning, I have now matched final examinations that I have recently copied at the Harvard archives to as many previously posted course syllabi/outlines/reading assignments as I could to date. Of course the pairings of exams to course outlines are not complete, but quite a few are and more will be coming in the future!

An outline with a list of items to be read for an intermediate/advanced undergraduate economic theory of distribution course jointly taught by Gottfried Haberler and Wassily Leontief has already been posted earlier. Below I have transcribed the final examination questions for Haberler and Leontief’s second term course from 1941-42. 

 

_____________________________

Final Examination
Theory of Production and Distribution of National Income
Professor Haberler and Associate Professor Leontief

1941-42
HARVARD UNIVERSITY

ECONOMICS 1b

Answer ONE question in EACH of the four following groups:

(a) 1, 2, or 3
(b) 4 or 5
(c) 6 or 7
(d) 8 or 9

  1. Compare the theory of time wages with that of piece wages.
  2. Describe the circumstances in which the introduction of a minimum wage law can increase the demand for labor.
  3. Compare the Keynesian theory of wages with that of the “orthodox” economists and indicate the implications of the difference existing between the two for the general theory of employment.
  4. How does an entrepreneur determine the amount of capital which can be most profitably invested in a single plant?
  5. Compare the expected future change in the price level with the prevailing rate of interest in its effect upon the amount of the present individual savings.
  6. Discuss the difference between the marginal social and marginal private product from the point of view of the efficient organization of production.
  7. “An economic system can be unjust but efficient, it can also be just but inefficient.” Discuss.
  8. Analyze Professor Schumpeter’s theory of “zero interest” in a static economy.
  9. “A negative circumstance such as uncertain cannot possibly explain the existence of profit which is a positive return.” Discuss

Final, 1942.

 

Source: Harvard University Archives. Harvard University. Final Examinations, 1853-2001 (HUC 7000.28, Box 6 of 284). Faculty of Arts and Sciences, Papers Printed for Final Examinations: History, History of Religions, … , Economics, … , Military Science, Naval Science, June, 1942.

Image Source: Gottfried Haberler (left) and Wassily Leontief (right) from Harvard Class Album 1942.